Monday, January 31, 2011

Chris Christie

Peggy Noonan wrote famous speeches for Ronald Reagan and George H.W. Bush. About Obama’s State of the Union speech, she said she “hated” to write:
It is a strange and confounding thing about this White House that the moment you finally think they have their act together—the moment they get in the groove and start to demonstrate that they do have some understanding of our country—they take the very next opportunity to prove anew that they do not have their act together, and are not in the groove. It’s almost magical. . . If the speech is remembered, it will be as the moment when the president actually slowed—or blocked—his own comeback.
Like Noonan, I was serious about Obama being back on track. Tax compromise and a productive “lame duck” session, pro-business appointments, and a post-Tucson Massacre speech that struck just the right tone, along with poll numbers to prove it. And say this about his State of the Union speech, he was honest enough not to promise to rein in government spending, a promise he seems totally unable to keep.

Obama’s failed State of the Union speech re-opens the Republican presidential nomination to a top tier of possible candidates. Republicans again have real hope of winning. And a stepped-up competition creates urgency for every possible candidate, since if a Republican is elected in 2012, the rest may have to wait until 2020, a political lifetime.

Michael Barone recently debunked the political rule that presidential candidates “have to start early to win.” Said Barone, “Many potential and putative Republican candidates this time seem to be biding their time. You may be able to ramp up a campaign pretty quickly in the Facebook era.” Waiting until 2012, for example. New Hampshire’s primary is January 24.

That’s good news for people like Marco Rubio, my previous favored candidate for 2012. Rubio has to hope the GOP field remains unsettled at least through his first year as a U.S. senator.

My thinking Rubio could be nominated for president next year rested on two assumptions: 1) nobody but Sarah Palin will generate any excitement at all, and 2) Palin excitement would cause panicked Republicans to turn to the young, quite untested Rubio as the charismatic alternative.

When I made those assumptions, Chris Christie was already as much in the picture as Rubio. Rubio seemed better. What? Well, Christie doesn’t have Rubio’s looks or his Hispanic heritage.

I’ve changed my mind. Christie is better. He’s a governor (New Jersey), and governors do stuff presidents do, while senators (like Obama) don’t. Governors run things. That’s why since Kennedy, Obama’s the first to go from Senate to the White House, while in between, governors Carter, Reagan, Clinton, and Bush won seven times.

Christie said that when he ran for governor in 2009, he felt qualified for the job. But as for now, he says, “I do not want to go for national office unless and until I believe that I’m completely prepared.” I’m thinking that by next year, after running New Jersey for two full years, and after having laid down another year of quotable blunt talk, Christie will be ready.

He’ll be a good candidate. He’s ethnic—Italian-American, Catholic—and looks it. Most important, he’s a straight talker. If by next year he has a record of success in New Jersey, he will fill the ticket better for Republicans than Wasps Daniels, Huckabee, Pawlenty, Thune, etc.

Christie will compete well for Reagan Democratic votes in the Northeast and Midwest. Democrats benefit when Southerners (Carter, Clinton, even Gore) lead their ticket, but except for first-African-American-ever Obama, do less well with Eastern and Northern liberal nominees (Stevenson, Humphrey, McGovern, Mondale, Dukakis, Kerry). As Frost Belt liberal nominees hurt Democrats, so will a Wasp male candidate handicap Republicans. And should the ethnic Christie make ethnic Rubio his vice president, he’ll extend the GOP’s potential voter base even farther, reaching the all-important Hispanic vote.

According to CNN’s Alexander Mooney, Christie is beginning to go presidential. He’s implicitly aiming his remarks at Obama:

"We're done with soaring rhetoric. Soaring rhetoric feels good for a little while, but if there's no follow-through, all that's left is the same problems except bigger because we put them off."


"the party is over. When you're in this deep a hole, of course you stop digging, but the other part is you need to climb out. And it's always hard, and often not pleasant."

Christie-Rubio in 2012. New Hampshire is 35% Catholic, #7 among U.S. states.

Saturday, January 29, 2011


Egypt is a very important country. Along with Saudi Arabia, Egypt is our most important ally in the Arab world, Israel’s most important Arab friend, and it sits astride the strategically-vital Suez Canal. It has 80 million people, ranking 15th in the world, and its economy is the 26th largest. In my 2006 list of most important countries ("Top 15" and "Next 25"), Eqypt ranked #23, just outside the now-magic "Group of 20".

Egypt is also home to the Muslim Brotherhood, a key opponent of modernism and Islamic reform in the Arab world, and a significant influence on the thinking of al Queda’s Osama bin Laden.

