Saturday, April 30, 2011

Obama Job Approval Ratings Drop

“The Oval Office, I always thought I was going to have really cool phones and stuff. I’m like, c’mon guys, I’m the president of the United States. Where’s the fancy buttons and stuff and the big screen comes up? It doesn’t happen.”

--Barack Obama, Fundraiser remarks, 4.14.11

There is something disturbing about a president wrapped up in the trappings of his office, at a time of such serious economic difficulty. In any case, President Obama’s job approval/disapproval ratings are upside down once again, and have been since April 7. This according to the RealClearPolitics average, which daily tracks the President’s job approval. Obama’s job approval rating has also stayed below 47% for the last two weeks. Presidents with ratings below 47% don’t get re-elected. People in politics follow Presidential job approval ratings the way stock traders follow the Dow, and Obama’s lower ratings are affecting news coverage, not to mention the power balance between the White House and Congress.

As we reported here, the picture earlier this year looked brighter for Obama. The above chart starts in January 2011. Obama’s numbers rose following his compromise with Republicans last December on extending the Bush tax cuts, and peaked in the aftermath of his mid-January “president of all of us” speech concerning the Tucson Massacre that gunned down Democratic Congresswoman Gabrielle Giffords. His more partisan State of the Union speech 11 days later, during which he offered no constructive solutions to our debt/deficit crisis, began the downward slope that has put him upside down and below 47% once again, where he was most of last year.

Besides his job approval ratings, there is another crucial number for Obama: the unemployment rate of 7.8% [LNS14000000], when he took office in January, 2009. Currently, 13,542,000 [LNS13000000] are unemployed, against a civilian employed total of 139,864,000 [LNS12000000]. To get back to 7.8% unemployment, the economy would have to create 2,633,000 jobs, or 146,250 a month for 18 months. Obama can do it, unless the workforce—those looking for work—starts growing again. That would mean the economy will have to crate even more jobs to lower the unemployment rate to 7.8%.

Wall Street Journal columnist Peggy Noonan thinks Democrats have already given up on the economy, and are putting their eggs in the “savage the GOP nominee” basket:
Democratic professionals. . . hope that in a mood of antic cultural pique, or in a great acting out of disdain for elites, or to annoy the mainstream media, Republican voters will [nominate a presidential candidate] unacceptable to . . . the great and vital center, which hires and fires presidents. [emphasis added]

Stocks Roar, Male Employment Tanks

Stocks continue to rise. The Dow yesterday reached 12,763, its highest close since May 20, 2008. The S&P 500's at 1,364, and the NASDAQ at 2,874.

The FOX Index is plus 1,000 for the first time in its nearly 3-year history, closing yesterday at +1,249 (chart). The Index defines “healthy” as 15,800, a total formed from adding a Dow of 12,000, an S&P 500 of 1,300, and a NASDAQ of 2,500. The Index has been “healthy” since this January, and now totals 17,049. Analysts attribute recent gains to strong corporate earnings in January-March, and Federal Reserve assurances it will keep interest rates low.

Still, against the overall weakness of our economy, the stock market’s good health looks increasingly out of place. The Financial Times (U.K.), after noting that U.S. GDP growth in the first quarter ran at an annual rate of only 1.8%, wrote:
At this stage of a recovery, growth often rebounds by between 4% and 5%. Expansion of less than 2% will not create enough jobs to keep up with population growth and cut the US unemployment rate of 8.8%.
In line with the Financial Times’ concern, first time unemployment claims rose this week to 429,000, well above the pre-report estimate of 392,000. Thursday’s report marks the third week in a row new unemployment claims have exceeded 400,000, a level economists consider too high to sustain job growth.

Bad GDP and unemployment claim numbers add urgency to ongoing concerns about U.S. long-term unemployment, especially among youth and men. The Economist has just completed a detailed look at U.S. male unemployment, offering these disturbing facts:

➢ Of the Group of 7 (G7) economies (U.S., Japan, Germany, Britain, France, Italy, Canada), America has the lowest share of “prime age” males in work: just over 80% of those aged between 25 and 54 have a job. In the late 1960s, 95% worked.

➢ The 2008-09 recession drove the American unemployment rate into double digits, and the rate for men is still very high—9.3%. Almost half the jobless have been out of work for more than six months.

