Category ►►► Econ. 101

July 22, 2008

Bush Still the Straight-Talker... But Only Behind Closed Doors

Lately, many of President George W. Bush's public comments have been, well, rather "diplomatic" -- by which I mean cryptic, eliptical, and filled with so many multiple-entendres that it's hard to know what he really believes. A far cry from when he was first elected and when he ran for reelection, when we could rely on a candor rare in sitting or running presidents.

But it appears that you can still get the simple truth out of Bush... but only when he believes the cameras are not rolling:

Explaining the current economic downturn to a closed-door fundraiser last week, President Bush said, "Wall Street got drunk."

"There's no question about it," Bush said. "Wall Street got drunk, that's one of the reasons I asked you to turn off the TV cameras. It got drunk and now it's got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments."

 

 

I sure wish he would return to saying such things when he knows America is watching, as he used to do. This is as good and succinct a description of our self-made economic woes as I've ever seen.

For some reason, the Briefing Room piece implies this is some terrible faux pas on the president's part that will hurt him (and McCain) somehow:

Last week, Bush indicated that he fears YouTube moments such as this making it to the web.

After asking a room of 400 supporters gathered for a fundraiser in Tucson, Arizona to turn off any recording devices, Bush said, "I don't know a lot about technology, but I do know about YouTube."

But I think real Americans will be as impressed by his honest assessment as we are. Now if only he would go back to doing the same in his public pronunciamentos.

Hatched by Dafydd on this day, July 22, 2008, at the time of 11:04 PM | Comments (3) | TrackBack

June 19, 2008

Oogo Fever: After Big Oil, Can Big Food and Big Gun Be Far Behind?

Nothing much happened this week. Oh, yes, I almost forgot: A plurality of likely Democratic voters said the federal government should nationalize the entire oil industry. (By the end of next week, I expect George Will to join them, preening all the way.)

According to Rasmussen Reports:

A Rasmussen Reports national telephone survey found that 29% of voters favor nationalizing the oil industry. Just 47% are opposed and 24% are not sure.

The survey found that a plurality of Democrats (37%) believe the oil industry should be nationalized. Just 32% of voters in Barack Obama’s party disagree with that approach. Republicans oppose nationalizing the oil industry by a 66% to 16% margin [16% of Republicans think we should follow the lead of Oogo Chavez? Great leaping horny toads.] Unaffiliated voters are opposed by a 47% to 33% margin.

I blame public schools.

Meanwhile, marginal Democratic Rep. Maxine Waters (D-CA, 85%) called for "socializing" the oil industry on a House panel in May:

John Hoffmeister from Shell Oil: I can guarantee to the American people because of the inaction of the United States Congress ever increasing prices unless the demand comes down and the five dollars will look like a very low price in the years to come if we are prohibited from finding new reserves and new opportunities to increase supplies.

Rep. Maxine Waters: And, guess what this liberal will be all about? This liberal will be about socializing... uh, will be about, basically taking over and the government running all of your companies.

Then last Monday, another Democrat in Congress, this time a much bigger fish, has joined the call... at least to nationalize the nation's oil refineries. From a video clip shown during the "all-star" panel on Special Report With Brit Hume last night:

REP. MAURICE HINCHEY, (D) NEW YORK: Do we own refineries? No. The oil companies own refineries. Should the people of the United States own refineries? Maybe so. Frankly, I think that's a good idea.

Just in case the above seems vague, here is Hinchey (D-NY, 100%), who sits on the Appropriations Subcommittee on Interior, Environment, and Related Agencies and the Natural Resources Subcommittee on Energy and Mineral Resources, clarifying his position... this time on a video played on Neil Cavuto's show on Fox News:

If there’s any seriousness about what some of our Republican colleages are saying here in the House and elsewhere about improving the number of refineries, then maybe they’d be willing to have these refineries owned publicly, owned by the people of the United States, so that the people of the United States can determine how much of the product is refined and put out on the market. To me that sounds like a good idea.

The dirty, little secret is that Democrats really do believe that there's no connection between supply and price... because they sincerely believe in a secret oil-company Illuminati-like conspiracy to keep prices high. Thus, they "reason," it doesn't matter even if we triple or quadruple the world oil supply: Somehow, Big Oil will conspire to hide the oil and raise the price even more.

An article in yesterday's Investor's Business Daily makes the point:

Others have found a new culprit: speculation in oil markets.

Senate Majority Whip Dick Durbin, D-Ill., a close ally of Obama, held an Appropriations Committee hearing Tuesday into just that.

"Increasing evidence shows that the run-up in crude oil prices and gasoline is being driven by larger trader banks, pension and hedge funds. Speculation may have as much, if not more, to do with high gas prices than any Saudi sheik."

Well, yes: The oil futures market has a huge influence on the current price of oil and gasoline. But that doesn't mean it's all controlled via illegal manipulation by a cartel of speculators and oil companies... it just means that investors consider future supply when they decide how much they're willing to value a barrel of oil today.

When you combine a deeply conspiratorial mindset with a propensity to believe in State control over private control, it's no wonder that the Democratic mind tends to see Capitalism itself as a giant pyramid scheme: They don't trust markets, they don't trust the profit motive, they don't trust Big Tobacco, Big Oil, Big Food, Big Gun, or Big Garment. Heck, they don't even trust the very people they claim to speak for... which is why they must speak for them, of course.

Democrats as a collective (how apt) trust only one "big" on the planet: Big Government. What does that profound difference in worldview mean? Slither on to read more...

The further from the apex of power you look, the more blatant Democrats are about wanting a "progressivist" tyranny of the proletariat, guided by the invisible fist of the Party. Thus Maxine Waters, lower on the DNC totem pole, is willing to come out and say "This liberal will be about... basically taking over and the government running all of your companies;" but the much more powerful Maurice Hinchey only suggests nationalizing refineries, not the entire industry.

And even further down the progressivism food chain, 37% of Democratic voters answer Yes to the question, "Should the government nationalize all the oil companies and run them on a non-profit basis?", while they're evenly divided on the following question: "Suppose a major oil company discovered an alternative energy source that would dramatically reduce the price of gas and other energy sources. If that new energy source would make a lot of money for the oil company, should the company be allowed to keep those profits?"

They don't stop to ask themselves, if this "major oil company" isn't going to be allowed to keep the profits of their invention that would "dramatically reduce the price of gas and other energy sources," why would they bother inventing "an alternative energy source" in the first place?

When you begin shuffling down the Socialist superhighway, you are quickly faced by two reality-based questions that have bedeviled progressivists for more than a century:

• If you remove the profit motive, with what incentive do you replace it? Why should people work hard if they won't personally benefit? We're not angels in the forms of proles.
• Once you nationalize an industry, you also "own" the consequences: You can no longer blame the opposition, impersonal forces, or external enemies. What do you do if things get worse, not better?

To resolve the first question, many Democrats now call for a "Manhattan Project-like" crash program to completely substitute "alternative energy sources" for fossil fuels (geothermal cars, windmill-powered airplanes, whatever). They believe that virtually all great inventions and innovations come from government, not the private sector -- which merely hijacks what belongs to "the people" and exploits it to line their own pockets.

But the reality is that aside from very limited and special circumstances such as the pressures of world war, government almost never innovates anything anywhere. It can fund, it can organize, it can certainly help secure exploitation rights of the private developer. But it, itself, does little to bring new products onto the shelves.

Even enormously valuable federal projects, like the nuclear labs, NASA, and DARPA, generally work to demonstrate broad, fundamental engineering principles and concepts; they leave the process of actually making those concepts workable and bringing them to market to the private sector. (And even for basic research, private companies give the government stiff competition: Who has developed more useful inventions, DARPA or Bell Labs?)

The second question is more devastating to the progressivist theory: If the State "owns" energy produciton, in all senses of the verb, then when things begin going badly, everybody will necessarily blame the State. What does a progressivist lawmaker do then?

We see this Catch-22 playing out today: To placate the environmentalist lobby, Democrats have prevented us obtaining oil offshore, from shale, along the outer continental shelf (OCS), in the deep waters of the Gulf of Mexico and the Caribbean, and in ANWR. But now we have premium gas approaching $5 a gallon here in California.

For some unfathomable reason, voters are pointing the finger at the Democrats who actually caused the problem, rather than accepting the Democratic mantras that it's all the fault of the "failed policies of the Bush-McCain administration" and that "We can't drill our way out of an oil shortage."

Democrats are going to have to do something; something other than haul oil-company executives before congress and harangue them for three hours. But that "something" will probably be to double-down: They will pull drilling bills from the Congressional docket and not let them be voted; they will push an extension of the drilling ban through the House and will try to do so in the Senate (where Republicans will stop them by filibuster); and they will attach ludicrous environmentalist riders to bills that have nothing to do with energy or the economy.

Each of these somethings will be to the same effect: To drive up the price of gasoline higher and higher, because the anointed ones simply know better. They have the vision, and they deserve to rule.

Democrats clearly take their cue from the Marxist machinations of Venezuelan President Oogo Chavez, who nationalized the Venezuelan oil industry starting in May, 2006. So how well did that work out?

In fact, it appears to have been about as successful as Robert Mugabe nationalizing all the farmland in Zimbabwe (where in this case, "nationalizing" means butchering the white owners, their wives, and their children, seizing the land, and handing it over to tribal Mugabe supporters... remarkably similar, if rather more thuggish, than the mass land-snatch committed by the Sandinistas the last time they ran Nicaragua).

