Thursday, March 31, 2011

Passing of the Elite (III)

"War is not merely a political act, but also a political instrument, a continuation of political relations, a carrying out of the same by other means."

-- Carl von Clausewitz

Simplify von Clausewitz to these words:

"War is . . . a continuation of [politics] by other means."

And update von Clausewitz for 21st century democracies:

"[Politics] is . . . a continuation of [war] by other means."

War. Our ruling class is underperforming, and putting great energy into hanging on. If Democrats have their way, the coming election will turn on how people feel about Republicans crippling government’s most popular programs. It won’t be about the cost and inadequacies of Obamacare, won’t be about unbalanced budgets and astronomical debt, and it won’t be about an administration failure to create jobs. No, it will be about mean Republicans.

Here’s the Washington Post’s Chris Cillizza:
The 2010 election was devastating for Democrats across the country, but the South was at the epicenter of the destruction. . . John Anzalone, a Democratic pollster based in Alabama, [argues] a Republican Party willing to cut Social Security and Medicare [is] at the root of a return to Democratic competitiveness in the South.
And Donna E. Shalala, Clinton’s health and human services secretary, tells us:
As [the new health care law] move[s] forward, it is important to remember how profoundly Medicare and Social Security altered the lives of . . . middle-class families. [emphasis added]
We earlier wrote about how Democrats now talk “middle class”—not “working class”—because their base has moved upscale; it’s now comfortable, secure government workers.

Democrats plan to win in 2012 using the "Colorado Strategy," derived from Colorado senator Michael Bennet's surprising win in his 2010 race. As Sean Trende of “RealClearPolitics” says of the "Colorado Strategy":
Obama's strategists have signaled that this could be the strategy [for] the 2012 Presidential race. . . Sen. Bennet won his election in a swing state in a tough year for Democratic incumbents by doing extremely well among minorities, college educated liberals, independent women, social moderates, and environmentalists.
In other words, “doing extremely well” among a Democratic base we earlier identified as 64% of the potential electorate.

And because that 64% potential Democratic base includes many worried about debt, jobs, and Obamacare, the Weekly Standard’s Jay Cost warns:
we should expect a highly negative reelection campaign from the president. . . Republican efforts to rein in the budget deficit will be cast again and again as the party's perfidious attempt to realize its 80-year dream of destroying the social safety net. What else can the president and his team do[?]
War. Conservative Michael Medved, writing in USA Today, says both sides in this war
believe that our country [is] set apart from the rest of the world. The right views America as exceptionally blessed and righteous — chosen by God to inspire humanity with distinctive ideals of liberty, self rule and free markets. The left [sees] the U.S. as exceptionally guilty [(slavery, genocide against natives, imperialism)] and exceptionally backward when it comes to social justice, [lacking] the welfare state guarantees that characterize other wealthy nations.
War. Writes Matthew Continetti in the Weekly Standard, “liberals think conservatives are evil while conservatives think liberals are stupid.” Liberals do think conservatives evil. But conservatives know liberals are smart, not stupid. It’s just that liberals are too smug, too self-assured, too close-minded about evidence challenging liberal orthodoxy.

So the war builds between the two sides. Fred Barnes, also in the Weekly Standard, after reviewing the book Disconnect: The Breakdown of Representation in American Politics by Morris P. Fiorina with Samuel J. Abrams, writes:
The book’s theory is simple: “In America today there is a disconnect between an unrepresentative political class and the citizenry it purports to represent”. . . While the political class tends to divide sharply between liberals and conservatives, the public is far more centrist . . . The moderate majority [is] often forced to choose “between relatively extreme candidates” put forth by the political class.
Unfortunately in war, most are forced to choose one side over the other.

Tuesday, March 29, 2011

Passing of the Elite (II)

"To unions, workers are just the raw material used to create union power, just as iron ore is the raw material used by U.S. Steel and bauxite is the raw material used by the Aluminum Company of America. The most fundamental fact about labor unions is that they do not create any wealth. They are one of a growing number of institutions which specialize in siphoning off wealth created by others, whether those others are businesses or the taxpayers."

--Thomas Sowell, Hoover Institution, Stanford

America’s struggle to be free of elite rule—whether by government, Wall Street, or union bosses—is nearly 250 years old. We resist the Old World (European-Asian) tradition that honors and elevates benevolent authority (philosopher kings). Here’s how Daniel Hannan, British member of the European Parliament, contrasts American individualism with the meritocracy Democrats and our national elite are currently fighting so hard to protect:
Obama wants to Europeanize the U.S. . . he wants a fairer America, a more tolerant America, a less arrogant America, a more engaged America. . . what these phrases amount to are higher taxes, less patriotism, a bigger role for state bureaucracies and a transfer of sovereignty to global institutions. He is . . . pursuing . . . European health care, European welfare, European carbon taxes, European day care, European college education, even a European foreign policy, based on engagement with supranational technocracies, nuclear disarmament and a reluctance to deploy forces overseas.

