One Side Must Lose (I)

49% of Americans believe the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. In 2003, less than a third (30%) believed this.

--Gallup

Look at the chart. It’s at the foundation of our current political struggle. Two sides are fighting about the growth and size of government spending—unsustainable unless taxes go up on everyone—and what to do about it.

Yes, government held a larger share of our national wealth in World War II (1942-46), and yes, it surged to another peak during the Korean War (1951-54). But aside from those two wars, after government grew sharply under Herbert Hoover and Franklin Roosevelt (1930 to 1935), it then more slowly and steadily expanded from 1940 (10% of GDP) to 1983 (23.5%). These were the years of the “Blue Model,” the big government-business-labor consensus dominated by Democrats that had frayed by the 1970s.

Reagan’s 1980s “revolution” capped government growth and actually sent it into reverse, as the economy boomed under Reagan/Bush 41 (1984-93) and under Clinton, who mostly governed with a Republican Congress (1995-2001). Economic growth yielded a larger economy, which reduced government’s share of GDP. In a tougher economy, Bush 43 held government’s size steady at 20% of GDP until 2008. Now comes Obama, and the dramatic surge of government to 25% of GDP, even as revenue fell below its historical 18% of GDP average. That 7-8% gap is unsustainable. The gap must close.

Republicans want to return government spending to 20% of GDP or lower, close to the historic revenue collection level. Obama and the Democrats can’t say before the 2012 election what they know: taxes have to rise on everyone if we are to maintain a government that’s 25% of our GDP. The national elite realize Americans must pay dramatically higher taxes to cover the rising medical expenses of our aging population, as well as to sustain the balance of a progressive agenda held in check between Reagan’s 1980 election and Obama’s 2008 victory.

Obama’s “no retreat” insistence on raising taxes on those making over $250,000 a year is his indispensable first step to raising taxes on everyone, most likely with a European-style Value Added Tax (national sales tax), the tax that props up national health insurance in Europe. Only if Obama insists before the election on raising taxes on wealthy people can he then use his re-election to justify later tax increases on everyone (equity, after all).

Democrats must attempt an election-season tax increase. Republicans who want to trim government back to its historical 20% of GDP must say “No!” to any tax increase, including one on the “idle rich.” No room for compromise. It’s war.

Democracy + Capitalism

"the left doesn't want to be judged on the results of anything they do. They only want to be judged on their good intentions."

--Rush Limbaugh

Put another way, hold us to our words, not our deeds.

You’d think it’d be different, that the progressives with all the brains and all the folks dying to serve in Washington D.C. would be out there under bright lights saying “Judge us on our performance; we know and live good government!!” But that’d be wrong. The elite with brains, living at the top, leading a vast army of victims, including millions of bureaucrats organized into militant public sector unions, can’t be responsible for asking its victims to deliver!

How are liberals supposed to make the economy work, anyway? That’s what business does. Democrats are government, and government in capitalism only fixes the excesses; it doesn’t own the means of production. Democrats know, as we discussed earlier, that government doesn’t create economic development—it is a parasite living off business.

Here’s Bill Clinton, an admired former Democratic president, talking about about what being president means to him:

[Rick Perry]’s saying “Oh, I’m going to Washington to make sure that the federal government stays as far away from you as possible — while I ride on Air Force One and that Marine One helicopter and go to Camp David and travel around the world and have a good time.” I mean, this is crazy.

I mean, this IS crazy—being president is about the perks of the office?! What? It’s not about doing what you can to get the economy working, to create growth? Democrats don’t believe in job performance because they don’t expect to deliver (see Limbaugh, above).

Listen to progressive Steve Kornacki, writing in “Salon” about the helplessness of our Democratic president:

the White House [believes] two grim realities: (1) The economy is not recovering and may soon slip into another recession; and (2) There’s very little that Obama can now do about it. . . The correlation between economic anxiety and the failure of presidents to win reelection is well-established. [S]ince he can’t enact policies that will generate economic momentum in the next year, Obama’s only recourse is to . . . convince swing voters that their anxiety [stems from] Republican obstructionism.

[Passage of Obama’s jobs plan is] beside the point. . . The goal here is to highlight Obama’s desire to do something with the GOP’s preference for doing … nothing. So [the] reelection strategy [is] redirecting swing voters’ intense anxiety, frustration and anger . . . onto the GOP. Obviously, there’s not much inspiring about this.

From Franklin Roosevelt forward, we looked to government to fix the economy for us. We used to believe in government. No longer. Top-down, “bright people will do it for us” doesn’t work as advertised. We need a working free market, millions of individual decision-makers, with smaller government helping from the sidelines, not doing economics itself.

Ronald Reagan was right. “Government is the problem.” Now we need the solution he reached for, but grasped only partially. We need government out of the way of working capitalism. We need democracy (in the form of elections) freeing up capitalism.

Solyndra green jobs ≈ “Soylent Green”

I remember vividly the horrifying futuristic movie, “Soylent Green.” It was filmed in 1973, starred Charlton Heston, and was set in 2022 New York City, population 40 million, a time when we had run out of food, including plankton from the ocean and were reduced to eating green wafers passed off as plankton but actually reprocessed human corpses.

I couldn’t figure out why name of the fraudulent green job producer—Solyndra—gave me an upset stomach. It’s subliminal. Soylent Green. Solyndra green.

European debt crisis foreshadows coming American revolution.

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"Whoever speaks of Europe is wrong. Europe is a geographical expression."
--Otto von Bismark

Facts about a Greek default: analysts note Greek debt is far above earlier national defaults, so ripple effects could be far more serious. Total Greek public debt is about $500 billion. By comparison, Argentina’s debt was $82 billion when it defaulted in 2001; when Russia defaulted, in 1998, its debt was $79 billion.

Charles Kadlec (picture), writing in Forbes, not only links Europe’s failing elite to their cousins in Washington, but also guesses any trans-Atlantic elite failure improves Republican (called “Tea Party”) prospects:

The looming Greek default and the nascent financial crisis in Europe is a symptom of . . . governing elite [failure]. At risk is the background consensus that supported the expansion of government to the point that public spending now accounts for roughly half of all economic activity among the 17 nations in the eurozone [up from 28% of Western Europe’s GDP in 1965].

A destruction of that consensus would imply a massive loss of power by the elites who for decades have declared that given the power, they could produce an economy with less risk and more fairness than free market capitalism. . . The promises broken during this adjustment will betray the fundamental belief by many in the wisdom of the governing elites and the benevolence of government.

The pending failure of the governing elites to deliver on their most basic promises is setting off alarm bells in Washington[, raising] concern that Europe’s failure will tarnish America’s governing elite, providing additional energy to the Tea Party’s call for restoring limited, constitutional government in the U.S.

