Stimulus and Confidence

The big question in economic crises is Confidence. When the stock market is going south and banks are going broke and everyone is worrying about a "double dip" they are looking for the magic bullet that will turn the whole thing around and restore Confidence.

In the liberal world-view, you restore Confidence with a stimulus program that keeps money in consumers' pockets and gives them Confidence in the economy's future.

In the conservative world-view, you restore Confidence with tax cuts that give businessmen Confidence that the future will allow them to make profitable investments and keep a good chunk of what they make.

James Glassman has a useful analysis of the current crisis of Confidence in "The Failure of the Liberal Economic Experiment?" in Commentary.

He argues that the stimulus hasn't worked because people are looking past the stimulus to the higher taxes and spending and heavier regulation that the Obama administration has so diligently been working on for the last 18 months.

If government spending is short-term or one-time-only, which is what the stimulus was supposed to be, then individuals might be expected to take a more benign view. But the 2009 stimulus did not take place in a vacuum. It was soon accompanied by other economic policies and proposals of the Obama administration and the Democratic Congress: health-care reform extending public coverage to 30 million new people, cap-and-trade energy proposals featuring vastly higher taxes, and the imminent expiration of the Bush tax cuts at the end of 2010.

American business leaders and consumers are not fools. They can see what is coming. They see that the Confidence-building stimulus was a bridge to nowhere.

Americans judged that the party in power intends the radical expansion of the size of government in perpetuity. That expansion will have to be paid for. There is no reason to expect very much good from the future if you are the sort of person who generates income and creates jobs. Your “permanent income” is going to decline, and your gut response will be to husband your resources.

Democrats have had this coming to them for a long time. They were lucky in the 1937-38 downturn resulting from increased taxes and higher union wages rates that World War II came along before they got pitched out on their ears. They were lucky in 1965-68 when their inflationary economic policies were drowned out by the Vietnam War. They were lucky in 1994 when Republicans gained control of Congress and reduced spending. They were lucky that the crazed credit subsidies at Fannie and Freddie crashed on Bush's watch.

But it is starting to look as if the American people are going to blame the Democrats for the current lack of progress on the economy. It is starting to look as if their luck is running out.

My guess is that the only thing President Obama needs to do to save his presidency is to extend the Bush tax cuts and lower corporate income tax in stages to 20 percent. Because that will restore Confidence in the future.

My guess is that he won't do it.

Glenn Beck's Girl Conservatism

Suppose you are a liberal, and here you are on Monday morning after the Beck Restoring Honor rally. What are you to think? What does it all mean?

You go read Ross Douthat in The New York Times and he isn't really that helpful. OK, he says, he underestimated Glenn Beck. But it's not really such a big deal:

Beck’s packed, three-hour jamboree was floated entirely on patriotism and piety, with no “get thee to a voting booth” message. It blessed a particular way of life without burdening that blessing with the compromises of a campaign, or the disillusioning work of governance. For a weekend, at least, Beck proved that he can conjure the thrill of a culture war without the costs of combat, and the solidarity of identity politics without any actual politics. If his influence outlasts the current election cycle, this will be the secret of his success.

OK. Here's a quickie analysis for liberals, so you chaps can figure it out.

Glenn Beck is selling girl conservatism.

Rush Limbaugh is selling boy conservatism.

That's it. That's all you need to know. Now go back to NPR. The rest of you, Stay tuned.

I once read a critic of Rush Limbaugh who lightly sneered at his "jaunty optimism." That's it, I thought! That's exactly the secret of Rush Limbaugh: his day in, day out, irrepressible jaunty optimism. It's a profoundly male thing, of course. When men are under stress, whether they are an army platoon in a tough spot or working in a business that is teetering on the edge of failure, the response is to maintain a front of jaunty optimism, to say to your brothers that things are looking up, we'll get through to the end of this, and then we'll lift our arms with a brewski.

Glenn Beck is different. He is all emotion, all twelve step recovery, all history lessons, all revival. This morning, I caught a couple of minutes of the Glenn Beck Radio Program, and it featured women calling in about Good Samaritan episodes that they experienced at the Restoring Honor Rally. Guess what: that's girl stuff.

So we have Rush Limbaugh servicing the boy side of conservatism, about "being the best you can be," about laughing in the face of adversity. We have Glenn Beck servicing the girl side of conservatism, dishing up morally uplifting stories, rolling his eyes and rolling out the blackboard for a lesson on conservatism. Women love that stuff.

So if I were a liberal, trotting off to my non-profit sinecure this morning with a vague feeling of unease, I'd realize that things were really a lot worse than I thought. Because conservatives now have a one-two punch communicating daily to the 40 percent of Americans that call themselves conservatives. Men and women.

P.S. How about that black woman at the rally that said: "I am not an African. I'm an American!... These people are my family."

I Just Got a Tingle!

For the last couple of years I've sneered at liberal Chris Matthews and his famous tingle. But now I take it all back.

Needless to say, my tingle--and yes, it was in my leg--had nothing to do with President Obama. It came at the end of an American Spectator blog by Ben Stein. It had to do with the comments of his Hispanic gas station attendant.

