Thursday, June 30, 2011

Guilt (Hatred) (Fear)

I’m no psychoanalyst or pop psychologist. So why am I now tackling guilt, after writing about hate and fear?

I think these strong emotions have a profound impact on what’s happening in our country today.

Walter Russell Mead (picture) writes 3000-word essays three times a week, and they are informed, provocative, and thoughtful. It helps that often, we find the wisdom he presents distilled in a single paragraph, such as the following excerpt from a piece about Al Gore:
[Gore] shares an illusion common amongst the narcissistic glitterati of our time: that politically fashionable virtue cancels private vice. The drug addled Hollywood celeb whose personal life is a long record of broken promises and failed relationships and whose serial bouts with drug and alcohol abuse and revolving door rehab adventures are notorious can redeem all by “standing up” for some exotic, stylish cause. . . Gore is sincere, as the fur-fighting actresses are sincere, as so many ’causey’ plutocrats and moguls are sincere. It is perhaps also true that the fundraisers who absolve them of their guilt in exchange for the donations and the publicity are at least as sincere as the indulgence sellers in Martin Luther’s Germany.
Mead is onto something big. What is “noblesse oblige” anyway, but “absolving” the rich “of their guilt”? They feel guilty about living off the backbreaking labor of peasants in the surrounding fields, so host a harvest festival for the village, and give workers a goose at Christmas. Our modern elite go to charity balls, plant trees, defend gays, protect seals, oppose U.S. imperialism, seek scholarships for illegal aliens, and support the Democratic Party, all while leading their comfortable lives. And their good deeds give them the right to look down on small business people, retail clerks, Republicans, churchgoers, and until recently, police and military officers.

Here’s something I found on the Internet in my attempt to understand better the projection of guilt. It’s by Kathleen Basi, a blogger from Missouri with a Down syndrome daughter who writes church music:
[G]uilt really gets bad rap, unfairly so. Guilt, after all, is the sign of an active conscience. It’s generally the first alert that I’ve done something damaging to myself or to another person. It makes me uncomfortable until I do something to remedy the damage. It . . . makes me a better person.
“Guilt makes me a better person.”

Now I understand why there is so much moral force behind our national elite’s collective effort to improve the lives of the rest of us. It is, partly at least, the power of guilt, projected.

First principle of economics: understand the problem.

“I’m extraordinarily proud of the economic record that we were able to produce.”

--Barack Obama, June 20, 2011


There is a weekly measure of our (lack of) economic progress. And initial claims for unemployment benefits came in today at 428,000, after economists had forecast claims dropping to 420,000. The total marks the 12th straight week claims have been above 400,000, dismal news since 400,000 is the level below which claims must fall to show progress on job creation. June’s continued string of 400,000+ weekly unemployment claims suggests this month’s job growth total, due July 8, may be around 90,000. That would be below the 167,000 needed just to keep pace with population growth.

Unemployment is the most visible sign of economic trouble. Another is the size of public debt both here and abroad, debt generated by out-of-control welfare states. Using Bank for International Settlements figures previously unfamiliar to me, Washington Post columnist Robert Samuelson sums up the horrible data on our international debt crisis:
We've arrived at a historical reckoning of the post-World War II welfare state, burdened with aging populations and huge debts. Germany's gross public debt is 87% of its economy; Japan's, 213%; Britain's, 89%; and the United States', 101%. . . Greece is not alone. [And remember,] The United States, Europe and Japan [are] half the world economy.
To reach a solution, you must first understand the problem. Conservaties consider the size of government—its gigantic footprint on the national economy—to be 1) our biggest economic problem, and 2) the reason Obama cannot address our problem.

We earlier noted that job growth in the U.S. today occurs primarily in government, and especially in two government-dominated sectors, education and health care. Now Arnold Kling of the Cato Institute and Nick Schulz of the American Enterprise Institute, both conservative think-tanks, have published in National Affairs a lengthy, documented attack on government domination of education and health care. Kling and Schultz tell us:
The commanding heights of our economy today are . . . education and health care. These are our foremost growth sectors — the ones most central to employment and consumption; the ones that, increasingly, drive our economy. And it is in precisely these two sectors that the case for extensive government intervention and planning, if not outright control, is dominant — and becoming ever more so.
. . it will simply not be possible to maintain a genuine free market — or a thriving, innovative, growing economy — if our education and health sectors are controlled by the government.
Bureaucratic monopolies don’t work, while competition—the competition small businesses are forced to endure, the competition that liberated our airline industry after 1979—generates economic growth. As Walter Russell Mead writes:
The bureaucratic state is too inefficient to provide the needed services at a sustainable cost – and bureaucratic, administrative governments are by nature committed to maintain the status quo at a time when change is needed. For America to move forward, power is going to have to shift from bureaucrats to entrepreneurs, from the state to society and from qualified experts and licensed professionals to the population at large.
Of course, it’s exactly that transfer of power threat our national elite of bureaucrats, experts, and professionals fight so hard to stop.

