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Pelosi: Katrina/AIG - A Tale of Two Reactions

 

Nancy Pelosi’s assessment of President Bush in the days following Hurricane Katrina and hers of President Obama following the revelation of the AIG bonus debacle and his handling of the financial crisis overall offer an unobstructed view of full blown party politics.

In the immediate aftermath of Hurricane Katrina in 2005, governments at all levels were scrambling to react to the most devastating, widespread and costly natural disaster in the nation’s history.  Over 1800 people died dwarfing the totals of all recent storms of the last several decades combined. There was nearly a complete break down in state and local governmental functions in the New Orleans metropolitan area causing the federal government to step into the first responders role in an unprecedented way, which it did heroically given the circumstances. The United States Coast Guard conducted the largest search and rescue operation in its century long history rescuing over 30,000 people throughout the region, while the United States Army rolled into New Orleans two and a half days after the breach of the city’s levees and restored order to a city that had fallen into anarchy.

About a week after the storm hit, while President Bush was overseeing the largest federal response to a natural disaster in our nation's history (eventually numbering over 70,000 people), Pelosi thought it a good time to attack him and the federal efforts. She recounted a conversation that she said she had with the President, during which she told him in light of everything that had gone wrong responding to Katrina, that he should fire FEMA Director Michael Brown. According to Pelosi, Bush responded, “What didn’t go right?” She then proclaimed to reporters that President Bush was “Oblivious, in denial, dangerous.”  (quote midway through linked article). 

Give me a break. If President Bush in fact responded as she said he did, the subtext almost certainly was, “I don’t really need you telling me how to do my job and whom I should hire and fire.” The President himself knew and stated publicly during the first days of the crisis that there were problems with the response at all levels government.  He said, “A lot of people are working hard to help those who have been affected, and I want to thank the people for their efforts.  The results are not acceptable.  I'm headed down there right now.  I'm looking forward to talking to the people on the ground.”  Certainly Michael Brown had some bad moments in front of the camera, particularly in being un-informed about the plight of those at the New Orleans Convention Center. Query why the city's mayor, Ray Nagin, directed people to go there (and to the Superdome) without even a day’s supply of water on-hand or why Louisiana Governor Kathleen Blanco could not direct the Louisiana National Guard to go to those locations sooner and bring people water and other needed supplies, as they awaited evacuation. State and local governments traditionally have met these immediate needs with the federal government in the supporting role.  Bush traveled to New Orleans in the days immediately following the storm and met with Mayor Nagin and Governor Blanco and several other state, local and federal authorities. By the time Pelosi said they spoke, order had been restored to streets of the city, the U.S. Army had brought supplies into the city, and evacuations were well under way.  Doesn’t sound like President Bush who was “Oblivious, in denial and dangerous.”  

Everyone knew Pelosi's comments about Bush and the federal response were political and directed to the American people in order to score as many points as possible from the disaster. A true statesman/woman, when tempted to attack one's political opponent in the first days of a major catastrophe, should have said something like, "This is an enormous challenge.  Obviously there have been problems with the government's response at all levels.  They'll be plenty of time to determine who's responsible and what went wrong in the weeks ahead, but for now let's just do all we can help those affected by the storm."  No such words or suggestion of any failures at the state and local levels were forthcoming, because Mayor Nagin and Governor Blanco were Democrats.  The Democratic Party Pelosi led was in the minority, and she intended to use emotionally charged moment following the storm to help bring the President's popularity ratings down, and the Republican Party's with him. The plan worked. Katrina was a PR disaster for the President and his ratings took a downturn, from which he never recovered. 

