Wednesday, September 29, 2010

Democrats divided by race, class, or both?

Is there a civil war inside the Democratic Party? Michael Barone thinks so. He writes the battle pits the “gentry” (the liberal elite, the ruling class) against the party’s union core, and the unions seem to be on top:
the most stark demonstration of unions' power came in the District of Columbia, where Mayor Adrian Fenty was defeated [following] his appointment of Michelle Rhee as school superintendent. Rhee’s reforms have produced higher test scores, stable rather than declining enrollment, a teacher-evaluation system that has resulted in dismissals of dozens of incompetents and a union contract giving administrators greater flexibility. . . [While g]entry liberals and public-employee unions were allies in the Obama campaign in 2008. . .now they're in a civil war in city and state politics. This raises the question of whether the Democratic Party favors public-employee unions that want more money and less accountability or gentry liberals and others who care about the quality of public services. Right now, the unions are winning.

Thomas Sowell, also writing about D.C. Mayor Adrian Fenty’s defeat, saw the election not as a struggle between liberals and unions, but instead between white and black:
[Fenty’s] serious efforts to reform the schools through an Asian school superintendent and to lower crime through a white woman police chief brought about his rejection by D.C.’s black voters, even as student test scores rose and the murder rate declined. Fenty, who is black himself, also suffered for not using enough black contractors, and because most of the teachers fired were black.

Sowell, himself also black, asks:
How did we reach the point where black voters put racial patronage and racial symbolism above the education of their children and the safety of everyone? . . One key factor was the creation, back in the 1960s, of a whole government-supported industry of race hustling [playing the race card].

President Lyndon Johnson's "war on poverty"-- a war that we have lost, by the way-- bankrolled all kinds of local "leaders" and organizations with the taxpayers' money, in the name of community "participation" in shaping the policies of government.

These "leaders" and community activists have had every reason to hype racial resentments and to make issues "us" against "them." . . ACORN, Jesse Jackson and other community activists have been able to transfer billions of dollars from banks to their own organizations' causes, with the aid of the federal government[‘s] Community Reinvestment Act and its sequels. Racial anger and racial resentments are the fuel that keeps this lucrative racket going.

The liberal elite use class and they use race to maintain their position—at the expense of Republicans—atop the political pyramid. How ironic, if both class and race now bite back.

Monday, September 27, 2010

Who knew? They really do rule.

President Obama is the smart academic, just as are those who love him most. Look at David Paul Kuhn’s summary of where Obama’s money comes from:
Obama's campaign raised a record $745 million. . . about a quarter of Obama's fundraising came from people who contributed less than $200, the same share as George W. Bush four years earlier, according to the nonpartisan Campaign Finance Institute. Donors who contributed at least $1,000 filled nearly half of Obama's coffer. And the five companies whose employees donated the most to Obama were respectively: University of California, Goldman Sachs, Harvard University, Microsoft Corp and Google Inc. [emphasis added]

Such a tight, tiny, high-powered circle: University of California; Harvard; Barack Obama, J.D., Harvard Law (1991); Goldman Sachs CEO Lloyd Blankfin, Harvard (1975), J.D., Harvard Law (1978); Microsoft founder Bill Gates, Harvard (x1977); Google CEO Eric Schmidt, Ph.D., University of California (1982).

Recall it, the excitement! A philosopher-king, one of their own, ruling the world’s most powerful nation. The dream did come true in 2008.

Wednesday, September 22, 2010

The Race Card

Gerard Alexander is an associate professor of politics at the University of Virginia and a visiting scholar at the American Enterprise Institute. He’s upset that Democrats continually skewer Republicans as racists:
There is power in the accusation of racism against conservatives, one that liberals understand well. In an April 2008 post on Journolist, a private online community for liberal journalists, academics and activists, one writer proposed a way to distract conservatives from the campaign controversy surrounding the Rev. Jeremiah Wright, Barack Obama's pastor. "If the right forces us all to either defend Wright or tear him down, no matter what we choose, we lose the game they've put upon us," Spencer Ackerman wrote. "Instead, take one of them -- Fred Barnes, Karl Rove, who cares -- and call them racists."

