From the Cato article:

But wait: In the Wall Street Journal, Whitacre says the company has made a $5.8 billion payment to the governments of the United States and Canada. But don’t I recall that the GM bailout was $50 billion? Shikha Dalmia of the Reason Foundation explains the whole story in Forbes: First, part of the bailout went into an “escrow fund,” and that government money is being used to pay back the small part of the bailout that was officially a loan. Second, GM is asking for another $10 billion loan to retool its plants to meet the stiffer Corporate Average Fuel Economy standards, and paying back one government loan — with other government money — will make it easier to get another government loan.

And finally, of course, most of the bailout money was transferred to GM in return for a 60 percent stake in the company. And the taxpayers will get that money back if and when GM becomes a publicly traded company again, provided that the company’s market capitalization is eventually higher than it’s ever been in history. Don’t hold your breath.

These are called GM ads, but they could just as well be called BS ads.

General Motors and Chrysler are dead to me, even if they repay Big Brother for their bailouts.  This kind of dishonesty only underscores my dislike for GM.

There is no doubt that wresting control of Congress away from these power-drunk government-loving statists will clearly be a good thing, and no sane person would suggest anything less than a full-bore attempt to win every possible seat.  Frankly, the future of the Republic depends on it.  But perhaps simply being close enough to a 50/50 split would be a better long-term result for the GOP as long as they can still obstruct the statist agenda of Obama and his minions.  While controlling at least one half of Congress would go a long way toward stopping Comrade Obama’s frantic rush toward socialism, let’s not forget that undoing the damage done by this administration is going to require control of the White House.  Even a lame duck Obama wields a difficult-to-override veto and there is no chance of gaining a two-thirds majority of both houses in 2010.  Our primary goal is to remove the most radical President in US history from office after one term, and being the minority party in 2012 would allow the GOP to adopt a different position as complete outsiders.

Rasmussen makes some other points about Evan Bayh’s retirement and the Scott Brown election that are worth watching as well.  But his point about the strategy of remaining the minority party has some real merit.  The perfect solution would be a 50/50 split in the Senate, which would give the dumbest man in politics something to do, and perhaps being down only a vote or two in the House would suffice.  A second term for the least qualified, most radical President in history would likely be the death knell of American Exceptionalism and may also be the final nail in the statist-built coffin for the American Experiment, a liberty first philosophy in which the freedom-loathing Mr. Obama simply does not believe.

Bad economic policies can throw economies into downturns, and delay recoveries. Keynesian economics and rising effective tax rates produced four worsening inflation/recession cycles in and around the 1970s: 1969-1970, 1973-1974, 1979-1980, and 1982.

But Reaganomics was so successful that it all but abolished the business cycle for a generation. The economy took off at the end of 1982 on a 25-year economic boom interrupted by only two, short, shallow recessions in 1990-1991 and 2001. That is why today we no longer recognize the natural workings of the business cycle.

He makes a good point.  Several years ago, well before our current government-caused financial crisis, it dawned on me that I was incredibly lucky to have lived my entire adult life in such comfortable and successful times.  Most people have indeed forgotten that there is a natural business cycle.

The slow and weak recovery from the recession, which has lasted almost two years (a postwar record), shows yet again the failure of Keynesian economics, continuing a long, unbroken record of failure stretching back to the 1930s.

But the Obama Administration came into office knowing that the economy would ultimately recover as the business cycle turned up naturally, and planned to reap the political credit, enabling still greater leaps of neo-socialism. Internally, they are surprised and miffed that it has taken so long, not understanding that their own, blindly anti-market policies only delayed recovery.

Virtually every economic decision made by Mr. Obama since the start of his presidency has perplexed me.  Admittedly, by late 2008 it was obvious to me who this character was and I fully expected him to govern like a naïve leftist, at least initially.  But having witnessed a few of these cycles I also predicted that the self-preservation that often springs from plunging approval ratings would force some economic pragmatism reminiscent of Bill Clinton’s triangulations in the mid-nineties.  However, this President’s ideologically based proposals seem so clearly bad for the economic outlook that I am left with only two choices for explanations.  Either they really are that clueless about economics or their ideology simply trumps it.  Neither of those scenarios bode well for Americans, particularly the future generations about whom today’s liberals seem so coldly unconcerned.

Quoting Art Laffer (of Laffer Curve fame), the author makes the argument that 2010 will be the best economic year of President Obama’s reign.  First, there is a natural bounce-back that can be expected after this deep a fall.  Combined with the effects, albeit short term, of the massive monetary expansion by the Federal Reserve and an artificial heightened productivity resulting from an attempt to beat the tax increases of 2011 this should cause a bubble of growth in 2010.

But Laffer ominously continues that “when the U.S. economy comes to 2011, the train’s going to come off the tracks.”  He argues that the effect of the massive monetary expansion by the Fed will be “petering out” and points out that changes to tax policy are going to contribute to this economic stagnation and collapse:

“And we haven’t even begun to talk about the tax rate increases of 2011. These purely ideological abuses of economic policy will end up punishing working people nationwide. The top income tax rate is scheduled to increase by close to 20%, the capital gains tax rate by at least 33%, and the top dividends tax rate by 164%. Further tax increases in the pending health care legislation would raise these tax rates still more.”

The article’s author closes with this assessment:

Again, just the opposite of the long-term economic boom that followed the 1982 downturn when Reagan first slayed inflation, the flowering of growth in Obama’s second year will be followed by long-term stagnation and economic decline for America, slaying the American Dream, until President Obama’s neo-socialist economic policies are reversed.

I think that the writing is already on the wall for the November 2010 elections.  It will almost certainly be a disaster for the Democrats.  If Laffer’s dismal economic forecast is accurate, the 2012 elections could be an epic landslide reflecting an outright rejection of the American left’s love affair with Big Government Keynesianism.

Now enjoy this enjoyably funny video of “Keynes and Hayek” rapping about their conflicting economic theories.

Collectivists sell their politics with a promise of “equality,” generally understood by their audience as a promise to redistribute the wealth of the rich to improve the lives of the poor… but this is a lie. The upper class in a communist, fascist, or socialist government is fantastically wealthy. Most of the “redistribution” comes at the expense of the middle class, which shrinks as the lower class grows. Every form of collectivist government, including twenty-first century American socialism, declares war on the middle class, or tries to lure them into submission with promises of benefits.

While the poor are initial supporters of collectivism, that changes when the results of that system come home to roost:

The desperately poor are generally reliable supporters of socialist politics. Someone who pays no taxes will understandably tend to support endless expansion of government benefits. Eventually, members of the working poor may come to realize their own prospects suffer when too much economic damage is sustained by those who employ them. It follows that high rates of long-term unemployment will generally increase the size of the dependency class, which produces more political rewards for statists who promise hefty government benefits… and extracting resources from the economy to pay for those benefits causes the economy to contract further, producing more unemployment.  Unemployment is a malignant tumor.

Finally, the brilliant Doctor Zero describes the Cloward-Piven like results (and intentions) of the sort of state-run health care that our current Marxist ruling junta is attempting to force on us:

Collectivist politicians have much to gain by increasing the size of the dependency class. The fundamental political purpose of State-controlled health care is to transform much of the middle class into the lower class. The economic damage from spending trillions of dollars on a monstrous new government program in the middle of a recession is a feature, not a bug. A middle class dependent on the benevolence of the State for its health care will become less troublesome, less independent, and less able to begin the climb into the upper class through small business formation. Fewer small businesses means fewer working poor rising into the middle class.

Read the whole thing, and consider following Doctor Zero on Twitter.  Doc Zero does not tweet a lot, but it is definitely quality over quantity.

Named after Columbia University sociologists Richard Cloward and Frances Piven, the general idea behind the strategy is to intentionally overload the government system so much that it causes a crisis and collapses with a subsequent loss of confidence that Cloward and Piven hoped would “hasten the fall of capitalism.”  I am reminded that my late father, a conservative, had a good but incredibly liberal friend who would bluntly argue that the cost of avoiding violent class warfare in America is the network of welfare programs that keep the poor complacent.  As much as the idea disgusts me I have always thought that he was at least partly right.  The article at DiscoverTheNetworks points out that the basic idea behind the Cloward-Piven strategy is to break the system in order to make the poor miserable enough to rebel.  Not surprisingly to those of us watching the tactics being employed by the current ruling party, the author also mentions their connections to the radical Saul Alinsky, whose ideas apparently so inspired President Obama:

In their 1966 article, Cloward and Piven charged that the ruling classes used welfare to weaken the poor; that by providing a social safety net, the rich doused the fires of rebellion. Poor people can advance only when “the rest of society is afraid of them,” Cloward told The New York Times on September 27, 1970. Rather than placating the poor with government hand-outs, wrote Cloward and Piven, activists should work to sabotage and destroy the welfare system; the collapse of the welfare state would ignite a political and financial crisis that would rock the nation; poor people would rise in revolt; only then would “the rest of society” accept their demands.

The key to sparking this rebellion would be to expose the inadequacy of the welfare state. Cloward-Piven’s early promoters cited radical organizer Saul Alinsky as their inspiration. “Make the enemy live up to their (sic) own book of rules,” Alinsky wrote in his 1972 book Rules for Radicals. When pressed to honor every word of every law and statute, every Judaeo-Christian moral tenet, and every implicit promise of the liberal social contract, human agencies inevitably fall short. The system’s failure to “live up” to its rule book can then be used to discredit it altogether, and to replace the capitalist “rule book” with a socialist one.

Saul Alinsky

The author points out that the approach called for “cadres of aggressive organizers” to use “demonstrations to create a climate of militancy.”  In fact, Cloward and Piven recruited an organizer named George Wiley to do just that.  His group, the National Welfare Rights Organization, enjoyed such successes in New York that they did cause the desired collapse:

Regarding Wiley’s tactics, The New York Times commented on September 27, 1970, “There have been sit-ins in legislative chambers, including a United States Senate committee hearing, mass demonstrations of several thousand welfare recipients, school boycotts, picket lines, mounted police, tear gas, arrests – and, on occasion, rock-throwing, smashed glass doors, overturned desks, scattered papers and ripped-out phones.”These methods proved effective. “The flooding succeeded beyond Wiley’s wildest dreams,” writes Sol Stern in the City Journal.  ”From 1965 to 1974, the number of single-parent households on welfare soared from 4.3 million to 10.8 million, despite mostly flush economic times. By the early 1970s, one person was on the welfare rolls in New York City for every two working in the city’s private economy.”As a direct result of its massive welfare spending, New York City was forced to declare bankruptcy in 1975. The entire state of New York nearly went down with it. The Cloward-Piven strategy had proved its effectiveness.

These are precisely the same tactics employed by groups like ACORN to intimidate elected officials into acquiescing to their demands, such as forcing lending institutions to make loans to people with bad credit.  The author argues that this approach requires surprise and that “when the public caught on to their welfare scheme, Cloward and Piven simply moved on, applying pressure to other sectors of the bureaucracy, wherever they detected weakness.”  In fact, he points out that followers of the Cloward-Piven strategy successfully shifted their focus to our electoral system, with sinister results:

The new “voting rights” coalition combines mass voter registration drives -- typically featuring high levels of fraud -- with systematic intimidation of election officials in the form of frivolous lawsuits, unfounded charges of “racism” and “disenfranchisement,” and “direct action” (street protests, violent or otherwise). Just as they swamped America’s welfare offices in the 1960s, Cloward-Piven devotees now seek to overwhelm the nation’s understaffed and poorly policed electoral system. Their tactics set the stage for the Florida recount crisis of 2000, and have introduced a level of fear, tension and foreboding to U.S. elections heretofore encountered mainly in Third World countries.  Both the Living Wage and Voting Rights movements depend heavily on financial support from George Soros‘s Open Society Institute and his “Shadow Party,” through whose support the Cloward-Piven strategy continues to provide a blueprint for some of the Left’s most ambitious campaigns.

In an article at the Washington Times subtitled Using the poor to tear down capitalism, Col. Robert Chandler points this out and shows that it not only was proven viable when the approach successfully bankrupted New York City in the 70s but that our sub-prime financial crisis was engineered with these very tactics:

The socialist test case for using society’s poor and disadvantaged people as sacrificial “shock troops,” in accordance with the Cloward-Piven strategy, was demonstrated in 1975, when new prospective welfare recipients flooded New York City with payment demands, bankrupting the government. As a consequence, New York state also teetered on the edge of financial collapse when the federal government stepped in with a bailout rescue.

The 2008 financial crisis has all of the earmarks of a Cloward-Piven strategy assault against the capitalist system. Stanley Kurtz of the Ethics and Public Policy Center recently explained that “community organizers” (1) “intimidate banks into making high risk loans to customers with poor credit,” (2) “occupy private offices, chant inside bank lobbies, and confront executives at their homes,” and, through these thuggish tactics, (3) compel “financial institutions to direct hundreds of millions dollars in mortgages to low-credit customers.” “In other words,” Mr. Kurtz explained during a presentation at the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal, “community organizers help to undermine America’s economy by pushing the banking system into a sink-hole of bad loans.”

We have seen the results of the Cloward-Piven strategy, from the sub-prime crisis to [always left-wing] voter fraud in any swing state, these people are playing for keeps.  Working in the trenches with these very people, attempting to destroy the system from within so that he could remake it, was our community organizer president.  Saul Alinksy would be so proud.

We need to stop underestimating our opponents and the depths to which they will sink to force their statist ideology on Americans.