Wednesday, March 31, 2010

Moving Up: Volvo Goes Chinese

China now has its own luxury car brand. From Fortune:
For only the second time in recent history, a large, thriving, privately owned Chinese company has stepped up and stepped out -- buying a big brand known the world over. Six years ago, computer maker Lenovo bought IBM's personal computer business and has struggled to manage it ever since. Now, Zhejiang Geely Holding Co., a rapidly growing Chinese automaker based in Hangzhou, bought Volvo from Ford Motor for $1.8 billion. . .

[T]his deal [is] one that an eager seller (Ford) wanted. (How eager? It paid $6.45 billion for Volvo in 1999.) . . . Gothenborg, home to [Swedish] industrial crown jewel [Volvo], no doubt wanted it even more. Better than getting shut down entirely, and it's not clear that a lot of other buyers were willing to step up. So Geely, which makes low-end small cars in China, wins what it hopes will be a prize, and gets to move up-market with a classy brand.

Robert McNamara, the former Defense Secretary and Ford CEO, once said we should let the Russians build automobiles for their people, because the resources needed to make the resulting auto-crazed population happy would drain the country’s war-making capability.

Will McNamara’s logic apply to China?

The Real Enemy

I think I understand why Barack Obama is being so tough on Israel, on March 20 leaving Israeli prime minister Benjamin Netanyahu to stew and fidget for over an hour while Obama had dinner with his family elsewhere in the White House.

Democrats simply aren’t going to go to war with Iran’s leadership over Ayatollah Khamenei's determination to take Iran nuclear. This even though all we have to do is allow Israel to employ whatever resources we collectively have between us to bomb Iran’s centrifuges into oblivion. We don’t have to undertake any sort of ground war with Iran. Israel previously destroyed nuclear facilities in Iraq and in Syria. It’s harder to knock out Iran's multiple, fortified sites, but an air war certainly seems preferable to a nuclear-armed Iran.

Except Democrats don’t want war of any kind. So Israel’s efforts to get us to help stop Iran from going nuclear are embarrassing Americans. If we make Israel instead of Iran the chief Middle East problem, we can shift our agenda there away from war against Tehran.

That’s what I think is going on.

Anyway, here's what Amos Harel, in the leading Israeli newspaper Harretz, reports:
The key question is how far the world powers are prepared to go to stop [Iran’s] nuclear program. . . Sources in Jerusalem say that behind closed doors, American and European officials are already discussing how to face the "day after" Iran attains nuclear weapons. Although publicly Israel is downplaying the crisis in its relations with the United States, the rift will have an impact on the attempt to keep Tehran in check, making bilateral coordination more difficult.

Israel wants to focus on Iran. We don’t.

Saturday, March 27, 2010

Why taxes are going up.

Jay Cost is a conservative who blogs at the “RealClearPolitics” political site. Cost says America fails to deal with our gigantic yet rapidly growing deficit because
Deficit reducers always have to choose between two undesirable alternatives: cut spending or raise taxes. The problem with both tactics is that somebody loses while nobody really wins.

We can’t cut spending or raise taxes.

Tom Friedman, a moderate Democrat and New York Times columnist, recently focused on precisely the same dilemma:
My definition of broken is simple. It is a system in which Republicans will be voted out for doing the right thing (raising taxes when needed) and Democrats will be voted out for doing the right thing (cutting services when needed). When your political system punishes lawmakers for the doing the right things, it is broken.

So then, since Democrats hold power, it’s up to Republicans to supply the “heroes” by helping raise taxes.

Friday, March 26, 2010

Health Care: The Third Way

Phil Gramm, the former Republican senator from Texas, sums up the continuing health care battle this way:
Any real debate about health-care reform has to be centered on solving the problem of cost. Ultimately, there are only two ways of doing it. The first approach is to have government control costs through some form of rationing. The alternative is to empower families to make their own health-care decisions in a system where costs matter. The fundamental question is about who is going to do the controlling: the family or the government.

There is a third way. The third way is the elite’s choice, the one they use for education, the one Europe, Canada, Australia, and Japan employ. You have a two-tier system. Government medicine (schools) for most of us. Expensive, private care (schools) for the fortunate.

