Overpaid Government Workers

Signs mount that America is headed for a radical overhall. Here’s another, from the libertarian journal Reason--proof the kleptocracy thrives at our expense:

➢ The most recent Bureau of Labor Statistics report on employee compensation revealed that, as of March 2010, state and local government workers earn, on average, nearly 44% more than do private-sector workers, including 34% higher salaries and wages and over 66% greater benefits.

➢ At the federal level, a recent USA Today analysis, based on Bureau of Economic Analysis data, found that government employees’ average compensation has grown to more than double that of private-sector workers. Federal workers earned average pay and benefits of more than $123,000 in 2009, compared to a little over $61,000 in total compensation for private workers. Since 2000, federal worker compensation has increased 36.9% after adjusting for inflation while private-sector workers saw only an 8.8% increase.

Cocoon

“the country has sorted itself into two distinct, roughly equally sized groups. . . We battle over a whole host of economic and cultural issues that did not divide us in the past.”


--Jay Cost, “RealClearPolitics,” August 25, 2010

Cost is asserting what I have argued for four years. The country’s pretty evenly divided. Liberals are a minority, but Democrats reach beyond liberalism to unmarried women, blacks, Hispanics, government workers, and others.

Yet the liberal-Democratic elite move around in their own cocoon. They are like “The Truman Show,” where Truman Burbank (Jim Carrey) lived oblivious to the fact that he was an act billions observed daily on TV. Here’s why:

1. The liberal elite is monocultural. The statement is counter-intuitive. Liberals are worldly, travel when possible, and enjoy mixing the best of home and abroad. But liberals do so in a surprisingly uniform way, taking their cues from the New York Times and the rest of the Times-influenced media. They talk to each other and bounce ideas off each other, using Times-inspired talking points. They have little use for non-elite America, don’t take it seriously, and are largely ignorant of life that goes on there, including how to make a business grow.

2. Those living outside liberal monoculturalism enjoy two or more cultures—the liberal host culture and their own. One can’t think or talk in America without knowing the American elite’s language. We may not speak or write it as well as the elite, but it is our native language too. We learn it in school. We function, however, in an America foreign to the New York Times, ignored by it, or ridiculed by it, one based on traditional, pre-Roosevelt America, when religious values were important. It's the America of Codevilla's "country class." As people who know two or more languages have advantages over monolingualists, so do those who understand two or more American cultures.

3. Outsiders enjoying multiculturalism believe liberals live in a restricted cocoon. It’s hard for those who live in two or more cultures to refrain from viewing monoculturalists the way we watch animals in a zoo, as Truman Burbanks. We know them; they don’t know us; they suffer for their relative situation. For liberals, the battle may be uneven. As Sun Tzu (The Art of War) says, “Know thy self, know thy enemy. A thousand battles, a thousand victories.”

Islamophobia’s Teachable Moment?

Objectively, we know the fury surrounding the planned Ground Zero mosque has ballooned all out of proportion to the attention properly due a single building renovation. Our nation faces truly serious challenges, of which this isn't one.

Yet the controversy is a big deal at two levels. First, it is the starkest example of our president, once thought to be a political master, shooting himself it the foot. Americans are flabbergasted and outraged that our very own leader would so misunderstand why New Yorkers and others affected by 9.11 cannot accept Imam Fiesal Abdul Rauf’s project, given Rauf’s 2001 statement that U.S. actions led to 9.11, his 2005 statement that “the United States has more Muslim blood on its hands than Al Qaeda has on its hands of innocent non-Muslims," and his public failure to disassociate from Hamas or Iran.

Second, it’s a crystal clear look at the self-contained cocoon created for themselves by those who teach: the academy, the media, arts, entertainment, non-profits, sympathetic bloggers, and their supporters in government and elsewhere in the liberal elite. Inside the cocoon, they relive again and again their civil rights triumph, where blacks and some whites in the South exposed themselves to real risk as most of the rest applauded from afar. They honor a time when thinking triumphed over prejudice, good overcame evil, and when in those unforgettable Vietnam years, we learned that our most important struggle should be wiping out prejudice at home.

Like generals who know only how to win the last war, Democrats are constantly refighting the civil rights war—for women, for Hispanics and other non-whites, for (they believe, others beg to differ) the elderly and children, recently for gays, lesbians, and bisexuals, and now for Muslims. Whoever they fight for, the enemy remains the same: less-educated bigots and racists represented by Republicans, white Southerners, and right-wing Christians. The elite's higher standing in society, which—they know—rests on the more advanced level of education they have achieved, depends upon a polity divided with the enlightened on top, and the ignorant below.

There are more ignorant than educated voters today, and that’s a problem. But over time, as with civil rights, as with the rise of women, this will change if the enlightened ones only keep the faith. College graduates will one day be the American majority. Until then, as the highly-educated courts have taught us, it’s not about majority rule, it’s about being right.

The elite stand with pride inside their cocoon alongside an anti-American imam. They stand against ordinary Americans who truly do believe in “liberty and justice for all,” as long as "all" includes those hurt by and resisting Islamic terror.

Outside the cocoon, it's such a different world. As Franklin Roosevelt once knew, it's really about jobs, and who can create them. Capitalism teaches that business people create jobs--sellers finding ready buyers. Helping business create jobs is teachable moment #1.

Fighting Back: The Country Class

Concluding our digest of Angelo M. Codevilla’s important essay. Codevilla, who has little use for establishment Republicans, has decided to define the “rest of us,” organized or not, as “the country class”:

America's country class . . . shares above all the desire to be rid of rulers it regards inept and haughty. It defines itself practically in terms of reflexive reaction against the rulers' defining ideas and proclivities -- e.g., ever higher taxes and expanding government, subsidizing political favorites, social engineering. . . Many want to restore a way of life largely superseded. Demographically, the country class is the other side of the ruling class's coin: its most distinguishing characteristics are marriage, children, and religious practice. . . it is different because of its non-orientation to government and its members' yearning to rule themselves rather than be ruled by others.

Nothing has set the country class apart. . .so much as the ruling class's insistence that people other than themselves are intellectually and hence otherwise humanly inferior. Persons who were brought up to believe themselves as worthy as anyone, who manage their own lives to their own satisfaction. . . resent politicians . . . who say that the issues of modern life are too complex for any but themselves.

The country class actually believes that America's ways are superior to the rest of the world's, and regards most of mankind as less free, less prosperous, and less virtuous. . . This class . . . takes part in the U.S. armed forces body and soul: nearly all the enlisted, non-commissioned officers and officers under flag rank belong to this class in every measurable way. Few vote for the Democratic Party.

Parents of young children and young women anxious about marriage worry that cultural directives from on high are dispelling their dreams. The faithful to God sense persecution. All resent higher taxes and loss of freedom. More and more realize that their own agenda's advancement requires concerting resistance to the ruling class across the board.

The fact that public employees are almost always paid more and have more generous benefits than the private sector people whose taxes support them only sharpened the sense among many in the country class that they now work for public employees rather than the other way around. But how to reverse the roles?

Let members of the country class object to anything the ruling class says or does, and likely as not their objection will be characterized as "religious," that is to say irrational, that is to say not to be considered on a par with the "science" of which the ruling class is the sole legitimate interpreter. Because aggressive, intolerant secularism is the moral and intellectual basis of the ruling class's claim to rule, resistance to that rule. . . must deal with secularism's intellectual and moral core.