Chavez first ordered all oil companies operating in Venezuela to pay a huge chunk of their revenues to the government, unilaterally rewriting longstanding contracts... in the name of the People, naturally. Democrats defended this as "social justice;" real Americans saw it as State extortion.

When that didn't get Oogo enough cash, he went ahead and nationalized the entire industry... and then he fired all of the geologists, engineers, and other professionals at the State-run oil company, PDVSA (Petróleos de Venezuela, S.A.), and replaced them with Oogo cronies:

The Venezuelan government claims that between 2006 and 2012 it will reinvest $76 billion of its earnings to increase production, but analysts canvassed by the three reporters who wrote the story think that the figure comes closer to between $2 and $5 billion a year--a drastic short-fall. Moreover, many of PDVSA's activities are now unrelated to oil--it has hatched subsidiaries to distribute powdered milk, or to mill corn, or even to build boats. (Anyone who knows Venezuela can imagine the lush opportunities this offers for illicit enrichment by the agency officials or the military who work with them.) Meanwhile, as oil production falters, the state company has decided to take on more employees. When Chavez took office PDVSA had 48,000 workers. It now has nearly 75,000, and the president-dictator has announced plans to hire an additional 30,000 by the end of next year. (One cannot help recalling the case of the Argentine YPF, which was the only oil company in the world that lost money in the go-go 1970s!)

This kind of crony capitalism is pushing Venezuela to the edge. Under these circumstances it won't take much of a decline in oil prices to destabilize Chavez's regime.

Meanwhile, Venezuela is experiencing a collapse of its (national) health-care industry to respond to epidemics of infectious disease, a collapse of its food industry, and a sweeping crisis of confidence by its people -- even the poor -- in the Venezuelan strongman:

But for each minor policy shift or good economic statistic from the government, Mr. Chávez has stirred deeper anxiety by intensifying threats to expand state control of the economy and society. For instance, Mr. Chávez warned Monday that he would nationalize large food distributors caught hoarding groceries.

Pedro E. Piñate, an agricultural consultant in the city of Maracay, said: “We live in two countries, one inhabited by officials who think they can alter reality by sending soldiers to intimidate citizens. The other country is where the rest of us live in fear of being killed or kidnapped or of our businesses being seized.”

But how can these trivial setbacks dampen the enthusiastic support of Democrats who still think that Fidel Castro is the savior of Cuba, the Sandinistas were a revolution of poets, and who still wear their faded, tie-dyed Che t-shirts? They are far more apt to follow Oogo even farther down that road, because the alternative is for Democrats to admit that they have been wrong all this time -- and to spit in the face of the special-interest lobbyists that maintain them in power. (That is, they would have to commit political suicide.)

The Great Dictator has now begun to nationalize other industries and threatens to nationalize the entire economy. He even tried to give himself full dictatorial powers last December, via a new constitution -- including the power to remain president-for-life. How long before Democrats seize upon a weak-tea version of that "solution" to the second problem?

All it requires is to identify some sector of the economy, no matter how small, which is not yet under direct control of progressives... and nationalize that, too. When that fails, find another. And another. And yet another. Thus they can stave off complete collapse until the current crop of Reids, Pelosis, Obamas, and Murthas retire.

But Democrats are unwise to rely upon the unwisdom and lack of intelligence of the people; the people have a refreshing tendency to be smarter than the Left thinks them. For example, Oogo himself was resoundingly defeated in his attempt to become the Supreme Tyrant of South America six months ago... and now, per the New York Times article above, there is for the first time in years a very strong political opposition building in Venezuela for the regional elections this November, in response to Oogo's overreaching.

And I believe we're going to see the same dynamic here as well: The overreach by Barack H. Obama and the Don't-Drill, Windfall, Nationalizing Surrendercrats is at least as egregious, relatively speaking, as that by Chavez: We expect more sanity from our leaders than they do in South America. (For example, Chavez was overwhelmingly elected in 1998 even though, just six years earlier, he had attempted to seize power in a coup d'état.)

I believe Obama's risible pandering to every nutty theme and meme of the New Left will finally drag him down, ensuring John McCain's election; and I believe the Democrats will not do anywhere near as well as they hope in the Congressional elections. They might even lose some seats, which could mean losing one or both houses of Congress.

I never bet against the wisdom of the American people; but Democrats stake their party's entire future doing just that every two years. They filled a gut-shot straight on the river in 2006, but the odds are against them doing it twice in a row.

Hatched by Dafydd on this day, June 19, 2008, at the time of 6:16 PM | Comments (8) | TrackBack

June 6, 2008

"What's Bad for General Motors Is Good for the DNC!"

Over at Real Clear Politics, Tom Bevan speaks for nearly all pundits, spread across three parties unto the tenth generation, when he writes:

Of course, the worse the economy gets, the better it is politically for Obama...

This is Conventional Wisdom 101. But why? What is the connection?

CW 102 explains CW 101 by postulating the following syllogism:

1. Economy heads south;
2. Voters decide to blame the "party in charge" and punish them at the polls;
3. The elite media always declare that the party in charge is the Republican Party;
4. Thus, the voters will inevitably punish the GOP (and the country) in November by voting Democratic. It's elementary!

The truly sad thing is that Democrats actually do believe this; they believe what's bad for America is good for them, because they can play "pin the blame on the elephant" and parlay some terrible catastrophe -- an earthquake, an act of terrorism, an economic challenge -- into furthering their congressional careers.

But there's something kind of weird about this syllogism... for some odd reason, whenever anything bad happens that (we are told) will earn the ire of the electorate against the party in charge -- it always seems to turn out that the responsible party is the Republican Party.

Today the voters will blame the GOP because, while Democrats control Congress, a Republican sits in the White House. But conversely, back in the 1990s, the voters blamed the GOP... after all, while a Democrat sat in the White House, it was the Republicans who controlled Congress!

I understand why the elite media would always blame Republicans for anything bad; they're knee-jerk New Left liberals who vote 93% for Democrats.

I even understand why commentators on the right so often assume voters will blame the Republicans: First, they see all the other pundits around them blaming Republicans, and if they did the opposite, they would experience cognitive dissonance; second, Republicans by their very natures tend to be dour and pessimistic... so much so that they, themselves, reflexively assume that everything that can go wrong will... and even things that can't go wrong will find a way to do so anyway.

You just watch: The closer we slide to the election, the more depressed and apocalyptic will be the Republican and conservative columnists, talking heads, and bloggers, no matter what the facts on the ground may be; the perennial pundits' pessimism and pity parade will once again take over Fox News Channel, the WSJ and the Washington Times, the Weekly Standard and the National Review, and virtually the entire dextrosphere.

In terms of Republican Party temperment (as opposed to policy), Ronald Reagan is the exception; Richard "They're coming to take me away, ha ha!" Nixon is more the rule.

But understanding a bizarre psychological syndrome of conspiracy and defeat is not the same as believing it. Here's a new syllogism that begins from my own core political belief:

1. Contrary to what the Left thinks, ordinary voters are not utter fools;
2. If the economy goes south, they will want to punish the predators and incompetents who caused it to go south;
3. Whichever party is best able to make a logical and rational argument that the economic problems are caused by the policies of the other guys will be rewarded at the polls;
4. The biggest economic problem today is the ludicrously high cost of fuel, which is driving up the price of virtually everything else;
5. The primary cause of that high cost is legislation preventing us from exploiting our own energy resources;
6. The party responsible for that legislation is the Democratic Party, not the GOP;
7. Thus if John McCain will actually articulate that argument and run on policies that would significantly increase our energy production -- something that Barack H. Obama will not, cannot do -- McCain has a very good shot at actually being rewarded by voters in November;
8. Even better, if the GOP across the board were to run on that platform in congressional, gubernatorial, and other races, it might mitigate by future-policy promises the "bad branding" that threatens to decimate Republicans once again, as it did in 2006.

The only really big "ifs" in this syllogism, I believe, are the last two points, (7) and (8). So far, neither the presumptive Republican nominee nor Republicans running for reelection has embraced the stark difference between the two parties: In general, the GOP defines success through growth and expansion -- while Democrats define their success through contraction, contrition, and condemnation of everything American.

But right now, McCain is still stuck on globaloney hysteria, while Republican congressmen running for reelection stand on the brink of accepting the Devil's bargain that the California GOP bought into long ago: Accepting permanent minority status in exchange for perpetual reelection. This is the basest of bargains: GOP incrumbents get their perks, and we get punked.

You can't recapture Congress by graciously conceding defeat -- months before the election!

Boldness is what we need now: Instead of accepting our political dhimmitude at the hands of Majority Leader Harry "Pinky" Reid (D-Caesar's Palace, 85%) and Squeaker of the House Nancy Pelosi (D-Haight-Ashbury, 93%, not counting missed votes), we must risk everything on a real campaign to take back the Congress.

The GOP needs a new national strategy, similar in some ways to the Contract With America in 1994; but that contract was entirely procedural and inside-baseball. What we need today is a substantive national strategy.

Obama has his "American Moment" speech; fine. But for those of us who want America to last more than a moment, let's have a strategy based around the theme, Vote For an American Future:

1 - Vote for American energy for America and our friends

America is an energy nation: We use a lot, but we have a lot more reserves than we're allowed by law to tap.

