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Brian Wesbury’s “It’s Not As Bad As You Think: Why Capitalism Trumps Fear and the Economy Will Thrive.”

Monday, November 2, 2009  |  posted by Hugh Hewitt

Brian Wesbury, chief economist at First Trust Advisors and a frequent contributor to the Wall Street Journal, joins me for an hour-and-a-half to dig deep into the aftermath of the Great Panic of 2008. His new book is a must read for anyone exhausted by the continual predictions of the demise of capitalism:

It's Not as Bad as You Think: Why Capitalism Trumps Fear and the Economy Will Thrive

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“What Will Tuesday’s Vote Mean?”

Monday, November 2, 2009  |  posted by Hugh Hewitt

The Monday morning column from Clark Judge:

What Will Tuesday’s Voting Mean?
by Clark S. Judge, managing director, White House Writers Group, Inc.

We have all heard the prognosticators by now. The fate of the Administration’s health care legislation could be sealed tomorrow, when voters in Virginia and New Jersey pick their new governors-or not.

It has become something of a superstition in Washington that if the two Democratic candidates go down in defeat, next year will be 1994 all over again. That was when the GOP took back Congress after (on the House side) decades in the wilderness.

As of this morning, Virginia can be considered a done deal. I live in the DC area, so am exposed daily to the two Virginia gubernatorial campaigns. A good campaign has a clear message. It speaks to the moment and to the candidate’s plans for addressing voter concerns. It conveys a perspective on government. It merges the candidate’s public personal and that perspective with his or her program. Each comes to validate the others, giving voters confidence both in follow-through and flexibility to meet the unforeseen demands that will come during four years in office.

The GOP candidate in Virginia, Bob McDonnell, is running one of the best I have ever seen. I am sure that I have seen worse campaigns than the one Creigh Deeds, the Democratic candidate, is running, but I can’t think when. Had this year been last year, Deeds would have been able to embrace the president and been swept through on his message. But in 2009 that message isn’t selling in Virginia, and Mr. Deeds has nothing of his own to say.

New Jersey is another story. As of Friday, the daily report from the Rasmussen polling organization (see ) showed Republican Chris Christie still leading (though barely) incumbent Democrat Jon Corzine.

In New Jersey it still makes sense for a Democrat to embrace a president whose national approval ratings leave him no longer a reliable plus for his party. So Mr. Corzine is calling his campaign “Yes We Can 2.0”, and the president is stumping for him almost daily. But the governor is also one of the wealthiest men in the nation, having shared the CEO position at Goldman Sachs with former Treasury secretary Hank Paulson before getting the boot in a C-suite dustup. He has outspent Mr. Christie by… well, at last count is was over five to one, but the final tally will undoubtedly climb much higher.

If a Democrat has to spend that kind of money to win an election in a state that in recent years has voted consistently Democratic, what does it say about his victory as a national indicator? Only that Democrats in Congress won’t be able to draw a breath of relief if he squeaks through. If New Jersey goes Corzine by a hair, it will still be bad news for the Democrats nationally. If it goes for Christie, look for a run on security blankets in the House Democratic caucus on Wednesday morning.

Though it is not well understood in the media, the battleground in American politics today is a particular kind of voter. That citizen cast his ballot for George W. Bush and a GOP member of Congress in 2004. Between then and 2008, he or she began voting Democrat.

Several issues moved this voter, but the anchor — the one he or she was most concerned about — was Federal spending. Before 2006, he or she had voted primarily Republican, because the GOP said it was the party of limited government and limited spending. But starting in 2005, this voter stopped believing that line. A big spending Republican Congress and a Republican president unwilling to veto a single spending bill took their toll.

Party professionals tell me that 2008 exit polls showed that the Obama victory margin came from Republican voters who expected the kind of sharp leftward turn we have seen. They didn’t care. They wanted to teach their own party’s leadership a lesson. Recent polls have Republican voters still deeply suspicious of the GOP in Congress. The collapse of support for the highly liberal Republican candidate in New York’s 23rd congressional district in favor of the Conservative Party nominee was another sign of the disgust of former loyalists with the GOP. This suspicion is one thing that the Democrats still have going for them.

The betting now is that Tuesday’s election will not prove enormously conclusive. The betting is wrong. However it turns out, the election is already speaking volumes about where the disaffected GOP vote-the swing vote in American politics — stands today.