"We have to wake up," he said. "Those people want to hurt us. Then they want to build a mosque. Why? To hurt us more? And how come Obama always takes the side of the people who hate us? Isn't this his country, too? What's wrong with him? Doesn't he know he's an American? Or what is he? This country has to wake up and get rid of Obama."

I nodded. "I agree," I said.

The man shook his head. "This country has to wake up," he said again. "We elected Obama. We made a big mistake. Now we have to fix it. Stop him, then get someone else in there. Someone who is an American. Someone who works for us, not our enemies."

Tingly stuff, I'd say. Because it tells a very big truth about America and American history.

At some point every immigrant stops thinking of himself as a helpless victim oppressed by a big bad America. He stops hugging the side of the swimming pool in the shallow end with all the liberal swimming instructors and strikes out into the deep end. He finds out the amazing, almost unbelievable truth about America. He belongs. He finds himself thinking of himself as a non-hyphenated American. He starts talking about "we." He finds, out there in the deep end, that when he gets into trouble and asks for help, Americans will come and help.

Perhaps he plucks up his courage and goes to a Tea Party--where all those racist whites hang out. And he finds out that he's welcome, that the sharp-faced middle-aged white women are pathetically grateful to see him there.

He finds out that everything the liberals told him is a lie, that all those awful racists and bigots of which he's heard tell are just folks.

Maybe he even gets a tingle running up his leg.

Ben Quayle's Way With Words

Back in the day--oh what halcyon days they were--Vice President Dan Quayle (R) had a little problem with his spelling.

Yes, he spelled "potato" with an "e." Oh what a jolly time our media friends had with that. Because, you see, it confirmed their worst prejudice, that Republicans were uncultured and anti-intellectual.

What a shock it is, then, to discover that Dan Quayle's son Ben has a remarkable way with words. Even the liberal Politico has taken notice covering his victory speech when he won the Republican primary for the 3rd congressional district in Arizona on Tuesday.

His victory speech's first line mirrored a startling attack ad he released in the campaign's final weeks: "I mainly have eight words for you: Barack Obama is the worst president in history," he told supporters.

Well. On the other hand, maybe he's not so good with words. His line seems a bit wordy to me. For one thing, it adds up to 15 words, including the vocal pause "mainly".

Dan Quayle can't spell, and now we find out that Ben Quayle can't add.

The thing is that in these latter days, you've got to cut things down, dumb them down so the "like" and the "totally" and the "whatever" crowd can get it. How about this:

Worst. President. Ever.

Still too long? Hmm. Maybe we have to reduce it to texting-speak, where everything is reduced to an abbreviation, as in LOL. How about:

WPE

I wonder if WPE is already taken? Let's just Google it and see.

Ah, no problem. WPE is already recognized as "worst president ever."

So that's all right. Mind you, WPE also stands for "writing proficiency exam" and "winsock packet editor." But somehow I think that people will get the point.

When they go into the voting booth in November.

Palin the Kingmaker

Several of the GOP candidates that won yesterday are, as our MSM friends like to say in their objective reports, outside the mainstream. In the next paragraph, they typically quote some Democratic honcho; he'll say that Democrats look forward to running against him.

Sharron Angle in Nevada is one such candidate. And it looks like Rick Scott (R), the self-financed businessman running for governor in Florida is another. Maybe Joe Miller, who seems to have defeated Lisa Murokowski, is another.

The MSM is right, of course. In the past conservative candidates that didn't mouth the correct pieties to liberal Articles of Faith got clobbered.

One day, of course, that's going to change. Because that's the way the world works. One day some chap will come along and desecrate a holy shrine. People will hold up their hands in horror. They will look up to the heavens expecting the wrath of the gods--and nothing will happen.

Is 2010 that year? Nobody knows. Not yet.

But we do know that Sarah Palin is a political force. All the people that wrote her off as a light-weight and as a bumbling fool are wrong. Sarah Palin is a remarkable political talent, and she has been a professional politician since the mid-1990s. She seems to have a political "golden gut," an instinct for the right word, the right gesture, that President Obama would probably love to borrow, if only he could.

Sarah Palin is making herself into a political kingmaker. She travels around the country sprinkling selected candidates with her pixie dust--and they keep coming out of nowhere to win elections.

Are you chaps ready to take her seriously yet?

Government's Kiss of Death

I picked up Tom Wolfe's two latest novels, I am Charlotte Simmons and A Man in Full a while back, and now I have started Charlotte.

But I almost stopped right there. Because I thought to myself: I don't want to read about this squalor, this tale of youth utterly degraded and demoralized. It's too painful.

Then just yesterday I had been reading Hugh Hewitt's interview with Peter Hitchens on his new book The Rage Against God. There's this nugget of life in Britland.

We are a country in very severe decline of all kinds, and there is, at the moment, no sign whatever of any serious attempt to recover from that decline... [T]he tourist visitor inevitably sees the nicer parts, and isn’t going to go to the sort of place where you discover that the feral youths loping through the streets, where they will kick your head in at the drop of a hat. But we see them, and we see the un-policed cities, and we see vast areas from which the economy has withdrawn, and where people live entirely on welfare... And we see the effects of an education system in which people can spend eleven years in full-time education and come out unable to read, write or count... And unless something is done about it very soon, then as a society, we will cease to function. We are becoming an uncivilized anarchy, and a very, very uneducated and immoral one as well.