We need to drill for oil everywhere on American territory where oil is to be found, as well as in international waters; but we'll use American high-technology to drill in an environmentally safe and sound way.. Produce energy for America, while preserving nature's beauty for all Americans.

With oil above $130 per barrel and people feeling the pinch everywhere, we no longer have the luxury of leaving our oil fields and natural gas mines unexplored and untapped. We must drill in the Bakken oil formation, off the two coasts, in ANWR, in the Gulf of Mexico, in international waters in the Caribbean and elsewhere. We mine oil shale and extract the oil. We mine for natural gas. We begin building smaller nuclear reactors using the safest of modern designs... and the federal government should insure them.

2 - Vote for an economy of wealth, not illth

A simple rule that applies universally: You cannot tax yourself into prosperity. We need some form of taxation to pay for things we need; but we don't need taxes to "level the playing field" by crippling successful people so that life's losers don't feel so bad.

Unless we make the tax cuts permanent, they'll expire (the Democrats forced that poison pill on us)... resulting in the largest tax increase in American history. But we need to go farther: We need to eliminate the alternative minimum tax altogether, cut the capital-gains tax to zero, and shift to a "fair tax" flat tax.

And we "pay for" these tax cuts, not with more tax increases, but by actually cutting spending -- reducing entitlements (see 4 below) and trimming unnecessary government departments and agencies -- and by growing the economy, letting Americans keep, spend, and invest more of what they earn.

3 - Vote for security, not surrender

We stand at a tipping point of history: We have it in our power to destroy the Iran/al-Qaeda axis and secure not just America but the West for decades. But we need to mobilize more than just our military, brilliant as it is. This existential struggle cannot be won by bullets and bombs alone.

We need to bring together defense, diplomacy, intelligence, and the ideology of freedom in this world-wide conflict. Americans instinctively distrust "nation building;" but that makes us ideal stewards to help failed states in the "non-integrated gap" to rebuild their own nations -- with our support and know-how.

We must completely rebuild our intelligence agencies from the ground up. They have failed terribly in recent years, but not because of the men and women who work tirelessly to get inside our enemies' heads. They failed because we're asking our intelligence agencies to do things they were never designed to do; they were birthed during the great wars of the twentieth century and raised during the cold war... but this is the twenty-first century, and we're fighting an enemy we've never faced before: A world-wide death cult that wants to destroy the entire modern world and drag us all back to the seventh century.

We fight on behalf of modernity -- so we need modern, up to date, redesigned, and reenergized intelligence agencies to be our eyes and ears.

Finally, the enemy has an ideology of repression, human sacrifice, and slavery. It sounds horrible to us; but to Muslim subjects living under totalitarian tyrants, peasant tribesmen whose world is a nightmare, the promise that, if they'll slaughter the innocent in this world, they'll gain paradise in the next must sound like a bargain.

You can't fight something with nothing: We need to create an ideological counterinsurgency to fight the war of ideas with the Iran/al-Qaeda axis. We need to spread the ideology of freedom, hope, security, stability, and the rights of the individual across the hellholes of the Earth. We must give potential terrorist recruits alternatives to that dreadful path, if we're ever going to be safe ourselves.

4 - Vote for the ownership society

So-called "entitlements" are bleeding us dry. Out of the $3 trillion budget, Medicare, Medicaid, and Social Security alone account for nearly 50% of spending. This is completely unsustainable; either we find a long-term solution to out of control entitlement programs, or else we give up on America.

The problem is right in the name: "Entitlement" programs are services and money that we've told citizens they're "entitled" to extract from the government, no matter how fiscally catastrophic that is. The amount we pay each recipient increases by more than inflation every year, while the number of recipients grow as we all live longer, due to better medical care, and lead healthier lives. Add those together, and you have a prescription for disaster.

Like the intelligence agencies, entitlement programs were created during a very different era, when people didn't live much past 65. Senior citizens, the disabled, and the poor had very real problems that were going unaddressed; and these three programs and similar ones were created by Democratic Presidents Franklin Roosevelt and Lyndon Johnson out of compassion. But their compassion turned out to be based on extremely bad economics.

We don't live there anymore... so we need a new paradigm to solve the old problems. The solution is to shift retirement planning and health care for the elderly, disabled, and poor from a "hand-out" mentality to an "ownership" mentality: Turn benefits into investments, and let the very people who need them control them.

This saves money two ways: First, when you're living on other people's money, it's easy to slip into the trap of "the sky's the limit;" but when you own your own programs, you have an incentive to avoid waste, fraud, and abuse. Second, owning your own retirement program is more economical in the long run for exactly the same reason that owning your own home is more economical than renting all your life: It's an asset that appreciates.

It would save big money for the country, too. The government invests today's Social Security so badly, it barely earns interest at all; that's because the feds want to be able to loot the money at a moment's notice, so it can't be tied up in anything high-yielding.

The government must pay for every dime of retirement out of current receipts. But in an ownership society, Social Security is like a government-guaranteed 401K that earns most or even all of its own expenditures by interest paid.

So your kids (and grandkids) won't be breaking their backs supporting you; with the same SSI tax you pay now, you'll have an account that could well earn more money per year than you take out of it. Thus, no matter how long you and your spouse live, you won't run out of money... and you can even leave it to your kids as a nest egg.

5 - Vote for Capitalism, not crony liberalism and corruption

Earmarks are the corruption of ruling elite; they're personal budget items stuffed into legislation in the dead of night, often without any other senator or representative even seeing them. They pour money into the pockets of special interests, to the tune of hundreds of thousands, millions, and sometimes even tens of millions of dollars.

The recipient then kicks back some of that money to the reelection campaign of the member who pushed through the earmark. Earmarks as close as you can get to out and out bribery without being arrested.

The Republican Party has tried time and again to get the rest of Congress to eliminate earmarks altogether, but the Democrats won't do it. John McCain has refused to insert earmarks into legislation for many years now -- and his constituents know that and respect him for his principled stand.

But America simply cannot wallow in quasi-legal corruption. It brings our entire government into disrepute. Neither Republicans nor Democrats can resist the temptation to funnel millions of taxpayer dollars for a twine museum or cookbook library in their home districts... or even giving public money to local churches, including the Rev. Michael Pfleger's church in Chicago.

Earmarks to a politician are like whiskey to an alcoholic: He can't have "just one drink." The only solution is that we must do away with earmarks, root and branch. Every expenditure in a piece of legislation must go through the regular process, with all senators and representatives getting a chance to vote up or down.

When no member of Congress has the power to sneak your tax money to his own favorite business (the one that supports his reelection most heavily); when you can look on the internet and find where every dollar of your tax money went; then the citizens can regain control of their government once more.

E pluribus unum

Democrats have controlled Congress for the past two years, and they had significant veto power even before the 2006 elections. The president is not a dictator; he can only sign the bills he's sent... he can't simply make up legislation and put it into effect by decree. There is no reason to assume from the outset that everybody in America thinks every bad thing that happens is all Bush's fault -- or that every Republican running is a Bush "mini-me." Voters are not stupid; they're you and me and that feller behind the tree.

Politically, an economic downturn is going to hurt whichever party is perceived as not having a clue how to grow the economy again. The only plan the Democrats have for growing the economy is to tax us all to death.

It shouldn't be too hard to show voters that we Republicans have a better plan than "taxicide." But we have to be unified. I want to see the party develop some sort of "Vote for an American Future" contract with voters: This is what we stand for; this is where we're miles ahead of the Democrats; this is what we will do if elected. Then each GOP candidate should flesh out what exactly these points mean in terms that resonate with his own constituents.

If we do that, we'll very quickly "rebrand" the Republican Party... and we might lose hardly any seats at all.

Heck, we could conceivably even gain seats; it wouldn't take much to flip either the House or Senate back to GOP control. But if Republicans stubbornly refuse to unite; if they don't support the Republican nominee for president; if they try to run as "diet liberals," then we're going to get kicked in the stomach by Jubilation T. Jackass.

Hatched by Dafydd on this day, June 6, 2008, at the time of 6:39 PM | Comments (10) | TrackBack

May 21, 2008

Marriage, Money, and Ursus Maritimus

I have in my pocket three horrible court decisions: One is a state supreme-court decision from California; another is a decision by a panel of the D.C. Circus Court; and the third is an initial court order followed by further action now pending before U.S. District Court Judge Claudia Wilken, based in Oakland, California.

What do these three decisions have in common? Let's get you some particulars...

California Supreme Court to California Voters: Drop Dead

In a previous post here (Californichusetts), we discussed the demerits of the underlying policy of same-sex marriage. Today, we're more concerned with how the court reached its decision -- the process -- and the implications of such a process for the future of democracy.

A liberal on a bulletin-board I frequent chastised me; "a court would never" -- I paraphase him -- "pull a claim of unconstitutionality out of hat!"

Oh yes they did, sez I; this is easily seen by anyone who actually reads California Chief Justice Ronald George's appalling opinion. But it's even more obvious when reading the magnificent and stunning dissent by Justice Marvin Baxter, which begins on page 128 of the pdf linked above. Baxter wrote perhaps the most devastating dissenting opinion since Hugo Black's dissent on Griswold.

