Quote of the Day (July 14, 2011)

Sarah Palin Is Right!
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Stacy McCain, at The Other McCain:

“Say what you will about Sarah Palin, love her or hate her, she has put the hammer on the nail of the essential problem with Obama’s presidency...”

- JP

The Richmans: Inflation climbs to 3.6% in May. Palin was right!

She's the only potential presidential candidate advocating what's needed to stabilize & grow the economy
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Howard Richman & Raymond Richman, two of the three generations of the Richman family of economists, give due credit to Sarah Palin who accurately predicted that Quantitative Easing would drive up inflation, but it would not have its intended effect of incresing American exports and business investment:

On June 15, the Bureau of Labor Statistics released the inflation data for May. If you didn't hear about the new data, you are not alone -- the mainstream media buried the story. Why? Inflation hit 3.6% in May, even though gasoline prices actually fell that month. Inflation has been rising since November...

[...]

Back in November, Governor Palin took on QE2 and President Obama's defense of it. Her predictions have turned out to be correct. When making her case against QE2, she argued that it could cause inflation, but would not much help U.S. net exports and business investment, the two factors needed to grow the U.S. economy.

Indeed, worsening net exports (exports minus imports) have been keeping the United States stuck in its current economic stagnation.

[...]

Bernanke hoped that QE2 would weaken the dollar which would turn U.S. net exports around. But Palin predicted that any positive effects would be temporary. In November she wrote:

Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about.

Indeed, so far Palin has been correct. QE2's effect upon net exports appears to have been temporary.

[...]

Bernanke had hoped that QE2 would stimulate business investment. But, in November, Palin predicted that QE2 would have little effect upon business investment. She wrote:

Will QE2 then at least boost domestic investment? No, again. As I explained in my speech in Phoenix, the reason banks aren't lending and businesses aren't investing isn't because of insufficient access to credit. There's plenty of money around, it's just that no one's willing to spend it. Big businesses especially have been hoarding cash. They're not expanding or adding to their workforce because there's just too much uncertainty created by a lot of big government experiments that aren't working. It's the President's own policies that are creating this uncertainty.

Indeed... the rate of growth in real fixed investment slowed in the fourth quarter of 2010 and the first quarter of 2011, despite QE2.

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Palin argued that QE2 was a dangerous experiment that risked inflation. She urged Obama to instead balance budgets, cut taxes and reduce burdensome business regulation. In November, she concluded:

If the President was serious about getting the economy moving again, he'd stop supporting the Fed's dangerous experiments with our currency and focus instead on what actually works: reducing government spending and boosting business investment through good old fashioned supply side reforms (cutting taxes and reducing overly burdensome regulations). Simply running the printing presses in order to avoid paying off your debts is no way for a great nation to behave.

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The mainstream media pretend that Palin is stupid. But she is actually blessed with a very rare commodity these days - economic common sense. She is the only potential presidential candidate currently advocating the three basic principles that would restore economic stability and long-term growth to the American economy: (1) balanced monetary growth, (2) balanced budgets, and (3) balanced trade.

Obviously, Gov. Palin has being doing her homework, not only on foreign policy, but economic policy as well. The corrupt media and her other political enemies would prefer that you did not know this.

h.t: Henry D'Andrea

- JP

Can we talk about the economy now? (Updated)

It's (still) the economy, stupid
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Now that Obama has released his long-form COLB, and now that the Trig troofers have been definitively debunked by liberal reporters, can we finally focus on what has most voters concerned right now? We're referring, of course, to the disastrous fiscal and economic policy of Obama and his fellow Democrats.

Former Reagan aide Mary Jo Jacobi Jephson sums it up rather nicely:

Assuming current economic trends continue (and barring discovery of cold fusion in the next six months, there’s no reason to think that they won’t) Republicans could simply bootleg James Carville’s “it’s the economy, stupid” messaging strategy from the 1992 Clinton Campaign. With the Obama Campaign touting their fundraising prowess (expected to top out around $1 billion), the GOP should have no trouble lampooning the Democrat’s backwards thinking on the intersection of money and government.

With values voters currently more concerned about the possibility of $8 gas and double-digit unemployment than gay marriage and guns, the GOP needs to be all business.

We have made rather the same point, although we did so in the context of a Palin victory over the Big-Spender-In-Chief. Ms. Jacobi Jephson would like to see Mitch Daniels as Obama's GOP challenger, and we "strenuously object," to quote a character in "A Few Good Men." But that's the fodder for another post. Though we have a different messenger in mind, we have no argument with the lion's share of her op-ed's title:

It's (still) the economy, stupid: GOP has the message to beat Obama...