America now tilts conservatives against not just blacks but also Hispanics, Muslims and anyone else outside a nostalgic and monochromatic description of the American way of life. The narrative usually begins with Barry Goldwater opposing provisions of the 1964 Civil Rights Act and with Richard Nixon scheming to win the presidency through a "Southern strategy" -- appealing to the racial prejudice of working-class whites in the South . . .As Dan Carter, George Wallace's biographer, put it, "The Wallace music played on" in "Barry Goldwater's vote against the Civil Rights Bill of 1964, in Richard Nixon's subtle manipulation of the busing issue, in Ronald Reagan's genial demolition of affirmative action, in George Bush's use of the Willie Horton ads, and in Newt Gingrich's demonization of welfare mothers."

To Alexander, such a reading of the conservative movement relies on these false assumptions: 1) Republicans depended on white Southerners to become competitive in the 1960s; 2) Republican presidents from Nixon forward gave bigoted voters the policies they wanted; 3) the modern conservative policy agenda is racially motivated, and; 4) conservative positions on controversies such as the Arizona law asking police to check for proof of legal status and opposition to the proposed Ground Zero mosque are new forms of white-heartland bigotry.

Alexander presents the issue as if pandering to white bigots wasn’t integral to the Republicans’ “Southern strategy,” when it most certainly was. Democrats were on the short end of this strategy for decades, breaking a 40-year Republican domination of the White House from 1968 to 2008 only when they nominated Southern candidates—Jimmy Carter in 1976 and Bill Clinton in 1992 and 1996. With Obama in 2008, they were finally able to beat Republicans at their own game, assembling a majority coalition of minorities, unmarried women, white liberals, and young people who hate white racism enough to play the race card with glee, and power a black Northern liberal Democrat into the White House.

The truth is race today helps the Democrats, not the Republicans. The Race Card is a Democratic play, and it works.

Here’s how: 1) playing the race card helps hold all minorities, even those doing well under the present system, close to Democrats; 2) unmarried women who suffered (or whose mothers suffered) during the male-dominated Republican era have great sympathy for female and male non-whites; 3) white liberals and young, college-educated whites gain moral strength by separating themselves from white bigots (Republicans), and standing alongside their brothers and sisters of color.

To me, politics based on race was wrong when Republicans practiced it, and it’s wrong in its current, Democratic version. But that’s because my vision of merit-based government favors a decentralized economy with millions of little decision-makers, with government only providing the framework for them to succeed. Government based on the race card is by contrast big, growing, now gigantic, supposedly benevolently and constantly acting on behalf of otherwise-discriminated-against minorities.

The trouble with race is that it gets in the way of merit, whether it’s used to push minorities down, or to pull them up. The trouble with government is that it doesn’t honor merit. If it did, it would get out of the way of those who create jobs and wealth. It would stop playing the race card.

Government + race = bad outcome.

Tuesday, September 21, 2010

Recovery on the way?

Forbes columnist Joel Kotkin has found some pretty convincing evidence that housing recovery is America’s future. Look at the chart below, drawn from Kotkin’s article:
Housing is so much more affordable now that once the jobs return, an upsurge in home sales is sure to follow.

Kotkin, who from his Orange County California perch is more attuned to suburban and immigrant trends than many, also believes that whatever planners say, the people want single family homes such as those found in Los Angeles, Riverside, and Las Vegas. Kotkin writes:
Already a majority of immigrants live in suburbia, up from 40% in the 1970s. They are attracted in many cases by both jobs and the opportunity to buy a single-family home. For an immigrant from Mumbai, Hong Kong or Mexico City, the “American dream” is rarely living in high density surrounded by concrete; if they wanted that, they could have stayed home.

Of course, it’s all about when that recovery will occur. Washington Post columnist Robert Samuelson has a view on why consumer spending is returning so slowly. (Samuelson seems to believe the relationship between jobs and consumer spending is cart-horse, not chicken-egg; in other words, consumers first spend, then consumer spending creates jobs.) The reason spending lags, Samuelson asserts, is that consumers spent down their wealth too far, and now must save to recover. In 2006, their savings rate had dropped to 2%. They were over-extended, too far in debt. Now they are recovering, back up to 6% savings.