But there is hope. Mead reminds us:
American society is the most revolutionary force on the planet. The Internet is more subversive than the CIA in its prime. The dynamism of American society is constantly creating new businesses, new technologies, new ideas and new social models. These innovations travel, and they make trouble when they do. . .It is power of a free people more than the brilliance of our intellectual and social establishment that has brought the United States this far; in that truth lies the secret of our revolution and of our success. [emphasis added]

Monday, June 27, 2011

Guilt Perverting American Foreign Policy

Quote without comment:

“[S]ome people feel guilty for anything done by rulers who are our friends. Our intelligentsia, like our enemies abroad, call our friends our ‘puppets’ and blame us for what they do, or are said to do. . . It is the opposite with regimes that are unfriendly to us; we feel able to ignore our guilt for their crimes, no matter what our role in creating or sustaining them.

“Is it motivated only by feelings of guilt for ‘our’ sins, or by aggressiveness against our society, which is called ‘us’ but viewed as the enemy? Is there an element of projection, expiating a sense of personal guilt by punishing one’s society at large?

“The phenomenon was analyzed decades ago by several major scholars. Prof. Jeane Kirkpatrick, in her essay ‘Dictatorships and Double Standards.’ James Burnham, former philosophy professor, in the chapters on ‘Guilt’ and ‘The Dialectic of Liberalism’ in The Suicide of the West: how recent liberal doctrine implies an inexpiable Western guilt before the Third World; how liberal society tends to identify with the Left as ‘us,’ feeling bad when crossing the Left, feeling good when attacking the Right and the West, proposing indirect strategies for the West that consist in the here and now of attacking the interests of ‘our side.’ Prof. Paul Hollander, in Understanding Anti-Americanism: our cultivation of negative self-image, which affects the society’s future. Prof. Lewis Feuer, a Freudian socio-psychologist, in The Conflict of Generations and subsequent books: the inward redirection of the normal stock of societal aggressiveness; the alienation of the societal superego to the Left; the inducing of guilt in the mainstream.”

--Ira Strauss, National Review, 6.13.11

Sunday, June 26, 2011

Exiting Afghanistan

What do you think of President Obama’s decision to end the American combat offensive in Afghanistan? We suspected Obama might use Osama bin Laden's death as an excuse to get out.

Obama is pulling the surge troops out smack in the middle of next year’s fighting season--disrupting the military’s plan to win in Afghanistan’s South then shift resources to the East--and instead encouraging “a battered Taliban to hang on [until we leave], rather than bargain for a truce.”

Washington insider Leslie Gelb is fine with Obama’s pull-out, writing
now is not the time for another nation-building crusade abroad, but rather for nation-building here at home. My main regret about Obama's speech on Wednesday was that [he talked] about restoring our domestic economy—without beginning to tell us how he would fight and win that crucial war. [emphasis added]
I had not realized that Obama’s call for “nation-building at home,” the president’s excuse for pulling resources out of Afghanistan, had become the subject of such conservative derision. Reason’s Matt Welch almost chokes on the phrase:
Like all vacuous Thomas L. Friedman metaphors, "nation building at home" dissolves long before contact with reality. After all, the president is not advocating [in the U.S.] "the use of armed force in the aftermath of a conflict to underpin an enduring transition to democracy."

As I pointed out [last November], Friedman had invoked domestic "nation-building" 34 times across 14 columns since June 2008, [none grappling] with the great unmentionable [truth] : Just about everything government provides has gotten too damned expensive, because government is a definitionally corruptible monopoly, and as a result there is [little] left over to pay for whatever shiny new government-monopoly [Friedman and friends want.]

