Be Careful What You Wish For

Senator John Kyl (R-AZ) reports to radio host Hugh Hewitt that Senate Democrats are planning to kill the filibuster. They want to get their cap-and-trade bill through to passage before the new Congress, with probably a lot fewer Democrats, assembles in January.

I say: be careful what you wish for, liberals.

You chaps don't understand the correlation of forces or your own interests.

The next few years are going to be hell for liberals. Because the next few years are going to be about cutting government debt and deficits. Guess where most of the problem comes from? Right first time: liberal programs for government pensions, government health care, government education and government welfare.

There's nothing quite like having a nice filibuster and supermajority requirements in the Senate to hold back the tide of change. Southern Democrats understood all of that in the Civil Rights era.

If Democrats end the filibuster to pass their liberal agenda this year then they are just making it easier for a Republican Congress and a Republican president to roll back the welfare state next year. Or the year after that.

I'd say that the filibuster has already been enormously helpful to liberals. It lets them pass their stuff when they have a temporary supermajority, as in the 1930s, the mid 1960s and right now. Then, after the liberal supermajority disappears it becomes almost impossible to repeal the liberal programs. Because it takes a supermajority.

All in all, as a conservative, I want to keep the supermajority requirement of the filibuster. I don't want change in a conservative direction unless it is supported by a large majority of the American people. I believe in the notion of "the consent of the governed." I believe that government is force and you need more than a bare majority to legitimize force. You need a solid majority to give political change real staying power.

Napoleon wanted his generals to be lucky. Lucky was better than good. Liberals don't really appreciate how lucky they have been over the last century.

They got to put the blame for the Great Depression on the Republicans, although it was probably Progressive era politics and the mania for big government that created the mess. They got to shovel through a ton of liberal programs in the mid 1960s after Republicans nominated Barry Goldwater for president and he got tagged as an extremist. They got to elect a supermajority in the context of a banking crisis that issued mainly from their own insane home-mortgage subsidies.

But luck runs out in the end.

And when it does, you sure appreciate having a shelter from the storm. Like a filibuster that requires a supermajority before evil Republicans can toss your beloved programs in the trash can.

The Rich Pay More Taxes

The rich are different from you and me. They pay more taxes. Well, of course they do. They make more money.

Yes, but they also pay more in taxes as a percent of income than ordinary middle-class Americans. That's what the Congressional Budget Office reports and Powerline summarizes.

Is that really what Americans want? Do we want to force high-income Americans (not necessarily high net-worth) to pay significantly more of their income to support big government? Especially since high-income Americans are typically the ones creating jobs.

And by big government we mean the commanding heights of government spending: government pensions, government health care, government education, and government welfare. Oh, and national defense.

The assumption of liberals and their once-in-a-generation progressive "seize-and-hold" strategy is that Americans want more public services paid for out of taxes and that the rich should pay more, a lot more. Once liberals seize the progressive moment they can ratchet in another entitlement that can never be taken away.

Until the ratchet breaks.

In his latest op-ed article Michael Barone wonders if the ratchet still applies. The progressive ratchet only applies in a nation where most people don't own property. Property owners don't like redistribution. They fear that it will hit them.

Back in the days of the New Deal, most American rented their homes. So it made sense that they would vote for redistribution. Not today.

But we still live in an America like the America of the Founders, and unlike the America of the Progressives and the New Dealers, in which a majority of citizens are or have every prospect of becoming property owners. And a nation of property owners is less willing to plunder the property of others in search of some promised gain than a nation where most people don't and will never own significant property.

And that goes back to Irving Kristol's law. If you want to help the poor you must deal in the middle class.

Health care to help the working poor won't help the middle class. It already has health insurance. Cap and trade won't help the middle class. It will hit them in the pocket book when they pay the utility bill and fill up their SUVs.

If Barone is right then the voters will be acting like property owners this Fall and not like benefit recipients. I'm shooting for a 80 seat Republican gain in the House of Representatives. Because that would be one more than the 79 gain in the 1938 off-year elections.

How Bad Will It Get?

The London Telegraph's Ambrose Evans-Pritchard is a solid bear. He's been forecasting gloom and doom for years. Now he's writing about the possibility of a double-dip recession provoked by the current Euro crisis.

Investors basking in Wall Street's V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

Leading indicators seem to be forecasting a US contraction by the end of the year. That means that the Fed will swing back to money printing. An analyst in Europe, Andrew Roberts, forecasts that the Fed will revert to the same policy as it followed during World War II when it printed enough money to keep US Treasury bonds yielding about 2 percent.

Well, of course we don't yet know what is going to happen. The markets clearly aren't sure. They are certainly calling for a very modest expansion from now on.

If there is a double-dip recession in the US we will know who to blame. President Obama and the Democrats. For trashing the credit markets with lunatic housing credit subsidies. For wasting a trillion dollars on stimulating state and local government union workers. For raising taxes in a recession. For burdening the economy with a huge new health care entitlement. For scaring consumers and businesses with lunatic green energy taxes.

It could all end up in a huge political realignment.

But will it be worth the cost? The millions of unemployed. The shattered lives.

What's the point of all this political power and subsidization and preening if it all leads to a massive meltdown as big government shows what a waste it all is?

Frankly, I'd rather have the the foolish President Obama continue in power and the utterly corrupt Democrats in Congress continue in power than subject the American people to another Great Depression.

The Limits of Stimulus

What is the point of Keynesianism and economic "stimulus?" Is it all just political gamesmanship--naive inflationism and politically-connected economists truckling to politicians who always need another justifiction to spend?

The Reason chaps are having their fun with the New York Times' Paul Krugman. Who is still calling for more "stimulus." Trillions, not billions. Even more stimulus after the trillions already thrown over the side. But the Europeans don't like it. As Tim Cavanaugh writes:

Europeans have lost their appetite for digging deeper holes of debt for the same reason Americans have: because they don't have a choice. As Margaret Thatcher predicted would happen, we have all run out of other people's money.

That is to say: Europeans are worried about sovereign default, meaning that the government can't borrow any more to fund stimulus. Why? Because just like a homeowner with an adjustable-rate mortgage, there comes a time when the interest payment becomes so high that you can't pay for policemen and firemen and teachers and health care and government pensions.

The financial markets are worried that Greekonomics, the inability to service government debt, is likely to spread.