Monday, March 22, 2010

State = Kleptocracy

Jared Diamond wrote Guns, Germs, and Steel over a decade ago. The book charted a new way to look at history, one based on science and data (Diamond’s book won a 1998 science prize in addition to his nonfiction Pulitzer). Diamond specifically advocates treating history as a science.

Yet what I appreciated most in Diamond’s book is Chapter 14 (pp. 265-92), “From Egalitar-ianism to Kleptocracy.” Here, Diamond takes on politics. He is pretty straightforward about linking ever-advancing forms of organization to ever more sophisticated schemes of theft. To Diamond, who has done most of his work among the peoples of New Guinea, advancement brings hierarchy, specialization, standing armies, police, official religion, and resource transfers from the people to the elite and their leader.


Before civilization, we all lived in bands. That’s how most of world was 11,000 years ago. Bands still exist in Diamond’s New Guinea. Bands are the lowest form of political organization: no permanent home, 50-80 people, land jointly used by whole group, no specialization except by age and sex, everybody forages for food. Bands are “egalitarian” societies with no formalized leadership, no monopolies of information or decision-making. Leadership is acquired and passed on through personality, strength, intelligence, and fighting skills.

With farming, beginning around 9000 B.C., society became more sophisticated, and developed tribes centered on villages, one tribe per village, and subdivided into clans, each with own land base. Everybody in a tribe—numbering in the 100s—still knows everybody, but tribes are the upper limit of societies built on personal knowledge. Tribes may have a “big man,” but the position is neither formal nor hereditary. Tribes don’t collect tribute, and the “big man” dresses, lives, and works like everybody else, in an economy based on reciprocal exchanges.

As societies advance they develop chiefdoms, more formalized than tribes and with rules, because the 1,000s to 10,000s of people living together in a large town or multiple villages don’t know each other. In this situation, people have to be able to meet without trying to kill each other. In a chiefdom, the chief has a monopoly on the use of force, has a hereditary job, makes significant decisions, has a monopoly of significant information, dresses and lives differently, and tops a bureaucracy, even though bureaucrats have generalized, not specific responsibilities. Chiefs acquire luxury goods, lead a class society built on slave labor, control all land, collect tribute, and run a redistributive economy. Tribes become part of the chiefdom’s hierarchy, complete with lesser chiefs.

Chiefdoms at worst function as kleptocracies, transferring net wealth from commoners to upper classes.

How do chiefs retain power? They

1. Disarm the populace, and arm the elite.
2. Redistribute tribute in popular ways.
3. By maintaining order, make popular the use of force.
4. Create a religion or ideology that justifies kleptocracy.

Chiefdoms finally evolve into states, the way one finds polities usually organized today. The first formed in Mesopotamia around 3700 B.C. States have kings, a literate elite, visible archaeological hallmarks, a monopoly on classified information, extensive taxation, large scale slavery (until recently), mass production, large public works, mass warfare, vertical and horizontal bureaucratic specialization, laws, a judiciary, police. States and especially empires can be multilingual and multiethnic. States often choose bureaucrats based on training and ability. States can fight and defend themselves because they possess: a) a concentration of resources, and b) a religion or ideology that inspires people to fight suicidally.

Thursday, March 18, 2010

Obama Job Approval Upside Down for First Time

More evidence Obama should move his attention away from ObamaCare and onto the economy: the “RealClearPolitics" average of polls asking about his job approval finds, for the first time, more disapproving of Obama’s performance (47.8%) than approving of it (47.3%). Also the Gallup poll has Obama’s job approval rating below 47% (it’s at 46%). History shows that presidents with job approval ratings below 47% don’t get reelected.

Wednesday, March 17, 2010

Shift to the Economy

Both sides are dug in on the health care debate, which reaches its climax this weekend. This highly partisan, highly divisive debate parallels the Washington atmosphere in 2003, when Bush’s prescription drug program passed the House on a 220-215 partisan (16 Democrats did join the Republicans) vote, but only after the speaker held the vote open for hours while he searched for more support. It's also like 1993, when Clinton’s tax hikes passed the House 218-216, then the Senate 51-50 with Vice President Gore breaking the tie. No Republicans in either house supported the 1993 Clinton tax increases.