➢ Many men have simply dropped out of the labor force. America has a smaller share of prime-age men in the workforce (i.e., in a job or seeking one) than any other G7 economy.

➢ Of 25- to 54-year-old men with no high-school diploma, 35% have no job, up from 10% in the 1960s. Of those who finished high school but didn’t go to college, the share without work is up from below 5% in the 1960s to 25% today. More than 30% of blacks overall, and almost 70% of black high-school dropouts, have no job.

➢ Less-educated men used to work in construction and manufacturing, where lots of jobs were lost in 2008-09. Teenage employment rates are currently the lowest on record, and those who enter adulthood without a job or college are much less likely to work when they are older.

➢ Two big groups among the long-term jobless are “older dislocateds”, less-educated workers who have lost long-lasting jobs, mainly in manufacturing, and “younger never-fully-connecteds”, high-school dropouts never really in the workforce.

➢ Economist Larry Summers worries that even when “full employment” returns, around 15% of all men, 20% of men who have not been to college, 35% of those who did not finish high school and more than 60% of black male high-school dropouts will probably not be working.

The Economist has found that low-skilled, low demand jobs offering lower wages reduce worker incentive to work. Many qualify instead for disability payments, or they let a working spouse provide income. The share of prime-age men on disability has gone from 1.5% in 1970 to 4.9%. Federal spending on disability benefits is now $120 billion a year, almost 1% of GDP.

Men face additional disincentives to work. They lose out on the Earned Income Tax Credit (EITC), a program designed to subsidize low-income work. The maximum EITC payout for a childless person is less than $500 a year, while families (usually headed by a female) with one child get six times as much, those with two children, more than ten times.

And men disproportionally suffer from child-support programs that take money directly from paychecks. Deductions can amount to 65% or more of wages. Some states even levy an extra charge to cover the mother’s welfare payments, and force men to accrue child-support obligations when they are in prison, leaving them owing thousands when they get out.

Still, we know the main problem men face stems from lack of education. Technological advances require higher skills. Yet American men have let their schooling slide. Those aged between 25 and 34 are less likely to have a degree than 45- to 54-year-olds. In recent years America’s university graduation rates have slipped from near the top of the world league to the middle, with men leading the drop. Furthermore, black and Hispanic boys are far less likely than whites or Asians to graduate from high school, start college, or get a college degree.

The Economist advocates intervention to encourage at-risk high-school students to graduate, to foster contacts with future employers, and to help those who go to college to stay there.

Monday, April 25, 2011

Liberal Hatred Explained

“Friedrich Hayek identified the ‘fatal conceit’ of believing that markets are flawed and can always be rectified and/or improved and/or fine tuned by bright people with big brains and good intentions. However, the fatal conceit is not just, or even, a cognitive error; it also inevitably features a good deal of self-interest. People come into government to do good and stay on to do well.” [emphasis added]

-- Peter Foster, Financial Post (Canada)

Government’s not working today. Our “best and brightest” in government have found themselves unable to generate jobs and economic growth. Scary.

“Fear of dependency” is a psychological condition, the basis for passive-aggressive behavior. In psychology, the condition is set against autonomy, which facilitates self-determined motivation, healthy development, and optimal functioning.

There is a rational basis for liberal American fear of Republicans and of conservative thought. It lies in the link between freedom, capitalism, and economic success. This freedom, this autonomy, is associated with Isaiah Berlin’s “negative liberty,” in contrast to “positive liberty,” which builds not from the actual wishes of individuals, but rather from what individuals should desire. “Positive liberty" justifies collective action by races, classes, sexes, nations, or religions, and lays down an alibi for coercion.

To simplify, the ruling class is panicking (“fear of dependency”) because it knows government has to depend upon economic development. Government cannot create economic development. Government is a parasite, taking in the form of taxes (kleptocracy) from society’s producers, those who risk, invest, employ, fail, and generate wealth. Like the scorpion who drowned after fatally stinging the frog that carried him across the stream because “he couldn’t help himself,” government knows it needs capitalism, but often can’t help interfering with the market economy.