One side or the other will prevail. The clash is as sure and momentous as its outcome is unpredictable. In this clash, the ruling class holds most of the cards: because it has established itself as the fount of authority, its primacy is based on habits of deference. [T]he country class wholly lacks organization. By contrast, the ruling class holds strong defensive positions and is well represented by the Democratic Party. But a [Democratic] two to one numerical disadvantage augurs defeat, while victory would leave it in control of a people whose confidence it cannot regain.

[Since] the Republican Party does not live to represent the country class [--] to do so, it would have to become principles-based [--] for the foreseeable future, American politics will consist of confrontation between what we might call the Country Party and the ruling class. The Democratic Party having transformed itself into a unit with near-European discipline, challenging it would seem to require empowering a rival party at least as disciplined. Yet this logic. . . has always been foreign to America . . . Any country party would have to be wise and skillful indeed not to become the Democrats' mirror image.

a serious party would have to attack the ruling class's fundamental claims to its superior intellect and morality in ways that dispirit the target and hearten one's own. The Democrats having set the rules of modern politics, opponents who want electoral success are obliged to follow them.

Ruling Class Crushes Economy, Puts Down Religion, Elevates Science

Continuing the digest of Angelo M. Codevilla’s important essay:

While the economic value of anything depends on sellers and buyers agreeing on that value as civil equals in the absence of force, modern government is about . . . tampering with civil equality. By endowing some in society with power to force others to sell cheaper than they would, and forcing others yet to buy at higher prices[,] modern government makes valuable some things that are not, and devalues others that are. Thus if you are not among the favored guests at the table where officials make detailed lists of who is to receive what at whose expense, you are on the menu.

picking economic winners and losers redirects the American people's energies to tasks that the political class deems more worthy than what Americans choose for themselves. . . ever-greater taxes and intrusive regulations are the main wrenches by which the American people can be improved (and, yes, by which the ruling class feeds and grows).

To the extent party leaders do not have to worry about voters, they can choose privileged interlocutors, representing those in society whom they find most amenable. In America ever more since the 1930s[,] government has designated certain individuals, companies, and organizations within each of society's sectors as (junior) partners in elaborating laws and administrative rules for those sectors. The government empowers the persons it has chosen over those not chosen, deems them the sector's true representatives, and rewards them. They become part of the ruling class. . . a doctor, a building contractor, a janitor, or a schoolteacher counts in today's America insofar as he is part of the hierarchy of a sector organization affiliated with the ruling class. Less and less do such persons count as voters.

legal words that say you are in the right avail you less in today's America than being on the right side of the persons who decide what they want those words to mean. As the discretionary powers of officeholders and of their informal entourages have grown, the importance of policy and of law itself is declining, citizenship is becoming vestigial, and the American people become ever more dependent.

The ruling class is keener to reform the American people's family and spiritual lives than their economic and civic ones. In no other areas is the ruling class's self-definition so definite, its contempt for opposition so patent, its Kulturkampf so open. It believes that the Christian family (and the Orthodox Jewish one too) is rooted in and perpetuates the ignorance commonly called religion, divisive social prejudices, and repressive gender roles, that it is the greatest barrier to human progress because it looks to its very particular interest -- often defined as mere coherence against outsiders who most often know better. Thus the family prevents its members from playing their proper roles in social reform. Worst of all, it reproduces itself.

Since marriage is the family's fertile seed, government at all levels, along with "mainstream" academics and media, have waged war on it. They legislate, regulate, and exhort in support not of "the family" -- meaning married parents raising children -- but rather of "families," meaning mostly households based on something other than marriage. . . rates of marriage in America have decreased as out-of-wedlock births have increased. The biggest demographic consequence has been that 20% of all households are women alone or with children, in which case they have about a 40% chance of living in poverty. Since unmarried mothers often are or expect to be clients of government services, it is not surprising that they are among the Democratic Party's most faithful voters.

dismissal of the American people's intellectual, spiritual, and moral substance is the very heart of what our ruling class is about. Its . . .claim to the right to decide for others is precisely that it . . .operates by standards beyond others' comprehension. While the unenlightened ones believe that man is created in the image and likeness of God and that we are subject to His and to His nature's laws, the enlightened ones know that we are products of evolution, driven by chance, the environment, and the will to primacy.

science is "science" only in the "right" hands. Consensus among the right people is the only standard of truth. Facts and logic matter only insofar as proper authority acknowledges them. That is why the ruling class is united and adamant about nothing so much as its right to pronounce definitive, "scientific" judgment on whatever it chooses. When the government declares, and its associated press echoes that "scientists say" this or that, ordinary people -- or for that matter scientists who "don't say," or are not part of the ruling class -- lose any right to see the information that went into what "scientists say."

By identifying science and reason with themselves, our rulers delegitimize opposition. Though they cannot prevent Americans from worshiping God, they can make it as socially disabling as smoking -- to be done furtively and with a bad social conscience. Though they cannot make Americans wish they were Europeans, they continue to press upon this nation of refugees from the rest of the world the notion that Americans ought to live by "world standards."

Ruling Class Power

This blog gives extensive attention to elite rule over the rest of us via the Democratic party (examples here and here). Similar views receive widespread coverage elsewhere, though rarely in the depth Boston University’s Angelo M. Codevilla provided in his 11,000-plus word essay on the ruling class. I’ve condensed Codevilla’s essay into three blog posts, beginning with his thoughts on ruling class power:

Today's ruling class. . . was formed by an educational system that exposed them to the same ideas and gave them remarkably uniform guidance. . . a social canon of judgments about good and evil, complete with secular sacred history, sins (against minorities and the environment), and saints. Using the right words and avoiding the wrong ones when referring to such matters . . . serves as a badge of identity. Regardless of what business or profession they are in, their road up included government channels and government money because, as government has grown, its boundary with the rest of American life has become indistinct.

while most Americans pray to [God], our ruling class prays to itself as "saviors of the planet" and improvers of humanity. Our classes' clash is over "whose country" America is, over what way of life will prevail, over who is to defer to whom about what. The gravity of such divisions points us, as it did Lincoln, to Mark's Gospel: "if a house be divided against itself, that house cannot stand."

the ruling class has a party, the Democrats. . . . They vote Democrat . . . consistently. . . draw their money and orientation from the same sources as the millions of teachers, consultants, and government employees in the middle ranks who aspire to be the [ruling class]. . . few speak well of the ruling class. [It has] presided over a declining economy and mushrooming debt, made life more expensive, raised taxes, and talked down to the American people. Americans' conviction that the ruling class is as hostile as it is incompetent has solidified.

Like a fraternity, [the ruling] class requires above all comity -- being in with the right people, giving the required signs that one is on the right side, and joining in despising the Outs. Once an official or professional shows that he shares the manners, the tastes, the interests of the class, gives lip service to its ideals and shibboleths, and is willing to accommodate the interests of its senior members, he can move profitably among our establishment's parts.

membership in the ruling class [doesn’t] depend on high academic achievement. [France is] an academic meritocracy . . . where elected officials have little power, a vast bureaucracy explicitly controls details from how babies are raised to how to make cheese, and people get into and advance in that bureaucracy strictly by competitive exams. . .France's ruling class are bright people -- certifiably. . .while getting into the Ecole Nationale d'Administration . . . requires outperforming others in blindly graded exams, and graduating . . . requires passing exams that many fail, getting into America's "top schools" is less a matter of passing exams than of showing up with acceptable grades and an attractive social profile.