I've decided that the point of stimulus is quite simple, despite all the clouds of rhetoric. It is to float the underwater debtors. Capitalism is simple. If the debtors are afloat, meaning that their assets exceed their liabilities, and the market is confident that they are afloat, then the world goes on. Creditors can trust that debtors will meet their interest payments.

But if debtors are underwater, then nobody knows when the debtors will default. That goes for governments, bankers, corporations, and homeowners. In that situation creditors are right to lose confidence in the underwater debtors.

Keynesianism is the economic doctrine that the government should print and borrow money in an economic crisis. The purpose is to float the debtors. And the government should spend money to push money towards the underwater debtors and thus enable them to meet their obligations and, hopefully, increase asset prices and thus refloat the underwater debtors.

The question is this. Once you have refloated the banks, as the US government did in the fall of 2008, is there a need for stimulus?

Well, I'd say that, once the banks are rescued, then it is time for triage, as practiced by J.P. Morgan in 1907.

Morgan and the richest men in the US sat in a room and decided which companies to lend money to. Hopeless case? No money. Likely to survive without a loan? No money. The only debtors Morgan lent money to were companies he thought he could save with a loan.

Notice the difference between then and now. The banks have been rescued. Thanks Hank Paulson. But you have to rescue the banks, otherwise "this sucker could go down," in the words of President Bush.

But auto companies? Who needs to rescue auto companies? Yeah. The criterion of Obama bailouts is politics. And the criterion of Obama stimulus is politics. The politically powerful get rescued and the rest go to the wall.

Not a good way to run a railroad.

OK. But what about lessons learned? The lesson is that we need a lot less leverage in the economy. The excessive leverage and debt is not the fault of greedy bankers. It is the fault of politicians. Politicians like easy money and excessive debt because voters and organized interests are always agitating for cheap money.

But excessive debt means that debtors can't afford a decline in asset prices, e.g., houses. When you shovel credit at the housing market with Fannie and Freddie, you push up housing prices with your 90 percent and zero-down loans. All it takes is a decline in home prices of ten percent and a ton of people are underwater.

What about overleveraged banks. There was an excuse for bank leverage in the old days. In the old days there wasn't an organized market in equities. Banking was the only efficient way to channel capital through the economy.

But today we have a market in just about everything. So a lot of today's leverage could be transformed into equity.

And equity is so much more civilized.

Debt is rigid. I lend you money and you pay me a fixed interest. Or else. Equity is flexible. I invest money in your enterprise and now we are partners. We share in the profits and we share in the losses.

McChrystal Jumps on Grenade

Given the reports about Gen. Stanley McChrystal's self-sacrificing personal regimen: four hours of sleep, one meal a day, rigorous exercise, it's hard to believe that he and his aides stumbled blindly into criticism of President Obama and his advisors. I mean: who would be dumb enough to talk to a free-lance writer writing for the liberal magazine Vanity Fair: someone with nothing to lose by breaking a confidence.

No. You have to believe that a man whose devotional exercises amount almost to mortification knew exactly what he was doing. The idea was to blow up the president's policy, knowing that the price of the explosion would be McChrystal's head on a platter.

So McChrystal took out a grenade, pulled the pin, and then jumped on it. It's the least he could do for the men serving under him.

In doing so, he puts the Obama administration between a rock and a hard place. Back in the 2000s Sen. Obama was part of the Democratic faction that accused the Bush administration of fighting the wrong war: in Iraq not Afghanistan. Obama ran for president on that platform. So President Obama found himself as president forced to go through the motions of caring about Afghanistan.

The plan was to do a surge, but not too much, and then start withdrawing troops by mid 2011, just about the time that the presidential campaign for 2012 would begin. Absent withdrawal from Afghanistan, Obama would risk an anti-war candidacy to challenge him from the left.

With his indiscretion, McChrystal has put the Obama Afghanistan strategy on the national radar, just where the Obamis don't want it.

If the Obamis fire McChrystal then they have to find another general to run the Afghan war and they have to do a deal with him, which might require more resources.

If the Obamis don't fire McChrystal then they show themselves as weak to the world.

But they also show themselves weak to their liberal base, and that is important to them.

One of the major liberal shibboleths is civilian control of the military. It's a big deal for liberals because they know that the military doesn't like them. At the back of their minds is the thought that the military might do a number on them, even a coup, so they have to show who's boss. You can imagine what liberals would think of a president that allowed a general to shoot off his mouth about the commander-in-chief.

This year, 2010, is going to be an annus horribilis for liberals, and I'd guess that 2011 and 2012 won't be much better. The reason is pretty simple. It is that liberals have gotten into power under a false flag. They don't believe in a strong defense, but they pretended that they did. They don't believe in God and guns and family, but they pretended that they did. They don't believe in the free market and people succeeding on their own, but have to pretend that they do. They don't believe in live and let live, but have to pretend that their national nannying is just for the children.

But when liberals actually get into power, then they haul down the false flag and hoist their real one, emblazoned with the motto: Big Government For Ever! Moderates--i.e., Americans not paying much attention to politics--are shocked. They upchuck at the next election.

The big question is: what comes after that? Bush or Reagan, or something new?

My vote is for a woman-centered, woman-led conservatism that changes the rigid administrative top-down welfare state into a social, convivial, cooperative, responsible society.

Be Careful What You Wish For

The New York Times quota-conservative David Brooks gets a lot of flak from conservatives. They think he is too bland, truckling to his liberal readers.

Sure, he serves up a bland conservative dish for the liberal readers at the Times. Writing, as he does, for liberals, he doesn't beat them upside the head. He seasons his conservative thoughts to make them bearable to sensitive liberal palates. It's called communication.

The advantage of building trust with your liberal readers is that, occasionally, you can slip a real scorcher on to the liberal dinner table. Like yesterday's "Faustus Makes a Deal."

(Yes. Very sophisticated. The Temptation of Faust.)

Says Mephistopheles to the liberal Dr. Faust: Whaddya want, pal?

Faust asks not just for a nice liberal president but the whole enchilada:

1. An economic crisis to discredit Wall Street and capitalism
2. The smartest Democrat in the land as president
3. A fabuloso $800 billion spending package
4. A dream health care package for a grateful nation
5. An environmental disaster to discredit Big Oil

Hey Faust, you got it!

Imagine that. Our liberal Faust got everything he wanted. But then everything went wrong! Hell is getting everything you ever wanted.