Johns Hopkins’ Fouad Ajami, a Lebanese Shiite by background, writes of Egypt that it had been
the trendsetter in Arab politics, in its self-image the place where all things modern in Arab life—the cinema, radio, women's emancipation, parliamentary life, mass politics, forced industrialization—had begun. The sight of Tunisians. . . taking to the streets and deposing their tyrant, both shamed and emboldened the Egyptians. They had wearied of the large prison that [President Hosni] Mubarak had constructed for them.
Ajami warns:
Revolts of this kind are always a gamble on the unknown. At bottom, they are an attempt at self-purification, a society wishes to be done with the stain of submission to a dictator's transgressions. Amid the tumult, what is so clear today is the hatred felt for the ruler and his immediate family. Reigns like Mr. Mubarak's devour the green and the dry, as a favored Arab expression has it.
From his current Davos Switzerland perch, Washington Post columnist (and Harvard lover) David Ignatius offers this view of America’s control over events:
this is a post-American revolution, encouraged in part by a recognition of the limits of U.S. power. The unrest follows a series of American failures in the region. President Obama promised change. But he couldn't bring Israel and the Palestinians to a peace agreement, and couldn't counter Hezbollah in Lebanon or its patron, Iran. America is not the stopper in the bottle anymore, and the Arab man in the street knows it.
Ignatius fears that:
revolutions are always attractive in their infancy, when freedom is in the air and the rebellion seems spontaneous. But from the French and Russian revolutions to the Iranian uprising of 1979, the idealistic but disorganized street protesters usually give way to a manipulative revolutionary elite.
Hard to stand by and just watch what happens to many friends, along with America’s total foreign aid investment of $70 billion (sources here and here).

Thursday, January 27, 2011

Obamacare Under Attack

if Republicans in the 112th Congress spent the next two years doing nothing but debating the health care law, beginning to dismantle it, and offering alternatives, they would have real momentum heading into the 2012 election.

-- Matthew Continetti, Weekly Standard, 1.31.11

Competition is always an act of aggression toward systems that can survive only by coercion.

--Patrick McIlheran, Milwaukee Journal Sentinel, 1.21.11

People favor repeal of Obamacare over its retention by 49% to 43%, according to the latest “RealClearPolitics” average (6 polls). That 6% margin in favor of repeal is down from 11% last May. Still, it’s noteworthy people continue to support repeal.

It’s possible Republicans could overplay the Obamacare issue, focusing on it instead of the job creation the public wants. After all Obama, unlike during his first two years, is now free to emphasize jobs, because health care is law, history, and his signal achievement. He gets to “move on,” while Republicans won’t.

In that context, some Democrats jumped on a recent AP-GfK poll that showed support for Obamacare holding steady at 40% over November-January, opposition dropping from 45% to 41%, and a third choice, “neither support nor oppose,” rising from 11% to 16%. Has the AP poll, by offering a middle choice between support and repeal, smoked out growing indifference to Republican efforts to undo Obamacare?

Perhaps, but perhaps not. In the November AP poll, respondents were 23% liberal, 44% conservative, and 31% moderate. In January, liberals were still at 22%, but conservatives were down to 39%, and moderates up to 36%. That means the 5% gain in moderates answering the survey exactly matches the 5% rise in those answering they “neither support nor oppose” Obamacare. So an apparent shift away from public opposition to Obamacare is merely a poll sample shift from conservative to moderate respondents.

Still, the AP poll has useful information. 59% oppose Obamacare’s requirement that people either buy insurance or pay a fine. Of significance, in addition to the people, 28 state governments oppose the same provision (see chart). It’s important to understand that repealing the requirement to buy insurance will collapse the financial structure needed to pay for Obamacare.

On the other hand, the AP poll finds 59% favor Obamacare’s requiring large and medium-sized companies to offer health insurance. Not surprisingly, people are happy to have someone else pay. And 59% say insurance companies shouldn’t be able to drop anyone who develops a serious illness, a provision Republicans say would be part of their health care “replacement” plan.

While Obama’s 2009-10 fight for health care clashed with the public's contrasting concern about job creation, Republicans want to link Obamacare’s repeal closely to job creation. This is an important difference. The GOP believes that for jobs to grow, government must shrink, and Obamacare is all about making government bigger.

As Charles Krauthammer wrote, Obama’s health care entitlement for 32 million Americans doesn’t kick in until 2014. That delay is deliberate, designed so any 10-year cost projection would cover only 6 years of expenditures. Ten years of collection versus six years of payment does produce a deficit-reducing number, but a fraudulent one. Obamacare’s true 10 year cost—its first 10 years of taxes matching its first 10 years of payments—is $2.3 trillion.