Superpower of One (Part 2)

Look at the chart (again). Note how the European nations—Great Britain, Germany, France in the 1870 column—are all gone by 2010. Parag Khanna and Mark Leonard, two scholars at the European Council on Foreign Relations, may have never seen the chart. They nevertheless object strongly to all the current talk of a “Chimerica” world, dominated by a U.S.-China duopoly. Writing in the New York Times, Khanna and Leonard assert:

In fact, we live in a “G-3” world — one that combines U.S. military power and consumption, Chinese capital and labor, and European rules and technology. The United States, the European Union (E.U.) and China are the three largest actors in the world, together representing approximately 60% of the world economy — with the E.U. being the largest of the three.

Khanna and Leonard further maintain that Europe may have more in common with China than does the U.S.:

Europe, not America, is China’s role model for its state welfare systems, social democracy, low inequality, infrastructure, and commitment to sustainability. There are far more Chinese students in Europe than in America, and far more delegations of Chinese technocrats visiting European capitals.

The chart does fail to treat the E.U. as a single, and therefore powerful, economic unit. But should Europe be treated as unified, given that European unity is under such stress? Here’s Janet Daley of The Telegraph (U.K.):

we are up against the unavoidable contradiction of the European federal project. . . The imperatives of federalism . . . come bang up against the basic principle of democracy: that elected governments should be answerable to their own electorates. . . Federalism cannot allow democracy to disrupt its objectives, and democracy will not permit federalism to ignore its anger and frustration.

[German Chancellor] Angela Merkel . . . cannot commit herself to endless bail-outs and the under-writing of infinite Mediterranean debt, just as the Greek government cannot deliver the European Union’s austerity measures—because the people of both these countries do not wish it. The irresistible force has met the immovable object[, meaning Europe must choose] between abandoning [democracy], or [abandoning] the euro.

If the E.U. hangs together with its euro—not certain—any “G-3” today would certainly include Europe in place of Japan. But the “eclipse” that Arvind Subramanian sees in our future will in any case embrace the rise of India (on the chart by 2030) and Asia, not just China, with the region gaining at the expense of the West including Europe, not just the U.S.

Superpower of One (Part 1)

China’s power is changing the world. Look at the above chart. It’s based upon Eclipse, a new book by Arvind Subramanian of the Peterson Institute for International Economics. Subramanian writes China will account for over 23% of world GDP by 2030, with America accounting for less than 12%. China will dominate trade, with twice America’s share of imports and exports, outpacing the U.S. not only because its own economy will grow faster, but also because its neighbors will grow faster than America’s neighbors.

Subramanian’s assumptions are actually conservative, projecting China’s per-person income will grow by only 5.5% a year over the next two decades, 3.3% slower than the past 20 years. Subramanian has found that after Japan, Hong Kong, Germany, Spain, Taiwan, Greece, and South Korea developed to a stage comparable to today’s China, they all grew faster than 5.5% per head over the subsequent 20 years.

Whatever China’s growth rate, the U.S. is already making room for the world’s single Superpower. Word comes that, as we wrote earlier, the U.S. has decided not to sell Taiwan the advanced F-16 fighters the island feels it needs. Many in the U.S. believe Taiwan should be able to buy the F-16s. Sen. Richard G. Lugar (R-IN), ranking Republican on the Senate Foreign Relations Committee for example, earlier called for the F-16 sale, saying Taiwan’s defense needs are legitimate, and its “existing capabilities are decaying.”

One sign of how sharply the U.S. is breaking with its previous defense of Taiwan’s right to peaceful reunification with China comes from the Financial Times (U.K.). The paper reports that last week, a “senior US official” warned that Tsai Ing-wen, the Taiwan Democratic Progressive party (opposition) leader who was visiting Washington, had sparked concerns about “stability” in the Taiwan Strait, an area the official called “critically important” to the U.S. “She left us with distinct doubts about whether she is both willing and able to continue the stability in cross-Strait relations the region has enjoyed in recent years,” the official said.

The “senior official’s” on-the-record comments constitute blatant U.S. interference in Taiwan’s internal affairs. An election in which Tsai is the leading candidate against current Taiwan leader Ma Ying-jeou is just 4 months away. By openly siding with China-friendly Ma against Tsai while simultaneously declining to sell F-16s to Taiwan, the U.S. is letting China know that whatever tensions China’s rising power brings to U.S.-China relations, they will no longer revolve around Taiwan.

The Father of Globalization

Keith Tantlinger, recently honored in a Telegraph (U.K.) obituary, developed the technology that launched containerized shipping. That means Tantlinger helped redraw the global economic map. Partly because of Tantlinger’s invention, Asia became the world’s workshop, pouring finished goods into retail markets worldwide. Containerization did for shipping and Asia what Henry Ford’s assembly line did for car production and the U.S.

Tantlinger, who died last month at 92, was born in Orange, California in 1919. He graduated in mechanical engineering from the University of California, Berkeley, and during World War II worked for Douglas Aircraft designing tools that built B-17 bombers.

Tantlinger patented several dozen container-related inventions. His most important design feature was the slotted eyelet at each corner of the container into which a lock, called a twist-lock, could be dropped, which stabilized stacked containers. By 1957, the container ship Gateway City had taken its first shipload of cargo along the U.S. East Coast. But major progress in containerization only came after 1965, when the American Standards Association adopted a national standard based on Tantlinger’s design that did away with the many competing designs copied from Tantlinger’s invention.

Hoobama

“History doesn't repeat itself - at best it sometimes rhymes.”

--Mark Twain

Is there a “rhyme” to the presidencies of Barack Obama and Herbert Hoover, as we earlier suggested? Consider the most significant parallel. Hoover ended a major sweep in U.S. history, the 1865-1933 post-Civil War domination of American politics by a Northern, business-friendly Republican Party. That era lasted 70 years. It’s possible that Obama is the president who will end the era of Democratic big government, which began with Franklin Roosevelt’s election in 1933, a period of now nearly 80 years.

Republicans before Hoover, whatever you felt about them, delivered business-led growth with rising prosperity. When Republicans produced a Great Depression instead, they were finished. Democrats before Obama were willing to be measured by government-led job creation. Once the job growth stopped, why elect Democrats?

Hoover: Great Depression. Obama: Great Recession.

Hoover’s political troubles had become obvious by 1930, two years into his presidency, when the nation threw out a Republican House and replaced it with Democrats. In 2010, two years into Obama’s presidency, America replaced a Democratic House with Republicans.

Hoover, with 14 months to go before the end of his term and very worried about his prospects for re-election amidst horrible economic conditions, launched a new program historians now call the “Hoover New Deal of 1932.” It consisted of 9 separate projects to spur economic growth.

