It’s Wednesday, November 23rd, 2011….and here’s The Gouge!

First up, the WSJ‘s Holman Jenkins offers a hypothetical which, at least initially, had us scratching our head:

If Only Obama Had Been This Guy

Carter at least did not substitute his priorities for the nation’s.

The good news is that growing economies can afford a great deal of government, if not quite as much as the Europeans and the U.S. have promised themselves. The bad news is that “policy error” are the saddest words in the language. These words, starting in the 1960s, came to dominate serious post mortems on the Great Depression of the 1930s, which blighted so many lives.

Which brings us to President Obama. Has a president ever arrived freer to choose his own course, to devise his own response to the economic crisis that greeted him in office? Candidate Obama landed with no explicit ideological commitments (at least that he cared to share). He was an icon of something else altogether, and his followers were ready to follow wherever he led.

Alas, a few days before his all-but-certain election, he glibly telegraphed what would prove the seminal mistake of his administration, telling Time magazine’s Joe Klein that, right after fixing the financial crisis, “a new energy economy . . . That’s going to be my No. 1 priority when I get into office.”

The financial crisis would not be fixed, but Mr. Obama decided our sagging economy would just have to endure fights over the big ideas he was so determined to implement anyway, including health care, re-empowering labor, redressing income inequality, etc.

Let us suggest a counterintuitive historical parallel. Jimmy Carter also came to the presidency as a “progressive” Democrat, amid a failing economy. He also had considerable freedom to define his own agenda, riding a wave of Watergate revulsion rather than an ideological mandate. But Mr. Carter had served aboard Navy submarines. He ran a peanut plantation. He served one term as Georgia governor—real jobs that produce real effects. Mr. Carter saw himself in some realistic relation to the world.

The world is big. A president, even the president’s “progressive” commitments, are small in comparison.

It was no part of Mr. Carter’s progressive heritage to dismantle the regulatory state that the original progressives had erected. But he did so—in airlines, trucking, railroads and (partially) energy—and made a virtue of it.

It was no part of his progressive heritage to prioritize a strong dollar, but he did so—appointing and supporting Paul Volcker because inflation-fighting had to be done.

The Carter presidency was a mixed bag, but he had the requisite adult judgment for the job. He did not abandon his “progressive” values, but he could see the obvious—that the times called for backing and filling in the “progressive” project, not charging ahead, onward and upward oblivious to realities.

He never got credit from the political calendar, but the Reagan economy was truly built on a Carter-Reagan foundation. Lost amid the shouting, the continuities of American life are often impressively large. Check out Mr. Carter’s speech to the 1980 Democratic convention, in which he boasted unembarrassedly and at length about “slashing regulations” and “restoring free enterprise” to failing regulated industries.

You perhaps see where we’re going. Mr. Obama’s career has been one in which the main effect has been the impression he leaves on audiences—the main effect has been himself. Familiarity with his country—or any other country—would be helpful at this point, if only to counterweight his mesmerization with the arc of his personal story.

Even at this late date, he could tell his aides: “I see the bill coming due for a generation of excesses and the last thing we need is more excesses. I want growth. I want only proposals that encourage growth.”

Our economy has great internal resiliency, even with Europe imploding, even with households weighed down by underwater mortgages. Population continues to grow. Families form and need homes. Cars wear out and need replacing. Domestic energy development is booming. Manufacturing is enjoying a renaissance. Boeing just announced its biggest plane sale ever. McDonald’s is doing great.

Yet his greatest miscalculation is still to come. His aides are sizing up a re-election campaign that gives up on growth, that resorts to score-settling and resentment.

His enemy will be the banks, which he bailed out. His enemy will be Wall Street—though the GOP rejoinder will be too easy: Tim Geithner. His enemy will be big business—the same big business whose adaptation to a chaotic global policy environment recently has been nothing short of revelatory.

This is triply sad because Mr. Obama, just this week, was handed a heaven-sent opportunity, a gift beyond his deserts. That gift was GOPer Pat Toomey’s tax-reform plan, floated as part of the super-committee deliberations.

Sen. Toomey’s plan concedes a big revenue hike on “the rich” in return for reforming the tax code based on pro-growth principles that both parties and Mr. Obama have endorsed. Mr. Obama, if he had the political creativity he credits himself with, would now pick it up and run with it, instantly redeeming the super-committee “failure” with an act of presidential leadership.

The suspicion becomes nigh irresistible, however, that Mr. Obama is lacking in the leadership department as the country stumbles towards its ultimate financial crisis. But give him credit for one world-historical achievement: He makes Carter look good.

Back in 1981, would anyone who lived through Carter’s term ever have believed….EVER….they’d live to see the day Jimmy was promoted to 2nd-worst President in our nation’s history?!?

And as this related video clip details, The Obamao’s response to the “super”-committee’s pre-ordained failure is to double-down on demagoguery:

Meanwhile, it’s been 938 days since the Dimocratic-controlled Senate has even passed a budget.

As Guy Benson notes of Tick-Tock’s tripe:

Two parting thoughts:  (a) This skirmish is over $1.2 Trillion in deficit reductions. To put that in perspective, President Obama’s proposed 2012 budget would have added $26.3 Trillion in new debt by 2022.  (b) Remember this?

So much for hope and change!

But as Glenn Hubbard, dean of the Columbia Business School notes in the WSJ….

It’s Still Possible to Cut Spending: Here’s How

The obvious place to begin is the repeal of ObamaCare. We also need to empower the states, streamline the federal government and modernize Medicare and Social Security.

After two months of talks, the super committee announced failure on Monday to agree on reducing federal deficits by $1.2 trillion over the next decade. But as the late economist Herb Stein once remarked: If something cannot go on forever, it won’t. That applies to the mounting budget shortfalls. But how?