And, indeed, everything Dr. Faustus wished for came to pass. Yet he watched events unfold with growing horror. Not in 70 years had there been a sequence of events so perfectly designed to fortify liberalism. Yet the country wasn’t swinging to the left; it was swinging to the right!

Oh no! Not that!

You gotta hand it to David Brooks. Sometimes he hits them out of the park.

But, remembering that he's got to humor his liberal readers, he ends with a swipe at conservatives: Faust's soul, he sniggers, will spend all eternity trapped in Glenn Beck's microphone.

Yep. That's the same Glenn Beck that just propelled The Road to Serfdom to the top of the best-selling charts. Who could be buying it? Conservatives don't read books. At least not as far as anyone knows in liberal-dom.

Old Obama Had a Farm - OIIOHH Aye Oh

It's an old, old song, but Obama Is In Over His Head:

Old Obama had a farm, OIIOHH aye oh.

And on that farm he had a Rahm, OIIOHH aye oh. With an F-word here and an F-word there, Here an F there an F, Everywhere an F-word,

Old Obama had a farm, OIIOHH aye oh.

And on that farm he had a spill, OIIOHH aye oh. With a glop-glop here and a glop-glop there, Here a glop there a glop, Everywhere a glop-glop,

Old Obama had a farm, OIIOHH aye oh.

And on that farm he had some debt, OIIOHH aye oh. With a Fannie here and a Freddie there, Here a debt there a debt, Everywhere a bailout,

Old Obama had a farm, OIIOHH aye oh.

And on that farm he had an ass, OIIOHH aye oh. With an ass-kick here and an ass-kick there, Here an ass there an ass, Everywhere a ass-kick,

Old Obama had a farm, OIIOHH aye oh.

You get the idea...

Scapegoating 101

It's telling that the iconic definition of evil conservatism, for our liberal friends, is the Communist witchhunting of Sen. Joe McCarthy (R-WI). And the cathartic moment for them is moment that Robert Welch the attorney stood up to Sen. McCarthy at the Army-McCarthy hearings.

Let us not assassinate this lad further, Senator. You have done enough. Have you no sense of decency sir, at long last? Have you left no sense of decency?

Yet the one thing that senior Democratic solons have excelled at since that day at the Army McCarthy hearings in 1954 is hauling scapegoats up before a congressional committee and utterly demolishing them.

As in many things, our liberal friends completely misunderstand the point of scapegoating.

The point of scapegoating is not for the king to haul up some miscreant, whether a tongue-tied BP CEO like Tony Hayward or some hapless virgin.

The point of scapegoating is for the king himself to take up the burden of guilt and failure and offer himself as a sacrifice to the gods, offering, as our Founders might say, his life, his fortune, and his sacred honor in order to save the village, the tribe, the nation from annihilation.

That is why the theme of sacrifice recurs throughout ancient mythology. One of the most famous sacrificed gods is the Egyptian god Osiris. That is why the sacrifice of the Crucifixion is the central article of faith in Christianity. This sacrifice is the greatest sacrifice imaginable: God sacrifices his Son.

Of course, powerful kings and tribal leaders have used their power, down the ages, to avoid doing the right thing. Take Abraham. Did he sacrifice himself? Oh no. He decided to sacrifice his son Isaac. Even that proved to high a price, so God thoughtfully told him he could sacrifice a goat instead.

President Bush is a man who understood that, after 9/11, he had to do the right thing. That is why the frat boy came, in due season, to acquire all the gravitas of a sacrificed king.

He knew, I think, that doing the right thing would probably mean political immolation for him. After all, he was a child of the Sixties and lived through the Vietnam War--not to mention the Cold War. He knew how quickly people tire of a long conflict.

So President Bush laid himself down on the altar of the nation, and allowed all the mistakes and failures and hardships of his time to be personalized in himself. He did that, giving himself up to humiliation and failure, so that the nation might live.

Our liberal friends do not understand this dynamic. They do not understand that a CEO and a $20 billion slush fund is not a sufficient sacrifice for a bungled oil-spill cleanup. They do not understand that, as the nation's intellectual and educated elite--and also by virtue of the elections of 2008, the nation's political elite--it is they that must take upon themselves the mistakes of the present era.

In fact, our liberal friends seem to have learned nothing from the example of history down the ages. They do not see themselves as just another powerful elite that has come to dominate and rule a people, just as tribal leaders, kings, and emperors did since time out of mind. They do not see themselves as normal, fallible rulers, clumsily manipulating the levers of political power no better than any of the perfumed aristocrats that came before them.

They do not understand that it is President Obama that must sacrifice himself as the scapegoat for the horrible mess in the Gulf. And maybe they never will.

But we are conservatives. Fallible and fallen as we are, we know a thing or two. And what we know is that President Obama must take the fall for this one.

And one way or another, he will.

The Party of No Canard

Our Democratic friends are really keen on the idea that the Republican Party is the Party of No. They think that this is a devastating critique of the party that is currently in opposition.

Earth to Democrats: that's what an opposition party does. Say "No!"

Even Democratic pollsters Doug Schoen and Pat Caddell in the Wall Street Journal piece can't resist the meme.

It may be a partisan cliché, but the GOP is increasingly seen as the "Party of No"... Republicans must offer a clear set of core principles, if not a comprehensive set of bold new ideas. If they do not, their hopes for winning both houses of Congress come November—a goal that is well within reach—could be dashed.

This is rubbish. Republicans don't need to do anything but yell bloody murder right now. That's all they need to do to rally people uncomfortable with Obama and Pelosi.

Let's rewind a little and look at the recent past so we can see how the Party of No tactic works in practice.

From January 2001 to July 2008 the United States had a real Party of No. Its name was the Democratic Party, and the No strategy came right from the top.

• Democrats said No to Bush's "selection."
• Democrats said No to recession-fighting tax rate cuts.
• Democrats said No to school choice.
• Democrats said No to the war in Iraq.
• Democrats said No to Social Security reform.
• Democrats said No to Fannie Freddie reform.
• Democrats said No to a corrupt Congress.
• Democrats said No to corporate lobbyists.
• Democrats said No to ineffective disaster response.

Yeah. All that negativity really messed the Dems up when they tried to capture the Congress in 2006 and the White House in 2008.

