Thursday, August 25, 2011
Updates
The C.A.A. is currently on vacation. Updates will be sporadic but I will still update every now and again so check back from time to time.
Friday, August 19, 2011
The Adventures of Captain America
By Jonah Goldberg
Friday, August 19, 2011
Before President Obama headed off to his rented 28-acre retreat in Martha's Vineyard, he spent a few days campaigning around the Midwest in his new million-dollar, Canadian-made campaign bus, paid for at government expense. He even unveiled what many believe will be his new re-election theme: "Country first."
According to his new stump speech, if you oppose his agenda, then you don't care about America as much as he does.
"There is no shortage of ideas to put people to work right now. What is needed is action on the part of Congress, a willingness to put the partisan games aside and say we're going to do what's right for the country, not what we think is going to score some political points for the next election," Obama explained in Cannon Falls, Minn., in an event the White House insisted had nothing to do with campaigning.
"There is nothing that we're facing that we can't solve with some spirit of 'America first,'" he added, inadvertently borrowing the slogan of 1930s isolationists and the presidential campaigns of Patrick Buchanan.
In news that will no doubt rekindle the hopes of the unemployed, the White House says Obama has an idea for how to get even more Americans working. Of course, it will depend on that "America first" spirit, which will really separate the patriotic from the petty.
And what is his big new plan for putting country first? Well, you'll just have to wait until September to find out. For now, his policy is Martha's Vineyard first.
So while we have this brief lull, let's take a moment to "compare and contrast," as they say in 10th-grade English class.
Rick Perry, the very Texan and very new entrant into the presidential race, said the other day that Ben Bernanke wasn't putting country first. "Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous -- in my opinion." He noted that the Fed chairman would be treated "ugly" if he visited Texas.
It was a poor choice of words for a presidential contender still finding his sea legs. You might even call it stupid. Bernanke is no traitor. His quantitative easing policy may have been wrong, but it's ugly and foolish to suggest he pursued it for less than honorable motives.
Nonetheless, Perry's comment has stirred up a whole kerfuffle, with editorials castigating his incivility and muckety-mucks hieing to their fainting couches. Widely quoted economist Nouriel Roubini called Perry "criminal" for his comments. "This may be the least responsible statement in the modern history of president politics," exclaimed Larry Summers, Obama's former economic advisor.
Obama, meanwhile, has taken the high road. "I think that everybody who runs for president, it probably takes them a little bit of time before they start realizing that this isn't like running for governor or running for senator or running for Congress," he said, "and you've got to be a little more careful about what you say."
Fair enough.
So, I wonder, where is the criticism of Obama? His new "country first" campaign theme isn't an off-the-cuff gaffe; it's been vetted, tweaked and (I suspect) focus-grouped by the White House and the Obama campaign. And he's not simply running for president; Barack Obama is president. And he's saying that people who disagree with him don't care about the country. Indeed, he explains at great length that our political system is "broken" because he can't have his way -- which, don't ya know, is the American way.
When George W. Bush was president, he once said "if you're not with us, you're against us." This was an explicit statement about U.S. foreign policy toward states that turn a blind eye to terrorists bent on attacking America. But Bush's opponents, including much of Hollywood and the "objective" press, took it differently. They claimed it was a sinister vision of domestic dissent (which back then was the "highest form of patriotism," not ersatz racism). When Karl Rove made the 2002 and 2004 elections partial referendums on the war on terror, the New York Times editorial pages collectively got their dresses over their heads in outrage.
Obama, former presidential nominee John Kerry and every other prominent Democrat of the last decade charged that Bush and, in 2008, John McCain inappropriately used patriotism as a political weapon.
And now, Obama does openly what he charged his enemies of doing through code words. And everyone's arguing about Rick Perry.
Friday, August 19, 2011
Before President Obama headed off to his rented 28-acre retreat in Martha's Vineyard, he spent a few days campaigning around the Midwest in his new million-dollar, Canadian-made campaign bus, paid for at government expense. He even unveiled what many believe will be his new re-election theme: "Country first."
According to his new stump speech, if you oppose his agenda, then you don't care about America as much as he does.
"There is no shortage of ideas to put people to work right now. What is needed is action on the part of Congress, a willingness to put the partisan games aside and say we're going to do what's right for the country, not what we think is going to score some political points for the next election," Obama explained in Cannon Falls, Minn., in an event the White House insisted had nothing to do with campaigning.
"There is nothing that we're facing that we can't solve with some spirit of 'America first,'" he added, inadvertently borrowing the slogan of 1930s isolationists and the presidential campaigns of Patrick Buchanan.
In news that will no doubt rekindle the hopes of the unemployed, the White House says Obama has an idea for how to get even more Americans working. Of course, it will depend on that "America first" spirit, which will really separate the patriotic from the petty.
And what is his big new plan for putting country first? Well, you'll just have to wait until September to find out. For now, his policy is Martha's Vineyard first.
So while we have this brief lull, let's take a moment to "compare and contrast," as they say in 10th-grade English class.
Rick Perry, the very Texan and very new entrant into the presidential race, said the other day that Ben Bernanke wasn't putting country first. "Printing more money to play politics at this particular time in American history is almost treacherous -- or treasonous -- in my opinion." He noted that the Fed chairman would be treated "ugly" if he visited Texas.
It was a poor choice of words for a presidential contender still finding his sea legs. You might even call it stupid. Bernanke is no traitor. His quantitative easing policy may have been wrong, but it's ugly and foolish to suggest he pursued it for less than honorable motives.
Nonetheless, Perry's comment has stirred up a whole kerfuffle, with editorials castigating his incivility and muckety-mucks hieing to their fainting couches. Widely quoted economist Nouriel Roubini called Perry "criminal" for his comments. "This may be the least responsible statement in the modern history of president politics," exclaimed Larry Summers, Obama's former economic advisor.
Obama, meanwhile, has taken the high road. "I think that everybody who runs for president, it probably takes them a little bit of time before they start realizing that this isn't like running for governor or running for senator or running for Congress," he said, "and you've got to be a little more careful about what you say."
Fair enough.
So, I wonder, where is the criticism of Obama? His new "country first" campaign theme isn't an off-the-cuff gaffe; it's been vetted, tweaked and (I suspect) focus-grouped by the White House and the Obama campaign. And he's not simply running for president; Barack Obama is president. And he's saying that people who disagree with him don't care about the country. Indeed, he explains at great length that our political system is "broken" because he can't have his way -- which, don't ya know, is the American way.
When George W. Bush was president, he once said "if you're not with us, you're against us." This was an explicit statement about U.S. foreign policy toward states that turn a blind eye to terrorists bent on attacking America. But Bush's opponents, including much of Hollywood and the "objective" press, took it differently. They claimed it was a sinister vision of domestic dissent (which back then was the "highest form of patriotism," not ersatz racism). When Karl Rove made the 2002 and 2004 elections partial referendums on the war on terror, the New York Times editorial pages collectively got their dresses over their heads in outrage.
Obama, former presidential nominee John Kerry and every other prominent Democrat of the last decade charged that Bush and, in 2008, John McCain inappropriately used patriotism as a political weapon.
And now, Obama does openly what he charged his enemies of doing through code words. And everyone's arguing about Rick Perry.
President Obama On Terror: An Uncertain Trumpet
By Ken Blackwell
Friday, August 19, 2011
“George W. Bush, forty-third president—forty-third president to not kill bin Laden, that is.” That’s the way the funsters on Saturday Night Live lampooned President Obama’s imaginary victory lap after Osama bin Laden was taken out by U.S. forces last May. It was a made-for-Hollywood moment for the president. But it was curiously empty. No one expected, or even thought it would be a good idea, for President Obama to dance in the end zone after that score. Still, the rightful satisfaction Americans should take from this wholly acceptable act of reprisal has been missing.
Why has the president not spoken soberly and carefully about the issues involved in the successful targeting of this mass murderer? The best single article written about the attack on bin Laden’s compound was printed in the August 6, 2011 issue of the reliably liberal New Yorker. While Nicholas Schmidle’s minute-by-minute account of the raid is invaluable, what is missing is a reasoned justification for the raid. What is missing is presidential leadership.
As a result, there has been no accrual of support from the American people for what must be seen as President Obama’s finest hour. Actually, the news of the bin Laden raid barely registered a blip on approval ratings for this president. We were all “focused like a laser on the economy” before the May 1st raid, and we immediately returned to near-obsession with our financial doldrums.
We need to attend to our stricken economy, to be sure. But we should also pay necessary heed to the danger of terrorism. This is especially so as we approach the tenth anniversary of 9/11. If we think the economy is bad now, and it is, just consider how much worse it would be were we to suffer another paralyzing terrorist attack.
There’s a reason why President Obama has not been able to rally support as a result of his successful anti-terror operation. It’s the same reason that eluded best-selling historian Steven Ambrose in his book Wild Blue: The Men and Boys Who Flew the B-24s Over Germany/1944-45.
My purpose here is not to re-hash the plagiarism controversy that unfortunately attended that excellent book. Instead, I want to note Ambrose’s puzzlement over the 1972 election of Richard Nixon over George McGovern.
Wild Blue tells the compelling story of incredible heroism by our young fliers over Germany . None is more compelling than that of Capt. George McGovern, Army Air Corps. It’s fair to say that McGovern is the hero of the book. He richly deserves the belated fame he gained as a result of his World War II combat record.
Ambrose was perplexed. How could this country have fallen for the patriotic posing of Richard Nixon—who spent the war playing high-stakes poker on a Navy supply ship—and spurned Sen. George McGovern, the real war hero in the race?
The real reason why President Obama has hurriedly put the bin Laden raid behind him is the same reason why George McGovern could not point to his wonderful combat record, or even let others point to it: The Democratic Party houses a large and influential pacifist element.
Recall that in January, 2008, then-Sen. Barack Obama made a YouTube video for distribution to the Peace Caucus-Goers in the run-up to the Iowa Caucuses. In that 52-second clip, candidate Obama takes the most left-wing position of any Democratic candidate for president that year. He is a virtual pacifist.
Sen. Obama won the Iowa Democratic Caucuses in 2008. In doing so, he defeated Sen. Hillary Clinton, who was desperately trying to achieve two contradictory goals: prove that as the first woman candidate for president she could be a tough commander-in-chief, and retain her credibility as a leading liberal.
Mr. Obama’s victory in the mostly-white, largely rural state of Iowa rocketed his candidacy into the lead. Seeing him win Iowa convinced many black leaders in the Democratic Party that Obama’s time, and their time, had come. This would be no quixotic preacher-as-candidate campaign, like those of Rev. Jesse Jackson and Rev. Al Sharpton. This time, they would not make a statement; they would make a difference.
It was and is historic. But it also explains why there was no “bin Laden bounce.” In order for the president to get such a bounce, he would have to lead the American people. He would have to use the Bully Pulpit of the White House to teach us all how important it is strike fear into the hearts of all who would do us harm.
As we look to the Mideast , to the Bloody Crescent where radical Islam clashes with Hindus, Buddhists, Jews, and Christians, as well as with moderate Muslims, it’s important for America ’s power and purpose to be respected. Tragically, even when President Obama achieves a brilliant success, as he did last May, he is forced by his pacifist following to mute his message. His leadership has become an uncertain trumpet.
Friday, August 19, 2011
“George W. Bush, forty-third president—forty-third president to not kill bin Laden, that is.” That’s the way the funsters on Saturday Night Live lampooned President Obama’s imaginary victory lap after Osama bin Laden was taken out by U.S. forces last May. It was a made-for-Hollywood moment for the president. But it was curiously empty. No one expected, or even thought it would be a good idea, for President Obama to dance in the end zone after that score. Still, the rightful satisfaction Americans should take from this wholly acceptable act of reprisal has been missing.
Why has the president not spoken soberly and carefully about the issues involved in the successful targeting of this mass murderer? The best single article written about the attack on bin Laden’s compound was printed in the August 6, 2011 issue of the reliably liberal New Yorker. While Nicholas Schmidle’s minute-by-minute account of the raid is invaluable, what is missing is a reasoned justification for the raid. What is missing is presidential leadership.
As a result, there has been no accrual of support from the American people for what must be seen as President Obama’s finest hour. Actually, the news of the bin Laden raid barely registered a blip on approval ratings for this president. We were all “focused like a laser on the economy” before the May 1st raid, and we immediately returned to near-obsession with our financial doldrums.
We need to attend to our stricken economy, to be sure. But we should also pay necessary heed to the danger of terrorism. This is especially so as we approach the tenth anniversary of 9/11. If we think the economy is bad now, and it is, just consider how much worse it would be were we to suffer another paralyzing terrorist attack.
There’s a reason why President Obama has not been able to rally support as a result of his successful anti-terror operation. It’s the same reason that eluded best-selling historian Steven Ambrose in his book Wild Blue: The Men and Boys Who Flew the B-24s Over Germany/1944-45.
My purpose here is not to re-hash the plagiarism controversy that unfortunately attended that excellent book. Instead, I want to note Ambrose’s puzzlement over the 1972 election of Richard Nixon over George McGovern.
Wild Blue tells the compelling story of incredible heroism by our young fliers over Germany . None is more compelling than that of Capt. George McGovern, Army Air Corps. It’s fair to say that McGovern is the hero of the book. He richly deserves the belated fame he gained as a result of his World War II combat record.
Ambrose was perplexed. How could this country have fallen for the patriotic posing of Richard Nixon—who spent the war playing high-stakes poker on a Navy supply ship—and spurned Sen. George McGovern, the real war hero in the race?
The real reason why President Obama has hurriedly put the bin Laden raid behind him is the same reason why George McGovern could not point to his wonderful combat record, or even let others point to it: The Democratic Party houses a large and influential pacifist element.
Recall that in January, 2008, then-Sen. Barack Obama made a YouTube video for distribution to the Peace Caucus-Goers in the run-up to the Iowa Caucuses. In that 52-second clip, candidate Obama takes the most left-wing position of any Democratic candidate for president that year. He is a virtual pacifist.
Sen. Obama won the Iowa Democratic Caucuses in 2008. In doing so, he defeated Sen. Hillary Clinton, who was desperately trying to achieve two contradictory goals: prove that as the first woman candidate for president she could be a tough commander-in-chief, and retain her credibility as a leading liberal.
Mr. Obama’s victory in the mostly-white, largely rural state of Iowa rocketed his candidacy into the lead. Seeing him win Iowa convinced many black leaders in the Democratic Party that Obama’s time, and their time, had come. This would be no quixotic preacher-as-candidate campaign, like those of Rev. Jesse Jackson and Rev. Al Sharpton. This time, they would not make a statement; they would make a difference.
It was and is historic. But it also explains why there was no “bin Laden bounce.” In order for the president to get such a bounce, he would have to lead the American people. He would have to use the Bully Pulpit of the White House to teach us all how important it is strike fear into the hearts of all who would do us harm.
As we look to the Mideast , to the Bloody Crescent where radical Islam clashes with Hindus, Buddhists, Jews, and Christians, as well as with moderate Muslims, it’s important for America ’s power and purpose to be respected. Tragically, even when President Obama achieves a brilliant success, as he did last May, he is forced by his pacifist following to mute his message. His leadership has become an uncertain trumpet.
The Euro Disaster
A transnational single currency harms both rich nations and poor ones.
Rich Lowry
Friday, August 19, 2011
The country’s op-ed pages have been full of condemnations of the dysfunction of American politics, what with all the populist clamor and partisan disagreement.
So, a thought experiment: What if we were governed by a sophisticated transnational elite that operated outside of normal political channels as much as possible and, sharing similar values, forged compromises relatively easily? What if the elite were high-minded and visionary? What if they succeeded in doing “big things”?
In Europe for the past couple of decades, this hasn’t been a fanciful hope, it’s been a reality. A political and financial overclass engineered the adoption of the euro, based on one of the world’s most foolhardy delusions since the fall of the Berlin Wall: that you can have a common currency without a common country.
The euro fueled the sovereign-debt crisis that has brought Europe to the brink and threatens to take the American economy down with it. Our double dip may come courtesy of people named Jacques and Wim who were brilliant — and desperately wrong.
As the euro began to become a reality in the 1990s, the chief economist of the German Bundesbank rudely pointed out that “there is no example in history of a lasting monetary union that was not linked to one state.” But what is history compared with the dream of guys around a conference table sipping Evian?
In his excellent primer on the euro crash, Bust, Matthew Lynn notes that there were two answers to this objection. One was that the euro would be the forerunner to a unified Europe — in other words, create the currency first, worry about the nation later (details, details). The other was that Europe was an “optimal currency area,” where economic efficiency would be served by a single cross-border currency.
As the euro expanded to the periphery of Europe, the currency area got steadily less optimal. The euro foundered on differences of national culture and interests. The Swabian housewife — once invoked by German chancellor Angela Merkel as a symbol of austere common sense — does not live in Athens. She never will.
The euro nonetheless made it possible for countries like Greece and Portugal to borrow at essentially the same low rates as Germany under the illusion that they were just as safe. It’s one thing for Germany to borrow at German rates, since fiscal tough-mindedness is practically the country’s state religion. It’s quite another for Greece, with an ingrained habit of spending what it doesn’t have, to do so.
True to form, Greece lied about its fiscal indicators to get accepted into the euro, and kept right on lying once it joined the currency. Its national motto could be a paraphrase of the famous Animal House line: “You messed up, you trusted us.”
The low costs of borrowing in countries like Greece spurred massive binges by consumers and government. The bubble felt good on the way up, but it’s been brutal on the way down, and Europe — which is to say Germany — is ultimately on the hook for all the unsustainable debt.
Under traditional rules, Greece would devalue its currency in its desperation to get out of its current predicament. The euro makes it impossible. The Greeks have accepted a crushing deflationary program imposed by the EU that makes growth impossible and probably only delays the inevitable default. And the contagion is spreading to Spain and Italy, raising the prospect of a crisis in countries too big to bail.
The euro locks them all into a German-approved currency despite the fact that only one of them is Germany. As Ambrose Evans-Pritchard writes in the Daily Telegraph, “These countries were thrown together into monetary union by high-handed politicians before there was any meaningful convergence of productivity, growth patterns, wage bargaining, inflation proclivities, legal systems, or sensitivity to interest rates.”