Krauthammer goes after another fake cost reduction: Obamacare’s underreported long-term-care insurance entitlement, possibly the biggest budget buster in our welfare state’s history. Unbelievably, the Obama long-term care entitlement claims to reduce the deficit over the next ten years by $70 billion. How? By collecting premiums now, and paying no benefits for the first 10 years!

Here are other ways Obamacare will cause financial hardship, thus killing jobs:

➢ it has effectively stopped the construction of physician-owned hospitals throughout the country, the 45 under way, and countless others that will never be built.

➢ A Physician's Foundation survey revealed that 40% of doctors plan to "drop out of patient care," and 60% said Obamacare will "compel them to close or significantly restrict" practices devoted to serving Medicare or Medicaid patients.

➢ rules requiring insurers in the individual and small-group markets to spend 80% of premiums on medical claims will push many out of existence, and fewer competitors means survivers will find it easier to raise rates.

➢ because people can no longer use Health Savings Accounts on over-the-counter drugs, they must pay for a doctor's appointment to get a prescription for a pricier drug.

➢ the new $2.5 billion excise tax on pharmaceutical companies means price increases for consumers, as drug manufacturers pass on their new costs.

Wednesday, January 26, 2011

Status Quo

Obama gathered his economic team in the West Wing's Roosevelt Room to review themes for his State of the Union address. ... The ideas presented to him...seemed familiar and uninspired. “You know, guys,” he said, according to someone in the room, "I've told you before, I want you to come to me with ideas that excite me.” Nothing he was hearing excited him.

[Obama wanted] “solutions on the cheap” . . . a way of promoting growth without deficit spending. [emphasis added]

--Peter Baker, New York Times Magazine, 1.19.11

Of course, Baker of the New York Times’ story has a happy ending. Obama, as we heard in his State of the Union address yesterday, has offered us “a vision for rebuilding by improving American competitiveness in a global economy, calling it ‘our generation’s Sputnik moment.’”

But did Obama truly capture “the state of the union”? Or are he and his advisors simply unable to fix the economy by helping business grow and government shrink, because they so deeply believe business is the problem and government the solution?

A “Sputnik moment” is about Big Government fixing everything for us innocents. Calling the president and his team “wrong” about “this [Sputnik] moment,” the National Review’s Yuval Levin writes:
We have an opportunity in the next few years to avoid a truly disastrous entitlement and debt crisis and foster the conditions for vibrant growth again. We still have a chance to implement reforms that could do this without crushing austerity or terrible disruptions for seniors and other vulnerable Americans. That chance won’t last long, however, and it is profoundly irresponsible to just pretend we needn’t worry about it.
Levin is one of many who think Obama has missed real problems and real solutions.

Such as reining in debt:
in his first two years Mr. Obama has overseen . . . increased federal spending to as much as 25% of the economy from a modern average between 20% and 21%. In terms of allocating resources, this means that 4% of annual economic output was suddenly taken out of private hands and put under government control.

--Wall Street Journal editorial, 1.26.11

Under President Obama, the U.S. has one of the worst budget deficits in the developed world. Our federal debt is exponentially increasing by $54,373 every second. At this dangerous rate, our debt will be $18.6 trillion at the end of the president's term — an unimaginable explosion of 75% above and beyond the debt accumulated by all of his 43 predecessors combined.

--Rep. Kevin Brady (R-TX), 1.24.11
and fixing unemployment and housing:
The unemployment rate was 8.2% in February 2009, when Obama first addressed Congress. It hit double digits by that October and was 9.4% at last report. . . there are 2.8 million fewer jobs now than when Obama took office. Housing is a particular sore spot. Foreclosures hit a record 1 million in 2010, and this year's figures are likely to be worse.

--Nancy Benac, AP, 1.23.11
and truly (not falsely) cutting government regulations:
The Small Business Administration estimates that government regulations cost our economy $1.7 trillion every year. According to the IRS's own figures, it cost taxpayers $338 billion to comply with the tax code just last year.

--Sen. Ron Johnson (R-WI), 1.26.11

the president's enacted health care and financial laws, by themselves, rigorously increase regulation over 25% [to] 30% of the entire economy. [Obama] announced that he had issued an executive order to review all government regulations. . . although [he] makes it explicit that the cost-benefit analysis must take account of -- as benefits -- intangible factors such as "equity, human dignity, fairness, and distributive impacts." Plenty of leeway there for career regulators and liberal political appointees to justify almost any oppressive regulation they may stumble over.