[Europeans] believe in markets, but regulated markets. . . a tripartite system in which employers, labor unions and government officials worked together. . . consensual coalition governments [accepting] a mixed market. Instead of competition between states, [Europeans] pursue political and economic integration.

that road leads. . . to burgeoning bureaucracy, more spending, higher taxes, slower growth and rising unemployment. But [the European] political class [believes] in its moral superiority. After all, if the American system were better—if people and businesses could thrive without government supervision—there would be less need for politicians. As Upton Sinclair once observed, "It is difficult to get a man to understand something when his job depends on not understanding it."

Nonetheless, the [facts: f]or the past 40 years, Europeans have fallen further and further behind Americans in their standard of living. In 1974, Western Europe. . . accounted for 36% of world GDP. Today that figure is 26%. In 2020 it will be 15%. In the same period, the U.S. share of world GDP has remained. . . around 26%.

Meritocracy—top-down rule—constrains growth. Individual freedom expands it. Michael Barone offers proof that people who want jobs aren't attracted to European-style big government. Barone’s proof comes from the contrasting population growth rates of high tax/strong public employee union states on the one hand, and low tax/weak union states on the other:
The eight states with no state income tax grew 18% in the last decade. The other states grew just 8%. The 22 states with right-to-work laws grew 15% in the last decade. The other states grew just 6%. The 16 states where collective bargaining with public employees is not required grew 15% in the last decade. The other states grew 7%.
Barone notes some believe low population growth is desirable because it reduces environmental damage and prevents urban sprawl. But according to Barone, states with slow growth “end up with aging populations and not enough people of working age” to sustain the old folks’ projected living standards.

Passing of the Elite (I)

Two years ago, I wrote a blog entry titled, “My ‘Eureka!’ Moment.”
I had realized our national elite mostly believed in rule by “philosopher kings,” mostly worked through the Democratic Party, and mostly gathered the votes needed to retain power by co-opting special interest groups headed by leaders brought into the elite. Sort of the Ivy League freshman class that a crafty admissions office annually assembles to be acculturated, once they are all grown up to rule.

Republicans and conservatives, rejected by this elite admissions office, are now uniting with the masses, the folks who never cared to apply. Democrats—our national elite, re-enforced by favored special interest groups, the status quo. Republicans—the rest of us, interested in revolution.

History is the story of elite rule, and progress toward an elite selected by merit, not inheritance or raw power. Now with America’s “best and brightest” unable to grow jobs, the country finds itself face-to-face with two fundamental truths: 1) meritocracies don’t work that well, and 2) our failed ruling class won’t voluntarily give up.

My current “eureka!” moment comes from a recent David Brooks column lamenting the misplaced self confidence of our masses:
American self-confidence has risen of late. . . In the 1950s, 12% of high school seniors said they were a “very important person.” By the ’90s, 80% said they believed that they were. [Y]oung people are bathed in messages telling them how special they are. Often these messages are untethered to evidence of actual merit. . . Students in Japan, South Korea, Hong Kong and Taiwan have much less self-confidence, though they actually do better on [global] tests.

I wonder if there is a link between a possible magnification of self and a declining saliency of the virtues associated with citizenship. [We need] awareness that we are not all that special but are, instead, enmeshed in a common enterprise.
What a shock to me! Brooks, a fellow conservative, is identifying with the national elite, not the masses. He likes a system where the existing elite picks its re-enforcements, where those deemed unqualified end up pulling their oars to the beat of the mallet, somehow satisfied to be “enmeshed in a common enterprise.” Rule by philosopher-kings. Eureka! By so pointedly attacking the non-elite, Brooks opened my eyes to the possible coming of. . . non-elite rule!

Yes! Look around. Isn’t America in 2011 evolving a society in which all individuals are encouraged to reach their full potential, and offered wide-ranging choices beyond academic success?

While Brooks frets, young people make money designing video games or creating pop-up stores, merging work with play, living life. Freedom not only expands opportunity, it simultaneously cuts away at our hierarchy committed to elite rule, the ruling class Brooks defends.

Our perplexing, exhilarating, growing, post-post-industrial world. “The U.S. is Flat”!

Sunday, March 27, 2011

Jobs, yes! How to create them.

We must be serious about job creation. So how do we do so?

The Hudson Institute’s Marie-Josee Kravis writes that
new business formation is . . . essential to job growth. Indeed, size is not the defining criterion, [age] is. . . "the younger companies are, the more jobs they create", and this is true irrespective of size. . . young, thriving firms . . . create 20% of new jobs in the U.S.
Of course, Kravis has found these new firms
are the most vulnerable to excessive paperwork, high taxes, and costly regulation [and] highly dependent on credit cards, home equity or local bank loans for their start-up capital. These sources of capital disappeared during the financial crisis, and new restrictions on consumer credit combined with prolonged weakness in housing make them unlikely to re-emerge.
Kravis has little nice to say about government schools at any level. They don’t prepare students for an increasingly knowledge-based job market:
If a business had treated its shareholders the way governments treat students, it would have been vigorously prosecuted, and rightly so. Nevertheless, the same approach is being replicated in job training programs with 47 different federal programs making no dent in the duration of unemployment.
And Kravis warns the Great Recession has made job creation worse:
workers who might find jobs cannot move because they are unable to sell their homes, or lack the confidence that their spouses or partners can find jobs in new locales. [Plus,] government has implemented 14 programs to assist in housing finance with no more success that it has shown in education or the postal system.
Want to create jobs? Kravis says then, one should “do no harm.” She wants every government initiative, program, law, regulation or budget proposal to pass the same litmus test: its effects on growth and job creation.