The handiwork of the splendidly effective euro-crats should be undone. Greece is a basket-case country. It deserves a basket-case currency. Bring back the drachma.
Rich Lowry
Friday, August 19, 2011
The country’s op-ed pages have been full of condemnations of the dysfunction of American politics, what with all the populist clamor and partisan disagreement.
So, a thought experiment: What if we were governed by a sophisticated transnational elite that operated outside of normal political channels as much as possible and, sharing similar values, forged compromises relatively easily? What if the elite were high-minded and visionary? What if they succeeded in doing “big things”?
In Europe for the past couple of decades, this hasn’t been a fanciful hope, it’s been a reality. A political and financial overclass engineered the adoption of the euro, based on one of the world’s most foolhardy delusions since the fall of the Berlin Wall: that you can have a common currency without a common country.
The euro fueled the sovereign-debt crisis that has brought Europe to the brink and threatens to take the American economy down with it. Our double dip may come courtesy of people named Jacques and Wim who were brilliant — and desperately wrong.
As the euro began to become a reality in the 1990s, the chief economist of the German Bundesbank rudely pointed out that “there is no example in history of a lasting monetary union that was not linked to one state.” But what is history compared with the dream of guys around a conference table sipping Evian?
In his excellent primer on the euro crash, Bust, Matthew Lynn notes that there were two answers to this objection. One was that the euro would be the forerunner to a unified Europe — in other words, create the currency first, worry about the nation later (details, details). The other was that Europe was an “optimal currency area,” where economic efficiency would be served by a single cross-border currency.
As the euro expanded to the periphery of Europe, the currency area got steadily less optimal. The euro foundered on differences of national culture and interests. The Swabian housewife — once invoked by German chancellor Angela Merkel as a symbol of austere common sense — does not live in Athens. She never will.
The euro nonetheless made it possible for countries like Greece and Portugal to borrow at essentially the same low rates as Germany under the illusion that they were just as safe. It’s one thing for Germany to borrow at German rates, since fiscal tough-mindedness is practically the country’s state religion. It’s quite another for Greece, with an ingrained habit of spending what it doesn’t have, to do so.
True to form, Greece lied about its fiscal indicators to get accepted into the euro, and kept right on lying once it joined the currency. Its national motto could be a paraphrase of the famous Animal House line: “You messed up, you trusted us.”
The low costs of borrowing in countries like Greece spurred massive binges by consumers and government. The bubble felt good on the way up, but it’s been brutal on the way down, and Europe — which is to say Germany — is ultimately on the hook for all the unsustainable debt.
Under traditional rules, Greece would devalue its currency in its desperation to get out of its current predicament. The euro makes it impossible. The Greeks have accepted a crushing deflationary program imposed by the EU that makes growth impossible and probably only delays the inevitable default. And the contagion is spreading to Spain and Italy, raising the prospect of a crisis in countries too big to bail.
The euro locks them all into a German-approved currency despite the fact that only one of them is Germany. As Ambrose Evans-Pritchard writes in the Daily Telegraph, “These countries were thrown together into monetary union by high-handed politicians before there was any meaningful convergence of productivity, growth patterns, wage bargaining, inflation proclivities, legal systems, or sensitivity to interest rates.”
The handiwork of the splendidly effective euro-crats should be undone. Greece is a basket-case country. It deserves a basket-case currency. Bring back the drachma.
Thursday, August 18, 2011
Young Westerners -- Deprived or Decadent
By Victor Davis Hanson
Thursday, August 18, 2011
A once civil and orderly England was recently torn apart by rioting and looting -- at first by mostly minority youth, but eventually also by young Brits in general. This summer, a number of American cities witnessed so-called "flash mobs" -- mostly African-American youths who swarmed at prearranged times to loot stores or randomly attack those of other races and classes.
The mayhem has reignited an old debate in the West. Are such criminally minded young Americans and British turning to violence in protest over inequality, poverty and bleak opportunities? The Left, of course, often blames cutbacks in the tottering welfare state and high unemployment. The havoc and mayhem, in other words, are a supposed wake-up call in an age of insolvency not to cut entitlements, but to tax the affluent to redistribute more of their earnings to those unfairly deprived.
The Right counters that the problem is not too few state subsidies, but far too many. The growing -- and now unsustainable -- state dole of the last half-century eroded self-reliance and personal initiative. The logical result is a dependent underclass spanning generations that becomes ever more unhappy and unsatisfied the more it is given from others. Today's looters have plenty to eat. That is why they target sneaker and electronics stores -- to enjoy the perks of life they either cannot or will not work for.
We might at least agree on a few facts behind the violence. First, much of the furor is because poverty is now seen as a relative, not an absolute, condition. Per-capita GDP is $47,000 in the U.S. and $35,000 in Britain. In contrast, those rioting in impoverished Syria (where average GDP is about $5,000) or Egypt (about $6,000) worry about being hungry or being shot for their views, rather than not acquiring a new BlackBerry or a pair of Nikes. Inequality, not Tiny Tim-like poverty, is the new Western looter's complaint.
So when the president lectures about fat-cat "corporate jet owners," he doesn't mean that greed prevents the lower classes from flying on affordable commercial jets -- only that a chosen few in luxury aircraft, like himself, reach their destinations a little more quickly and easily. Not having what someone richer has is our generation's lament instead of lacking elemental shelter, food or electricity. The problem is not that the bathwater in Philadelphia is not as hot as in Martha's Vineyard, but that the conditions under which it is delivered in comparison are far more basic and ordinary.
Second, the wealthy have not set an example that hard work and self-discipline leads to well-deserved success and the good life. Recently, a drunken, affluent young prospect for the U.S. ski team urinated on a sleeping 11-year old during a transcontinental flight. And the more the psychodramas of drones like Lindsay Lohan and Paris Hilton, or some members of the royal family, become headline news, the more we see boredom and corruption among the pampered elite. The behavior of John Edwards, Eliot Spitzer, Dominique Strauss-Kahn or Arnold Schwarzenegger does not remind us that good habits of elite public figures follow from well-deserved riches and acclaim -- but only that with today's wealth and power comes inevitable license and decadence.
Third, communism may be dead, but Marxist-inspired materialism still measures the good life only by equal access to "things." We can argue whether those who loot a computer store are spoiled or oppressed. But even a person in faded jeans and a worn T-shirt can still find all sorts of spiritual enrichment at no cost in either a museum or a good book. Did we forget that in our affluent postmodern society, being poor is often an impoverishment of the mind, not necessarily the result of a cruel physical world?
Finally, there is far too much emphasis on government as the doting, problem-solving parent. What made Western civilization rich and liberal was not just free-market capitalism and well-funded constitutional government, but the role of the family, community and church in reminding the emancipated individual of an affluent society that he should not always do what he was legally permitted to. Destroy these bridles, ridicule the old shame culture of the past, and we end up with unchecked appetites -- as we now witness from a smoldering London to the flash mobbing in Wisconsin.
Our high-tech angry youth are deprived not just because their elders put at risk their future subsidies, but because they were not taught what real wealth is -- and where and how it is obtained and should be used.
Thursday, August 18, 2011
A once civil and orderly England was recently torn apart by rioting and looting -- at first by mostly minority youth, but eventually also by young Brits in general. This summer, a number of American cities witnessed so-called "flash mobs" -- mostly African-American youths who swarmed at prearranged times to loot stores or randomly attack those of other races and classes.
The mayhem has reignited an old debate in the West. Are such criminally minded young Americans and British turning to violence in protest over inequality, poverty and bleak opportunities? The Left, of course, often blames cutbacks in the tottering welfare state and high unemployment. The havoc and mayhem, in other words, are a supposed wake-up call in an age of insolvency not to cut entitlements, but to tax the affluent to redistribute more of their earnings to those unfairly deprived.
The Right counters that the problem is not too few state subsidies, but far too many. The growing -- and now unsustainable -- state dole of the last half-century eroded self-reliance and personal initiative. The logical result is a dependent underclass spanning generations that becomes ever more unhappy and unsatisfied the more it is given from others. Today's looters have plenty to eat. That is why they target sneaker and electronics stores -- to enjoy the perks of life they either cannot or will not work for.
We might at least agree on a few facts behind the violence. First, much of the furor is because poverty is now seen as a relative, not an absolute, condition. Per-capita GDP is $47,000 in the U.S. and $35,000 in Britain. In contrast, those rioting in impoverished Syria (where average GDP is about $5,000) or Egypt (about $6,000) worry about being hungry or being shot for their views, rather than not acquiring a new BlackBerry or a pair of Nikes. Inequality, not Tiny Tim-like poverty, is the new Western looter's complaint.
So when the president lectures about fat-cat "corporate jet owners," he doesn't mean that greed prevents the lower classes from flying on affordable commercial jets -- only that a chosen few in luxury aircraft, like himself, reach their destinations a little more quickly and easily. Not having what someone richer has is our generation's lament instead of lacking elemental shelter, food or electricity. The problem is not that the bathwater in Philadelphia is not as hot as in Martha's Vineyard, but that the conditions under which it is delivered in comparison are far more basic and ordinary.
Second, the wealthy have not set an example that hard work and self-discipline leads to well-deserved success and the good life. Recently, a drunken, affluent young prospect for the U.S. ski team urinated on a sleeping 11-year old during a transcontinental flight. And the more the psychodramas of drones like Lindsay Lohan and Paris Hilton, or some members of the royal family, become headline news, the more we see boredom and corruption among the pampered elite. The behavior of John Edwards, Eliot Spitzer, Dominique Strauss-Kahn or Arnold Schwarzenegger does not remind us that good habits of elite public figures follow from well-deserved riches and acclaim -- but only that with today's wealth and power comes inevitable license and decadence.
Third, communism may be dead, but Marxist-inspired materialism still measures the good life only by equal access to "things." We can argue whether those who loot a computer store are spoiled or oppressed. But even a person in faded jeans and a worn T-shirt can still find all sorts of spiritual enrichment at no cost in either a museum or a good book. Did we forget that in our affluent postmodern society, being poor is often an impoverishment of the mind, not necessarily the result of a cruel physical world?
Finally, there is far too much emphasis on government as the doting, problem-solving parent. What made Western civilization rich and liberal was not just free-market capitalism and well-funded constitutional government, but the role of the family, community and church in reminding the emancipated individual of an affluent society that he should not always do what he was legally permitted to. Destroy these bridles, ridicule the old shame culture of the past, and we end up with unchecked appetites -- as we now witness from a smoldering London to the flash mobbing in Wisconsin.
Our high-tech angry youth are deprived not just because their elders put at risk their future subsidies, but because they were not taught what real wealth is -- and where and how it is obtained and should be used.
Appellate Smackdown and the Future of Obamacare
By Zachary Gappa
Thursday, August 18, 2011
The future of the Patient Protection and Affordable Care Act (PPACA - a.k.a. "Obamacare") is more in question than ever after Friday's ruling by the 11th Circuit Court of Appeals. The divided court ruled that the individual mandate is unconstitutional (The individual mandate is a part of the PPACA that forces citizens to purchase health insurance or pay a hefty penalty). Since another appellate court (the 6th Circuit) ruled in favor of Obamacare, the matter will surely be taken up by the Supreme Court next year. At this point, the greatest hope for overturning or significantly changing this federal overreach lies in the hands of the nine justices who make up our Supreme Court.
Back to this latest ruling (which you can find on The Wall Street Journal's website - all 304 pages of it). Of note is that the majority throws out the "activity vs. inactivity" question that has been bandied about by commentators over the last several months. The court draws no clear distinction between government regulating the activity of a citizen and forcing that citizen into action. On this point, they actually agree with the previous ruling by the 6th Circuit Court which upheld the PPACA.
Despite rejecting this common anti-Obamacare argument, the court still ruled that the PPACA was a massive overreach by the federal government. They dismissed the idea that the power to force a citizen to purchase a minimum amount of health insurance was covered through the government's "Commerce Clause" or "Necessary and Proper" powers. From the ruling:
"The federal government’s assertion of power, under the commerce clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.... This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives."
The court believes that there is a significant difference between the individual mandate and past federal mandates. They explain that "Americans have, historically, been subject only to a limited set of personal mandates: serving on juries, registering for the draft, filing tax returns, and responding to the census. These mandates are in the nature of duties owed to the government attendant to citizenship, and they contain clear foundations in the constitutional."
The 11th Circuit majority argues that the individual mandate can be broken off from the broader PPACA and dismissed without negating the entire package. This opinion, if upheld by the Supreme Court, has huge implications for the future of the PPACA. Obamacare is completely undermined without the individual mandate. Its guarantees of coverage for preexisting conditions alone will cripple the insurance industry if healthy Americans are not forced to participate in the system. The PPACA depends on forcing the healthy to subsidize the costs of the sick. Without the individual mandate, insurance rates will skyrocket.
If the Supreme Court agrees with the 11th Circuit Court, we are left with two primary alternatives: Either we subsidize the resultant rapidly-rising cost of insurance policies through taxation or we massively reform the PPACA.
Democrats would likely peddle the former option. This would produce something like a single-payer system that provides insurance for all by taxing all. Essentially, we would have another massive government entitlement.
Republicans would favor the latter option. If the Supreme Court eliminates the individual mandate and Republicans gain seats in the Senate (and maybe the Presidency) in the next election, watch for them to try to strip the PPACA of all significance.
The 11th Circuit Court's opinion will not be the final appellate ruling. There are two more cases that will likely make their way to separate appeals courts (3rd and 4th Circuit) within the next few months, and we are a long way from a conclusive ruling from the Supreme Court, but it is good to see at least one appellate court standing up for the Constitution. When it comes before their bench, hopefully the Supreme Court upholds our founding principles and blocks this overreach. If the individual mandate is struck down, Republicans will have an excellent opportunity to overturn the PPACA after the 2012 elections.
Thursday, August 18, 2011
The future of the Patient Protection and Affordable Care Act (PPACA - a.k.a. "Obamacare") is more in question than ever after Friday's ruling by the 11th Circuit Court of Appeals. The divided court ruled that the individual mandate is unconstitutional (The individual mandate is a part of the PPACA that forces citizens to purchase health insurance or pay a hefty penalty). Since another appellate court (the 6th Circuit) ruled in favor of Obamacare, the matter will surely be taken up by the Supreme Court next year. At this point, the greatest hope for overturning or significantly changing this federal overreach lies in the hands of the nine justices who make up our Supreme Court.
Back to this latest ruling (which you can find on The Wall Street Journal's website - all 304 pages of it). Of note is that the majority throws out the "activity vs. inactivity" question that has been bandied about by commentators over the last several months. The court draws no clear distinction between government regulating the activity of a citizen and forcing that citizen into action. On this point, they actually agree with the previous ruling by the 6th Circuit Court which upheld the PPACA.
Despite rejecting this common anti-Obamacare argument, the court still ruled that the PPACA was a massive overreach by the federal government. They dismissed the idea that the power to force a citizen to purchase a minimum amount of health insurance was covered through the government's "Commerce Clause" or "Necessary and Proper" powers. From the ruling:
"The federal government’s assertion of power, under the commerce clause, to issue an economic mandate for Americans to purchase insurance from a private company for the entire duration of their lives is unprecedented, lacks cognizable limits, and imperils our federalist structure.... This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives."
The court believes that there is a significant difference between the individual mandate and past federal mandates. They explain that "Americans have, historically, been subject only to a limited set of personal mandates: serving on juries, registering for the draft, filing tax returns, and responding to the census. These mandates are in the nature of duties owed to the government attendant to citizenship, and they contain clear foundations in the constitutional."
The 11th Circuit majority argues that the individual mandate can be broken off from the broader PPACA and dismissed without negating the entire package. This opinion, if upheld by the Supreme Court, has huge implications for the future of the PPACA. Obamacare is completely undermined without the individual mandate. Its guarantees of coverage for preexisting conditions alone will cripple the insurance industry if healthy Americans are not forced to participate in the system. The PPACA depends on forcing the healthy to subsidize the costs of the sick. Without the individual mandate, insurance rates will skyrocket.
If the Supreme Court agrees with the 11th Circuit Court, we are left with two primary alternatives: Either we subsidize the resultant rapidly-rising cost of insurance policies through taxation or we massively reform the PPACA.
Democrats would likely peddle the former option. This would produce something like a single-payer system that provides insurance for all by taxing all. Essentially, we would have another massive government entitlement.
Republicans would favor the latter option. If the Supreme Court eliminates the individual mandate and Republicans gain seats in the Senate (and maybe the Presidency) in the next election, watch for them to try to strip the PPACA of all significance.
The 11th Circuit Court's opinion will not be the final appellate ruling. There are two more cases that will likely make their way to separate appeals courts (3rd and 4th Circuit) within the next few months, and we are a long way from a conclusive ruling from the Supreme Court, but it is good to see at least one appellate court standing up for the Constitution. When it comes before their bench, hopefully the Supreme Court upholds our founding principles and blocks this overreach. If the individual mandate is struck down, Republicans will have an excellent opportunity to overturn the PPACA after the 2012 elections.
Warren Buffett’s Posture
He’s an intelligent man who knows better.
Conrad Black
Thursday, August 18, 2011
I am far from an iconoclast, but I am getting a little weary of Warren Buffett’s posturing as a social democrat. He is a brilliant investor and a pretty good aphorist, and his shtick as friendly, folksy Uncle Warren, the Sage of Omaha, though a tired routine, has been an effective one. But he is an extremely wealthy man because he is a relentlessly hardball operator. His masquerade as a public-policy expert is starting to resemble nothing so much as the antics of entertainers who try to translate their renown as vocalists or actors into political influence. But most of them are airheads, oblivious to the fact that it is incongruous to opine on the exigencies of a reformed welfare state while paying below the minimum wage to the undocumented immigrants who roll their tennis courts.