Of course, strategically, the Party of No business has really screwed the Democrats. The American people didn't think they were voting for a left-liberal president and Congress in 2008. They didn't think they were voting for the Cornhusker Kickback. They thought they were voting for Change You Can Believe In.

So now the 80 percent of the American people that are not liberal are looking at a government that is completely out of touch with their hopes and fears.

And it looks more and more likely that they are going to do something about it in November.

But forget about mindless opposition. Let's talk about Core Principles. I just looked at the Amazon product page for Hayek's Road to Serfdom. As of Thursday, June 17, 2010, the the rank for this 66 year-old book is #2. Why? Because Glenn Beck featured the book on his TV show a week ago.

Imagine that. Conservative TV watchers that read books about core principles!

So how does your Party of No look now?

The Poor Suffering Millennials

Michael Barone seems to have opened a hornet's nest with his recent blog about Millennials. All he did was indulge in a mild dig at the ObamaCare provision to force health insurance to cover children up to age 26.

[C]hildren... should not be encouraged to remain dependent on parents for extended periods.

Maybe, he suggested, the ObamaCare bureaucrats should add some modest "terms and conditions" for 21-26 year-olds in the area of "late night activities" and "substantial alcohol consumption."

Millennials were not amused, and the outrage spilled onto Glenn Reynold's Instapundit.

As a baby boomer, I think millennials have a right to be upset. But think up millennials! What do you expect? The political system is bound to screw you guys. That's what politics is all about. It is a conspiracy of the old and well-connected against the young and inexperienced. As in:

Compulsory education. What would you do if you wanted to make youngsters tractable and demoralized? You'd lock them up in custodial facilities for their entire childhood and adolescence.

Academic education. Most people, studies show, learn by doing. So let's structure education to benefit kids that learn from listening to teacher and from books.

Child labor. Let's keep kids out of the labor force so they can't learn any practical skills.

Minimum wage. Let's make it really hard for people without skills to get a job. (But unpaid internships for the rich kids are OK).

Regulated labor market. Kill the common law "employment at will" concept, and tangle up the labor market with all kinds of laws to prevent employers from hiring and firing without cause. You wouldn't want an employer to take a risk on hiring some young uncredentialed nobody.

Mandated benefits. One way to keep inexperienced young people from competing in the labor market is to mandate all kinds of benefits from health insurance to unemployment to retirement. These are things that young people don't need and shouldn't have to pay for. They just make it more expensive to hire young people.

I could go on. We could discuss Fannie and Freddie, which crank up housing prices, making it hard for young people without family means to buy houses, and then devastate the economy with a credit crisis. But let's not get into that.

Let's just point out that the more power you give government the more it will discriminate against young people. That is simply because young people haven't had time to organize into special interests like older adults.

But, of course, the whole point of older adults supervising the education and indoctrination of young people is to make it hard for young people to fight their way out of their oppression. By the time that young people have figured it all out they are well into their 30s and they are getting ready to screw the next generation of young people.

Now you know why we baby boomers made such a fuss about overthrowing the "system." We didn't overthrow it, of course. We just made it worse.

Here's a concept for you, millennials. Join conservatives in smashing the cruel, corrupt, unjust, wasteful, and deluded welfare state that liberals have created over the last century to empower the educated elite and to oppress the young and the poor.

You won't regret it.

The Difference between Government and Business

I just finished reading this chilling blog on the gulf oil spill.

Briefly, it suggests that the "downhole" is damaged and that the oil is already leaking into the ground around the well. In due course the well head (weighing about 500 tons) will fall over due to abrasion in the downhole pipe and the well will start to disintegrate. Think lots more oil gushing into the gulf. Etc.

It's pretty obvious that a major cause of the accident was BP trying to cut corners and cut costs.

Well? That's what businesses do to stay competitive.

Congersmen are experts at expressing shock and outrage at this. So are lefty activists. Corporate greed, they call it.

In this they are acting like stopped clocks, right twice a day. But they say nothing when, e.g., John D. Rockefeller lowers the price of illuminating oil from $0.80 a gallon to $0.08. (In today's dollars that is $80 and $8).

On the other hand, it is clear that government suffers from the opposite problem. For instance we know, from numerous reports, that about half the kids arriving in college from high school need remedial classes before they are ready for college material.

What do public schools do about this? Nothing. And they will do nothing until the education system starts falling about our ears.

So here is my universal rule.

The difference between business and government is that business keeps cutting costs until something breaks. Government keeps doing the same old thing until something breaks.

As a complete right-wing nut-case (or right wing-nut case) I'm rather partial to the first notion. We humans proceed down the ages by trial and error. When we make a mistake, we fix it.

Obviously, BP has made a big mistake in the gulf. Today, it's time to fix it. Tomorrow it will be time to do "lessons learned," punish the innocent and let the guilty go free.

The second notion, if you like, is close to the "precautionary principle" beloved by environmentalists. Don't do anything unless you are sure it is safe. That is what government bureaucrats do by instinct because the only thing that can prevent you from getting your inflation-proofed government pension is a big mistake.

Since doing nothing can be just as unsafe as doing something, the precautionary principle is meaningless, except as a political prodding tool. But it is a universal tool for government proponents, since only people in business ever actually "do" anything.

Meanwhile we continue to refine the ancient art of scapegoating. We locate someone to take the blame for all our mistakes and disasters, and then stuff them into an oil well.

Ain't life great?

Big Government Doesn't Work

The great delusion of our modern age is that politicians and bureaucrats can run an economy just like the village Big Man in a remote village in New Guinea.

Earth to liberals: they can't. That's why President Obama, True Believer in politics and bureaucratic administration, is making such a poor fist of the presidency.

Today we have a couple of readings in big government folly. First of all, David Warren:

We learned a simple thing this week: that the BP clean-up effort in the Gulf of Mexico is hampered by the Jones Act. This is a piece of 1920s protectionist legislation, that requires all vessels working in U.S. waters to be American-built, and American-crewed. So while, for instance, the U.S. Coast Guard can accept such help as three kilometres of containment boom from Canada, they can't accept, and therefore don't ask for, the assistance of high-tech European vessels specifically designed for the task in hand.

Oh really. Who would have thought that the dear old Jones Act would still be doing its damage. (By the way, Obamis, here's a chance to blame Republicans. The Jones Act was passed in 1920 by a Republican Congress--and a Democratic president.)