Under these crisis-like conditions, the party in power generally prevails, as leadership makes margins appear even tighter than they actually are by allowing its most vulnerable members to side with their districts rather than the party. Right now, Speaker Pelosi is sorting out who gets to vote with the district, and who must, MUST, vote with the party.

Still, polls show hardened opinion against ObamaCare. One survey, conducted by OnMessage Inc., has Republicans leading a ballot test for the fall election by 37% to 36%, with 27% undecided. It's the first time since 2004--the year Republicans last won control of congress--that the GOP polls ahead of Democrats. Of the 27% who say they're undecided, only 30% favor ObamaCare, with 60% opposed. Such results indicate ObamaCare’s a loser for Democrats.

In another survey, jointly managed by a Republican and a Democratic pollster for NBC News and the Wall Street Journal, 48% called ObamaCare a "bad idea" and 36% viewed it as a "good idea"—a 12% gap.

The same survey found that by a 10% margin, registered voters most likely to vote in November believe the GOP is better than Democrats at dealing with the economy. If the polls are real, Democrats have to move past ObamaCare, where opinions are hardened, and concentrate on the economy, where though Democrats trail, voters go by actual results and so are more flexible.

Here are two reasons the economy may in fact start helping Democrats:

1. The stock market reached new highs today on the road to recovery. The S&P 500 rose to 1,159, the Dow cleared 10,725, and the NASDAQ 2,378—all new highs since the market crashed in Fall 2008. As a consequence, my FOX INDEX has reached another post-crash high [chart]. The INDEX measures as a percentage the distance traveled from the market’s March 9, 2009 bottom, while also marking the distance remaining to its pre-crash healthy level (12,000 Dow, 1,300 S&P, 2,500 NASDAQ). As of today, the distance traveled from the bottom to healthy is close to 80% of the path to full recovery.

2. The March jobs report will show a big improvement when it's released April 2. After years of monthly declines, we may see jobs jump by 300,000 this month, a big number the media will trumpet as fantastic news. Of course, 100,000 of these are temporary census workers, who only hold their jobs until summer. And the balance will come mostly from workers who were laid off during 2010’s terrible winter and are now able to work again. Still, the country may be ready to respond to good news—however soft and squishy—by increasing spending. Then the economy could truly begin to hum.

Tuesday, March 16, 2010

Why Obama Doubles Down: Conservative Views

“The essence of contemporary liberalism is the illiberal conviction that Americans, in their comprehensive incompetence, need minute supervision by government, which liberals believe exists to spare citizens the torture of thinking and choosing.”

--George Will

Liberals, as we have seen, believe Obama—Democrats in general—know what’s best for the American people. Conservatives mostly agree liberals think they think better, and therefore are entitled to rule over the rest of us. Conservatives, however, don’t agree liberals should run the show. Liberals and Democrats, after all, live in a country where “the rest of us” actually have the votes.

Jay Cost, a “RealClearPolitics” numbers cruncher:
[Democrats] will lose [their] majority because of President Obama's divisiveness. We have seen hints of things to come with GOP victories in Virginia, New Jersey, and most recently Massachusetts—as the difference-making voters for the Democrats in 2006 and 2008 turned to the Grand Old Party. Either Mr. Obama and his advisors are blind to this, or they don't care, or both. I think it's both; call it willful blindness, a self-serving belief that 2008 was indeed a liberal realignment, and that the numbers will eventually reflect it. . . the 44th President. . .has made pretty clear his belief that, when he and the people disagree, the people must be in error.

Commentary's Peter Wehner on Obama’s “State of the Union” speech:
What we are seeing play out on a very large stage, it seems, is a man of extraordinary self-regard having to deal with punishing political set-backs, with the fact that his high hopes have come crashing down around him. The nation has turned against his agenda. They are turning against his party. And they are tiring of him as well. This is something he cannot seem to process. So the president marches ahead, pretending up is down and east is west, embracing an agenda the country has rejected and that is doing terrible damage to his own party.