He goes on to say that marriage as an institution has just about ceased to exist in Britland.

Then, of course, we come back to the Obama administration and its $4.4 trillion increase in government spending and its utter failure to spark the economy from the banking crisis of 2008.

If you want to come up with the common denominator in all this, it is government and the government's kiss of death.

This is not all that hard. Government is the social agent of force. Politics is about power. The people that succeed in politics are people that are good at power.

When you put government in charge of anything then the culture of force takes over. Compulsion becomes the order of the day. And then the social arts, the kindly virtues, start to wither. Since everything becomes a matter of political power, then everything in society becomes reduced to power.

When everything is reduced to power, you no longer have a society.

We've put government in charge of education. So now everything to do with education is a matter of power. All the mediating institutions that make the world safe get tossed away, and solitary individuals like Charlotte Simmons get chewed up in the government meat grinder. The government kiss of death to young people.

We've put government in charge of welfare. So now everything in welfare is a matter of political influence. Welfare recipients understand how this works. They vote for the chaps that promise more money. If you want money, you must act pathological. Now we find that a century of government money for the poor has destroyed the low-income family. The government kiss of death to the poor.

We've put the government in charge of the economy. So now we have the massive swings and tidal bores of the current economy. Government spends a ton of money on housing subsidies, and creates a housing bubble and the inevitable housing bust. Now government is trying to fix the broken credit system while it plans vast new interventions in the economy. And, of course, in the century of the Federal Reserve, the value of the dollar has gone from $20.75 per ounce of gold to $1,200 per ounce of gold. The government kiss of death to the economy.

I wonder what will happen if we put the government in charge of health care? Oh dear. We already did.

Obama's Religion Problem

Our liberal friends have their knickers in a twist right now about the shocking finding that about 20 percent of Americans think that President Obama is a Muslim. Just to be on the safe side, they are blaming Rush Limbaugh for this.

The awful Rush, you see, started calling the president "Imam Obama" last week.

Earth to liberals: One of Rush Limbaugh's big secrets is hidden in the phrase "fun, frolic, and a serious discussion of the issues." The Rush Limbaugh Program features humor and wit--even extending to irony and sarcasm--as much as it features political analysis.

And I would suggest that calling the president "Imam Obama" is an instance of irony. Very advanced and sophisticated, irony. At least that's what liberals used to say. That was before their ox got gored.

It's not that surprising that 20 percent of Americans think Obama is Muslim. His father is Muslim. He spent a good part of his youth in Indonesia, a Muslim country. His middle name is Hussein. So what! Liberals put out confusing and unhelpful memes about conservatives all the time.

But Obama's problem is not really about Islam. Obama's problem is his political approach to religion in general. And that is what came through so loud and clear on the president's iftar speech.

When it comes to religion, Obama is a liberal. He is liberal in the way that he pronounces on the 9/11 mosque. He is liberal on the way that he condones the ugly black racism of Reverend Wright. He is liberal in the way that he talked about "my faith tradition" during the campaign. And of course he is liberal in the way that he has no regard for the religious beliefs of health care workers that may not want to be involved in abortion procedures or "death panel" decisions.

I don't know whether Obama is a Christian. I doubt if he is a Muslim. I do know that he is a liberal. If you are looking for his "belief system" then the answer is "liberal."

Liberalism is what we now call a "secular religion." It has all the hallmarks of a religion except a belief in God. It's a faith community. It has its articles of belief. It divides the world into us and them. It is militant, actively seeking converts, particularly in the government education system. It is intolerant towards non-believers.

This wouldn't be exceptionable, except for one thing. Liberalism wants to combine its secular faith, its church of liberalism, with the government. It wants its belief system to become a kind of state religion, but without God. This puts liberals into an interesting position. They are always quoting Thomas Jefferson and his call for a wall between church and state.

But they refuse to admit that their beliefs constitute a religion and that there amounts, in the United States, an establishment of liberal religion, officially supported and imposed by the government in a host of ways. Here's one. In the welfare state the government does a lot of things, like education, health care, and welfare, that used to be done by churches.

Obama's problem with religion is that, in a nation that's 40 percent conservatives, 35 percent moderate, and 20 percent liberal, he's forcing a minority world view on the majority.

That is not a situation that is likely to end happily.

They Just Don't Get It, cont.

What must they be thinking at the White House? Here's faithful liberal reporter Matt Bai talking it other with some Democratic bigwigs.

Democrats in Washington are divided and somewhat puzzled over President Obama’s fading popularity.

Somehow, they figure, the president failed to communicate his successes! It's all a problem of messaging.

Well, not exactly, says bigwig John Podesta. It's really all because the president has been focusing on big legislative accomplishments, assuming that he would get an "updraft" from an improving economy.