No reasonable person debates Warren Buffett’s talents any more than Barbra Streisand’s, but in his case, he knows what he is saying is bunk, and he should know that most of his audience is suspicious of his motives. His comments in the New York Times this week on why he should be taxed more are spurious, and presumably just another public-relations exercise by a mega-billionaire who sees what a shambles his friends in the administration are making, and is tilting farther left to preempt public-relations problems. His years of padding around university campuses with Bill Gates in their corduroy trousers and viyella shirts explaining that they weren’t really interested in money were hard enough to take, but this next act, solo, as a slimmed-down Santa without beard, sleigh, or red uniform is wearing thin.
Though I consider the spirit of J. P. Morgan’s famous “The public be damned!” to be somewhat dated and inegalitarian, it did — like Orson Welles’s statement as Charles Foster Kane (a parody of William Randolph Hearst) in Citizen Kane that “People will think what I tell them to think!” — at least have a ring of sincerity. As President Bush II said, in response to Buffett and others, the Treasury will deposit their checks, if they are so concerned that they want to contribute more to national revenues. They don’t have to wait for the taxman, and the legislators whom Warren (a very amiable and unpretentious man, from my very slight acquaintance with him) chastises for taking only almost 18 percent of his income. Of course, I have no standing to debate his tax rate with him, but he knows that the way to deal with the problem he identifies as paying a lower rate of tax than the people in his office and the middle class and even most wage-earners would be a wealth tax, and not a legislative fishing expedition in search of imputable income of very wealthy people less ambitious to provoke tax increases than he is.
He might stand still while the tax-swatter approached, but most of his income peers, in so far as he has any, would not. They would fly away in tax-planning terms, and what we would get is an escalation of the cat-and-mouse game of legislators and tax experts on licit avoidance. And a wealth tax, though it would be more collectible than taxes on large and unconventional incomes, would offend the American ethos of not confiscating, at least until death, the proceeds of the legitimate successes of individual American enterprise. And it would open the gates to terrible abuse, as legislators who are afraid to cut spending, pare entitlements to those who don’t need them, raise the actuarial presumptions about Social Security 67 years after its adoption and after the average life expectancy of participants has risen by over ten years, and other steps that will have to be taken, would resort to tokenistic fiscal persecution of the most affluent. Few living things, animal or vegetable, are more tenacious than a politician clinging to an envisioned panacea to justify the deferral of hard decisions. The country waited for the bust of the stimulus monstrosity, and then for the Simpson-Bowles report to be shelved, and for various futile and demeaning bipartisan jawbonings; if anyone took this Buffettism seriously, it would push things out into the next presidential term.
There are a number of incongruities in the Buffett Plan. If Buffett’s equity share of the taxes paid by his company, Berkshire Hathaway, were factored in, his tax rate would, I think, get to around 45 percent. And despite his recycled exhortation not to ask what “your country can do for you,” his lobby for TARP and the bailout of AIG, though quite justifiable, was not disinterested, as he was a preferred shareholder, as well as a new investor, in Goldman Sachs, and the pay-through from AIG saved Goldman about $20 billion, enabling Buffett to enjoy a $3.7 billion gain on that position this year. There’s nothing wrong with any of this, but designer lobbying for personal gain from official policy on that scale makes Santa look a little more versatile than a night-flying patron of the toymakers.
Warren Buffett knows the reinsurance and many other businesses, but he seems not to realize how easily politicians yield to the temptations of demagogy. President Obama is already grumbling about the “billionaires and millionaires,” and elaborating on his redistributive notions on how to “share the wealth.” Anyone who owns a family home in all but the very inner cities or outer suburbs without a lot of debt on it would probably qualify for the president’s description of being wealthy, and Warren Buffett made the point in his Times piece that most of those people are far from flush now.
More important, he knows, but did not write, that even if all his mega-billionaire comrades were soaked 50 percent of their imputable income, it would not lower the present and projected federal annual deficits by more than one third of one percent. This prompts the question of why he is playing to the galleries like this. The top one percent of American income-earners, as he is perfectly aware, a number that gets us pretty far down into the ranks of run-of-the-mill millionaires, pay 38 percent of federal personal income taxes, the lower 50 percent pay 3 percent, and nearly half of American families pay none. Of course everyone but the very rich is worried, and most would be severely threatened if their taxes were increased.
As any experienced observer can see, the answer does not lie in chasing the very rich through the tax courts; it lies in taxes on elective transactions, including gasoline (when buying it is elective), spending reductions, entitlement reform, less government, and incentivization of savings and investment. The basic problems are that too many people (including most of those in government) are addicted to government spending, and that too many employed people don’t really add any value to anything and are more of a taxation, even if they are intelligent and work hard. The best thing that could happen in patterns of employment would be if half the country’s million lawyers, who bill over $1 trillion a year, donned blue overalls, bought metal lunchboxes, and went out to add actual value — make something or extract resources from the earth; and if half the silly laws and much of the access to courts for frivolous and vexatious litigation were ended.
Of course it won’t happen, but for the economy to be robust again, the general addictions to public-sector spending and to the excesses of the service economy will have to be reduced. Much of it is just vocational snobbery, the common ambition to work in skyscraper offices rather than in light industry, as well as the failure to employ unskilled migrant labor in low-end manufacturing jobs, and instead putting them to work in sweatshops and lettuce fields and outsourcing the manufacturing jobs abroad. At this stage, increasing supply and shrieking at the public to spend will just create more sales jobs for vendors of French and Italian luxury goods and German- and Japanese-engineered products.
Obviously, after 31 months in office, the administration and the congressional Democrats are hopeless in these terms, and one of the problems with the lackluster Republican race is that none of the declared candidates has addressed real issues either. And the vacuum is unlikely to be filled by the Texas governor who jogs with a firearm in his sweat suit and had his father-in-law perform a vasectomy on him.
Warren Buffett is one of the country’s most respected citizens, and has earned that status and held it for a long time. He should not be throwing raw meat to the soak-the-rich advocates, whether of the envious or arithmetically challenged variety. If he said what he really thinks, the country would listen, and it could make a positive difference. With so little leadership in the public sector, his time has come; he shouldn’t squander it on nostrums like mega-billionaire taxes.
Conrad Black
Thursday, August 18, 2011
I am far from an iconoclast, but I am getting a little weary of Warren Buffett’s posturing as a social democrat. He is a brilliant investor and a pretty good aphorist, and his shtick as friendly, folksy Uncle Warren, the Sage of Omaha, though a tired routine, has been an effective one. But he is an extremely wealthy man because he is a relentlessly hardball operator. His masquerade as a public-policy expert is starting to resemble nothing so much as the antics of entertainers who try to translate their renown as vocalists or actors into political influence. But most of them are airheads, oblivious to the fact that it is incongruous to opine on the exigencies of a reformed welfare state while paying below the minimum wage to the undocumented immigrants who roll their tennis courts.
No reasonable person debates Warren Buffett’s talents any more than Barbra Streisand’s, but in his case, he knows what he is saying is bunk, and he should know that most of his audience is suspicious of his motives. His comments in the New York Times this week on why he should be taxed more are spurious, and presumably just another public-relations exercise by a mega-billionaire who sees what a shambles his friends in the administration are making, and is tilting farther left to preempt public-relations problems. His years of padding around university campuses with Bill Gates in their corduroy trousers and viyella shirts explaining that they weren’t really interested in money were hard enough to take, but this next act, solo, as a slimmed-down Santa without beard, sleigh, or red uniform is wearing thin.
Though I consider the spirit of J. P. Morgan’s famous “The public be damned!” to be somewhat dated and inegalitarian, it did — like Orson Welles’s statement as Charles Foster Kane (a parody of William Randolph Hearst) in Citizen Kane that “People will think what I tell them to think!” — at least have a ring of sincerity. As President Bush II said, in response to Buffett and others, the Treasury will deposit their checks, if they are so concerned that they want to contribute more to national revenues. They don’t have to wait for the taxman, and the legislators whom Warren (a very amiable and unpretentious man, from my very slight acquaintance with him) chastises for taking only almost 18 percent of his income. Of course, I have no standing to debate his tax rate with him, but he knows that the way to deal with the problem he identifies as paying a lower rate of tax than the people in his office and the middle class and even most wage-earners would be a wealth tax, and not a legislative fishing expedition in search of imputable income of very wealthy people less ambitious to provoke tax increases than he is.
He might stand still while the tax-swatter approached, but most of his income peers, in so far as he has any, would not. They would fly away in tax-planning terms, and what we would get is an escalation of the cat-and-mouse game of legislators and tax experts on licit avoidance. And a wealth tax, though it would be more collectible than taxes on large and unconventional incomes, would offend the American ethos of not confiscating, at least until death, the proceeds of the legitimate successes of individual American enterprise. And it would open the gates to terrible abuse, as legislators who are afraid to cut spending, pare entitlements to those who don’t need them, raise the actuarial presumptions about Social Security 67 years after its adoption and after the average life expectancy of participants has risen by over ten years, and other steps that will have to be taken, would resort to tokenistic fiscal persecution of the most affluent. Few living things, animal or vegetable, are more tenacious than a politician clinging to an envisioned panacea to justify the deferral of hard decisions. The country waited for the bust of the stimulus monstrosity, and then for the Simpson-Bowles report to be shelved, and for various futile and demeaning bipartisan jawbonings; if anyone took this Buffettism seriously, it would push things out into the next presidential term.
There are a number of incongruities in the Buffett Plan. If Buffett’s equity share of the taxes paid by his company, Berkshire Hathaway, were factored in, his tax rate would, I think, get to around 45 percent. And despite his recycled exhortation not to ask what “your country can do for you,” his lobby for TARP and the bailout of AIG, though quite justifiable, was not disinterested, as he was a preferred shareholder, as well as a new investor, in Goldman Sachs, and the pay-through from AIG saved Goldman about $20 billion, enabling Buffett to enjoy a $3.7 billion gain on that position this year. There’s nothing wrong with any of this, but designer lobbying for personal gain from official policy on that scale makes Santa look a little more versatile than a night-flying patron of the toymakers.
Warren Buffett knows the reinsurance and many other businesses, but he seems not to realize how easily politicians yield to the temptations of demagogy. President Obama is already grumbling about the “billionaires and millionaires,” and elaborating on his redistributive notions on how to “share the wealth.” Anyone who owns a family home in all but the very inner cities or outer suburbs without a lot of debt on it would probably qualify for the president’s description of being wealthy, and Warren Buffett made the point in his Times piece that most of those people are far from flush now.
More important, he knows, but did not write, that even if all his mega-billionaire comrades were soaked 50 percent of their imputable income, it would not lower the present and projected federal annual deficits by more than one third of one percent. This prompts the question of why he is playing to the galleries like this. The top one percent of American income-earners, as he is perfectly aware, a number that gets us pretty far down into the ranks of run-of-the-mill millionaires, pay 38 percent of federal personal income taxes, the lower 50 percent pay 3 percent, and nearly half of American families pay none. Of course everyone but the very rich is worried, and most would be severely threatened if their taxes were increased.
As any experienced observer can see, the answer does not lie in chasing the very rich through the tax courts; it lies in taxes on elective transactions, including gasoline (when buying it is elective), spending reductions, entitlement reform, less government, and incentivization of savings and investment. The basic problems are that too many people (including most of those in government) are addicted to government spending, and that too many employed people don’t really add any value to anything and are more of a taxation, even if they are intelligent and work hard. The best thing that could happen in patterns of employment would be if half the country’s million lawyers, who bill over $1 trillion a year, donned blue overalls, bought metal lunchboxes, and went out to add actual value — make something or extract resources from the earth; and if half the silly laws and much of the access to courts for frivolous and vexatious litigation were ended.
Of course it won’t happen, but for the economy to be robust again, the general addictions to public-sector spending and to the excesses of the service economy will have to be reduced. Much of it is just vocational snobbery, the common ambition to work in skyscraper offices rather than in light industry, as well as the failure to employ unskilled migrant labor in low-end manufacturing jobs, and instead putting them to work in sweatshops and lettuce fields and outsourcing the manufacturing jobs abroad. At this stage, increasing supply and shrieking at the public to spend will just create more sales jobs for vendors of French and Italian luxury goods and German- and Japanese-engineered products.
Obviously, after 31 months in office, the administration and the congressional Democrats are hopeless in these terms, and one of the problems with the lackluster Republican race is that none of the declared candidates has addressed real issues either. And the vacuum is unlikely to be filled by the Texas governor who jogs with a firearm in his sweat suit and had his father-in-law perform a vasectomy on him.
Warren Buffett is one of the country’s most respected citizens, and has earned that status and held it for a long time. He should not be throwing raw meat to the soak-the-rich advocates, whether of the envious or arithmetically challenged variety. If he said what he really thinks, the country would listen, and it could make a positive difference. With so little leadership in the public sector, his time has come; he shouldn’t squander it on nostrums like mega-billionaire taxes.
Wednesday, August 17, 2011
Ominous Parallels
By Walter E. Williams
Wednesday, August 17, 2011
People are beginning to compare Barack Obama's administration to the failed administration of Jimmy Carter, but a better comparison is to the Roosevelt administration of the 1930s and '40s. Let's look at it with the help of a publication from the Mackinac Center for Public Policy and the Foundation for Economic Education titled "Great Myths of the Great Depression," by Dr. Lawrence Reed.
During the first year of President Franklin D. Roosevelt's New Deal, he called for increasing federal spending to $10 billion while revenues were only $3 billion. Between 1933 and 1936, government expenditures rose by more than 83 percent. Federal debt skyrocketed by 73 percent. Roosevelt signed off on legislation that raised the top income tax rate to 79 percent and then later to 90 percent. Hillsdale College economics historian and professor Burt Folsom, author of "New Deal or Raw Deal?", notes that in 1941, Roosevelt even proposed a 99.5 percent marginal tax rate on all incomes more than $100,000. When a top adviser questioned the idea, Roosevelt replied, "Why not?"
Roosevelt had other ideas for the economy, including the National Recovery Act. Dr. Reed says: "The economic impact of the NRA was immediate and powerful. In the five months leading up to the act's passage, signs of recovery were evident: factory employment and payrolls had increased by 23 and 35 percent, respectively. Then came the NRA, shortening hours of work, raising wages arbitrarily and imposing other new costs on enterprise. In the six months after the law took effect, industrial production dropped 25 percent."
Blacks were especially hard hit by the NRA. Black spokesmen and the black press often referred to the NRA as the "Negro Run Around," Negroes Rarely Allowed," "Negroes Ruined Again," "Negroes Robbed Again," "No Roosevelt Again" and the "Negro Removal Act." Fortunately, the courts ruled the NRA unconstitutional. As a result, unemployment fell to 14 percent in 1936 and lower by 1937.
Roosevelt had more plans for the economy, namely the National Labor Relations Act, better known as the "Wagner Act." This was a payoff to labor unions, and with these new powers, labor unions went on a militant organizing frenzy that included threats, boycotts, strikes, seizures of plants, widespread violence and other acts that pushed productivity down sharply and unemployment up dramatically. In 1938, Roosevelt's New Deal produced the nation's first depression within a depression. The stock market crashed again, losing nearly 50 percent of its value between August 1937 and March 1938, and unemployment climbed back to 20 percent. Columnist Walter Lippmann wrote in March 1938 that "with almost no important exception every measure (Roosevelt) has been interested in for the past five months has been to reduce or discourage the production of wealth."
Roosevelt's agenda was not without its international admirers. The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised "Roosevelt's adoption of National Socialist strains of thought in his economic and social policies" and "the development toward an authoritarian state" based on the "demand that collective good be put before individual self-interest." Roosevelt himself called Benito Mussolini "admirable" and professed that he was "deeply impressed by what he (had) accomplished."
FDR's very own treasury secretary, Henry Morgenthau, saw the folly of the New Deal, writing: "We have tried spending money. We are spending more than we have ever spent before and it does not work. ... We have never made good on our promises. ... I say after eight years of this Administration we have just as much unemployment as when we started ... and an enormous debt to boot!" The bottom line is that Roosevelt's New Deal policies turned what would have been a three- or four-year sharp downturn into a 16-year affair.
The 1930s depression was caused by and aggravated by acts of government, and so was the current financial mess that we're in. Do we want to repeat history by listening to those who created the calamity? That's like calling on an arsonist to help put out a fire.
Wednesday, August 17, 2011
People are beginning to compare Barack Obama's administration to the failed administration of Jimmy Carter, but a better comparison is to the Roosevelt administration of the 1930s and '40s. Let's look at it with the help of a publication from the Mackinac Center for Public Policy and the Foundation for Economic Education titled "Great Myths of the Great Depression," by Dr. Lawrence Reed.
During the first year of President Franklin D. Roosevelt's New Deal, he called for increasing federal spending to $10 billion while revenues were only $3 billion. Between 1933 and 1936, government expenditures rose by more than 83 percent. Federal debt skyrocketed by 73 percent. Roosevelt signed off on legislation that raised the top income tax rate to 79 percent and then later to 90 percent. Hillsdale College economics historian and professor Burt Folsom, author of "New Deal or Raw Deal?", notes that in 1941, Roosevelt even proposed a 99.5 percent marginal tax rate on all incomes more than $100,000. When a top adviser questioned the idea, Roosevelt replied, "Why not?"
Roosevelt had other ideas for the economy, including the National Recovery Act. Dr. Reed says: "The economic impact of the NRA was immediate and powerful. In the five months leading up to the act's passage, signs of recovery were evident: factory employment and payrolls had increased by 23 and 35 percent, respectively. Then came the NRA, shortening hours of work, raising wages arbitrarily and imposing other new costs on enterprise. In the six months after the law took effect, industrial production dropped 25 percent."
Blacks were especially hard hit by the NRA. Black spokesmen and the black press often referred to the NRA as the "Negro Run Around," Negroes Rarely Allowed," "Negroes Ruined Again," "Negroes Robbed Again," "No Roosevelt Again" and the "Negro Removal Act." Fortunately, the courts ruled the NRA unconstitutional. As a result, unemployment fell to 14 percent in 1936 and lower by 1937.
