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September 2009

GDP continues decline

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.7 percent in the second quarter of 2009, (that is, from the first quarter to the second quarter), according to the "third" estimate released by the Bureau of Economic Analysis.  In the first quarter, real GDP decreased 6.4 percent.

The GDP estimate released today is based on more complete source data than were available for the "second" estimate issued last month.  In the second estimate, the decrease in real GDP was 1.0 percent.

The decrease in real GDP in the second quarter primarily reflected negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, personal consumption expenditures (PCE), and exports that were partly offset by positive contributions from federal government spending and state and local government spending.  Imports, which are a subtraction in the calculation of GDP, decreased.

The full text of the release on BEA's Web site can be found at

The Growth of Government

Today the federal government continues to grow under both Republican and Democrat administrations and neither the Congress nor the President is taking a serious look at reducing the size and scope of government. The United States, especially in the 20th century, has seen a continual growth in the size and power of the federal government. The Progressive era in the early part of the 20th century saw a push by reformers to increase the regulatory power of the federal government to respond to the economic, political, and social problems that resulted from the industrialization during the Gilded Age. Progressives believed that the social contract of limited government and economic liberty was no longer sufficient to deal with the complications of a modern society.

The first wave of progressivism emerged with the presidential administrations of Theodore Roosevelt and Woodrow Wilson. The modern administrative or regulatory state emerged in the first wave of progressivism. The federal government also continued to grow during the First World War when President Wilson centralized a majority of the economy.  The Great Depression in the 1930s enabled the second wave of progressivism under President Franklin D. Roosevelt.    

The New Deal institutionalized the administrative state, modern presidency, and initiated the welfare state.   Roosevelt and the philosophy behind the New Deal argued that as the economy and capitalism changed the federal government needed to step in and provide economic security. The New Deal legacy continued through the presidential administrations of Harry S. Truman, John F. Kennedy, and in the mid-1960s President Lyndon B. Johnson built on the Roosevelt tradition by declaring war on poverty and launching the Great Society.

The current recession has provided another opportunity for progressives to call for reform and for additional Keynesian-style spending proposals. The federal budget is over $3 trillion, the national debt is $11 trillion, and the current budget deficit is approaching $2 trillion. In addition the federal government, along with state and local governments, are thirsting for additional tax revenues, but quenching that thirst is getting more difficult. The federal budget is also under tremendous stress with the looming entitlement crisis of Social Security and Medicare.

Chris Edwards, Director of Tax Policy Studies at Cato Institute, recently wrote in Tax & Budget Bulletin that “the government is also increasing the scope of its activities, intervening in many areas that used to be left to state and local governments, businesses, charities, and individuals.” Edwards reported that by 2008 “there were 1,804 different subsidy programs in the federal budget.” “We are in the midst of the largest federal gold rush since the 1960s,” noted Edwards.  This is true when examining the health-care and environmental policy proposals, and the push for new regulations to provide a new form of economic dependency.

Edwards and his colleagues at Cato Institute have done remarkable work in finding constitutional solutions to reduce government programs and spending. The current path of government growth and spending is not sustainable and perhaps policy leaders should be asking the question of what would former Treasury Secretaries Alexander Hamilton and Andrew Mellon recommend?

The views expressed in this column are those of the author and not necessarily those of the Public Interest Institute.  They are brought to you in the interest of a better informed citizenry. 

John Hendrickson is a Research Analyst with the Public Interest Institute in Mount Pleasant, IA.  

Web site:

Government is too BIG and too FAT with YOUR cash: 09/29/2009

The first four posts in this series totalled more than $60 MILLION in taxpayer abuses, coming from just four days worth of politicians announcing handouts, awards and grants of one kind or another.  Why is all this money going to Washington via taxation, instead of staying in the communities where it belongs?   Why are we tolerating the so-called leaders in Washington to act like Knights and Lords, handing out 'awards' and 'gifts' as they see fit to us lowly serfs and peasants?  The money games Washington politicians are playing with YOUR money are NOT authorized by the Constitution folks.  The money should stay in YOUR hands, not government's.