Obama, with 14 months to go before the next election and very worried about his prospects amidst poor economic conditions, launched a new program called the “American Jobs Act.” It consists of 15 separate points to spur job growth.

One of Hoover’s projects was the Reconstruction Finance Corporation, a government institution that by providing loans to financial institutions, aimed to spur growth. Hoover provided the Corporation with $2 billion, which would be $27.5 billion today.

One of Obama’s “Jobs Act” points is creation of a National Infrastructure Bank, charged with financing job-growing projects. Obama plans to provide the Bank $10 billion.

Hoover’s “little New Deal” didn’t work. Here’s why Obama’s “American Jobs Act” seems doomed, even if it could get past a Repubican House. As Milton Friedman has taught us (via Wikipedia and James Pethokoukis), consumer choices regarding consumption— and recall that consumer spending accounts for roughly 70% of economic activity—are determined not by current income but by the consumers’ longer-term income expectations. Friedman’s key conclusion is that transitory, short-term changes in income have little effect on consumer spending behavior.

And as CNBC’s Larry Kudlow has observed about the “American Jobs Act’s” impact on hiring:

while more than half of the president's new package is called "tax cuts," the reality is that these are temporary tax cuts. . . just for one year. . . Businesses like to look ahead at least three to five years for their employment planning. And they're already worried about the tax and regulatory mandate costs of Obamacare, which has become a great deterrent to job creation.

We already know temporary tax cuts don’t work. Obama in 2011 seems lost in the economic hard times. Like Herbert Hoover in 1932.

Big Government Apologist David Brooks No Conservative

“He who is not with me is against me.”

--Jesus (Matthew 12:30)


New York Times’ house conservative David Brooks knows government doesn’t work, but chooses to defend it anyway. Such writing groups him with the enemy, assuming we are waging a revolutionary struggle against big government.

In his latest column, Brooks rebukes (mildly, politely) Obama-type efforts to create green jobs. Brooks instead recommends a different approach, one more in line with conservative thinking:

[In Boulevard of Broken Dreams,] Josh Lerner of Harvard Business School [endorses] government efforts to set the table for entrepreneurial activity[--]building an underlying context for innovation: funding academic research, establishing clear laws, improving immigration policies, building infrastructure and keeping capital gains tax rates low.

Brooks’ recommendation follows his earlier writing that under past and present administrations, government has

sucked resources away from the most productive parts of the economy — innovators, entrepreneurs and workers — and redirected it to the most politically connected parts. The byzantine tax code and regulatory state has clogged the arteries of American dynamism.

Such writings suggest Brooks “gets it,” that in the words of Ronald Reagan, “Government is the problem.” Not so. Brooks is an open defender of government. In the column quoted above, Brooks also writes, “The United States became the wealthiest nation on earth primarily because Americans were the best educated.”

That is quite a statement. Now we have American exceptionalism reduced to elite private and public high schools like Radnor on Philadelphia’s Main Line, where 93% of graduates go on to college, and elite universities like the University of Chicago. Brooks graduated from Radnor and the University of Chicago.

I think Brooks truly believes our educated elite, mostly running the U.S. since Stanford engineer Herbert Hoover became president in 1929, is responsible for our wealth. Canadian-born Brooks, 50, the same age as ex-University of Chicago faculty member Barack Obama, didn’t arrive in the U.S. until well after our educated elite had taken over.

I don’t agree with Brooks that education is “primarily” responsible for our success. The educated elite, after all, are the folks who cannot bring us out of our current economic mess, and who—contrary to Brooks’ most fervent wish—must be removed from power. I go with conservative Thomas Sowell’s rebuttal of the importance of education:

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. . .

[E]xperience 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.

Brooks does want change. But he instructs us that change

can’t be done without leadership from government [take that, Reagan]. Just as the Washington and Lincoln administrations actively nurtured an industrial economy, so some future American administration will have to nurture a globalized producer society. [emphasis added]

So much wrong here. Washington saw the need for roads and Lincoln supported railroads, though privately built and run. It’s dishonest, however, for Brooks to associate either with the all-intrusive state we face today, marching toward cradle-to-grave socialism.

And it’s also dishonest for Brooks to talk about “administrations” as if big government’s been around since Washington. While the federal government did provide land for state-run agricultural colleges under Lincoln, neither president, for example, could ever have imagined the current federal government’s intrusive role in directing public and even private education from preschool (Head Start) through graduate school.

George Washington, father of big government? It’s a stretch too far.

Zero Job Growth

When it comes to jobs, it looks like the Obama presidency may be stuck with the Peggy Noonan-coined sentence, “He made it worse.” No job growth whatsoever in August. June and July job growth numbers lowered by a combined 58,000 jobs. That means over the last three months, job growth has averaged only 48,300 a month. It needs to reach 200,000 a month to generate real economic growth.

The chart below shows what should be Obama’s minimum job growth and unemployment rate targets: the totals for January 2009, the month he took office. He has 13 months, until the October 2012 final pre-election jobs report, to hit those targets. It is going to be difficult. As the chart states, Obama will have to average 187,000 new jobs a month, every month, for 13 months. By comparison over the previous 13 months, job creation has averaged only 92,300 a month, less than half the 187,000 average he needs, starting now.

“He made it worse.”

Media the Status Quo’s Strike Force

No secret we are headed for an awful political war in 2012, one in which the media will lead the attack. Here’s the conservative “Big Journalism’s” John Nolte:

Obama cannot win re-election, and furthermore, the media knows this. Obama is a failed president who failed in a way no president before him ever has.

For two years he could and did get absolutely every piece of legislation passed he wanted passed and as a direct result[--prolongation of] The Great Recession. . . Nope, Obama cannot win re-election. The media, however, can win it for him, and the only way they can do that is to toxify our candidates into something unelectable. [emphasis added]

This is a bitterly partisan war being waged by a media disguising themselves as “objective.” They are our real political enemies in 2012, [and] you haven’t seen anything yet. This is merely the tip of the spear, the 2012 warm up.

The evidence of bias is everywhere. By 20-to-1, the TV networks (CBS, NBC, ABC) apply ideological labels to Republicans over Democratic presidential candidates. Comparing treatment of Republican candidates from January 1 to July 31 this year to that of Democratic candidates over the same period in 2007, the Media Research Center found the networks branding Republicans “conservative” 62 times, but calling Democrats “liberal” only 3 times.