--Tony Blankley, 1.26.11
in sum, giving business the confidence to invest and hire:
The basic issue [with Obama] is uncertainty — uncertainty on what health care is actually going to cost, uncertainty on hundreds of rule-makings in the Dodd-Frank [financial reform] bill, uncertainty about what’s going to come out of the E.P.A. putting through what they couldn’t get legislatively, uncertainty about taxes.

-- Thomas Donohue, chamber of commerce president, December 2010
The president is stuck defending the status quo because government is under attack, and he’s playing defense the best way he can. Last November’s election means he can’t make government bigger. He doesn’t want it smaller. So he’s hoping what he’s done so far will work.

Again, the New York Times’ Peter Baker:
The president. . . recently asked advisers to present arguments about whether the slow recovery is part of an economic cycle that will ultimately turn around or something different, a “new normal” signaling stagnation as in Japan in the 1990s. . . In the end, Obama concluded that the economic moment is part of a cycle.
Kenneth Rogoff, author with Carmen Reinhart of This Time Is Different, a book about financial crises, told Baker that after two years, the president has essentially done everything he can and must wait to see if it works. “What’s going to happen with unemployment and the economy is largely set at this point. He’s taken his decisions, and now it will unfold and things will begin to improve.”

Noam Scheiber, writing in the New Republic, put a little blunter spin on Obama’s hope:
The dirty little secret of macroeconomic policy is that most of the decisions that will influence job growth over the next two years have already been made. The beauty of [Obama’s] rapprochement with business is that it creates the appearance of a president rolling up his sleeves to solve the problem. And the best part is that it seems to come at little substantive cost.
Too bad “appearance” won’t work. The status quo is unacceptable. We need the reality of job and housing growth.

Monday, January 24, 2011

Blacks, Unmarried Women, and Government Jobs

Walter Russell Mead, discussing the symbiosis between the Democratic/government party and blacks, has perceptively noted the following truth:
middle class African Americans compared to whites tend to work disproportionately in public sector jobs or in private sector jobs like health care that are heavily subsidized by government transfers. A pension crisis for state or federal workers will hit African-American families harder, proportionately, than white ones; municipal layoffs and bankruptcies will have a disproportionate effect on both the African-Americans who depend on these services and those who are paid to provide them.
Let’s match Mead and raise him one by substituting “unmarried women” for “African-Americans” and “married couples” for “whites.” so that the passage reads:
middle class unmarried women compared to married couples tend to work disproportionately in public sector jobs or in private sector jobs like health care that are heavily subsidized by government transfers. A pension crisis for state or federal workers will hit unmarried women harder, proportionately, than married couples; municipal layoffs and bankruptcies will have a disproportionate effect on both the unmarried women who depend on these services and those who are paid to provide them.
The same federal government that emancipated blacks and gave black males the rights previously denied slaves later gave women those same rights. The civil rights revolution that first helped blacks toward equality in the 1950s and 1960s did the same for women a few years later (see chart). The same governments that practiced affirmative action to help blacks toward job equality then seamlessly did the same for women, helping create the current situation where blacks and women are in relation to other groups over-represented in government employment.

How could we not help women the same way we helped blacks? The one had to follow the other.

The problem for blacks, unmarried women, and others who rely on government employment and government pensions is the economy’s approaching shift away from inefficient government services and generous, union-backed government benefits. The problem for those who would take government benefits away is that people fight hardest to hold onto what they already have.

Thursday, January 20, 2011

End the Internal Empire

the political class continues to cause government to overpromise and underperform. This class blithely considers itself exempt from the tyranny of the bell-shaped curve - the fact that in most occupations a few people are excellent, a few are awful, and most are average.

--George Will, 1.20.11

The people who start our country’s fastest growing businesses do so at an average age of 40. Some never went to college, and top-tier entrepreneurs who have degrees also tend to have work experience — they learn about an industry before starting a firm in it. . . the personal qualities useful in building a company. . . are widely distributed through our society, not concentrated in young people at universities.

--Carl Schramm, Forbes, 1.19.11

Land distribution in America has shaped our history. Settlers gained farms in Ohio, Indiana, Illinois, Michigan, Wisconsin, and part of Minnesota under the 1785 Northwest Land Ordinance, which divided the territories of the area into equal parts of a grid. The policy carried over to the farm states and the West through the Homestead Act of 1862, which gave 160 acres to any settler who worked the land for five years. These policies extended the vision of our founders, who believed the Declaration of Independence America was built upon the backs of free farmers—men created equal, with the right to “life, liberty, and the pursuit of happiness.”