James Pethokoukis of Reuters has highlighted the big problem with our current job creation pattern. We grow jobs best in the economy’s least-productive areas. Pethokoukis maintains
it is critical to deal comprehensively with the Axis of Economic Evil: Big deficits, high taxes and onerous regulation. America must get more competitive and productive. I find the below chart from McKinsey particularly scary since it shows how much job growth is happening in unproductive areas of the US economy.
The economy's most unproductive areas, as the McKinsey chart shows, are government, education, health care, and social assistance. Forbes’ Steve Forbes believes the Greece/Ireland-like fiscal crisis battering U.S. states offers a chance for “profound reforms.” We can “turn [the] Big Government mantra on its head” and truly liberate people. Forbes recommends changes in three areas:

1. public-employee pensions. We now have an environment in which governments can move to 401(k) types of pension plans, which will avoid . . . inadequate funding.

2. public education.
No more centralized management; each school runs autonomously, doing what it thinks is best for its students. 2/3rds of New Orleans children go to charter schools, which escape. . . bureaucratic government and union regulations. [And any unhappy parent] can easily choose a different [school]. The results [are] astounding: Test scores have soared, even though 84% of the students come from low-income families.

3. Medicaid.
Governors should vigorously push radical new approaches, such as the health care equivalent of vouchers or food stamps, that allow [for direct] patient control.

Wednesday, March 23, 2011

The Youth Unemployment Bomb

Peter Coy has written an important Bloomberg Businessweek cover article on youth unemployment. Here are some highlights:

➢ In Tunisia, the young people who helped bring down a dictator are called hittistes—French-Arabic slang for those who lean against the wall. In Egypt, shabab atileen, unemployed youths; in Britain, NEETs—"not in education, employment, or training;" in Japan, freeters, the English word freelance and the German word Arbeiter, or worker; Spaniards call them mileuristas, those who earn less than 1,000 euros a month; in the U.S., they're "boomerang" kids back home after college; in China, the "ant tribe" are recent college graduates who crowd together in cheap flats on the fringes of big cities.

➢ the common element is failure—. . . of society . . . to harness the energy, intelligence, and enthusiasm of the next generation. . . extra-worrisome: The world is aging. . . the young are being crushed by a gerontocracy of older workers . . . determined to cling to the better jobs . . . and then, when they do retire, demand impossibly rich private and public pensions [youth must] shoulder.

➢ The highest rates of youth unemployment are found in the Middle East and North Africa, at roughly 24%. Most of the rest of the world is in the high teens—except for South and East Asia. . . with single-¬digit youth unemployment. Young people are nearly three times as likely as adults to be unemployed.

➢ A demographic bulge is contributing to the tensions in North Africa and the Middle East, where people aged 15-29 make up the largest share of the population ever. [15]- to 29-year-olds account for 34% of the population in Iran, 30% in Jordan, and 29% in Egypt and Morocco. (The U.S. figure is 21%.)

➢ the failure to launch has serious consequences for society—. . . "Educated youth have been in the vanguard of rebellions against authority certainly since the French Revolution and in some cases even earlier," says Jack A. Goldstone, a sociologist at George Mason. Goldstone [talks of] the "paradox of autocracy: any authoritarian ruler who wants to modernize his country has to educate the workforce. But when you educate the workforce you also create people who are not so willing to follow authority. Thus you create this threat of rebellion and disorder."

➢ rich democracies [also] ignore youth unemployment at their peril. In the 34 industrialized nations in the Organization for Economic Cooperation and Development, at least 16.7 million young people are not employed, in school, or in training, and about 10 million of those aren't even looking. . . the job market has split between high-paying jobs that many workers aren't qualified for and low-paying jobs that they can't live on.

➢ In the U.S., 18% of 16- to 24-year-olds were unemployed in December 2010. . . For blacks of the same age it was 27%. . . many teens have simply given up. . . The percentage of American 16- to 19-year-olds who are employed has fallen to below 26%, a record low.

➢ more education is not always better. . . [In] the Chinese labor market, newly minted technical-school graduates are earning as much or more than new university graduates, with monthly pay of 2,000 to 4,000 renminbi a month, and in some cases 6,000 renminbi, vs. 2,000 to 2,500 for the university grads. (Monthly pay of 2,000 renminbi equals $3,600 a year.)