Karl Marx is the modern government party’s godfather. Marx, who lived when the industrial revolution began providing unimaginable wealth to the general population, fully understood how well capitalism worked. In response, Marx developed a “scientific philosophy” that justified government seizing wealth from capitalists (socialism) by proclaiming the workers (proletariat) the true source of wealth (labor theory of value).

In reality, capitalism is the most advanced stage of economic evolution, spreading economic responsibility to an ever-increasing circle of brains, talent, and energy. Capitalism democratizes economic decision-making. Progress means sharing capitalism’s rewards with ever more people.

In reality, government is the force of reaction, wary of entrepreneurs and fighting to retain top-down control over the population. Government cannot replace the market’s efficiency; it should rely on it. But government, built upon a concept as old as the 3700 B.C. Mesopotamia priesthood, one that says we need a credentialed elite to make our lives better, has found “helping the weak” (proletariat) its best justification for disrupting free market operations.

So we have a Republican Party fighting for economic growth, while deeply resenting taxes and government interference. And we have a Democratic Party panicked about its separation from the free market, fearing dependency, deeply hostile to capitalism’s Republican supporters, still blind to the value of autonomy.

Friday, April 22, 2011

Easter and Christianity’s Bum Rap

“‘What is reality? What is the infinite?’ we ask while looking at the sky through a straw."

--Lama Surya Das

“In this world nothing can be said to be certain, except death and taxes."

--Benjamin Franklin

We are taxed (“Render unto Caesar the things that are Caesar's,” Mark 12:17), we die. Beyond those two certainties, we try to make something out of our brief time on Earth.

Surya Das has such a simple and profound way of expressing how little we know about life. Humility, in the face of what we don’t know. Humility, knowing we can’t do it alone, we need help.

So we try as part of something larger. Christianity is such a humble religion. We are forgiven, we are loved, God is love, we are inspired to love others, join with others. Prayer helps take us beyond ourselves into service to others. Pull yourself together (you are already forgiven and loved), act (love).

Christianity isn’t the only path to love, but it is a path to action, and it has worked imperfectly (humans, after all) for two millennia. It speaks to Westerners through people such as Reinhold Niebuhr, Paul Tillich, Karl Barth, Dietrich Bonhoeffer, Martin Luther King, Catherine Clark Kroeger.

We are taught to love, not hate, to turn the other cheek, not to kill, lie, or steal, and taught that the greatest commandments are to love God with all our heart, soul, and mind, and to love your neighbor as yourself.

We have a way; it's toward action. We live in a post-Christian nation in a post-Christian time, and that is fine. What we don’t know humbles us, but we do have faith in love.

Wednesday, April 20, 2011

Inequality: Recut or Make Pie Bigger?

"Economic growth is the sine qua non for generating prosperity in the U.S. As economic growth increases, the prosperity of families and individuals in the U.S. increases in step. Higher income growth benefits government revenues too. The dynamic impacts created by the increased economic activity will lead to higher tax revenues for the federal government as well as state and local governments."

--Arthur Laffer

Laffer, more than anybody else, is guru of the American prosperity (rising GDP and wages, job growth) from 1982 to 2007 we loved but eventually took for granted. Laffer, then a USC economist, and happy-face politician/ex-NFL quarterback Jack Kemp convinced Ronald Reagan in the late 1970s that he could generate more revenue thereby closing the deficit by lowering taxes, not raising them. And “the rest is history.” Reaganomics led to 25 years of prosperity.

Democrats, however, don’t focus on growth. Obama talks about preserving “the basic social compact in America,” about “tak[ing] responsibility for each other.” He favors recutting the pie so that “the bottom 90%” get more from the government, while “the top 1%,” who “saw their income rise by an average of more than a quarter of a million dollars each,” take a hit in higher taxes.

Looking at this, Peter Wehner of the Weekly Standard commented:
What liberals are interested in isn’t growth so much as egalitarianism and redistribution for its own sake. For many on the left, increasing taxes isn’t about economics as much as morality. They believe taxing the wealthy is a virtue, to the point that they would penalize “the rich” even if that has harmful economic consequences.

Recall that during a campaign debate, when asked by Charles Gibson about his support for raising capital gains taxes even if that caused a net revenue loss to the Treasury, Obama sided with tax increases “for purposes of fairness.” The point cannot be made often enough: Modern liberalism, as embodied in the Obama presidency, is the defender of the status quo.
And, Wehner editorializes, “the status quo is a road to economic ruin.” Since the “status quo” is big government, and since big government takes resources that would otherwise generate growth, the status quo could well mean economic ruin.