Liberal Democratic candidates John Edwards and Hillary Clinton were never once called “liberal” on any of the networks, while CBS and NBC never tagged Barack Obama as liberal, even though Obama’s arguably the most rigidly liberal president in history. Meanwhile, Tim Pawlenty was identified as “conservative” the day he announced, Newt Gingrich as a “conservative’s conservative,” Rick Perry as having “strong conservative credentials,” Michele Bachmann as a “take-no-prisoners conservative,” Bachmann and Sarah Palin as “soul mates — unbending conservatives,” and Rick Santorum as the “strongest social conservative in the bunch.”

The uniformly progressive networks see no reason to label the like-minded, but feel compelled to warn viewers whenever a candidate opposed to liberalism comes smiling down the path.

More evidence. California Democrat Micky Kaus, whose “KausFiles” was one of the first political blogs, recently (August 15) wrote:

The [New York] Times is a struggling new media company now, and in new media the readers, viewers and dollars go to those who tell committed partisans and ideologues what they want to hear. So why not tell your mainly Dem readers that the other side is “on the defensive”? They’ll eat it up. They might even subscribe. Better yet, throw in some macho chest-thumping: The GOP is not just “on the defensive. Their “boasts” are “ringing hollow”! Yeaaaghh! If the Republicans nevertheless inexplicably win the next election–hey, deal with that then.

Still more evidence. Charlotte Allen, in the conservative Weekly Standard, reports on a study and a book by UCLA professor Tim Groseclose. The study, co-authored by Chicago professor Jeffrey Milyo, was published November 2005 in the Quarterly Journal of Economics, a Harvard University publication regarded as one of America’s top four scholarly economics journals. The study found most major American news outlets reflected a liberal bias. Allen wrote:

The media not only skewed left in terms of the political leanings of their personnel, but they could not report about a controversial issue—whether the issue was George W. Bush’s tax cuts, global warming, partial-birth abortion, or the effects of affirmative action on college-campus demographics—without loading the piece in ideological ways that made it a completely different story from that which a conservative, or even a centrist, might tell.

The Groseclose-Milyo study devastatingly undercut the prevailing wisdom, held dear by the press and its apologists, that yes, most reporters may pull the Democratic lever in the voting booth, but they bend over backwards to frame their news stories in a nonpartisan and evenhanded fashion that disguises their personal ideological leanings. As Groseclose and Milyo concluded, that doesn’t happen.

Groseclose’s book, Left Turn, is just out. It shows liberal bias has made American voters considerably more liberal than they would otherwise be. That, Allen says, “cracks wide open the prevailing wisdom, subscribed to even by many conservatives[,] that New York Times [readers] automatically correct for the Sulzberger slant, saying to themselves, ‘Oh, yeah, that’s the New York Times.’”

It’s not news here, and probably not news even among the general public, that biased media are deeply committed to bringing Barack Obama back for another term. Nevertheless, it helps to have facts supporting the conventional wisdom. And exposing the media for what they are—conscious, dedicated agents of the Democratic war machine.

Taiwan’s Darkened Future

“China may soon be able to . . . demand the United States get out of its back yard.”

--David Cohen, The Diplomat

Cohen means China is approaching the point where it can be confident that the U.S. won’t interfere with China’s Number One foreign policy goal: regaining control over its lost province of Taiwan.

The U.S. intends to decide by October 1 what to do about Taiwan’s request—strongly opposed by China—that the U.S. upgrade Taiwan’s aging aircraft inventory by selling the breakaway province 66 F-16 fighter jets. Reportedly, the U.S. has already come down against the sale.

As for any future administration’s approach to Taiwan, Texas Governor Rick Perry yesterday told the Veterans of Foreign Wars Convention:

I do not believe that America should fall subject to a foreign policy of military adventurism. We should only risk shedding American blood and spending American treasure when our vital interests are threatened and we should always look to build coalitions . . . It’s not our interest to go it alone.

In the same speech, Perry did say America should be willing to “tak[e] the fight to the enemy, wherever they are, before they strike at home.” But does he mean attacking China to defend Taiwan? Not likely.

At a time of weak U.S. economic growth, traceable in part to our exploding deficit, a time when Republicans are looking at allowing large defense cuts rather than accept budget growth in both domestic and defense accounts, Perry’s more noteworthy comment was his caution against “military adventurism.” And that phrase could describe any U.S. military effort to stop China from reclaiming Taiwan.

It’s a fact that while our ability to defend Taiwan declines, China’s offensive military capabilities are on the rise. Richard Weitz, writing
in the Asian-focused journal Diplomat after reviewing the Pentagon’s recent re-evaluation of Chinese military power, chose these words to summarize the current U.S.-China balance of forces:

China’s development of ballistic missiles and other anti-access, area denial, and asymmetric capabilities is challenging US primacy in the sea and air near China. . . The Chinese apparently aim to disrupt US space satellites, computer systems, and . . . degrade US military capabilities . . . to establish a fait accompli, such as the occupation of Taiwan.

Similarly, the National Review’s Michael Auslin concluded:

When we [cut] hundreds of billions of dollars from the budgets of our Navy and Air Force, which keep the big peace in Asia, then the Chinese seem to be making a pretty good calculation that they just have to wait us out for a while before we’re too weak to oppose whatever whim they have on a given day.

Taiwan seems left with little beyond hopes and prayers. Andrew N.D. Yang, the Republic of China (ROC/Taiwan) Vice Minister (Policy), Ministry of National Defense, wrote in a recent Brookings Institution paper:

the ROC [Taiwan] is now proceeding toward volunteer forces . . . in an attempt to [modernize and] safeguard national security . . . It is hoped that the United States . . . will continue to support the ROC and expand exchanges and cooperation . . . Eventually, it is expected that United States will sell advanced defensive weapons to the ROC for self-defense.

While giving up the draft in favor of a volunteer army might seem an odd way to “modernize” one’s power, it does keep one’s military viable even after a country’s rising prosperity has built resentment against the draft. At least Taiwan can “modernize” ground forces on its own. But Yang’s wish that the U.S. will in the future sell Taiwan the planes it needs to hold off China remains just that—a wish.

Taiwan’s current government has placed the bulk of its security hopes in its Economic Cooperation Framework Agreement (ECFA) with China. The ECFA has significantly lowered economic barriers between the two, and tariffs on hundreds of products will be eliminated over time. John Lee of Sydney’s Centre for Independent Studies, however, believes the ECFA “is all about politics.” Lee adds that in China’s view “this is about enmeshing the two economies in such a way that Taiwan’s future is tied to China’s.”

Nevertheless, says Doug Bandow (in the Forbes article that quotes Lee):

Economic integration, exemplified by ECFA, is the centerpiece of the [ruling Kuomintang’s] policy. President Ma [Ying-jeou] declared: “We have transformed the Taiwan Strait from a danger zone into a peace corridor.” And the process is not over. [According to Ma associate] Chao Chien-min[,] “if President Ma is reelected [in January,] the current pace will be continued.”