Today's Specials:

  • U.S. Rep. Boswell: Boswell announces $1.37 million in HHS Recovery Act funds for Urbandale health care non-profit
  • U.S. Sen. Grassley: $599,986 to Iowa State University and Iowa State University Book Store
  • U.S. Sen. Grassley: More than $1.5 million to the Iowa Coalition Against Sexual Assault
  • U.S. Sen. Harkin: Nearly $870,000 to address violence against women in rural areas
  • U.S. Sen. Harkin: More than $231,000 to support homeless victims of domestic violence
  • U.S. Sen. Harkin: Harkin announces more than $1.3 million in recovery funding for electronic health records initiative

The Iowa Coalition Against Sexual Assault provides $1.5 million worth of services?  Taxpayers *gave* $870,000 to address violence against women in rural areas?  Iowa has that much violent crime being committed against women who live in the country?  Why is the U.S. Department of Education *awarding* competitive grants?  Why do they have money (your money) outside the scope of policy making?  This is government run amok!

The running tally now totals more than $65 million in just five days worth of elected official announcements.  This is $65 million that should have stayed in the very communities it came from.  Our Founding Fathers did not establish this country so that career politicians would be kicking back in a leather chair sipping on scotch deciding who to hand out cash to....  YOUR cash.....

In This Corner...The Challenger

By Doug Stout

Real transparency means being able to sift through the political rhetoric and get a true view of where your elected officials stand on the important policy issues of the day. Unfortunately, for several years now, we have slid further down the slippery slope of the politics of 4th grade insults. The “I know you are…but what am I?” school yard retort to childish taunts. Civility is essential to reasoned debates and we are losing all sense of decorum in our public rhetoric, from the withering and unrelenting personal attacks on President Bush, to recent instances of shows of disrespect to President Obama, things have deteriorated.

Now, just when you thought that politics could not get any stranger, Linda McMahon, Chief Executive Officer of World Wrestling Entertainment, Inc. and wife of long time professional wrestling icon Vince McMahon has entered the political arena. Their entertainment productions include live events and the “Raw” and “Smackdown” television shows. This is not an environment in which you are going to find Iowa Olympic wrestling legend Dan Gable.

Ms. McMahon recently announced that she is running for the U.S. Senate seat currently held by Democrat Christopher Dodd of Connecticut. She becomes the fourth to join the Republican primary field. Mr. Dodd is considered vulnerable and the race is expected to be very competitive. (1) Ms. McMahon has previously been somewhat involved in GOP politics and has hired a professional campaign staff, so this does not appear to be a publicity stunt. 

Of course in the event of a tie, the four Republican candidates can always appear in a four-person elimination match, with the last one in the ring standing, winning the nomination. Anyone who would dismiss her should remember Minnesota Governor Jesse Ventura. He was the only Governor to have been pictured in a feather boa (at least intentionally), from his earlier days as Jesse “The Body” Ventura, professional wrestling champion.

Actually, adding the CEO of the WWE to the political equation can only bring more civility and respectability to the political process. Based on recent events, there could hardly be less. Our former President Jimmy Carter, serving for one very, very long term from 1976 to 1980, recently made a distasteful accusation. He was commenting on the outburst by Congressman Joe Wilson (R-SC), during President Obama’s health care speech before Congress. The outburst was clearly inappropriate and embarrassing and the Congressman promptly apologized. The House went on to vote a “resolution of disapproval” for his actions.  It is not clear what purpose was served by the resolution, given that Congressman Wilson had already apologized to the President and had his apology accepted. The resolution may have been partisan posturing, but the Congressman did make an obvious mistake in judgment.

What seems to be even poorer judgment are the comments by former President Carter. The Associated Press reported: “Former President Jimmy Carter says Congressman Joe Wilson’s outburst to President Barack Obama last week was an act ‘based on racism.’ Carter called Wilson’s comment ‘dastardly’ and part of an ‘inherent feeling’ held by some in this country who feel that a black man should not be president.” (2)

Dick Harpootlian, a former leader of the South Carolina Democratic Party issued a statement taking issue with the former President. He said the Congressman’s outburst “was asinine, but not racist.” (3)  Former President Carter’s resort to racism as a reason that many Americans oppose President Obama’s policy initiatives is both disingenuous and distasteful. It is an apparent tactic to discourage and disparage Americans who do not share the President’s policy agenda. Polls show that many of those who are upset with the current health care initiatives voted for President Obama in November. Is President Carter suggesting they “became” racists since the election?