. . . the Wall Street Journal[‘s] James Taranto notes that Friedman has only used [nation building at home] once since then, and concludes, “How can anyone take seriously Barack Obama's status as the World's Greatest Orator when he uses Friedmanisms that have become so Friedmanistic that even Friedman avoids them?”
Bing West, a combat marine veteran of Vietnam, Reagan’s International Security Affairs assistant secretary, and a military affairs writer who chronicled the success of the Iraq surge after 2006, is sour on America’s war in Afghanistan, and supports Obama’s troop pull-back. West writes:
[Create] a 20,000-member Adviser Corps. . . We need more advisers at the point of combat to call in fire, so that the Afghan soldiers gain a sense that they can win. [We should] bolster the size of the adviser teams from about 20 to 60. . .
replace . . . combat units with enlarged adviser teams. Currently, there is one American in Afghanistan for every two Afghan soldiers. [We need] one American for every 10 Afghan soldiers.

In addition, for the next 10 years, the U.S. should pay members of the Afghan army directly, without going through unreliable civilians in Kabul to do so. If there is a negotiated settlement, the Taliban will emerge as an armed faction of subversion within the state. But without a settlement, the Afghan army faces a long war. Either way, the Afghan army must be confident of direct -- at a cost of $10 billion a year, even when our forces are gone.
The West approach takes strategy way back to the Vietnam war’s beginning, 1961-64, when we fought insurgency with an advisors corps imbedded in South Vietnamese army (ARVN) units. West apparently thinks that was a winning approach, and would have worked had we circumvented the highly corrupt South Vietnamese superstructure, instead paying and dealing directly with the ARVN troops themselves.

Who knows? The White House reportedly doesn’t think much of West, but at least he provides a way out that doesn’t equal total defeat.

Thursday, June 23, 2011

On the economy, Tom Friedman doesn’t get it.

New York Times sage Thomas Friedman is unhappy, warning us June 22:
There is no way that America can remain a great country if the opportunities for meaningful reform are reduced to either market- or and climate-induced crises and 100 working days every four years. We need a full-time government.
Frustrated that Obama has accomplished so little since his first 100 days, Friedman recommends forming a third party for next year’s election. But look at Friedman’s proposed party platform: 1) pass a short-term stimulus, 2) enact the Simpson-Bowles agenda of balancing the budget by raising $1 in new taxes for every $3 of budget cuts, 3) shrink our presence in Afghanistan, 4) raise automobile mileage standards, and 5) impose a gasoline tax to pay for a massive increase in government-supported scientific research, and a carbon tax to pay for new infrastructure and stimulate clean-power innovation.

Let’s see. That’s 1) spend, 2) raise taxes to cover one-third the cost of cuts, 3) cut Afghanistan war costs (cutting part of a $100 billion a year total, peanuts next to our $14 trillion debt), 4) increase government regulation, and 5) tax and spend and tax and spend. It’s a tax-and-spend Democratic Party agenda that would take votes from Obama should such a third party emerge, which it won’t. Friedman in his head knows government's got to shrink, but his heart still loves big government.

I’m sorry to see this Friedman tax-and-spend column, because ten days earlier, Friedman wrote suggesting he understood what Republicans believe—job creation is a job for business not government, so we should just help business. According to Friedman:
The [McKinsey Report, An Economy That Works: Job Creation and America’s Future,] concludes, “Progress on dimensions is needed: . . . finding ways for U.S. workers to win ‘share’ in the global economy” [—] encouraging more foreign investment in the U.S.[—] “encouraging innovation, new company creation, and scaling up of industries in the United States, and removing unnecessary impediments that slow business investment and job creation.” [emphasis added]
Friedman continued:
[D]o not underestimate uncertainty as a silent jobs killer. . . Investors and companies who have to make hiring decisions have no clue. “The economy is paying a high uncertainty premium right now,” says Mohamed El-Erian, the C.E.O. of the world’s largest bond fund, Pimco. “With such uncertainty, people delay as many decisions as possible.”
To help business, remove the uncertainty of threatened new taxes, of increasing government spending and debt, of expanding regulation, and reduce big government so business has room to grow and create jobs. I thought Friedman had gotten it.

But no.

Wednesday, June 22, 2011

Politics 2012: Overcoming Hatred

This blog has talked about how our national elite fears the change coming to America's political order, so fights back as does a cornered animal. We are witnessing fear, and its related expression of prejudice and hatred.