But what about the morality of “the top 1%” having 40% of wealth and 25% of income? Bothers you, doesn’t it?

Well, Alan Reynolds, writing in the Wall Street Journal (where else?), tells us that the top 1% made 20% of total income before tax in 2004, and paid 41% of the individual federal income tax that year. That means those with 40% of the wealth paid 41% of income taxes, which seems fair. According to Reynolds, "No other major country is so dependent on so few taxpayers.”

Reynolds also reports on a study that documented how when tax rates go up, the top 1% step up their efforts to dodge taxes; that there is a statistical ceiling on how much they will pay.

Steven R. Cunningham of the American Institute for Economic Research has with facts answered the larger moral argument for “equality,” for re-cutting the pie:

➢ While there's obviously a correlation between wealth and income, they're not the same. . . A retiree who has $1 million invested in CDs . . . at a 2.5% rate of return . . . could have an annual income of just $25,000. [In fact,] households of people ages 70 to 74 have the highest average wealth of any age group in America, but less than half the income of those . . . 35 to 44.

➢ from 2000 to 2009, inflation-adjusted household income fell 4.5%, but consumer spending increased 22.4%. This raises an obvious question: How did [this happen? Answer:] the number of individuals per U.S. household was shrinking, which lowered the average. [While] after-tax income rose 25.2% from 2000 to 2009. . . households got smaller, as more people divorced, or rejected or delayed marriage. So total spending went up, while average household income [dropped].

➢ the top 20% of U.S. households receive roughly 50% of total income, while the bottom 20% receives less than 4%. [But] the top 20% of households includes four times as many workers as the bottom 20%, and nearly six times as many full-time, year-round workers.

➢ economic mobility [differentiates] the U.S. from many other countries. Between 2004 and 2007, for example, roughly a third of the households in the lowest income group moved up to a higher income group. . . while roughly a third of the households in the highest income group moved down.

➢ [A] U.S. Treasury [study of] income tax returns from 1996 and 2005 [found] the median income of the study group rose by 24%. . . 58% of those in lowest income group in 1996 moved to a higher group by 2005[, 25%] to middle- or upper-middle class incomes; more than 5 % [to] the highest income group -- in 10 years. The only group [declining] was the richest 1%.

Cunningham concludes the assertions that U.S. income growth is stagnant and that the rich get richer while the poor get poorer are both untrue. The American economy provides opportunity, and income mobility numbers prove it.

Monday, April 18, 2011

The Rich are Different from Us

The Washington Post’s E.J. Dionne says, “The American ruling class is failing us.” It used to advocate “social decency out of self-interest (reasonably fair societies are more stable),” but now cares only about money.

What can Dionne be talking about? As the American Enterprise Institute’s John Glassman has found, and as we have repeated somewhat endlessly here, the American elite—its ruling class—is almost entirely Democratic, dominating the media, government, academe, arts and entertainment, and the non-profit sector, while grabbing a good share of big business and religion, leaving only small business and the military to Republicans. And Democrats, party of the ruling class, are committed to big government and caring via government for the less fortunate. So how can Dionne say the ruling class that runs our country cares only about money?

Turns out Dionne’s “ruling class” is the “top 400 taxpayers,” as identified by David Cay Johnson, whom Dionne fails to tell us is an ex-New York Times investigative reporter now writing for the progressive Nation. Johnson has found that “the 400’s” effective rate of taxation has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush, meaning their effective rate has dropped more than 40%. Johnson proclaims (does he have a transcript from their secret meetings?) “the 400’s” current objective is to “push the burden of government, of taxes, down the income ladder."

Also writing in the Nation, well-known progressive Robert Scheer identifies our “upper class” as much larger than 400. To Scheer, it’s the top 1% of our population, as described by “Nobel Prize winner” Joseph E. Stiglitz. Like Dionne in discussing Johnson (of “the 400”), Scheer shields us from any true description of Stiglitz, who has spent a career debunking Adam Smith’s “invisible hand,” quit the World Bank because he distrusts “globalization,” and regularly attacks from the left “market socialism,” the European left’s dominant philosophy. Stiglitz has found our “top 1%” controls 40% of American wealth, and says, “in our own democracy, 1% of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.”