This is the same President Jimmy Carter who on July 2, 1979, had a job DISAPPROVAL rating of 59%, (4) who blamed the American people for the bad economy because of the malaise they were suffering from, and managed to make the Presidency of Gerald Ford, who preceded him into office, look like the “good old days.”  I suppose President Carter would suggest that his disapproval ratings…far lower than the current falling ratings of President Obama…were the result of the American people’s distrust of southern peanut farmers, rather than having any reflection on the fact that he was doing a very poor job and most Americans disagreed with his policies?  President Carter’s failed Presidency ended after one term, when only 41% of Americans voted for him in the 1980 Presidential election. (5)

President Carter’s comments are particularly damaging because they have been picked up by the foreign press. Americans can judge the irresponsible comments based on actually being here and knowing that while there are certainly still some racists in America, they have nothing to do with the millions of Americans who are frustrated and dismayed by the Administration’s policy agenda.  To suggest otherwise should be beneath the dignity of a former President of the United States, whom I would hope would hold himself to an even higher standard of conduct than that of the Congressman whom he chooses to disparage.

Michael Steele, the African-American chairman of the Republican Party, called President Carter’s remarks an outrage. “President Carter is flat out wrong. This isn’t about race. It is about policy… Injecting race into the debate over critical issues facing American families doesn’t create jobs, reform our health care system or reduce the growing deficit. It only divides Americans rather than uniting us to find solutions to challenges facing our nation.” (6)

To President Obama’s credit, he has pointedly indicated that he does not share President Carter’s view of the American electorate. Robert Gibbs, his press secretary, had said the previous week that Mr. Obama did not believe the protests or opposition were based on the color of the president’s skin. (7)  After the Carter remarks an Administration spokesman reiterated that: “Obama believes that any racist sentiment against him is held by a very tiny minority that doesn’t reflect the attitudes of the vast majority of Americans.” (8)

So what then does reflect the sentiment of a vast majority of Americans?  They still want “hope and change” in Washington, D.C.  However, as the President’s opposition pointed out prior to the last election…it matters very much exactly what kind of “hope and change,” we are talking about. 

There is great skepticism about the direction that President Obama, Senate Majority Leader Harry Reid, (a September poll shows the Senator trailing either of his 2 likely GOP opponents by 7 and 10 points respectively in his race for re-election as a Senator from Nevada. (9)) and House Speaker Nancy Pelosi are taking our country. A September Harris poll shows the President falling into negative territory himself, with 49% positive and 51% negative.  The same poll asked the question of whether the country is headed in the “right direction” or “wrong direction.”  The poll said 42% said we were headed in the right direction and 58% said the country was going down the wrong path. (10)

So does this bode well for Republicans?  Well, it certainly is troubling news for the Democrats.  The generic “Democrat vs. Republican” polling questions have shown large gains for the Republicans in the last six months.  However, there is also another factor at work. The number of Americans who are registered to vote as Independents has now reached 43 percent. (11) This may suggest that the people have been listening to the shrill voices on both sides of the political aisle and have decided they don’t want to participate.  Americans continually say that want more cooperation and problem solving from their elected officials and yet most political observers would say that over the last three years, the level of polarization and hostility has reached new heights.

It does not take a political scientist to remember the venom and disrespect that were hurled at President George Bush on a personal level during the final years of his term in office. In spite of the wailing voices on the political left about the tone of the current political opposition to President Obama’s policy agenda…it is certainly no more bitter than the disgraceful things that were said about President Bush.  In fact, the millions of voices raised in opposition are primarily directed at the President’s ambitious and misguided policy objectives. His personal popularity is still higher than that of his policies…and he has only accelerated the decline of his personal popularity when he tries to rally the American public behind policies they clearly are deeply concerned about.