Then there's Gerald P. O'Driscoll in the Wall Street Journal on the failure of regulation in the Gulf:

By all accounts, MMS operated as a rubber stamp for BP. It is a striking example of regulatory capture: Agencies tasked with protecting the public interest come to identify with the regulated industry and protect its interests against that of the public.

Of course it did. If BP followed all the rules to the letter it would never be able to drill a well.

Let's turn to the financial meltdown:

Boston University Professor Laurence Kotlikoff counts over 115 regulatory agencies for financial services. If more hands in the pot helped, financial services would be in fine shape.

Who knew? 115 financial regulatory agencies, and still we got a meltdown.

Then O'Driscoll hauls out Hayek. Friedrich Hayek, you'll remember, was the chap who identified the Knowledge Problem. To run a central-planning economy, he argued, the planner must know everything out there in the economy, so he can make decisions that usually would be made on the spot by local actors with local knowledge.

Of course, that is impossible. No planning manager, no central planning agency can possibly know enough to run an economy. The result, on a nationwide level, is the Soviet Union. On a tin-pot dictator level, the result is Venezuela, where thousands of containers of food have been discovered rotting in Venezuela's ports. Venezuela has a government food distribution and retail system.

On an industry-wide level, writes O'Driscoll:

Regulatory practice represents islands of central planning in otherwise decentralized market economies.

And the result is failure, just like at the national level. And that is why we are reading over the weekend that we won't be able to keep our health insurance as President Obama promised. Over 50 percent of health insurance plans won't meet regulatory requirements.

"Regulatory capture" is just a theory. The "knowledge problem" is just a theory. If you don't believe the theories then you have to wait for experience to confirm or deny the theory.

Conservatives maintain that these theories have already been amply proved by experience, again and again. But our liberal friends don't seem to agree.

It looks like only one thing will persuade our liberal friends of the validity of these theories: to be out of political power for a generation.

What "Mama Grizzlies?"

Gov. Sarah Palin is being too modest when she talks about "her mama grizzlies."

The only mama grizzly I see on the political radar is Palin herself.

Yeah. When that mama grizzly charges...

Conservative war-horse Pat Buchanan seems to have an eye on Palin. As a papa grizzly and political fighter who goes back to the Nixon years, you could say it takes one to know one.

It was Pat who noted, back last fall after Palin had introduced the gentle idea of "death panels" on her Facebook site, that "the lady knows how to frame an issue."

Pat, the political operative, is telling it like it is.

Now Pat's reacting to the Super Tuesday results. He muses on the MSM writing off Palin as a quitter. It reminds him of Nixon's famous farewell in 1962 when he quit politics after losing against Pat Brown, father of Jerry, in the race for governor of California. And how President Nixon ended up taking the oath of office a mere six years later.

So Palin quit as governor last year. Now look at her.

And though the media have painted Palin as a ditz, no politician in memory has conducted a more brilliant pre-presidential campaign, if that is what she is about, than the lady who calls herself "the Mama Grizzly."

Yes. She just happens to have picked a winner out of the pack in South Carolina. Nikki Haley may well be governor of a state with a key primary in 2012.

Palin endorsed Terry Branstad, a moderate, who will run for governor of Iowa in November. Iowa, let's see...

But then Palin backed John McCain against J.D. Hayworth in Arizona.

There's only one way to make sense of this mama bear's cuffing. She's backing people who will owe her in 2012. Big time.

She's aiming for the White House. That's not me. That's veteran Pat Buchanan's judgement.

Dems Whistling Past the Graveyard

Democrats are still hanging onto the narrative of January 2009, that Obama represents a "subversive force inside the governing establishment", according to Matt Bai in a New York Times Magazine thumbsucker piece. He came to power by bringing 15 to 20 million new "surge" voters to the polls in 2008, who believed that he represented something new.

But now top Democrats are upset that Obama is not being partisan enough. Pelosi & Co. want him to unload on the Republicans and fire up the base.

But that's not what brought out the 20 million "surge" voters, explains Obama's strategist David Plouffe. He is trying to organize these voters in new ways, getting past the tried and true labor-union GOTV and TV ad strategy.

Oh well, Matt Bai sums up: "[T]he one thing [Obama] will never really embody is the status quo."

Oh really? I'd say that the big takeaway this year for everyone except the Democratic Party faithful is that Obama is same-old-same-old Big Government liberal.

Why would anyone think that? Oh, I don't know. He's supported down-the-line mainstream liberal agenda items like Big Government health care and Big Government stimulus and Big Government energy policy. And he's bumbled the response to his Katrina moment. That's transformational?

Look, it was tempting for Democrats to believe that they had done something exceptional in 2008. America's first black president was a milestone. But they forgot that they got into power by being not-Republican at a moment when that is just what the American people wanted.

Having got into power, the Democrats governed exactly like the Democrats that everyone had been voting against for a generation. Sure voters wanted change in 2008. That's what you do after you've got fed up with the chaps in power.

Here's the bigger challenge for the Democrats, as divined by American Thinker contributor and recovering liberal Robin of Berkeley. She reports that her lefty Jewish friends are getting exactly what they wanted in Obama.

But her liberal Jewish friend Laura is "shell shocked."

It's no wonder that polls show Obama's support plummeting among liberal Jews. They thought they were getting a patriotic American who'd unite this country, not someone who would tear it to shreds.

Now, when I talk to Laura on the phone, she sounds shell-shocked. While she hasn't put two and two together yet (I'm working on it), she describes a spooky feeling of nameless dread.

"Nameless dread?" Anyone seen the panic button? If I were a Democratic operative I would be scared to death about shell-shocked liberal Jewish voters suffering from "nameless dread." The very best I could hope for would be that the shell-shocked wouldn't turn out to vote.

But the real danger is that I could be losing a voter like that forever. Especially if she happened to be friends with a recovering liberal like Robin of Berkeley.

Alien vs. Mama Grizzly

The problem with President Obama, writes Dorothy Rabinowitz, is that he's not really our president. He's a kind of "representative at large" to the world community.

[Obama is] wanting in certain qualities citizens have until now taken for granted in their presidents. Namely, a tone and presence that said: This is the Americans' leader, a man of them, for them, the nation's voice and champion.

Well, nobody can say that about Sarah Palin. In fact, the hit on her is that she is too demotic and folksy. In fact a lot of people complain that she has only a vague hold on the all-important "issues."