So that’s what's supposed to concern us. That’s how our ruling class, our national elite, our Democrats with power and wealth aplenty in their hands, can launch a presidential campaign targeting (in Obama’s words) “millionaires and billionaires.” No matter how rich you are, there’s someone richer you can use to make yourself appear relatively poor.

Now I understand how progressives keep class warfare alive after they have become the ruling class. While the top 1% annually made over $1 million a year in 2007, Obama's tax increase is also aimed at households making over $250,000 ($200,000 for individuals)--a much larger, less affluent group that includes small business folks who are the Republican Party's backbone, and who must pay income tax on their business earnings. Democrats talk about billionaires, and tax small business.

I’m now prepared to translate the recent New York Times editorial praising Obama’s speech last week on deficit reduction (what the New York Times says, and what it really means):
President Obama. . . used his budget speech to clearly distance himself from Republican plans to heap tax benefits on the rich (that is: small business) while casting adrift the nation’s poor, elderly and unemployed (that is: salaried government and nonprofit employees paid to help the poor, elderly, and unemployed). Instead of adapting the themes of the right (that is: Republicans) to his own uses, he set out a very different vision of an America that keeps its promises to the weak (that is: salaried government and nonprofit workers) and asks for sacrifice from the strong (that is: small business).

The super rich don't care about these attacks in the New York Times, which is, for most of them anyway, their newspaper. Such stuff concerns others, the less privileged Democrats and Republicans. The top 1% are too rich to mind serving as a foil for Democratic grabs at small business profits.

Saturday, April 16, 2011

Debt and Growth

"Raising America's debt limit is a sign of leadership failure."

--Sen. Barack Obama (D-IL) (2006; repudiated, 2011)

“Our generation's greatest challenge is an economy that isn't growing, alongside a national debt that is.”

--Sen. Marco Rubio (R-FL)

Rubio identifies with Senator (as opposed to President) Obama, who says those who fight national debt increases are leaders. Rubio, however, takes the next step Obama didn't by linking debt constriction to economic growth. Rubio—Republicans—believe prosperity comes from shifting resources from government to the job-creating private sector.

Obama—Democrats—seem to think keeping government big helps the economy, but more important than economic growth, big government helps the nation’s people. Here’s how the Washington Examiner’s Michael Barone phrases the thought:
[Obama won’t serously] address entitlement issues [and] wants spending to continue on its upward trajectory and tax rates to be increased. [The] intellectually serious argument for this: We're an aging country that needs to spend more on health care and we'll just have to settle for less economic growth, as Europe has done. [emphasis added]
John Podhoretz, writing in Commentary, agrees the president seems unconcerned about economic growth, but wonders if Obama’s approach might backfire on him:
The lubriciousness with which Obama went after Paul Ryan’s serious and stark budget proposal . . . suggests that he thinks the GOP went for the bait—that he demanded a serious debt-reduction plan, then got one from Ryan, and is now intending to build his reelection campaign on attacking it.

But what if the misdirection goes the other way? What if Obama is making a mistake . . . defending the entitlements—when he should really be panicking and doing whatever he can think of to get some economic growth going so that he [can] prevent [the] Bush tax cuts from [becoming permanent] after the 2012 election? [emphasis added]
You know the economy isn’t really growing, right? Here’s a graph from Jay Cost that illustrates the average growth rate from 1948 to the present—dotted line (3.43%)—plotted against real growth over that period (solid line):

The graph is ugly. Cost points out that any time we’re above the dotted line, growth is faster than 3.43% per year. Any time we’re under it, growth’s below 3.43% up to that point. The graph shows the economy has been winding down for a decade, with only one year between 2001 and 2007 above 3.43%. But since the latest recession, growth is significantly under 3.43%, and it’s expected to fall even farther in the next two years.

Big government—big government spending—is not working. Especially, it’s not working for the average person. Look back at Cost’s graph published earlier showing what a small percentage of our population currently has a job (lowest share since the early 1980s). And look at another Cost graph, which shows that real per capita wages and salaries, which peaked in 2007, have since fallen to their lowest level since 1998:

Under Obama, our economy is on the wrong track. And the people know it. Two-thirds of them currently believe the country’s going in the wrong direction.