So if you look “behind the curtain” in Washington, D.C, how do the political parties really feel about bipartisanship? I would recommend an article that appeared in Politico on September 14, entitled “The great myth: bipartisanship.”  It may give some insight on why the percentage of registered Independents is on the rise…and why the country still calls out for “hope and change,” which was never about a call for bigger and more active government, but simply a call to reform a process which the public clearly sees as broken.

“In truth, Democratic offers to reach across the aisle — and Republican demand that they do so — are largely a charade, performed for the benefit of a huge bloc of practical-minded voters who hunger for the two parties to work together and are mystified that it never seems to happen…This ritual — publicly trumpeting the virtues of bipartisanship while privately navigating a Washington status quo with a bias for partisan combat — is playing out across virtually every major issue the White House and Congress confront…There are plenty of reasons that bipartisanship gets talked about more than it gets practiced. Start with a redistricting process that allows the two parties to conspire to make a big chunk of House seats virtual locks for one party or the other, meaning the typical member has scant reason to gravitate to the ideological center. Add to that the decision by activists in both parties to increasingly target centrists in primary fights — giving ideologues an even stronger hand.” (12)

While we have not been spared the hand-to-hand combat of political battles in Iowa, we can be thankful that we have operated under a political reapportionment system which is considered about as equitable as can be achieved under a political system.  It is often used as a positive example by reformers eager to change the more blatant partisan and incumbent protection redistricting schemes used in other states. 

“One vivid sign of the times has been the GOP massacre in the Northeast. It wasn’t long ago — the 106th Congress of nine years ago to be precise — that Republicans held 37 House seats and eight Senate seats in the Northeast (our count includes the New England states plus New York, New Jersey, Pennsylvania, Delaware and Maryland). Today, there are 17 House Republicans, most of them in the conservative rural areas of those states and three senators.” (13)

Many of those seats were held by what some conservatives derisively label RINOs (Republicans In Name Only). Moderate incumbent Republicans were challenged and defeated in primaries only to see their more conservative replacements, out of place in the progressive politics of New England, defeated by Democrats in the general election.  Those Republican moderates provided the votes to elect Newt Gingrich Speaker of the House.  If they were still there, Nancy Pelosi would not be setting the agenda and socialized medicine would not be on the House agenda.

With the loss of so many moderate Republicans, you would think that RINOs would be on the endangered species list.  However, fear not, that will never happen. Since the basic tenet of the “purity of party concept” defines a “RINO” as anyone who is less conservative than I am…there is always a next target in line, even though the current trend has brought the Republican Party to the brink of irrelevance in Washington. Earlier this year, there were even calls that Congressman Steve King should face a primary, because he did not take a conservative enough position on an issue.  By almost any measure, Congressman King is one of the most conservative members in the U.S. House of Representatives and is currently Chairman of the Conservative Opportunity Society.  It only goes to prove that no one is safe from being labeled by some in the party as “not conservative enough to wear the brand.” 

Although the media focuses more attention on the GOP internal battles, conservative Democrats face the same challenges. The quest for purity seems to be actively at work in both parties, as the ranks of Independent voters continue to increase. The last points from the article to bring to your attention are the “cycle of revenge” and the impact that a 24-hour political media cycle is having on the increasingly polarized and dysfunctional political dynamics of our country:

“The House itself seems to grow more absurdly partisan with each passing year. Like children screaming, ‘he did it first,’ party leaders keep making it harder for the out-of-power party to have its voice heard in the legislative process — and justifying it by saying that’s how they were treated in the past.  Roll all of this together, and douse it with a new media culture that guarantees plenty of cable TV time and fundraising success for the most flamboyantly confrontational figures, and the partisan fire burns wildly. With no clear national leader in elected office, talk radio hosts such as Rush Limbaugh, TV personalities such as Glenn Beck and websites such as the Drudge Report are dominating the GOP. They have much more power than John Boehner or Mitch McConnell to drive a story narrative — or get conservative activists worked up. A similar dynamic is playing out on the left, too. The Huffington Post, the fast-growing and highly influential site for liberals, and the most popular figures on MSNBC in prime time such as Keith Olbermann are often popularly caricatured as being in the tank for Obama. That is often true. But it is also true that liberal commentators have criticized Obama for being too accommodating. Like the echo chamber on the right, they thrive on partisan fights, reward partisan sniping, and make it harder for party leaders to seek common ground.” (14)