Here’s Stanley Kurtz in National Review:
Liberalism nowadays may be the last great holdout of old-fashioned prejudice. By telling themselves they’re against group hatreds of all kinds, and dismissing their opponents’ arguments as nothing but bigotry in disguise, liberals grant themselves license to despise. They swear, mock, and hate with a clean conscience, never guessing they’re turning liberalism itself into an outpost of bigotry in reverse. The flip side of liberal guilt is this hidden license to hate.
Peter Wehner, in Commentary, has his own column about our rising climate of hatred. Wehner writes that
politics often stirs up intense feelings. This makes perfect sense, given that it involves issues of power and consent, liberty and order, rights and duties, ethics and morality. A huge amount, including our way of life, hinges on how political matters resolve themselves. People are right to feel strongly about these things. But we all know that political passions can. . . give way to hatred.
Wehner believes our political leaders should call out one’s own side when it’s warranted. He relays a story from Indiana governor Mitch Daniels. Daniels, who used to be a White House staffer, said that when he and others showed anger in Ronald Reagan’s presence, the President would tell them, “Remember, we have no enemies, only opponents.” Wehner reminds us that Reagan was “on the receiving end of many slanders, yet he remained a model of graciousness and good manners.”

It’s really true. The best way to fight prejudice and hatred is to rise above it.

Monday, June 20, 2011

Movies: the American Elite’s Bible

I am especially interested in movies that advance liberalism by capturing a truth about America. Liberal thinking is post-religious. The American elite, bless their souls, get their big ideas from movies. Liberals and movies go together.

Movie stories make truth out of current events. Movies put words and actions into “ordinary people,” using “regular folks” to carry the political message, though like everything Hollywood, we’re of course looking at an ersatz reality. But it works. Must be true. After all, it’s in the movie everybody’s talking about.

There are many lists of “most influential” movies. Here’s one: an ABC list of the top 20 political movies. My list of the ten most politically influential movies includes two from the ABC list—“The Candidate” and “The American President.” Below, my selections:

1. “To Kill a Mockingbird” (1962). The civil rights revolution in America, from the Supreme Court’s 1954 school desegregation decision to the 1965 Voting Rights Act, was about finishing the Civil War fought 100 years earlier. White liberals transformed the South, and Harper Lee, a Southern liberal who wrote the book and screenplay about good, brave, Southern lawyer Atticus Finch, ably acted by Gregory Peck in his favorite film, personified the role liberals and especially liberal lawyers played in this epic struggle during liberalism’s finest decade.

2. “M*A*S*H” (1970). Vietnam was, besides civil rights, the other great 1960s liberal cause. The best "Vietnam" book was Catch 22, about the absurdity of World War II, and the best movie made about Vietnam during the Vietnam war era was “M*A*S*H,” Robert Altman’s brilliant satire set in the Korean War. What craziness. Vietnam had to end.

3. “The Candidate” (1972). By the early 1970s, the American left was deeply disillusioned with phony, Kennedy-like liberal politicians such as Democratic senator John V. Tunney of California, who with his name (his father was a famous heavyweight boxing champion) and a well-financed slick campaign managed by paid consultants, beat back more authentically progressive challengers. Tunney seemed to stand for nothing, and in fact lost after a single term. Robert Redford, who played the winning “Candidate,” closed the movie by famously asking, “Now what do we do?”

4. “Nashville” (1975). Robert Altman’s movie set in the nation’s country music capital, contained a piercingly satirical look at a presidential candidate who spoke simple truths about honesty and integrity, as part of a calculated campaign designed to win over simple people in the aftermath of Watergate. “Nashville” revolved around a town that was Altman’s stand-in for Middle America. Altman had eerily foreshadowed Jimmy Carter's campaign for president, one that carried Carter to the White House a year later, to the liberal establishment's eventual dismay. “Nashville’s” impact was more limited than it should have been, though the movie was the subject of eight New York Times articles and generated much discussion for months afterward.

5. “All the President’s Men” (1976). The film was a popular success, won 4 Oscars, and was nominated for best picture. It nailed down investigative reporting’s reputation as a profession that could not only change our politics, but also lead us out of the darkness. The Washington Post (and along with it, the entire mainstream media) never stood taller than when “All the President’s Men” made heroes out of the Post’s owner, editor, managing editor, and top young reporters. They changed the country for the better.

6. “Platoon” (1986). Many good, but flawed movies came our of our bleak Vietnam experience. Oliver Stone’s “Platoon” was the most real, and gave the generation that had earlier lived through Vietnam from a distance its most vivid image of why America should avoid all such future wars. "Platoon" won the Oscar for best picture, and Stone won for best direction.

