Democrats Ignore Basic Economic Facts

Foster Friess

By Foster Friess, Guest Blogger

Democrats are fond of talking about the Clinton era budget surplus President George W. Bush “squandered” and the terrible financial mess President Barack Obama “inherited.” Both arguments ignore a few basic facts. First, presidents don’t control spending, Congress does. Second, outside events have to be taken into account before you assign praise or blame.

President Bill Clinton had the lucky combination of a time of peace, a Republican controlled House of Representatives and a booming economy, including the gains from internet stock insanities. Since all spending bills originate in the House of Representatives, credit for the budget surplus could more fairly be given to Speaker Newt Gingrich and the “Contract with America” than President Clinton.

President Bush had been in office less than nine months when the cowardly 9-11 attack on the World Trade Center occurred. Blaming Bush for the deficits that followed is akin to blaming President Franklin D. Roosevelt (FDR) for the sudden increase in federal spending after the Japanese attack on Pearl Harbor.

The chart above shows the deficit when each party was in control of the House of Representatives. Democrats are blue while the Republicans are red. The graph indicates a clear trend. Since 1974 – the year the budget process began to implode – the Republicans controlled the House for 12 years and the Democrats 24 years.

In 8 of the 12 years the Republicans controlled the spending, the deficit went down the following year and the 4 years it went up were all in the years immediately after the 9-11 attack. Despite the huge blow to the economy and the expenses of fighting two wars, deficit spending peaked in 2004 and was declining sharply until the Democrats regained control of the House in 2007.

Meanwhile, in 18 of the 24 years the Democrats controlled the federal purse strings, the deficit rose the following year.

The Democrats, not the Republicans, have had firm control of both houses of Congress for the past four years. During their first two years, we had the near financial collapse on their watch. For the past two years, the Democrats have added the White House giving them carte blanche to promote their legislative agenda in Washington.

Instead of focusing on the economy, the Democrats have passed a series of unpopular and expensive bills, which added regulatory uncertainly to an already shaky marketplace. Until employers know how health care reform and the overhaul of the entire financial market structure will impact their business, they will not be hiring. Only four months from a new tax year, the people who actually create jobs and drive the economy have no idea what their personal taxes rates will be in 2011.

It seems to be dawning on the American people that President Obama and the Democrats now own this economy and blaming it on George W. Bush, whose name has not appeared on a ballot since 2004, is getting old.

President Obama certainly inherited a financial problem, but a case can be made that the tax and spend Democrats on Capitol Hill have only made it worse. A $1.6 trillion dollar deficit for the year, an ineffective and wasteful $800+ billion stimulus package and a 9.6% unemployment rate gives the impression that when it comes to boasting the economy the Democrats are out of their depth. During a recession, government should be encouraging small businesses instead of loading them down with new regulations adding to labor costs and raising taxes.

Are the Democrats in over their heads? With less than 60 days left in the current fiscal year, they haven’t even been able to write a budget for 2010, much less create a long-term recovery plan.

How did we get into this mess? The deficit spending death spiral began with the passage of the “Congressional Budget Reform and Impoundment Control Act of 1974.” Before its passage, other than times of war, deficits were rare and small. Presidents would routinely not spend money Congress had appropriated. This bill stripped the Executive Branch of the ability to “impound” funds, turning the U.S. Treasury into a cash cow that Congress is more than happy to milk.

Thomas Jefferson was the first president to impound funds Congress had voted to spend. He declined to build gunboats on the Mississippi River because he thought they were inferior. For the next 160 years nearly every president, including FDR, Harry Truman and John F. Kennedy, exercised their executive power by declining to spend money for military equipment that Congress had appropriated but they thought unnecessary.

In 1968, President Richard Nixon, horrified by the excesses of President Lyndon Johnson’s “Great Society” spending on domestic programs, began impounding funds on a massive scale never seen before. This fiscal restraint earned him no friends on pork addicted Capitol Hill. In 1974, with Nixon badly weakened by the Watergate Scandal, Congress passed the Impoundment Control Act which effectively ended any future president’s ability to impound funds once authorized by Congress.