For better, for worse. We had earlier hoped, in a calmer time when the U.S. seemed stronger and more solidly behind Taiwan, that Ma’s approach might indeed work.

Forty years ago, the U.S.-China relationship came out of its cold war deep freeze when Mao Zedong invited a U.S. ping pong team to play in China under the banner, “Friendship first, competition second.” It's so different now says Brook Larmer, writing in the Washington Post about this month’s Georgetown-Chinese army basketball “game”:

So how did it go so wrong. . . degenerating into all-out hostility early in the fourth quarter — sparking a bench-clearing, chair-heaving, game-ending brawl? [Was] this fight a grand metaphor for an emerging superpower seeking to supplant an established one[? After all, t]he 2008 Beijing Olympics were portrayed not just as another Games, but as incontrovertible proof, for all to see, that China had arrived as a world power.

Reprise: business, not government, creates jobs.

"Prosperity is just around the corner."
--Herbert Hoover (1932)

"When I said 'Change we can believe in,' [w]e knew this was going to take time."
--Barack Obama (2011)

Reprise: how bad it is.

From Fortune’s Nina Easton:

• a quiet cultural crisis brews as one out of five American men stop collecting paychecks -- getting by instead on unemployment or disability checks, the incomes of friends and family, and . . . illicit activity.

• There are now 6.2 million Americans (more than 44% of the unemployed) who have been out of work for more than a year -- and are dead last on any list of employers seeking to fill positions. These are people whose skills have rusted in a fast-paced global economy, along with twentysomethings who haven't even developed the habit of work.

• Safety nets, built to protect people in trouble, are actually contributing to their long-term unemployment -- and thereby hurting their job prospects. A study by the Chicago Fed suggests people go back to work -- and unemployment drops -- when unemployment insurance is set to run out.

Reprise: how wrong current policies are.

More from Nina Easton:

The Obama team resists a pro-growth tax and regulation agenda that business leaders insist would give them the confidence to invest their growing profits in an expanded U.S. workforce. . . Washington spends more than $18 billion a year on 47 different training programs -- spread across nine agencies. What has all that bureaucracy and money bought? Employers who complain that they can't find qualified workers -- even in this market (one out of three employers, according to a recent McKinsey Global Institute survey). As many as 3 million jobs in this country are sitting unfilled.

Reprise: we need business, not government, creating jobs.

From Canadian David Warren (Ottawa Citizen):

Most moral issues [aren’t about] distinguishing between right and wrong. [They are about] finding a way to justify doing the wrong thing. And once you think you have found it, the people still arguing for doing the right thing may be dismissed as "simplistic."

[“Simplistic:”] If what we want is a functioning, even flourishing economy, and therefore jobs, jobs, jobs, then the policies of Texas make sense. They are, as Rick Perry says, low taxes, minimal regulation, the avoidance of debt, and business-friendly attitudes. It is a political culture [focused] on the political questions (law, order, and so forth), [leaving] economic questions to the free market.

The Truman Show

Barack Obama is channeling Harry S. Truman. His Midwest bus tour, denouncing Congress at each stop, is a virtual carbon copy of Truman’s whistle-stop denunciation of the 80th Congress. And as such, it’s in line with American Enterprise Institute moderate Norman Ornstein’s recommendation to Obama, published in the New Republic:

the President can [follow] a precedent from 64 [sic] years ago: Harry Truman’s campaign for reelection in 1948—successful, despite a poor economic climate, and a polarized electorate—offers a promising path for Obama’s reelection. . . the Republicans [a]s historian William Leuchtenburg put it, “veered so sharply to the right that they alienated one segment of the electorate after another. They antagonized farmers by slashing funds for crop storage; irritated Westerners by cutting appropriations for reclamation projects;” and, . . . by pushing the anti-union Taft-Hartley legislation over Truman’s veto, they drove a labor movement furious with Truman back into the president’s arms.

[Truman realized] that the hyper-partisan Congress was as much a political boon as it was a political liability. Truman seized upon the conservative over-reaching and openly fought against what he dubbed the “Do-Nothing Eightieth Congress.” That rhetorical strategy paid dividends, as voters rebelled against the ideologues and the Democratic base was energized to elect a president they had long disparaged and opposed. . . “The luckiest thing that ever happened to me,” Truman remarked years later, “was the Eightieth Congress.” [For Obama,] the absence of an energized and angry president demanding better of the do-nothings in Congress can only lead to something worse.

To me, it looks like Obama is jumping the gun a bit. Truman didn’t coin the term “do-nothing” Congress until after the congressional special session he called adjourned August 7, 1948, and his whistle-stop train tour denouncing the Congress didn’t begin until September 17, 1948, six weeks before the election (David McCullough, Truman, pp. 652, 654). Obama’s bus tour is 14 months before the election, and much closer to Congress’s opening than to its close. Shouldn’t the president wait a bit? Or is he just too eager for the “Truman Show” to end, the one that closed with “Give ‘em Hell” Harry’s all-time upset presidential win?

Conservative Michael Barone, in a Washington Examiner article entitled “Harry S. Obama?”, also takes on the Obama-Ornstein parallel to Truman, but from a different, more substantive, angle. Barone writes about the agricultural policy (in a time when much more of the country lived in farm areas) and foreign policy advantages 1948 Truman had over our current president.

Tax reform doesn’t mean tax increase.

"Tax reform is the political fulcrum for addressing the growth shortage, the fiscal crisis and our runaway health-care prices problem. It's the one idea that reaches across the partisan divide. It might be the only thing that could save the Obama presidency."

--Holman Jenkins, Wall Street Journal

Two conservatives just recently jumped on the idea that tax reform that lowers rates while simultaneously eliminating loopholes is something both liberals and conservatives can endorse. Why not, when lower rates help do what everyone wants, boost economic growth? The Wall Street Journal’s Stephen Moore pushed tax reform in a column entitled, “Tax Reform's Moment? Where else is the growth going to come from?” And syndicated columnist Charles Krauthammer similarly argued that “Debt-Reduction On Grand Scale Is Within Reach.”

Neither Moore nor Krauthammer recommend an overall tax increase (Krauthammer specifically rejects it). But neither do they call for an overall tax reduction. They favor tax reform, a more efficient taxing system that begins with the same level of overall tax revenue, but by lowering rates, promises to spur growth.