[The] ruling class[‘s] first tenet is that "we" are the best and brightest while the rest of Americans are retrograde, racist, and dysfunctional unless properly constrained. How did this replace the Founding generation's paradigm that "all men are created equal"? The notion of human equality was always a hard sell, because experience teaches us that we are so unequal in so many ways, and because making one's self superior is so tempting . . . But human equality made sense to our Founding generation because they believed that all men are made in the image and likeness of God, [and] because they were yearning for equal treatment under British law. . .

[After Darwin], the educated class's religious fervor turned to social reform: they were sure that because man is a mere part of evolutionary nature, man could be improved, and that they, the most highly evolved of all, were the improvers. Thus began the Progressive Era. The Progressives. . . found it fulfilling to attribute the failure of their schemes to the American people's backwardness, to something deeply wrong with America. The American people had failed them because democracy in its American form perpetuated the worst in humanity. Thus Progressives began to look down on the masses, to look on themselves as the vanguard, and to look abroad for examples to emulate.

Franklin Roosevelt . . . described America's problems in technocratic terms. America's problems would be fixed by a "brain trust" (picked by him). His New Deal's solutions -- the alphabet-soup "independent" agencies that have run America ever since -- turned many Progressives into powerful bureaucrats and then into lobbyists.

Our ruling class's agenda is power for itself. While it stakes its claim through intellectual-moral pretense, it holds power [via] patronage and promises thereof. . . it is a "machine”. . . providing tangible rewards to its members. . . whatever else such parties might accomplish, they must feed the machine by transferring money or jobs or privileges -- civic as well as economic -- to the party's clients. . . Hence our ruling class's standard approach to any and all matters. . . is to increase the power of the government -- meaning of those who run it, meaning themselves. . .

Iran

"We do not worship Iran, we worship Allah. For patriotism is another name for paganism. I say let this land burn. I say let this land go up in smoke, provided Islam emerges triumphant in the rest of the world."

-- Ayatollah Ruhollah Khomeini (1980)

Khomeini, Khamenei. 1980, 2010. It's all much the same. What changes is Iran’s growing ability to carry out its threat. To Israel, George Will reports after visiting with Israeli Premier Binyamin Netanyahu, Iran constitutes the greatest threat to its existence since Israelis fought with mostly small arms against Arab tanks in 1948.

Iran’s threat stems from the Iranian revolutionary government’s take-over in 1979, its unflagging militancy since, its aggressive encouragement and arming of Hezbollah and Hamas starting in the early 1980s, the Hezbollah victory over the Israeli army in 2006, the present-day threat Hezbollah and its rockets on Israel’s northern border pose to the Jewish homeland today, Hamas’ emergence unfazed from Israel’s invasion of Gaza last year, with virtually the entire world condemning Israel’s action (condemnation repeated when Israeli commandos repulsed a Muslim-supported effort to break Israel’s blockade of Gaza in May), and the current threat of Hamas rockets fired from Gaza into southern Israel.

Then there’s Iran with the bomb—perhaps within two short years. Khamenei calls Israel the "enemy of God." Iran's former president, Ali Rafsanjani, considered a "moderate" by many, calls Israel a "one-bomb country," meaning, fairly accurately, one bomb, and Israel is no more.

The only threat comparable to a nuclear Iran is an already-nuclear Pakistan under militant Islamic control. Our foreign policy must continue to be fixed on Iran, Afghanistan, and Pakistan.

Tossing the Lemon; Finding A Better Way

America’s ruling class has failed us. Its caché is the ability to make things work by putting the meritocracy (itself) in charge. But the elite’s bright, shiny, large, well-oiled, pricy machine, it turns out, can’t deliver the horsepower our economy needs. It’s a clunker, and America seems ready to junk it.

We need to replace the big government model with policies that free business to do what it does best—invest, create jobs, generate wealth. While the right way forward seems simple, obvious, easily understood, we are now discovering intellectually refined justifications for the common-sense transformation America needs.

One find comes from Michael Barone: an article by economist Arnold Kling that advocates treating labor as capital. In Barone’s words:

Kling argues that the collapse of the housing market and the financial crisis disrupted what had been "a sustainable pattern of specialization and trade" and that we need to let the market economy develop a new one. Instead [of] propping up the old order -- holding up housing prices and the mortgage market, keeping the Detroit auto companies in place, maintaining the lush standard of living of public employee union members [-- we need a] trial-and-error process of private investment that creates new jobs and patterns of production that will be sustainable.

Kling says job creation today involves investing in labor as if labor is capital. Spending for the sake of spending doesn’t work anymore. It’s all about investment:

we have lost the [old] connection between spending and employment. Firms can vary their output with little or no variation in employment. This explains how we can have a “jobless recovery,” meaning a large percentage increase in output without a comparable percentage increase in employment. For firms in today's economy, labor represents an investment. Firms hire workers in order to develop capabilities that will eventually produce output more efficiently. The return on an investment in workers may take . . . longer to realize [than] return on investment [on] a machine [and] may be at least as uncertain.

For the sake of American workers, Kling says, we must start investing now:

The market needs to undertake a recalculation in order to deploy workers in a new, sustainable pattern of specialization and trade. The process involves . . .trial and error. Firms need to be launched by entrepreneurs, who will make risky investments in employees. The failure rate will be high, but eventually the successes will have a cumulative effect that brings about more economic activity.

How much better this new economy sounds. It works when entrepreneurs invest in labor. Government moves its old “spend, spend, spend” model out of the way.

What Price Victory?

"On June 30, 2009, I and eight other historians were invited to a dinner with President Obama. . . The only thing achieved has been the silencing of the main point the dinner guests tried to make—pursuit of war in Afghanistan would be for him what Vietnam was to Lyndon Johnson."

--Garry Wills, New York Review of Books, 7.27.10

Angelo M. Codevilla is professor emeritus of international relations at Boston University. He has written a long, detailed examination of the American elite’s grip on national power, and how we commoners can cope with it. I like much of what Codevilla has to say, and will expand on other parts of his article later.

For now, I must answer his attack on establishment Republicans for, paraphrasing George W. Bush's 2005 inaugural address, preaching that “America cannot be free until the whole world is free and hence that America must push . . . mankind to freedom.” Codevilla pronounces Bush’s exhortation “an extrapolation of the sentiments of America's Progressive class, first articulated by such as Princeton's Woodrow Wilson.”

Yet Codevilla thinks Bush is worse:

while the early Progressives expected the rest of the world to follow peacefully, today's ruling class makes decisions about war and peace at least as much forcibly to tinker with the innards of foreign bodies politic as to protect America.

Codevilla goes on to attack Obama along with Bush and the rest of the ruling class for committing

blood and treasure to long-term, twilight efforts to reform the world's Vietnams, Somalias, Iraqs, and Afghanistans, believing that changing hearts and minds is the prerequisite of peace and that it knows how to change them.

Gary Wills, elite/ruling class intellectual. Anti-war. Angelo Codevilla, anti-elitist conservative/libertarian. Anti-war. So what about those who believe America must counter Islamic extremist efforts to wipe us out? Where do we fit in?

The Iraq war ruined Bush’s presidency, even though he was right about the surge, and the people of Iraq—not to mention the rest of us—are far better off without Saddam Hussein. In Afghanistan, we are fighting the Taliban backed by al Qaeda in Pakistan, the people who destroyed the World Trade Center and want to finish the job. Codevilla thinks our efforts in Iraq and Afghanistan “have achieved nothing worthwhile at great cost in lives and treasure.”