The lack of fiscal responsibility has resulted in an explosion of “earmarks” for expensive and wasteful pork barrel projects being inserted into essential bills. With the ability to simply not spend the money off the table, a president’s only options are to either sign or veto. Since the shameless members of Congress have no compunction about attaching tons of wasteful pork to critical legislation, too often it is quietly signed into law with the hope no one will notice.

In 1970, before the passage of the Impoundment Act, the Defense Bill had 12 earmarks. In 2010 it had 1,720. When President Dwight Eisenhower proposed the first highway bill in the 1950s, it had two earmarks. In 1987, President Ronald Reagan vetoed the Highway Bill because it had 121 earmarks. His veto was easily overridden. The most recent highway bill contained an estimated 6,371 “special projects.” It passed 412 to 8 in the House of Representatives.

The party that controls the House controls the spending. When you go to the polls this November be sure to pull the lever for a true fiscal conservative, Democrat or Republican, and not someone who is trying to buy your vote with your grandchildren’s money.

God Bless,

Foster (:>)*****

EDITOR’S NOTE: Foster Friess promotes private-sector solutions to benefit society and curb an increasingly intrusive government. Through the Express Rider network of like-minded influence-leaders, provides a conduit to educate and empower citizens on issues transforming America.  To read previous BMW posts written by or about Foster Friess, click here.

Oil Spill Response Puts Barack Obama on Hot Seat

President Barack Obama knows all too well how easy it is to criticize others when you’re not in charge.  Five years ago, as shown in the video below, he seemed to revel in criticizing President George W. Bush for allegedly taking too long to respond to Hurricane Katrina and for being ineffective when he did act.

Today, President Obama is on the receiving end of criticism that stems from his handling of the BP Deepwater Horizon oil spill disaster in the Gulf of Mexico.  Proof appears in the graphic below that accompanied a USA TODAY/Gallup Poll conducted May 24-25:

Welcome to the hot seat, Mr. President.

Hat tip:  Gateway Pundit

Business Owner Says Economy Not Turning Around

Rick Misch

Rick Misch

The Obama Administration wants Americans to believe the economy is beginning to turn around and that President Barack Obama’s efforts are starting to result in more and more “saved and created jobs.”  Ask Rick Misch for his assessment of the economy, however, and you’ll find the economic picture he sees daily isn’t as pretty as the one painted by politicians.

“I know there simply isn’t any real ‘job creation’ taking place,” said Misch, president of Ohio-based Phoenix Research Inc., during a recent phone interview.  And he should know.

Phoenix Research is a courthouse research company Misch and business partner Bill Brown launched in November 1997.  The company provides on-site criminal records checks for some 750 employment screening companies across the United States by way of a network of approximately 1,500 subcontractors working in almost every county in the nation.

A look at his company’s growth is revealing:

  • By April-May 1998, Misch said, the company had hit its stride;
  • By 2000, the partners had paid off all of the company’s start-up costs and relocated from Cincinnati to Mt. Orab, 60 miles due east in Brown County; and
  • By 2001, Phoenix Research employed nine people, including Misch and Brown, and was handling approximately 3,000 individual criminal history searches per day — including 250 to 350 in Los Angeles County alone.

In addition to providing a decent living for its owners and employees, the enterprise provides Misch a great deal of insight about the state of the economy.

“One thing that was consistent from basically 1998 to 2008 (was that) I could accurately predict within one-tenth of a percentage point what the unemployment rate was going to be the following month,” he said.  “I knew it before anybody in the media did.”

In May 2009, however, Misch said his numbers and those coming out of Washington, D.C., began, inexplicably, to diverge, though he had not changed the way he calculated his predictions.

Misch alluded to having suspicions about reasons behind the government’s variance, but opted not to pursue them.  Instead, he simply explained how his numbers paint a terrible economic picture of actual unemployment “north of 20 percent.”

“We were a multi-million-dollar-a-year business just 36 months ago,” said Misch.  Now, Phoenix Research employs only five people and is now only a few months from bankruptcy, largely due to the fact that the company is handling only 150 criminal history searches — or five percent of normal — on a daily basis.

“We made money under Clinton,” he said.  “We made money under Bush.  We are being KILLED under Obama!

“As a small business owner and as veteran, I’ve never looked to the government to do anything for me; I’ve never asked the government to do anything for me,” he said, “but I can tell you this, this Congress and this administration hasn’t done a thing that can help me.