Notice what this delicately tip-toes around. The Obama administration made a choice to push its expensive big-government agenda in 2009 instead of pushing economic recovery. It "assumed" that the economy would revive.

So John Podesta is just beginning to admit, in a veiled manner to soften the blow for New York Times readers, that the Obama administration made the biggest political error of all time, assuming that it was business as usual in the aftermath of the biggest financial crisis since the Great Depression.

The administration assumed that it could pile huge new costs upon the private sector without stalling the recovery. We now know that it was wrong. Dead wrong.

Here's another veiled admission from Podesta--on postpartisanship:

[P]art of the president’s significant appeal to voters — “a big part of the secret sauce of getting him elected” — was his promise to transcend perennial partisanship. A more national, outward-looking strategy for creating a “postpartisan” dynamic might have included White House partnerships with Republican governors or even with conservative foundations or industry groups. Because the president effectively boxed himself in to a Capitol-Hill-only strategy, though, he handed the Republican minorities in Congress the power to sabotage his goal. “Once you became a legislative president, which is arguably what you needed to do, you couldn’t deliver on the nonpartisanship promise,” Mr. Podesta said. “And it’s something people wanted.”

You see the misdirection here? What do you mean, John Podesta, "partnerships with Republican governors or even with conservative foundations?" You are trying to suggest that there was no chance that the president could have done a deal with the Republicans in Congress. But this is rubbish. In 2009 the Republicans were ripe for the taking if the president had made a even modest move in their direction. They were extremely reluctant to criticize the president--right until the grass-roots entry into the health care debate during the August town-halls. At any time until August 2009 the president could have picked off a few moderate Republicans with some token compromises to get a bipartisan health bill.

It's interesting to see John Podesta starting to wake up to reality. But he has a problem. He must be careful not to frighten the horses in the street otherwise the base Democrats will get so demoralized that the GOP will pick up 100 seats in the House in November instead of 80.

So he speaks in veiled terms, in nods and winks. If he were a Straussian, we could talk about esoteric talk versus exoteric talk, saying in the same words one thing to the initiated and another to the uninitiated.

But of course, John Podesta is a Democrat, so he can't possibly be a follower of conservative Leo Strauss.

One Step at a Time

Here in Washington State we had our primary yesterday. The result? Sen. Patty Murray is in trouble, since her vote about pegged equal with the Republican vote. And three Dem districts are in play, the 2nd with Koster against incumbent Larson, the 3rd, an open seat, and the 9th, maybe, with Muri against the incumbent Smith.

If a couple of those seats turn Republican then we'd get a 5-4 GOP advantage instead of a 6-3 Dem majority in the House delegation.

I said it back in 2008. The only way you get to win in politics is by letting the voters get a taste of the other guys. Disgust, the psychologists are finally realizing, is not just about avoiding rancid meat, but avoiding rancid ideas.

With President Obama we have the world set upside down. We have a war on the American economy, with a breathtaking program to seize a huge chunk of the economy and parcel it out to Democratic Party supporters. And we have a president who wants to pass on the great clash of civilizations, the question of whether the West shall prevail or Islam. It is all laid out today by Ayaan Hirsi Ali in The Wall Street Journal.

The president's hope was that moderate Muslims would eagerly accept [his] invitation to be friends.

The president is a One Worlder, a devotee of the fashionable idea that the fall of Communism meant the "End of History" according to Francis Fukuyama. No it isn't, wrote Samuel Huntington in The Clash of Civilizations, and Ali agrees.

The West's universalist pretensions are increasingly bringing it into conflict with the other civilizations. most seriously with Islam and China.

The future of the West depends upon a successful defense against these challenges, according to Ali. Ordinarily, as far as Islam is concerned, it shouldn't be a problem, since the Islamic countries are "ruled by despots of various stripes."

China is a bigger problem, but here there is hope--that China is reinventing itself as a Christian country. Huh? Here is a Chinese Christian describing to David Aikman in Jesus in Beijing how China has looked at the West over the last two centuries.

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.

There are thought to be about 100 million Chinese Christians in house churches in China, but nobody knows, because the house churches are more-or-less underground. So China may in fact be in the process of modeling itself on the West, rather than challenging it.

The great thing about the Obama administration is that all the ideas that the center left has been pushing for the last half century are going to be utterly repudiated by the American people in the next few years. Not because the American people will have done an exhaustive analysis on them, but because they are associated with Obama and the failures of the Obama administration.

And it all starts in the House districts in play this November in Washington State and elsewhere.

Because we are looking right down the barrel of an 80 seat pickup for Republicans in the House. That will be the biggest pickup since the 75 seat swing in 1938, and it will change the rules, starting on November 3, 2010.

Liberals Defend Religion!

Sometimes our liberal friends astound us. We conservatives have suffered for half a century as liberals have pointedly pushed religion out of the public square. No prayer in schools. No religion on campus. No religious symbols on government property.

But then out of a clear blue sky, liberals are all hot to prove their devotion to the First Amendment's guarantee of freedom of religion--to Muslims. And when President Obama, in an address to Muslims, affirms their right to build a mosque right next to 9/11's Ground Zero, liberal pundit hearts go aflutter here, here, and here.