7. “Roger and Me” (1989). Before Michael Moore became a caricature of himself, he made a hard-hitting documentary about how U.S. corporations (he focused on General Motors) were downsizing by sending manufacturing jobs to low wage countries overseas. Graphically, he captured the cost of job displacement at home, and opened the political line of attack Ross Perot took up in the 1992 campaign about the “giant sucking sound” of American jobs headed for Mexico. Perot’s success in turn helped elect Democrat Bill Clinton as president, and led to Democrats distancing themselves from their historic pro-free trade position.

8. “The American President” (1995). Aaron Sorkin’s story of an idealistic, good American widower president who falls in love with a top environmental lawyer captured well the elite’s return from post-Watergate cynicism about our leaders, and why not? Handsome Rhodes scholar Bill Clinton was in the White House with his brilliant lawyer wife, the first "First Couple" in the over three decades since Kennedy’s assassination with whom liberals could truly identify. Michael Douglas starred as our liberal dreamboat, and the movie inspired Sorkin’s long-running TV hit “The West Wing,” which carried forward the theme of idealistic liberals running the country well.

9. “As Good as It Gets” (1997). By Clinton’s time, universal health care stood out as the great unfinished item on the liberal agenda. Neither Truman, nor Kennedy, nor Johnson, nor Carter, nor Clinton were able to enact health insurance coverage for all Americans. “As Good as It Gets,” a pro-gay comedy vehicle for Jack Nicholson, has an important subplot about how Nicholson acquaintance Helen Hunt can’t get adequate health care for her sick son, because her HMO (Health Maintenance Organization) is so greedy and profit-driven. The subplot helped build popular support for better health care.

10. "Sicko" (2007). By the time Michael Moore's propaganda piece for national health insurance hit movie theaters, America had become sharply divided into two roughly equal camps of liberal Democrats and conservative Republicans. Moore's audience was his fellow liberals, and "Sicko" provided sets of talking points for the cause even as conservatives catalogued the movie's many distortions. In the end, "Sicko" helped move universal health care forward, and on to its 2010 passage under President Obama.

Taken together, the movies I've catalogued helped advance the civil rights agenda, end our involvement in Vietnam, expose the emptiness of consultant-driven campaigns electing cliche-popping unknowns, build support for liberal lawyers and investigative reporters, undermine backing of the military, big business, and health insurance organizations, and rally us behind handsome liberal presidents supported by sharp women. These movies have done so in part because they are quality products that tell a good story.

Thursday, June 16, 2011

Bottom Line: All of Us Like Low Taxes

Alan Reynolds, a Cato Institute senior fellow, has the skinny
on what lower tax rates do to revenue collections.
What they say: lower tax rates mean lower revenues. "You do probably get a modest boost to GDP from tax cuts," concedes the Atlantic's Megan McCardle. "But you also get falling tax revenue. It can't be said too often—and there you are, I've said it again."

What’s the truth:
Since the era of 70% tax rates, the U.S. income tax system has become far more "progressive." [F]rom 1979 to 2007 average income tax rates fell by 110% to minus 0.4% from 4.1% for the second-poorest quintile of taxpayers. Average tax rates fell by 56% for the middle quintile and 39% for the fourth, but only 8% at the top. Despite these massive tax cuts for the bottom 80%, overall federal revenues were the same 18.5% share of GDP in 2007 as they were in 1979 and individual tax revenues were nearly the same—8.7% of GDP in 1979 versus 8.4% in 2007.
In short, tax reductions under Kennedy, Reagan, Clinton and Bush 43 not only "paid for themselves," they also provided extra revenue that paid for negative income taxes for the bottom 40%, and record-low taxes at middle incomes.

The hidden truth is that existing lower tax rates for everyone mean the big government folks are out of options. People at all income levels—and this includes the near wealthy making $250,000 a year—no longer believe government is worth higher taxes. Republicans won the war against big government over the last three decades by lowering taxes on everyone, and forcing a situation where expenses need to fall to match revenue under 20% of GDP, the federal tax level people seem willing to tolerate. Taxes won’t go lower, but they won’t go higher either.

Wednesday, June 15, 2011

Obama = Hoover?

Walter Russell Mead, who invented the “Blue social model” as a way to label the 1950s-early 1960s great time in America when Democrats dominated our big government-big business-big labor everybody happy middle class way of life, is one of the best political analysts around. He now is out with a post that compares Obama not to Roosevelt, but to Herbert Hoover, the man Roosevelt defeated in a landslide.