➢ Germany and Austria experienced milder youth unemployment . . . partly because of blue-collar apprenticeship programs. . . Last year. . . Germany's youth unemployment rate was 13.9%, compared with a Europe-wide average of 21.2% and 21% in the U.S. In . . . the Netherlands . . . university students . . . gain work experience while enrolled. . . 70% of Dutch youth ages 20-24 are getting some work experience. By contrast in Italy and Portugal only about 10% work while in school. The Netherlands' youth unemployment rate is just 11.2%.

➢ The only surefire cure for youth unemployment. . . is strong, sustained economic growth that generates so much demand for labor that employers have no choice but to hire the young.

Sunday, March 20, 2011

Making Sense of Obama’s Middle East Policy

"This is the greatest opportunity to realign our interests and our values."

--attributed to Barack Obama

What is Obama doing? He came into the White House with a strategy: unite the Arab world against Iran by securing peace between Arab moderates and Israel, doing so by forcing Israel to end expansion of its West Bank settlements.

In June 2009, he expanded his Middle East strategy. In Cairo Obama delivered an important address that played off his multi-racial background and Muslim heritage to identify with the Muslim world. As Obama telegraphed in advance of his address, he hoped to connect with young Arabs and Muslims in order to either persuade their leaders to move toward economic development, tolerance, and inclusiveness, or to threaten the leaders’ hold on power by rallying their youthful populations against them.

In another post, I laid out the resulting difference between the Bush and the Obama foreign policies:
Bush foreign policy: change the world by encouraging democratic governments in place of bad dictators.

Obama foreign policy: change the world by inspiring each nation’s youth to overthrow their bad dictators.
Following the Cairo speech, Obama took his policy through what seemed many twists and turns. First, he did nothing in Iran when the street erupted in fatal demonstrations against Ahmadinejad’s fraudulent re-election. Apparently Obama believed he would be able to negotiate directly with Iran’s true boss, Ayatollah Khamenei, for a better Iran, while also thinking that if he publicly supported the demonstrators, Khameni would blame Tehran’s disorder on America (which Khameni did anyway). Thus Iran’s youth demonstrated for the very democracy the president encouraged in his Cairo address two weeks earlier, the youth died, and Obama just watched.

Six months after Iran, in December 2009, Obama zagged. He backed an infusion of 30,000 American troops into Afghanistan, rather than see the former al-Queda base-nation drift back into the Taliban’s hands. Though Democrats once called Afghanistan, in contrast to Iraq, the “good war,” by late 2009, many believed Afghanistan was becoming an Iraq-like quagmire from which we should extract ourselves. So Obama’s decision to go with his military was a surprising, positive sign he appreciated civilized people sometimes needed guns.

Over the next year, Obama continued to struggle with his Iran, Israel, and Afghanistan/Pakistan policies. But 2011 delivered him a new set of challenges, youthful uprisings in Arab capitals that seem a response to his 2009 Cairo call for change. In Egypt, he dithered, but eventually backed the demonstrators, who fortunately prevailed in their demands for change without forcing direct U.S. involvement. Then came Libya.

American opposition to U.S. military intervention on behalf of rebels fighting the ruthless dictator Muammar Gaddafi comes from both left and right—e.g., TIME’s Massimo Calabresi and Marc Lynch of Foreign Policy on one side, and Andrew McCarthy of National Review and conservative columnist George Will on the other. Both sides share a similar concern, not wanting to get the U.S. into a “new Iraq” in Libya.

Of course, Obama shares the same concern, and that’s why he opposes placing U.S. ground troops in Libya, and wants other nations taking the lead. Still, supporting military action of any kind against Gaddafi is a big change from cheering on from a distance the youthful uprisings in Tunisia and Egypt, and from standing by as demonstrators are crushed in Iran, Syria, Bahrain, and Yemen. It’s also a sharp departure from his earlier, obvious reluctance to move against Libya. Another big zig.

Why the sudden willingness to deploy our forces? Two recent articles, one in the Washington Post and the other in Foreign Policy, carry the “insider” story on Obama’s latest policy shift. According to Foreign Policy’s Josh Rogin, Obama is responding “to the broader change going on in the Middle East and the need to rebalance U.S. foreign policy toward a greater focus on democracy and human rights.” We are going into Libya in the name of human rights. Obama is paying more than lip service to the Cairo speech; his actions now finally match his words.