In this case, the court admitted that there was no history at all, none whatsoever, of same-sex marriage even being contemplated in the writing of the California constitution. So how on earth could the court be "in accordance with the constitution" when they say -- and this really is their reasoning -- that the fact that the legislature has passed some legislative relief for gays that does not include marriage means the legislature has inadvertently given "exlicit official recognition" (George's words) to the putative right of persons of the same sex to marry?

It's completely loony. From Baxter (pp. 5-7, 132-134 of the pdf -- the italics are Baxter's):

But a bare majority of this court, not satisfied with the pace of democratic change, now abruptly forestalls that process and substitutes, by judicial fiat, its own social policy views for those expressed by the People themselves. Undeterred by the strong weight of state and federal law and authority, the majority invents a new constitutional right, immune from the ordinary process of legislative consideration. The majority finds that our Constitution suddenly demands no less than a permanent redefinition of marriage, regardless of the popular will.

In doing so, the majority holds, in effect, that the Legislature has done indirectly what the Constitution prohibits it from doing directly. Under article II, section 10, subdivision (c), that body cannot unilaterally repeal an initiative statute, such as Family Code section 308.5, unless the initiative measure itself so provides. Section 308.5 contains no such provision. Yet the majority suggests that, by enacting other statutes which do provide substantial rights to gays and lesbians -- including domestic partnership rights which, under section 308.5, the Legislature could not call "marriage" -- the Legislature has given "explicit official recognition" (maj. opn., ante, at pp. 68, 69) to a California right of equal treatment which, because it includes the right to marry, thereby invalidates section 308.5.

I cannot join this exercise in legal jujitsu, by which the Legislature’s own weight is used against it to create a constitutional right from whole cloth, defeat the People’s will, and invalidate a statute otherwise immune from legislative interference. Though the majority insists otherwise, its pronouncement seriously oversteps the judicial power. The majority purports to apply certain fundamental provisions of the state Constitution, but it runs afoul of another just as fundamental -- article III, section 3, the separation of powers clause. This clause declares that "[t]he powers of state government are legislative, executive, and judicial," and that "[p]ersons charged with the exercise of one power may not exercise either of the others" except as the Constitution itself specifically provides.

The rest is equally brutal.

This decision was a pure power-play: Four members of the court wrestled the other three to the ground, declaring a brand, new right to marry a person of the same sex... and at the same time, declared homosexuality to be a "suspect class," like race, requiring "strict scrutiny" to be applied to any law that affects disparately those with different sexual preferences.

Who needs a legislature, an executive, democracy, or the people themselves, when we have black-robed masters who will so kindly tell us what to do?

But worse even than the policy is the usurpation of the will of the people. The people are striking back now: More than 1.2 million Californios signed a petition to place upon the November ballot a state constitutional amendment that has the exact wording of Proposition 22, which passed in 2000 by 61.4% -- and which the court just struck down. The idea is that if the constitution itself is amended to restrict marriage to one man, one woman, then clearly the court cannot continue to find that same-sex marriage is required by the very constitution that forbids it.

But of course, that assumes at least a faint, embryonic heartbeat of judicial dignity and humility in the breasts of the four members of the majority. If the citizen initiative constitutional amendment passes, but the justices in fact defy the will of the people and double down on same-sex marriage... well, we'll have a full-scale revolt in the Golden State, like the one that led to three California Supreme Court justices being recalled by the people (for persistently preventing the death penalty from being executed).

Democracy only works, and only serves to fuse individuals into a society, when voters have reason to believe their votes actually count. That allows us to accept defeat graciously, because we know that if in the future, we managed to get a majority to see it our way, we can reopen the policy in question.

But if the judiciary only supports democracy so long as the judges agree with the vote, then citizens will have no choice but to seize jurisdiction from the courts. And that could signal the beginning of the end of Western Civ. So let us hope the court accepts passage of the amendment with the same grace that those of us who support it would accept the will of the people should it lose.

Pawing the money

The next case takes place across the country, in the District of Columbia; the Treasury Department is in a lather after a three-judge panel of the D.C. Circus ruled today that folding money "discriminates" against the blind.

And why is that? Because blind people cannot see what denomination bill they have in their wallets! AP takes up the trail of tears:

The U.S. acknowledges the current design hinders blind people, but it argues that they have adapted. Some rely on store clerks to help, some use credit cards and others fold certain corners to help distinguish between bills....

The court ruled 2-1 that such adaptations were insufficient under the Rehabilitation Act. The government might as well argue that there's no need to make buildings accessible to wheelchairs because handicapped people can crawl on all fours or ask passers-by for help, the court said.

"Even the most searching tactile examination will reveal no difference between a $100 bill and a $1 bill. The secretary has identified no reason that requires paper currency to be uniform to the touch," Judge Judith W. Rogers wrote for the majority.

Courts don't decide how to design currency. That's up to the Treasury Department [well... it used to be!], and the ruling forces the department to address what the court called a discriminatory problem.

This is absurd, of course. Recorded phone-help systems at government offices ("Push 1 for English, 2 for Spanish, 64 for Serbo-Croatian...") discriminate against the deaf, because they cannot access that information without "adaptations," like a texting phone. (The recorders of these phone-help trees "might as well argue that there's no need to make buildings accessible to wheelchairs because handicapped people can crawl on all fours or ask passers-by for help.")

Elevator buttons in tall buildings discriminate against the vertically challenged, because they cannot reach the top buttons. Police discriminate against schizophrenics who want to live on the streets, because the cops continually arrest them for sleeping on the sidewalk.

Everybody has some inconvenience in life, and especially so when he has a disability. But failure to create a landscape with no sharp edges -- "Nerfworld," I dubbed it in a story anthologized here -- is not automatically unlawful discrimination.

One blind man makes exactly that point:

Not all blind people agree that U.S. money should be changed. The National Federation of the Blind sided with the government and told the appeals court that no changes were needed.

Charlie Richardson, the legally blind manager of Charlie's Express Stop inside the Capitol in Albany, N.Y., said he doesn't oppose changing the money but disagrees with the ruling.

"To actually be discriminated against is to have something denied to you," Richardson said. "We're not denied the use of money."

But the court did not agree; it has ordered Treasury to redesign all American currency, without regard to what Congress and the President have already decided.

Polar bear on a stick

Finally, recall that a few days ago, some environmental extremists won a court ruling from federal Judge Claudia Wilken, forcing the Department of the Interior to immediately rule whether the polar bear (Ursus maritimus) falls under the Endangered Species Act. As we all expected, this was simply Phase One of a deep plan.

The plaintiffs dropped the other shoe yesterday -- Phase Two of the judicial coup d'état: The enviro-mentally challenged loons have gone back to court to abuse the judicially forced listing of polar bears as "threatened" by "global warming" (which supposedly causes the Arctic ice to melt): They demand a judicial order forcing the Bush administration to implement the Kyoto Protocol, or some similar regulatory regime to combat Anthropogenic Global Climate Change (AGCC) -- a.k.a. Globaloney.

Judge Wilken issued her ruling in spite of (possibly in complete ignorance of) the fact that there is a raging conflagration within the atmospheric sciences community on whether global temperatures are still warming now, whether they will warm in the near future, whether it has anything significantly to do with human activity, and whether we can do anything about it anyway. I doubt she even cared... some scientists said Globaloney would kill the polar bears, and her heart simply bled at the thought.

Thus, she flexed her judicial muscles and forced Interior to dance to her tune. And now the same plaintiffs that she favored once want her to use her robe to force an anti-climate-change policy upon the entire United States, outside the democratic system:

[Interior Secretary Dirk] Kempthorne, echoing President Bush, said last week the Endangered Species Act was the wrong tool to reduce greenhouse gas emissions. Kempthorne that he would propose "common sense modifications" to make sure the polar bear listing would not set backdoor climate policy outside the normal system of political accountability.

The conservation groups said Kempthorne acted improperly.

"On the one hand, he's acknowledging that global warming is impacting polar bears," said Melanie Duchin of Greenpeace in Alaska. "On the other hand, he's not willing to do anything about it. We're asking the administration to uphold the spirit and intent of the Endangered Species Act."

Since when was the "spirit and intent" of the ESA to completely bypass Congress and the President to allow judges to enact sweeping changes to our energy, economic, and pollution regulations, all ordered by an unelected person who holds her appointment for life? I reckon I missed that part of the debate over passage of the Endangered Species Act.

In this case, it's clear that the polar bears don't even enter into the affair, except as hairy, white bludgeons by which leftist enviromentalists hope to pound the Bush administration into combating AGCC -- no matter how many scientists doubt the connection between human activity and global warming, and no matter what it does to the economy. They want to bypass not only the democratic process but also the normal scientific vetting process; instead, they would use the courts to render a final verdict on the issue... quickly, before somebody discovers something contrary!

That last line is not a joke; I believe some of the activists are actually aware of the rising chorus of well-credentialed scientific naysayers, and they want to cut them off at the knees. Once the Judiciary has decided, how could mere research undo that judicial decision? The colossal edifice of Globaloney would stand thus in perpetuity, unaffected by the tides and vagaries of honest scientific theory.

The leaden thread

In the brilliant "Rumpole" stories by John Mortimer, British barrister Horace Rumpole often argues in the Old Bailey that British justice hangs by a "golden thread," the principle that the crown must prove a man guilty before he can be punished, that he starts out with the presumption of innocence. But in America's courtrooms today, we have a new principle -- the leaden thread of judicial activism: This is the presumption by an increasing number of judges that, by virtue of the very robes they wear, they know best how to govern society.