We'll see about that. Anything that plays into the eternal liberal narrative that conservatives are stupid sets off my bullshit alarm.

The fact is that Palin is living up to the title of her book. She really is a rogue player, and she's not afraid to get out there and take risks when she endorses candidates and keeps herself in the public eye.

And that points to another difference between her and President Obama. It's pretty obvious by now that President Obama is slow on his feet. We saw that in the campaign, but it was explained away as a magnificent coolness under fire.

The question that the average pundit is now beginning to ask, as the BP oil spill continues, is whether that celebrated coolness is not in fact just a fear of making decisions, an inability to think on his feet and act fast in an emergency.

We know, from the commentary on the passenger jet that made an emergency landing in the Hudson River, that in an emergency people revert to their training. That's why they train pilots and airline cabin staff for emergencies.

Palin seems to thrive on emergencies and risk. Many national politicians have built support by endorsing and supporting candidates. They usually do in quietly, behind the scenes. But Palin's very public candidate endorsements and support have created controversy--e.g. her support of GOP Senate candidate Carly Fiorina. Robert Costa:

For Palin, policy ideas and values are important. So, smartly, is winning — especially when it comes to electing her hand-picked crop of Palinistas. “No matter your gender or politics, you have to hand it to her: Palin is fearless,” says Mark McKinnon, a former adviser to Pres. George W. Bush.

Who is President Obama, really? And who is Sarah Palin, really? There's lots of partisan narrative out there, crude attempts to define the other party's candidate as a lightweight, or as out of touch. And really, with a public figure, you can never separate the reality from the image.

What's the reality? The only thing a voter can do is pay attention. And watch the way the politician makes her moves.

Suppose the Liberal Luck Ran Out

Our liberal friends don't know how lucky they are. They've been wrong on pretty well everything (except civil rights between 1962 and 1965) but somehow the American people keep voting for them.

They were wrong on the Great Depression. FDR's economic policy kept the nation buried in misery for a full decade. They were wrong on Communism. It was an evil, just as evil as fascism. They were wrong on government welfare. Their cradle-to-grave welfare state has demolished the working class. In the 1970s their Keynesianism gave us the worst inflation since the Civil War. In the 1990s and 2000s their housing subsidies gave us bubbles and a banking crisis.

One big reason why liberals never seem to get the blame for their screw-ups is that they get to make their own weather. With bribed apologists in the academy, willing accomplices in the media, and immoralists in the commanding heights of the culture, they can spin everything to make themselves look good.

But now we have President Obama. Our liberal friends liked to make fun of President Bush as a fortunate son, a dim-witted scion who wasn't up to the job. Actually, George W. Bush had a baptism of fire with his failing oil firm, Arbusto, which must have taught him a lot about dealing with disaster, and helped him soldier through the dark days of the Iraq mess.

President Obama, on the other hand, really is a fortunate son. He's been eased along by helping hands his entire adult life. Now he is president at a tricky time when the president is really going to have to make some tough choices. He is going to have to make decisions that are going to anger his supporters.

The big thing he is going to have to face is big spending cuts for government. And that is really going to piss off his liberal supporters, who, working in government, have never had to deal with financial reverse.

Arthur Laffer, writing in Wall Street Journal, is predicting a "collapse" in 2011. More precisely, he predicts that the big tax-rate increases that take effect next January are already warping the recovery from the Great Recession. Businesses and individuals are pushing income into 2010 before the big tax increase. That means that 2011 will be pretty dismal, economically.

Maybe we are already seeing the dismal outlook, as the stock market has been swooning for the last month. We are, in early June, just a little over six months out from January 2011, and the market generally leads the economy by about six months.

If the economy is still sluggish in mid 2011, then look for the Obama administration to start proposing some really stupid stuff to goose the economy in time for reelection.

The problem is that there isn't much the Feds can do to goose the economy with Keynesian "stimulus." What do you think they have been doing for the last two years?

The Feds are already maxed out on borrowing. More borrowing would probably create angst in the credit markets and raise interest rates, and a continued easy money policy from the Fed is sure to be developing major inflation by 2012.

See what I mean? Some time in the next two years, the federal government is going to have to bite the bullet and implement real spending cuts to get its fiscal house in order. President Obama is going to be president, pushing spending cuts for liberal voters that have never faced spending cuts in their lives. Federal government employees will be losing their jobs. Teachers by the tens of thousands will be losing theirs. State and local governments will be going broke, and maybe cutting pension payments and health care benefits.

When the liberals run out of luck, it ain't gonna be pretty. The question is: what will the American people think? Will they feel sorry for well-paid teachers suddenly having to pay for health insurance? Or will they decide that big government and its supporters had it coming?

It all depends on who makes the weather.

Let's Not Think Big on Energy

Oh good. Big thinker Jeffrey Sachs, part-owner of the mess in post-Soviet Russia, and now director of the Earth Institute at Columbia University, wants President Obama to think big on energy.

What the disaster truly makes clear, however, is the inadequacy of the administration's own approach to overhauling America's energy system.

Yeah. Like government and its bribed-apologist experts have a clue "overhauling" anything, let alone America's energy system.

Sachs understands, at least, that the current Obama policy approach is flawed. The American people can see that it is a rat's nest of favors and subsidies to special interests. So that's why a bold plan is needed.

That is where the government - and the President - must come in: to promote, in a systematic and aggressive way, the best alternatives for clean energy and then to speed their adoption as they prove their economic and environmental merit.

Franky, Mr. Sachs, I doubt it. For all the talk about consensus and imminent disaster required massive government intervention, the fact is that we haven't a clue about the "best alternatives" or even the meaning of "clean energy." We don't know if CO2 concentration is a problem. We don't know what the climate is doing. And we don't know which technologies will be the winners.

The best thing to do, right now, as Iain Murray writes in National Review Online, is to stop the crony capitalism that induces companies like BP--"Beyond Petroleum"--to get cozy with the government. Look what happened after the Exxon Valdez spill.

After the Exxon Valdez spill, legislators and industry got together and agreed to a cap on damages in exchange for an increase in tax payments. Generally, damage caps create what is known as “moral hazard,” lessening the consequences — and thus increasing the likelihood — of a potentially damaging act.

Isn't that special! Special privileges and exemptions in return for tribute.

