Arthur Laffer comments on the risks posed by the bailout, observing that the current pricetag is approximately $3 trillion, or 20% of the entire U.S. economy:

It is true, as the proponents of these stimulus packages argue, that recipients of government checks will spend more than they otherwise would have spent. And, that increased spending will have a multiplier effect increasing spending even further. But this is only part of the story.

The government can only transfer resources; it can’t create resources. There is no tooth fairy. Every dollar given to someone comes from someone else. The government can’t bail some people out of trouble without putting other people into trouble, plus a hefty “toll for the troll.”

. . .

To see this point more intuitively, imagine what the “stimulus effect” would be if they borrowed the $700 billion from the same people to whom they gave the $700 billion and then promised to raise their taxes by enough in the future to pay off their bonds. Where’s the stimulus in that?

According to Bloomberg:

Officials of the three automakers told members of Congress this week that they had studied a pre-arranged bankruptcy, championed by Republican lawmakers such as Senator Bob Corker of Tennessee, before dismissing the idea as unworkable.

However, now Obama might be interested in pre-packaged bankruptcies for the Big 3:

President-Elect Barack Obama`s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.

Obama’s team has already contacted at least one bankruptcy-law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.

One blogger thinks so.  Given the divisions in the country – this blogger has a good point:

Our Founding Fathers understood one truth about political philosophy: To find common ground is sometimes impossible.  When disagreement between political opponents rests on fundamental ideological principles, one side must forfeit its core beliefs in the name of unity, or suffer defeat.  Consequently, to unify a young nation without engaging in an immediate civil war, the framers of the Constitution set up a system of Federalism that has since been abandoned by both political parties to America’s detriment.

Federalism is the system of dividing government and political power between the States and the Federal government.  This form of decentralization guaranteed by the 10th Amendment of the Constitution ensures that regardless of which ideology achieves power at the federal level, it would not be granted monopolistic tyranny over minority views. . . .

Since Ronald Reagan, the Republican Party has doubled down on remaking the federal government in its own image.  It went from a Party that advocated local control over education and accountability, to using Jimmy Carter’s Department of Education to create a “conservative” federal program called No Child Left Behind. . . .

The greatness of Federalism is that States can freely experiment with public policy without significant political difficulty.  Subsequently, if the ideas prevail, other states in the Union can mimic them.  If the ideas fail, individuals can “vote with their feet” and leave.  Conversely, if ideas crash at the federal level, our entire Country experiences a disaster . . .

Not only are there political differences between libertarians and social conservatives, but also there are cultural differences between different regions of the Country.

. . . San Francisco has few cultural similarities to Montgomery, Alabama.  This is not a moral judgment; it is just a reality that we need to accept.

The great irony is that if the Republican Party adopts Federalism as a major goal of its Party platform, it will appeal to people across the political spectrum, even some Democrats.  The reason is obvious: Federalism offers the individual more control over his or her life.  The only tradeoff is that one must allow someone from across the Country to have that same liberty. . . .

Lastly, it must be noted that the term, “States’ Rights” has a pejorative connotation gained from the era of Jim Crow Laws.  This may explain why Republicans recently have abandoned the policy for fear of being labeled a racist.  Nevertheless, fear that an ignorant few could engage in an ad hominem attack is no reason to avoid educating the masses of your true laudable intentions. . . .

In conclusion, the Republican Party has only one option to avoid being swept into the dustbin of history.  It must offer a solution to empower the masses to take control over their own lives.  For the same reasons that the Founding Fathers did in the past, the Republican Party must unite around Federalism.   Do not forget that unity via a decentralized government is why we are called the United States in the first place.

This article from the Washington Post details Obama’s amazing e-campaign, described as a “multifaceted digital operation”:

• Barack Obama raised half a billion dollars online: 3 million donors made a total of 6.5 million donations online adding up to more than $500 million.  Of those 6.5 million donations, 6 million were in increments of $100 or less.  The average online donation was $80, and the average Obama donor gave more than once.
• Obama’s e-mail list contains upwards of 13 million addresses.  Over the course of the campaign, aides sent more than 7,000 different messages, many of them targeted to specific donation levels (people who gave less than $200, for example, or those who gave more than $1,000).  In total, more than 1 billion e-mails landed in inboxes.
• A million people signed up for Obama’s text-messaging program.  On Election Day, every voter who’d signed up for alerts in battleground states got at least three text messages.  Supporters on average received five to 20 text messages per month, depending on where they lived — the program was divided by states, regions, zip codes and colleges — and what kind of messages they had opted to receive.
• On MyBarackObama.com, or MyBO, Obama’s own online social network (“socnet”), 2 million profiles were created.  In addition, 200,000 offline events were planned, about 400,000 blog posts were written and more than 35,000 volunteer groups were created.  Some 3 million calls were made in the final four days of the campaign using MyBO’s virtual phone-banking platform.  On their own MyBO fundraising pages, 70,000 people raised $30 million.  The campaign even set up a grassroots finance committee that was inspired by the national finance committee’s high-dollar bundlers.  In the grassroots committee, though, supporters were trained to collect small-dollar donations from their friends, relatives and co-workers.
• Obama has 5 million supporters in other socnets.  He maintained a profile in more than 15 online communities, including BlackPlanet, a MySpace for African Americans, and Eons, a Facebook for baby boomers.  On Facebook, where about 3.2 million signed up as his supporters, a group called Students for Barack Obama was created in July 2007.  It was so effective at energizing college-age voters that senior aides made it an official part of the campaign the following spring.  And Facebook users did vote: On Facebook’s Election 2008 page, which listed an 800 number to call for voting problems, more than 5.4 million users clicked on an “I Voted” button to let their Facebook friends know that they made it to the polls.

Thanks to The Next Right for linking the story.

From an email sent by RebuildTheParty.com:

Watch for our new site to go up in the next couple of days.  The next version will include a full list of endorsees, self-organizing and networking features and a scorecard to highlight responses to the plan by potential candidates for RNC Chairman.  And we’ll create a space for highlighting the best solutions from our ideas site on how to modernize the way we run and win campaigns. 

Many have expressed strong interest in devoting time and resources to rebuilding the party.  We’ve heard you.  In addition to better tools for self-organizing, we’ll be rolling out more specific opportunities to channel your enthusiasm in the coming weeks.  Stay tuned!

This is good.

Good points by Alan Reynolds:

Before “loaning” billions more in taxpayer money to some very bad credit risks, simply because they are old American brands associated with Detroit, we might ask what distinguishes these companies from others.

Follow the link to see what, if anything, distinguishes the “Big 3″ from other auto manufacturers.

Dick Morris comments on the effect of the bailout and the recent G-20 meeting that Bush hosted:

Will Obama govern from the left? He doesn’t have to. George W. Bush has done all the heavy lifting for him. It was under Bush that the government basically took over as the chief stockholder of our financial institutions and under Bush that we ceded our financial controls to the European Union. In doing so, he has done nothing to preserve what differentiates the vibrant American economy from those dying economies in Europe. Why have 80 percent of the jobs that have been created since 1980 in the industrialized world been created in the United States? How has America managed to retain its leading 24 percent share of global manufacturing even in the face of the Chinese surge? How has the U.S. GDP risen so high that it essentially equals that of the European Union, which has 50 percent more population? It has done so by an absence of stifling regulation, a liberation of capital to flow to innovative businesses, low taxes, and by a low level of unionization that has given business the flexibility to grow and prosper. Europe, stagnated by taxation and regulation, has grown by a pittance while we have roared ahead. But now Bush — not Obama — Bush has given that all up and caved in to European socialists.

The Bush legacy? European socialism. Who needs enemies with friends like Bush?

David Brooks offers a sobering view of the future:

In this recession, maybe even more than other ones, the last ones to join the middle class will be the first ones out. And it won’t only be material deprivations that bites. It will be the loss of a social identity, the loss of social networks, the loss of the little status symbols that suggest an elevated place in the social order. These reversals are bound to produce alienation and a political response. If you want to know where the next big social movements will come from, I’d say the formerly middle class.

  “Make it work.” 

At least, that’s what John J. Pitney Jr. says:

In his 1981 inaugural, Ronald Reagan famously said: “In this present crisis, government is not the solution to our problem; government is the problem.” He was right. Errors in monetary policy had led to stagflation, and federal regulations had the perverse effect of creating gasoline shortages. But many people forget what he said moments later: “[I]t’s not my intention to do away with government. It is rather to make it work-work with us, not over us; to stand by our side, not ride on our back.”

The key words are “make it work.” We conservatives believe in government that is limited and effective. Washington should not try to do everything, but when it does take on a task, it should do it well. That is why Hurricane Katrina was a political disaster for the Republican party. Rightly or wrongly, most people thought that the Bush administration had responded ineptly, and the perception of incompetence dogs the party to this day. Republican governors can help repair the damage by supplying models of skillful conservative governance. So when we’re seeking answers to our political problems, we should look not just to Washington but to Juneau, Indianapolis, and Baton Rouge.