That could be great news, if their savings target is 6%, and consumers have now reached that target. Savings stashed away, consumers can then begin spending in earnest again. And debt reduction works the same way—first reduce debt, then resume spending. The good news here, Samuelson says, is that household debt has already dropped $800 billion from its peak of $11.7 trillion, while debt service — the share of income going to interest and principal payment — has decreased from almost 14% in early 2008 to 12.5%, its lowest level since 2000.

Good news, for sure. But what if people want to save even more, or reduce their debt payments even further, before resuming spending?

Saturday, September 18, 2010

Unhappy with the news? Less likely to vote.

Michael Barone has found that when your side does poorly, you like the news less. And you’re less likely to vote.

Here’s what Barone says:
Enthusiasm is not aroused simply by a stirring speech. It’s aroused by seeing your ideas and policies work out the way you expected. Or. . .by seeing your political adversaries’ ideas and policies fail to work out the way they expected.

Democrats in the past 20 months have seen Barack Obama fail to produce the hope and change they expected. [No] withdrawal from Iraq and Afghanistan. . . shuttering Guantanamo. . . end[ing] the ban on openly gay men and women serving in the military. . . Meanwhile, the vast increases in government spending . . . have[n’t] produce[d] economic recovery, and the health-care bill [hasn’t generated] the widespread gratitude that Obama said we should expect.

So, [Democrats have stopped paying attention]. . .the Pew Research Center for the People and the Press. . . found that in 2008, 67% of liberal Democrats said they enjoyed the news a lot, while just 45% say so today. In contrast, 57% of conservative Republicans say they enjoy the news a lot today.

Wednesday, September 15, 2010

Three Big Elections

Yesterday proved to be a big day for people who watch politics. In Delaware, when tea party-backed Christine O’Donnell [picture] defeated Rep. Mike Castle for the GOP Senate nomination, Democrats effectively captured a senate seat they were supposed to lose in November. Now with 6 seats rated toss-ups, Democrats lead Republicans 49-45 in the RealClearPolitics count, meaning if one more seat goes Democratic, with Vice President Biden’s deciding vote Democrats will control the next Senate.

In nearby Washington, D.C., Mayor Adrian Fenty lost his bid for re-election. That means School Superintendent Michelle Rhee [picture], whom Fenty hired and fully supported, will be gone by the end of the year—terrible news for those who believe in school reform.

Earlier in the day in Tokyo, Japanese Prime Minister Naoto Kan [picture] survived a bitter challenge to his leadership from political heavyweight Ichiro Ozawa, who was trying to win the poll for the ruling Democratic Party of Japan’s presidency. Had the corrupt Ozawa won, he would have become prime minister, setting back a year’s worth of Japanese reform efforts.

Three elections; three big stories.

In Delaware, according to "RealClearPolitics’" Sean Trende, “O’Donnell really can’t win.” Why would the Tea Party and Sarah Palin work to take away a Republican senate seat (GOP loser Castle was favored to win in November), and help hand control of the Senate to Democrats? It’s like 1964, when Republicans’ suicidal nomination of Barry Goldwater handed Democrats a sweeping triumph that year. Except that 1964, the year after President Kennedy’s assassination, was a Democratic year anyway. And according to Trende, Castle was actually no shoe-in, perhaps especially if conservatives had stayed away following the bitter O’Donnell-Castle primary.

Before voters rejected Obama’s stimulus, ObamaCare, and Obama’s huge federal deficits, they were upset about the $800 billion Wall Street bailout engineered by Bush, Democrats, and Republicans in Congress in October 2008. Castle is yet another defeated Republican primary candidate who, as Delaware’s congressman, voted for the bailout.

In Washington D.C., I read the tea leaves wrong, saying that since Mayor Fenty backed Michelle Rhee’s firing of 241 low-performing teachers, he must have thought the firings would “work for him politically.” Today’s Washington Post analysis of what went wrong during Fenty’s re-election campaign lists Rhee’s teacher firings as one of the factors working against him.