What we need to get us to the energy future is a lot of people trying different stuff. That's because nobody knows what the future will demand. Nobody knows what the best alternatives are. Sure, there are a ton of promising ideas out there. But who knows which are the good ideas and which are the good ideas that work.

Fortunately, we have a wonderful system for exploring the future and rewarding the people that get it right. It is called capitalism. Free enterprise capitalism, not government-corrupted crony capitalism.

Government's role is an important one. It is to play the role of impartial judge. When you get "people trying different stuff" you can be sure that they will make a ton of mistakes. Some of those mistakes will be messy, like BP's mistake in the Gulf of Mexico. When people make a mess, they must clean it up. No need to send down the US Attorney General with criminal complaints and perp walks. Just make sure that the law operates properly so that people damaged by a spill or a gas release get compensated fairly and justly.

Conservatives have a great role to play here. It is to play interference against politicians, against experts like Jeffrey Sachs, and against politicized corporations like BP.

The future will almost certainly be significantly different from the future planned by government and its experts. It will almost certainly be different from the future imagined by today's big corporations. That's because, in the nature of things, today's power elite won't want futures that diminish their power. Politicians want to spend money on programs that will get them reelected. Experts want national crises that require more research. Big corporations want solutions that will allow them to leverage their current market advantages against small upstarts.

The beauty of capitalism is that it doesn't give a damn about politicians, experts and big corporations. It just rewards the chap who had the right idea at the right time. And the other people? The chaps with the right idea at the wrong time? The chaps with the promising idea that wouldn't scale or couldn't be reliable or inexpensive enough? Well, they probably had a grand time trying.

The encouraging thing is that whatever stupid crony-capitalist or public-private partnership policy or grand strategy that Obama comes up with, he'll probably botch it.

And then the decks will be cleared for ordinary technologists and businessmen to do something sensible.

Canada and Welfare State Cuts

I checked out a TV in the guest room yesterday and in two minutes saw an ad for AARP's Medicare Supplement insurance and an ad by a lawyer advertising his services in applying for Social Security Disability benefits--the benefits "you deserve!"

It shows how central the welfare state must be in the lives of the TV-watching classes.

AARP's Medicare Supplement business is one of the untouchables in national politics.

And Social Security's Disability program already covers about four percent of the working population. I read an article a while back that predicted that the disability rolls would reach seven percent. Expect that number to be reached when we fully emerge from the current Man-cession in the next couple of years.

What will happen to the welfare state in the years ahead? Obviously we will hit a crisis. And liberals will suddenly realize that they need to trim the welfare state or go out of business.

In Canada, liberals reached that point in the 1990s, as Fred Barnes reminds us.

Canada was called an “honorary member of the Third World” by the Wall Street Journal in 1995, and for good reason. Out-of-control spending, soaring debt, and the government’s bite of the country’s gross domestic product (GDP) growing at a furious pace—those trends prompted the Journal’s harsh putdown.

The liberals in Canada's Liberal Party realized that something had to give. So they implemented draconian cuts in central government spending.

The results have been remarkable. In two years, spending declined 8.8 per-cent. The size of the national government dropped from 16 percent of GDP in 1994 to 13 percent. As debt shrunk, once-gigantic interest payments fell dramatically.

That’s not all. Canada’s version of Social Security was put on a sound financial footing. Only one large government entity with soaring costs has been left unreformed: the single-payer health care system.

Now Canada is trying to do something about its health care system, satirized a while back in the movie The Barbarian Invasions. According to Reuters:

British Columbia is replacing block grants to hospitals with fee-for-procedure payments and Quebec has a new flat health tax and a proposal for payments on each medical visit -- an idea that critics say is an illegal user fee.

Well, you can see that the Canadians are not that serious about cutting health care costs. Not yet.

But you can see the problem. Millions of people, like the folks watching those TV ads about government benefits, have organized their lives around the government's IV. If anyone tries to change the bottle of joy-juice, or even reduce it, it will produce enormous rage and resistance.

So, just like in Canada, we really need the liberals to get out in front. It is liberals that must carry the news to their supporters that the glory days are over. Will they? Would President Obama lead such an effort in 2012 after a chilling defeat in the November 2010 mid-terms?

Because if President Obama doesn't lead off, then it will be eight or ten years before another Democrat can lead his party towards a welfare state that recognizes limits on government largesse.

By that time we'll really be in trouble.

Not "Battle" but "Conversation"

I'm afraid that Arthur C. Brooks is missing the point in his new book The Battle: How the Fight between Free Enterprise and Big Government Will Shape America's Future

Not that there won't be a battle over the future of America.

In his book, trailed in The Washington Post in "America's New Culture War: Free Enterprise vs. Government Control," Brooks argues that Americans support free enterprise over government control by 70% to 30%. And he writes that it is not just money and materialism that drives the private sector but "earned success."

Earned success is the creation of value in our lives or in the lives of others. Earned success is the stuff of entrepreneurs who seek value through innovation, hard work and passion. Earned success is what parents feel when their children do wonderful things, what social innovators feel when they change lives, what artists feel when they create something of beauty.

There's just one problem with "The Battle" and "earned success." It is boy stuff. What about the girls?

The key challenge for conservatives is not to appeal to men. Men are already voting conservative and Republican. It is to appeal to women, particularly the single women who vote 70-30 for Democrats.

Free enterprise is a sublimation of the warrior code into the non-violent pursuit of victory in the pursuit of market share. Battle is the way that men go about social competition. Free enterprise vs. big government is a battle-oriented way of looking at our national problems.

We conservatives need to learn girl talk. We must propose not a "battle" but a "conversation." Men assemble on two sides to fight a battle to decide a conflict. Women gather for a conversation to "share" their dilemmas and negotiate a fair outcome.

Conservatives need to "share" with their liberal friends that big government is a terrible way to resolve dilemmas. Take education for instance. Every woman knows that her child is different and special. So why do we turn education of children over to big government and its one-size-fits-all philosophy?

Conservatives need to advance the idea that abortion doesn't just terminate the life of a child, but aborts the future. Abortion makes it harder for a woman to find love, for abortion makes the argument that sex is nothing special and should be available on demand.

Conservatives need to discuss with women how children suffer in any home that isn't headed by their married biological mother and father. Any other arrangement means more abuse of the children in it. When it's mother and boyfriend, the abuse may be six to 30 times the abuse in a married, biological home.