In Virginia we know the answer. They have gone home. This probably tells us a lot about the prospects for moderate Democrats outside of major metropolitan areas all over the country.

In New Jersey, a narrow Democratic victory and even more a loss will signal significant Democratic weakness inside the major metropolitan areas. The GOP’s heartbeat is back, much stronger than was expected only a few months ago.

Finally, the race in New York-23 already shows that GOP voters remain fed up with the politics of label trumping the politics of principal. A product of the local GOP organization, the Republican candidate blamed outsiders for the collapse of her campaign. But NY-23 is one of those districts that went for Bush in 2004 and Obama in 2008. Those outsiders only pointed out that if elected she would have proven the kind of congressperson that had made the typical American swing voter turn away from the GOP in the first place.

So here is the verdict that this year’s election has already handed down. Establishments in both parties are on notice. The key swing voters of the past half-decade want change. And what the change they have received to date is not change they believe in, from establishments on either side of the aisle.

The CPSIA, The ESA, The CWA and Obamacare

Sunday, November 1, 2009  |  posted by Hugh Hewitt

The federal statutes I and my law partners deal with the most are the Consumer Products Safety Improvement Act (“CPSIA”), the Endangered Species Act (“ESA”) and the Clean Water Act (“CWA”).

The CPSIA is less than a year old. The ESA and CWA are both more than 35 years old.

All three laws continue to surprise and confuse the owners and operators of the businesses they regulate, and to extract enormous costs from the private sector while burdening the overall economy with extraordinary but largely hidden costs.

On Saturday the New York Times recounted how CPSIA has devastated the toy business. What the article did not recount is how the burdens of CPSIA have extended far, far beyond toys to burden every industry in which any product is made with the sale to a child in mind.

Hardly a day goes by when either or both of the ESA and CWA operate to delay, cripple or totally block the use of land for productive, job-creating construction projects. And the toll of these statutes is increasing and becoming ever more unpredictable. The catastrophe of the water cut-off in California’s central valley as a result of the listing of the delta smelt is just one example of this extraordinary toll. (The story is well and quickly told by Janet Levy at The American Thinker.)

Very soon the activists who know how to use the ESA and the CWA (as well as the California Endangered Species Act) will be using alleged threats to the American pika from climate change to regulate or completely block projects throughout the Golden State and indeed the entire west.

What the CPSIA, the ESA and CWA all have in common is that the disastrous economic costs they are operating to exact from the private sector were not intended by the men and women who drafted them and were not foreseen by those who legislators who voted for them. Client after client arrives in our offices in various states of disbelief that Congress could have possibly intended the federal laws to operate in such destructive fashion.

The answer is always the same: Congress did not so intend, but activists, enthusiasts within bureaucracies, and the federal courts have all combined to take seemingly sensible efforts at apparently practical, small-step legislation and turn them all into regulatory behemoths with vast power to cripple or completely destroy private enterprise.

This week the Congress will be taking up 1,990 pages of unintended consequences. Nancy Pelosi’s version of Obamacare is worse by far than Harry Reid’s version of Obamacare, but they are both vast skyscrapers of ambiguity and imprecision. If either of them passes, activists, enthusiasts within bureaucracies and federal courts will take whatever emerges from the Congress and roll it forward into the very same sort of iron control from centralized authority as now flows out of CPSIA, ESA and CWA. It is crazy to expect any different result.

A couple of weeks ago I called attention to the FDA’s new war on cereal boxes. The FDA’s sudden declaration of the authority to regulate commercial speech of this sort has gone almost unremarked upon, and the industry did not itself attempt to resist it, quickly abandoning the “Smart Choice” campaign that had caused the FDA’s eyebrows to rise. That which is rewarded gets repeated, so expect more demands about advertising from the FDA and various states’ attorneys general. Expect plaintiffs’ lawyers to start filing their own cases against food producers. Expect the same sequence of law, regulation and lawsuit to play out again and again.

That’s why Obamacare should concern you. It isn’t just the obvious flaws in the plan, from the massive cuts to Medicare and the doctor-decimating impacts embedded in the plan, that will cripple the American economy’s recovery and future robust growth.

It is the years and years of unknown and unintended consequences that follow from the delegation of imprecise authority to government regulators who will be urged on by activists and who will turn to the federal courts to impose their will on the private sector.

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