In Tokyo, Ozawa’s even trying to unseat Kan at this early stage in the Prime Minister’s tenure (Kan just took over in June) shows how deeply divided is Japan’s leading party. Kan is scandal-free, in contrast to Ozawa and Kan’s predecessor, Yukio Hatoyama, both forced out of power and tainted by scandals that saw three aides indicted. But Ozawa is a political genius, the man who remade Japanese politics, and the one people believe can best engineer future changes. In order to survive, Kan probably has to win over Ozawa’s supporters by undertaking the very reforms Ozawa himself had promised to deliver.

Tuesday, September 14, 2010

Experts,”Yes,” Government-controlled Experts, “No.”

Arnold Kling writes in the Cato Policy Report about why experts have failed to fix America’s economy. First Kling makes an important point—one this blog needs to underscore and repeat—“decentralized knowledge is becoming increasingly important.” Kling adds that “trained professionals really do have superior knowledge in their areas of expertise, and it is dangerous to pretend otherwise.”

Kling believes the rise of expertise “makes centralized power increasingly anomalous,” because power overwhelms expertise. Key Kling points:

➢ linking expertise to power . . . diminishes the diversity and competitive pressure faced by the experts. . . The power of government experts is concentrated and unchecked.

➢ private experts have to respect the dignity of the individual, because the individual has the freedom to ignore the expert. . . knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.

➢ When knowledge is dispersed but power is concentrated, [we have a] knowledge-power discrepancy. . . The authority of the state gives government experts a dangerous level of power. And the absence of market discipline gives any errors that these experts make an opportunity to accumulate and compound almost without limit. In recent decades, this knowledge-power discrepancy has gotten worse. Knowledge has grown more dispersed, while government power has become more concentrated.

Kling supplies several examples of how government power overwhelms expertise, to the detriment of all. They include government's job creation failure, the health care reform mess, botched efforts to create green industries, over-regulation of the financial industry, and the post-9/11 ineffective ballooning of our national intelligence apparatus. Kling concludes:
the way to address the knowledge-power discrepancy is to reduce the concentration of power. We should . . . resist the temptation to give power to government experts, and instead allow experts in business and nonprofit institutions to grope toward solutions to problems.

We need to fight government’s natural inclination to use expertise to advance its own political objectives, and instead send decisionmaking back to the private sector, where experts more naturally compete for the ideas that, in the eyes of consumers (us}, work best.

Sunday, September 12, 2010


The goal of any organized terrorist attack is to goad a vastly more powerful enemy into an excessive response. And over the past nine years, the United States has blundered into the 9/11 snare with one overreaction after another . . . much of what [Bin Laden] has achieved we have done, and continue to do, to ourselves.

--Ted Koppel, 9.12.10

[Islamic] terrorists regard themselves as “jihadis” - heroic Islamic warriors and conquerors. They see their enemies as “infidels” - enemies of Allah. Yes, the jihadis and those who support them have grievances against America, Europe and Israel. But resolving policy differences is not their goal. Their goal is to defeat the West, and to restore to Muslims the power and glory they enjoyed in the past and which they are confident they are destined to enjoy again.

Iranians are paying members of the Taliban to kill American soldiers in Afghanistan. Think about that: Iran’s rulers are collaborating with the Taliban, an affiliate of al-Qaeda. Political leaders . . . ought to be pondering what . . . it will mean if Tehran succeeds in acquiring nuclear weapons. . .

-- Clifford D. May, President, Foundation for Defense of Democracies, 9.11.10

It takes a high IQ to evade the obvious.

--Thomas Sowell, 9.7.10

Why are intellectuals such as Ted Koppel so determined to downplay the serious, ongoing threat we face from Islamic extremism? Does a high IQ really lead people to evade the obvious?

Most Muslims aren’t “jihadis,” but the minority who are jihadists threaten peace more than any other group of believers practicing politics/terror today. Most Soviet citizens longed for peace; those who didn’t fought in Spain, signed a non-aggression pact with Hitler that while enabling Hitler to invade Poland and start World War II, led to U.S.S.R. seizure of eastern Poland, Latvia, Lithuania, and Estonia, war with Finland, the eventual conquest of Eastern and Central Europe and creation of a satellite empire, the creation North Korea and the invasion of South Korea, theft of A-bomb secrets and a subsequent Cold War that threatened the entire planet.

