Politicians could suffer as PACT languishes

This is off topic, but spring practice isn’t here yet and part of this relates to the University.

The economic problems could undermine confidence in state and national politicians as things continue to worsen. Today, the Birmingham News reports the state’s prepaid tuition plan has seen its asset value decline more than 45 percent in the last year-and-a-half.

According to the News, “The Alabama Prepaid Affordable College Tuition trust fund currently has assets totaling $484 million, said Gregory Fitch, chairman of the Alabama Commission on Higher Education. In September 2007 the fund had assets totaling $899 million, accord­ing to program documents. In September 2008 the fund totaled $606 million.”

The PACT trouble could undermine state treasurer Kay Ivey’s run for higher office. Ivey has long been one of my favorite politicians. She is smart and entertaining when speaking to civic clubs like Rotary. But can this be seen as anything but bad for her candidacy for higher office?

And that is sad. I would have considered her strongly if she chose to run. According to some political polling, Ivey enjoyed good name recognition in the state (big surprise there since she won statewide office.) Maybe she would have had a shot.

Ivey’s candidacy could be the latest victim of the deepening economic panic that began under George W. Bush, but has deepened under the incompetence of Barack Obama. The Wall Street Journal spelled out the problems of pursuing the failed economic policies of LBJ, Richard Nixon and Jimmy Carter.

According to the Wall Street Journal, “The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they’re no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

“Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress — unrebuked by Mr. Obama — are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.”

Anyone have buyer’s remorse yet?

And it likely will get worse. A looming concern is that with increased government consumption, increased money from the Fed and no real growth prospects this year or next, could we expect to see a return to stagflation?