Oh yeah? So when did a liberal heart ever go aflutter over celebrating the right of Christians to put up a church right next to a liberal shrine?

Liberals certainly don't seem too happy about Glenn Beck and his Restoring Honor rally at the Lincoln Memorial on August 28, the anniversary of Martin Luther King's "I Have a Dream" speech.

OK, it's clear how liberals get to supporting the 9/11 mosque. Muslims are anti-American; liberals approve of that. Muslims are anti-Christian; liberals like that. Muslims are victims in Palestine; liberals rally to that. Muslims in America are a minority; liberals like that. Hate groups might attack Muslims; liberals must rally against that. And so on.

As for me, I notice that the mosque issue fits into my culture of compulsion/culture of friendship template. Liberals are saying as enlightened elitists that government must compel the American people to allow Muslims the right to build mosques wherever they want. Conservatives agree that Muslims have the right. But in the spirit of friendship, conservatives say, surely Muslims would not want to build a mosque so close to a site where Muslim extremists killed thousands of Americans.

"There is such a thing as society. It's just not the same thing as the state." Scratch a liberal, and you'll find someone that doesn't get it.

Cordoba House vs. St. Patrick's Cathedral

Once upon a time in New York City there was an immigrant group determined to show the powers-that-be that they were a force to be reckoned with.

No, I am not talking about Muslims and the Cordoba House project led by imam Feisal Abdul Rauf. I am talking about the Irish Catholics led by Archbishop John "Dagger" Hughes.

John Hughes was an immigrant gardener at the gardener and stonemason at Mount St. Mary’s College and seminary in Emmitsburg, Maryland. Then, through the intercession of Mother Elizabeth Bayley Seton--canonized later as America’s first native-born saint--he went to the seminary, became a priest and the first Catholic Archbishop of New York. You can read his story here. In the 1850s Archbishop Hughes conceived of a project to build a new cathedral in New York City. Here's how William J. Stern wrote about it in City Journal.

As the 1850s wore on, the archbishop began to conceive a plan that would give magnificent, concrete expression to the rise of New York’s Catholics. He would build a great cathedral, financed by the Catholics themselves, as proof to the Protestant elites that the Irish, too, knew how to make New York the premier city of the world.

And he would build it right on Fifth Avenue, right where the Protestant swells and the Astors and the Vanderbilts lived and right where they could see it every day.

Fast forward to 2010 and the Cordoba House project. Imam Rauf, like Archbishop Hughes before him, wants to show to the world that Muslims are a force to be reckoned with. Unfortunately the project is not right where the the dominant liberal swells couldn't miss it. It is right next to the hallowed ground of 9/11's Ground Zero.

The Cordoba Project might have made sense when the Twin Towers were standing, when they represented the cultural power of the United States. But not now, not after 9/11. The Cordoba project doesn't represent the ability of Muslims to contribute to the glory of New York City. It just shows the tone-deafness of America's elite Muslims.

There are other differences too. Back in the 1850s the rich New York Protestants clearly represented the cultural elite heart of New York City. But now the cultural elite is the educated progressive elite of liberals. Thus the Muslims are not an insurgent group of dirt-poor Irish laborers and "nymphs of the pave" desperately working their way up from famine and indigence. They are, on the contrary, the darlings of the liberals. Liberals are pontificating up and down the land about the "right" of the Muslims to put a mosque any where they want. (Do not spend too much time waiting around for liberals to assert the right of Christians to put a church anywhere they want.)

What we are seeing is liberal street theater with the usual rent-a-mob. Also, it appears, Cordoba House is not getting funding from dirt-poor Muslim cab-drivers in Manhattan but from rich Saudi and Kuwaiti princes. Next thing we'll learn that George Soros is a contributor!

In the 21st century, if you want to prove you have hair on your chest, it's absurd to come into the public square as a liberal darling. You need to be a real grass-roots movement that must overcome every day with the scorn of the liberals. You know, like the Tea Party.

Forget Medved, the Future is Bright!

If you want to understand why President Obama is pushing immigration and punishing Arizona for trying to enforce the immigration laws, look no further than 2012, writes Michael Medved in The Wall Street Journal.

The politics is aimed directly at the Hispanic vote. That and the black vote is what will put President Obama over the finish line in 2012, according to Medved.

Maybe it will, especially as Hispanic voters are going to swell a lot in the next few years. And if you assume that blacks will still turn out big-time for the first African-American president.

But look on the bright side. Young people. After the soul-destroying years of 10 percent unemployment that falls most heavily on the youth, they won't be voting 67 oercent for the president, if they show up at all. Snobby social-liberal/economically-conservative types. They didn't like the religious right in the 2000s, but they will be voting their economic interests this time around. And then there's the ordinary white middle-class voter. Can you spell "T-E-A-P-A-R-T-Y?"

The thing to remember about Obama is that his Keynesian Obamanomics has screwed everyone except unionized auto workers and government employees, and there just aren't all that many of them. So the 2012 election is shaping up as Hispanics, blacks, auto workers and government employees against everyone else.