A significant minority of American intellectuals supported the U.S.S.R. in the 1930s, a big majority during World War II when the Soviet Union was an ally, smaller numbers wanted to “ban the bomb” in the 1950s and found sympathy with Castro in the early 1960s. As a result of America’s Vietnam debacle, the intellectual left gained control over the Democratic Party in 1968, forcing Democratic President Lyndon Johnson from office. Since then, Democrats, led by its intellectuals, have generally opposed U.S. military action abroad, favoring big government at home, a small military footprint overseas.

Republicans, junior partners in big government/big military coalitions led by Roosevelt, Truman, Eisenhower, Kennedy, and Johnson from 1941 to 1968, are now the party of national security; the only unified political force still focused on overseas threats. And making the separation complete, Republicans now strongly believe in small government at home.

The division shapes our deeply contrasting visions. To intellectuals, smarter than the rest of us, it’s obvious Islamic extremism doesn’t threaten our way of life—homegrown poverty, racism, poor education and health, religious superstition, and polluting businesses pursuing short-term profits do. We can fix our problems by having intellectuals spend money wisely at home.

Here’s what the rest of us realize. Intellectuals are so focused on their domestic enemies, the ones trying to downsize all the government programs they lovingly put together with their own hands, that they refuse to see bad people who don’t like us will take us down unless we fight back, and it’s urgent we beat the bad guys to the punch. We won World War II because we fought back, but at great cost—we could have begun earlier and saved millions of lives. We won the Cold War by fighting back each step of the way, having learned our lesson in World War II. Now, post-9/11, we’ve got another war to win.


Wednesday, September 08, 2010

Immigrants Saving America

Joel Kotkin makes a lot of sense. I’ve quoted his work here, here, and here. Now he’s writing about how much impact immigrants will have on the American business model. His main facts:

➢ Between 1990 and 2005 immigrants started one quarter of all venture-backed public companies. . . CEOs with roots in foreign countries [lead] 14 of the of the 2007 Fortune 100.

➢ eight Indian American CEOs run U.S. corporations with over $2 billion in sales, including . . . Citicorp, Adobe Systems and Pepsico[, with] Coca Cola. . . run by . . . a native of Turkey.

➢ Between one-third and one-half all students at Stanford, MIT, University of Pennsylvania, University of Chicago and UC Berkeley [business schools] come from abroad.

➢ immigrants are 60% more likely to start a new business than native-born Americas. . . the immigrant experience . . .encourages innovation--. . . the advantage of non-acceptance. . . [H]istorian Irving Howe notes that the immigrant need[s] to find an unoccupied or underserved niche . . .

➢ In 2005 the U.S. swore in more new citizens than the next nine countries put together. . . more than half of all skilled immigrants in the world . . . come to the U.S. . . 400,000 E.U. science and technology graduates resid[e] in the U.S.

➢ nearly one in three [Houston] restaurants serves Mexican or Asian cuisine. . . account[ing] for more establishments than hamburger, BBQ and Italian restaurants put together. . . Immigrant-founded firms such as El Pollo Loco, Wolfgang Puck and Panda Express, are emerging as the McDonalds of 21st-century America.

➢ The emerging post-racial economy provides two distinct opportunities for American business. First the newcomers offer a new domestic "emerging" market. . . minorities could account for over $2.5 trillion [in sales] by 2010, close to $1 in every $4 in total U.S. consumer spending.

➢ [Second,] the uniquely international cast of American business [means] leading American firms will not have to go to graduate school in international training; they will have received theirs at home, talking to parents or grandparents who migrated from Mexico, Cuba, Russia, Iran, China, India, Israel . . . Americans [will] tap the global market, and culture, in ways other countries . . . just can't match.

Just think how much better our economic future would be, if we only liberalized current immigration policy.