Ironic. Perceptive. Unlike George Bush, who was out of office 4 months after the big crash of 2008, Hoover was stuck with the Great Depression for 3-1/2 long years. Hoover and the Depression merged in people’s minds by the time Roosevelt beat him in 1932. And Obama’s problem is that the same thing is happening with him. The Great Recession is Obama’s. As Democratic National Committee Chair Debbie Wasserman Schultz says, “We own the economy.” Mead additionally points out that Hoover, like Obama, was an activist who believed government deficit spending could fix the economy.

Today Obama looks to be Mr. Problem (Hoover), not Mr. Cure (Roosevelt).

A little note: this blog first hinted at a parallel between Obama and Hoover rather than FDR earlier, in July 2009 in fact.

Chris Christie "100% Certain not Running"

Sometimes you can be really wrong, and sometimes, you can be really wrong fast. Chris Christie just said he's "100% certain" he's not running for president in 2012.

Click on this link to watch the video.

Here's why Christie won't run. If the party is so desperate they must draft Christie almost against his will, Republicans aren't offering Christie anything attractive. Yet if Christie doesn't leave in response to a draft, but because he actually wants to be president in 2012, he damages any presidential campaign by exiting New Jersey after just two years as governor.

Christie has figured this all out, and must say "No."

Monday, June 13, 2011

Chris Christie for President

the president and his team ha[ve]n’t even contemplated the possibility of a re-election loss. They comfort themselves with the beliefs the GOP field is fatally flawed, demographics are working to their advantage, and Obama is a spectacularly good politician. Even states such as North Carolina and Georgia will be up for grabs. . . this self-confidence borders on being delusional.

--Peter Wehner, Commentary

We are in the midst of a once-in-a-generation debate about the nature of the welfare state (entitlement versus safety net) and, indeed, of the social contract between citizen and state (e.g., whether Congress can mandate – compel – you to purchase whatever it wills). Let's finish that debate. Start with Obama's abysmal stewardship, root it in his out-of-touch social-democratic ideology, and win. That would create the strongest mandate for conservative governance since the Reagan era.

--Charles Krauthammer, conservative columnist

This blog wants New Jersey governor Chris Christe to be president in 2012.

No question, the weaker Obama looks, the more likely Christie is to run. Christie isn’t going to run because he’s the Republicans’ best shot. Running for president is, literally, deadly serious business. It’s not volunteering for charity work. Good candidates with alternative political futures take on this massive, life-disrupting battle when they calculate they can win. Christie isn’t going to run unless he sees a clear path to the White House. Obama’s declining popularity makes a Christie run more possible.

And we are seeing signs Christie could take the first step, winning the nomination. Stephen Hayes of the Weekly Standard reported that when a group of heavyweight Iowa Republican fundraisers flew to New Jersey to urge Chris Christie to run for president, they came away with the impression that while Christie didn’t say he’d run, he didn’t rule it out as emphatically as he had before.

And here’s a report from the New York Post’s Josh Margolin:
Republican leaders from Henry Kissinger to House Speaker John Boehner have encouraged [Christie] to run. And well-heeled GOP donors in New York have been spreading word that Christie has privately shown a willingness to consider it. They say Christie might enter the race if he can get part of his pension-reform agenda passed in Trenton and score a GOP takeover of one of the Democratic-controlled houses of the state Legislature in November.
Well, the latest news out of New Jersey has Christie pointing to a June 30th wrap-up of the current legislature, with Democratic Senate president Stephen Sweeney on board to pass a state pension and health benefits reform package. Sweeney needs to deliver 4 other Democrat votes to the Senate Republican bloc, and now the Democratic-controlled State Assembly has countered on health benefits with a compromise proposal that would lock in Christie's benefits reform for only three years. If Christie accepts the compromise, he may have cleared a path to run for president.

Margolin wrote that Christie spokesman Mike DuHaime rejected his story that Christie might run, saying, "This is just wishful thinking . . . He is not running, and he is not cracking the door open even a little bit." But DuHaime couldn’t resist commenting on reports the Obama camp is already doing opposition research on Christie. DuHaime called the reports "an acknowledgment that Christie is a bold leader successfully taking on big challenges as governor. A leader who cuts spending and takes on the special interests tends to earn notice at the highest levels."

Our Christie watch continues.

Wednesday, June 08, 2011

Obama’s Darker Future

President Obama deserves much credit for killing Osama bin Laden, “America’s Most Wanted.” Does that additionally make his re-election likely? After 40 days, maybe not so much. The above graph shows the “RealClearPolitics” average of Obama’s approval rating since April 18. He's still ahead of where he was April 30, the day before Osama died, but well down from the peak of the “bin Laden bounce,” which by now has mostly dissipated.