Let's not forget the really big factor that is working against Democrats. Matt Welch calls it "The Death of Neo-liberalism." You can call it the death of the New Democrats, or the Third Way, or Clintonism, if you like.

The fact is that the Clinton lurch to the center was a necessary tactical move for elected Democrats in the aftermath of the Reagan era. Reagan proved to most Americans that the old menu of big business, big labor, and big government wasn't working, and he introduced them to a hopeful agenda of entrepreneurism and start-up capitalism. Democrats like Clinton realized that they couldn't get elected on the old agenda.

The left hated Clintonism, and by 2006 they were the articulate base of the Democratic Party. So they swept into power in 2008 on the strength of Republican exhaustion (and the banking crisis caused in large part by New Democratic housing policy!). Now, they thought, we can effect real change with health care, green energy, and more money for progressive programs.

Anyone paying attention could see, starting right away in 2009, that these lefties were wrong. First of all, even in the fall of 2008, Americans hated the bank bailouts. Then in early 2009 a new movement of rejection, the Tea Party, popped up on the radar, taking everyone by surprise. Then, by the summer of 2009, Americans hated the auto bailouts, hated the stimulus, and hated ObamaCare.

Now, in the summer of 2010, we see the recovery faltering. So whatever Obama did, things are going wrong on his watch and Obama is to blame. Actually, according to non-Keynesian economics, what he did was economic stupidity, and he really is to blame.

Let's fast forward to the summer of 2012. Yes, the economy will be in better shape then, but there will still be big-time unemployment. Probably inflation will be starting to look nasty. And, probably, ObamaCare will be causing major anger out there in the heartland as ordinary Americans find that their health care arrangements are being ripped up by new ObamaCare regulations.

My prediction is that we'll see an 80 seat Republican pickup in the House, and you ain't seen nothing yet. That's because the liberals have been lucky, and their luck has run out.

The Democratic Party has always been the party of people trying to get on their feet in the capitalist economy. That was true with Andrew Jackson in 1828, true with the Irish in the big cities in the 19th century, true with the Jews and Italians in the early 20th century, and true with the New Deal coalition in mid-century. Now it's true with Hispanics and blacks.

But once people get on their feet and they discover that capitalism is not a monstrous thing they change their minds about politics. They find that a person with moderate skills and a will to work can always find a decent job and a moderate prosperity in America. They find that just about the only thing government does well is screw things up. They start to believe in themselves as rugged individualists and they start to read about the Constitution and individual freedom. They stop being hyphenated Americans and they become true-blue, rock-ribbed Americans. They stop voting for Democrats.

Bill Clinton, with his stunning political skills, was able to square the circle for a while. But I knew Bill Clinton, and let me tell you, President Obama is no Bill Clinton.

In 2012, President Obama will play the immigration card. He will play the race card. He will play every card in the deck of Democratic identity politics.

But the American people won't care. They will say: "Frankly my dear, I don't give a damn." And they will vote for a Mitch Daniels, a Bobby Jindal, or a Sarah Palin for president.

And here's a long-term prospect. President Obama is going to end up breaking the hearts of African Americans, because they will find that electing a black president doesn't solve their problems. Politics, they will discover, is a false god. We won't see much happen in 2012, but by 2016 we will see a significant minority of blacks detaching from the Democratic Party. No more 90 percent voting for the Democrats. Try 75 percent, 65 percent within ten years. We already know what they look like. They look like those Tea Party black conservatives that keep popping up on the radar.

Yep, things may look gloomy right now, but America is going through a necessary transition, learning by experience that the big-government top-down society of the liberals just doesn't work for them and their families.

After it is all over we will all realize that the pain was worth it. No pain, no gain.

The Luck of the Liberals

You've got to hand it to our liberal friends. They've had an amazing run of luck. After mucking up the economy throughout the 1930s they managed to persuade the American people that they saved the economy in those years with their brilliant stimulus spending on the CCC and the WPA and the TVA and Grand Coolee Dam.

Then, for the last half century, it always turned out that a Republican was in the White House during a recession: 1958, 1969, 1974, 1981, 1990, 2001. Those stupid Republicans, we are reminded again and again. How could they keep screwing it up.

You could also think of the Luck of the Liberals. They always manage to be on vacation when there is real work to be done.

Let's think of liberals more as the uncouth Baron Ochs auf Lerchenau in Der Rosenkavalier. He had a remarkably high opinion of himself, even though his name translates as "ox of the lark-meadow." And he had a favorite rollicking waltz, "The Luck of the Lerchenaus." Eventually, the Baron's luck ran out and he was roundly humiliated to the satisfaction of everyone.

But now the liberals are in charge in the worst recession for a while, and it is a recession combined with a banking crisis, a particularly nasty combination. In such a situation, you need to get it right, otherwise things are going to be really nasty--kinda like the unending Great Depression of 1929-39, America's lost decade.

I felt and I wrote, back in early 2009, about my foreboding when the Obama administration did not change course after winning the election and continued with its entitlement and regulation agenda during the aftermath of the Crash of 2008. Not good, I thought. You chaps need to fix the economy first.