Roosevelt had more plans for the economy, namely the National Labor Relations Act, better known as the "Wagner Act." This was a payoff to labor unions, and with these new powers, labor unions went on a militant organizing frenzy that included threats, boycotts, strikes, seizures of plants, widespread violence and other acts that pushed productivity down sharply and unemployment up dramatically. In 1938, Roosevelt's New Deal produced the nation's first depression within a depression. The stock market crashed again, losing nearly 50 percent of its value between August 1937 and March 1938, and unemployment climbed back to 20 percent. Columnist Walter Lippmann wrote in March 1938 that "with almost no important exception every measure (Roosevelt) has been interested in for the past five months has been to reduce or discourage the production of wealth."
Roosevelt's agenda was not without its international admirers. The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised "Roosevelt's adoption of National Socialist strains of thought in his economic and social policies" and "the development toward an authoritarian state" based on the "demand that collective good be put before individual self-interest." Roosevelt himself called Benito Mussolini "admirable" and professed that he was "deeply impressed by what he (had) accomplished."
FDR's very own treasury secretary, Henry Morgenthau, saw the folly of the New Deal, writing: "We have tried spending money. We are spending more than we have ever spent before and it does not work. ... We have never made good on our promises. ... I say after eight years of this Administration we have just as much unemployment as when we started ... and an enormous debt to boot!" The bottom line is that Roosevelt's New Deal policies turned what would have been a three- or four-year sharp downturn into a 16-year affair.
The 1930s depression was caused by and aggravated by acts of government, and so was the current financial mess that we're in. Do we want to repeat history by listening to those who created the calamity? That's like calling on an arsonist to help put out a fire.
Should Warren Buffett Pay More Taxes?
By John C. Goodman
Tuesday, August 16, 2011
I hope he doesn’t. Here’s why.
Writing in The New York Times the other day, Buffett claimed that he and others like him pay too little in taxes. As he’s said before, he calculates that his tax rate is lower than his secretary’s and that’s not fair. In his own words:
Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
Some have pointed out that Buffett’s calculation is off. The money he receives in dividends has already been taxed once at the corporate level. So his personal taxes are the IRS’s second bite of the apple.
But for the moment, put aside all notions of fairness — both the unfairness of double taxation and the unfairness of Buffett vis-Ã -vis his secretary. I want you to consider instead your own self-interest.
You and I should not be indifferent about the taxes Warren Buffett pays. How he is taxed and how much he pays affects our own economic futures. Here’s how.
Consider that when Warren Buffett is consuming, he’s benefiting himself. When he’s saving and investing, he’s benefitting you and me. Every time Buffett forgoes personal consumption (a pricey dinner, a larger house, a huge yacht) and puts his money in the capital market instead, he’s doing an enormous favor for everyone else. A larger capital stock means higher productivity and that means everyone can have more income for the same amount of work.
So it’s in our self-interest to have very low taxes on Buffett’s capital. In fact, capital taxes should be zero. That means no capital gains tax, no tax on dividends and profits — so long as the income is recycled back into the capital market. We should instead tax Buffett’s consumption. Tax him on what he takes out of the system, not what he puts into it. Tax him when he is benefitting himself, not when he is benefitting you and me.
So how much does Warren Buffett consume? That’s hard to say. But he doesn’t seem to live a lavish lifestyle. It’s hard to believe he spent seven million dollars on consumer goods last years. As economist Arnold Kling speculated the other day, it’s highly likely that Buffet’s income taxes are more than 100 percent of what he consumed!
If you’re an envious sort, that result may be satisfying. But it doesn’t change the fact that the current tax system has everything backward. The taxes are imposed on Buffett’s investment income. They are affected not one whit by how much or how little Warren Buffett spends on himself.
What kind of tax system would get the incentives right? Any tax system that taxes consumption, but not investment.
A flat tax, a national sales tax and a value-added tax — at least in their pure forms — would all accomplish the right goal. And contrary to a lot of loose rhetoric, the changeover to a consumption tax is actually “progressive.” It would leave after-tax income more equal than it is today!
Tuesday, August 16, 2011
I hope he doesn’t. Here’s why.
Writing in The New York Times the other day, Buffett claimed that he and others like him pay too little in taxes. As he’s said before, he calculates that his tax rate is lower than his secretary’s and that’s not fair. In his own words:
Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
Some have pointed out that Buffett’s calculation is off. The money he receives in dividends has already been taxed once at the corporate level. So his personal taxes are the IRS’s second bite of the apple.
But for the moment, put aside all notions of fairness — both the unfairness of double taxation and the unfairness of Buffett vis-Ã -vis his secretary. I want you to consider instead your own self-interest.
You and I should not be indifferent about the taxes Warren Buffett pays. How he is taxed and how much he pays affects our own economic futures. Here’s how.
Consider that when Warren Buffett is consuming, he’s benefiting himself. When he’s saving and investing, he’s benefitting you and me. Every time Buffett forgoes personal consumption (a pricey dinner, a larger house, a huge yacht) and puts his money in the capital market instead, he’s doing an enormous favor for everyone else. A larger capital stock means higher productivity and that means everyone can have more income for the same amount of work.
So it’s in our self-interest to have very low taxes on Buffett’s capital. In fact, capital taxes should be zero. That means no capital gains tax, no tax on dividends and profits — so long as the income is recycled back into the capital market. We should instead tax Buffett’s consumption. Tax him on what he takes out of the system, not what he puts into it. Tax him when he is benefitting himself, not when he is benefitting you and me.
So how much does Warren Buffett consume? That’s hard to say. But he doesn’t seem to live a lavish lifestyle. It’s hard to believe he spent seven million dollars on consumer goods last years. As economist Arnold Kling speculated the other day, it’s highly likely that Buffet’s income taxes are more than 100 percent of what he consumed!
If you’re an envious sort, that result may be satisfying. But it doesn’t change the fact that the current tax system has everything backward. The taxes are imposed on Buffett’s investment income. They are affected not one whit by how much or how little Warren Buffett spends on himself.
What kind of tax system would get the incentives right? Any tax system that taxes consumption, but not investment.
A flat tax, a national sales tax and a value-added tax — at least in their pure forms — would all accomplish the right goal. And contrary to a lot of loose rhetoric, the changeover to a consumption tax is actually “progressive.” It would leave after-tax income more equal than it is today!
Defend Western Civilization
The British riots show what happens when the elites give up on their civilization.
Jim Lacey
Wednesday, August 17, 2011
I embrace all cultures. If the Irish want to drink green beer and have a St. Patrick’s Day parade — let them. Likewise, I support Cinco de Mayo festivals, and have no problem with the Scots’ Tartan Day (April 6). I have no more problem with Muslims fasting during Ramadan than I have with Christians giving up meat for Lent. Moreover, I feel no more threatened by a group of Arab men sitting in a Brooklyn café smoking their hookah pipes than I do by a group of Italian men playing bocce ball in a Brooklyn park.
People who choose to live in America should be welcome to keep many of the attributes of the culture they or their ancestors left behind. It adds to the color and vibrancy that make America a wonderful and interesting place in which to live. By all means, bring your culture — your art, your songs, your literature, your food. America will take it all and integrate it into a greater and ever more distinctively American culture.
But leave your civilization behind.
Although the terms culture and civilization are often used interchangeably, there is a distinct difference. Within Western Europe, for instance, there are dozens of distinct cultures (Italian, French, Irish, etc.), but all of them reside within a single Western civilization. Similarly, the vast American melting pot is home to hundreds of intermingled cultures. What allows these myriad cultures to coexist on generally peaceful terms is that most of their adherents accept the basic tenets of Western civilization. When this is lost, everything else goes.
Foremost among these tenets is respect for the rights, freedoms, and property of all individuals. Although last week’s riots in Britain were not blamed on any one cultural group, they did represent a general fraying of civilization’s social compact. I am not going to try to explain what caused Britain’s riots. There are thousands of sociologists only too eager to offer explanations for the indefensible behavior of thousands of British youths. What is obvious, however, is that the spread of multiculturalism has weakened the governing classes’ ability to cope with attacks on the very underpinnings of our civilization. Convinced that no culture is superior to another, they are equally convinced that no civilization is better than any other. It is but a short step from this point to seeing nothing worth defending in the civilization that has nourished us to greatness.
The British rioters were not possessed of any noble goals. Rather, their fixed purpose was to destroy or take the property of others. And they were prepared to use violence, up to and including murder, to accomplish that. But what is truly troubling is the fact that Britain’s political leaders allowed them to get away with it for five full days. Worse, many commentators, while condemning the violence, told us in the very next sentence that, given the socioeconomic conditions of the rioters, their anger was understandable. No, it was not. And even if their anger were understandable, their actions would still be wrong.
In any viable civilization the state has one function that supersedes all others: to protect the rights, property, and lives of its citizens. If it cannot accomplish that task, it has no reason to exist. The British government, which spends about half of the nation’s entire GDP, appears ready to undertake every task except the one for which it was created. It now does so much of the trivial that it is incapable of accomplishing the most basic task of any government: to defend its citizens. In some regards we in America are not far behind. Our government is willing to regulate the minutest details of our daily lives, but is incapable of producing a budget that will not bankrupt the nation.
In a just society the state is supposed to have a monopoly on violence. Although Americans are generally permitted to arm themselves for self-defense, the assumption is that the need to use their weapons will remain rare. Of course, if the U.S. government abdicates its raison d’être, the average American is much better prepared to defend his life and property than the average Briton. For the most part, though, Americans count on the state to protect them from violence, even if it has to meet violence with violence.
In fact, violence remains the only effective response to any group willing to collapse the social order. Violent acts must everywhere and always be met with an overwhelmingly violent response. Afterward, there will be plenty of time to talk and to let sociologists search for deeper meanings. In the meantime, there are innocent lives to save and many millions of dollars of private property to protect. Paul Collier, in his magnificent book The Bottom Billion, points out that what halted Sierra Leone’s descent into barbarity was that the British government sent in paratroopers willing to face down the forces of barbarism and to both take and inflict casualties. Where was that same British backbone when it came to facing down the barbarians in their midst?
As I see it, the reason the British elites and the country’s ruling class failed to act was that too many of them are convinced that their civilization is no longer worth defending. They have made a serious mistake in accepting that an equality between cultures holds true for civilizations too. Personally, if given a choice between classic Irish pub tunes and the music of an Arab bazaar, I will pick the pub tunes. This is a matter of taste and upbringing, and I fully accept that those brought up to appreciate the music of the bazaar have every right to enjoy it. I do not, however, accept that anyone living in the United States has a right to choose between the American Constitution and sharia law. This is a matter of civilization, and it should never be the subject of serious debate within our borders.
The West has endured thousands of years of war, misrule, genocide, and a multitude of other trials. Out of these tribulations evolved a political system that places respect for the rights and freedoms of the individual at its center. It is not a perfect system, but it is far superior to what can be found anywhere else. It deserves to be defended, and must be defended. Any person choosing to come to America (or Britain, for that matter) from a non-Western country must give up the tenets of whatever civilization he was raised with. In its place must be substituted a strong belief in unfettered democracy (of the people, by the people, and for the people), human dignity, equal rights, and the freedom of the individual.
When I was in London a few weeks back I was absolutely stunned to see how many women walked the streets in full burqa — the garment that covers the whole body, including the face. That this is permitted for any person residing in Britain (or the United States) is unconscionable. I am fine with the burqa as a cultural artifact. Women should be permitted to wear it — if they choose — whenever they are celebrating an Islamic cultural event. It should, however, be forbidden for women to wear it on the street as their typical day wear. The burqa is not only a sign of female oppression, it is an instrument of it. It is a direct affront to any concept of freedom, equal rights, or personal dignity. In the West, allowing women to wear burqas in daily life is not being culturally sensitive. It is a betrayal of all that is good in Western civilization.
Of course, burqas are just one of many manifestations of the ongoing assault on Western values. In many areas, value systems alien to the precepts of Western civilization make daily inroads. That they can make such advances is primarily due to the fact that our intellectuals no longer feel the idea of the West is worth saving or even teaching about. Two decades ago, at Stanford University, Jesse Jackson led 500 clueless students in demanding an end to the required class on Western civilization. Unbelievably, they were wildly successful not only at Stanford but almost everywhere else. The National Association of Scholars, after examining the curricula at 50 leading universities, reported that in 1964, all of them required a Western-civilization survey course. By 2010, however, none of them required a basic Western Civ course, not even for history majors.
One wonders how the next generation of intellectuals will be able to defend the concepts that nourish our society when the very existence of a superior Western civilization is being denied within our foremost academic institutions.
Jim Lacey
Wednesday, August 17, 2011
I embrace all cultures. If the Irish want to drink green beer and have a St. Patrick’s Day parade — let them. Likewise, I support Cinco de Mayo festivals, and have no problem with the Scots’ Tartan Day (April 6). I have no more problem with Muslims fasting during Ramadan than I have with Christians giving up meat for Lent. Moreover, I feel no more threatened by a group of Arab men sitting in a Brooklyn café smoking their hookah pipes than I do by a group of Italian men playing bocce ball in a Brooklyn park.
People who choose to live in America should be welcome to keep many of the attributes of the culture they or their ancestors left behind. It adds to the color and vibrancy that make America a wonderful and interesting place in which to live. By all means, bring your culture — your art, your songs, your literature, your food. America will take it all and integrate it into a greater and ever more distinctively American culture.
But leave your civilization behind.
Although the terms culture and civilization are often used interchangeably, there is a distinct difference. Within Western Europe, for instance, there are dozens of distinct cultures (Italian, French, Irish, etc.), but all of them reside within a single Western civilization. Similarly, the vast American melting pot is home to hundreds of intermingled cultures. What allows these myriad cultures to coexist on generally peaceful terms is that most of their adherents accept the basic tenets of Western civilization. When this is lost, everything else goes.
Foremost among these tenets is respect for the rights, freedoms, and property of all individuals. Although last week’s riots in Britain were not blamed on any one cultural group, they did represent a general fraying of civilization’s social compact. I am not going to try to explain what caused Britain’s riots. There are thousands of sociologists only too eager to offer explanations for the indefensible behavior of thousands of British youths. What is obvious, however, is that the spread of multiculturalism has weakened the governing classes’ ability to cope with attacks on the very underpinnings of our civilization. Convinced that no culture is superior to another, they are equally convinced that no civilization is better than any other. It is but a short step from this point to seeing nothing worth defending in the civilization that has nourished us to greatness.
The British rioters were not possessed of any noble goals. Rather, their fixed purpose was to destroy or take the property of others. And they were prepared to use violence, up to and including murder, to accomplish that. But what is truly troubling is the fact that Britain’s political leaders allowed them to get away with it for five full days. Worse, many commentators, while condemning the violence, told us in the very next sentence that, given the socioeconomic conditions of the rioters, their anger was understandable. No, it was not. And even if their anger were understandable, their actions would still be wrong.
In any viable civilization the state has one function that supersedes all others: to protect the rights, property, and lives of its citizens. If it cannot accomplish that task, it has no reason to exist. The British government, which spends about half of the nation’s entire GDP, appears ready to undertake every task except the one for which it was created. It now does so much of the trivial that it is incapable of accomplishing the most basic task of any government: to defend its citizens. In some regards we in America are not far behind. Our government is willing to regulate the minutest details of our daily lives, but is incapable of producing a budget that will not bankrupt the nation.
In a just society the state is supposed to have a monopoly on violence. Although Americans are generally permitted to arm themselves for self-defense, the assumption is that the need to use their weapons will remain rare. Of course, if the U.S. government abdicates its raison d’être, the average American is much better prepared to defend his life and property than the average Briton. For the most part, though, Americans count on the state to protect them from violence, even if it has to meet violence with violence.
In fact, violence remains the only effective response to any group willing to collapse the social order. Violent acts must everywhere and always be met with an overwhelmingly violent response. Afterward, there will be plenty of time to talk and to let sociologists search for deeper meanings. In the meantime, there are innocent lives to save and many millions of dollars of private property to protect. Paul Collier, in his magnificent book The Bottom Billion, points out that what halted Sierra Leone’s descent into barbarity was that the British government sent in paratroopers willing to face down the forces of barbarism and to both take and inflict casualties. Where was that same British backbone when it came to facing down the barbarians in their midst?
As I see it, the reason the British elites and the country’s ruling class failed to act was that too many of them are convinced that their civilization is no longer worth defending. They have made a serious mistake in accepting that an equality between cultures holds true for civilizations too. Personally, if given a choice between classic Irish pub tunes and the music of an Arab bazaar, I will pick the pub tunes. This is a matter of taste and upbringing, and I fully accept that those brought up to appreciate the music of the bazaar have every right to enjoy it. I do not, however, accept that anyone living in the United States has a right to choose between the American Constitution and sharia law. This is a matter of civilization, and it should never be the subject of serious debate within our borders.
The West has endured thousands of years of war, misrule, genocide, and a multitude of other trials. Out of these tribulations evolved a political system that places respect for the rights and freedoms of the individual at its center. It is not a perfect system, but it is far superior to what can be found anywhere else. It deserves to be defended, and must be defended. Any person choosing to come to America (or Britain, for that matter) from a non-Western country must give up the tenets of whatever civilization he was raised with. In its place must be substituted a strong belief in unfettered democracy (of the people, by the people, and for the people), human dignity, equal rights, and the freedom of the individual.
When I was in London a few weeks back I was absolutely stunned to see how many women walked the streets in full burqa — the garment that covers the whole body, including the face. That this is permitted for any person residing in Britain (or the United States) is unconscionable. I am fine with the burqa as a cultural artifact. Women should be permitted to wear it — if they choose — whenever they are celebrating an Islamic cultural event. It should, however, be forbidden for women to wear it on the street as their typical day wear. The burqa is not only a sign of female oppression, it is an instrument of it. It is a direct affront to any concept of freedom, equal rights, or personal dignity. In the West, allowing women to wear burqas in daily life is not being culturally sensitive. It is a betrayal of all that is good in Western civilization.
Of course, burqas are just one of many manifestations of the ongoing assault on Western values. In many areas, value systems alien to the precepts of Western civilization make daily inroads. That they can make such advances is primarily due to the fact that our intellectuals no longer feel the idea of the West is worth saving or even teaching about. Two decades ago, at Stanford University, Jesse Jackson led 500 clueless students in demanding an end to the required class on Western civilization. Unbelievably, they were wildly successful not only at Stanford but almost everywhere else. The National Association of Scholars, after examining the curricula at 50 leading universities, reported that in 1964, all of them required a Western-civilization survey course. By 2010, however, none of them required a basic Western Civ course, not even for history majors.