The Wall Street Journal's Peggy Noonan talked to:
a Republican who bears [Obama] no animus. Why, I asked . . ., did the president not move decisively to the political center? Because he is more "intellectually honest" than that, he said. "I don't think he can do a Bill Clinton pivot, because he's not a pragmatist, he's an ideologue. He's a community organizer. He mixes the discrimination he felt as a young man with the hardship so many feel in this country, and he wants to change it and the way to change that is government programs and not opportunity."

Mark Steyn, in the conservative Washington Times:
Functioning societies depend on agreed rules. If you want to open a business, you do it in Singapore or Ireland because the rules are known to all parties. You don't go to Sudan or Zimbabwe, where the rules are whatever the state's whims happen to be that morning. That's why Mr. Obama is such a job-killer. Why would a small business take on a new employee? The . . . [Obama] message is clear: more Washington, more regulation, more spending and no rules [emphasis added].

Jeffrey H. Anderson, Weekly Standard writer:
“Incremental gains” is a phrase foreign to [Obama’s] vocabulary, as is the notion of having Washington solve problems by getting out of the way and unleashing the initiative of individuals or communities. Rather, problems must be solved all at once, [an] approach. . . largely divorced from practical considerations or. . . from compromise. [His] is the approach of the theoretician, not the practitioner; of the academic, not the statesman; of one who prefers to decree or to gain acquiescence, rather than to negotiate or to persuade.

[As Obama said to Katie Couric,] “I would have loved nothing better than to simply come up with some very elegant, you know, academically approved approach to health care [that] didn’t have any kinds of legislative fingerprints on it, and just go ahead and have that passed. But that’s not how it works in our democracy.”

Quin Hillyer, senior editor of the conservative American Spectator:
The American republic was designed to give a minority a way to slow down major changes buoyed by popular passions. It was not designed to give a minority the power to implement major changes against popular passions. The Obamites are doing the latter. They are turning American checks and balances on their heads. They are using temporary parliamentary advantages for a permanent power grab. The Obamites are dictating to Americans rather than representing them. Revolutionizing, not just evolving. Ruling, not serving.

Former Bush speechwriter Michael Gerson:
Obama's greatest achievement during the 2008 campaign was to combine soothing reassurance with a message of transformational change in a single political persona. Governing, however, has required a choice between reassurance and transformation. Because Obama has chosen liberal transformation, the political outcomes are now limited: He can appear radical in victory or weak in defeat.

A kinder view of Obama, from New York Times in-house conservative David Brooks:
Obama is as he always has been, a center-left pragmatic reformer. . .[H]e always describes a moderately activist government restrained by a sense of trade-offs. He always uses the same on-the-one-hand-on-the-other sentence structure. Government should address problems without interfering with the dynamism of the market.

Monday, March 15, 2010

Why Obama Doubles Down: Liberal Views

"All animals are equal, but some animals are more equal than others."

--George Orwell, Animal Farm (1945)

Many liberals have helped explain why Obama has chosen to disregard popular opinion in the aftermath of the Democrats' epic January Massachusetts senatorial election defeat. To me, most of their reasons come down to appreciating that some of us, including our president, are brighter than others.

Anna Quindlen in Newsweek:
A very smart man once said, "Telling the American people what we think they want to hear instead of telling the American people what they need to hear just won't do." That man was Barack Obama, and that attitude is one reason he got elected. He should stick to that position, and the American people should embrace it.