But the courtiers were all egging the Obamis on, and on they went. Now, of course, everyone is predicting a double-dip recession and deflation and a lost decade like Japan's in the 1990s, and Democrats are waking up the the prospect of an electoral tsunami in October. (A tsunami? Another proof of global warming, I should think.)

The sensible strategy is to repeal ObamaCare, repeal the Dodd-Frank financial re-regulation bill, enact sharp spending cuts, extend the Bush tax rate cuts, enact corporate income tax rate cuts, and watch the stock market turn on a dime.

But that, I would guess, is politically impossible for the Democrats. If they were to do that it would announce to the voters and the world that everything they stand for is rubbish and always has been.

The problem, I think, was encapsulated in a recent Wall Street Journal article by businessman Michael P. Fleischer about the problem he faces in the Obama economy. He talks about the cost of "Sally," the median employee at his business. She has a high-school education plus some specialized training. He goes on and on for several paragraphs adding up all the taxes and fees he must pay for.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

Think of it this way. Government puts a 33 percent jobs tax on every job in America.

Now do you wonder why business is slow to hire new employees in the aftermath of the Great Recession?

I'm reading A History of Central Banking in Great Britain and the United States by John H. Wood right now. Don't laugh, it's a real page-turner. Here's an important take-away. Every time there's a financial panic or crash, it seems that the big question is "confidence." Market players look for a magic bullet to restore "confidence." Another word for "confidence" is "credit" or faith.

In other words, the economy runs on more than the numbers. It runs on confidence and credit and faith and trust. It runs on the faith in the counter-party, that he is good for his commitments.

Governments and financial "plungers" tend to take advantage of other peoples' trust to hoodwink and deceive. But the market economy, at bottom, runs on trust, the trust that things will turn out all right and that the other guy will not try to run away from his commitments.

That's why J.P. Morgan told the Congress this in 1913:

[A] man I do not trust could not get money from me on all the bonds in Christendom.

This statement merely states the obvious. The problem with lending money arises not when things are going well but when things are going badly. What will a man do about the money he owes me when things are going south?

America's businessmen right now are in a quandary. They are making money, because they have ruthlessly pared back their operations to make sure they can turn a profit. But they are looking forward and they just don't have the confidence in the future to take a risk on expansion.

Not with President Obama in the White House and Pelosi and Reid leading Congress.

And so it looks like the Luck of the Liberals is running out, just like the Luck of the Lerchenaus. You just don't want to let the oxen loose in the lark meadow. Not if you want larks in it.

Central Bankers Don't Know Nothing

August 9 was a red-letter day in the Chantrill household. You'll never guess why.

Yep, yesterday was the day that A History of Central Banking in Great Britain and the United States arrived from Amazon.

I can tell you, it is a real page-turner. Seriously.

I'm afraid that I've only got through the first four chapters so far, so I can't give a full report on the book. In fact, the story so far only includes the history of the Bank of England up to 1844.

But the story so far is pretty simple. Central bankers are clueless when it comes to stabilizing the economy. Central banks are vehicles for lubricating government finance, and in Britain and the US they have done this job very well. Good work, chaps!

But we expect more of the central bankers. We expect them to lean against the wind. We expect them to lean against bubbles and booms and we expect them to step in to prevent collapse during banking crises.

Central bankers are very good at doing their job of acting as the government's banker. Unfortunately, they are lousy at doing what we want them to do, and that is to stop the big booms before they turn into bubbles and busts.

We think of the Bank of England as an august body with the wisdom of Solomon. Not a bit of it. The story of the Bank of England is one clueless mess after another. 1720 and the South Sea Bubble. 1745 and the panic of Bonnie Prince Charlie. 1797 and suspension of the gold standard in the Napoleonic Wars. 1819 and the deflation on the resumption of gold payments after the Napoleonic Wars. The crash of 1825.

But the Bank did a bang-up job of acting as the government's banker. The Brits ran the National Debt up to 250 percent of GDP by the battle of Waterloo. You can credit the Bank of England for that.

What excitement! What suspense! And there are still 300 pages left to go!

Learning Lessons Good and Hard

Democracy is the theory that the common people know what they want, and deserve to get it good and hard. That was H.L.Mencken's clever quote.

Let's combine his line with a related quote from Benjamin Franklin: "Experience keeps a dear school, yet Fools will learn in no other."

The welfare state is the theory that the people should pay for the folly of the liberal elite good and hard.

The great question in democracy is how to get it through the thick heads of the liberal ruling class that its ideas and policies stink. Like right now.

The liberal elite has given us trillions in stimulus and bailouts but the economy is barely making headway. Obviously the elite has made a mistake. You do not revive the economy with handouts to the darlings of the politicians. Those darlings are already wasting money big time. You want to give them more money to waste?

We have known that this policy, Keynesianism, doesn't work. We have known it at least since the days of Reaganomics when the economy shot up like a rocket about three months before the Reagan tax cuts kicked in in 1983. And then continued to rocket.

There are lots of articles out today about the folly of Keynesianism, and the common sense of Reaganomics. Liberals should read them here and here. They might learn something.