But there was another America, that of Southern plantations, Western ranches, and large California and Southwest hacienda land holdings built upon water rights. These large estates enshrined European feudalism inside America’s borders, characterized by giving a small group of wealthy landholders control over the lives of thousands of tenants. In all too many cases, the rich were white, the tenants non-white. In the South especially, the rich in politics used race--a fear of blacks--to corral poor whites to their side.

The industrial revolution worsened this picture, with capitalists based in the East and California railroad barons joining landlords inside the ruling class, and controlling millions of dispossessed tenants and immigrants working in urban factories. The progressive movement began with anti-bank Midwest prairie farmers, but then enlarged the attack to cover rich capitalists, East and West, allying itself with industrial labor unions, while leaving the South relatively undisturbed (progressives and Southerners were white and mostly Democrats who didn’t let race get between them). But after the federal government first tamed big business, it turned on Southern and other racists from the 1950s forward, as a government-based elite centered in the Northeast gained control of the nation.

Government expanded to counter anti-democratic landowners, capitalists, racists, and sexists. It grew and rules now in the name of the people, believing in its right to speak for the voiceless masses against big business, racists, and bigots of all stripes. Without the dark America of plantations, large ranches, haciendas, and rich capitalists, our new elite would never have gained power.

Contrast this government intervention justified by dark forces to the America of free farmers, or especially that of small business, with each owner able to pursue one’s own destiny. They aren’t victims in need of government help, and they don’t trade loss of control for government assistance. The symbiotic relationship of master and servant is foreign to them.

America has a history of elite rule and suppression of its people. But America also has a history of successfully opposing elite rule, and a history of thriving under a free enterprise economic system that allows for success, and for failure followed by success.

Today, we have too much government control. We chafe inside an inefficient internal empire. We need instead, in the words of Carl Schramm, “messy capitalism” with all its possible mistakes, if we are to grow the jobs our people so desperately want.

Tuesday, January 18, 2011

China as #1

Obama greets China’s President Hu. Do we really see what’s coming?

In four years, the Chinese and Taiwanese economies, measured in Gross Domestic Product/ Purchasing Power Parity (GDP/PPP), combined will be the same size as the U.S. economy, but with a far higher growth rate, with a far more favorable trade balance, with far larger foreign currency reserves, and with a much larger population. These are facts, you know.

In the recent Program for International Student Assessment’s testing of 15 year olds, Shanghai students came in first in reading, math, and science. Americans were 17th in reading, 23rd in science, and 31st in math (65 countries tested).

Now people are buzzing about Yale law school professor and bestselling author Amy Chua’s new book, Battle Hymn of the Tiger Mother, with its accompanying Wall Street Journal commentary. To most Westerners, Chua is a monster, not a mother. Chua stands by her results.

Henry Kissinger has made money off his role in bringing China to the forefront of U.S. consciousness. He once wrote that an intellectual block inhibits status quo powers like the U.S. from accepting that rising revolutionary powers—powers intent on replacing the existing order altogether—really mean to “smash the existing framework.” Kissinger maintains we are lulled by the seeming permanence of the system over which we preside, and can’t bring ourselves to believe that a rising challenger truly wants to demolish an international order we so much believe benefits everyone.

Monday, January 17, 2011

Stocks Move into Healthy Territory

In August 2008, in the midst of much angst about the economy, I realized that three numbers defined not a spectacular stock market, not even an excellent one, but certainly a “healthy” one. Those numbers are a Dow at 12,000, an S&P 500 of 1,300, and a NASDAQ of 2,500. The three numbers total 15,800, so I measured how far the market was from “healthy” by calculating the distance between the current market and 15,800.

Well once my index was in place, we never did reach a “healthy” market. Far from it. By March 2009, the market had fallen almost 50% of the way from “healthy” to zero, nada, nothing. Terrible times. Full recovery seemed a long way off.

Could be that 22 months is a long time. But a healthy market made from a Dow at 11,787, an S&P 500 at 1,293, and a NASDAQ at 2,755 hitting numbers not seen since 2007—all adding up to a healthy 15,835 (see chart)—is where we are today. And it’s great news. Wall Street is back. Now for that follow-on job and housing recovery our country so badly needs.

Friday, January 14, 2011

It’s a fact: Obama’s back.

our top political priority over the next two years should be to deny President Obama a second term in office.

--Mitch McConnell, GOP Senate Leader, 11.3.10

The president’s poll ratings are back in positive territory, after having been upside down for 10 months. According to the “RealClear Politics” average, Obama’s job approval rating of 49% exceeds his 46% disapproval rating, putting his performance right side up once again. Also, historically, presidents with job approval ratings below 47% don’t get re-elected. Obama’s 49% approval rating is back in the re-elect range for the first time since last May.