Flash forward to 2009.  The Democrats did take control of Congress in 2006.  The nation is now experiencing the greatest financial upheaval since the Great Depression and now it’s President Obama who was oblivious to something he should have known about and it's his Treasury Secretary, Timothy Geither, whose competence is in question. New York Times Op-Ed columnist Frank Rich called the whole debacle Obama's “Katrina Moment.” It started with Obama telling Congress it had to rush the $800 billion Stimulus Bill to his desk by President's Day, giving members of Congress less than a day to read the 1100 page bill with its hundreds of provisions (with references to numerous other laws).  He then took five days to sign it himself.  Tucked in that bill was an executive compensation provision for those receiving government bail out funds, which exempted all pay received prior to February 11th.  Obama said he didn't know anything about it and was "Outraged."  Secretary Geithner, in turn, couldn't seem to keep his story straight. He said last week that he first learned of the $150 million plus in AIG bonuses on March 10 when some aides in the Treasury Department informed him; however, he was questioned on this very matter by on March 3 during a Congressional hearing. Therefore, he at least had knowledge of them then: he told the Congressman the prospect of such bonuses was troubling and he would look into the matter.  He didn't have to look far, because his own Department requested that language exempting bonuses paid before February 11 be included in the Stimulus Bill. Further, the Federal Reserve Bank of New York, with Geitner as its President, helped craft the original terms of the government bailout last fall, which included provision for bonuses.  Executive compensation was obviously going to be a major issue when taxpayer money was being used to keep these companies afloat. He is either being deceitful or is incompetent.  Further if Obama were truly exercising good leadership, he would not have been rushing Congress, so such a provision could be slipped in with few knowing about it.   

Where’s the outrage now from Speaker Pelosi? Why isn’t she telling President Obama that he should fire Geither, and if she has, announcing it to the public? Or calling President Obama, “Oblivious, in denial, dangerous.” The federal government has spent approximately $170 billion bailing out AIG alone and approaching $2 trillion dealing with the mortgage meltdown and financial crisis.  By contrast, Katrina recovery efforts have cost $175 billion to date.  Additionally, Obama has proposed a $3.6 trillion federal budget with massive increases in spending not only in the short term to deal with the crisis, but over the next ten years, which the Congressional Budget Office forecasts will add a $1 trillion to the national debt per year.  Obama's argument is that unless we adopt a government financed health program costing 100's of billions and increase government aid for college tuition and conduct research for alternative energy to the tune of 10's of billions more, the economy will not recover.  Funny, it was functioning quite well a year or two ago, without these massive new government programs.  Such plans are shaking the confidence of the financial sector and faith in the dollar.  Katrina only affected a region of the country directly; while the financial crisis is affecting the world. 

Rather than cutting criticism, Pelosi's observation regarding Obama is, “I believe the President is on the right path and did an excellent job in his leadership when we passed the [$800 billion] recovery act here”, with its provision protecting executive bonuses.  As for the executive bonuses she said, “It’s not right” and that the executives should give the money back or the government should use whatever means required to get it. Pelosi directs all blame to the companies rather than to the President, the Treasury and Congress (well that would include herself of course) for allowing them. 
 
The difference between Speaker Pelosi's reaction to President Bush's leadership during Katrina and Obama's during this financial crisis is of course entirely political.  The difference in reality is while President Bush was in no way "Oblivious, in denial or dangerous" when Pelosi made her pronouncement, President Obama was oblivious, by his own admission, regarding executive bonuses; and is in denial about the effects of accumulating massive government debt to the future of our republic; and therefore may well be dangerous.       

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Randy DeSoto is the author of the book We Hold These Truths, which addresses how leaders have appealed to the beliefs in God's Providence and inalienable rights, throughout our nation's history.      
   
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Pilgrims Discovered Perils of Spreading the Wealth

 

  

Most Americans probably have at least a passing knowledge of the perils faced by the Pilgrims, especially during the first year. The difficult passage over the seas with the contrary winds, which delayed their arrival by months.  How they landed hundreds of miles north of their intended destination right at the beginning of a New England winter. How they went through a difficult winter with severe shortages of food, so that half their number died of malnutrition and disease. How the Indians helped them plant their first cornfields in the spring, and the subsequent celebration of their first Thanksgiving the following fall. What is less known is that the Pilgrims nearly starved again two years later. Their experiment in what Karl Marx would later describe as the communist goal of “from each according to his ability, to each according to his needs” failed miserably. While Barack Obama is not calling for the creation of a communist system in the United States, many of the same mal-effects of taking peoples’ hard-earned wealth and giving it to others will come into play.  