Wednesday, April 13, 2011

Deficit Reduction Disappointment

"We believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves."

--Barack Obama, 4.13.11 Deficit Reduction Speech

Though I hadn’t expected much, I was disappointed with the President’s deficit reduction speech. Mostly, he defended big government, reaching back to Republican Abraham Lincoln (see quote) as opposed to Democrat Franklin Roosevelt to find his government patron saint. Is it that Civil War thing? When Obama's speech finally got around to budget cuts, he not only offered no “steak,” as I had predicted, he also failed to give us the “sizzle” I expected to see.

As I said he would, he called for tax increases and cuts to defense spending. The two would reduce the debt $1.4 trillion over 12 years (Obama pumped up all his figures by taking them out 12 years, two years beyond the ten budget sheets call for).

And, as I said, he did propose Medicare and Medicaid cuts. Here’s where I expected the “sizzle,” something that would look like entitlement reform, but would not happen because Republicans would be unable to accept the ideas.

Instead, after first instructing us that “politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse,” [emphasis added] the President then said he would achieve his Medicare/Medicaid savings by eliminating waste and abuse! Not kidding:
We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid. We will change the way we pay for health care — not by procedure or the number of days spent in a hospital, but with new incentives . . . And we will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending. [emphasis added].
Obama claims just by going after waste and abuse in the above manner, he can realize total healthcare savings of $830 billion.

Not likely. No steak. No sizzle.

Tuesday, April 12, 2011

Obama’s Deficit Reduction Plan Tomorrow: A Prediction

Is the country broke? Chicago Sun-Times columnist Jacob Sullum thinks so, even though the New York Times thinks otherwise. Sullum writes:
The New York Times says it’s “obfuscating nonsense” to declare that “we’re broke,” as House Speaker John Boehner (R-Ohio) likes to do. “A country with a deficit is not necessarily any more ‘broke’ than a family with a mortgage or a college loan,” the Times explains.

Suppose the mortgage is twice the home’s current value, the college loan was used for an unfinished degree in anthropology, and the family cannot make payments on either without borrowing or stealing because it has no income of its own. Now this family looks more like the federal government.
I believe the New York Times’ mortgage analogy to be even more absurd than Sullum suggests. Prudent homebuyers deliberately take out fixed-rate mortgages so that they can plan around their monthly payments. The U.S. national debt, by contrast, is rocketing higher every year. It’s as if we took out a mortgage every year only to refinance it for a larger mortgage the very next year. Except that no bank would ever let us refinance annually for more.

Tomorrow, the President will apparently reject the New York Times mortgage analogy, and concede our nation faces a debt crisis. He will tell us how we are to reduce, not increase, our deficit. This will be tricky, however. Every specific proposal to reduce spending Obama offers is highly likely to succeed if Republicans accept it.

So if Obama is to refrain from alienating his progressive, big-government-loving base and the New York Times, he has to stay away from specifics. There are two exceptions: 1) he can safely propose tax increases of any variety, and 2) he can recommend defense cuts. Republicans won’t easily support any tax increase, even as part of some overall reform, and Republicans don’t think we spend too much on national security.

If Obama is to come across as at all serious about debt reduction, he must deal with out-of-control entitlement expenditures. We hear he will discuss how to lower Medicare and Medicaid costs. But to seem serious without actually doing anything, Obama must ask for changes Republicans cannot accept.

Bottom line:
Look for sizzle, no steak.

Monday, April 11, 2011

Civil War Anniversary: Another View

Seattle Times staff columnist Jerry Large has also written about our 150th anniversary of the Civil War’s beginning. In a column entitled, “Our future is again at risk,” Large more directly echoes sentiments expressed by filmmaker Ken Burns when he bemoans how too many children are “born into poor families, lacking adequate health care and living in neighborhoods where a good education is hard to come by.”

Large explains:
Efforts to address those issues are suffering, and in some cases dying altogether, because of . . . an aversion to paying taxes that is driven by . . . attitudes that haven't changed since the Civil War.