In his column yesterday on the same-sex marriage decision by the California Supreme Court, Dennis Prager nailed the "hubris" -- I would say narcissism -- that applies to all the judges discussed above:

Another reason for this decision is arrogance. First, the arrogance of four individuals to impose their understanding of what is right and wrong on the rest of society. And second is the arrogance of the four compassionate ones in assuming that all thinkers, theologians, philosophers, religions and moral systems in history were wrong, while they and their supporters have seen a moral light never seen before. Not a single religion or moral philosophical system -- East or West -- since antiquity ever defined marriage as between members of the same sex.

That is one reason the argument that this decision is the same as courts undoing legal bans on marriages between races is false. No major religion -- not Judaism, not Christianity, not Islam, not Buddhism -- ever banned interracial marriage. Some religions have banned marriages with members of other religions. But since these religions allowed anyone of any race to convert, i.e., become a member of that religion, the race or ethnicity of individuals never mattered with regard to marriage. American bans on interracial marriages were not supported by any major religious or moral system; those bans were immoral aberrations, no matter how many religious individuals may have supported them. Justices who overthrew bans on interracial marriages, therefore, had virtually every moral and religious value system since ancient times on their side. But justices who overthrow the ban on same-sex marriage have nothing other their hubris and their notions of compassion on their side.

These undemocratic judges ride high above the fray on great, white stallions, passing lordly judgment -- immune from being gainsayed, corrected, or even criticized:

• Four (out of seven) justices on the California Supreme Court know better than the legislature, the governor, even the people themselves; they know better than thousands of years of religious and philsophical systems how to organize society. And by golly, these Anointed -- with their Vision of the perfectability of society -- will fix all our problems for us.
• The D.C. Circus (well, two out of a three-judge panel of the appellate court) feel great compassion for the blind -- itself a noble emotion; so to assuage their feelings of pity and sympathy (and perhaps guilt at being sighted), they order the Treasury Department to implement the judges' own personal solution to the problem they themselves defined. (The decisions of the democratic branches of government which normally have jurisdiction over printing and engraving are irrelevant; those folks just don't share the Vision.)
• And lone Judge Wilken -- I know you're shocked to discover that she is a Clinton appointee, confirmed by the Democratic Senate of 1993 -- decides all by herself that polar bears must be designated as "threatened" (the plaintiffs now demand that be changed to "endangered," the stronger classification)... and she will decide, again all by herself, whether that means we must implement a drastic curtailing of energy usage, costing us hundreds of billions of dollars every year (irrelevant as an issue in the case) and damaging our ability to generate energy for generations to come (equally irrelevant... the poor, suffering polar bears!), all to reduce greenhouse gas emissions that may or may not have anything to do with Arctic sea ice that may or may not be melting in temperatures that may or may not still be rising.

Three cases; three separate jurisdictions; one leaden thread: "benevolent" judicial tyranny... for our own good. And one presidential candidate who promises to appoint that exact kind of judge, and only that kind, in every federal judicial opening he is allowed to fill. Judges who will rule for life, with no realistic way to get them out of office, no matter how egregiously they rule. (Thelton Henderson was never impeached, despite his ghastly ruling that refusing to discriminate on the basis of race constitutes discrimination on the basis of race.)

All right, conservatives... still think there's "not a dime's worth of difference" between John McCain and Barack H. Obama?

It's well at this point to recall Auric Goldfinger's great rule of threes; it was only alluded to in the Ian Fleming "James Bond" novel Goldfinger, I believe, but stated explicitly in the movie: "Once is happenstance, twice is coincidence. The third time is enemy action."

Just so long as we all know what's going on here.

Hatched by Dafydd on this day, May 21, 2008, at the time of 4:51 PM | Comments (2) | TrackBack

April 12, 2008

Barack Obama - "Liberal Fascist" on Parade

Here's Sen. O:

Obama, in remarks he planned to make to reporters Friday morning, wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on executive compensation packages.

Under Obama's legislation, shareholders could not veto a compensation package offered to an executive and would not place limits on pay. Rather, they would have a means to publicly express their position.

A similar bill passed the House last year.

Oh. Well... I turn to my well-thumbed pocket-sized edition of the United States Constitution (I filched it from Sen. Robert Byrd's jacket while he was gibbering on about his little dog Billy). There's this section in there, see, that lists what powers Congress has... the only powers. You'll find it in Article 1, Section 8; but to save you the trouble of looking it up, I'll quote it here. It's pretty long, but you can just skim, if you're in a hurry:

And that's pretty much all the powers that Congress has. You may notice that nowhere in there does it say that Congress has any authority to order corporations to hold a vote among all their shareholders -- non-binding or not -- on the compensation packages they offer the CEO or any other corporate officer or employee. If the Senate follows suit on what the House already did, then both chambers will be in egregious breach of the Constitution.

Of course, that possibility holds no terror for members of Congress: They've been passing laws that bore no relation to any enumerated power for many decades now, and usually they're upheld by liberal judges. But that's not the issue here.

Rather, this proposal of Barack Obama's is a wonderfully illustrative window into his totalitarian heart. Like all good "liberal fascists," Obama is not concerned with ancient words written on dead trees. So what if Congress has no authority to do what is necessary... it's necessary! Enough talk; Obama wants action, action, action!

John McCain at least understands constitutionality: He promises only to use the presidency as a "bully pulpit" to try to shame corporate boards of directors into reining in some of the more outrageous salaries, bonuses, and stock options; and fulminating from the presidential pulpit is certainly within the scope of powers of the president. (Now, if he were to issue an executive order forcing corporations to comply, that would be just as unconstitutional as Barack Obama's law.)

Nor do I think the Securities and Exchange Commission has any such authority, nor the Federal Trade Commission, nor OSHA, nor any other regulatory regime. I'm pretty sure executive pay is solely at the discretion of the corporation itself, through its officers and its directors. If they choose to put the CEO's compensation up for a non-binding referendum among the shareholders, that's their own business (literally).

Neither Congress, nor the president, nor the Court has the right to issue such an order, in my non-lawyerly opinion. There is still such a thing as freedom and Capitalism in this country; and we have a Constitution that restrains government from just steamrolling over private parties or publicly held corporations.

But to Obama, the Constitution is just an obstacle that must be got around or simply ignored. What's more important, all those "procedures" that limit what government can do to help people's lives? Or enacting what the masses really want -- making CEOs work for no more than the company would pay a journeyman machinist? Action, action!

"President Obama" will try to force his laws through; and if blocked, he'll issue a whirlwind of royal proclamations (executive orders)... all to "solve problems" using the "third way"... not Communism nor democracy and Capitalism, but just the efficiency of a maximum leader who has his finger on the pulse of America, giving the people what they want without the foot-dragging of democracy or the destructive competition of Capitalism.

Just letting you know what we're in for, if -- out of mistaken support for Mr. Audacity or equally foolish McCain Derangement Syndrome -- we allow Senator B.O. to be elected president.

Hatched by Dafydd on this day, April 12, 2008, at the time of 6:24 AM | Comments (8) | TrackBack

March 13, 2008

Democrats Reject "Slashing" Medicare Down to a Scant 5% Increase

Here's a fun party game: Google the following phrase: budget 2009 slash

I got 135,000 hits... how about you?

Now, there are some false hits there -- "Lawmakers vote to slash Florida budget," for example. But if you just keep clicking Next, you'll see page after page of links with titles like "Bush Budget Slashes Women's Health Funding | Reproductive Health" and "Bush's 2009 Budget Calls For Slashing Public TV Funding"... but especially ones like "Bush budget would slash Medicaid, Medicare budgets."

If they don't say "slashes," nearly all these pieces generally include some equivalent; here's a typical example, from the Associated Press today, that talks about "huge cuts" rather than "slashes":

A Republican alternative that largely mirrored a plan by McCain to permanently extend Bush's tax cuts and eliminate the alternative minimum tax was expected to fail badly, with party moderates distancing themselves from the GOP plan's huge cuts in popular programs like Medicare, housing, community development, and the Medicaid health care program for the poor and disabled. Such cuts were needed to make room for big tax cuts and still project a balanced budget.

So why the obsession with how President Bush's budget or John McCain's budget "slashes" (or inflicts "huge cuts" -- get a bandage, ow!) in "popular programs like" [fill in a series of "entitlement" programs that Americans now rely upon, after decades of "liberal fascism" under both Democratic and Republican administrations]? Why is any cut -- rather, any reduction in the rate of increase -- denounced as draconian, ruinous, and thuggish? Read on to find out...

Pay no attention to that budgetary black hole behind the curtain!

Quite simply, the inflammatory rhetoric is designed to take our minds off of the real story:

• Democrats fully intend to vastly raise taxes -- by stealth. Allowing the Bush tax cuts to expire at the end of 2010 will jack up income taxes by $683 billion over five years, or $137 billion per year. Yet even so, Democrats propose even more spending increases than the tax increases, so the deficit will explode as well, probably triggering a real, live recession (and lowering tax receipts even further).
• Democrats have no intention whatsoever of doing anything to restrain the growth of putative "entitlement" programs -- Medicare, Medicaid, and Social Security. They will allow the programs to rise at more than double the inflation rate until the cows come home to roost.
• Therefore, in fewer years than most folks realize, either Congress must enact tax increases on the level of trillions of dollars... or else the "entitlement" programs will grow to the point where they literally gobble up the entire rest of the budget. All revenues will go for entitlements, leaving nothing left over for anything else -- no more national defense, education, NASA, scientific research, or any other discretionary spending.