So are we, as he and Wills believe we should, to give up before we win?

Here’s why we should: 1) war and democracy don’t go together. Europe learned the lesson in two world wars fought on its soil, Japan did in World War II. Wills, Codevilla, and most of the country think America learned the lesson in Vietnam, with its 58,000 deaths for no apparent benefit. No more war. 2) Leaders who ignore the lesson, Johnson in 1968, Bush and maybe Obama, are battered and beaten into submission. 3) Vietnam, now a free trading member of the global economy and growing in prosperity, is an advertisement for avoiding war, or for accepting defeat earlier.

Here’s why we shouldn’t give up the fight: 1) as Codevilla acknowledges, Americans know some wars are worth it; they just prefer “decisive military action or none.” Bush understood we fight to win. Obama may not, and his doubts complicate the Afghanistan mission. 2) there is a gigantic difference between Vietnam and Iraq/Afghanistan. We fight today with a professional army, and we do everything possible to minimize casualties. In our major wars (Revolutionary, War of 1812, Mexican, Civil, Spanish-American/
Philippine, World War I, World War II, Korea, Vietnam, War on Terror), American deaths in the War on Terror (Afghanistan + Iraq) are the lowest at 5,500, less than the 6,642 who died in the Spanish-American War + Philippine Insurrection, less than twice the number who died on 9.11, that single day (2,995). 3) Islamic extremists aren’t Vietnamese nationalists who fought a war of independence (a civil war to us) solely to liberate Vietnam. Islamic extremists have a broader objective that already brought them to U.S. territory, and if we don’t fight back, moderate Muslims and the entire West will lose along with us.

The high price of war demands we fight effectively, at the lowest possible human cost, to win.

D.C.’s Michelle Rhee Fires 241 Teachers

When D.C. Schools Chancellor Michelle Rhee signed a contract with the teachers union last April that boosted their salaries while allowing them to be fired under a new evaluation system only when lack of funds or low enrollment caused school closings that created excess teachers, I called the agreement a poor “compromise.” To me, it looked like Rhee had caved in order to help her protector, Mayor Adrian Fenty, in his tough re-election battle.

Here’s why I may have got it wrong. Rhee has just fired 241 teachers, 4% of the teacher total. Apparently, D.C. is closing schools, thus kicking in the contract provision I thought would go unused.

Rhee has also put another 737 teachers on notice they may go next year. Taken together, the total number of teachers potentially affected is 25% of D.C.’s 4000, a serious share of the workforce. Moreover, her contract allows Rhee to reward those at the top end of the evaluation process, an additional major step toward differentiating among good and bad teachers. Finally, Mayor Fenty, still locked in a tough battle for re-election, is totally behind Rhee’s actions, suggesting he thinks his efforts to improve D.C. education might work for him politically. If Fenty wins, the Rhee-Fenty combination may start to shake the unions’ nationwide grip on teacher firings.

That would be big news.

Dark before the dawn: History

In his seminal political science book Essence of Decision, Graham Allison dealt briefly (pp. 261-63) with a question America was asking itself in 1971, the year Allison published his work. The question: “Why do we keep fighting in Vietnam when we know we’ve lost?”

The real darkness before the dawn comes from continuing to accumulate losses past the point when the costs of prolonging a struggle outweigh the benefits. Dawn comes when the struggle ceases. It’s Kaprun, Austria (picture), where the “Band of Brothers,“ after their fight across northern Europe, finally settled once Germany surrendered—several months/years too late for millions of casualties.

Allison said people keep fighting past the logical surrender point because they don’t have organizations feeding them accurate information about the enemy’s strengths or their own weaknesses, they underestimate the strategic costs of continuing, and top leadership gains unfiltered access only to the most highly visible costs of struggling (organizations distort the rest). Also, since most organizations consider treasonous any serious look at surrender, the option gets short shrift.

Not only organizations get in the way. At the top, anybody with a career closely identified with the struggle rarely sees the costs of continuing outweighing the benefits. Other high level voices are discounted because they always opposed the struggle—their views don’t mark any tipping point. Change comes either when an internal political shift aids the opponents of continuing, or when the outsiders who are winning the struggle do something that alters the balance between those wanting to continue and those wanting to quit.

Famous unnecessarily dark periods include Vietnam in 1966-75, after McNamara first realized the U.S. could not win, most of World War I (1914-18), after Germany’s surprise sweep through neutral Belgium failed to knock out France, much of the Great Depression (1935-40), after Roosevelt turned away from the economy in mid-1935 to focus instead on the politics of re-election (Shlaes, p. 246), World War II after Germany failed to invade Britain but invaded the U.S.S.R., and Japan attacked the U.S. (1941-45), Southern resistance to integration after Jackie Robinson, Truman integrating the military, and Brown v. Board of Education made integration inevitable (1954-65), and Nixon hanging on for 17 months after Watergate burglar James McCord began talking to federal authorities.

Our current dark period began with the elections of Republican governors in Virginia and New Jersey last November, states Obama carried a year earlier. The defeats should have shown the Obama political team they needed to shift course, and start governing as leaders of a whole country, not just its liberal fifth. Month after month, we pay an economic cost for Obama’s unlearned lesson. Dark before the dawn.

Dark before the dawn: America

China is the most dynamic country in the world today. By itself, it is remaking the world map. Its heroes are hundreds of millions of hard-working people, released by economic freedom to better themselves and their families.

We fear darkness from China's leadership riding the tiger of a popular surge it barely controls. We fear some misbegotten effort to tame the tiger will turn out bad for the world, before China eventually reaches political freedom.

This blog has repeatedly come back to America’s own darkness before its dawn, the elite’s current rearguard fight to hang onto power by enlarging government control over our capitalist system. People who once won, such as our current elite, fight harder to hold onto what they have than do those yet to win.

The elite’s struggle to hang on is bound to fail, sooner or later. Listen to George Will:

We are not Europeans. We are not, in Orwell's phrase, a "state-broken people." We do not have a feudal background of subservience to the state. No, that is the project of the current administration - it can be boiled down to learned feudalism. It is a dependency agenda. . .The American people . . . have nothing to fear, right now, but an insufficiency of their fear itself. It is time for a wholesome fear of what people with a dependency agenda are trying to do. We have few allies. We don't have Hollywood, we don't have academia, and we don't have the mainstream media. But we have . . . arithmetic. The numbers do not add up, and cannot be made to do so.

And listen to Thomas Sowell:

How [is it] possible that transferring decisions from elites with more education, intellect, data and power to ordinary people [leads] consistently to demonstrably better results? One implication is that no one is smart enough to carry out social engineering, whether in the economy or in other areas where the results may not always be so easily quantifiable. We learn, not from our initial brilliance, but from trial and error adjustments to events as they unfold.

Science tells us that the human brain reaches its maximum potential in early adulthood. Why then are young adults so seldom capable of doing what people with more years of experience can do? Because experience trumps brilliance. Elites may have more brilliance, but those who make decisions for society as a whole cannot possibly have as much experience as the millions of people whose decisions they pre-empt. The education and intellects of the elites may lead them to have more sweeping presumptions, but that just makes them more dangerous to the freedom, as well as the well-being, of the people as a whole.