The New York Times' Tom Friedman, from Davos, Switzerland:
developing countries are looking for a recipe for faster growth and greater stability than that offered by the now tattered “Washington Consensus” of open markets, floating currencies and free elections. . . [T]here is growing talk about a “Beijing Consensus” . . . a “Confucian-Communist-Capitalist” hybrid under . . . a one-party state, with a lot of government guidance, strictly controlled capital markets and . . . authoritarian decision-making . . . capable of making tough choices and long-term investments, without having to heed daily public polls. [emphasis added]

Liberal commentator Jacob Weisberg, in his “funny, ha, ha”-titled article, “Down With the People”:
the American public lives in Candyland, where government can tackle the big problems and get out of the way at the same time. In this respect, the whole country is becoming more and more like California, where ignorance is bliss and the state's bonds have dropped to an A-rating (the same level as Libya's), thanks to a referendum system that allows the people to be even more irresponsible than their elected representatives. Middle-class Americans really don't want to hear about sacrifices or trade-offs—except as flattering descriptions about how ready we, as a people, are, or used to be, to accept them. We like the idea of hard choices in theory. When was the last time we made one in reality? [emphasis added]

Peter Beinart, senior political writer for the liberal “Daily Beast”:
Obama[, by deciding] to double down on health care. . . has forfeited any chance of bridging the red-blue divide. [At the same time, he] has cemented his bond with the netroots . . . For the netroots, a politicians’ ideological purity has always been less important than his willingness to resist pressure from the other side, which is exactly what Obama has just done. . . Democrats have decided to bet the party’s future on the belief that Americans prefer bold liberals to [the] cautious.

Game Change, John Heilemann and Mark Halperin's book on the 2008 presidential campaign (via Peggy Noonan--Wall Street Journal, 3.11.10):
Barack Obama. . . is smart, “and he not only knew it but wanted to make sure that everyone else knew it.” In meetings with aides, he controlled the conversation by interrupting whoever was talking. He is boastful, gaudily confident. Before his 2004 convention speech, a reporter asked him if he was nervous: “I’m LeBron, baby,” he answers. “I got some game.”

Sunday, March 14, 2010

Why Obama “Doubles Down”

In response to 2009-10 Democratic defeats in Virginia, New Jersey, and Massachusetts, Obama is asking Democrats to pull together on health care and pass a bill for the good of the party. In other words, faced with the seeming political reality that folks don’t like what he is doing, Obama gives us “double down.”

I believe Obama is being stubborn for five good reasons:

Reason #1: Obama was right in 2008. During the presidential campaign, people (including me) said Obama wouldn’t get away with running against Bush instead of real opponent McCain. But he did. And he won. Today, Obama’s straw opponent is (finally!) no longer Bush. It’s Wall Street, oil companies, and especially health insurers. Obama believes he can again successfully beat up a straw opponent in 2010.

Reason #2: civil rights history. Obama’s election brought to a successful conclusion the Democrats’ long (45 years: 1963-2008), difficult struggle to achieve equality for blacks, a struggle the party reasoned would eventually, sooner or later, “some day” reward Democrats at the polls because a) it was the right thing to do, b) blacks would overwhelmingly vote Democratic. Universal health care as a top Democrat concern dates back to Clinton’s 1992 presidential campaign, so the latest big struggle is only 18 years old. Democrats believe universal health care’s a) the right thing to do, and b) it will eventually reward Democrats at the polls.

Reason #3: it’s the Democrats’ moment. One way or another, in most every year since 1965, conservatives and Republicans have frustrated Democrats’ efforts to build the grand government superstructure they believe America needs. This time is different. Democrats’ goal is European social democracy, beautiful polities like those in Sweden, Holland, Germany, France, even Canada and the UK. Aren’t they such nice, civilized nations? With all power in their hands now—and perhaps not for long—Democrats are crazy not to create a gigantic welfare state, one where taxes will eventually provide the revenue needed to cover services people demand. Once mandated benefits are in place, voters will inevitably insist on retaining them, meaning taxes will have to rise.

Reason #4: Democrats control our culture, and know it. As the late, esteemed Harvard political philosopher Sam Huntington argued, America’s word for ideology is “culture.” Democrats believe they can get away with propaganda (lying) because they control the “culture”—our ideology. After all, Democrats won in 2006 with propaganda that: a) Bush “lied us into war” (no weapons of mass destruction), b) Republicans can’t govern (Katrina), and c), Republicans swim in a “culture of corruption” (Mark Foley). The proof of all this: Bush’s low poll ratings, which featured in most articles about Bush’s second term. And poll ratings do in fact reflect the effectiveness of one’s propaganda. Democrats did a good job in 2006-08, as the polls demonstrated.

