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Reece Terry, publisher
Opinion
Mark Boehler, editor
4 • Thursday, September 19, 2013
Corinth, Miss.
Is the president a lame duck? BY DICK MORRIS AND EILEEN MCGANN Congressional Democrats have defected from President Obama on three key issues in recent weeks, a sure sign of his looming lame duck status. First, 111 House Democrats refused to fund the NSA surveillance program despite heavy pressure from the administration and House Minority Leader Nancy Pelosi, D-Calif. It became evident then that Obama would suffer enough Democratic defections in the House, and possibly also in the Senate, so as to imperil his resolution to allow the use of force in Syria. And this week, Obama was forced to reconsider his likely nomination of Larry Summers to be the Chairman of the Federal Reserve Board under pressure from Democrats who wanted vice-chairman Janet Yellen instead. These defections from what had been a solid phalanx of Democratic support for Obama signal the waning of his power and approaching lame duck status only nine months into his second term. So, on three key issues: surveillance, war and crony capitalism, Obama has become suspect in Democratic eyes. The revelations of NSA spying initially brought into public view by Edward Snowden have cut right across party lines, enraging the tea party’s small government advocates and ACLU civil libertarians alike. The fact that the 111 Democrats who voted against NSA funding were joined by 94 Republicans shows how strong this coalition of outsiders has become. The Syria war vote that never happened also showed the inroads that the anti-establishment coalition has made among Democrats. While House Republicans lined up to pledge to vote no on the resolution allowing U.S. air strikes in Syria, most Democrats reported themselves as undecided pending the president’s speech on Sept. 10. When Obama was shown up by Russian dictator Putin and his speech fell flat, it was so evident that he couldn’t deliver Democrats that Senate Majority Leader Harry Reid, D-Nev., quietly shelved the resolution to await a U.N. vote. But it is the Summers nomination that best illustrates Obama’s loss of clout among members of his own party. With increasing evidence that income inequality has flourished and widened under Obama, Democrats are impatient with his courting of Wall Street and his appointment of crony capitalists to key posts in Treasury and the Fed. Under President Clinton, 45 percent of all new personal income went to the top 1 percent. Under President Bush, it was 65 percent. So far under Obama, 95 percent of the income has gone to the richest 1 percent. Why? The main blame falls on the cascade of moneymaking opportunities the Fed and Treasury have made available to America’s rich people. It began with our ending the gold standard under Richard Nixon and swelled with the futures markets that speculate on Treasury bill interest rates. When Clinton allowed the repeal of Glass-Spiegel, largely on Summers’ advice, the gambling ratcheted up. Now banks could use federally guaranteed depositor money to bet on iffy investments and outright gambling. With the Fed shipping $85 billion each month to Wall Street, brokerage executives and bank officials can earn vast sums by gambling on derivatives. With not much loan demand to soak up the currency, the bankers gamble with the money. The too-big-to-fail policy implicit in the TARP guarantees underwrites the betting. Larry Summers came to epitomize this crony capitalism and his association with it has rubbed off on Obama. Democrats finally rebelled. It is this Administration’s policies that are widening the income gap. Janet Yellen, the heir apparent, is no better than Summers. Her tenure as vice-chairman of the Fed under Bernanke is enough to signal her support of crony capitalist gambling. She is likely to hold interest rates down, nominally to encourage job creation, but, in reality, to provide free money to Wall Street’s government-guaranteed derivative gambling casino. (Daily Corinthian columnist Dick Morris, former advisor to the Clinton administration, is a commentator and writer. He is also a columnist for the New York Post and The Hill. His wife, Eileen McGann is an attorney and consultant.)
Prayer for today Father, as a sign of my love for You I will obey Your commands and heed Your instruction. I can do this because I have stored up Your truths and commands in my heart and because Christ gives me strength. Amen.
A verse to share “All scripture is given by inspiration of God, and is profitable for doctrine, for reproof, for correction, for instruction in righteousness:” — 2 Timothy 3:16
Will Mabus end up political fall guy in shooting? Secretary of the Navy Ray Mabus may be cast in the role of the political fall guy as the search for answers in the Washington Navy Yard shootings continues. National news organizations were already examining that angle on the story less than 24 hours after the tragedy. One line of inquiry has been whether or not the Navy implemented an unproven security system as a means to cut costs while another focuses on allegations that felons may have been able to gain restricted access to Navy facilities on a consistent basis. The bottom line is that someone in a position of authority in the Navy will have to account for not only the actions of alleged shooter Aaron Alexis, but for his access to the supposedly secure military facility. The death toll in the Sept. 16 shooting is now up to 13. Witnesses described a gunman opening fire from the fourth floor, aiming down at people in a first-floor cafeteria. But the knee-jerk conclusion that Mabus is somehow culpable is suspect at best.