The Bush budget (unveiled last month) will at least "slash" the Medicare growth rate from 7.2% per year to 5% -- which is still more than inflation: Inflation has averaged 2.69% per year during Bush's presidency, but will probably rise to around 3.5% this year. This "huge cut" -- which still leaves the programs advancing more than retreating, even in constant dollars -- would trim about $10 trillion, about a third, off the unfunded liability of the program, currently estimated at $34 trillion.

But that still leaves the unfunded liabilities of Social Security, Medicaid, and other "entitlement" programs. Estimates vary, but a figure I've often seen is that all of them add up to about $75 trillion dollars... a staggering amount that equals the entire gross domestic product of the United States for 5.7 years. In budgetary terms, it represents the entire annual federal budget for a quarter century.

Unfunded liability stems from the fact that the cost of the programs rises so much faster than the inflation rate; this will only get worse as baby boomers begin to retire in mass numbers in 2011, just three years from now, and as retirees live longer and collect benefits for many more years.

John McCain has not yet proposed a serious solution to the problem, but there are quite a few very good ideas out there. I expect he will make entitlement reform the centerpiece of the domestic part of his campaign... because he has no choice. The retirement time-bomb is ticking, ticking, ticking; and neither Barack Obama nor Hillary Clinton has made -- or will make -- any serious proposal.

Social Security

There are two serious problems; eventually, Congress must fix both in order to make the program sustainable into the future:

• The return on investment (ROI) for an individual's payroll-tax contribution to Social Security varies due to a number of factors, including lifespan, how much he contributed while working, when he retired, and so forth. But the Heritage Foundation calculates that the ROI for a person born in 2006 is no more than 1%... and it can even be negative, meaning you literally pay more than you ever receive. (This is especially true for men, who tend to have shorter life expectecies than women.)

  In other words, the Social Security Trust Fund is a terrible, miserable investment. Your retirement money would do better in virtually any private investment imaginable.

  The ROI may go up if lifespan increases significantly, as I expect it will; but that means the cost of the program will again become unsustainable, since it does not generate any wealth, as a real investment would, thus cannot pay for itself over the long run.

• Even the pittance we earn on our "investment" (not much better than stuffing the money into a mattress) has been systematically raided by past Congresses, Democratic and Republican, to finance current expenses.

  There is no trust fund. There is no "lockbox." There is no money; there is only a wad of hand-scribbled IOUs.

  Social Security is a pay-as-you-go program. We paid as we went... but we also spent that money on a vast array of other "popular programs" besides Social Security, and it's all gone. C'est la vie.

Both problems can be solved by a single change... but it's going to hurt. Social Security must be fully privatized. Not the namby-pamby partial privatization proposed by President Bush (and shot down in a green-eyeshade second by the Republican Congress), but the whole kit and kaboodle. We do it like this:

Each payroll taxpayer gets an individual Social Security Retirement Account; the SSRA can be maintained by any brokerage firm, which sets up any number of SEC-approved investment funds... divided into three tiers of investment: 1 - Safe, 2 - Moderately Aggressive, and 3 - Aggressive.

All Social-Security "contributions" by a taxpayer are poured into his own personal SSRA. The taxpayer picks the tiers and the funds to invest in; when he retires, that's his own money -- to spend, to reinvest, or to pass along to his children.

And there you have it:

• The ROI is the same as for a 401K, so the SSRAs will be self-sustaining;
• And since they're in the name of the taxpayer, the government cannot raid them.

That's about the only way to permanently solve the problem -- as numerous countries have already discovered, including Argentina, Australia, El Salvadore, Great Britain, Hong Kong, Hungary, Mexico, Peru, Poland, Sweden, and many others.

The feds will have to skim off the top to partially subsidize the program for those folks who, for whatever reason, have SSRAs deemed too small to live... and also to pay the transition cost of all the past contributions by taxpayers into the current system, spread over some period of time to avoid bankrupting the country. Alas, the transition costs will be very, very high; payroll taxes will have to rise, though hopefully not damagingly so.

Such a fix would be market-positive, since it would increase America's "net worth." It's like paying to put a new roof on your house: The money you pay now will increase the value of the house for later resale by more than you put into it.

Will John McCain have the guts to propose it? I hope so; but I know for a fact that neither Hillary nor Obama will.

Medicare/Medicaid

Medicare is basically health insurance for senior citizens of any income level. Medicaid is a group of needs-based state-run (under federal guidelines) medical welfare programs for the poor, which is currently gnawing away at state economies, gobbling up 20% to 30% of state budgets.

With these entitlement programs, the real problem is the rising cost of health care itself. But the cost is being driven to a large extent by factors external to medical care:

• Medical malpractice lawsuits, which force doctors and hospitals to practice "defensive medicine," ordering unnecessary tests for the purpose of covering themselves in the event of a lawsuit.

• The vile practice in other countries (especially Canada) of legally requiring prescription drugs to be sold to their citizens below manufacturer's cost... forcing Big Drug to jack up the price here to avoid going out of business.

  (Were we to follow suit -- an idea that McCain has flirted with in the past, alas -- we would likely lose many pharmaceutical manufacturers... and all the lifesaving and life-enhancing drugs they would have produced.)

• Increasing lifespan: Just as with Social Security, when people live longer -- as they have been, due to medical advances, the decreased rate of smoking, and so forth -- the government must pay more money per person. Thus, if the taxes paid by future recipients don't rise as fast as the increased payments due to living longer, any system will eventually become insolvent.

The solution has several components. First, we need major tort reform, especially in the area of medical malpractice. The reforms must include loser pays; barring "expert witnesses" hired by the plaintiffs' attorneys (let them come from a pool hired by the court, with no financial incentive to lie); and ending the practice of expanding liability further and further outward until one finally reaches a parent company with enough money to satisfy the trial lawyer's greed.

Second, patients are just going to have to be responsible for more of their own medical costs; this will force them to budget their medical dollars more wisely. A very, very good first step is to introduce medical savings accounts (MSAs) into the Medicare system in a big way, particularly for affluent seniors. Getting fiscal responsibility into Medicaid is harder, because it is by definition a program for the poor; but we should put some thought into it.

Third, rather than pay doctors and hospitals directly, perhaps Medicare and Medicaid should pay the patient -- then let him pay the bills. If doctors charge more than the government pays, they will have to get the rest from the patient himself.

This gives patients a huge incentive to shop around and think twice about going to the doctor for minor problems; and it likewise gives doctors a huge incentive to reduce costs by bringing the free market into the equation. At the moment, they simply get paid according to a government "schedule"... which encourages medical professionals to spend money on lobbyists to increase the scheduled payment rates, rather than on finding ways to contain their own costs and remain competitive, as every other business must do.

Fiscal responsibility

If Republicans want to regain control of Congress someday -- and if John McCain wants to get elected president -- then both must offer bold, permanent solutions to the entitlement crisis. There is no more time for tepid "can-kicking."

Even if the Democrats shoot down the GOP proposals, that will give us a vital and future-oriented issue to run on, buttressing our claim to be the party of great new ideas. And this issue will be one that clearly differentiates between the European-style socialism of the Left and the American tradition of personal responsibility on the Right.

Let's hope that if the GOP can ride this issue back into power (this election or the next), that this time, the reality of Republican governance will actually live up to the stirring rhetoric of personal responsibility.

Hatched by Dafydd on this day, March 13, 2008, at the time of 8:14 PM | Comments (3) | TrackBack

October 10, 2007

Are We Going to HillaryFare?

Sen. Hillary Clinton (D-Carpetbag, 95%) was roundly mocked for her "Hillsbury Doughboy" proposal, which she made before a forum hosted by the Congressional Black Caucus, to dig down deep into other people's pockets to send $5,000 to every newborn in America. So she dumped it as casually as she threw Billy Dale under the bus. What are black voters going to do -- vote Republican?

Now she has a new scheme to lurch America further along towards Socialism: She wants the federal government to pay $1,000 in "matching funds" every year to every (low-income) American who puts $1,000 in a fake, government-run "401K". What a wonderful, new way to create yet another government piggy bank -- in addition to Social Security -- that the liberals can loot whenever they run short!

(Nota bene: That's $1,000 matching funds to lower-income investors only -- under 60 Gs; higher-income investors, 60 to 100 grand, only get $500 per year in matching funds. $100 thou a year, and you're SOL.)

The tens of billions of dollars to fund this scheme would come from heavily taxing "large" estates. So let's think this through: We kill the rich and feed them to the poor, forcing middle-income people to liquidate family farms and family businesses, so that we can redistribute that (clearly unearned) wealth to the poor. Sounds familiar, somehow...

Let's call Hillary's new welfare program "HillaryFare" for short.

Of course, it likely wouldn't pass Congress; but that's not the point, is it? It serves to burnish Hillary's credentials with the all-important MoveOn.org, George Soros, "two Americas" crowd, thus further crippling the anemic campaign of the Silky Pony, John Edwards, and causing Sen. Barack Obama (D-IL, 95%) to become even more tongue-tied in debates:

While many Democrats would embrace an estate tax freeze, many Republicans and antitax stalwarts would oppose it, and Democrats would probably have a hard time passing such legislation in the United States Senate, where the party’s majority is currently razor-thin.