It may be that politics gives a party one day to celebrate, then reality begins to turn on the winner. For two years leading up to November 2010, the country had one party to blame for our troubles—the party of Obama, Pelosi, and Reid. Democrats couldn’t perform, and blameless Republicans won big. Now Republicans are part of the problem, and a carping, negative part at that.

Also, the Obama voters who stayed home in 2010 will be back in 2012, voting in a presidential year, which stacks the deck for Obama the same way lower turnout helped Republicans in 2010.

Obama benefits from being “president of all of us” in the aftermath of the Tucson Massacre, and will benefit again from his State of the Union speech 11 days from now. Mitch McConnell and other Republican leaders have their work cut out for them, if they are to block Obama’s re-election next year.

Thursday, January 13, 2011

Reform: Civil Service

Republicans must find a way to sustain the entitlements that Americans have come to depend on — most notably Social Security and Medicare — without crippling the economy with increased levels of taxation. . . the Republican party — and only the Republican party — can save . . . entitlements without destroying the prospects for economic growth. The Democratic party can no longer be counted on to do this.

--Jay Cost, Weekly Standard, 1.17.11

There is a growing realization that the mantle of good government has passed from Democratic hands, for the “government party” is owned by its unionized employees, not the people taxed to pay civil servants’ salaries and benefits. The Economist is on to union power, writing that:
unions have blocked reform at every turn. . . it is almost as hard to reward an outstanding teacher as it is to sack a useless one. . . union power is magnified not just by strikers’ ability to shut down monopolies that everyone needs without seeing their employer go bust, but also by their political clout over those employers.
The Economist is striving to save civil servants from themselves before it’s too late, telling government what it must do:

➢ [There is] a huge opportunity to redesign government by focusing on productivity and improving services, not just cutting costs.

➢ The immediate battle will be over benefits. . .Too many state workers can retire in their mid-50s on close to full pay. America’s states have as much as $5 trillion in unfunded pension liabilities. . . Sixty-five should be a minimum age for retirement for people who spend their lives in classrooms and offices; and new civil servants should be switched to defined-contribution pensions.

➢ [The] right to strike should be more tightly limited; and the rules governing political donations and even unionisation itself should be changed to “opt-in” ones, in which a member decides whether to give or join.

➢ Private-sector productivity has soared . . . because [companies] have the freedom to manage—to experiment, to expand successful innovations, to close down bad ones, to promote talented people. Across the public sector, unions have fought all this.

➢ Focusing on productivity should help politicians redefine the debate. . . to hire a new generation of workers with different contracts.

It must happen, and perhaps the Economist will help Democrats/government see the light. More likely, however, Republicans will be the ones to make changes by first breaking union power.

Wednesday, January 12, 2011

Reform: Education

Michelle Rhee, the fired ex-superintendent of the very troubled Washington D.C. school system, is still committed to reforming public education.

She’s now head of “StudentsFirst,” which she calls “a national organization to defend and promote the interests of children in public education and to pursue an aggressive reform agenda to make American schools the best in the world.” According to Rhee, “StudentsFirst” signed up 100,000 people and collected $1 million in its first 48 hours, and aims at “a frontal attack on the educational status quo.”

Specifically, Rhee is pushing a three-part agenda:

1. Treat teachers like professionals. That means basing compensation, staffing decisions and professional development on teachers' effectiveness, not seniority. It means implementing a strong performance pay system for the best teachers, and discontinuing tenure for ineffective teachers. When budget problems require layoffs of school staff, honor quality over seniority.

2. Empower parents with information and choices. Remove barriers that limit available seats in high-quality schools, allowing the best charter schools to grow and serve more students. Give poor families publicly funded scholarships to attend private schools. Expand use of California's "parent trigger" law, which forces the restructuring of a poor performing school when more than 50% of the school’s parents sign a petition.

3. Ensure accountability for every dollar spent. Today, billions of dollars are wasted, for example, on paying for advanced degrees for teachers that have no measurable impact on student achievement. Also, to ensure states aren't draining their budgets with pension payouts, the current pensions structure must shift new employees from defined-benefit programs to portable, defined-contribution plans, with employees contributing to their own retirement.

If you want to join and contribute to “StudentsFirst,” sign up here.