Sowell’s statement is simply the most brilliant I have seen about why the people win out in the end. Economic determinism by Adam Smith triumphs over that of Karl Marx.

Dark before the dawn: China

It is always darkest just before the Day dawneth.

-- Thomas Fuller (1650)

In the long run, China will be free, under the rule of law. How to get there; that’s what frightens us. The dark before the dawn.

Geremie R. Barmé, director of the Centre on China in the World at Australian National University, writes about the overseas Chinese. He says overseas Chinese are playing a crucial role in China's economic reform, especially helping integrate China into the global economy.

Figures supplied along with Barmé’s article tell us that, including Hong Kong (residents carry separate passports from the mainland’s), there are 66 million overseas Chinese. If they were a separate nation, they would be the world’s 20th largest country, bigger than France. But as overseas Chinese, they are more important than France, because of their impact on China, the world’s #1 country in population, and its #2 economy. The 55% of overseas Chinese from Taiwan, Hong Kong, Singapore, the U.S., Canada, Australia, and Britain, largely connected by at least two languages including English, are especially well-positioned to influence China’s future.

Still, Barmé has a warning:

To be Chinese [leads to an] expectation that you understand the overt rules as well as the unspoken codes of your native land. . . When things go well and there are opportunities to be grasped, the overseas Chinese, with their inside-track appreciation of the distinctive modus operandi in the People's Republic, ride high. When [things don’t], however, these intuitive insiders, the commercial compradors with local knowledge, are particularly vulnerable.

One overseas Chinese is Minxin Pei, Adjunct Senior Associate at the Carnegie Endowment for International Peace. Pei is, presumably like most overseas Chinese, hopeful China is progressing toward the freedoms enjoyed by Chinese abroad. He writes:

➢ [signs exist of a] broader political re-awakening in Chinese civil society

➢ migrant workers who have risked their jobs and personal safety [are] joining. . . strikes

➢ if . . . authorities fail to end the current labour unrest in foreign-invested firms, disgruntlement will likely spread to workers in . . . construction and mining, where working conditions are dangerous and pay extremely low

➢ [Chinese activists] focus on issues directly related to their economic interests, property rights and social justice. . . fighting off local governments’ attempts to build polluting factories, seize farmers’ land without compensation and evict urban residents from their homes

➢ criticism of government policy and performance in delivering public services and protecting social justice are routine in Chinese publications and on-line venues

➢ the information revolution—a direct result of economic modernization—has helped change values and reduced the costs of organizing collective action[, and] magnified the political impact of such moves

➢ the rapidity with which the latest labour unrest has spread would [be] inconceivable without . . . the Internet and cell phones

➢ rising physical mobility [gives] ordinary Chinese . . . opportunities to compare . . . conditions [in] diverse localities, [gaining] awareness of the political and social injustice [at home] and becom[ing] less tolerant of such injustices

➢ the Communist Party’s own populist rhetoric has . . . raised the people’s expectations, but meeting those expectations would be economically costly (more redistribution and social welfare) and politically risky (greater popular political participation)

➢ [it’s] harder for the government to continue . . . its post-Tiananmen strategy of promoting economic growth at all cost[, creating tensions leading] to greater disunity within the elites [with some] tempted to exploit rising populism for personal political advantage

Still, Pei concludes, “Most activities that challenge government authority are uncoordinated, disorganized and short-lived.”

Harvard Takes on Princeton

Niall Ferguson is a Harvard professor of economic and financial history who has a concurrent appointment to Harvard Business School. He’s engaged in an ongoing public debate with Paul Krugman, the Princeton Nobel Prize winner in economics, and America’s best-known advocate of spending our way to prosperity. Krugman’s views appear regularly in the New York Times. Here are Ferguson’s:

➢ the second world war. . . saw the US embark on fiscal expansions of the sort we have seen since 2007. So what we are witnessing today has less to do with the 1930s than with the 1940s: it is world war finance without the war. . .

➢ the differences are immense. First, the US financed its huge wartime deficits from domestic savings, via the sale of war bonds. Second, wartime economies were essentially closed, so there was no leakage of fiscal stimulus. Third, war economies worked at maximum capacity; all kinds of controls had to be imposed on the private sector to prevent inflation.

➢ Today’s war-like deficits are being run at a time when the US is heavily reliant on foreign lenders, not least its rising strategic rival China; at a time when economies are open, so American stimulus can end up benefiting Chinese exporters; and at a time when there is much under-utilised capacity, so that deflation is a bigger threat than inflation.

➢ Are there precedents for such a combination? Certainly. . .Argentina [and] Venezuela used to experiment with large peace-time deficits to see if there were ways of avoiding hard choices. [But] either the foreign lenders got fleeced through default, or the domestic lenders got fleeced through inflation.

➢ [By 1981, Britain] had discovered the hard way that deficits could not save [it]. With double-digit inflation and rising unemployment, drastic remedies were called for. [It took] “regime-change” [to] bring stabilisation, because only that would suffice to alter inflationary expectations.

➢ People are nervous of world war-sized deficits when there isn’t a war to justify them. According to a recent poll. . . 45% of Americans “think it likely that their government will be unable to meet its financial commitments within 10 years”.

➢ The remedy for such fears must be the kind of policy regime-change . . . Thatcher and Reagan . . . implemented. Then, as today, the choice [is] between policies that boost private-sector confidence and those that kill it.

A Democrat Takes on Unions

Mickey Kaus lost the California Democratic Senate primary to Barbara Boxer. He finished 3rd with 5% of the vote. He is a known contrarian who ran to give his views wider publicity. But he is a serious commentator known for his “Kausfiles,” one of the first-ever blogs and published until recently in “Slate.”

Kaus has problems with unions:

unions have . . . outlived [their] usefulness. What unions do is give workers democratically the right to choose a bargaining representative who’s then their exclusive representative. That’s the whole key to unionism. What are going to be the first demands of an honest democratic workforce? They’re going to demand you can’t fire me without notice and a hearing because we don’t want arbitrary firings. And when people gather in a group, they say we don’t make invidious distinctions by merit, we want promotion by seniority and layoff by seniority. Two perfectly reasonable things.

They happen to be terrible for an organization that wants to succeed because the due process hearings for firings inevitably become cumbersome and you basically give up firing people, and promotion by seniority means you only have to do well enough not to get fired and you’ll advance. There’s no incentive to doing really well. . .So, right off the bat, unions do not contribute to productivity. The question is, what all do they do that’s so good that compensates for this effect? I don’t see it anymore.

Public employees is a much worse situation. If a private sector union asks for too much and the company gives it to them, the company will disappear, as half of General Motors disappeared.

That incentive or disincentive doesn’t have impact in the public sector. All the union has to do is get some politician to vote a tax increase to pay the increased salary, and boom—they’re back in business. That’s what happened year after year and now it’s all coming to a head because cities and towns and states all across America are starting to go bankrupt under the weight of these generations of wage increases and pension increases that unions have won for themselves.

Public employees didn’t used to be able to organize. They had civil service protections. That was enough. It was only starting in the last quarter of the 20th century that politicians gave them the right to organize. . .

Pretty much everybody hates the teachers unions now. People who have kids in the public schools, people who are paying through the noses, $20,000 a year to get out of the public schools, send their kids to private schools, hate the teachers unions.