One wonders how the next generation of intellectuals will be able to defend the concepts that nourish our society when the very existence of a superior Western civilization is being denied within our foremost academic institutions.
Tuesday, August 16, 2011
Obama’s Paradoxes
The Left’s greatest dream is becoming its worst nightmare.
Victor Davis Hanson
Tuesday, August 16, 2011
Consider the myriad paradoxes of the Obama age. Unprecedented government borrowing is out of control, unsustainable, and finally causing financial markets to panic. Yet we are told that the necessary cutting ahead will further stall the stalled economy. We went from $9 trillion to $14 trillion in aggregate debt in order to jump-start a sluggish recovery, and failed — only to be warned that if we do not proceed to incur even more debt — from $14 trillion to $16 trillion — we will stall the stalled effort to restart the stalled economy. So more of what did not work most surely will work?
The Left insists that the real problem is not unmanageable debt, but near-record unemployment, as if the two were unrelated. Most Americans apparently once agreed, as Obama easily borrowed nearly $5 trillion in his first two and a half years in office, supposedly to stimulate employers into hiring workers. We are now told the U.S. must borrow more, and should worry less, not more, about paying the money back. The logic of the new Keynesians is that stimulus is never quite achieved because indebtedness is never quite large enough — an Achilles-and-the-tortoise paradox that only insolvency will finally dispel.
Rioting in London and flash mobbing in American cities have raised another paradox: Does contemporary looting and violence follow from physical deprivation or from a boredom, envy, and anger caused by too many subsidies and too little personal initiative and self-reliance? We know that the more we ensure that young people have generous unemployment insurance and government money for housing, food, and education, the more they are likely not to get up at 6 a.m. and take an extra class or look for a job. And yet the more we provide such bread-and-circuses dependencies, the more it becomes dangerous to question such life support. Ask the Emperor Justinian, who cut back on a bloated civil-service and entitlement bureau — and earned the Nika riots, which almost toppled his regime. So even as we suspect that the welfare state is unsustainable, we are told that it alone can prevent social unrest — which we suspect is currently brought about by the welfare state.
We worry about our youth, citing high unemployment among those under 25, a $16 trillion debt bequeathed to them, a bankrupt Social Security and Medicare system propped up by a shrinking and poor youth cohort working for an affluent and long-lived aging generation. But we also fret that young people are not quite suffering in Depression-era style, but instead are hooked on iPhones, iPads, iPods, DVDs, and video games. A new profile of the stay-at-home, electronics-laden, late-20-something-year-old suggests that millions are earning just enough for entertainment, car payments, and gas, subsidized by mom and dad with free rent, food, and laundry. Are today’s students saddled with the highest per capita student-loan debt in history, and at the same time more pampered and learning less than any previous generation?
We all receive impassioned fund-raising letters from our almae matres about cruel budget cuts that threaten brilliant research and inspired teaching. But we also know that universities have more drone administrators subsidized by exploited part-time teachers than ever, as the percentage of the college budget devoted to non-instruction is at an all-time high. So do we give money to save a pathological university as it is, or withhold it on the logic that only scarcity will force it to prune unnecessary spending that is not merely superfluous to learning but actually antithetical to it?
When Barack Obama won the election in 2008, he was quite right that the old system needed fixing. America’s debt, its poorly educated youth, its imbalances in trade, its counterproductive tax system, its out-of-control annual spending, its culture of entitlement and subsidies, all in perfect-storm fashion were starting to coalesce and weaken America from within and the perception of America abroad. The statesmanlike thing to do — in the manner of a once-naïve Harry Truman, who woke up to the threat of Soviet-inspired global Communism, or of a Bill Clinton, who finally addressed some of the contradictions of the welfare state and deficit spending — would have been to overhaul the tax system, recalibrate Social Security and Medicare, cut spending, lecture the citizenry on personal responsibility, and address the therapeutic curriculum in our failing schools. With a 70 percent approval rating and supermajorities in both houses of Congress, Obama could have done almost anything throughout 2009.
Instead, he chose the path of Jimmy Carter and the pre-1995 Bill Clinton — even more redistributive state programs, more stifling regulations, more petulant talk about “them,” more class warfare, more debt, and more failed big government.
As a genuine reactionary wedded to the dream of the 1960s, Obama not only rejected the idea of national renewal, but hastened by a decade or so our day of reckoning with the out-of-control welfare state. Was he naïve in thinking that the private sector could be hectored and harassed, and still create enough new wealth to fund his growing redistributive agenda? Or was he Machiavellian in seeing that only by massive new debt, government regulations, and spread-the-wealth programs would America be reduced to the status of just another indebted European-style socialist state — in itself a good and long-overdue thing?
Finally, one last paradox remains: The once-divine Obama will do more to discredit the Left than any other progressive in modern history — as its greatest dream becomes its worst nightmare.
Victor Davis Hanson
Tuesday, August 16, 2011
Consider the myriad paradoxes of the Obama age. Unprecedented government borrowing is out of control, unsustainable, and finally causing financial markets to panic. Yet we are told that the necessary cutting ahead will further stall the stalled economy. We went from $9 trillion to $14 trillion in aggregate debt in order to jump-start a sluggish recovery, and failed — only to be warned that if we do not proceed to incur even more debt — from $14 trillion to $16 trillion — we will stall the stalled effort to restart the stalled economy. So more of what did not work most surely will work?
The Left insists that the real problem is not unmanageable debt, but near-record unemployment, as if the two were unrelated. Most Americans apparently once agreed, as Obama easily borrowed nearly $5 trillion in his first two and a half years in office, supposedly to stimulate employers into hiring workers. We are now told the U.S. must borrow more, and should worry less, not more, about paying the money back. The logic of the new Keynesians is that stimulus is never quite achieved because indebtedness is never quite large enough — an Achilles-and-the-tortoise paradox that only insolvency will finally dispel.
Rioting in London and flash mobbing in American cities have raised another paradox: Does contemporary looting and violence follow from physical deprivation or from a boredom, envy, and anger caused by too many subsidies and too little personal initiative and self-reliance? We know that the more we ensure that young people have generous unemployment insurance and government money for housing, food, and education, the more they are likely not to get up at 6 a.m. and take an extra class or look for a job. And yet the more we provide such bread-and-circuses dependencies, the more it becomes dangerous to question such life support. Ask the Emperor Justinian, who cut back on a bloated civil-service and entitlement bureau — and earned the Nika riots, which almost toppled his regime. So even as we suspect that the welfare state is unsustainable, we are told that it alone can prevent social unrest — which we suspect is currently brought about by the welfare state.
We worry about our youth, citing high unemployment among those under 25, a $16 trillion debt bequeathed to them, a bankrupt Social Security and Medicare system propped up by a shrinking and poor youth cohort working for an affluent and long-lived aging generation. But we also fret that young people are not quite suffering in Depression-era style, but instead are hooked on iPhones, iPads, iPods, DVDs, and video games. A new profile of the stay-at-home, electronics-laden, late-20-something-year-old suggests that millions are earning just enough for entertainment, car payments, and gas, subsidized by mom and dad with free rent, food, and laundry. Are today’s students saddled with the highest per capita student-loan debt in history, and at the same time more pampered and learning less than any previous generation?
We all receive impassioned fund-raising letters from our almae matres about cruel budget cuts that threaten brilliant research and inspired teaching. But we also know that universities have more drone administrators subsidized by exploited part-time teachers than ever, as the percentage of the college budget devoted to non-instruction is at an all-time high. So do we give money to save a pathological university as it is, or withhold it on the logic that only scarcity will force it to prune unnecessary spending that is not merely superfluous to learning but actually antithetical to it?
When Barack Obama won the election in 2008, he was quite right that the old system needed fixing. America’s debt, its poorly educated youth, its imbalances in trade, its counterproductive tax system, its out-of-control annual spending, its culture of entitlement and subsidies, all in perfect-storm fashion were starting to coalesce and weaken America from within and the perception of America abroad. The statesmanlike thing to do — in the manner of a once-naïve Harry Truman, who woke up to the threat of Soviet-inspired global Communism, or of a Bill Clinton, who finally addressed some of the contradictions of the welfare state and deficit spending — would have been to overhaul the tax system, recalibrate Social Security and Medicare, cut spending, lecture the citizenry on personal responsibility, and address the therapeutic curriculum in our failing schools. With a 70 percent approval rating and supermajorities in both houses of Congress, Obama could have done almost anything throughout 2009.
Instead, he chose the path of Jimmy Carter and the pre-1995 Bill Clinton — even more redistributive state programs, more stifling regulations, more petulant talk about “them,” more class warfare, more debt, and more failed big government.
As a genuine reactionary wedded to the dream of the 1960s, Obama not only rejected the idea of national renewal, but hastened by a decade or so our day of reckoning with the out-of-control welfare state. Was he naïve in thinking that the private sector could be hectored and harassed, and still create enough new wealth to fund his growing redistributive agenda? Or was he Machiavellian in seeing that only by massive new debt, government regulations, and spread-the-wealth programs would America be reduced to the status of just another indebted European-style socialist state — in itself a good and long-overdue thing?
Finally, one last paradox remains: The once-divine Obama will do more to discredit the Left than any other progressive in modern history — as its greatest dream becomes its worst nightmare.
How the Academic Left Engages in Debate
Inside an ugly attack on a renowned criminologist.
John R. Lott Jr.
Tuesday, August 16, 2011
Academic debates occasionally get pretty ugly, and that is just the way it is. Sometimes they get very ugly. There is one case that has bothered me for several years.
James Q. Wilson is now 80 years old, and for decades he has been the most prominent criminologist in the country, responsible for a number of important ideas, such as the Broken Windows theory, which argues that urban disorder and vandalism produce additional crime.
Undoubtedly, Wilson has made a number of enemies, as he has taken positions that upset some on the left. One such issue was Wilson’s involvement with the National Academy of Sciences panel that wrote the 2004 report “Firearms and Violence: A Critical Review.” The panel was set up by the Clinton administration and contained many outspoken gun-control proponents (e.g., Steven Levitt, who with John Donohue argued that theoretically, the presence of firearms leads to greater levels of violence, and who claimed without any empirical evidence that higher homicide rates during the late 1980s and early 1990s are “clearly linked to . . . the easy availability of guns”; and Richard Rosenfeld, who argued that those opposed to the Brady Law were “immune to scientific assessment”).
The purpose of the panel was to examine the research on whether various gun-control laws reduce or increase crime. In particular, the debate over right-to-carry laws — which give citizens the right to carry concealed weapons — was raging in academia at the time; a body of research, much of which I conducted, indicated that these laws reduce crime by giving the innocent a way to deter potential criminals. Nevertheless, the final report refused to take a stand on whether right-to-carry laws reduce crime.
Dissents for National Academy of Sciences reports are exceedingly rare. Being on a panel is a cushy, prestigious position, and there is a lot of pressure to sign on to the panel’s conclusion. Those who don’t sign on aren’t invited to be on future panels. Over the ten years prior to the “Firearms and Violence” report, there were 236 reports, and only two featured dissents. Wilson had participated in four of these panels over the years, including the highly controversial panel that attacked research on the death penalty, and had never written a dissent.
For Wilson, the firearms panel was different. Wilson’s dissent was not only rare, it was forceful: “In view of the confirmation of the findings that shall-issue laws drive down the murder rate, it is hard for me to understand why these claims are called ‘fragile.’”
Wilson said that that panel’s conclusion raises concerns given that “virtually every reanalysis done by the committee” confirmed that right-to-carry laws reduced crime. He found the committee’s only evidence that did not confirm the drop in crime “quite puzzling.” The result that they pointed to was co-produced by John Donohue, a law professor at Stanford, and accounted for “no control variables” — nothing on any of the social, demographic, and public-policy factors that might affect crime. Furthermore, Wilson found it incomprehensible how evidence that was not published in a peer-reviewed journal would be given such weight: “It strikes me that such an argument ought first to be tested in a peer-reviewed journal before it is used in this report as a sound strategy.”
But Donohue wasn’t willing to let Wilson’s dissent go unanswered, and the attacks became quite personal. In a debate carried nationally on National Public Radio, Donohue claimed that Wilson not only was employed by the National Rifle Association, but had let his employment bias his academic findings:
The lone dissenter was someone who was not an econometrician, who admitted in his dissent that he wished he knew more econometrics, and who had previously testified as an expert witness on behalf of the execrable NRA.
When later called on to justify this claim after the debate, Mr. Donohue did not offer proof, but instead called on Wilson to prove that he had never gotten paid by the NRA. When asked for evidence, Donohue e-mailed me: “Do you have Wilson’s email address or not? I am going to assume you do and that you know he worked for the NRA since you could ask him via email to confirm or deny and cc me, and you are not doing so.” Even later in 2009, after Wilson had denied that he had ever worked for the NRA, Donohue refused to accept it: “On the issue of the NRA, somehow I suspect that the Ronald Reagan professor of public policy doesn’t think the NRA is a bad organization and therefore any affiliation would not be deemed problematic.” Even during the last couple of weeks, with repeated calls to publicly retract his claim, Donohue has yet to correct the record.
Given Donohue’s distaste for the “execrable” NRA, linking Wilson to the NRA is hardly Donohue’s way of showing his respect. For example, in a debate with me at the Contemporary Club in Charlottesville, Va., on Oct. 22, 2008, Donohue claimed: “A free market in guns, which of course the NRA likes, and the reason why they like it is because when crime rises gun sales go up.” Donohue has made this claim at other times, including this weekend, when he sent out an e-mail to several people claiming the following (emphasis in the original): “In fact, there is only one group in America that DOES benefit from high crime — and that is the gun lobby. Fear and crime sell guns; crime reduction and safety undermine gun sales. The crime drop of the Clinton years was enormously costly to the gun industry as sales of guns dropped sharply. So who would be more likely to want fear and crime in the citizenry — a sitting president who would be blamed for not stopping crime, or the gun lobby that gets an extra pay day every time crime or fear of crime ticks up?”
As usual, Donohue provided no evidence to back up his claims. But it is extreme to publicly argue that the NRA — or by implication Wilson, who supposedly does their bidding — wants to sell more guns because that will cause more people to die and that in turn will increase the demand for guns.
Unfortunately, the attacks on Wilson are just part of a long pattern, both from Donohue himself as well as from the Left in general.
John R. Lott Jr.
Tuesday, August 16, 2011
Academic debates occasionally get pretty ugly, and that is just the way it is. Sometimes they get very ugly. There is one case that has bothered me for several years.
James Q. Wilson is now 80 years old, and for decades he has been the most prominent criminologist in the country, responsible for a number of important ideas, such as the Broken Windows theory, which argues that urban disorder and vandalism produce additional crime.
Undoubtedly, Wilson has made a number of enemies, as he has taken positions that upset some on the left. One such issue was Wilson’s involvement with the National Academy of Sciences panel that wrote the 2004 report “Firearms and Violence: A Critical Review.” The panel was set up by the Clinton administration and contained many outspoken gun-control proponents (e.g., Steven Levitt, who with John Donohue argued that theoretically, the presence of firearms leads to greater levels of violence, and who claimed without any empirical evidence that higher homicide rates during the late 1980s and early 1990s are “clearly linked to . . . the easy availability of guns”; and Richard Rosenfeld, who argued that those opposed to the Brady Law were “immune to scientific assessment”).
The purpose of the panel was to examine the research on whether various gun-control laws reduce or increase crime. In particular, the debate over right-to-carry laws — which give citizens the right to carry concealed weapons — was raging in academia at the time; a body of research, much of which I conducted, indicated that these laws reduce crime by giving the innocent a way to deter potential criminals. Nevertheless, the final report refused to take a stand on whether right-to-carry laws reduce crime.
Dissents for National Academy of Sciences reports are exceedingly rare. Being on a panel is a cushy, prestigious position, and there is a lot of pressure to sign on to the panel’s conclusion. Those who don’t sign on aren’t invited to be on future panels. Over the ten years prior to the “Firearms and Violence” report, there were 236 reports, and only two featured dissents. Wilson had participated in four of these panels over the years, including the highly controversial panel that attacked research on the death penalty, and had never written a dissent.
For Wilson, the firearms panel was different. Wilson’s dissent was not only rare, it was forceful: “In view of the confirmation of the findings that shall-issue laws drive down the murder rate, it is hard for me to understand why these claims are called ‘fragile.’”
Wilson said that that panel’s conclusion raises concerns given that “virtually every reanalysis done by the committee” confirmed that right-to-carry laws reduced crime. He found the committee’s only evidence that did not confirm the drop in crime “quite puzzling.” The result that they pointed to was co-produced by John Donohue, a law professor at Stanford, and accounted for “no control variables” — nothing on any of the social, demographic, and public-policy factors that might affect crime. Furthermore, Wilson found it incomprehensible how evidence that was not published in a peer-reviewed journal would be given such weight: “It strikes me that such an argument ought first to be tested in a peer-reviewed journal before it is used in this report as a sound strategy.”
But Donohue wasn’t willing to let Wilson’s dissent go unanswered, and the attacks became quite personal. In a debate carried nationally on National Public Radio, Donohue claimed that Wilson not only was employed by the National Rifle Association, but had let his employment bias his academic findings:
The lone dissenter was someone who was not an econometrician, who admitted in his dissent that he wished he knew more econometrics, and who had previously testified as an expert witness on behalf of the execrable NRA.
When later called on to justify this claim after the debate, Mr. Donohue did not offer proof, but instead called on Wilson to prove that he had never gotten paid by the NRA. When asked for evidence, Donohue e-mailed me: “Do you have Wilson’s email address or not? I am going to assume you do and that you know he worked for the NRA since you could ask him via email to confirm or deny and cc me, and you are not doing so.” Even later in 2009, after Wilson had denied that he had ever worked for the NRA, Donohue refused to accept it: “On the issue of the NRA, somehow I suspect that the Ronald Reagan professor of public policy doesn’t think the NRA is a bad organization and therefore any affiliation would not be deemed problematic.” Even during the last couple of weeks, with repeated calls to publicly retract his claim, Donohue has yet to correct the record.