Some people don't want their tax dollars educating the children of immigrants, or providing health care to poor people. Americans today aren't faced with putting their lives on the line in a Civil War. But governments won't risk asking citizens to sacrifice by paying for social services. . . Yet we know unaddressed inequality. . . drags out problems that ultimately affect all of us.
In other words, the Civil War’s not over; we still need big government backed by higher taxes to solve our problems.

Comment: Large is right. 150 years on, we have big problems. But the solution isn’t more government. Instead, we need economic growth--jobs. And when it comes to economic growth, government’s not the solution, it’s the problem.

Saturday, April 09, 2011

Understanding the Republican Opposition

Republicans are mostly outside our current national elite. Republicans do dominate two parts of the elite—small business and the military. And they have pockets of strength elsewhere, including:

1. Big business.
Starting in the Great Depression, big business has learned to survive by getting along with Democratic-dominated government. Big business knows how to play both sides of the aisle, however, which does help some Republicans. And some in big business, most notably brothers David and Charles Koch, even openly side with Republicans.

Here are America’s wealthiest families, based upon Forbes' survey of our wealthiest people:

And here’s what the Koch brothers, according to the Weekly Standard’s Matthew Continetti, think of Obama:
[His] silver tongue promised to build a “New Foundation” for America based on greater federal government involvement in health care, education, and energy. Taxes would be raised, regulations increased, mandates imposed to guarantee a more equitable distribution of wealth. [The Koch brothers] agreed with none of this. The larger government grows, they believed, the worse off societies become. Obama had to be stopped.
I guess to those who worry about Republican firepower, the Kochs certainly are worth a New Yorker feature article.

2. Religious America. The country’s increasing secularization is seemingly transforming itself into an alternate religion complete with its own moral code. This development unsettles believers. Religious people feel drawn to Republicans who share the believers’ concerns about where our country is headed, and who make believers feel more at home.

Canadian David Warren on North America’s new non-religion:
what makes our own society unique is not its freedom from religion but rather the peculiar nature of the religion upon which our theocracy rests. That is to say, we have an upside-down religion, in which there is no God, but that “Not God” commands an obedience more absolute than God ever required, stipulating everything from the sanctity of antinomian sexual behaviour, down to how we should sort our garbage. It rides upon an inexhaustible series of mildly fluctuating, but invariably self-contradictory moral and epistemological premises (or more precisely, conceits); and because everything is “relative,” nothing may be challenged. [One maxim:] “You must seek pleasure, and avoid pain."

3. Upstart media.
What I first called “mainstream media” or MSM, and later just labeled “media,” I now prefer to call “legacy media,” like the legacy airlines, the carriers formed in an earlier era now having the most trouble adapting to deregulation. The legacy media certainly do struggle against new media in all their forms, a part of which is conservative, as opposed to conventionally liberal or solidly progressive/radical-left. One area where conservatives seem to dominate is talk radio.

Wilfred M. McClay, writing in Commentary, explains why:
Talk radio is, implicitly, talk-back radio—a medium tuned to during times of frustration, exasperation, even desperation, by people who do not find that their thoughts, sentiments, values, and loyalties are fairly or even minimally represented in the “official” media. . . Talk radio is a place where people can go to hear opinions freely expressed that they will not hear elsewhere, and where they can come away with a sense of confirmation that they are not alone, are not crazy, and are not wrong to think and feel such things. The existence of such frustrations and fears are the sine qua non of talk radio; it would not exist without them.
Three pockets of Republican support to help the U.S. flatten (i.e., disempower the elite).

Civil War: 150 Years On

The U.S. was “conceived in liberty, and dedicated to the proposition that all men are created equal.”

--Abraham Lincoln (1863)

"This is the most important event in American history. . .Everything today has a connection to the Civil War: How we're configured, racial issues, social issues, political issues. We're debating the role of government now — the Civil War saw our first big federal government."

-- Ken Burns, “Civil War” filmmaker

"too much pluribus, and not enough unum."

-- Arthur Schlesinger, Jr, via Ken Burns

150 years ago, on April 12, 1861, the Civil War began when Confederate forces under Brig. Gen. P.G.T. Beauregard bombarded the Federal garrison at Ft. Sumter, Charleston Harbor, South Carolina. 1861 was one of the two most important years in U.S. history between our founding and the present. The other was 1929, when the Wall Street crash brought an end to unfettered capitalism. Both the Civil War and the Great Depression transformed the American political landscape; Republicans running the North and the nation between 1861 and 1929, and Democrats taking over after 1929.