Reform: Mental Health

Fuller Torrey is the founder of the Treatment Advocacy Center and the author of The Insanity Offense: How America's Failure to Treat the Seriously Mentally Ill Endangers Its Citizens (W.W. Norton, 2008). He writes in the Wall Street Journal that tragedies similar to the Tucson massacre “are happening every day throughout the United States.” They happen because of
five decades of failed mental-health policies. During the 1960s, we began to empty the state mental hospitals but failed to put in place programs to ensure that the released patients received treatment after they left. By the 1980s, the results were evident—increasing numbers of seriously mentally ill persons among the homeless population and in the nation's jails and prisons. Over the past three decades, things have only gotten worse. A 2007 study by the U.S. Justice Department found that 56% of state prisoners, 45% of federal prisoners, and 64% of local jail inmates suffer from mental illnesses.
Torrey adds:
The solution to this situation is obvious—make sure individuals with serious mental illnesses are receiving treatment. The mistake [is] ignoring the treatment needs of the patients being released. Many such patients will take medication voluntarily if it is made available to them. [But o]thers are unaware they are sick and should be required by law to receive assisted outpatient treatment, including medication and counseling. . . If they do not comply with the court-ordered treatment plan, they can and should be involuntarily admitted to a hospital.

Friday, January 07, 2011

Creating Jobs

The Washington Post’s Steve Pearlstein is a D.C.-based media pooh-bah who seems much less relaxed than Doyle McManus is about the Republicans’ new power in Washington. In a column titled, “'Job-killing' regulation? 'Job-killing' spending? Let's kill this GOP canard,” Pearlstein sets out to strangle in the crib the Republican effort to link Obamacare, big government regulations, and big spending to job destruction:
Republicans these days [tell us] President Obama runs a "job-killing administration" with a "job-killing agenda" carried out by, you guessed it, a "job-killing bureaucracy." In the fevered Republican imagination, the entire federal government is a "job-killing machine" or - my personal favorite - a "job-killing beast."
Yeah. To my “fevered imagination,” that actually seems about right. But not to Pearlstein, who believes killing Obamacare is the most “effective way to reduce employment in the one sector that is actually adding jobs," that cutting “$100 billion this year from the government's domestic spending” means “the loss of close to a million jobs for government workers” (in Washington D.C., that especially hurts), and cutting regulations will “kill people rather than jobs.” (Ouch! Ouch!)

Pearlstein then wonders
how Republicans and their media posse would like it if Democrats started referring to "genocidal" deregulation or the "murderous" repeal of health-care reform. Or if Republican economic policies were likened to the infamous neutron bomb - they kill the workers but leave their jobs intact.
Finally, Pearlstein really goes over the top when he calls "job-killing" rhetoric “a throwback to the McCarthy era. . . the sort of economic fundamentalism better suited to Afghan politics than American.”

We get that Pearlstein likes the status quo, but believe his name calling means he has no constructive response to GOP plans. Bad pooh-bah.

By contrast Nick Schultz, writing in Forbes, puts forth two job-creating ideas:
The first idea is the Regulations from the Executive in Need of Scrutiny Act, or the REINS Act [which] would require that any economically significant regulation--meaning any rule that would have an annual economic effect of $100 million or more--must be sent to Congress for approval.
The second idea comes from
Sen. Mark Warner, a Democrat from Virginia, [who] proposes what he calls a regulatory "pay as you go" system. Sen. Warner's plan "would require federal agencies to identify and eliminate one existing regulation for each new regulation they want to add."
Schultz recommends combining the two ideas into a single bill that could earn bipartisan support.

All job creating ideas, from anywhere, are welcome. In the UK Telegraph, Jeremy Warner explains why the West’s structural imbalance vis a vis the East makes job creation here so difficult. China saves, the U.S. spends, and there is no real answer to the problem, short or long term. Faced with this reality, Warner wisely concludes:
Imbalances within economies are common place. . . The trick with global imbalances must surely be to limit their potential for damage, rather than the futile endeavour of trying to get rid of them altogether. It's plainly in no one's interests that an excess of developing economy savings is allowed to finance another credit bubble in the already over-indebted West.
CNBC’s Larry Kudlow is more hopeful than Warner, believing
“there's an opportunity for both ends of Pennsylvania Avenue to move in the direction of a supply-side economic growth model to reduce chronic unemployment and really get the economy moving again.” We know about the Republicans. What Kudlow is watching are signs the White House is becoming more business friendly, considering lower taxes on business and adding staff that better understands business needs.

Maybe Pearlstein didn’t get the memo.

Thursday, January 06, 2011

Rest easy, Democrats.

Doyle McManus is a media pooh-bah. He sits in the nation’s capital and pontificates for readers of the Los Angeles Times about what really goes on in Washington D.C. His present concern is that folks not get too excited about what a Republican take-over of the U.S. House might mean for the president, Democrats, and their continued domination of national politics.