Even with the so-called “hiring incentives” in place?

Misch explained why business owners are not taking advantage of the tax credits being offered by the Obama Administration.

“They want to give me a $3,000 tax credit if I go out and buy all new computers.  But why would I go out and buy all new computers when my computers work fine and I own all my own file servers, but I don’t have the business to support the expenditures in the first place.”

The same thing goes for job creation, he explained, citing the government’s offer of tax credits for companies that hire individuals who’ve been unemployed for some lengthy period of time.

“Why on earth would I fill a job  that’s going to cost me $25,000 a year minimum to get a $6,000 tax credit and have a person sitting around with nothing to do because we don’t have the business?  It doesn’t make any sense!

“It they want to help people like me, they need to cut taxes across the board and get the venture capital back in the game,” he said.  “There’s no incentive for small businesses to hire.”

Of course, the Obama Administration would accuse Misch and Brown of being greedy.  But nothing could be further from reality.

“My business partner and I have cut our salaries six times during the last 18 months,” Misch said.

Cross-posted 4/17/10 at

Oklahoma City Wrong for Honoring Bill Clinton (Update)

In an article published recently on the web site of Oklahoma’s largest newspaper, I was disappointed by the words attributed to the executive director of the Oklahoma City National Memorial & Museum said about President Bill Clinton on the occasion of the announcement that her group will honor the nation’s 40th president with the Reflections of Hope Award in conjunction with the 15th anniversary of the Oklahoma City Bombing:

“President Clinton and the work of the Clinton Foundation exemplify the core mission of this award and the Memorial and Museum,” said Kari Watkins. “He stood by this city 15 years ago and helped lead the way to rebuilding the heart of our city. Since then, he has done a tremendous job of bringing together the private sector and the non-governmental organizations to combat global issues.”

My beef isn’t with Watkins, mind you.  It lies, instead, with the continuation of the myths surrounding the bombing.  Stated more succinctly, it lies with the fact that the cover up surrounding the April 19, 1995, attack on the Alfred P. Murrah Federal Building continues.

As reported in four posts based on exclusive interviews with David P. Schippers and Jayna Davis, the evidence points to President Clinton being responsible for doing little to bring about complete justice for the 168 victims of the bombing in the nation’s heartland.

Who is Schippers?  He’s a 70-something Chicago-based attorney who served as chief investigative counsel for the U.S. House of Representatives Judiciary Committee during the Clinton Impeachment Hearings.  In addition, he authored the book, “SELLOUT: The Inside Story of President Clinton’s Impeachment.”

I was introduced to Schippers by Jayna Davis, author of the book, “The Third Terrorist,” which chronicled her decade-long investigation of the Oklahoma City bombing and became a New York Times Best Seller.  Some 30 years his junior, Davis considers Schippers a close personal friend and something of a father figure.

In a post published Sept. 30, I recounted my interview with Schippers:

I began the interview by asking Schippers why no one had pursued Hussain Al-Hussaini, the Iraqi native Davis identified in her book as the third terrorist who, along with Timothy McVeigh and Terry Nichols, carried out the attack?

“My honest opinion is that the original shot was made by (President Bill) Clinton in 1995,” he explained.  “Remember, it was 1995, and he had lost the congress — both houses of Congress — and people were saying he would never get reelected, and his numbers were way the hell down.

“If he had had another attack against the United States, he would have had to act, and he didn’t do a damn thing on the first Twin Towers bombing,” he continued.  “Clinton said, ‘Let’s not overreact,’ and, at that time, we had the Department of Justice with (Janet) Reno in there who was completely politicized, and I think (Clinton) just decided we’re not going to do it.”

Schippers continued, “riding” a bipartisan train of thought.

“Now, why didn’t the (President George W.) Bush people do it?” he asked rhetorically.  “That’s the one that really bothered me.  We deliberately waited until Reno and that gang got out of the administration and then Bush came in.”

Unfortunately, no one ever bit on the information Schippers said a president could have used as a legitimate reason to invade Iraq, and he blames it on a pact between the Bushes and Clintons — something akin to the mutually-assured destruction mindset that prevailed during the Cold War between Russia and the United States.