Maybe. Here’s what I see. If Gaddafi crushes the rebels while the U.S. stands by, Republicans will never let the country forget the president’s weakness in the face of tyranny, treating Libya as far worse than his inaction during the 2009 Tehran demonstrations. And what really forced Obama’s hand was al-Jazeera, which has mobilized the entire Arab world behind the Libyan rebels. According to Foreign Policy’s Marc Lynch:
Al-Jazeera Arabic has been covering the Libyan situation heavily . . . and has powerfully conveyed the gravity of the situation, including broadcasting some truly disturbing images and video of protestors. I've been stunned by what Libyans inside the country and outside have been willing to say on the air about the regime --- prominent Libyan diplomats declaring Gaddafi to be a tyrant, major tribal leaders calling for his overthrow, [Muslim Brotherhood leader and al-Jazeera commentator] Yusuf al-Qaradawi calling on the air for someone to shoot Gaddafi, and more.
Now I understand. Al-Jazeera—the Arablc language television network that once rallied the ummah (Muslim nation) against America’s war in Iraq—is today going all-out for the Libyan rebels against Gaddafi, and the Arab League, France, Britain and others have taken up the call. Even China and Russia, who constantly use their Security Council vetoes to protect every repressive regime that comes before the UN, have backed away from Gaddafi.

Does the president, the man who told Arab youth to seize their destiny two years ago, now want to find himself that much out of step with the Arab masses, particularly when the entire coalition calling for us to help the rebels would then blame Obama for any crushing Gaddafi victory? In the end, fortunately, no.

Friday, March 18, 2011

Obama’s Re-election Chances

Gene Lyons is a liberal political columnist with the Arkansas Democrat-Gazette. In a “Salon” article titled, “Why Obama is the favorite for 2012,” Lyons says Republicans are handicapped by having leading candidates like Gingrich (three marriages—considered one too many), Huckabee (Obama grew up in Kenya), and Michelle Bachmann (Concord’s “shot heard ‘round the world” took place in New Hampshire, not Massachusetts). No kidding.

But something else Lyons said better explains Obama’s strength:
In Wisconsin, Gov. Walker's brazen attempt to break the unions and defund the Democratic Party has sparked mass demonstrations dwarfing tea party extravaganzas the press made so much of -- hardhats and university teaching assistants marching together for the first time in a generation. If President Obama's looking for a parade to get in front of, that would be the one.
Lyons is right. The Wisconsin demonstrations were both large and intense. Democrats are fighting for their lives, as the Madison show tells us. We have talked about how people threatened with the loss of what they already possess invariably fight harder than those striving to gain new territory. Now we see the phenomenon starkly before us.

Fear. Revolutions are hard. The “old order“ will do anything to prevail.

Monday, March 14, 2011

Christie, not Romney

Quote without comment:

"Republicans, like most Americans, want hope and change. The leading Republican candidates represent disappointment and the GOP’s molded age. Politicians are more like milk than wine. Age isn’t kind to them. Republican voters deserve a choice between a fresh product and one past its sell-by date."

--Daniel J. Flynn, Human Events

Sunday, March 13, 2011

Do Public Sector Unions Treat Teachers as Dumb Animals?

In a fascinating article, Michael Barone of the Washington Examiner blames Frederick W. Taylor, who died in 1915, for the plight of public sector unions today. Taylor conducted time and motion studies aimed at getting workers to perform most efficiently single tasks on long assembly lines. Taylor considered workers, in effect, dumb animals, incapable of initiative, and inefficient when they are not compelled to perform the same simple task in the same single way over and over.

As Barone writes:

➢ Taylor “had huge influence” on auto and steel assembly-line managers, whose workforces consisted of off-the-farm and immigrant hordes with little education and/or little English. The managers believed Taylorite methods that squeezed maximum production out of low-skill workers were the best way to profits.

➢ In the 1930s, the auto and steel industrial unions, helped by the New Deal, went after Taylorism head-on. Unions worked to prevent management from ordering speedups based on Taylorite analysis, and fought against the rewarding of speedy workers with merit pay, instead demanding promotions based strictly on seniority. All this made sense when industrial managers clung to Taylorism, and unions understood workers' interests were diametrically opposed.

➢ Today, liberals look back with nostalgia to the days of powerful industrial unions, when a young man fresh from high school and military service could get an assembly line job and be guaranteed lifetime employment.

But Barone says, “I grew up in Detroit, and I know that these workers hated those jobs. Taylorism, even modified by union representation, was a miserable way to make a living.”

A big turning point came in 1970, when the United Auto Workers (UAW) got the Big Three automakers to agree to "30 and out" -- retirement after 30 years on a generous pension and big medical benefits, because workers retiring at 50 were 15 years short of Medicare. Barone notes that in The Company and the Union, author William Serrin asked why the union and company didn’t instead try to make assembly-line work more creative and fulfilling. That’s exactly what the Japanese and other foreign auto companies did.

When the National Education Association (NEA)—led by Michigan teachers—took the UAW as their model, they made the fatal mistake that haunts America to this day:
The NEA would never allow management to speed up their work. Promotions and firing would be governed by seniority. They would never, ever allow merit pay. This adversarial unionism assumed that management would always be Taylorite. But that has been increasingly untrue in the private sector and was never really true in the public sector.

As a result . . . public-sector unions, with their bought-and-paid-for politicians, have produced public-sector workforces that are unresponsive, unaccountable and impossibly expensive. [Public sector u]nion leaders need to realize that Frederick W. Taylor is dead.