Men think in terms of strategic concentration. Women think in terms of sharing the wealth. Want to share the wealth? Much better to do it in a large extended family or through charitable kindness than in the wasteful corruption of Chicago-style big government.

"Earned success" is also a boy concept. Women don't "earn" anything; they don't have to. A man knows that he must prove himself before he can contribute to society. A woman is valuable and precious just because she is. She works and cares and loves and gives. What the world must do is give back to her, for there is nothing sadder and nothing angrier than a woman whose love and care has been spurned and wasted.

Yup. There's going to be a battle royal in the next few years. But conservatives need to see beyond that.

What we need is a great national conversation with women. We need to discuss with them how big government diminishes the future of their children and pollutes their lives with conflict and cruelty.

Should be a slam-dunk, fellas. I mean, it should be easy for everyone to share and come to agreement.

Sometimes Footwork Can't Save You

This year it looks like there's no place to hide. Moderate Republican US Senator Arlen Specter (D-PA) thought he could switch to the Democratic Party and win a sixth term to the Senate. But he was wrong, and was defeated in the Democratic Primary by Rep. Joe Sestak two weeks ago.

Democratic Rep. Parker Griffith (R-AL) thought he could switch from the Democratic Party and keep his seat in north Alabama as a Republican. He was wrong, and was defeated last night in a Republican Primary by "long-time conservative Mo Brooks."

Is it possible that we are looking at a Perfect Storm this Fall? You never know. Here are three reasons why our liberal friends are probably looking at the worst night of their lives.

People don't like the powerful. Our liberal friends have done a remarkable job over the years pretending that it is evil banks and corporations that run the country, and that they are plucky Davids trying to slay Goliath. Sorry chum. But they are deluding themselves. It is liberals that occupy the commanding heights of politics and culture. We are spending 45 percent of GDP on government these days because of liberals. A trillion dollars a year on pensions, a trillion a year on health care, a trillion a year on education, and a half-trillion a year on welfare. You could look it up.

Liberals "have misused the King's press damnably." Shakespeare's Falstaff said it first. At least he was honest. The Greek-American said it better. You don't have power unless you've abused it. And how. I don't think that our liberal friends really understand the damage they have done with their power and their government programs: smashing the low-income family, devastating urban neighborhoods, smashing the nation's finances, politicizing everything (and thus dividing the nation), wrecking education, messing up health care with a rat's nest of subsidies and regulations.

Sometimes, it's time. One of the consolations of religion is that it promises that the evil will get their deserts. Maybe not in this life but in the next one. Abuse and injustice in this vale of tears roll on from year to year, and it seems that the heavens themselves ought to cry out for justice. Sometimes you don't have to wait till the next life for the Last Judgement. All of a sudden, along comes a Perfect Storm. The floodwaters rise, and years of sediment are washed away in a single night. So far, 2010 is shaping up as a year like no other.

Of course, after the Perfect Storm, the problems are still there, maybe worse than ever. But at least the old order has been shaken to its foundations.

Our problems are not that great. We simply spend too much on government and on its supporters. Just about every dollar spent on government is a waste. But the people getting their dollars from the government are well organized. In normal times they can face down the reformers that want to reduce the weight of government on Americans and American businesses.

But then, along comes a year with a Perfect Storm.

Where the Liberals Went Wrong

So, the sea level hasn't started to recede. Nor has the planet started to heal. In fact, the planet is ripped open in two places, the Gulf of Mexico and Iceland.

And President Obama is staring into the abyss of presidential irrelevance, as his irresolute response to the Deepwater Horizon disaster has exposed the hollow man where his executive ability ought to be.

What went wrong?

The problem is the fundamental error at the heart of the liberal project.

The problem is quite simple. Everything that should be forced, liberals won't force; everything that shouldn't be forced, liberals force. The result is disaster.

Should we take a firm line against communism and radical Islam? No, no. Not so fast. Should we crack the heads of teenage hoodlums in the city? No, that would be racial profiling.

Should parents have the right to direct their children's education? Certainly not. They cannot be trusted, and must be forced to send their children to government schools. Health care? Force everyone to help the needy and the not-so-needy. Relief of the poor? Force is the only option.

Here's the error. Humans are social animals, not servile animals or mechanical animals. We are designed not for rigid hierarchies and clockwork precision, but flexible social interaction. We thrive not as subordinate ciphers but as interconnected members of a group.

Thus, to view society as a private sector and a public sector, of corporations and government, as we like to do, is a fundamental misunderstanding of human society.

Let us at least divide it into three, as Michael Novak does in The Spirit of Democratic Capitalism. There is the political sector, the zone of force. There is the economic sector, the zone of exchange. And there is the moral/cultural sector, the zone of... Er, yes. What shall we call it?

Shall we call it the zone of persuasion? The zone of feeling? Sentiment? Caring? Sharing? Yes, that's it: the zone of sharing.

You can see where the liberals go wrong. They want to make the zone of force the preeminent zone. OK, but look at the problems they create. Liberals bring everything under the color of compulsion. Sharing is compulsory. Exchange comes under the knout of political power. Persuasion is backed up by the power of the state. Caring comes to be defined by the amount of government spending.

The great challenge of the coming years, starting from right now, is to imagine a world of sharing, a world of social animals, in which the zone of force has been put back into its box. Where exchange is once more free and equal, and sharing is voluntary and free.

In the enlargement of the zone of force, liberals have collapsed the penumbra of moral action. It used to be that social force was limited, and people found themselves under enormous social pressure to be moral. But now, the moral and the legal are almost identical. So that means that the immoral has become almost always the illegal and the criminal.

Not a good idea.

We know why this has happened. It has happened because liberals have deliberately worked to loosen social ties and obligations. That is because liberals think that community obligations are often oppressive and marginalizing. People need to be liberated from the cramped norms of the family and the neighborhood--even the nation state.

But there's a price to that. Looser networks mean less social norms and more antisocial behavior and more force. As Leon Festinger found in his research: "norms are clearer, more firmly held and easier to enforce the more dense a social network is." And vice-versa.

Actually, "enforce" is an unfortunate choice of word here, and shows the liberal blindness on force and persuasion. Because in a social network, you usually don't have to resort to force.

What is the right word? Let's say this: Norms are clearer, more consensual, and more observed the more dense a social network is.

Well, it's a start.