50 years ago, the nation relived the Civil War on its 100th Anniversary and simultaneously realized how little the American Negro’s lot had improved in the century since. A new ground-shifting political struggle began. A Northern elite that incorporated the two components of our mixed economy—Republican business on one hand, and the Federal government including related support groups nurtured by New Deal Democrats on the other—then ruled America. We lived the “Blue Model”.

Over the next decade, America’s ruling class worked to grant blacks the equality the Civil War had promised them (see Lincoln, above), bring true equality to women and other minorities, and in the process forfeited Democratic control of the South. In the eyes of Ken Burns, and by implication, the late Arthur Schlesinger, Jr., the still-unfolding struggle unleashed in the 1960s resumed the Civil War, except that now, the Democrats not the Republicans dominate the national elite, the North(east), California, and the Federal government, and Republicans, not Democrats, now rule the South and fight for state rights against an intrusive Federal government.

Democrats have peacefully sought to make right the bloody Civil War of a century earlier. Yet this new struggle for equal rights has generated the sharpest divisions the country had seen since the Civil War. It pitted the North against the Southern segregationist way of life, then with forced busing to integrate Northern schools and fair housing laws, it pitted elite liberals against the Northern working class, then with court-forced legalized abortion and affirmative action for women and minorities, it set progressive values against our traditional culture. Finally, rejection of U.S. involvement in Vietnam bonded the ruling class to the Democratic Party, eventually sending “neoconservative” defenders of the war into the Republican fold.

Burns claims the Civil War high ground of a noble quest for equality under the leadership of a strong Federal government, and Burns (quoting Schlesinger) mourns America’s unnecessary division, resting as it does on no-longer-legitimate white male supremacy. But Burns and fellow Democrats fail to appreciate that Federal government control over our economy and lives, to paraphrase Ronald Reagan, is no longer the solution; it has instead become the problem.

What will be the new key date in U.S. history, the date to set alongside 1861 and 1929, the date we step back from the big government launched in 1929 and thereby empower the people to rule their own lives?

That’s the date we end our current civil war.

Monday, April 04, 2011

Withering Away of the State

When there are no classes. . . then "the state... ceases to exist."

--Karl Marx

Neil Reynolds of Canada’s Globe and Mail has raised a subject that makes as much sense as my declaration that we are approaching “non-elite rule.” Reynolds believes we are beginning to see the “withering away of the state,” not in the Marxist sense of triumph of the proletariat, but rather as a reaction to the failure of bureaucratic rule.

Here are excerpts from Reynolds’ article:
Controversial Israeli military historian Martin van Creveld argued (in his brilliant The Rise and Decline of the State, 1999) that government . . . peaked in the 20th century and [is now] withering away.

The state peaked militarily, van Creveld said, on Aug. 6, 1945 – the “fine summer day” when an atomic bomb fell on Hiroshima. The state had gone too far. Any greater deployment of military power would have required the annihilation of nations. People’s trust in government eroded. The armies of the superpowers proved ineffective in small-scale wars.

governments turned inward after the Second World War, adopted socialist economic models and built cradle-to-grave welfare states. They began by nationalizing industry, then vastly expanding bureaucracies to care for the old, the poor and the sick. Once established, these bureaucracies grew relentlessly. . . The welfare state, van Creveld said, peaked in 1977, when governments realized the only way to expand programs was to pay for the expansion with borrowed money.

van Creveld blamed the state’s decline on the nature of bureaucracy. “Considered as individuals, bureaucrats may be mild, harmless and self-effacing people. Collectively, they have created a monster whose powers far exceed the mightiest empires of old. By merely waiting, a bureaucrat can outlast any individual. For the first time in history, victory goes to the buttocks rather than the fist.” [emphasis added]
Reynolds notes, however, that van Creveld in his book anticipated the state’s decline would produce “calamitous consequences” that “will affect every living person, producing upheavals as profound, and probably as bloody, as the upheavals that propelled humanity out of the Middle Ages.”