Real Story of the Campaign: President’s Crony Capitalism Prolonged the Downturn | 09.11.12 | HughHewitt.com

Last week, the Democrats in Charlotte partied as if there were no tomorrow… and no yesterday.  Friday morning, following the president’s peculiarly disconnected speech of Thursday night, reality returned.

Last week’s jobs numbers – few new ones, an entire city of Americans dropping out of the workforce in the month before – were enough to sink any Republican administration this close to an election.  Instead, with the president’s support in editorial offices around the country, this latest sign of economic policy failure rated barely a one-day story.

Instead this week, all the talk is of the Democratic convention’s bounce – the uptick for the president in the polls that came in the days after the delegates went home.

We are in the manic-depressive stage of the campaign.  Every poll that shows one party or the other ahead will lead to euphoria in one camp and the popping of Xanax tablets in the other.  But if you’ve been on the inside of a few of these races, you know to say goodbye to all that.  Politics is like baseball (or any number of other sports).  A team may surge at one moment, only to lose its momentum in the next.  Pros don’t let the moment-to-moment state of play phase them.  They keep focused on the game.

In this case, a pro would notice that in their convention, the Democrats set a number of traps… for themselves.

Take, for example, Joe Biden’s answer to Governor Romney’s challenge that the administration could not say we are all better off than four years ago.  Not so, said the so-often-misspeaking vice president, “General Motors is alive and Osama Bin Laden is dead.”

And, yes, it is true that after a decade of unceasing labor by tens of thousands of patriots, and after what chroniclers have reported was a long period of indecision on his part, the president finally gave the word, and Seal Team Six finished the job.

And it is right for the president to receive credit for his part – though I, for one, would have preferred it if he and the vice president had accepted credit by giving credit… to the SEALS, to the intelligence community, to other branches of the military that not only supported this mission but fought the Afghan and Iraq Wars, to the Bush team who did so much to build our intelligence and military capabilities, to the American people who supported the more than decade-long effort, not just politically and financially but with the time and, too often, the lives of their sons and daughters.

General Motors is another matter.

Any number of financial experts have noted that the number of jobs lost in the bailout was not much, if at all, different than what would have happened in a normal bankruptcy.  The big difference, according to a recent Heritage Foundation study (http://tinyurl.com/6mhb4e4), was the treatment of the United Auto Workers.

The union’s pension fund was bumped ahead of senior bondholders, shredding the laws of contract.  The government’s $26 billion “investment” went not to rescuing GM but the UAW’s pension fund, most of which “investment” the taxpayers will never see again.  At the same time, according to the Heritage study:

“GM employees who belonged to other unions received particularly harsh treatment. Approximately 2,500 employees at GM’s Moraine, Ohio, assembly plant belonged to the [International Union of Electrical Workers]. They were among GM’s most productive workers…. The bank­ruptcy deal that the Administration oversaw barred these laid-off IUE members from transferring to any of the UAW facilities. While GM has rehired many laid-off UAW members, IUE employees have remained on the sidelines.”

More and more the GM bailout looks not like an even-handed rescue but a massive injection of crony capitalism into the American system.

More and more, it looks like a good case study of why the Administration’s economic policies have failed and we got that terrible jobs report last week.

The president keeps saying that the low taxes and freer markets of the Reagan years and beyond were the reason for the “mess we’re in.” To him, government intervention in the economy is the solution.

But didn’t we all live through 2008?  Wasn’t the real reason for the crisis the freezing up of the financial markets when the Fannie Mae and Freddie Mac sponsored and engineered housing bubble burst?  What I am saying is, wasn’t crony capitalism the clear and evident cause of the downturn?

And in an economy that for nearly half a century has been driven by entrepreneurship and global trade, aren’t lower taxes, less regulatory intrusion, more open global markets, stronger not weaker rule of law and less not more government spending the essentials for renewed growth?

The convention of dunces that met in Charlotte could not be expected to grasp this, but the president’s policies have not rescued the economy.  They have prolonged the downturn.  And they are the reason the cold news of Friday morning followed last Thursday’s hot night of speeches.