The more wild-eyed among the birthers and troofers will not be convinced by any evidence, no matter how compelling. As Stacy McCain observes:

David Frum refers to Birtherism as “the racialist aspect of the anti-Obama movement,” which is rather a large leap. I always compared it to the various strange conspiracy theories about Mena Airport and/or Vince Foster that flourished during Bill Clinton’s first term.

In politics, some people are always more interested in throwing out spooky charges of criminality or fraud than in arguing over policy. You saw this during the Bush administration, with the stuff about Halliburton and Iraq, the claims of rigged voting machines in Ohio, the “Plamegate” controversy and all those wild fantasies about Karl Rove getting indicted.

Here's a novel idea: How about we refuse to allow the more imaginatively deranged among us to define the national debate and get on with the discussion that is most likely to help deny Obama a second term? And pay no attention to the Obama foot-washers who would have you believe that the economy is significantly improving. It isn't, and it will not, as long as Obama pursues his destructive statist agenda. Ignore those who wish to distract and their shiny objects. Let's get back to economic and fiscal issues with a real debate, for a change. It's a win-win for our side.

Update: Victor Davis Hanson specifies the issues we need to focus on:

Okay — the chief one is the present lull before the oncoming storm: Food and gas prices are consistent now with hyperinflation, which seems to be spreading to the general consumer price index — at a time of slow growth, a depression-like housing industry, a pathetic dollar, and high unemployment. It’s hard to see any upside there, inasmuch as in the old days inflation was associated with an overheated economy and, conversely, high unemployment and slow growth at least meant low prices for essentials. Instead, we seem to be entering a 1970s-like stagflationary cycle, whose remedies — higher interest rates, massive energy exploration, entitlement reform, strict budgetary discipline — will seem to this administration the proverbial medicine that is worse than the disease.

Add all this to a new America in which half the population pays no federal income tax and half receives some sort of government check, and we are starting to resemble southern Europe, where the dismal statistics are not so much globally or politically driven but increasingly a reflection of stubborn cultural attitudes about entitlement, work, and consumption in the era of globalization.

- JP

NY Sun: Sarah Palin’s Seoul

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Even the Obama-friendly left wing media was forced to admit that the president failed miserably at the G-20 summit. “Obama’s Economic View Is Rejected on the World Stage,” wrote the New York Times. “Zachary Karabell reports on Obama's mistake going into the summit,” read the subhead at the Daily Beast, which lamented the fact that the president’s letter to his foreign counterparts was doomed to “make things worse.” Obama couldn’t even manage to cut a free trade agreement with the host country of South Korea, a nation which in large measure owes its very existence to 60 years of support from the United States. Why did Obama strike out at the G-20? "It seems the skills and principles of a community organizer don’t translate well into the world of statecraft," opines today's editorial in the New York Sun:

So, just as a thought experiment here, let’s consider what might have happened had America been represented at the Group of 20 Summit not by a former community organizer but by a certain former governor of a state that, like South Korea itself, can see Russia from its door — and, in Free Korea's case, Communist China, too. The big news on the eve of the G20 was how upset our friends overseas are with the plan for a second round of money printing by the Federal Reserve. Mr. Obama took time out from his Asian travels to defend the weak-dollar policy. It turns out that the politician who challenged Mr. Bernanke most pointedly, and substantively, as the G20 was getting set for its meeting was none other than Mrs. Palin.

So one can speculate that had a President Palin been leading our delegation to Seoul, the monetary tensions would have been dissipated. The whole issue of a currency war — a competition over who can keep their currencies low and thus promote their own exports — would have been defanged. No doubt that had Mrs. Palin been leading our delegation in Seoul, her departure would have been preceded by a wave of warnings in the liberal press about our country’s trade deficit. The conceit is that we need to devalue the dollar in order to make it more attractive for foreigners to buy American products.

Mrs. Palin, however, has a plank in her political campaign that would address the trade deficit in a way that neither Mr. Obama, nor any other Democrat, has been prepared to endorse. She wants to move to domestic energy production, opening up the Arctic National Wildlife Reserve and close-in (and safer to drill in) coastal regions for production. Mrs. Palin has a hard-earned canniness about the energy sector that can be matched by few other politicians in the country. She knows that our oil imports are a major part of our trade deficit. So while pursuing a sound-dollar policy that, at least in theory, could hurt our exports, she’d pursue a domestic oil policy that would help our trade deficit.

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It’s not just idle speculation, conclude the editors, to imagine our allies among the G-20 nations reacting positively to an American president "who had a clear and savvy world view and knew where he, or she, was going."

h/t: Benyamin Korn

- JP