But suppose enough Democrats are elected that President Hillary is able to get this thing passed as she proposes it. Has anybody bothered to run the numbers, here?

Hillary boldly estimates that the whole pyramid scheme would only cost "$20 billion to $25 billion a year." Let's assume that half the "investors" in this government numbers racket fall in the under sixty thousand category, while the rest are between sixty and a hundred. Then the average per capita payment by the federal government is $750 per year; the total cost, allowing for about 40% in overhead costs (which is typical of government programs), would be $1,250 per person, per year.

The $20 billion to $25 billion that Hillary proposes for this, er, idea would cover only 16 to 20 million people (the way the Times writes it, it appears to be open to every person, not every family).

So what if instead, after a year or two, we have 40 million families taking advantage of the government's largess? It shouldn't be that tough to get 13% of the population to go for it; heck, even higher-income earners wouldn't sneeze at a guaranteed 50% return on investment. I would take it!

All right; with 40 million fake investors, now the cost is up to $30 billion of actual matching funds, which works out to $50 billion per year in total costs to the government. That's a lot of samoyans. But in fact, Hillary is far more grandiose -- though she keeps this part of the mathematics pretty close to her vest. Viz:

“We’ve got a lot of workers -- more than half in America right now -- without any employer-based retirement system,” she added, noting that the number included about 770,000 workers in Iowa.

Half of all workers in America: According to the Bureau of Labor Statistics household data, "total employment" in the United States is currently 146.3 million (page 2, table A). So if half of those don't have an "employer-based retirement system," and those are the targets of HillaryFare -- then is she really planning on sending those $500 and $1,000 matching-fund checks to 73.15 million people every year?

That's $55 billion dollars a year just in matching funds; add in the overhead, and you get an annual price tag of over $90 billion each and every year.

But wait -- just like the Ginsu knives, there's more! Of course, the investment ceiling of the program would have to have its own growth curve; in ten years, $1,000 won't be worth what it is today. If Social Security and welfare programs are any indicator, that growth curve will be significantly steeper than the inflation index. So how long before HillaryCare is costing us $100 billion, $130 billion, even $180 billion per year in a new middle-class entitlement program?

So in addition to HillaryCare II -- where 25 year old children whose families make up to $80 thousand a year get government-run health-care plans -- the good senator more or less from New York also promises to put half the whole country on the government welfare rolls.

But all is not lost. Having learnt her lesson from the 1994 HillaryCare I debacle, Sen. Clinton now supports individual choice:

As with her biggest policy plan for universal health insurance, Mrs. Clinton cast her savings proposal in terms of choice: If Americans like their 401(k) plans and other retirement accounts, they can keep those, while those who lack any savings plan will have a chance to start one with government help and save $5,000 a year on a tax-deferred basis.

In other words, those who like HillaryFare better than their own retirement accoutns will be lured from private to public funding... just the way the new Democratic S-CHP proposal lures millions of families from private medical insurance for their kids to government-run health care. So it's not just the 73.15 million people above; we may well be paying matching funds to a bunch of people who currently do have an employer-based retirement system!

Can we go back to the $5,000 baby bounty instead?

You know, the way Hillary Rodham Clinton Rodham is going, I fully expect that by this time next year... she'll be offering to buy our children at birth and raise them in liberal incubators.

Sen. Clinton has a simple philosophy about our golden years:

“Saving in the accounts will be easy -- it should not require a Ph.D. to save for retirement,” Mrs. Clinton said.

She's right, it doesn't take a Ph.D. It takes a village idiot.

Hatched by Dafydd on this day, October 10, 2007, at the time of 3:18 AM | Comments (8) | TrackBack

September 24, 2007

Cindy Sheehan's Day of Out-of-Tunement Manifesto

I rarely do this, as you know: I rarely link to some piece and say simply "read this." (I'm too in love with the sound of my own fingers typing on a keyboard.)

But here's an exception. Read Cindy Sheehan's Yom Kippur "sermon," delivered at Michael Lerner's Beyt Tikkun "synogogue;" you will be -- if not exactly glad, then at least agape. (Rabbi Lerner is Hillary Clinton's mentor, author of the Politics of Meaning and other works of Socialist agit-prop masquerading as theology.)

My response (I love this) is entirely contained in the list of categories I had to attach to this post.

(Well, one more thing. It has always been my understanding that Yom Kippur, the Jewish Day of Atonement, is a day for each person to atone for what he, personally, has done wrong -- not "atone" for his enemies failing to live up to his own lofty standards, apologize for all the times America hasn't followed his lead, or wallow in self-righteous indignation that nobody listens to him. 'Nuff said; read the list of categories above.)

Hatched by Dafydd on this day, September 24, 2007, at the time of 2:36 PM | Comments (3) | TrackBack

August 8, 2007

Kosher Security: the War Against Global Pork

This is the second in our ongoing series, searching for a unifying theme of national security in the campaigns of Republican candidates for president. I believe that we desperately need such a theme: an easy-to-understand, overarching "narrative" that melds together a number of urgent problems and their solutions. Our first post in this series explained why the future of energy production is actually a national-security issue:

• Executive Energy

In this installment, I hope we can demonstrate that eliminating "pork" (earmarks, phonemarks) from the government's diet is also a vital national-security issue.

First, let's start with a definition: Not every earmark is "pork." In the Congress, an earmark means a section of appropriations legislation that directs funding to a specific, named purpose. If the purpose truly benefits the entire country -- for example, earmarking funds to upgrade and improve the Air Traffic Control computer system -- there is nothing untoward about it. It could still be either a good or bad expenditure, but it's not necessarily corrupt, even if it specifies the company that will perform the upgrade.

The problem arises when the earmark is directed to a project benefitting only the district or state of the powerful congressman who forced its inclusion... and especially when it benefits a particular business within that district (or even elsewhere) that just happens to have contributed significant money to that congressman's reelection fund. Let's agree to call earmarks intended to benfit only a narrow subset of Americans, at the expense of the rest of us, "evil-earmarks," or EEs, to distinguish them from the other kind.

EEs can be a profitable deal for the company: They bundle $200 thousand from "voluntary" employee contributions to Congressman Smitty, and Congressman Smitty directs $223 million worth of new business to the company, building a Mucus Museum or a new dome for the George Soreass Sports Centre. If it just so happens that the 200 Gs came from a hundred executives, each of whom owns significant stock in the company, and if the company stock rises a few points because of the earmark, it can even be profitable (and legal) for the donating employees.

Of course, it's not so good for the rest of us, who have to pay higher taxes to support somebody else's wretched soccer stadium. $223 million may be a mere molecule in the opalescent ocean of federal spending; but a couple thousand of such earmarks would be greater than this year's entire budget for the Department of Defense. A billion dollars here, a billion dollars there... it adds up.

And as it adds up, such corruption saps the economic strength of the United States.

Econ. 101

Most economists -- and by definition all free-market economists, who are the only ones I care about (color me prejudiced) -- agree that wealth is generally much better spent or invested by its creators, or those who legitimately purchase it, than by the government. Financial decisions of governmental bodies or functionaries are often not made on the basis of a proper cost-benefit analysis but for purely political reasons.

For example, consider the move by politicians (and left-liberal academics at state-funded universities) in the 1970s and 80s to divest pension-fund portfolios of all stock in South African companies, to protest Apartheid... and the similar move among many state and local governments -- and left-liberal academics at state-funded universities -- to divest pension funds of all stock in Israeli companies, and even non-Israeli companies that do business in Israel, to protest Israel's continued existence. Or consider the move to divest from Wal-Mart because Wal-Mart's employees continue to vote against unionizing.

When people invest their own money, they tend to take more care; and they tend to put economic considerations above sending a partisan message. But when they invest "OPM," they're much less circumspect. Democrats especially are always willing to purchase sanctimony by digging down deep -- into your pocket.

It is a truism requiring no argument that investing for non-economic reasons will not, in general, generate as great a return as investing based upon purely economic reasons. Bad investments of great magnitude damage the economy. Thus, evil-earmarks damage the economy.

Why does this matter? For the obvious reason that the operating budget of the United States -- and all components, including the DoD, the CIA, DHS, NSA, FBI, and the State Department -- critically depends upon the health of the nation's economy: Anything that damages the economy, including evil-earmarks, harms national security.

The road to apathy

But there is a more subtle way that EEs become a national-security issue: They are the most visible examples of corruption in government; and when the government is seen as corrupt, it's harder to inspire support for vital national-security programs, from the NSA's Terrorist Surveillance Program and the data-mining program, to support for the Iraq and Afghanistan wars, to military recruitment.

The more people believe the government is corrupt, the less likely they are to believe anything government officials say... hence the less likely they are to support intelligence gathering programs and major sacrifices, such as war. In an indirect but nevertheless very real sense, past GOP corruption led Americans to discount defenses of the war and other security measures. Many Americans believed "they'll say anything to keep the spigot wide open."

Now the Democrats are in charge, to a large extent because of the perception of a "Republican culture of corruption;" and voters have discovered that lobbyists are equal-opportunity seducers: They're just as happy bribing Democrats as Republicans, and the former are equally willing to grab for the cash. Thus, despite many promises to the contrary, in the end, the Democrats could not bring themselves to shine a spotlight on individual earmarks; since they took over the corrupt practice of evil-earmarks themselves, they have lost all interest in making EEs public record.