Since then, familiar partisan divides have emerged. Conservatives have made it crystal clear that overall taxes cannot go up. And progressives are just as insistent taxes must increase. Here’s liberal Ezra Klein, writing in the Washington Post about last Thursday’s Republican presidential debate:

every single GOP candidate on the stage agreed that they would reject a budget deal that was $10 in spending cuts for every $1 in tax increases. Even Fox News’s Bret Baier couldn’t quite believe what he was seeing. . . A world in which the GOP will not agree to deficit reduction with a 10:1 split between spending cuts and tax increases is a world where entitlement reform can’t happen. It’s a world where the “supercommittee” fails and the trigger is pulled, and thus a world in which $1 out of every $2 in cuts comes from the Pentagon. . . The losers in tonight’s debate were anyone who wants to see the sort of compromise necessary for the political process to work.

As we wrote earlier, progressives are determined to secure some sort of tax increase, a tax increase of any size, because they desperately want validation at the polls in 2012 for the big tax increases they hope await America from 2013 onward. Of course, neither Klein or the president will say this openly. Conservatives are just as equally determined to deny progressives the tax increase validation they seek.

In resisting compromise settlements that allow for even slight tax increases, conservatives refer back to when Ronald Reagan compromised with Democrats in 1982, and it backfired. From Heritage Foundation scholar Lee Edwards:

Reagan “admitted that his failures to cut federal spending absolutely and to balance the federal budget were his ‘biggest disappointments’ as president.”

Reagan went along with . . . chief of staff James Baker, who persuaded the president to accept the Tax Equity and Fiscal Responsibility Act of 1982 . . . $98 billion [in tax increases] over the next three years. . . Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, [the 1982 act] looked like a pretty good "70%" deal. But Congress wound up cutting less than 27 cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described [the 1982 act] as "the greatest domestic error of the Reagan administration."

Nevertheless, the progressive “teeny, weeny tax increase” net cast over the Washington pundit world has caught at least one conservative fish, a catch that complicates conservative efforts to hold the line against tax increases. Commentary’s Peter Wehner recently wrote of the $10-cuts-for-$1-increase proposal:

this thought experiment has to do with (a) a real spending cuts deal and (b) a compromise plan, not what one believes to be an ideal one. It is hard for me to imagine that any serious conservative who wants to limit government wouldn’t accept such a deal. The alternative, after all, would not be to reduce the size and scope of government without tax increases; it would be to keep Leviathan at its current size instead of significantly cutting it at the cost of a relatively small tax increase. . . if taxes cannot be raised under any circumstance — then we have veered from economic policy to religious catechism.

Harsh. And hurtful to the cause of halting federal growth.

The Berlin Wall

On a quiet August weekend 50 years ago, with world leaders all off on vacation, the Berlin Wall went up. Writing about the then-president’s “Berlin blunder” in his latest column, George Will quotes the New York Times’ Scotty Reston saying at the time that Kennedy “talked like Churchill but acted like Chamberlain.” In Will’s view,

Tens of millions of East Europeans might have been spared those years of tyranny, and the West might have been spared considerable dangers and costs, if Kennedy had not been complicit in preventing the unraveling of East Germany.

I don’t see it that way. Kennedy understood that the entire Soviet empire, not just East Germany, was bleeding through the Iron Curtain cut that was Berlin, where anybody could take a subway or just walk from east to west (Communist authorities were able to control access from East Germany into East Berlin). Khrushchev had to do something about Berlin, which he called a "bone in my throat."

East-West tensions dropped once the bleeding stopped. The U.S. came out on top a year later, when the Cuban Missile Crisis ended in failure for Khrushchev, who was attempting to upend the balance of terror that was fast turning against the Soviet Union, as the U.S. brought Polaris-missile nuclear submarines and Minuteman intercontinental missiles rapidly online. By decade's end we were on the moon, the ultimate symbol of our technological superiority. In time, no East Germany. In time, no Soviet empire.

The U.S. overreach in Vietnam, a product of hubris as much as weakness, delayed our post-Cuban Missile Crisis victory in the Cold War. Vietnam was an unnecessary venture, at least following the far more important 1965 anti-Communist take-over in Indonesia. America did not regain its post-Vietnam debacle footing until Reagan’s election in 1980. Reagan’s muscular foreign policy then helped bring the Berlin Wall down in 1989, after 28 too-long years.

My version of history. Thank you Mr. Will.

[Stuff] they say about Rick Perry.

“Obama . . . will have to 'kill' Romney."

--A “prominent Democratic strategist aligned with the White House”

Should Rick Perry, not Romney, win the nomination, substitute the word “Perry” for “Romney.” The “oppo” (opposition research) on Perry, in fact, is already underway, as the following comments reveal:

Compared with most other large states, Texas. . . has fewer public services, lower public benefits, greater income inequality and a higher rate of medically uninsured.

--Karen Tumulty, Washington Post

According to researchers in the [quietly progressive] Texas Legislative Study Group, 17.3% of the state's population lives in poverty, 4.26 million people[,] 66% of Latino children and 59% of black children live in low-income families, compared to 25% of white children. 28% or 6.1 million of the population of Texas is uninsured, the largest share of uninsured in the nation. . . In 2010, the average monthly benefit for Women, Infant, and Children (WIC) recipients in Texas was $26.86, the lowest in the country. . . Texas is 50th in workers' compensation, 50th in percent of women receiving prenatal care, 50th in percent of non-elderly women with health care, 50th in per capita spending on mental health, 49th in per capita state spending on Medicaid.

--James Moore, “Huffington Post”

previous Perry controversies [include] his now-infamous 2009 suggestion that Texas might consider seceding from the union [and] an earlier furor when rock musician Ted Nugent played at his 2007 inaugural ball clad in a Confederate-flag T-shirt and with machine guns as props.

David Axelrod, a senior advisor to President Obama, told CBS’s “Early Show” Friday that the Lone Star State’s strong performance had little to do with the governor’s decisions. “He’s been the beneficiary down there of the boom in oil prices ... and in increased military spending because of the wars,” Axelrod said.

--Niall Stanage, “The Hill”

state taxpayers [have paid $700,000] for rent, utilities and upkeep on [a] five-bedroom mansion . . . which Perry had moved into in the fall of 2007 while renovations were being done on the governor's mansion. In 2008, a fire [attributed to] arson partially destroyed the mansion, [so] Perry has continued to live in the rental home. . . valued [at around] $1 million.

--Scott Conroy, “RealClearPolitics”

[As a Democratic state representative, Perry supported] the $5.7 billion tax hike in 1987, signed by Gov. Bill Clements, a Republican, opposed by most Republican members. The bill passed the House by a 78-70 vote. Even without adjusting for inflation, the legislation triggered the largest tax increase ever passed in modern Texas.

Perry was also the co-author of legislation aimed at tripling the amount of money state legislators are paid[. At the time, they were making] $7,200 as part-time lawmakers. Voters rejected the proposal in a statewide referendum.