Wednesday, March 09, 2011

David Broder, how good? Very.

The Washington Post’s David Broder died today at 81. He was a great political reporter. His newspaper’s obituary quotes Broder saying about the political beat:
I've learned that the most undervalued, underreported aspect of politics is what voters bring to the table. My generation of reporters was deeply influenced by Teddy White, the greatest political journalist of our time. He showed us how far inside a campaign you could go. We naturally emulated him, at least as far as our skills would take us. Before long, we got so far inside that we forgot the outside - that the campaign belonged not to the candidates or their consultants or their pollsters, but to the public.
I hadn’t realized that Teddy White’s writing led so directly to Bob Woodward-style “inside” journalism, but I do believe the media too often ignore what Broder called “the outside”—voters, the people.

Broder’s work was a regular part of life during my 1967-68 and 1974-82 years in Washington. I appreciated most how in preparing his stories, wherever he went in the country he insisted on walking the precincts himself, knocking on doors, and interviewing people directly. And his calm, reasoned expression of views on various Washington television panel shows appealed to me. Of course I was a liberal at the time, and so was he.

Apparently his restrained, mid-Western style didn’t please everyone. Today’s Washington Post editorial on Broder, commenting on his nickname “the Dean,“ said, “His detractors used the term sarcastically; they came mostly from the political left and found him much too moderate.”

Five years ago, in this blog, I attacked Broder, ridiculing his proclamation that Iraq was headed for civil war because “80% of Americans” believed this to be so, and dismissing his suggestion that Democrats’ fury with a Dubai company attempting to purchase U.S. port handling services rested on anything but anti-Arab motives. Broder and I were on different sides by then.

But long before that, we were also seemingly on different sides, with me the liberal. I recall when I first encountered Broder’s reporting. It was early 1965, and I was delighted about the Democrats’ crushing defeat of Goldwater and Republicans that previous November.

After reading a very early Broder piece, perhaps “Bliss Rules the Elephant”, in the New York Times Magazine, March 25, 1965, I was convinced Broder was a full-on Republican. Otherwise, why was he giving such attention to the new GOP national chairman, Ray Bliss, writing him up so favorably? You’d have thought Bliss actually had some chance to pull Republicans from the hole in which Goldwater had buried them, leaving Democrats controlling the Senate 68-32, and the House, 295-140. The GOP was dead!

In 1966, after less than two years of Bliss, Republicans picked up 4 Senate seats, and 47 in the House. And of course Nixon became president two years after that.

Broder visited the University of Akron's Ray C. Bliss Institute of Applied Politics in 1991. On the occasion, he wrote further about Bliss:
Bliss was the chain-smoking former Akron insurance man, who rose from county and state party leadership to take over the national party helm after Barry Goldwater's 1964 defeat. The programs Bliss put in place led to the Richard Nixon victory in 1968 that inaugurated the modern era of Republican dominance of the presidency. Bliss created the new-model national party committee, financed mainly by small, direct-mail contributions and geared to delivering high-tech campaign services to its state and local affiliates.

Bliss [--] though primarily [an] organization [man--] shortened [the GOP’s] exile from power by moving boldly into the issues area as a way of changing the party's image. Bliss's vehicle was the Republican Coordinating Committee, a panel that included former President Eisenhower, presidential nominees, congressional leaders, governors and party officials. Seven allied task forces provided roles for many emerging figures, among them a freshman congressman from Houston named George Bush.
Broder; so very right about Ray Bliss. And much else.

Tuesday, March 08, 2011

Stunning Job Losses

The U.S. has to focus on job growth. Last Friday, some good news. The unemployment rate dropped below 9%, down to 8.9% (graph from Bureau of Labor Statistics):

Since the Great Recession ended in July 2009 (did you forget it’s over?), the unemployment rate has fallen. Of course, that’s mostly because so many have dropped out of the workforce. They’ve just given up on finding a job.

That’s why the following graph (from Jay Cost) is more meaningful than the BLS chart:

The graph shows how the number of employed as a share of the total population is back down to levels not seen since the early 1980’s, when under Reagan we were fighting through the deep recession needed to kill Carter-era inflation that peaked at 13.5% in 1980. After 1982, job numbers shot up under Reagan/Bush 41, hit an all-time high under Clinton and the GOP Congress in 2000, then rose again under Bush 43. Are those 1983-2007 high-employment days now permanently in America’s rear-view mirror?

Mort Zuckerman, writing in the Financial Times (U.K.), provides a pretty grim outlook on the current job situation:
More jobs were lost in the recession of 2007 to 2009 than in the previous four recessions combined, and this time it is an agonisingly slow business to replace them. Of the 8.8m jobs lost during the downturn, roughly 900,000 were recovered in 2010, and many of these were temporary census positions. . . But the people who have dropped out of the job market have not dropped out of life. They represent a major loss of spending power in the economy. Add in the 8.4m involuntary part-time employed workers whose hours have been cut back and you get a “household” unemployment rate of slightly under 17%. The result is that some 25m Americans are now either jobless or underemployed.