Given Donohue’s distaste for the “execrable” NRA, linking Wilson to the NRA is hardly Donohue’s way of showing his respect. For example, in a debate with me at the Contemporary Club in Charlottesville, Va., on Oct. 22, 2008, Donohue claimed: “A free market in guns, which of course the NRA likes, and the reason why they like it is because when crime rises gun sales go up.” Donohue has made this claim at other times, including this weekend, when he sent out an e-mail to several people claiming the following (emphasis in the original): “In fact, there is only one group in America that DOES benefit from high crime — and that is the gun lobby. Fear and crime sell guns; crime reduction and safety undermine gun sales. The crime drop of the Clinton years was enormously costly to the gun industry as sales of guns dropped sharply. So who would be more likely to want fear and crime in the citizenry — a sitting president who would be blamed for not stopping crime, or the gun lobby that gets an extra pay day every time crime or fear of crime ticks up?”
As usual, Donohue provided no evidence to back up his claims. But it is extreme to publicly argue that the NRA — or by implication Wilson, who supposedly does their bidding — wants to sell more guns because that will cause more people to die and that in turn will increase the demand for guns.
Unfortunately, the attacks on Wilson are just part of a long pattern, both from Donohue himself as well as from the Left in general.
Social Degeneration
By Thomas Sowell
Tuesday, August 16, 2011
Someone at long last has had the courage to tell the plain, honest truth about race.
After mobs of young blacks rampaged through Philadelphia committing violence -- as similar mobs have rampaged through Chicago, Denver, Milwaukee and other places -- Philadelphia's black mayor, Michael A. Nutter, ordered a police crackdown and lashed out at the whole lifestyle of those who did such things.
"Pull up your pants and buy a belt 'cause no one wants to see your underwear or the crack of your butt," he said. "If you walk into somebody's office with your hair uncombed and a pick in the back, and your shoes untied, and your pants half down, tattoos up and down your arms and on your neck, and you wonder why somebody won't hire you? They don't hire you 'cause you look like you're crazy," the mayor said. He added: "You have damaged your own race."
While this might seem like it is just plain common sense, what Mayor Nutter said undermines a whole vision of the world that has brought fame, fortune and power to race hustlers in politics, the media and academia. Any racial disparities in hiring can only be due to racism and discrimination, according to the prevailing vision, which reaches from street corner demagogues to the august chambers of the Supreme Court of the United States.
Just to identify the rioters and looters as black is a radical departure, when mayors, police chiefs and the media in other cities report on these outbreaks of violence without mentioning the race of those who are doing these things. The Chicago Tribune even made excuses for failing to mention race when reporting on violent attacks by blacks on whites in Chicago.
Such excuses might make sense if the same politicians and media talking heads were not constantly mentioning race when denouncing the fact that a disproportionate number of young black men are being sent to prison.
The prevailing social dogma is that disparities in outcomes between races can only be due to disparities in how these races are treated. In other words, there cannot possibly be any differences in behavior.
But if black and white Americans had exactly the same behavior patterns, they would be the only two groups on this planet that are the same.
The Chinese minority in Malaysia has long been more successful and more prosperous than the Malay majority, just as the Indians in Fiji have long been more successful and more prosperous than the indigenous Fijians. At various places and times throughout history, the same could be said of the Armenians in Turkey, the Lebanese in Sierra Leone, the Parsees in India, the Japanese in Brazil, and numerous others.
There are similar disparities within particular racial or ethnic groups. Even this late in history, I have had northern Italians explain to me why they are not like southern Italians. In Australia, Jewish leaders in both Sydney and Melbourne went to great lengths to tell me why and how the Jews are different in these two cities.
In the United States, despite the higher poverty level among blacks than among whites, the poverty rate among black married couples has been in single digits since 1994. The disparities within the black community are huge, both in behavior and in outcomes.
Nevertheless, the dogma persists that differences between groups can only be due to the way others treat them or to differences in the way others perceive them in "stereotypes."
All around the country, people in politics and the media have been tip-toeing around the fact that violent attacks by blacks on whites in public places are racially motivated, even when the attackers themselves use anti-white invective and mock the victims they leave lying on the streets bleeding.
This is not something to ignore or excuse. It is something to be stopped. Mayor Michael Nutter of Philadelphia seems to be the first to openly recognize this.
This needs to be done for the sake of both black and white Americans -- and even for the sake of the hoodlums. They have set out on a path that leads only downward for themselves.
Tuesday, August 16, 2011
Someone at long last has had the courage to tell the plain, honest truth about race.
After mobs of young blacks rampaged through Philadelphia committing violence -- as similar mobs have rampaged through Chicago, Denver, Milwaukee and other places -- Philadelphia's black mayor, Michael A. Nutter, ordered a police crackdown and lashed out at the whole lifestyle of those who did such things.
"Pull up your pants and buy a belt 'cause no one wants to see your underwear or the crack of your butt," he said. "If you walk into somebody's office with your hair uncombed and a pick in the back, and your shoes untied, and your pants half down, tattoos up and down your arms and on your neck, and you wonder why somebody won't hire you? They don't hire you 'cause you look like you're crazy," the mayor said. He added: "You have damaged your own race."
While this might seem like it is just plain common sense, what Mayor Nutter said undermines a whole vision of the world that has brought fame, fortune and power to race hustlers in politics, the media and academia. Any racial disparities in hiring can only be due to racism and discrimination, according to the prevailing vision, which reaches from street corner demagogues to the august chambers of the Supreme Court of the United States.
Just to identify the rioters and looters as black is a radical departure, when mayors, police chiefs and the media in other cities report on these outbreaks of violence without mentioning the race of those who are doing these things. The Chicago Tribune even made excuses for failing to mention race when reporting on violent attacks by blacks on whites in Chicago.
Such excuses might make sense if the same politicians and media talking heads were not constantly mentioning race when denouncing the fact that a disproportionate number of young black men are being sent to prison.
The prevailing social dogma is that disparities in outcomes between races can only be due to disparities in how these races are treated. In other words, there cannot possibly be any differences in behavior.
But if black and white Americans had exactly the same behavior patterns, they would be the only two groups on this planet that are the same.
The Chinese minority in Malaysia has long been more successful and more prosperous than the Malay majority, just as the Indians in Fiji have long been more successful and more prosperous than the indigenous Fijians. At various places and times throughout history, the same could be said of the Armenians in Turkey, the Lebanese in Sierra Leone, the Parsees in India, the Japanese in Brazil, and numerous others.
There are similar disparities within particular racial or ethnic groups. Even this late in history, I have had northern Italians explain to me why they are not like southern Italians. In Australia, Jewish leaders in both Sydney and Melbourne went to great lengths to tell me why and how the Jews are different in these two cities.
In the United States, despite the higher poverty level among blacks than among whites, the poverty rate among black married couples has been in single digits since 1994. The disparities within the black community are huge, both in behavior and in outcomes.
Nevertheless, the dogma persists that differences between groups can only be due to the way others treat them or to differences in the way others perceive them in "stereotypes."
All around the country, people in politics and the media have been tip-toeing around the fact that violent attacks by blacks on whites in public places are racially motivated, even when the attackers themselves use anti-white invective and mock the victims they leave lying on the streets bleeding.
This is not something to ignore or excuse. It is something to be stopped. Mayor Michael Nutter of Philadelphia seems to be the first to openly recognize this.
This needs to be done for the sake of both black and white Americans -- and even for the sake of the hoodlums. They have set out on a path that leads only downward for themselves.
Monday, August 15, 2011
Terminating the Liberal Agenda
By Mike Needham
Monday, August 15, 2011
Every expansion of big government starts with a lofty, often inspiring goal. Politicians and interest groups identify a problem, and in turn, identify a corresponding government solution. Of course, more often than not, those solutions fail – or even worse, cause further harm.
The Legal Services Corporation (LSC) is one such entity.
In 1974, a bipartisan majority in Congress and President Richard Nixon created the federally funded organization under the auspicious that it would provide legal services to those unable to afford them. Obviously, non-government pro bono services are available. But, for the sake of argument, let us set aside the obvious and focus on the LSC’s record.
A 2010 Government Accountability Office report casts a dim view over the LSC’s grant approval process. Some highlights from the 44-page report:
7 of the 57 (12 percent) renewal grantees’ files had input fields that were BLANK and required information was NOT included;
15 out of 57 (26 percent) of noncompetitive grantees and 6 out of 23 (26 percent) competitive grantees entered data in DIFFERENT parts of the grant application and the data were INCONSISTENT;
3 of the 23 competitive grantees (13 percent) the evaluation data was NOT filled out;
and, along with the continuing nature of several related deficiencies first identified nearly 3 years ago; these are indicative of WEAKNESS in LSC’s overall control environment.
Given this poor track record, it would seem nearly impossible the LCS could ensure taxpayer funds are being used in an appropriate fashion. In fact, the LSC’s use of taxpayer funds has often been dubious; promoting the advancement of big-government priorities as opposed to representing the legal interests of the poor. They’ve sued job creators and lobbied the federal government for the expansion of welfare programs.
In effect, the Legal Services Corporation has become an arm of big-government liberalism. Fortunately, conservatives in Congress are fighting to end the LSC, which has not been reauthorized since 1980. On August 1, Congressman Austin Scott (R-GA) introduced H.R.2774, a bill to repeal the Legal Services Corporation.
Earlier this year, the House rejected an amendment by Congressman Jeff Duncan (R-SC), which would have eliminated funding for the LSC. 170 Republicans and 1 Democrat supported the effort.
Some pundits have come to the conclusion that since the LSC retains bipartisan support in the House (68 Republicans and 191 Democrats), Rep. Scott’s effort is futile. Drawing such a conclusion ignores legislative history and fails to recognize the growing sentiment in America to shrink the size and scope of the federal government.
Conservative policy victories rarely just happen, they are usually the product of long intellectual battles against an entrenched Washington Establishment that finally folds under genuine grassroots and good-government pressure. This is true on issue both large and small.
Look at the Presidio Trust, a federal corporation created by Congress in 1996 to preserve, protect, enhance and manage the Presidio of San Francisco. In 2007, Congressman Jeff Flake (R-AZ) offered an amendment to deny funding to the trust on the basis it was merely a local development matter – in essence, an earmark. That vote split House Republicans, 93 to 94.
Fast-forward 4 years, freshman Congressman Tom Reed (R-NY) offered an amendment to roll back funding for the Presidio Trust Fund, which was adopted by the House with near unanimous support among Republicans, 224 to 10. The amendment even enjoyed the support of 15 House Democrats.
In 1980, The Heritage Foundation’s “Mandate for Leadership” described the LSC as follows:
The poor do have legal problems which need solution, and they need lawyers who either work pro bono or who are paid a salary to represent the poor. But a $350 million federal bureaucracy is not needed to provide such services.
It went on to quote the New Republic, which wrote:
The legal services program may be the most extreme example of the paternalism of the American welfare state: denying the poor what they explicitly lack – money – in favor of goods and services the government thinks they should have, in the amount and proportion it deems appropriate.
It took conservatives years to win the fight against earmarks – a symbol of Washington waste and an enabler of big-government. Conservatives must apply the same passion and commitment to the small ball legislative issues. Seemingly innocuous programs, like the LSC, can have a dramatic impact not only on the cost of government, but also the scope of government.
As President Reagan was fond of saying, “The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'”
Monday, August 15, 2011
Every expansion of big government starts with a lofty, often inspiring goal. Politicians and interest groups identify a problem, and in turn, identify a corresponding government solution. Of course, more often than not, those solutions fail – or even worse, cause further harm.
The Legal Services Corporation (LSC) is one such entity.
In 1974, a bipartisan majority in Congress and President Richard Nixon created the federally funded organization under the auspicious that it would provide legal services to those unable to afford them. Obviously, non-government pro bono services are available. But, for the sake of argument, let us set aside the obvious and focus on the LSC’s record.
A 2010 Government Accountability Office report casts a dim view over the LSC’s grant approval process. Some highlights from the 44-page report:
7 of the 57 (12 percent) renewal grantees’ files had input fields that were BLANK and required information was NOT included;
15 out of 57 (26 percent) of noncompetitive grantees and 6 out of 23 (26 percent) competitive grantees entered data in DIFFERENT parts of the grant application and the data were INCONSISTENT;
3 of the 23 competitive grantees (13 percent) the evaluation data was NOT filled out;
and, along with the continuing nature of several related deficiencies first identified nearly 3 years ago; these are indicative of WEAKNESS in LSC’s overall control environment.
Given this poor track record, it would seem nearly impossible the LCS could ensure taxpayer funds are being used in an appropriate fashion. In fact, the LSC’s use of taxpayer funds has often been dubious; promoting the advancement of big-government priorities as opposed to representing the legal interests of the poor. They’ve sued job creators and lobbied the federal government for the expansion of welfare programs.
In effect, the Legal Services Corporation has become an arm of big-government liberalism. Fortunately, conservatives in Congress are fighting to end the LSC, which has not been reauthorized since 1980. On August 1, Congressman Austin Scott (R-GA) introduced H.R.2774, a bill to repeal the Legal Services Corporation.
Earlier this year, the House rejected an amendment by Congressman Jeff Duncan (R-SC), which would have eliminated funding for the LSC. 170 Republicans and 1 Democrat supported the effort.
Some pundits have come to the conclusion that since the LSC retains bipartisan support in the House (68 Republicans and 191 Democrats), Rep. Scott’s effort is futile. Drawing such a conclusion ignores legislative history and fails to recognize the growing sentiment in America to shrink the size and scope of the federal government.
Conservative policy victories rarely just happen, they are usually the product of long intellectual battles against an entrenched Washington Establishment that finally folds under genuine grassroots and good-government pressure. This is true on issue both large and small.
Look at the Presidio Trust, a federal corporation created by Congress in 1996 to preserve, protect, enhance and manage the Presidio of San Francisco. In 2007, Congressman Jeff Flake (R-AZ) offered an amendment to deny funding to the trust on the basis it was merely a local development matter – in essence, an earmark. That vote split House Republicans, 93 to 94.
Fast-forward 4 years, freshman Congressman Tom Reed (R-NY) offered an amendment to roll back funding for the Presidio Trust Fund, which was adopted by the House with near unanimous support among Republicans, 224 to 10. The amendment even enjoyed the support of 15 House Democrats.
In 1980, The Heritage Foundation’s “Mandate for Leadership” described the LSC as follows:
The poor do have legal problems which need solution, and they need lawyers who either work pro bono or who are paid a salary to represent the poor. But a $350 million federal bureaucracy is not needed to provide such services.
It went on to quote the New Republic, which wrote:
The legal services program may be the most extreme example of the paternalism of the American welfare state: denying the poor what they explicitly lack – money – in favor of goods and services the government thinks they should have, in the amount and proportion it deems appropriate.
It took conservatives years to win the fight against earmarks – a symbol of Washington waste and an enabler of big-government. Conservatives must apply the same passion and commitment to the small ball legislative issues. Seemingly innocuous programs, like the LSC, can have a dramatic impact not only on the cost of government, but also the scope of government.
As President Reagan was fond of saying, “The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'”
Uday’s Body Double, the Hero?
A new movie depicts the brutality of Saddam Hussein’s regime, but fudges the details.
Charles C. Johnson
Monday, August 15, 2011
After eight years of focusing on the moral ambiguities of the Iraq occupation, Hollywood has finally offered up what might be the strongest possible apologetic for the war: an unflinching portrait of the murderous dynasty it deposed, with a focus on Saddam Hussein’s psychopathic elder son, Uday. The Devil’s Double, which hit theaters July 29, stars Dominic Cooper as both Uday and his fiday, or body double, Latif Yahia.
Latif, who was a classmate of Uday’s, is an army officer until his striking resemblance to the despot’s son marks him for a special assignment. Accepting the role of fiday only in order to spare his family torture and execution, Latif undergoes extensive plastic surgery to perfect the resemblance. Now there is no turning back. He becomes equal parts confidant and plaything for the capricious and temperamental Uday, who initiates him into his inner circle and indulges him with the same luxuries he himself enjoys. They are “two peas in a pod,” Uday says. But the peas are not equal, even if physically indistinguishable. “You belong to him,” Latif is warned. In a very real sense, he does.
Mentally, though, it’s a different story. Latif takes on the mask of the evil Uday, but he does not take on his character. “You’re a good man in a bad job,” he tells Uday’s security chief. The same can be said of Latif himself. As Uday’s body double, he’s a man with a bad face — and, we’re led to believe, a good soul.
This is the film’s principal weakness. No matter what happens, it portrays Latif as never being corrupted by tyranny’s trappings, including Uday’s trusted prostitute, Sarrab. Latif remains unambiguously the good guy, even as he is sucked deeper and deeper into Uday’s depraved world. In this highly fictionalized film, it is Latif — and not the utterly neglected Iraqi resistance — who conceives and executes the botched assassination of Uday in 1996.
In real life, Latif wasn’t a great army officer who was later drafted as Uday’s double; he was groomed for the job from high school. He was not a hero but a pawn of the regime. Worse yet, he may be a serial liar, and his book — on which the movie is based — a fantasy. Latif told the Sunday Times earlier this year that he was tortured by the CIA and later offered a position in the post-Hussein government.
Still, as a gangster flick, The Devil’s Double ought to be in the running for every cinematic award around. Its pacing, directing, and acting, especially Cooper’s, deserve considerable recognition, not the panning of critics who find it lacking when compared with Scarface. Director Lee Tamahori once directed an episode of The Sopranos, and it is easy to imagine his Saddam Hussein (Philip Quast) as a sort of Tony Soprano — an evil but family-oriented figure who strongly disapproves of his son’s behavior, but has trouble containing it.