--Jay Root, New York Times

In 2007, the governor of Texas earned $1,092,810. According to his IRS form, he gave $90 of that total to his church. He was a tad more generous in 2008 when the governor's adjusted gross income was $277,667 and he donated $2,850 to his church. Perry was feeling less magnanimous in 2009 when he earned $200,370 but shows all zeroes as a line item for church donations. For the years 2000-2009, Governor Perry's adjusted gross income on his tax returns adds up to $2,694,253 and church donations are $14,293.

--James Moore, “Huffington Post”

A source in Texas passed The Huffington Post Perry's transcripts from his years at Texas A&M University. The future politician did not distinguish himself much in the classroom. While he later became a student leader, he had to get out of academic probation to do so. He rarely earned anything above a C in his courses -- earning a C in U.S. History, a D in Shakespeare, and a D in the principles of economics. Perry got a C in gym. Perry also did poorly on classes within his animal science major. In fall semester 1970, he received a D in veterinary anatomy, a F in a second course on organic chemistry and a C in animal breeding. He did get an A in world military systems and “Improv. of Learning” -- his only two As while at A&M. "A&M wasn't exactly Harvard on the Brazos River," recalled a Perry classmate in an interview with The Huffington Post. "This was not the brightest guy around. We always kind of laughed. He was always kind of a joke."

[Transcript is from 1968-72, before and shortly after the May 1970 Kent State massacre led to a nationwide university shut-down followed by professors instituting draft discouraging grade inflation at Ivy League and other schools (when did grade inflation reach A&M?). Perry’s university GPA was a “gentlemanly” 1.94 (C). BTW, where are Barack Obama’s Occidental College, Columbia, and Harvard Law transcripts?--GF]

--Jason Cherkis, “Huffington Post”

Perry said, "Our friends in New York six weeks ago passed a statute that said marriage can be between two people of the same sex. And you know what? That's New York, and that's their business, and that's fine with me."

Oran Smith, the president of the Palmetto Family Council, a conservative, family-values organization in South Carolina, . . . said he has been bombarded with emails from activists over the past 48 hours about Perry's comments -- with mixed responses. . . Smith said he believes that Perry's comments will give conservative voters pause about the Texas governor's possible candidacy, and if he doesn't explain himself, those comments may make them hesitant to support him.

"It's the way he said it," Smith said, noting that Perry said he was "fine" with New York's new law. He explained that if by "fine" he means he's happy about it, that won't sit well with evangelical voters, but if he's approaching it as a constitutional lawyer would, it may not be so bad.

At the same time, Smith said he's concerned that Perry's comments suggest he could be "slippery" on other issues. "And he may be perceived as stumbling out of the gate because of a poor choice of words," he said, indicating that such a stumble could hurt Perry in the early voting states of Iowa and South Carolina, where he would need to do well.

--Scott Conroy and Erin McPike, “RealClearPolitics”

Perry has been . . . dismissive of Democrats and fond of political maneuvers that put the heat on moderates within his own party. And in the legislative session that just wrapped up, he presided over a budget that cut $4 billion from public schools. . . Perry is a hard man. He is the kind of politician who would rather be feared than loved—or respected. And he has gotten his wish.

-- Paul Burka, Texas Monthly

[The Perry-Mike Toomey] relationship will be scrutinized if Mr. Perry runs for president: Mr. Toomey was a lobbyist for Merck when Mr. Perry issued a 2007 executive order requiring sixth-grade girls in Texas to be vaccinated against the sexually transmitted human papillomavirus, the leading cause of cervical cancer. At the time, the only approved vaccine was Gardasil, made by Merck. The Legislature overrode the executive order, and some attributed the flap to the close ties between Mr. Toomey and the governor.

--Ross Ramsey, New York Times

"We are tired of being told how much salt to put on our food, what kind of cars we can drive, what kind of guns we can own [and] what kind of prayers we are allowed to say," [Perry] writes. [But] his list of complaints against the federal government [isn’t fact-based], unless you count Agriculture Department brochures about salt.

Perry wears his evangelical Christian faith on his sleeve, which will help him with some voters but not others. In April, he called for three days of prayer for divine intercession to end Texas' drought. (It didn't work.)

--Doyle McManus, Los Angeles Times

does he have the stamina for a long campaign? He has been examined by Democrats and the Texas media but will undergo a vetting unlike anything he’s seen in the past. How will he react to the inevitable stories critical of him, his record, his policies, his exercise of power and his connections?

He knows his message and sticks to it — and sticks to it and sticks to it and sticks to it. That can be an asset or, if it appears he doesn’t have answers beyond his main message, a potential liability. What he will be like in debates and on the Sunday shows is another question. He avoided debates in the last campaign and also declined to sit for interviews with editorial boards, saying he knew he wasn’t going to get their endorsements so it wasn’t worth bothering.

. . . will Rick Perry be remembered as some of his Texas predecessors, John Connolly and Phil Gramm among them, as a candidate who came into the race with high expectations but who never found his footing or his audience? Texans say Perry has been underestimated many times. But he’s never faced what will await him if he does jump in.

--Dan Balz, Washington Post

His statements related to possible Texas secession actually helped him in his recent race in 2010, and will help him in a national campaign in the Republican primaries and caucuses. [But] this talk will hurt him in a general-election race. Moderate voters in the Midwest will see it as off-putting.

Perry has never been fully vetted by the media. . . Perry and some of his staffers are known to have thin skins. They will need to grow calluses if they are to succeed in the [big] show. . . Perry has never lost a race. While many immediately list this as a positive, losing at some point in your career makes you better when the inevitable problems hit. . . The real question is: Can he suffer defeat and rise to the next battle?

--Matthew Dowd, National Journal, who has known Perry for 25 years.

Perry appears to be the anti-Obama in many ways. Unlike the deliberate incumbent, Perry has used his powers aggressively through his appointments (some opponents even call it political revenge) While the current president has talked about unity and bipartisanship, Perry once (jokingly?) suggested secession. While Obama was an Ivy League star and head of the Harvard Law Review, Perry was a C- and D-student from Texas A&M. . . Perry represents [Republicans’] sharpest contrast with Obama. And chew on this: The more vulnerable Obama looks, GOP voters might be more concerned with ideological purity and likeability than electability. Think heart over head.

--Chuck Todd, NBC News

can [Perry] present his ruggedly conservative views in a way that will appeal to voters far from Texas? The conventional wisdom is that he's too conservative, too controversial and maybe not as book smart as the men he'd be running against. But that's what they said in 1980, when the candidate was Ronald Reagan.