But as in the aftermath of most events of this nature, the country is quick to seek Sid Salter someone to blame and Columnist that target is now aimed at the Obama Administration. Was Alexis a mentally unbalanced disgruntled employee? How did he pass a background check that gave him a security clearance? Did Alexis get his clearance before Mabus became the Navy’s leader? Clearly, members of Congress will be asking those questions — for the simple truth is that getting to Mabus on the Navy Yard shooting is a way for Republicans in the Congress to get at President Barack Obama. Obama has been bullish on Ray Mabus — and why not? Mabus is the former Mississippi governor and Clinton administration ambassador to Saudi Arabia. After a fiery career as a crusading state auditor, Mabus served as Mississippi’s governor
from 1988 to 1992. He served as ambassador to Saudi Arabia from 1994 to 1996. Despite the Clinton connection, Mabus was an early supporter of Obama. After Mabus endorsed Obama in the spring of 2007, he said the Obama campaign sent him over the next year to speak in 24 states at over 300 events in places in rural America “where a presidential campaign has literally never visited.” After earning his undergraduate degree from Ole Miss, Mabus earned a graduate degree from Johns Hopkins and a law degree from Harvard. He served a two-year hitch in the Navy as a surface warfare officer aboard the cruiser USS Little Rock — honorably discharging as a lieutenant. With support from both of Mississippi’s Republican U.S. senators, Obama named Mabus as Navy secretary in March 2009. Obama later tapped the Harvard-educated Mabus to oversee the restoration plan for the Gulf Coast after the British Petroleum (BP)
Macondo oil spill in the Gulf of Mexico, the worst environmental disaster in U.S. history. What Mississippians will recall from the term Mabus served as their governor was that despite some unpopular initiatives, Mabus was meticulous personally and politically. He did his homework and he usually had his political bases well covered. The notion that the Navy Yard shooting was the result of benign neglect by the former Mississippi governor is one that’s frankly hard to swallow. But did the sequester — a government budget cutting debacle that was caused by the politics of stalemate in both the Democratic and Republicans parties — play a role in possible security lapses? Maybe. At any rate, the next few weeks may prove a tough road for the former Mississippi chief executive from Ackerman. (Daily Corinthian and syndicated columnist Sid Salter can be contacted at 601-507-8004 or sidsalter@sidsalter.com.)
Political crusaders push minimum wage madness Political crusades for raising the minimum wage are back again. Advocates of minimum wage laws often give themselves credit for being more “compassionate” towards “the poor.” But they seldom bother to check what are the actual consequences of such laws. One of the simplest and most fundamental economic principles is that people tend to buy more when the price is lower and less when the price is higher. Yet advocates of minimum wage laws seem to think that the government can raise the price of labor without reducing the amount of labor that will be hired. When you turn from economic principles to hard facts, the case against minimum wage laws is even stronger. Countries with minimum wage laws almost invariably have higher rates of unemployment than countries without minimum wage laws. Most nations today have minimum wage laws, but they have not always had them. Unemployment rates have been very much lower in places and times when there were no minimum wage laws. Switzerland is one of the few modern nations without a minimum wage law. In 2003, “The Economist” magazine reported: “Swit-
Reece Terry
Mark Boehler
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zerland’s unemployment neared a five-year high of 3.9 percent in February.” Thomas In FebruSowell ary of this year, SwitColumnist zerland’s unemployment rate was 3.1 percent. A recent issue of “The Economist” showed Switzerland’s unemployment rate as 2.1 percent. Most Americans today have never seen unemployment rates that low. However, there was a time when there was no federal minimum wage law in the United States. The last time was during the Coolidge administration, when the annual unemployment rate got as low as 1.8 percent. When Hong Kong was a British colony, it had no minimum wage law. In 1991 its unemployment rate was under 2 percent. As for being “compassionate” toward “the poor,” this assumes that there is some enduring class of Americans who are poor in some meaningful sense, and that there is something compassionate about reducing their chances of getting a job. Most Americans living below the government-set poverty line have a washer
and/or a dryer, as well as a computer. More than 80 percent have air conditioning. More than 80 percent also have both a landline and a cell phone. Nearly all have television and a refrigerator. Most Americans living below the official poverty line also own a motor vehicle and have more living space than the average European -- not Europeans in poverty, the average European. Why then are they called “poor?” Because government bureaucrats create the official definition of poverty, and they do so in ways that provide a political rationale for the welfare state -- and, not incidentally, for the bureaucrats’ own jobs. Most people in the lower income brackets are not an enduring class. Most working people in the bottom 20 percent in income at a given time do not stay there over time. More of them end up in the top 20 percent than remain behind in the bottom 20 percent. There is nothing mysterious about the fact that most people start off in entry level jobs that pay much less than they will earn after they get some work experience. But, when minimum wage levels are set without regard to their initial productivity, young people are disproportionately unem-
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ployed -- priced out of jobs. Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on. Minorities, like young people, can also be priced out of jobs. In the United States, the last year in which the black unemployment rate was lower than the white unemployment rate -- 1930 -- was also the last year when there was no federal minimum wage law. Inflation in the 1940s raised the pay of even unskilled workers above the minimum wage set in 1938. Economically, it was the same as if there were no minimum wage law by the late 1940s. In 1948 the unemployment rate of black 16-yearold and 17-year-old males was 9.4 percent. This was a fraction of what it would become in even the most prosperous years from 1958 on, as the minimum wage was raised repeatedly to keep up with inflation. Some “compassion” for “the poor!” (Daily Corinthian columnist Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com.)
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