The preponderance of the evidence, thoroughly documented by Davis and explained further by Schippers, is difficult — if not impossible — to refute.

Don’t believe it?  Read the posts or, better yet, read Davis’ book, “The Third Terrorist.”  Then decide.

UDPATE 4/17/10 at 3:52 p.m. Central: Two days before the 15th anniversary of the Oklahoma City Bombing, President Clinton is painting tea partiers as “gonna-be terrorists”.  Plays into the 15-year-old cover up I wrote about above.

Secret Memo ‘Spirited Out’ of Speaker Nancy Pelosi’s Office Contains Damning Jobs Language

This is big news.  Late this morning, I obtained a heavily-edited draft copy of a not-yet-released secret memo.  Originally dated Aug. 1, 2003, my sources tell me it was “spirited out” of the office of Speaker of the House Nancy Pelosi sometime during the past five days.

Most telling about the memo (below) is the subject line which reads, “Pelosi: Where Are the Jobs, Mr. President?” Even the least-astute political observer can spot the fact that this memo was originally drafted for use during President George W. Bush’s first term.  Only recently — on Feb. 5, to be precise — was the document edited heavily with the red pen Speaker Pelosi has been known to use so often when dealing with Republican legislation.


Hat tip:  SondraK via All-American Blogger via Doug Edelman

Yellowstone Quake Swarm Making News Again

Tourists walk toward Quake Lake, formed in Northwest Montant after a 1959 earthquake (National Park Service Photo, 1960).

The annual “Yellowstone is shaking and might erupt” news reports have surfaced, prompting me to ponder how the Obama Administration might respond to a natural disaster with its epicenter at the national park.

The New York Times, among others, reported today that more than 100 mostly-tiny earthquakes a day, on average, have rattled a remote area of Yellowstone National Park in Wyoming, putting scientists who monitor the park’s strange and volatile geology on alert.

Similar reports 13 months ago prompted me to publish a post in which I asked the question, Will Yellowstone Eruption Be Obama’s Katrina? In that post, I surmised (1) that then-President-Elect Barack Obama would want to avoid the kind of criticism that has haunted President George W. Bush after the federal government’s response to Hurricane Katrina was viewed as inadequate at best and incompetent at worst and (2) that he should tell the American people how you will protect the nation from the carnage that’s certain to follow such a cataclysmic event.

Not surprisingly, President Obama has yet to share any thoughts on how his administration might deal with such a disaster, and I don’t expect he will anytime soon.  After all, he’s a reactionary, not a planner, and, as White House Chief of Staff Rahm Emanuel loves to say, “Never let a serious crisis go to waste.  What I mean by that is it’s an opportunity to do things you couldn’t do before.”

SHOCK! Liberal Media Blame Bush for Suspending Airlift of Critically-Ill Haitians to United States

The headline above isn’t true, but I wouldn’t be surprised to see headlines like it pop up during the next few days following news that senior Obama Administration officials had ordered a suspension of airlifts of critically-ill Haitians to the United States.

While driving to St. Louis Lambert International Airport earlier this evening, I heard a report about the suspension of airlift activities and immediately began thinking about how the liberal news media would have excoriated George W. Bush if the Haiti earthquake had occurred during his watch.

As of this posting, however, several media outlets — Associated Press via Fox News Channel, Atlanta Journal-Constitution, CNN and an Orlando television station WESH — had published stories about the suspension of airlifts from Haiti. None, however, had included any criticism of President Obama despite the fact that many of them quoted people working on behalf of the federal government — people like Navy Capt. Kevin Aandahl, a spokesperson for the U.S. Transportation Command, and the U.S. Ambassador to Haiti Kenneth Merten.


* * *

UPDATE 1/30/10 at 8:47 p.m. Central: The Wall Street Journal reports tonight that (1) 100 critically-ill earthquake victims “will die in the next day or two” if the U.S. government doesn’t resume medical evacuations to the U.S., and (2) the U.S. military originally said that it had suspended the medical evacuations because of an apparent federal-state dispute over who would pay for their care.

UPDATE #2 1/30/10 at 10:08 p.m. Central: NewsOK, the web site of Oklahoma’s largest newspaper, published an article tonight under the headline, “Katrina II: U.S. Haiti relief falling far short.”