If ever there was a place and a people on earth where the Marxian ideal of “from each according to his ability, to each according to his needs” could have succeeded, it was in Plymouth colony. These were probably among the most idealistic people to be found; the crème-de-la-crème of the England’s Pilgrim sect, willing to risk it all and go across the seas to start a new life in an unsettled world. They’d put their lives in each other’s hands, confronting death through want and, at times, hostile neighboring native populations. Few live through this sort of bonding experience. Even with these bonds, the Pilgrims still possessed basic human nature, which, over time, has the unction to strive and to create and to enjoy the fruits of one’s own labor. Conversely this same human nature doesn’t like to see one’s hard work go to the benefit of another, unless it’s freely given, and especially to those who are capable of working for themselves. 

This basic aspect of human nature came into clear view in the Pilgrim's initial farming scheme. During their first year in Plymouth, they farmed as a community. Given the exigencies of their situation, with their survival in doubt, everybody pitched in and they enjoyed a good fall harvest. In effect their labor in the fields was being 100% taxed by the government, who then in turn shared the resources as it determined best: “from each according to his ability, to each according to his needs.” With the arrival of new immigrants, who had not shared the first settlers' perils or worked in the planting and harvesting and with the passing of the sense of urgency, human nature kicked in. Young, single men, for example, complained that they were having to work hard for other men’s wives and children and married woman complained about having to clean clothes and do other household work for those outside of their families. The fields were not planted and cared for at nearly the level required to support their population. Food had to be severely rationed, much as it had during their first winter. 

In response to this predicament, Governor William Bradford along with the colony’s other leadership decided to give each family its own plot of land and grouped single men in with particular families. Bradford reports that “This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.”
 
Bradford went on to observe that no one should have been surprised at this result. It only validated what all of human history teaches regarding communal undertakings, contrary to what utopian philosophers taught. “The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato's and other ancients applauded by some of later times; and that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God.” It’s what the Soviet Union learned in spades when over three million of its population died of starvation following the collectivization of their farms during the last century. It’s what parents know, who have their children work for an allowance or to earn a particular prize: people work for a reward and will work even harder for a greater reward. 
 
You do not have to full communist/100% taxing society to see the effects of taking the fruit of people’s labor from them. Barack Obama plans to grow the government massively in the areas of health care, education and energy to name three, and he plans to pay for it by raising taxes on the wealthiest, and often the most productive Americans: the people who have dared and risked and created new businesses and new technologies and thereby new jobs.  He intends to raise their federal income tax rate to 39.6% and to eliminate or reduce tax exemptions and deductions. Couple that with state and local taxes these Americans pay, which takes another 5-10% of their earnings and payroll taxes for social security and Medicare another 7.65% (15.3% if self-employed/business owner), and you’ve crossed the threshold of taking over half someone’s income to feed a government bureaucracy. He also intends to raise the capital gains tax (the tax on investment income) to 20%, when several of our competitor nations have little or no capital gains tax. Even with all these new taxes, Obama projects nearly a $2 trillion dollar deficit this year, over a trillion next year and at least a half trillion for as far as the eye can see. This is unsustainable. The result of these taxes and massive deficits will be hundred of billions less in the private sector to invest and to create and to grow businesses and to remain competitive in a world economy. 
 
The United States is at a crossroads: do we intend to go down the road of the failed philosophies of the past, which hold that government legislators and bureaucrats are the best arbiters of where the wealth in a society should go or down the road of encouraging private enterprise and individual industriousness? Governor William Bradford and the Pilgrims and societies throughout all of human history discovered the latter to be the better choice. 
 
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Randy DeSoto is the author of the book We Hold These Truths, which addresses how leaders have appealed to beliefs found in the Declaration of Independence, throughout our nation's history. 

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