President Obama’s answer is higher taxes. But he can’t be serious. Just accommodating his spending plans over the next decade requires across-the-board tax increases of 20%. Over the next 25 years, taxes would need to rise across the board by 60%.

Instead, what is needed is spending reform that offers goals, specifics and ways to blend fiscal responsibility with modernizing government. This includes near-term action on discretionary spending and longer-term action to reform entitlements and reduce the growth of Social Security and Medicare. Then revenue contributions can be addressed in the context of tax reform. (i.e., it’s the spending stupid, NOT the rate of taxation1)

The first goal is to reduce federal spending to a healthier 20% share of GDP from today’s bloated 25% within a decade. A tall order, yes, given the profligacy of the last few years. But it can be accomplished by eliminating unnecessary federal programs, empowering states, and reforming and streamlining government.

The obvious place to begin is repealing ObamaCare and its expansion of spending. Programs like the federal Community Development Fund, which should fall under state and local or private responsibilities, can be axed. So can intercity and high-speed rail grants, which lack plans to make rail competitive, and duplicative education programs.

We should also let states experiment with alternatives to our current one-size-fits-all federal solution. The best example is Medicaid, which should be converted into a block grant. Replacing federal matching support with block grants eliminates state incentives to attract additional federal subsidies, while allowing states to manage Medicaid more efficiently. Federal Medicaid costs should be capped at growth of 1% over the inflation rate.

The federal work force can shrink through attrition, and employee compensation can be adjusted to private levels. We should cut costly applied research in fields such as renewable energy at the Department of Energy, focusing only on basic research. And the Davis-Bacon Act, which inflates the price of federal construction projects by requiring high-cost union labor, has to be repealed.

These three approaches would bring federal spending down to 20% of GDP. Yet as ambitious as they are, these won’t solve our long-term budget problems, which reflect yawning deficits in Social Security and Medicare.

Regarding Social Security, the program first needs to be made solvent and sustainable over the long term. In particular, program outlays need to grow more slowly to allow for rising costs in health-care entitlements. Second, we must modernize Social Security by making it more effective in protecting low earners and more conducive to personal saving and the longer work lives needed in today’s economy. These changes will require a strong minimum benefit, gradual increases in the retirement age, and slowing benefit growth for more affluent Americans.

As a pro-growth measure, we should also eliminate the Social Security payroll tax for all individuals age 62 and older to encourage individuals to keep working and to increase their attractiveness to employers. In that vein, we should also eliminate the retirement earnings test that reduces benefits for early retirees who continue to work.

Our long-term budget problems are dominated by Medicare’s unfunded liabilities of tens of trillions of dollars. But changes must preserve Medicare’s role of assisting lower- and moderate-income Americans. As with Social Security, Medicare’s eligibility age should be increased gradually, and we should promote work by eliminating the Medicare payroll tax for individuals 62 or older.

A more modern version of traditional Medicare would replace Parts A, B and D with comprehensive benefits including coverage for catastrophic costs and prescription drugs. Simpler cost-sharing would be offered—with one deductible for inpatient and outpatient services and a common coinsurance rate for all services.

Medicare would be placed on a budget through premium support, which would let beneficiaries choose among competing health plans, much like federal employees do now. Subsidies would be larger for lower-income or higher-health-risk individuals. The annual growth would be determined by Congress along with other spending priorities.

And what about taxes? Incorporating revenue increases into forward-looking budget planning requires care. For the plan to be pro-growth, marginal tax rates must not be raised. That leaves base-broadening by reducing tax expenditures and tax preferences. With this in mind, Congress should agree on a revenue target for the decade, then deliver on this target via tax reform.

Merely extending the 2001 and 2003 tax cuts is not the most pro-growth policy. Fundamental tax reform need not be revenue-neutral, as the Bowles-Simpson Commission plan—which would raise net revenue through broadening the tax base—indicates. And reform can be progressive. But tax reform is important for ensuring that deficit reduction promotes economic growth as well as budget austerity.

It is unfortunate that many members of Congress and much of the public don’t understand that America’s fiscal problems can be solved almost entirely by altering the trajectory of government spending. President Obama’s leadership failure here is obvious.

If something cannot go on forever, it will stop. But even with the super committee’s failure we may be able to avoid a sudden, calamitous stop—and provide a government worthy of the 21st century for all Americans.

All of which makes infinite sense and does indeed remain possible; but not with THIS skipper….

….at the helm of our Ship of State.

Which brings us to today’s Money Quote, courtesy of Jeff Foutch and Musings from the Oil Patch,….

“TransCanada’s president and CEO, Russ Girling, pointed out an obvious fact about the pipeline decision, but one often overlooked by the media and those objecting to the pipeline: “If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long-term energy security.” This is one of the largest shovel-ready construction projects that would employ 13,000 construction workers and 7,000 manufacturing workers – high- paying jobs this economy needs right now. Now political concerns have sacrificed these jobs in the name of re-election politics.“

And in yet another sordid story of skullduggery ripped from the pages of the Crime Blotter, Townhall.com informs us….

Shhh: Obama’s Favorite Slumlord Sentenced to Decade in Prison

Can you name one Republican presidential candidate….just ONE….that has, or could have, survived the MSM firestorm resulting from such an obviously unsavory transaction and relationship?

On the Lighter Side….

Finally, we’ll call it a wrap with News of the Bizarre, and this headline from the Big Apple:

Wedding Day Suicide as Groom Throws Himself in River

P.S.  After Thursday’s traditional Thanksgiving edition, we’ll be off until Monday.