[Ex-California Republican Party chair] Shawn Steel. . . isn't sure that Perry can pull off a Reagan-style victory. [Reagen], he noted, could "take controversial positions and make them sound like ice cream. Can Perry do that?" Right now, Perry's rawboned conservatism doesn't sound much like ice cream. It's more like strong tea, with no sweetener.

--Doyle McManus, Los Angeles Times

“I am haunted and humbled by the legend of [Jimmy] Carter supporters saying we want [Ronald] Reagan. And I think everybody in politics ought to be.”

--Paul Begala, Top Democratic operative

Rick Perry-Marco Rubio

“I can’t think of anything that’s brighter, that’s more positive for the future of America than creating this environment where people know they can get up every day, go to work, have a job and take care of family.”

--Rick Perry

We wrote that Rick Perry’s run for president is handicapped by his being from the South, the region where Republicans are already strongest. I wish to seemingly compound Perry’s problem by endorsing Florida’s Marco Rubio as Perry’s running mate. A Southwest-South team to run against the Midwest-Northeast Obama-Biden team, base against base.

Doesn’t seem to make sense. Sean Theriault, a University of Texas political science professor, says that Rick Perry "speaks the Tea Party language." And Marco Rubio was the (winning) Tea Party candidate for Florida senator. Loading the ticket with two Southern Tea Party conservatives hardly seems the way to appeal to the non-Southern independents who will decide next year’s presidential contest. As Theriault concludes, "I think the Republican nomination for [Perry] would be much easier than the general election."

Of course, the reason for Perry-Rubio isn’t that Rubio is from the South or from Florida, even though Florida is a state Republicans must carry. Of course, it’s that Rubio is Hispanic, and would be in position to become America’s first Hispanic president. Of course, Rubio would help boost the Hispanic GOP vote up to at least the 40% share Bush-Cheney carried in 2004. Of course, winning Hispanic votes cuts painfully into the Democratic base vote Obama is counting on, a base that we earlier documented.

In 2004, Hispanic votes helped Bush-Cheney carry Colorado, Nevada, and New Mexico, heavily Hispanic states in addition to Florida the GOP lost to Obama in 2008. A Perry-Rubio ticket would certainly aim to recapture those Hispanic-influenced states.

Also, there are two states outside the South and West that went to Obama in 2008 that Perry-Rubio would likely carry next year. They are Indiana, where Obama’s approval rating in June was already down to 42%, and New Hampshire, where it had dropped even lower, to 40%.

If Perry-Rubio carried every Southern and Southwestern state, Alaska, all the interior West and Great Plains states including Colorado, Nevada, and New Mexico that Bush-Cheney carried in 2004, plus Indiana and New Hampshire, the ticket would have enough electoral votes to prevail in 2012 without having to win in a single other Pacific Coast, Midwestern, or Northeastern state of any size (hit to enlarge map below):

President Perry

"For the very first time in my life, I feel compelled to stand up and to speak out for the man who I believe has a new vision for America. I am here to tell you, Iowa, he is the one. He is the one!" [emphasis added]

--Oprah Winfrey (2007)

O.K. We don’t want to go down that road again. But Rick Perry is already the best presidential candidate Republicans have seen since Ronald Reagan in 1980 (Reagan was a bit old by 1984). Better than George H.W. Bush, Bob Dole, Lamar Alexander, Elizabeth Dole, George W. Bush, John McCain, Mike Huckabee, and Rudy Giuliani, and better than Mitt Romney, Michele Bachmann, Tim Pawlenty, and Sarah Palin.

Not even close, really.

Perry looks like a president. He has a terrific bio, including Eagle Scout and service as an Air Force pilot. He is three-term governor of America’s second largest state. That’s experience. His budgets are in surplus even though Texas has no income tax. His pro-growth policies are even more important than his budget balancing. In the last two years (Obama’s years as president), Texas has created 40% of the new jobs in America.

Tea Party economic conservatives love Perry’s budget-balancing, job-creating record. But social conservatives have just as much reason to love Perry, who wears his Christianity on his sleeve, and Saturday presided over a 30,000-person Houston prayer rally he himself organized. It seems highly likely that in these troubled times, Perry’s message of faith and hope will reach well beyond the evangelical Christian community, a core group that is, nevertheless, crucial to winning two of the early Republican contests—the Iowa caucuses and the South Carolina primary (whose winner since the primary's 1980 inception then wins the GOP nomination).

Politics tells you Democrats should never nominate a candidate from their Northeast-Midwest base, and Republicans should stay away from their Southern core. In politics, after all, you always want to expand beyond your base. I favored Northeasterner Chris Christie. But maybe what worked for Obama in 2008—give ‘em the progressive intellectual your party truly is and truly fix the country—will work in 2012 for the other side, now that country is still broke and broken. Hope. Change. Rick Perry. President.

Jobs: surface gains, deep troubles continue.

Economist Heather Boushey of the progressive Center for American Progress writes July’s jobs report produced a positive headline: jobs up 117,000, May and June totals revised upward by 56,000, the unemployment rate down from 9.2% to 9.1%. The Dow responded accordingly, up 61 points from Thursday.

Nevertheless, the Dow, S&P 500 and the NASDAQ all fell massively over the Thursday-Friday combined period, with the total of a Dow at 11,445, an S&P of 1,199, and a NASDAQ at 2,532 reaching just 15,176. That means the FOX Index (which measures “healthy” as a Dow of 12,000, an S&P of 1,300 and a NASDAQ of 2,500—total 15,800) is deeper in “unhealthy” territory at minus -624 (see chart).

Despite the positive job growth headline, Boushey is negative about the current jobs picture. She notes the share of Americans at work fell to 58.1%, lower than at any other point in 28 years; the share of adult men with a job fell to 66.7%, and prior to the Great Recession, that share had never fallen below its previous low of 70.5% in 1983; the share of adult women with a job was 54.9% in July, up slightly from 54.8% in June, its lowest level in eight years; temporary help, a leading indicator firms may hire, added no new jobs in July with little change over 2011; hours of work and overtime were flat in July, at the same level as they have been for months, indicating employers feel no pressure to hire; though the unemployment rate fell to 9.1%, this is the 25th month the rate has been at or above 9%, a post-war era record; nearly 7 million workers are out of the labor force so are uncounted, but currently want a job; long-term unemployed — actively searching for work for at least six months — are at 44.4% of total unemployed, only slightly below all-time highs; wages are failing to keep pace with inflation, with wage growth at 2.8% in July against an inflation rate of 3.4%.

Each month, we measure Obama’s employment record against two benchmarks that will be important in November 2012—the unemployment rate and the number of jobs in January 2009, when Obama took office. Here’s the chart measuring his progress: