The Obama Watch

The Downward Spiral

Obama's America is coming unglued. Chaos in the streets isn't far off.

By 8.24.11

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Accelerating downward spiral. That is what I have been predicting for the Obama Administration for over two years. And now it's happening. Events are spinning out of control.

Rising inflation is restricting the Fed's options for keeping the economy high on monetary stimulus crack. The result? Fast developing market chaos.

On account of President Obama's economic policies, the economy never recovered from the last recession. Now it may go back into full scale recession before any recovery occurs. We may soon be living through a reenactment of the 1930s, not the 1970s. If we do not change course, there will be a double dip recession by 2013, directly caused by the economic policies Obama already has in place under current law.

And now we have riots in Obama's Amerika, kept quiet by the media, echoing the violence in London.

Inflation and the Fed

Rapidly increasing producer price inflation is now spilling over into the consumer price index. The CPI soared in July at an eight percent annual rate, up close to four percent over the past year. The Wall Street Journal reported on Friday that these price pressures "could constrain the Federal Reserve from taking more action soon to spur economic growth and hiring." Or, as the Journal quoted J.P. Morgan Chase chief economist Michael Feroli, the budding inflation "could slow the degree to which the Fed provides further monetary stimulus."

Why is that? Because continuing to pump up the money supply could push inflation into double digits. And stopping it then will be even worse, throwing the economy into a bigger recession, just like in the 1970s.

But Rick Perry has it pegged right. The Fed is committed to pumping up the money supply right through the election, to prevent any downturn from darkening Obama's magical Dupe America reelection tour. That is why the Fed is so committed to keeping interest rates near zero until 2013. So to accomplish this, they’re running the printing presses. Inflation may well climb into double digits next year.

That inflation will force the Fed to turn off the spigot right after the election, with the contractionary effect coming in 2013, just when all the tax rate increases from Obamacare and the expiration of the Bush tax cuts will become effective. There will be a whopping recession then unless the voters remove Obama from office next year and quickly replace Obamanomics with Reaganomics, which solved a very similar problem in the early 1980s.

Obama's Strategy: Shut Down Debate

What else is contributing to national events spinning out of control? How about President Obama's abusive, deceptive rhetoric? It was evidenced in his disgraceful speech at Johnson's Controls, Inc. in Michigan on August 11, where he said:

We know there are things we have to do to erase a legacy of debt that hangs over the economy. But time and again, we've seen partisan brinkmanship get in the way -- as if winning the next election is more important than fulfilling our responsibilities to you and to our country. This downgrade you've been reading about could have been entirely avoided if there had been a willingness to compromise in Congress. See, it didn't happen because we don't have the capacity to pay our bills -- it happened because Washington doesn't have the capacity to come together and get things done.

This echoed what Obama said at a press conference soon after America's historic credit rating downgrade:

On Friday, we learned that the United States received a downgrade by one of the credit rating agencies -- not so much because they doubt our ability to pay our debt if we make good decisions, but because after witnessing a month of wrangling over raising the debt ceiling, they doubted our political system's ability to act.

Obama is saying that the downgrade resulted because the Tea Party had the temerity to debate and question his policies. See, it was a Tea Party downgrade, according to the Democrats' silly rhetoric. It wasn't Obama's record smashing national debt and first-time-ever trillion dollar plus deficits every year in office that caused the debt downgrade. No. It was the Tea Party-forced debt limit debate, that "month of wrangling over raising the debt ceiling," that supposedly indicated to the markets that "Washington doesn't have the capacity to come together and get things done."

But the debt limit debate demonstrated precisely that Congress has the ability to compromise and come together and get things done. Once the left-wing extremist Obama got out of the way, the Republican House and the Democrat Senate quickly came to agreement to raise the debt ceiling. Even before that, the GOP House acted to resolve the debt crisis -- twice -- first by passing the Ryan budget, and then by passing Cut, Cap and Balance. If the Democrat Senate had acted on either of those, and Obama had supported either one, there would have been no credit rating downgrade, and the long term deficit and debt problem would have been solved. But the Democrat Senate refused to even consider them and the President abusively and dishonestly attacked these GOP solutions.

Obama was making essentially the same point when he also said at Johnson Controls:

The only thing keeping us back is our politics. The only thing preventing these bills from being passed is the refusal of some folks in Congress to put the country ahead of party. There are some in Congress right now who would rather see their opponents lose than see America win. And that has to stop. It's got to stop.

What Obama is telling us here is that if anyone disagrees with him and his policies, then that's just politics and it's got to stop. If you oppose raising the debt limit without offsetting spending cuts, and you oppose raising taxes still more, that means you refuse to put country ahead of party and that you would rather see your opponents lose than see America win. You see what I mean by abusive, disgraceful rhetoric?

And what are those bills that are not getting passed only because of the refusal of some folks in Congress to put country ahead of party? Obama explains some of them:

Send a message to Congress to come to an agreement on trade deals that will level the playing field and open markets to our businesses -- so we can sell more goods to countries around the world. We've got a lot of Americans driving Kias and Hyundias. I want folks in Korea driving Fords and Chevys and Chryslers. I want to see billions of dollars more products sold around the world stamped with three words: "Made in America." Those trade bills are teed up; they're ready to go. Let's get it done.

Well, not exactly teed up, as the Wall Street Journal explained last weekend:

In order for Congress to ratify free trade agreements, the White House must first send the signed deals to the other end of Pennsylvania Avenue. On his three-state tour in the Midwest this week, Mr. Obama repeatedly told audiences that the Korea, Columbia, and Panama free trade deals would all be law by now if not for an obstructionist Congress. Passing the deals is something Congress "could do right now," he said.

Except that's not true. Congress can't pass the agreements "right now" because it doesn't have them. They are still sitting on the President's desk. Seriously. If you are surprised to learn this, you are not alone. White House deputy press secretary Josh Earnest only learned the news on Friday during a press conference. Asked why the FTAs haven't been sent yet, he responded, "We have not sent them over?"

More honest than the President, Obama's own deputy press secretary confessed, "We are in a place where we have seen Republicans advocating for passing these free trade agreements for quite some time."

You see what I mean by President Obama's calculated deception? There he is campaigning in the Midwest, a year before the campaign even starts, blaming congressional Republicans for failing to pass free trade agreements that they have long supported when he hasn't even sent the agreements to Congress for enactment yet! Obama figures those yahoos in Iowa, where the farm community strongly supports free trade, will never catch up to the truth.

Race Riots

Now Obama's poor leadership is having violent and dangerous consequences.

Race riots. That is the only accurate way to characterize the actions of mostly minority flash mobs suddenly appearing from Chicago to Philadelphia to the D.C. suburbs to loot white-owned retail stores and even violently attack white citizens.

The liberal mainstream media has tried to keep this quiet. But the awful truth is showing up on talk radio and in other alternative media. And if it doesn't stop suddenly, soon something will happen that cannot be covered up, and the whole country will be talking about it.

These race riots are more modest versions of the violence and mayhem we have seen in London recently. But in London they have essentially asked for it, as Joyce Lee Malcolm explained in the August 16 Wall Street Journal:

And despite the uselessness of police during the recent urban violence -- standing in line while thugs hurled bricks and bottles at them and looted and burned -- Home Secretary Theresa May initially ruled out the use of water cannons or asking for Army help, insisting on Sky News that "the way we police in Britain is not through use of water cannon. The way we police in Britain is through consent of communities."

Even self-defense in Britain is mostly illegal. Parliament as a result banned handguns in 1997. When former soldier Paul Clark turned into police a shotgun he found in his garden, he was arrested for not calling the police to come pick it up instead.

But Malcolm reported, "The ban on handguns did not stop actual crimes committed with handguns. Those crimes rose nearly 40 percent… and doubled by a decade later."

What has happened in London will never quite happen here, because America has the Second Amendment, affirmed in 2008 by the Supreme Court. Millions of Americans in almost every state hold legal conceal and carry permits, carrying handguns that can be used in self-defense. Gunowners, Tea Party activists and other grassroots patriots should act today to strengthen the recognition of the right to self-defense in their states.

If the flash mob riots don't stop, sooner or later a legally armed citizen is going to shoot someone in self-defense. Then the issue will explode in the national media. That is when grassroots and media conservatives are going to have to rally behind the shooter in support of the right to self-defense. That will powerfully frame another issue for the election.

The Future

Near the end of his August 11 speech at Johnson's Controls, President Obama concluded:

That's what Congress should be doing -- go back home, listen to people's frustrations with all the gridlock. Listen to how frustrated folks are with the constant bickering and the unwillingness to compromise and the desire to score points, even if it's at the expense of our country. And if they're listening hard enough, maybe they'll come back to Washington ready to compromise and ready to create jobs and ready to reduce our deficit -- ready to do what you sent them here to do.

Once again, if you disagree with Obama, then you're just bickering. But the GOP House has undeniably done what the people sent them to do: shut down Obama's agenda. And the people are going to take care of the gridlock next year too, by voting the Marxist infiltrator out of office.

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About the Author
Peter Ferrara is Director of Entitlement and Budget Policy at the Heartland Institute, General Counsel of the American Civil Rights Union, Senior Fellow at the National Center for Policy Analysis, and Senior Policy Advisor on Entitlements and Budget Policy at the National Tax Limitation Foundation. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under President George H.W. Bush.