The White Middle Class Vote

"white middle- and working-class voters who supported Hillary — and former President Bill — Clinton. . ., according to recent polls, are increasingly alienated from the Obama administration. Reasons include slow economic growth, high unemployment among blue- and white-collar workers and a persistent credit crunch for small businesses. . .About two in five Americans report household incomes between $35,000 and $100,000 a year. Right now, almost [60% of them] are deeply worried about their financial situation"

--Joel Kotkin, “Politico”

"the Democrats' 'middle-class problem'. . . means that there has been a spectacular collapse of support for the administration among the core blue-collar voters who should constitute its base. . . Americans who have risen from poverty to become qualified tradesmen or entrepreneurs generally believe that they have a right to put what wealth they produce back into their own businesses, rather than trusting governments to spread it around. . .

"startling is the growth in America of . . . an electoral alliance of the educated, self-consciously 'enlightened' class with the poor and deprived. America, in other words, has discovered bourgeois guilt [and] embraced noblesse oblige. Now. . . this sentiment is taking on precisely the pseudo-aristocratic tone of disdain for the aspiring, struggling middle class that is such a familiar part of the British scene."

--Janet Daley, Daily Telegraph (U.K.)

"neither party has made stable progress against the most intractable problems of our time -- particularly the stagnation in wages for average families. . . [L]ong-term . . ., Democrats have an edge because the voters most favorable to them (minorities and college-educated whites) are growing in the electorate, while the GOP's best group (blue-collar whites) is shrinking. But Democrats have not demonstrated that they can [hold] enough white voters to maintain a national majority."

--Ron Brownstein, National Journal

There seems general agreement Democrats are losing the white middle class. But “long term,” according to Brownstein, Democrats will prevail because minorities and “college-educated whites” are growing faster.

Yet who are these “college-educated whites”? Those in the suburbs of what Kotkin calls “aspirational cities”-- Atlanta, Phoenix, Charlotte, Las Vegas, and Florida along the Gulf Coast, are outpacing the suburban growth in Kotkin’s “Euro-American cities” like Boston, San Francisco, Minneapolis, Chicago, Philadelphia, and Seattle. Republicans stand to benefit from this geographical difference in growth, since “aspirational” means “red state”.

I agree Republicans must fight more effectively for the Hispanic vote--white, middle-class votes soon won't be enough. The key to winning Hispanic support, I feel, is effective immigration reform.

Man Behind the Green Curtain

Charles Krauthammer is warning conservatives to curb their cockiness. He sees Obama succeeding in his first two years the same way Reagan did in his:

Just as President Ronald Reagan cut taxes to starve the federal government and prevent massive growth in spending, Obama's wild spending -- and quarantining health-care costs from providing possible relief -- will necessitate huge tax increases. The net effect of 18 months of Obamaism will be to undo much of Reaganism. . . The next burst of ideological energy -- massive regulation of the energy economy, federalizing higher education and "comprehensive" immigration reform (i.e., amnesty) -- will require a second mandate, meaning reelection in 2012.

The Obama-Reagan parallel Krauthammer sees is one I suggested in October 2008 and again in February 2009.

But will the parallel continue? Krauthammer says Obama is looking forward to another burst of energy after his 2012 re-election, a victory Obama’s midterm election defeat will help bring about the same way Clinton won re-election in 1996 after Democrats’ 1994 midterm election defeat moved Clinton toward the center. Yet Clinton didn’t have a transformative second term. And neither did Reagan, for that matter.

But will Obama even win re-election, much less enjoy a post-election energy burst? Reagan swept to re-election in 1984 because the tax cuts he put in place, along with Fed Chair Paul Volcker’s successful fight against inflation, turbocharged domestic growth.

Obama, by contrast, seems to be frustrating business—and therefore economic growth—by running up the debt and starving credit markets, increasing regulations, and raising taxes (rescinding Bush tax cuts). Obama’s anticipated midterm election defeat will lead to a one-term presidency unless he (like Clinton before him) changes course. And if he changes course, he’s a different person than the president Krauthammer tells us to fear. Obama can change and win. He can stay the same and lose. He can’t—in contrast to growth-generating Reagan—stay the same and win.

As we believe, only business creates growth and jobs. Adam Smith taught that restraining government allows the free market to flourish. Government ever since has been on the defensive, forced to use crises of capitalism to win back control over the economy. When Roosevelt became president during the Great Depression crisis, he shifted the balance away from business and toward government.

Subsequently, the big government-big business-big labor “Blue Beast“ (“blue” as in “blue state,” i.e., Democrat) delivered economic progress from World War II until 1964-65—the last time until today liberal Democrats had total political control. In 1966, inflation-based economic troubles began that didn’t end until Reagan’s time.

The divided government that, except for Reagan’s first two years, has characterized most of the time since 1966 had two legs: Republicans, who were right about business driving growth and creating jobs, and Democrats, who were right about using government to help the environment, women and minorities, especially blacks. When Republicans failed to provide growth and jobs in 2008, the balance shifted sharply toward Democrats. Now Democrats and Obama face two huge problems:

1. They have failed to get the economy working through government intervention, making business-based growth once again the more viable option, and;

2. Their success in ending racial inequality, personified in Obama’s election, has pulled away the moral authority used to justify big government, thus exposing the ineffective, over-compensated, often corrupt, business-destroying operation behind government’s green curtain.

It’s the economy, stupid.

Politics of Fear (II)

Nat Hentoff, 85, is a strong civil libertarian who nevertheless holds idiosyncratic views. For one thing, he hates Obamacare. Hentoff’s all-out attack on Obama’s interim appointment of Dr. Donald Berwick (picture) to head the Health and Human Services' Centers for Medicare and Medicaid Services (CMS) suggests to me that Dr. Berwick could be the poster boy for a GOP election-year assault on Obamacare—the latest election villain, like Willie Horton (used against Dukakis in 1988) or Mark Foley (used against Republicans in 2006).

Dr. Berwick’s appointment is particularly controversial because:

➢ as Hentoff notes, Dr. Berwick is getting America’s most powerful health-care position: "CMS covers over 100 million Americans, has an annual $800 billion budget that is larger than the Defense Department's and is the second-largest insurance company in the world."

➢ Obama put him in office while Congress was in recess, giving Republicans no opportunity to question the doctor about his controversial views, and leaving the upcoming election the only available outlet for voter hostility.

Hentoff reminds us Obama told the American Medical Association any charge his health care plan would ration medical services is only a "fear tactic," and said flat out: "I don't believe that government can or should run health care." Yet Dr. Berwick is enthusiastically, openly candid in his support of Britain's socialistic National Health Service, having said: "I am romantic about National Health Service. I love it (because it is) 'generous, hopeful, confident, joyous and just.’”

Hentoff adds that Dr. Berwick’s:

"just" National Health Care Service decides which care can be too costly for the government to pay. Its real-time decider of life-or-death outcomes is the National Institute for Health and Clinical Excellence (NICE), [which] acts as a comparative-effectiveness tool for the National Health Care Service, comparing various treatments and determining whether the benefits the patients receives - SUCH AS PROLONGED LIFE - are cost-efficient for the government.

In the British Health Service Dr. Berwick loves, 750,000 patients are awaiting admission to NHS hospitals. The latest estimates suggest that for most specialties, only 30% to 50% of patients are treated within 18 weeks. For trauma and orthopedic patients, the figure is only 20%. Every year, 50,000 surgeries are canceled because patients become too sick on the waiting list to proceed. [And] Berwick tells it like it frighteningly [will be here]: "It's not a question of whether we will ration health care. It is whether we will ration with our eyes open."