So his latest essay lays out Republican weaknesses, latent Democratic strengths, and traps that await the GOP newcomers to power:

➢ most voters — except for the "tea party" legions, of course — weren't . . . focused [on GOP] demands. . . The [actual] mandate is to deal with jobs. . .[Speaker] Boehner's [challenge] is . . . [k]eeping his 242 members (including 75 freshmen elected with tea party backing) focused on job creation . . .

Comment: McManus himself points out elsewhere that Republicans plan to make it as clear as they can that repealing Obamacare and cutting spending are both job creation strategies. The GOP knows voters care about jobs first and foremost.


Despite the party's electoral victory, polls suggest that many of the swing voters who put the GOP over the top didn't sign up for the whole program. A Bloomberg poll last month found that . . . the Republican Party is still less popular than . . . Democrats.

Comment: McManus is scratching hard for facts here. Gallup has just reported that the share of voters identifying themselves as Democrats is at an all-time low of 31%, only 2% above the still-damaged Republican label. And when Gallup pushes independents to lean Democrat or Republican, Republicans are just 1% away from the parity with Democrats; parity they last achieved in 2002-3. Republicans are up from trailing Democrats by 12% just two years ago. Is McManus dishing his liberal readers false hope? You be the judge.


Most Republican voters want to repeal the healthcare law, but polls show the public as a whole evenly divided; about half of Americans want to keep or expand the Obama plan.

Comment: As mentioned in this blog earlier, “polls” is actually a single exit poll that asked voters if they wanted to repeal Obamacare on the one hand, or keep or expand it on the other. Voters were not asked if they wanted to fix Obamacare, the most likely eventual outcome. Taking away that choice skewed poll results toward “keep.” McManus knows better, but uses a poorly-drafted poll to help his liberal readers stay happy.


Boehner[‘s] biggest test will come in March, when the federal government is expected to bump up against the debt ceiling . . . Boehner[‘s] goal will be to use the debt ceiling to force Obama to cut spending without precipitating a federal government shutdown (a gambit that backfired on Gingrich in 1995) or, worse, a default that would be disastrous for financial markets.

Republicans know (as McManus says they do) that the debt ceiling will have to rise. They also want to use the battle to extract spending concessions from Democrats. Is McManus predicting Republicans won’t force even a single concession? We’ll see soon enough. Even pooh-bahs are right sometimes.

Wednesday, January 05, 2011

China, then India.

A “Wikileaks” cable has provided a look at how China will be run after 2012. According to the UK’s Telegraph, future paramount leader Xi Jinping is "exceptionally ambitious," had "his eye on the prize" of becoming China's leader from "early adulthood," and made sure he’d get there by devoting himself to Marxist ideology in order to "become redder than the red."

The quoted U.S. embassy cable describes Xi as a true "elitist" who believes that "dedicated and committed Communist Party leadership is the key to enduring social stability and national strength.” Xi is “of average intelligence,” says the cable’s source, and blessed with a strong sense of entitlement, believing that “members of his generation are the 'legitimate heirs' to the revolutionary achievements of their parents and therefore 'deserve to rule China.'”

Xi, you see, is a “princeling” whose father ruled Guangdong in the late 1970’s (Xi is 57), and in fact set up China’s most successful export zone, Shenzhen. Xi himself was, really, a prince born and raised in Beijing. According to another cable,
the compounds in which Xi Jinping's generation grew up were "ironically the most precisely class-based mini-society ever constructed". Everything from which kindergarten or supermarket a leader could use to what car he could own was determined by Party rank. "The children of this revolutionary elite were told that they, too, would someday take their rightful place in the Chinese leadership."

Xi’s wife is a famous Chinese folk singer.

As China’s strength grows, it will inevitably bump up against India, Asia’s other population giant. Kevin Rafferty, writing in the Japan Times, points out the struggle is uneven:

➢ India is a difficult place to do business, according to the World Bank Group's annual report Doing Business 2011. India ranks 134th out of 183 economies, while China is 79th.

➢ China is an exporting giant that took over from Germany as the world's biggest exporter in 2009, with exports of $1.2 trillion, 9.6% of global exports and a trade surplus of almost $200 billion. India is in 21st place with only $136 billion exports in 2009, 1.3% of global exports and a trade deficit of $114 billion.

➢ Trade between China and India will top $60 billion for 2010, making China India's biggest trading partner. China has made big inroads into India's consumer markets. India has not had anything like the same success in selling to China. Iron ore alone makes up about half of India's exports, and the rest consist mostly of basic commodities. Beijing's surplus in trade with India will probably reach $24 billion in 2010.