If anything, the film surely toned down Uday’s bestial cruelty to avoid an NC-17 rating. After all, this Armani-clad thug raped his way through Baghdad’s schoolgirls; after he had finished, his men dumped their bodies into the marshes outside the city. He tortured Olympic athletes who lost, even going so far as to keep a private torture scorecard listing how many times each player should be beaten after a loss. He snorted coke, guzzled booze, and violated a bride on her wedding day. He executed a friend of his father’s for sport. He carelessly shot his gold-plated AK-47s at crowded parties, knowing that he was immune from punishment if anyone was killed. He once, Latif told a BBC interviewer, got his hands on a “beautiful woman and transformed her into a barely breathing hunk of meat.”
“Just wait until I become president,” Uday is said to have threatened. “I’ll be crueler than my father ever was. You mark my words. You’ll yearn for the time of Saddam Hussein.” But the time of Uday never came. His sadism was too much even for his father, who exiled him for a time to Switzerland, and supplanted him as heir with his younger brother, Qusay. (The Swiss sent Uday back to Iraq after he threatened to kill a waiter.)
Left unanswered both by the movie and by the reviewers is this question: Isn’t the world better off since this mad dog was put down by American soldiers? American filmmakers have proven morally ill-equipped to answer it. It falls instead to New Zealander Lee Tamahori, much as it fell to the unjustly neglected HBO and BBC series House of Saddam. It has become chic to pooh-pooh the wickedness of Arab despots — just this winter, the fashion magazine Vogue featured a puff piece on Syrian dictator Bashar Assad’s wife, Asma. When so glamorized, evil’s pathologies are seen as mere eccentricities. Tamahori, to his credit, avoids this pitfall, but by turning the story into a gangster movie, he prevents it from being the compelling morality piece it could have been.
Charles C. Johnson
Monday, August 15, 2011
After eight years of focusing on the moral ambiguities of the Iraq occupation, Hollywood has finally offered up what might be the strongest possible apologetic for the war: an unflinching portrait of the murderous dynasty it deposed, with a focus on Saddam Hussein’s psychopathic elder son, Uday. The Devil’s Double, which hit theaters July 29, stars Dominic Cooper as both Uday and his fiday, or body double, Latif Yahia.
Latif, who was a classmate of Uday’s, is an army officer until his striking resemblance to the despot’s son marks him for a special assignment. Accepting the role of fiday only in order to spare his family torture and execution, Latif undergoes extensive plastic surgery to perfect the resemblance. Now there is no turning back. He becomes equal parts confidant and plaything for the capricious and temperamental Uday, who initiates him into his inner circle and indulges him with the same luxuries he himself enjoys. They are “two peas in a pod,” Uday says. But the peas are not equal, even if physically indistinguishable. “You belong to him,” Latif is warned. In a very real sense, he does.
Mentally, though, it’s a different story. Latif takes on the mask of the evil Uday, but he does not take on his character. “You’re a good man in a bad job,” he tells Uday’s security chief. The same can be said of Latif himself. As Uday’s body double, he’s a man with a bad face — and, we’re led to believe, a good soul.
This is the film’s principal weakness. No matter what happens, it portrays Latif as never being corrupted by tyranny’s trappings, including Uday’s trusted prostitute, Sarrab. Latif remains unambiguously the good guy, even as he is sucked deeper and deeper into Uday’s depraved world. In this highly fictionalized film, it is Latif — and not the utterly neglected Iraqi resistance — who conceives and executes the botched assassination of Uday in 1996.
In real life, Latif wasn’t a great army officer who was later drafted as Uday’s double; he was groomed for the job from high school. He was not a hero but a pawn of the regime. Worse yet, he may be a serial liar, and his book — on which the movie is based — a fantasy. Latif told the Sunday Times earlier this year that he was tortured by the CIA and later offered a position in the post-Hussein government.
Still, as a gangster flick, The Devil’s Double ought to be in the running for every cinematic award around. Its pacing, directing, and acting, especially Cooper’s, deserve considerable recognition, not the panning of critics who find it lacking when compared with Scarface. Director Lee Tamahori once directed an episode of The Sopranos, and it is easy to imagine his Saddam Hussein (Philip Quast) as a sort of Tony Soprano — an evil but family-oriented figure who strongly disapproves of his son’s behavior, but has trouble containing it.
If anything, the film surely toned down Uday’s bestial cruelty to avoid an NC-17 rating. After all, this Armani-clad thug raped his way through Baghdad’s schoolgirls; after he had finished, his men dumped their bodies into the marshes outside the city. He tortured Olympic athletes who lost, even going so far as to keep a private torture scorecard listing how many times each player should be beaten after a loss. He snorted coke, guzzled booze, and violated a bride on her wedding day. He executed a friend of his father’s for sport. He carelessly shot his gold-plated AK-47s at crowded parties, knowing that he was immune from punishment if anyone was killed. He once, Latif told a BBC interviewer, got his hands on a “beautiful woman and transformed her into a barely breathing hunk of meat.”
“Just wait until I become president,” Uday is said to have threatened. “I’ll be crueler than my father ever was. You mark my words. You’ll yearn for the time of Saddam Hussein.” But the time of Uday never came. His sadism was too much even for his father, who exiled him for a time to Switzerland, and supplanted him as heir with his younger brother, Qusay. (The Swiss sent Uday back to Iraq after he threatened to kill a waiter.)
Left unanswered both by the movie and by the reviewers is this question: Isn’t the world better off since this mad dog was put down by American soldiers? American filmmakers have proven morally ill-equipped to answer it. It falls instead to New Zealander Lee Tamahori, much as it fell to the unjustly neglected HBO and BBC series House of Saddam. It has become chic to pooh-pooh the wickedness of Arab despots — just this winter, the fashion magazine Vogue featured a puff piece on Syrian dictator Bashar Assad’s wife, Asma. When so glamorized, evil’s pathologies are seen as mere eccentricities. Tamahori, to his credit, avoids this pitfall, but by turning the story into a gangster movie, he prevents it from being the compelling morality piece it could have been.
Unarmed Brits Go to Bat
By Janet M. LaRue
Monday, August 15, 2011
In the midst of riots, arson and looting, British citizens armed themselves … with aluminum bats.
A Louisville Slugger is no match for a mob, but when your Socialist government makes it virtually impossible to own a gun, you grab whatever you can to protect yourself, your family, and property.
Online sales of aluminum bats on Amazon.com increased by 6,000 percent during the violence, according to CNN. Most British police don’t carry guns. The situation is a far cry from the right to bear arms enshrined in the English Bill of Rights, a forerunner of our Second Amendment.
Supreme Court Justice Antonin Scalia provided a historical summation of our Second Amendment’s origins in English law in his brilliant 5-4 majority opinion in District of Columbia v. Heller (2008). Holding that “the Second Amendment protects an individual right to possess firearms,” Scalia wrote:
Americans should look soberly at our nearly defenseless English cousins rather than take our Second Amendment rights for granted.
It’s not like it can’t happen here. Remember when authorities went house to house in New Orleans right after Hurricane Katrina, disarming citizens and leaving them at the mercy of looters?
One more Obama appointment to the Supreme Court, and we could be relying on Louisville Sluggers for self-defense.
Monday, August 15, 2011
In the midst of riots, arson and looting, British citizens armed themselves … with aluminum bats.
A Louisville Slugger is no match for a mob, but when your Socialist government makes it virtually impossible to own a gun, you grab whatever you can to protect yourself, your family, and property.
Online sales of aluminum bats on Amazon.com increased by 6,000 percent during the violence, according to CNN. Most British police don’t carry guns. The situation is a far cry from the right to bear arms enshrined in the English Bill of Rights, a forerunner of our Second Amendment.
Supreme Court Justice Antonin Scalia provided a historical summation of our Second Amendment’s origins in English law in his brilliant 5-4 majority opinion in District of Columbia v. Heller (2008). Holding that “the Second Amendment protects an individual right to possess firearms,” Scalia wrote:
By the time of the founding, the right to have arms had become fundamental for English subjects. … Blackstone, whose works, we have said, "constituted the preeminent authority on English law for the founding generation," … cited the arms provision of the Bill of Rights as one of the fundamental rights of Englishmen. … His description of it cannot possibly be thought to tie it to militia or military service. It was, he said, "the natural right of resistance and self-preservation,"… and "the right of having and using arms for self-preservation and defence.” … Other contemporary authorities concurred. … Thus, the right secured in 1689 as a result of the Stuarts' abuses was by the time of the founding understood to be an individual right protecting against both public and private violence.Dominic Casciani, writing for the liberal BBC in Nov. 10, 2010, details the extraordinary difficulty of anyone but criminals possessing firearms in the UK:
And, of course, what the Stuarts had tried to do to their political enemies, George III had tried to do to the colonists. In the tumultuous decades of the 1760's and 1770's, the Crown began to disarm the inhabitants of the most rebellious areas. That provoked polemical reactions by Americans invoking their rights as Englishmen to keep arms. A New York article of April 1769 said that "[i]t is a natural right which the people have reserved to themselves, confirmed by the Bill of Rights, to keep arms for their own defence." … They understood the right to enable individuals to defend themselves. As the most important early American edition of Blackstone's Commentaries (by the law professor and former Antifederalist St. George Tucker) made clear in the notes to the description of the arms right, Americans understood the "right of self-preservation" as permitting a citizen to "repe[l] force by force" when "the intervention of society in his behalf, may be too late to prevent an injury."
“The UK has some of the toughest gun control laws in the world. If you want to own a gun, it is very difficult to do so. In short, it has been designed to put as many barriers in the way as possible and to assume the worst, rather than hope for the best.”Violence in the UK has increased despite its stringent gun laws. “Britain is the most violent country in Europe,” according to James Slack writing for the UK Daily Mail online July 3, 2009:
“Britain's violent crime record is worse than any other country in the European union, it has been revealed. Official crime figures show the UK also has a worse rate for all types of violence than the U.S. and even South Africa - widely considered one of the world's most dangerous countries.According to the National Rifle Association:
In the decade following the [Labour] party's election in 1997, the number of recorded violent attacks soared by 77 per cent to 1.158million - or more than two every minute.
The figures, compiled from reports released by the European Commission and United Nations, also show:
• The UK has the second highest overall crime rate in the EU.
• It has a higher homicide rate than most of our western European neighbours, including France, Germany, Italy and Spain.
• The UK has the fifth highest robbery rate in the EU.
• It has the fourth highest burglary rate and the highest absolute number of burglaries in the EU, with double the number of offences than recorded in Germany and France.
But it is the naming of Britain as the most violent country in the EU that is most shocking. The analysis is based on the number of crimes per 100,000 residents.
In the UK, there are 2,034 offences per 100,000 people, way ahead of second-placed Austria with a rate of 1,677.”
“Licenses have been required for rifles and handguns since 1920, and for shotguns since 1967. A decade ago semi-automatic and pump-action center-fire rifles, and all handguns except single- shot .22s, were prohibited. The .22s were banned in 1997. Shotguns must be registered and semi-automatic shotguns that can hold more than two shells must be licensed. Despite a near ban on private ownership of firearms, ‘English crime rates as measured in both victim surveys and police statistics have all risen since 1981. . . . In 1995 the English robbery rate was 1.4 times higher than America`s. . . . the English assault rate was more than double America`s.’ All told, ‘Whether measured by surveys of crime victims or by police statistics, serious crime rates are not generally higher in the United States than England.’ (Bureau of Justice Statistics, "Crime and Justice in the United States and in England and in Wales, 1981-1996," 10/98.) An English doctor is suspected of murdering more than 200 people, many times the number killed in the gun-related crimes used to justify the most recent restrictions.”Two years after the Heller decision, in another 5-4 opinion written by Justice Samuel Alito, McDonald v. City of Chicago, the Court held that “the Second Amendment right is fully applicable to the States.”
Americans should look soberly at our nearly defenseless English cousins rather than take our Second Amendment rights for granted.
It’s not like it can’t happen here. Remember when authorities went house to house in New Orleans right after Hurricane Katrina, disarming citizens and leaving them at the mercy of looters?
One more Obama appointment to the Supreme Court, and we could be relying on Louisville Sluggers for self-defense.
Saturday, August 13, 2011
Why Profit Is Our Best Friend
By John C. Goodman
Saturday, August 13, 2011
Many liberals think of profit as evil. They see it as the product of “corporate greed,” something that needs to be harshly taxed. Yet the desire to earn a profit is what impels innovators to solve some of our most important social problems.
I don’t think that getting rich is the main motivation of entrepreneurs — the possibility of changing the world may be an even stronger desire. However, you can almost guarantee there will be no entrepreneurship if you do two things: (a) eliminate all possibility of getting rich, and (b) make it impossible to change anything without the approval of an intractable bureaucracy.
That in a nutshell is my explanation for why our two most visibly dysfunctional social systems — health care and public education — remain so dysfunctional.
I meet entrepreneurs in health care almost every day. Their novel ideas are invariably focused on helping some entity — a hospital, insurer, employer, etc. — solve a problem. They are rarely focused on how to solve an overall social problem, however. Because our health care system is so dysfunctional, in solving the problem for a client, they may be making our social problems worse than they would have been.
Solving social problems in health care with innovative policy proposals is what I do. It is a lonely field. But it would be a lot less lonely if we allowed people to get rich doing it.
To take one example, it is often asserted that one-third of all health care spending is wasteful. Suppose Bill Gates was able to write a computer program that would find the waste and eliminate it. Society as a whole would save more than $800 billion. So how much should we be willing to pay Bill Gates? A tenth of the overall benefit he creates ($80 billion)? One-half the benefit ($400 billion)?
Perhaps you’re thinking that we shouldn’t pay Bill Gates anything. Maybe you think he should give us the program for free, as an altruistic gesture. Or, maybe you think the most he should get back is a 1% or 2% return — something close to the return paid by government bonds. If this is your viewpoint, welcome to the world of health policy. You will find all kinds of people who think just like you do.
In general, there is no limit to how much people can make in health care by successfully exploiting reimbursement formulas. But the federal government is in the process of limiting what insurance companies can earn, effectively reducing them to the role of public utilities.
Two recent items in the news help illustrate why this approach is so wrong. In one, The New York Times reports:
Think about those two examples. Almost everybody in health care agrees that many of our biggest problems stem from the way we pay for care. And who is paying? Insurance companies.
The $800 billion is almost all funded by third-party payers. So another way of stating the social problem is: we need to find newer and better types of third-party payment.
Let’s suppose that an insurance company contracts with Bill Gates for the hypothetical software described above. By using it, the insurer will cut its spending by one-third and add that amount to the bottom line. This would be good for numerous reasons: the elimination of wasteful spending would improve the quality of care for patients, reduce the chance of medical errors, free up resources for use by other patients and encourage every other insurer to find ways of achieving the same outcome.
But under ObamaCare, the software will never be invented, never be purchased and never be used. Why? Because under the new health law it will be impossible for an insurer to cash in on that innovation.
Under the new law, large health insurance companies have to pay out as much as 85% of their premium income in the form of benefits. The remaining 15% has to cover all sales and administrative costs plus brokers fees and if anything is left that’s what the insurer gets to keep.
The insurer with Bill Gates’ hypothetical software would have to rebate its profit to enrollees in the form of lower premiums. Thus, no insurer will be able to profit from major cost-reducing discoveries. Nor will any insurer even try. Instead, insurance companies will function like utilities, taking no real risks and making no radical changes in their current business model.
ObamaCare has ensured that our health care problems will not be solved by stifling innovation in the one sector of the market that most needs vigorous entrepreneurial activity.
Saturday, August 13, 2011
Many liberals think of profit as evil. They see it as the product of “corporate greed,” something that needs to be harshly taxed. Yet the desire to earn a profit is what impels innovators to solve some of our most important social problems.
I don’t think that getting rich is the main motivation of entrepreneurs — the possibility of changing the world may be an even stronger desire. However, you can almost guarantee there will be no entrepreneurship if you do two things: (a) eliminate all possibility of getting rich, and (b) make it impossible to change anything without the approval of an intractable bureaucracy.
That in a nutshell is my explanation for why our two most visibly dysfunctional social systems — health care and public education — remain so dysfunctional.
I meet entrepreneurs in health care almost every day. Their novel ideas are invariably focused on helping some entity — a hospital, insurer, employer, etc. — solve a problem. They are rarely focused on how to solve an overall social problem, however. Because our health care system is so dysfunctional, in solving the problem for a client, they may be making our social problems worse than they would have been.
Solving social problems in health care with innovative policy proposals is what I do. It is a lonely field. But it would be a lot less lonely if we allowed people to get rich doing it.
To take one example, it is often asserted that one-third of all health care spending is wasteful. Suppose Bill Gates was able to write a computer program that would find the waste and eliminate it. Society as a whole would save more than $800 billion. So how much should we be willing to pay Bill Gates? A tenth of the overall benefit he creates ($80 billion)? One-half the benefit ($400 billion)?
Perhaps you’re thinking that we shouldn’t pay Bill Gates anything. Maybe you think he should give us the program for free, as an altruistic gesture. Or, maybe you think the most he should get back is a 1% or 2% return — something close to the return paid by government bonds. If this is your viewpoint, welcome to the world of health policy. You will find all kinds of people who think just like you do.
In general, there is no limit to how much people can make in health care by successfully exploiting reimbursement formulas. But the federal government is in the process of limiting what insurance companies can earn, effectively reducing them to the role of public utilities.
Two recent items in the news help illustrate why this approach is so wrong. In one, The New York Times reports:
The brothers, Philip and Joel [Levy], earned close to $1 million a year each as the two top executives running a Medicaid-financed nonprofit organization serving the developmentally disabled.In the other story, The New York Times reports that Blue Shield of California will voluntarily limit its profit to no more than 2% of revenues — no doubt anticipating that government regulators were going to force that result anyway.
They each had luxury cars paid for with public money. And when their children went to college, they could pass on the tuition bills to their nonprofit group.
Philip H. Levy went as far as charging the organization $50,400 for his daughter’s living expenses one year when she attended graduate school at New York University.
That money paid not for a dorm room, but rather it helped her buy a co-op apartment in Greenwich Village.
Think about those two examples. Almost everybody in health care agrees that many of our biggest problems stem from the way we pay for care. And who is paying? Insurance companies.