Dr. Berwick: Obamacare’s “Dr. Death.” Using Dr. Berwick in the upcoming election, Republicans can fight fear with fear.

But should they? Maybe not, says Peter Wehner, writing in the conservative magazine, Commentary:

Politics . . . should be about debating issues to discern truth and understand, as best we can, the reality of things. It . . . should not be primarily about taking and keeping power. Power for its own sake — power detached from truth and empirical evidence — leads us down a very dangerous path.

Most of us who are active in politics have a tendency to overlook the flaws of our allies and accentuate the flaws of our opponents. That is a common human tendency [which] becomes entangled with the issue of loyalty.

In addition, very few of us are completely detached in our analysis or are free of biases and prejudices. . . [O]ne problem with political discourse in our age is that in the heat of debate, we too easily suspend a disinterested search for the truth and advance a more narrow, partisan aim. That leads to hypocrisy and double standards. . . We view the world through a tinted lens [when] we ought to . . . aspire to intellectual integrity and uphold as models those who embody it.

Peter Wehner, amen. Whatever Democrats do this election round, Republicans should avoid the politics of fear, instead elevating us with the politics of hope.

Politics of Fear (I)

Obama. . . regularly caricatures Republican views and ascribes to GOP lawmakers the most cynical of motives. “They figured, ‘If we just keep on saying no to everything, and nothing gets done, then somehow people will forget who got us into this mess in the first place, and we’ll get more votes in November.’ So their prescription for every challenge is pretty much the same — and I don’t think I’m exaggerating here —basically: cut taxes for the wealthy, cut rules for corporations, and cut working folks loose to fend for themselves. Basically, their attitude is: You’re on your own.”

--Keith Koffler, “Politico,” 7.7.10

I noted last January Democrats planned to make this fall’s election about Republican shortcomings; as one Democrat consultant put it, “kick the shit out of somebody.” So Obama not only blames Republicans for everything, but adds they are deliberately driving the country into the ditch to benefit the wealthy. Obama doesn’t bother to remind us Democrats have been running congress since January 2007.

As Republican Mark McKinnon writes in the “Daily Beast,” quoting Democratic strategist Paul Begala, “This is not a hope election, it’s a fear election. Since you don’t have your hero [Obama] on the ballot, make sure you have a villain.”

McKinnon goes on:

Begala recognizes there ain't much water left in the "hope" well, so the plan is to poison what's left. Begala understands that narrative architecture requires a villain. And every one of Obama’s transformative initiatives has had a designated villain—from greedy insurance companies, to big banks and fat cats on Wall Street.

The Democratic Congressional Campaign Committee is now digging for any dirt it can find on Republican candidates in close races to send to local reporters. And the Democratic National Committee has launched a Web site to solicit videos of Republican candidates’ gaffes filmed by partisan plants with cams in the crowds.

The Weekly Standard’s Fred Barnes, for one, worries that Democratic efforts to tag Republicans as the party of “no” might actually stick. He recommends Republicans stand behind Wisconsin Congressman Paul Ryan’s “Road Map,” his 87-page document that would give everyone a refundable tax credit to buy health insurance, allow individual investment accounts to be carved out of Social Security, reduce the six income tax rates to two (10% and 25%), and replace the corporate tax (35%) with a business consumption tax (8.5%). Ryan had the Congressional Budget Office (CBO) run the numbers in his plan. CBO concluded the plan would “make the Social Security and Medicare programs permanently solvent [and thereby] lift the growing debt burden on future generations.”

Barnes, however, points out why Republicans aren’t currently lining up behind Ryan’s “Road Map”: it would overhaul two popular programs, Social Security and Medicare, relying on individuals to make decisions now made by government.

Democrats are already attacking the “Road Map.” When Republicans in June gave Ryan a national platform to advance his program, House Speaker Pelosi’s press release pounced saying, “Republicans Make Key Advocate of Privatizing Social Security and Ending Medicare Their Spokesman on Budget.” When Democratic focus groups told swing voters Ryan would turn Medicare into “a voucher system .  .  . it has a massive impact,” according to Democratic strategist Robert Creamer, who added, “People like the Democratic program of Medicare.”

We would all like to be part of a nation where we debated, then moved to solve our two most intractable fiscal problems—Social Security and Medicare. Ryan is brave enough to get the ball rolling.

I’m afraid Republicans would be crazy to hand Democrats, using the “politics of fear,” an opportunity to demagogue either Medicare or Social Security. Better to live to fight another day.

Is the answer to Democrats’ “politics of fear” and their branding Republicans “the party of ‘no’” to respond in kind, not just talk about jobs, taxes, and deficits? No "hope"? Just meet fear with fear?

Possibly yes.

Piecemeal Immigration Reform

"the Washington establishment [is] so dismissive of modest legislation [because it] neither flatters the egos of wonks nor enhances the legacies (or electoral prospects) of Congressional members. And it ruins the strategy of holding common-sense reforms hostage to more controversial policy changes, a type of gamesmanship on which legislators rely."

-- Conor Friedersdof, Forbes, 7.08.10

Friedersdof is trying to explain why we always wrongly go for the big change when little steps are easier to pass, and much less likely to create future problems. And specifically, Friedersdof is attacking comprehensive immigration reform, exactly as I did earlier.

I liked many recommendations from the Council on Foreign Relations’ study, U.S. Immigration Policy, but thought it wrong to try to make all the changes at once. It’s more realistic to close the borders first, fix illegal workplace hiring, and push through changes that bring in more qualified immigrants right away, building a national consensus behind broader immigration reform before dealing with less-skilled (unskilled) workers and illegal immigrants.

Though he has the right idea, Friedersdof ‘s first steps are limited to:

➢ Expanding visa allotments for highly skilled immigrants, helping us join the global competition for talent that other industrialized countries long ago began in earnest.

➢ finishing a border fence whose half-existence steers unlawful border jumpers toward the most dangerous parts of the desert.

➢ passing the DREAM Act, extending lawful status to some children illegally brought to the United States.

➢ expelling the least desirable newcomers: illegal immigrants who commit violent crimes, felonies or other serious transgressions against the law.

Obama’s "Toughest" 18 Months: Another Look

“liberals are determined to reinvigorate the reputation of government, to prove that only the state can get important things done. That is why the Gulf oil spill, for instance, is so vexatious for the White House and its liberal supporters. Why can't the government be more nimble and resourceful?”

--Jonah Goldberg, 7.8.10

Here and here, I was incredulous about Obama’s statement that he was going through the “toughest year and a half” any president had seen since the 1930s. The first time I refuted the statement, the Deepwater Horizon oil spill was 36 days old (the day before “top kill,” BP’s first effort to close the well), and the second time, the spill was 48 days old (BP was saying “top cap,” tried three days earlier, was capturing “the vast majority of the oil.")

Eight days after that second post, on day 56, Obama visited the Gulf and declared, "I am confident that we're going to be able to leave the Gulf Coast in better shape than it was before." The next day, day 57, he made his first-ever Oval Office address, called for a new, post-oil energy policy, and said, “The one approach I will not accept is inaction.”

Obama had nothing to do with the Gulf oil spill. It wasn’t his fault. He does, however, properly draw blame for not moving sooner against the spill, with everything at his disposal, to keep oil from hitting land. Government could have done more, and Jonah Goldberg, a conservative columnist, is right to suggest so.