Democrats have thought that in addition to the “bin Laden bounce,” Obama will benefit from the weakness of his Republican opposition. Republicans believe the election will be about Obama’s record. Former Reagan speechwriter Peggy Noonan writes that in the face of our looming debt crisis, Obama would have his way politically if he agrees to real budget cuts. Says Noonan,
He could claim to have been conciliatory, looking out for the national interest. The left won't like it, but the center will. And he will have shown he can work closely and in good faith with Republicans, who control the House.
Obama the winner. But Noonan doesn’t think it will happen.
He really dislikes the other side, and can't fake it. This is peculiar in a politician, the not faking it. But he doesn't bother to show warmth and high regard. And so appeals to patriotism -- "Come on guys, we have to save this thing" -- ring hollow from him. In this he is the un-Clinton. Bill Clinton understood why conservatives think what they think because he was raised in the South. He was surrounded by them, and he wasn't by nature an ideologue.

Obama is different. . .not a warm-blooded animal but a cool, chill character, a fish who sits deep in the tank and stares, stilly, at the other fish. He doesn't know how to confuse his foes with "outreach," with phone calls, jokes, affection. . . And because he can't confuse them or reach them they more readily coalesce around their own explanation of him: socialist, destroyer.

Clare Booth Luce [observed] that all presidents have a sentence: "He fought to hold the union together and end slavery." "He brought Americans through economic collapse and a world war." You didn't have to be told it was Lincoln, or FDR.

Republicans now think they know [Obama’s sentence]: He made it worse.
“He made it worse.”

Monday, June 06, 2011

U.S. Sick Economy: Chinese to the Rescue?

Gordon G. Chang, writing in Forbes, provides confirming evidence that China is moving in an unhealthy, statist direction and driving out its best entrepreneurs. We must, however, keep in mind that Chang, author of 2001’s The Coming Collapse of China, is an established Cassandra on the country’s future.

In his article, Chang makes these points:
➢ almost 60% of China’s “high net worth individuals” . . . possessing more than $1.5 million in investable assets, are either considering emigration through investment programs or are completing the emigration process. . .27% of those with more than $15 million in investable assets have already emigrated and 47% of them are thinking about leaving the Motherland.

➢ There has, in the last five years, been a 73% increase in Chinese investment immigrants to the United States. [Canada is raising its] minimum investment requirements for investment-immigrant candidates due to the sheer size of the tide of Chinese cash. . . In an “unprecedented” surge of business for brokerages in [Vancouver over Chinese New Year’s], Chinese buyers snapped up homes, townhouses, and condominiums as sales skyrocketed 70% over the preceding month.

➢ U.S. Treasury . . . monitoring illegal money flows has, since the beginning of last summer, detected a surge in hidden cash transfers out of China. The country leads the world in illicit fund transfers. . . China’s outbound flows from 2000 to 2008 was a staggering $2.18 trillion.

➢ The flood of “hot money” . . .picked up in the last quarter of 2008. . . when the . . . government announced its stimulus plan, [a] partial renationalization of the economy. Then, Premier Wen Jiabao started pouring state cash into the state sector and state financial institutions began diverting credit to state-sponsored infrastructure. As a result . . . 95% of China’s growth in 2009 was attributable to investment, [with] almost all . . . from the state.

➢ private entrepreneurs who, although shut out of many portions of the economy by state enterprises, rode the resulting asset bubbles to even greater wealth. The number of the country’s high net worth individuals . . . will reach 585,000 this year, almost double the figure for 2008.

➢ [Officials not happy.] “We have been working hard to develop the economy in the past 30 years, but now these elite members of society are fleeing with the majority of the wealth,” said economic analyst Zhong Dajun [in a] Communist Party-run newspaper. “The loss may be even higher than all the foreign investment we have attracted. It is as if, when the time of harvest comes, we find the fruits have all gone to others’ baskets.”

➢ Beijing, since 2008, has been [abusing] private entrepreneurs . . . even more than usual, so it is natural they are now trying to protect themselves . . . the situation is bound to get even worse [when] Xi Jinping becomes . . .Party general secretary . . . Xi will undoubtedly bring his fellow “princelings” into positions of political power [who] will surely use their new political clout to consolidate their grip on the economy. This means. . . owners of private domestic enterprises, will have even fewer opportunities than they do today.
Last year, our progressive friends were arguing the China model, with its strong, authoritarian lines of control in contrast to our checks-and-balances democracy, was going to do us in. Now, it seems that if we can straighten out U.S. immigration policy to compete with Canada and Australia in attracting Chinese entrepreneurs, we can have the best of China helping build our economy.