Tuesday, September 07, 2010

Israel's Netanyahu Wants Peace Deal

Aluf Benn is editor at large at Haaretz, Israel’s newspaper for intellectuals. Writing in the Washington Post, Benn argues that Israeli Premier Binyamin Netanyahu, contrary to what most believed just months ago, is determined to conclude a peace settlement with his counterpart, Palestinian President Mahmoud Abbas. In Benn’s words:
With no serious domestic challengers, Netanyahu knows that he is the strongest Israeli leader in a generation. Looking outside, however, he sees mostly trouble: His country is ever more isolated from an international community that increasingly rejects Israel's occupation of the Palestinian territories, its settlements and its excessive use of force. At the same time, he is deeply alarmed by Iran's quest for nuclear weapons, coupled with what he describes as its effort to "delegitimize" the Jewish state. He sees Israel's sheer existence, not its controversial policies, as the matter at stake. He therefore wants President Obama to help neutralize the Iranian threat -- and he understands that Obama's price for that help will be Israeli concessions in the West Bank.

If true, this remarkable development means Obama is on the cusp of a foreign policy achievement that has eluded every American president since Nixon. Obama will need to deliver on Iran, however, and to help Abbas give up the Palestinian refugees’ generations-old demand for a “right of return.”

Thursday, September 02, 2010

The American Way

First, a Reuters editor tells America to honor democracy over dictatorship. Now a German academic tells us to honor our traditions, and not “go European” on America’s friends. In Der Spiegel, Thomas Straubhaar, a Hamburg University economics professor, takes on the “big government” strategy pushed by Princeton’s Paul Krugman, the approach Straubhaar fears Obama is following. Straubhaar writes:
what is good for Europe and Germany does not automatically work for the US[, whose] settlers . . .rejected everything . . . with a semblance of state authority. They fled Europe to find freedom. The sole shared goal of the settlers was to obtain individual freedom and live independently, which included the freedom to say what they wanted, believe what they wanted and write what they wanted. . . The state should not interfere in people's lives, aside from securing freedom, peace and security. Economic prosperity was seen as the responsibility of the individual.

If you take this belief away from Americans, you are destroying the binds which interlink America's heterogeneous society[. You thereby threaten] conflicts between different sections of society [that] have long bubbled beneath the surface.

[Better] would be a return to the American Way, the . . . success of [which] is illustrated by history. In 1820, twice as many people lived in the United Kingdom as the US, and its economic performance (measured by GDP) was three times as strong and the average standard of living (measured by GDP per person) was a quarter higher. Today, there are about five times more people living in the US than the UK, America's economic performance is about seven times better than Britain's and the average American is about 50 percent better off than the average Briton.

When Europeans and Canadians warn us about big government, it’s surely time for Americans to take on directly this threat to our "way."

Wednesday, September 01, 2010

China Needs Capitalism + Democracy

Chrystia Freeland, global editor at large for Thomson Reuters, in the Washington Post has a good take on why China, like all of us, needs both capitalism and democracy:

state capitalism may falter as China gets richer [because] it may be hard to allow people to become consumers without letting them become real citizens, too. One of China's big economic challenges over the next decade will be to allow its domestic market to grow. That will mean giving the Chinese people more spending power. As the Chinese become more bourgeois, they may demand more political rights, too. . .

[China’s] state capitalism [needs] innovation. The American political economy has many flaws . . . But America has one great virtue that no other country has yet to replicate: When it comes to innovation and its translation into things people want, America is unbeatable. This is the country of Apple, Google and Facebook. These are the inventions driving the technology revolution, and only an open society can create them. . .

[China's] centuries of stagnation [stemmed from] its centralized, authoritarian state. As economic historian Joel Mokyr has written, "the absence of political competition did not mean that technological progress could not take place, but it did mean that one decision maker could deal it a mortal blow." Meanwhile, in chaotic, divided, inefficient Europe, when one ruler decided to repress his innovators, "they did no more than switch the center of economic gravity from one area to another."

Freeland, born in Canada but of Ukrainian background, a student of Russia’s exit from Communism, has that appreciation for the freedoms we take for granted that comes best from those who know oppression. She concludes,
Dictators are easy to admire, especially at a distance. Free markets and free societies always look messy and inefficient, especially up close. But when it comes to inventing the modern world, and living at its edge, so far the best model the world has come up with is democratic capitalism.