Along with the president, I underestimated the seriousness of the Gulf oil spill, the greatest human-caused environmental disaster in U.S. history. And of course, the spill adds significantly to Obama’s woes during his first 18 months, mitigating some of what I said earlier. Obama’s first 18 months end July 20, spill day 92. It’s been a rough period indeed.

And accordingly, the president’s polls are down. Obama’s job approval rating has been below 47% for 5 straight days, 8 of the last 14. No president with a job approval rating below 47% has ever won re-election. During the past two weeks, Obama’s job disapproval ratings twice reached to his approval ratings, and for the last 3 days, Obama has been “upside down” (disapproval higher than approval). Currently, Obama’s at 46.1% approval, 48.0% disapproval.

Jobs: The Naked Truth

What if politics is about jobs, and you don’t know how to create them?

When you say something obvious, people go, “Duh.” Here goes anyway.

Politics is about jobs. People with jobs pay their mortgages and buy things. They support families. Roosevelt in the Depression understood the importance of jobs, putting people to work, getting them off the dole. Ever since, we treat the unemployment rate as the most important measure of economic health.

Amity Shlaes, in her readable, important book The Forgotten Man, turns rightside up the conventional wisdom about the Depression. Roosevelt’s “forgotten man” was the poor guy left out when business and its business-influenced friends in government made profit-oriented decisions that put average people out of work.

Shlaes maintains over 400 pages that the chief Depression headline wasn’t that the war (wartime spending) ended it, it was instead the tragedy of the Depression lasting eleven long years. It lasted, and lasted, and lasted because Roosevelt didn’t know how to create jobs. Roosevelt’s real “forgotten man” was the person left out when A and B pass a law to help X, and their law takes resources from A, B, and (mostly) C to help X (Shlaes, p. 12). “C” is the real “forgotten man.” And forgetting C is particularly dangerous when we need “C”’s talents and capital to create jobs.

Shlaes’ thesis is that the Depression is a history of constant government interference with the private sector that left business unable to plan for and invest in the future. And of course it’s private investment that creates jobs. So of course business didn’t create the jobs it could have, and so unemployment during 1940, the Depression’s eleventh year, averaged a today-staggering level of 14.5%.

If we understand unemployment in the Depression, we will understand better what’s happening in 2010. CNBC’s Larry Kudlow notes the household survey, which captures small owner-operated business employment, dropped 300,000 following a decline the previous month. Jobs are declining at the very place we look for jobs growth. Kudlow points out that Roosevelt-type pump-priming isn’t working today. Government transfer payments don't contribute to the output of goods and services. In the last three quarters, GDP growth has averaged 3.5%, with the federal contribution just 0.2%, while state and local government’s contribution is worse—a negative 0.3%.

Kudlow:

Businesses create investment and jobs. . . In a watershed study, former Treasury economists Gary and Aldona Robbins showed tax cuts aimed at capital and business produced the biggest economic benefits. For . . . every tax-cut dollar on capital gains, $10.61 of new GDP is created. For every dollar of accelerated business-investment tax write-offs, $9 of new GDP is created. And for every dollar of corporate tax cuts, $2.76 of new GDP is created. [This] contrasts sharply with [White House] estimates [that for] every dollar of new government spending [we generate only] $1.50 of new GDP . . . And the White House analysis looks like a stretch. The International Monetary Fund has a model that says every additional dollar of government spending creates only $0.70 of new GDP. So you have to borrow a buck to get 70 cents back[!]

“Businesses create investment and jobs.” Job creation for dummies.

Ownership

"When we look at Elena Kagan's resume, what we find is a woman who has spent much of her adult life working to advance the goals of the Democratic Party."

--Senate Minority Leader Mitch McConnell

Except that, I would say, “what we find is a party that has spent my entire adult life working to advance the goals of women.” The Democratic Party is the party of women, at least the women drawn to women’s issues—abortion, equal rights, education funding, health care, peace/anti-war. Unmarried women, college educated or not (and 60% of college graduates today are women), are a core Democratic constituency. Democrats, “their” party, advance women’s issues.

A Democratic woman, Hillary Clinton, was the party’s leading candidate for president until Obama upset her in Iowa early in 2008; still Clinton ended the primaries with 18.2 million total votes to Obama’s 18.0 million, and Obama wisely awarded her his top cabinet post—Secretary of State. A Democratic woman, Nancy Pelosi, heads one of Congress’s two houses.

Democratic women in the Senate (16) are 61.5% of the way to a theoretical goal of 26 seats—a majority of the majority party (women don’t want it all, just their rightful half). In the House, Democratic women (56) are 51.4% of the way to a theoretical goal of 109 seats; a majority of the House majority. And most significantly, Elena Kagan’s confirmation will make Democratic women, all unmarried (Ruth Bader Ginsburg’s husband just passed away), three of the Supreme Court’s liberal four.

When a liberal Democrat woman looks from her corner office out at the nation she helps run, what does she see? Government, at all levels is hers. The publications she reads, the news she watches, the culture she enjoys, the foundations she works with—all hers. Her party deserves power, for they are sincere about helping working class Americans through the unions Democrats support, they fought and won civil rights battles for blacks and Hispanics, they gave seniors security in their old age, they keep the powerful trial lawyers happy.

In all these endeavors, her party struggles against a common enemy—Republicans backed by the wealth of anti-government business, and the votes of less educated (a polite word) rightwing Christians. She knows these voting blocs theoretically, but personally, our female, college graduate leader is more likely to know her European peer than a working class American not providing her a service.

Helping Democrats retain power is figuratively, not literally of course, a matter of life and death. Democrats and the elite have worked together over four decades to build the world they currently enjoy. Until 1994, no matter who was in the White House, Democrats mostly controlled Congress as well as the Washington bureaucracy, and when Democrats lost Congress in 1994, Bill Clinton remained as president until 2001 (the era of television’s “West Wing,” the good president).

In 2001, Democrats lost the presidency even though Al Gore won the popular vote, but Democrats managed to win back the Senate when Vermont's Jim Jeffords left the GOP that June to vote with Democrats. In the broad sweep of history from 1955 onward, only from 2003 through 2006 did Republicans formally control both the White House and Congress, and George W. Bush was under withering attack most of those four years.

Now a time of true liberal Democratic ascendancy is drawing to a close (see my five “Six Months” posts). But the lessons of ownership tell us those struggling to hold onto what they have fight harder than those trying to take the possessions away. Republicans are in for a real war.

In Predictably Irrational: The Hidden Forces That Shape Our Decisions (2008), Dan Ariely discusses how we overvalue what we have, making irrational decisions about ownership. Ownership—as in liberals owning our political system through the Democratic party—leads us to value an object much more than if we do not own the object. Ariely calls this phenomenon the “endowment effect”—placing a higher value on property once we have possession. Ariely found, for example, that Duke students who received basketball tickets through a lottery valued them ten times more than the students who did not receive them.

Ariely gives three reasons for the “endowment effect”: 1) ownership is such a big part of our society that we focus on what we may lose rather than on what we may gain; 2) the connection we feel to what we own makes it difficult for us to dispose of them, and; 3) we assume others will see the transaction through our eyes. The "peculiarities" of ownership mean that the harder we work to get something, the more we feel it’s our own.

According to the Gallup poll, the liberals who feel such ownership over our political system today are but 20% of electorate. Conservatives, at 42%, hold their highest share since the “wave” election they won in 1994.