Long-term trends are depressing job growth. There is more outsourcing abroad, more automation, more conversion of full-time jobs to temps and contracts, and a stagnant median wage. Information technologies are advancing dramatically and increasingly being employed to eliminate jobs of all types, especially those that are fundamentally routine and repetitive in nature. . . we face the risk that high unemployment may become chronic.
And the Wall Street Journal’s Sudeep Reddy and Sara Murray not only point to the same high structural unemployment, but also have found that many unemployed have shifted from job searches to going after social security disability money:
If [the] labor force participation today were at the same level as [it was] before the recession, the jobless rate would have been 11.5% [not 8.9%] in February.

A growing number of workers with health problems are applying for Social Security Disability Insurance benefits. The disability rolls, where many beneficiaries remain for life, have surged more than 14% since the recession began, to nearly 10.2 million in December 2010. . . Lawrence Katz, a Harvard University economist, said the rising number of people on disability is a “permanent hit to the labor force participation rate [t]hat's both costly to them—they're going to be less happy—and costly to us to lose someone who could be a productive worker."

Jobs gone. Never to return. This is America’s most serious problem.

Monday, March 07, 2011

Rising cost of Obamacare

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“Independent experts have shown that the cost of health insurance will rise faster than it would have without [Obamacare]. The Congressional Budget Office expects the price of a family policy in the individual market to be $2,100 higher by 2016 than it would have been had the law not passed. In at least 20 states, it's now impossible to buy child-only health insurance because of [the law’s] onerous new rules.”

--Grace-Marie Turner, Alex Cortes, and Heather R. Higgins, Wall Street Journal

Saturday, March 05, 2011

China leaving West behind?

China's Premier Wen Jiabao today delivered his government work report during the National People's Congress opening ceremony. Asserting that the drivers of China's meteoric economic rise remained firm, Wen said, "There is huge potential demand in the market, the supply of funds is ample, the overall scientific and educational level of the people is rising."

Wen said the top priority this year will be to curb price rises hurting ordinary people. The premier vowed to boost spending on education, healthcare and public housing. He aimed his televised speech partly at ordinary citizens who could become sources of anger unless grievances about prices, housing, and healthcare are eased.

According to Reuters’ reporters Zhou Xin and Koh Gui Qing, Wen's speech reflected “the confidence of a government that has presided over two decades” of “double-digit expansion.” As Wen added, "The government's ability to exercise overall control and respond to major challenges has increased significantly."

Stephen S. Roach of Yale is Chairman of Morgan Stanley Asia and author of The Next Asia. Roach is very high on Wen’s Five Year Plan. Roach maintains it will change the character of China’s economic model – moving it from the export- and investment-led structure of the past 30 years toward growth driven by Chinese consumers, a shift with broad implications for China, Asia, and the global economy.

Wen’s Five-Year Plan focuses on three pro-consumption initiatives:

First, China will downgrade capital-intensive, labor-saving productivity enhancement in favor of labor-intensive services, such as wholesale and retail trade, domestic transport and supply-chain logistics, health care, and leisure and hospitality. The employment content of a unit of Chinese services is over 35% higher than that of manufacturing and construction, meaning China can hit its employment target with lower GDP growth. Also, far less resource-intensive services offer China lighter, cleaner, and greener growth.

Second, the plan will seek to boost rural workers’ wages, which are only 30% of urban workers. It will: a) enact tax policies to increase rural purchasing power, b) broaden rural land ownership, and c) push technology that raises agricultural productivity. The plan will also foster continued rapid migration from the countryside to the cities. Since 2000, rural-to-urban migration has been 15-20 million people a year. To maintain migration at this pace, China will relax its hukou, or household registration system, which tethers workers and their benefits to their birthplace.

Third, China wants to shift from consumer saving to spending, which means building a social safety net of social security, private pensions, and medical and unemployment insurance. In 2009, China’s retirement-system assets totaled just RMB2.4 trillion ($364 billion), or about $470 of lifetime retirement benefits for the average Chinese worker. Little wonder Chinese families save out of fear of the future.

Roach believes the Five-Year Plan will boost private consumption as a share of Chinese GDP from its current rock-bottom 36% to the 42-45% range by 2015. That would represent a huge boost for China’s major trading partners, and could spark the greatest consumption story in modern history.

Of course, as China reduces its surplus saving, it has less to fund the West’s ongoing saving deficits, especially that of the U.S.

Thursday, March 03, 2011

America in decline. Why?

Another year, another major publication with a cover story on our decline. Last year, Atlantic. This year, TIME. Same reason. Us unwashed don’t buy the liberal agenda of 2009, the same one we didn’t buy last year.