Isn’t it ironic?

Friday, June 03, 2011

U.S. economy: please stop the bad news!

"Genuine government stimulus comes from low taxes, stable prices, reduced regulation and low debt. Our economic policymakers have scrupulously avoided such remedies."

--Michael Pento, senior economist at Euro Pacific Capital

Lack of job creation continues to be a big knock against Obama’s management of the economy. Only 54,000 new jobs in May, with the unemployment rate back up to 9.1%. It takes 167,000 jobs a month to keep pace with population growth, and 157,500 jobs a month plus an unemployment rate lowered to 7.8% (see chart below) for Obama just to get jobs back to where they were when he took office.

Christine Owens, executive director at the National Employment Labor Project, tells us that with 1.8 million jobs created since 2010 and nearly 8.7 million jobs lost during the recession, there is still a deficit of 6.9 million jobs, not counting the 4.1 million needed to keep up with population growth. That’s a true job deficit of 11 million!

The month’s economic bad news also involves housing. The widely watched Case-Shiller Home Price index fell by 4.2% in the first quarter, a 5.1% drop year-to-year. This lowered the overall price level to where it was in 2002, and means US home values have now fallen by a third from their 2006 peak—a bigger housing price drop than even during the Great Depression!

One big reason housing prices keep falling—our country isn’t creating the jobs that build demand for new homes.

The New York Times’ Nate Silver has an article debunking any relationship between the unemployment rate and Obama’s re-election chances. I find the article unpersuasive; a statistical smokescreen blotting out the real world. People understand the unemployment rate the same way they understand that Osama bin Laden is dead, not alive. The unemployment rate tells people whether or not Obama’s doing his job.

Wednesday, June 01, 2011

Democrats Fear Losing Power, Respond with Politics of Fear

Republicans and Democrats — rather than coming together and generating the political authority needed for us to take our castor oil to compensate for our binge — are just demonizing one another. As the Israeli political theorist Yaron Ezrahi points out, governance is based on authority “that is generated in one of two ways — by trust or by fear. Both of those sources of authority are disintegrating right now.” . . the Western democracies governed by generating trust, but their societies today are more splintered than ever.

--Thomas Friedman, New York Times

Another look at how fear is gripping today's elite.

Friedman may be sincerely pointing fingers at both Republicans and Democrats when he talks about the need to take our “caster oil.” More likely, he ritually chides Republicans because his audience is mostly Democrat, and he wants his party to listen, not feel lectured to. To review, we have two parties, only one of which is serious about the need to cut the deficit, and to take on the entitlement spending that’s at the heart of our future debt problems. And Friedman and other thinking Democrats know it.

Also, by ignoring the need for entitlement reform and turning to “Mediscare” tactics to win in 2012, Democrats seem to be making clear how much they fear loss of power. And as Friedman suggests, having lost the people’s trust, the only tactic they have to hang onto power is fear itself—scaring voters away from Republicans.

Look at these facts:

1. When Democrats had all the power, they favored a bipartisan effort to reform entitlements.

Here’s Obama in January 2010:
“We’re not going to be able to do anything about any of these entitlements if what we do is characterize whatever proposals are put out there as, ‘Well, you know, that’s — the other party’s being irresponsible. The other party is trying to hurt our senior citizens. That the other party is doing X, Y, Z.”
2. Once Republicans earned a share of power, they initiated an effort to reform Medicare, the entitlement program that goes broke in 13 years.

Here’s House Budget Chair Paul Ryan (R-WI) on the Republican effort:
“You cannot ever fully balance the budget and pay off the debt unless you address the drivers of the debt. The drivers of our debt are our health care entitlements. We need a leader who is willing to address this. . .

“Let’s be clear about what we’re proposing . . . We’re saying no changes for Medicare for people at or above the age of 55. In order to keep the promise to current seniors who have already retired and organized their lives around this program, you have to reform it for the next generation. [Our reform] for the next generation – in keeping with Bill Clinton’s bipartisan commission to reform Medicare – is an idea that’s been around for a long time called premium support: guaranteed coverage options for Medicare, where the government subsidizes the poor and the sick a whole lot more than the wealthy, and people get to choose. We’re saying: do not affect current seniors, give future seniors the ability to deny business to inefficient providers.”
3. The Democrats’ comeback? 100% “Mediscare” (see video here).