In fact, they even invented a brand new method of achieving the same goal, which has been dubbed "phonemarking." See the link above.

Visible corruption leads to the erroneous belief that it "doesn't matter" who is in charge, because "they're all equally corrupt." This in turn leads to voter apathy... or even worse, electoral tribalism, where elections are treated as playoff games; voters cheer when "their guy" wins, regardless of his issue positions, experience, or even fitness for the job.

An apathetic or tribalist electorate has a very hard time understanding bipartisan issues such as war, national security, protecting the borders, the rule of law, and leadership. They care only where their "team" stands in the rankings.

Finis

A presidential candidate can sum up this entire syllogism very pithily:

I have never seen a valid counterargument: Stopping evil-earmarks is a vital national-security issue, and it should be defended as such by all the Republican candidates for president... and indeed, the Democrats as well; though so far, the latter -- notably including the Democratic presidential candidates -- seem as incapable of understanding this point as the Republicans who ran the 109th Congress last term.

Hatched by Dafydd on this day, August 8, 2007, at the time of 3:22 PM | Comments (2) | TrackBack

July 24, 2007

Executive Energy

One of the reasons I'm not entirely thrilled with the current bunch of presidential candidates... wait, a detour: Many animal-nouns have associated words for collections of that animal; for example, a gaggle of geese, an exhaltation of larks, a bay of hounds, a bale of turtles, and a murder of crows. Since most politicians are more or less barnyard animals, it makes sense that they have their own collection term. I propose "a corruption of politicians" and a "smarm of candidates."

One of the reasons I'm not entirely thrilled with the current smarm of presidential candidates is that none of them seems to be able to articulate a coherent theme... a single "big issue" that can spawn a whole series of positions that all relate to a central principle. You can have more than one; Reagan had two: The destruction of the Evil Empire, which drove every element of his foreign policy, and the primacy of the individual taxpayer in running his own life, which informed most of his domestic ideas. But without at least one, it's very hard to answer the fundamental question of electoral politics: What makes you different from the other guys?

We live in dangerous times. I believe that our candidates need to focus like a laser beam on national security, but not just in the form of mass invasions of enemy countries (though that is clearly one element that should never be taken off the table). I want to see national security taken seriously enough by some candidate for president that it drives both his foreign and domestic programs. (Naturally, no Democrat would care for principle-based governance; so consider that I speak only to the GOP candidates.)

Let me give you an example of what I mean: One of the big four -- Rudy, Fred, Mitt, or John -- should distinguish himself from the smarm by developing and repeatedly enunciating a coherent, long-term energy policy geared towards replacing foreign oil importation with domestic production as much as possible, as a necessary component of national security. And that should be a major and oft-explained component of his presidential campaign.

The connection is clear; anyone can understand it: The only reason that either Sunni "al-Qaeda" terrorist groups or Shiite "Twelver" terrorists have the resources to threaten the world is that oil-rich countries like Iran and Saudi Arabia (and Venezuela) keep shoveling mountains of petrodollars at them. How long would Hezbollah last if Iran were not able to pay for it? How many radical mosques would we have in the United States if Saudi Arabia didn't have enough money to finance them?

Obviously, then, we can drastically cut the threat to American national security by reducing the price of oil. High oil prices mean the oil producers have money to burn... and they burn it by giving it to Salafists, Wahhabis, and Shiite death squads. But low oil prices means that members of OPEC do not have anywhere near the money they need to fund global hirabah ("unholy war").

All right, so how do we reduce the price of oil? This is Econ. 101 stuff: Price is controlled by demand drawing upon supply. When demand is high and supply low, prices rise; but if either demand drops or supply rises, prices fall.

We cannot significantly reduce demand for oil, so we concentrate on the supply side. And the best -- and most readily apparent -- method of increasing the world supply of oil is to drill more. If we were to drill in the Gulf of Mexico, off the California coast, and of course in the Arctic National Wildlife Refuge in the northeast corner of Alaska, we could reduce our own need to buy foreign oil so dramatically, it would likely drop the price of oil for everyone else, too.

And even though it's difficult to reduce world demand while China and India grow exponentially, we could still reduce our own demand by expedited building of scores of high-tech, safe nuclear power plants (Integral Fast or Pebble Bed designs). Why not? It's a good thing with or without the unifying theme.

OPEC would be in a tizzy. Terrorist butchers would find their paychecks slim and sporatic. And the economic side benefits here in America would include reduced prices and shrinking inflation for all... which would probably also mean the Federal Reserve loosening money, allowing more economic expansion. We increase our national security and improve our economy all in one swell foop.

So where is the GOP candidate willing to step forward and forcefully make this case? Where is the Fred Thompson or Mitt Romney or Rudy Giuliani who will seize this strongest of all electoral themes and beat Hillary and Barack over the head with it?

I even have his slogan: "Defund al-Qaeda by drilling in ANWR!"

Over the next few weeks, I'll post a few more examples of how a principled theme of "boosting national security" can lead to a surprising number of foreign and domestic policies, each of which are good ideas in themselves; but together, they will make our country, and everyone who lives here, safer, more prosperous, and more secure.

Hillary Clinton has her "theme song;" let's us have our campaign theme. There, I'm done.

Hatched by Dafydd on this day, July 24, 2007, at the time of 4:33 AM | Comments (35) | TrackBack

June 22, 2007

China's Growing Pains

Recently, we have started to hear one disturbing story after another coming out of China:

• Poisonous pet food;
• Toxic toothpaste;
• Dangerous toys, and so on.

All of a sudden, we started to notice that one of our largest trading partners was not living up to the standard we demand. But in fact, China’s sloppy business practice has been noticed by many businessmen all over the world who have dealt with them over the years. Only recently, however -- when their products started to kill us (and especially our pets!) -- have we started to pay attention.

Decades ago my father, a patent attorney in Japan, was engaged as a business consultant to a Japanese company dealing with a Chinese manufacturer. As you probably know, patents and copyrights are foreign concepts for the Chinese. After a few months of frustrating and fruitless negotiation, the Japanese company, disgusted by the “unprofessional, and childish behavior,” terminated the contract. In my father’s opinion, the Chinese were not ready for real world business.

For years, I have heard bits and pieces of news about the terrible pollution and lethal food in China. I heard that the soil of southern China was so contaminated that northern Chinese would not eat any vegetables coming from the South; they called them “poison vegetables." I even heard that some Chinese started bringing their own cooking oil to restaurants after they discovered the chefs using industrial oil to cook food.

However, not until I started reading Japanese language Chinese blogs few months ago did I realize just how serious the situation has become.

I honestly do not think that China is unusually unethical or uncaring a country. After all, the western world went through the exact same phase of industrial innovation vastly outstripping resource management and pollution control. The very reason we have a Food and Drug Administration today is the careless or ignorant misuse of chemicals in food, particularly diethylene glycol; DEG was used extensively in the late 19th century as a cheap substitute for non-toxic, pharmaceutical-grade glycerin.

It was used in our tooth paste, just as China does now; and many children's toys were painted with colors containing lead... just as many Chinese toys are today. We made such practices illegal precisely because the toxic materials killed and harmed thousands of Americans in the past:

[diethylene glycol] has been responsible for a number of mass poisonings:

The most infamous incident was the 1937 Elixir Sulfanilamide disaster in the USA, in which 107 people died after taking sulfanilamide dissolved in diethylene glycol. This episode was the impetus for the Federal Food, Drug, and Cosmetic Act of 1938.

The reason today’s air is cleaner than yesterday is that most individuals realized, somewhere along the road, that it's not a good idea to pollute the environment we live in. We figured out that killing consumers with unsafe food is, shall I say, fatal to marketing.

The distinction is that we did not know the bad effects at first, and nobody else did either. The industrial revolution was new then; we had to learn from our mistakes by trial and terrible error.

But China does not. China need not make the same mistakes we made, because they have the West as an example. They study our experience and do the right thing from the beginning. Even though it may cost more money initially, when you take the long view and consider lost business, law suites, and so on, clean and safe manufacturing of products will save billions of dollars.

Eventually, China will learn... because it must. Their survival depends upon it.

But meanwhile, how many people are going to be poisoned or killed by their products? We cannot wait forever for China to grow up.

Hatched by Sachi on this day, June 22, 2007, at the time of 3:53 AM | Comments (4) | TrackBack

March 20, 2007

The Contranomics of Global Jihad

So the burning (sorry) question is -- can Iran actually be brought low by mere economics?

The answer is not yet known for certain; but a new wrinkle in the ongoing crisis about Iran's development of nuclear weapons makes the answer to the riddle above seem more and more like "Yes, it can."

What am I talking about? (Does anybody really know what I'm ever talking about?) Yesterday, Russia announced that it was suspending its shipment of low-grade enriched Uranium fuel to Iran -- ostensibly on the grounds that Iran has missed two payments of $25 million to Russia. However, sources say the real reason is that Iran refuses to stop enriching the low-grade fuel at its centrifuge complex at Natanz:

Russia has informed Iran that it will withhold nuclear fuel for Iran’s nearly completed Bushehr power plant unless Iran suspends its uranium enrichment as demanded by the United