Transparency is not just about knowing how your politicians vote, it is about trying to understand why they vote the way they do and why they speak the way they do. There is an old saying that you should never watch the process of how sausage and laws are actually being made…but it is becoming incumbent on us to hold our noses and look behind the curtain, because the process is broken and our Republic depends on it to work effectively.


1 Chris Cillizza, “The Fix – Morning Fix: A McMahon in the Senate?” The Washington Post, September 16, 2009, (September 18, 2009).

2 Greg Bluestein, “Carter Says Wilson’s comments ‘based on racism,’” Associated Press, September 16, 2009, (September 18, 2009).

3 Ibid.

4 Jennifer Agiesta, “Approval Highs and Lows – Behind the Numbers,” The Washington Post, July 24, 2007, (September 18, 2009).

5 “United States presidential election, 1980,” Wikipedia, n.d.,,_1980 (September 18, 2009).

6 Kate Phillips, “Carter’s Racism Charge Sparks War of Words,” The Caucus Blog - New York Times, September 16, 2009, (September 18, 2009).

7 Ibid.

8 Kenneth Walsh, “Obama Doesn’t See Race as a Factor in Criticism,” U.S. News & World Report, September 16, 2009, (September 18, 2009).

9 Kathleen Hunter, “Despite Sagging Polls, Reid Sees Happy Ending,” CQ Politics, September 15, 2009,, (September 18, 2009).

10 “Obama’s Negative Ratings, and Those Who Think Country Is on the Wrong Track Continue to Rise,” Business Wire from Reuters, September 17, 2009, (September 18, 2009).

11 “Washington Post-ABC News poll,” The Washington Post, September 2009, (September 18, 2009).

12 Jim VandeHei and Mike Allen, “The great myth: bipartisanship,”, September 14, 2009, (September 18, 2009).

13 Ibid.

14 Ibid. 

Doug Stout is a Research Analyst with Public Interest Institute.

The September 2009 IOWA TRANSPARENCY NEWSLETTER can be viewed at Public Interest Institute’s government transparency web site,

Reprinted by permission from IOWA TRANSPARENCY NEWSLETTER, a publication of Public Interest Institute.  The views expressed in this publication are those of the authors and not necessarily those of Public Interest Institute. They are brought to you in the interest of a better-informed citizenry.


Company backed by Gore gets millions of your taxpayer dollars

The federal government has loaned more than half-a-BILLION dollars of your money to a start-up automotive company backed by former Vice President Al Gore.  

In a report by the The Wall Street Journal, Fisker Automotive Inc. has received $529 million in taxpayer money to build hybrid sports cars.  Here's the problem, Fisker Automotive doesn't even have any retailers to sell the car here in the U.S. and the vehicle is going to be built in Finland.  And here's another problem, the price tag of the limited production vehicle will run at approximately $88,000. 

Now how does that help middle-class Americans?  You just got raped - again.

Contact your elected officials in Washington.  You set the agenda, don't let them do it - it literally COSTS us to let them do it.

Senator John Kerry thinks you're stupid

Here's another example of why a growing number of people are participating in tea parties and expressing their discontent with Washington.....

Senator John Kerry has apparently realized that the term 'Cap n Trade' has a hugely negative connotation with the public.  So what does Kerry do?  Try to fool you.  Kerry sought to change the language in the climate bill he is proposing, calling it a 'pollution reduction' bill instead of what it is - a tax increase on energy use and does nothing to reduce pollution.

From the NY Times: Kerry last week sought to change the vernacular surrounding the climate bill and sell its concepts more broadly, insisting it is not a "cap and trade" proposal but a "pollution reduction" bill. "I don't know what 'cap and trade' means. I don't think the average American does," Kerry said. "This is not a cap-and-trade bill, it's a pollution reduction bill."