The $800 billion is almost all funded by third-party payers. So another way of stating the social problem is: we need to find newer and better types of third-party payment.
Let’s suppose that an insurance company contracts with Bill Gates for the hypothetical software described above. By using it, the insurer will cut its spending by one-third and add that amount to the bottom line. This would be good for numerous reasons: the elimination of wasteful spending would improve the quality of care for patients, reduce the chance of medical errors, free up resources for use by other patients and encourage every other insurer to find ways of achieving the same outcome.
But under ObamaCare, the software will never be invented, never be purchased and never be used. Why? Because under the new health law it will be impossible for an insurer to cash in on that innovation.
Under the new law, large health insurance companies have to pay out as much as 85% of their premium income in the form of benefits. The remaining 15% has to cover all sales and administrative costs plus brokers fees and if anything is left that’s what the insurer gets to keep.
The insurer with Bill Gates’ hypothetical software would have to rebate its profit to enrollees in the form of lower premiums. Thus, no insurer will be able to profit from major cost-reducing discoveries. Nor will any insurer even try. Instead, insurance companies will function like utilities, taking no real risks and making no radical changes in their current business model.
ObamaCare has ensured that our health care problems will not be solved by stifling innovation in the one sector of the market that most needs vigorous entrepreneurial activity.
Mr. Geithner, Meet Econ 101
By Bill Tatro
Saturday, August 13, 2011
Here’s an economic primer for the weekend.
Periodically, as my old economics professor John Kenneth Galbraith used to say: “Sometimes, it’s good to return to Econ 101” (a paraphrase.)
In other words, make it simple, because after all, it really is.
The cycle of growth starts with demand, and to most people that’s understood as sales. Another old mentor of mine once said: “Nothing happens until you sell something.”
That statement from an old tool and die maker is just as profound as the statement from one of the world’s most renowned economists, JKG. Yet, it’s important to understand that sales can be misleading.
For example, much of what we are seeing today is the result of the consumer not paying their mortgage, not paying theirmproperty taxes, and not paying their credit card bills. In fact, they’re maxing-out their credit cards.
Circumstances have provided a window of opportunity for people to choose to abrogate their debt responsibilities in order to buy the newest iPad. Historically, nobody would have ever thought to strategically default on their debt, yet today, it’s a widely accepted practice.
These kinds of discretionary sales, however, are fleeting,and dictate why businesses are currently not hiring.
Imagine if you owned a business and believed that sales will ultimately decline. As a result, you would be very hesitant to reorder product. Without reordering, not counting inventory build, there would be less need for production.
Here’s where it gets a little complicated. Most people think of production as productivity, whereas productivity is producing more with less man-hours. Production is just simply manufacturing a product, regardless of the number of employees involved.
With decreased sales, overtime shifts disappear as production plants sit idle week after week, month after month, and year after year.
Obviously, if the production facilities are too expensive to maintain you would be forced to take action by downsizing employees or moving production offshore where labor costs are dramatically lower. (Unfortunately, most small businesses can’t implement the offshore strategy.)
Next, decreasing employment leads to reduced personal income. Regrettably, as taxes rise and day-to-day costs (food and gasoline) go up, workers need not only a secure income, but also an increasing income, just to keep pace.
Given that unemployment is a corporate strategy (witness Cisco’s stock rise after announcing 6,500 layoffs) and will be with us for many years (Bernanke’s Federal Reserve) it only stands to reason that for the foreseeable future it will be very difficult for most people to afford the necessities, let alone any discretionary spending, and thus no sales.
It’s simple.
No sales, no production, no production no employee, no employee no increasing income, no increasing income no sales, and on and on.
A very vicious cycle.
In fact, a cycle Japan has been experiencing for over twenty years. Unfortunately, our cruel cycle has just begun.
Yes, it’s good to revisit Econ 101, but it can also be extremely painful.
Saturday, August 13, 2011
Here’s an economic primer for the weekend.
Periodically, as my old economics professor John Kenneth Galbraith used to say: “Sometimes, it’s good to return to Econ 101” (a paraphrase.)
In other words, make it simple, because after all, it really is.
The cycle of growth starts with demand, and to most people that’s understood as sales. Another old mentor of mine once said: “Nothing happens until you sell something.”
That statement from an old tool and die maker is just as profound as the statement from one of the world’s most renowned economists, JKG. Yet, it’s important to understand that sales can be misleading.
For example, much of what we are seeing today is the result of the consumer not paying their mortgage, not paying theirmproperty taxes, and not paying their credit card bills. In fact, they’re maxing-out their credit cards.
Circumstances have provided a window of opportunity for people to choose to abrogate their debt responsibilities in order to buy the newest iPad. Historically, nobody would have ever thought to strategically default on their debt, yet today, it’s a widely accepted practice.
These kinds of discretionary sales, however, are fleeting,and dictate why businesses are currently not hiring.
Imagine if you owned a business and believed that sales will ultimately decline. As a result, you would be very hesitant to reorder product. Without reordering, not counting inventory build, there would be less need for production.
Here’s where it gets a little complicated. Most people think of production as productivity, whereas productivity is producing more with less man-hours. Production is just simply manufacturing a product, regardless of the number of employees involved.
With decreased sales, overtime shifts disappear as production plants sit idle week after week, month after month, and year after year.
Obviously, if the production facilities are too expensive to maintain you would be forced to take action by downsizing employees or moving production offshore where labor costs are dramatically lower. (Unfortunately, most small businesses can’t implement the offshore strategy.)
Next, decreasing employment leads to reduced personal income. Regrettably, as taxes rise and day-to-day costs (food and gasoline) go up, workers need not only a secure income, but also an increasing income, just to keep pace.
Given that unemployment is a corporate strategy (witness Cisco’s stock rise after announcing 6,500 layoffs) and will be with us for many years (Bernanke’s Federal Reserve) it only stands to reason that for the foreseeable future it will be very difficult for most people to afford the necessities, let alone any discretionary spending, and thus no sales.
It’s simple.
No sales, no production, no production no employee, no employee no increasing income, no increasing income no sales, and on and on.
A very vicious cycle.
In fact, a cycle Japan has been experiencing for over twenty years. Unfortunately, our cruel cycle has just begun.
Yes, it’s good to revisit Econ 101, but it can also be extremely painful.
The New Britannia
Big Government corrodes the integrity of a people, catastrophically.
Mark Steyn
Saturday, August 13, 2011
The trick in this business is not to be right too early. A week ago I released my new book — the usual doom’n’gloom stuff — and, just as the sensible prudent moderate chaps were about to dismiss it as hysterical and alarmist, Standard & Poor’s went and downgraded the United States from its AAA rating for the first time in history. Obligingly enough they downgraded it to AA+, which happens to be the initials of my book: After America. Okay, there’s not a lot of “+” in that, but you can’t have everything.
But the news cycle moves on, and a day or two later, the news shows were filled with scenes of London ablaze, as gangs of feral youths trashed and looted their own neighborhoods. Several readers wrote to taunt me for not having anything to say on the London riots. As it happens, Chapter Five of my book is called “The New Britannia: The Depraved City.” You have to get up pretty early in the morning to beat me to Western civilization’s descent into barbarism. Anyone who’s read it will fully understand what’s happening on the streets of London. The downgrade and the riots are part of the same story: Big Government debauches not only a nation’s finances but its human capital, too.
As part of my promotional efforts, I chanced to find myself on a TV show the other day with an affable liberal who argued that what Obama needed to do was pass another trillion-dollar — or, better yet, multi-trillion — stimulus. I think not. The London rioters are the children of dependency, the progeny of Big Government: They have been marinated in “stimulus” their entire lives. There is literally nothing you can’t get Her Majesty’s Government to pay for. From page 205 of my book:
“A man of 21 with learning disabilities has been granted taxpayers’ money to fly to Amsterdam and have sex with a prostitute.”
Hey, why not? “He’s planning to do more than just have his end away,” explained his social worker. “Refusing to offer him this service would be a violation of his human rights.”
Why do they need a Dutch hooker? Just another hardworking foreigner doing the jobs Britons won’t do? Given the reputation of English womanhood, you’d have thought this would be the one gig that wouldn’t have to be outsourced overseas.
While the British Treasury is busy writing checks to Amsterdam prostitutes, one-fifth of children are raised in homes in which no adult works — in which the weekday ritual of rising, dressing, and leaving for gainful employment is entirely unknown. One tenth of the adult population has done not a day’s work since Tony Blair took office on May 1, 1997.
If you were born into such a household, you’ve been comprehensively “stimulated” into the dead-eyed zombies staggering about the streets this last week: pathetic inarticulate sub-humans unable even to grunt the minimal monosyllables to BBC interviewers desperate to appease their pathologies. C’mon, we’re not asking much: just a word or two about how it’s all the fault of government “cuts” like the leftie columnists argue. And yet even that is beyond these baying beasts. The great-grandparents of these brutes stood alone against a Fascist Europe in that dark year after the fall of France in 1940. Their grandparents were raised in one of the most peaceful and crime-free nations on the planet. Were those Englishmen of the mid-20th century to be magically transplanted to London today, they’d assume they were in some fantastical remote galaxy. If Charlton Heston was horrified to discover the Planet of the Apes was his own, Britons are beginning to realize that the remote desert island of Lord of the Flies is, in fact, located just off the coast of Europe in the north-east Atlantic. Within two generations of the Blitz and the Battle of Britain, a significant proportion of the once-free British people entrusted themselves to social rewiring by liberal compassionate Big Government and thereby rendered themselves paralytic and unemployable save for non-speaking parts in Rise of the Planet of the Apes. And even that would likely be too much like hard work.
Here’s another line from my book:
“In Britain, everything is policed except crime.”
Her Majesty’s cowed and craven politically correct constabulary stand around with their riot shields and Robocop gear as young rioters lob concrete through store windows to steal the electronic toys that provide their only non-narcotic or alcoholic amusement. I chanced to be in Piccadilly for the springtime riots when the police failed to stop the mob from smashing the windows of the Ritz and other upscale emporia, so it goes without saying that they wouldn’t lift a finger to protect less prestigious private property from thugs. Some of whom are as young as nine years old. And girls.
Yet a police force all but entirely useless when it comes to preventing crime or maintaining public order has time to police everything else. When Sam Brown observed en passant to a mounted policeman on Cornmarket Street in Oxford, “Do you know your horse is gay?”, he was surrounded within minutes by six officers and a fleet of patrol cars, handcuffed, tossed in the slammer overnight, and fined 80 pounds. Mr. Brown’s “homophobic comments,” explained a spokesmoron for Thames Valley Police, were “not only offensive to the policeman and his horse, but any members of the general public in the area.” The zealous crackdown on Sam Brown’s hippohomophobia has not been replicated in the present disturbances. Anyone who has so much as glanced at British policing policy over the last two decades would be hard pressed to argue which party on the streets of London, the thugs or the cops, is more irredeemably stupid.
This is the logical dead end of the Nanny State. When William Beveridge laid out his blueprint for the British welfare regime in 1942, his goal was the “abolition of want” to be accomplished by “co-operation between the State and the individual.” In attempting to insulate the citizenry from life’s vicissitudes, Sir William succeeded beyond his wildest dreams. As I write in my book: “Want has been all but abolished. Today, fewer and fewer Britons want to work, want to marry, want to raise children, want to lead a life of any purpose or dignity.” The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate. Marriage is all but defunct, except for William and Kate, fellow toffs, upscale gays, and Muslims. From page 204:
“For Americans, the quickest way to understand modern Britain is to look at what LBJ’s Great Society did to the black family and imagine it applied to the general population”.
I believe it is regarded as a sign of insanity to start quoting oneself, but at the risk of trying your patience I’ll try one more, because it’s the link between America’s downgraded debt and Britain’s downgraded citizenry:
“The evil of such a system is not the waste of money but the waste of people.”
Big Government means small citizens: It corrodes the integrity of a people, catastrophically. Within living memory, the city in flames on our TV screens every night governed a fifth of the earth’s surface and a quarter of its population. When you’re imperialists on that scale, there are bound to be a few mishaps along the way. But nothing the British Empire did to its subject peoples has been as total and catastrophic as what a post-great Britain did to its own.
There are lessons for all of us there.
Mark Steyn
Saturday, August 13, 2011
The trick in this business is not to be right too early. A week ago I released my new book — the usual doom’n’gloom stuff — and, just as the sensible prudent moderate chaps were about to dismiss it as hysterical and alarmist, Standard & Poor’s went and downgraded the United States from its AAA rating for the first time in history. Obligingly enough they downgraded it to AA+, which happens to be the initials of my book: After America. Okay, there’s not a lot of “+” in that, but you can’t have everything.
But the news cycle moves on, and a day or two later, the news shows were filled with scenes of London ablaze, as gangs of feral youths trashed and looted their own neighborhoods. Several readers wrote to taunt me for not having anything to say on the London riots. As it happens, Chapter Five of my book is called “The New Britannia: The Depraved City.” You have to get up pretty early in the morning to beat me to Western civilization’s descent into barbarism. Anyone who’s read it will fully understand what’s happening on the streets of London. The downgrade and the riots are part of the same story: Big Government debauches not only a nation’s finances but its human capital, too.
As part of my promotional efforts, I chanced to find myself on a TV show the other day with an affable liberal who argued that what Obama needed to do was pass another trillion-dollar — or, better yet, multi-trillion — stimulus. I think not. The London rioters are the children of dependency, the progeny of Big Government: They have been marinated in “stimulus” their entire lives. There is literally nothing you can’t get Her Majesty’s Government to pay for. From page 205 of my book:
“A man of 21 with learning disabilities has been granted taxpayers’ money to fly to Amsterdam and have sex with a prostitute.”
Hey, why not? “He’s planning to do more than just have his end away,” explained his social worker. “Refusing to offer him this service would be a violation of his human rights.”
Why do they need a Dutch hooker? Just another hardworking foreigner doing the jobs Britons won’t do? Given the reputation of English womanhood, you’d have thought this would be the one gig that wouldn’t have to be outsourced overseas.
While the British Treasury is busy writing checks to Amsterdam prostitutes, one-fifth of children are raised in homes in which no adult works — in which the weekday ritual of rising, dressing, and leaving for gainful employment is entirely unknown. One tenth of the adult population has done not a day’s work since Tony Blair took office on May 1, 1997.
If you were born into such a household, you’ve been comprehensively “stimulated” into the dead-eyed zombies staggering about the streets this last week: pathetic inarticulate sub-humans unable even to grunt the minimal monosyllables to BBC interviewers desperate to appease their pathologies. C’mon, we’re not asking much: just a word or two about how it’s all the fault of government “cuts” like the leftie columnists argue. And yet even that is beyond these baying beasts. The great-grandparents of these brutes stood alone against a Fascist Europe in that dark year after the fall of France in 1940. Their grandparents were raised in one of the most peaceful and crime-free nations on the planet. Were those Englishmen of the mid-20th century to be magically transplanted to London today, they’d assume they were in some fantastical remote galaxy. If Charlton Heston was horrified to discover the Planet of the Apes was his own, Britons are beginning to realize that the remote desert island of Lord of the Flies is, in fact, located just off the coast of Europe in the north-east Atlantic. Within two generations of the Blitz and the Battle of Britain, a significant proportion of the once-free British people entrusted themselves to social rewiring by liberal compassionate Big Government and thereby rendered themselves paralytic and unemployable save for non-speaking parts in Rise of the Planet of the Apes. And even that would likely be too much like hard work.
Here’s another line from my book:
“In Britain, everything is policed except crime.”
Her Majesty’s cowed and craven politically correct constabulary stand around with their riot shields and Robocop gear as young rioters lob concrete through store windows to steal the electronic toys that provide their only non-narcotic or alcoholic amusement. I chanced to be in Piccadilly for the springtime riots when the police failed to stop the mob from smashing the windows of the Ritz and other upscale emporia, so it goes without saying that they wouldn’t lift a finger to protect less prestigious private property from thugs. Some of whom are as young as nine years old. And girls.
Yet a police force all but entirely useless when it comes to preventing crime or maintaining public order has time to police everything else. When Sam Brown observed en passant to a mounted policeman on Cornmarket Street in Oxford, “Do you know your horse is gay?”, he was surrounded within minutes by six officers and a fleet of patrol cars, handcuffed, tossed in the slammer overnight, and fined 80 pounds. Mr. Brown’s “homophobic comments,” explained a spokesmoron for Thames Valley Police, were “not only offensive to the policeman and his horse, but any members of the general public in the area.” The zealous crackdown on Sam Brown’s hippohomophobia has not been replicated in the present disturbances. Anyone who has so much as glanced at British policing policy over the last two decades would be hard pressed to argue which party on the streets of London, the thugs or the cops, is more irredeemably stupid.
This is the logical dead end of the Nanny State. When William Beveridge laid out his blueprint for the British welfare regime in 1942, his goal was the “abolition of want” to be accomplished by “co-operation between the State and the individual.” In attempting to insulate the citizenry from life’s vicissitudes, Sir William succeeded beyond his wildest dreams. As I write in my book: “Want has been all but abolished. Today, fewer and fewer Britons want to work, want to marry, want to raise children, want to lead a life of any purpose or dignity.” The United Kingdom has the highest drug use in Europe, the highest incidence of sexually transmitted disease, the highest number of single mothers, the highest abortion rate. Marriage is all but defunct, except for William and Kate, fellow toffs, upscale gays, and Muslims. From page 204:
“For Americans, the quickest way to understand modern Britain is to look at what LBJ’s Great Society did to the black family and imagine it applied to the general population”.
I believe it is regarded as a sign of insanity to start quoting oneself, but at the risk of trying your patience I’ll try one more, because it’s the link between America’s downgraded debt and Britain’s downgraded citizenry:
“The evil of such a system is not the waste of money but the waste of people.”
Big Government means small citizens: It corrodes the integrity of a people, catastrophically. Within living memory, the city in flames on our TV screens every night governed a fifth of the earth’s surface and a quarter of its population. When you’re imperialists on that scale, there are bound to be a few mishaps along the way. But nothing the British Empire did to its subject peoples has been as total and catastrophic as what a post-great Britain did to its own.
There are lessons for all of us there.
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