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President Obama: Listen To Your Inner Market

Monday, March 2, 2009  |  posted by Hugh Hewitt

Another weekend of digesting bad economic news and radical policy proposals and the market sells off again, setting a new bottom for the financial crisis. Would somebody in the White House please read Amity Shlaes’ The Forgotten Man, and perhaps leave it in the Oval Office for POTUS to find? Investors aren’t coming back into the market until they are assured of the rules under which the economy will be governed. The early promise of competence in the Summers and Geithner appointments has completely evaporated, and absent some rapid moves that demonstrate a coherent economic strategy, it won’t be recoverable. The new president’s unnerving demands for sweeping changes to all programs immediately has capital on the sidelines, and it won’t be coming back unless and until the new Administration sets its priorities and its parameters, and abandons its worst ideas such as reducing the deductability of charitable contributions and mortgage interest. The president’s rhetoric is driving uncertainty and fear, violating every rule of presidential leadership in a recession. The DOW is down nearly 3000 points since President Obama’s election. American business and the people who buy equity in it aren’t buying the Obama program. Democrats can tell themselves they won’t be blamed for this come 2010, but they already own this economy as a result of the porkulus, the president’s budget message, and the failure to have developed a plan for the banks in the nearly four months since the president won in November.

I am off the radio this week, and Geraghty the Indispensable fills in for me today, tomorrow and Wednesday, Mark Larson on Thursday and Duane in hours two and three on Friday after the playing of the next installment of my interview with Thomas P.M. Barnett on his new book Great Powers, recorded last week.

Blogging is on the vacation schedule –intermittent.

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The Congress Should Fix CPSIA Now

Sunday, March 1, 2009  |  posted by Hugh Hewitt

Last week I interviewed Gary Wolensky of Snell & Wilmer about the devastating effects of the the 2008 Consumer Products Safety Improvements Act (“CPSIA”) on his clients in the manufacturing and retail industries. Hundreds of millions of dollars of perfectly good inventory has been recalled because of the Act’s draconian standards and timelines. Some industries have been crippled, and others badly damaged. The interview with Wolensky is here.

Now the Boston Globe has noticed the impacts of CPSIA on another of the sectors Wolensky and I discussed –resellers like thrift stores:

A federal law designed to protect children from lead products has caused several Massachusetts thrift stores to stop selling kids’ clothing, shutting off an important shopping alternative for families struggling in this recession.

The Consumer Product Safety Improvement Act, which took effect Feb. 10, prohibits all shops from selling children’s products that contain too much lead or potentially harmful chemicals. Congress passed the law in response to a series of recalls of toys and jewelry that had high lead content and were linked to several child deaths and illnesses. But the legislation applies to all children’s products, including clothes, which could contain lead in metal zippers, buttons, or painted fabrics.

The sweeping nature of the law has been devastating for many resale shops nationwide, such as those run by Morgan Memorial Goodwill Industries. Unlike traditional merchants, thrift stores do not deal directly with manufacturers, which can provide proof that products meet safety standards. The regulation also applies retroactively to goods already in stores, and many thrift stores do not have funds to conduct the tests themselves.

In recent weeks, Goodwill pulled all children’s merchandise from its nine stores in the state. Thrift chain Second Time Around eliminated kids’ clothing from several of its 16 shops. St Vincent de Paul is currently removing children’s clothing with metal zippers, buttons, and painted fabrics from its processing center, which sends out merchandise to its six stores in Massachusetts.

Read the whole thing. The article is right to note that “[t]he fallout from the law is especially damaging for consumers who have increasingly visited thrift stores during the tough economic times,” but it should have spent more ink on the impact to the bottom line of the charitable enterprizes that run the second-hand stores and to the employees of places like Goodwill. The article did not even mention the vast damage the law is doing to other industries like the ATV business and sporting goods, or the legion of plaintiffs’ lawyers who are empowered by the law to bring suits against non-compliers.

I am traveling the next two days but will continue to try and answer e-mails about the law, but suggest that if you have questions you e-mail Wolensky at gwolensky@swlaw.com.

“The Speech,” 2009

Saturday, February 28, 2009  |  posted by Hugh Hewitt

Rush gave a speech at CPAC today that will be talked about for years and even decades. The CNN commentators called him “angry,” –did that description ever attach to Howard Dean or any of the leading Democrats in opposition to President Bush?– but what he actually was was passionate about freedom. And completely and utterly contemptuous of conservatives urging accommodation to the agenda of President Obama, especially those conservatives ashamed of the grassroots and their attachments to pastimes such as NASCAR and issues such as the dignity of every human life and the importance of marriage.

A week ago a reporter from a major American newspaper called me to talk about Rush. I agreed to do the interview provided it was recorded and that I could air it after the story the reporter was working on ran. The reporter asked me if Rush was a “leader,” and I said no. He is, I continued, a communicator, a pundit and an entertainer, one of the two best in the country –along with Oprah. And a man of extraordinary influence. I think the Rush-Oprah comparison startled the reporter, but it is exactly correct. They have the same reach, and though they have almost completely different approaches to life, both are deeply sincere about their views and thus far beyond merely “effective.” Both communicators change lives.

Rush eschews “leadership.” He doesn’t tell people who to vote for or where to show up and march.

But he does communicate with quite extraordinary clarity the deep, abiding attachment that conservatives have for liberty. He does so with great, good humor, and it is this quality that drives the left to distraction. Rush is funny; really, really funny. This is of course the reason he has succeeded far beyond every other radio talk show host. The “women’s summit” this week was just the latest in a long string of innovative –and profitable– firsts that amused even as it made key points.

And Rush is authentic. And deeply appreciated as a result. Long may he prosper.

BTW: The newspaper’s story hasn’t run yet. Though I am on vacation next week, Duane will play it if and when the story does run to see which quotes the reporter used. That will be interesting.

“Some analysts say Obama’s proposals are almost radical.”

Saturday, February 28, 2009  |  posted by Hugh Hewitt

Thus sayeth CBS News. No analysts are mentioned, but they should be. Two of the president’s proposals to cripple the charitable and mortgage interest deductions are indeed “radical” as they are squarely aimed not just at high income families who will see their deductions slashed but also at the churches, charities, schools and every not-for-profit that will be greatly damaged if the charitable deduction is reduced, and at every single homeowner in America, especially the retirees, who need their houses to grow in value not diminish. Reducing the value of the mortgage interest deduction reduces the value of every home in America, not just the incomes of those in the highest brackets.

A non-radical proposal would be a straight-forward demand to raise the top rate to 42 or 45%. That would be a transparent attempt to cost-shift, and consistent with standard liberal economics. But a stealth rate-hike that deeply damages the country’s charitable and faith-based sectors as well as every homeowner is indeed radical. No Republican who supports either idea should be supported, and no Democrat who does so can ever legitimately claim to be a “moderate” again.

Declaring even a covert war on churches and home-ownership isn’t remotely “liberal.” It is radical.

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