Reason #5: protect the castle. At the subconscious level, it’s all about power. Obama is doing for Democrats what every privileged elite does for itself. He uses every advantage rank provides to keep illegitimate power seekers from seizing what rightfully belongs to the elite. Obama stands for the status quo, the power structure consolidated in the aftermath of Vietnam and civil rights turmoil, rule by the American meritocracy shaped at the nation’s best schools. This national elite faces a dangerous enemy: Republicans who constantly attempt to frustrate good government and try to grab power through market-tested appeals to people’s baser instincts. The enemy is financed by an evil capitalist remnant that never accepted defeat at the hands of Roosevelt’s New Deal, an era which gave birth to rule by the very meritocracy still striving to hold power today.

Sunday, March 07, 2010

Who is Dana Milbank?

The Washington Post’s Dana Milbank sarcastically slams Karl Rove’s new book, Courage and Consequence, writing that in the model of Bush staffer Karen Hughes's memoir, Ten Minutes from Normal, “Rove's work should be called ‘Ten Thousand Miles from Self-Aware.’” You want some proof Milbank is right to ridicule the man known as Bush’s “brain”? OK. Milbank reports that Rove
describes at length how Clinton staffers "trashed" the White House, though investigators were "unable to conclude whether the 2001 transition was worse than previous ones."

Helpful Dana. His “proof” is a link to a 220-page GAO report, available in PDF form only. No page number mentioned. Now reader, you are welcome to hunt through the entire document for the quote Dana referenced. Hint: Dana hopes you don’t look.

I’ll save you searching for the needle. On page 18 of “GAO-02-360 The White House,” I found this passage:
Seven EOP staff and one former Clinton administration employee who had worked in the White House complex during previous transitions made comparisons regarding the condition of the space during the 2001 transition with conditions during previous transitions. Six EOP staff said that the condition was worse in 2001 than previous transitions, while one EOP employee and one former Clinton administration employee said the office space was worse in 1993 than 2001. Because of the lack of definitive data available to compare the extent of damage, vandalism, and pranks during the 2001 transition with past transitions, we were unable to conclude whether the 2001 transition was worse than previous ones.

Six of seven Executive Office of the President (EOP) staffers agreed with Karl Rove that Clinton’s staff had trashed the White House, and one Clinton staffer, totally unbiased, no doubt, plus one EOP staffer dissented. Dana read that passage, and chose to tell us that the GAO report contradicted Rove.

Here’s the truth. Dana Milbank, whoever he is, lies.

Tuesday, March 02, 2010

The GOP’s continuing demographic challenge: Hispanics and Youth

I’m struck by two facts underlining Republican failure with young people and Hispanics.

1. Party registration in California, America's 6th youngest state with 30% of the nation's Hispanic population, is overwhelmingly non-Republican.

Joel Kotkin, in the liberal “Daily Beast,” writes that
The Republicans[‘] Neanderthal stance on social issues varies radically from the rising millennial generation, and threatens to alienate them permanently. [Also, it represents] a threat to the other large emerging voting block, immigrants and their offspring. If you want to see an illustration of what [alienating youth and Hispanics] means, just examine the plummeting GOP registration levels in increasingly multi-racial California. For the first time in modern history, according to veteran political observer Allan Hoffenblum, there is not a single congressional, state Senate or Assembly district in the state with a majority Republican registration.

2. Protestant Hispanics have returned to the Democrats.

“RealClearPolitics’” David Paul Kuhn found a year ago that
Obama's margin with Hispanics. . . grew with the [2008] economic collapse and was rooted in the immigration debate. Latino Protestants were especially impacted. More than half of Hispanic Protestants backed Bush in 2004. [In 2008], two thirds of them backed Obama. Obama eventually won Hispanics by a two to one ratio. [Still,] that mark remains a smaller share of Latino support than the Democratic nominee earned in 1988 and 1996.

Obama may have had a smaller percentage of the Hispanic vote than Dukakis in 1988 or Clinton in 1996, but the total Hispanic Democratic vote in 2008 was far higher.