Here’s how TIME cover article author Fareed Zakaria (a refugee fresh from the nearly defunct Newsweek) reveals his longing for the “Blue Model” Obama has promised to restore:
The decisions that created today's growth — decisions about education, infrastructure and the like — were made decades ago. What we see today is an American economy that has boomed because of policies and developments of the 1950s and '60s: the interstate-highway system, massive funding for science and technology, a public-education system that was the envy of the world and generous immigration policies.
Why don’t we listen to the President, groans Zakaria figuratively:
Obama's efforts to preserve and even increase resources for core programs appear to be failing in a Congress determined to demonstrate its clout. But reducing funds for things like education, scientific research, air-traffic control, NASA, infrastructure and alternative energy will not produce much in savings, and it will hurt the economy's long-term growth. It would happen at the very moment that countries from Germany to South Korea to China are making large investments in education, science, technology and infrastructure.
Reader, you can turn to the Atlantic or TIME cover stories. Or you can go to the White House website. You don’t need more than one of the three.

In the end, along with so many liberals today, Zakaria throws up his hands in exasperation at democracy’s failures, saying “It's not that our democracy doesn't work; it's that it works only too well.”

Let’s hope so.

2012 presidential winner will be pro-growth.

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"It is surely essential that Republicans justify spending cuts on fiscal and moral grounds. It is also essential to make the case for restoring robust growth and job creation. . . Americans today want to know what steps Republicans will take to create more jobs, bigger paychecks and greater prosperity. . . To prevail in 2012, the GOP needs a pro-growth candidate who represents a pro-growth party."

--Karl Rove, Wall Street Journal

Wednesday, March 02, 2011

States’ Rights: Obamacare’s Unintended Impact

We have talked about how Obamacare is intended to complete the New Deal, and enshrine Obama in the pantheon of great liberal heroes. Given the man’s self-absorption, Democrats’ strong sense of historical destiny, and the party’s genuine belief that people will benefit from government-run health care, we have reasons enough to explain the 2009-10 obsession with passing Obamacare even as unemployment numbers kept growing.

Let me return to another blog reference to health care, one that even more fundamentally explains Democrats’ urgency in the face of strong popular opposition. In 1976, liberal Stanford economist Victor Fuchs candidly discussed how national health insurance is “one of the most effective ways of increasing allegiance to the state.” And don’t liberals in fact deeply believe that once national health insurance is in place, they will have secured America’s destiny as a European-style welfare state?

No wonder the fight is so intense. But it’s generating a strong reaction that could significantly reduce Washington’s command of the nation, not exactly what Fuchs and liberals had in mind.

First, the people continue to resist Obamacare.

Jeffrey H. Anderson of the Weekly Standard reports that the latest Kaiser Health Tracking Poll shows by a 59% to 32% margin, seniors have an “unfavorable” opinion of Obamacare. And Kaiser says Americans as a whole, by 48% to 43%, don’t like the new law.

It’s worth noting Kaiser's negative results on Obamacare come from a poll biased in favor of Democrats: the sample was 36% Democrats 24% Republicans, a 3-to-2 ratio of Democrats over Republicans. Anderson asserts this sample “isn’t even remotely representative of current party allegiance,” since 2010 exit polling showed Republicans and Democrats even at 35%.

Second, Obamacare is separating state governments from Washington (recall the 28 states suing to block enforcement of Obamacare's individual mandate). George Melloan, writing in the Wall Street Journal, noted that
For decades, the federal government has presumed increasingly to make policy in health, education, welfare, business regulation, law enforcement and other areas beyond the powers enumerated in the Constitution. Up until recently, the courts have largely viewed this intrusion benignly, partly because the states have acquiesced, bargaining their sovereignty away in return for federal aid. This once-happy marriage is on the rocks. [Obamacare] off-loaded massive costs on the states.
Yesterday, nearly a month after Melloan, Wall Street Journal columnist Gerald F. Seib made the same point using similar language, but with additional evidence:
For decades, the implicit deal between Washington and state capitals has been that the feds would offer chunks of cash, and in return would get commensurate influence over the states' social policies. Now [the] flow of federal goodies has begun what figures to be a long-term decline, as the money Washington has available to pass around to the states is squeezed. . . A loss of federal largess means a loss of influence in state capitals. . .

the federal government is slipping in its standing with voters. . . Citizens show more confidence in state governments. In a survey by the Pew Research Center in February, a majority of Americans—53%—said they had a favorable opinion of their state government, while just 38% offered a favorable opinion of the federal government.
Obamacare may well survive in some form. But the revolution against Big Government is also becoming one against Big Washington, one that looks increasingly likely to shift power to the states.

Tuesday, March 01, 2011

Government Unions and “Logic of Collective Action”

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"Public-sector unions have long posed a problem of what the economist Mancur Olson called the 'logic of collective action'. Democracy tends to offer benefits to small, well-organised groups (who defend them vigilantly) while spreading the costs among the broader public (in doses that are too small to rally resistance around). The result is a hardening of privilege. What is new in Wisconsin is that those who do not belong to public-employee unions see this logic as clearly as those who do."

--Christopher Caldwell, Financial Times (U.K.)