But liberals never learn. So now they are going to get their heads handed to them in the mid-term elections. I am going for the long bomb on this: 80 seats in the House of Representatives, biggest since 1938. The experience of electoral defeat is a hard school. But politicians will learn in no other.

Call it Perry v. Eastwood

This week Judge Walker found for gay marriage in his decision against California's Proposition 8. His decision in Perry v. Schwarzenegger centers on numerous findings of fact in favor of gay marriage.

Conservatives are united in regarding these findings of fact as irretrievably biased in favor of the plaintiffs.

James Taranto thinks that appellate judges will find it hard to argue against findings of fact, however risible. And then the case comes to a Supreme Court split 4-4 with Justice Kennedy in the middle. Taranto predicts that Kennedy will vote in favor of gay marriage.

If that occurs, I realized yesterday, Perry v. Schwarzenegger will probably turn out to be Roe v. Wade II. Only this time the Supreme Court will know what it is doing.

Back in 1973 the US Supreme Court, in finding a right to privacy and a right to abortion in the US Constitution, did not expect to stir up a hornet's nest. It assumed, along with all right-minded people, that legal, accessible, value-free abortion was a sensible and practical individual right. The Court did not understand that, for millions of ordinary Americans, babies are sacred.

There's a reason for the disconnect between ordinary Americans and elite Americans on the social issues. For elite Americans the hope of immortality rests in the hope of becoming a footnote to history with a great creative achievement: a law, a work of art, a scientific discovery. But for ordinary Americans the only hope of immortality outside religious faith is their children. For such people, children and babies and marriage become a transcendent issue.

Gay marriage is the abortion issue all over again. In elite America, gay marriage is no big deal. It's a lifestyle choice. But for ordinary Americans it threatens the hope for immortality in children.

Gay marriage advocates are clear that the basis of gay marriage is the universal right to marry the one you love. For ordinary Americans marriage is rather different. It is the framework within which you can lay down your hope for immortality, your children.

Conservative partisans should wish that the tough guy defendant in Perry v. Schwarzenegger were not Conan the Barbarian but Dirty Harry. For if Justice Kennedy doubles down on Roe v. Wade we might as well call the gay marriage case Perry v. Eastwood.

Politically, a pro gay marriage decision will likely create a new movement of rejection against liberalism as persistent and as fervent as the pro-choice movement. It might be enough to create a conservative political majority in the United States for the next generation. So conservatives might well say, with Dirty Harry, Go ahead, make my day.

But that would be a shame. For the sake of social peace it would be better for the Supreme Court to fudge the issue, as it did in the famous Bakke decision on racial preferences.

On the other hand, we must recognize that the social issues cannot be kicked down the road forever. The US tried that with slavery. In retrospect, it would have been better to tackle slavery sooner rather than later.

You'll remember that it was the South's intransigence that prevented a peaceful solution, or even a fudge, on slavery. Kinda reminds me of the intransigence of today's liberal judges and their liberal activist cheerleaders.

Imperial Judiciary

The great liberal innovation is using the courts to force the pace of "social change."

Traditionally, judges were small "c" conservative. You had to drag them kicking and screaming into the modern world. In this way, of course, they provided a kind of social "ballast," curbing the enthusiasms of power politicians and wild-eyed activists.

But liberals have changed all that. Ever since Brown v. Board of Education they have used the courts to do what they couldn't get done in the legislatures.

The purpose of the Brown decision was to force the pace on the civil rights of Negroes, as they were then called. In rejecting the "principle" of "separate but equal" in education the US Supreme Court set in motion decades of school busing to achieve racial balance in the classroom. The price of this win was the ritual humiliation of the South and the unintended consequence of enraging white ethnic enclaves like South Boston.

Let's stipulate that Brown was the right decision, particularly as it dealt with America's original sin, African slavery.

But Brown was followed by the Miranda decision on the right of an accused suspect to remain silent. OK, maybe, although the job of the police is to whack young lower-class males upside the head.

Then Goldberg v. Kelly conferred property rights on entitlement benefits like welfare. Was that really a good idea? At some point shouldn't we tell benefit recipients to go get a job.

There were the decisions giving public school students due-process rights, Tinker v. Des Moines School District and Goss v. Lopez. Really? End summary discipline in the schools?

Then there was Roe v. Wade on abortion, and various decisions limiting religious expression in government schools. That is what created the Reagan Revolution, sending millions of Roosevelt Democrats into the Republican camp.

In these cases, the US Supreme Court was not mopping up a confusion in the law, or correcting a flagrant injustice that had festered for decades. It was forcing the pace, implementing the moral/cultural agenda of the liberal ruling class by judicial ukase.

Now we have the gay marriage issue, Perry v. Schwarzenegger, in which a federal judge just overturned a California state constitutional amendment defining marriage as a union between and man and a woman. Again, the courts are clearly forcing the pace.

Maybe all these decisions are for the best. But the problem is that they haven't been decided by persuasion. They have been declared from the bench and imposed on society from above without the consent of the governed.

That's not how America is supposed to work.

It's Conservative Nostalgia Time Again

A recurring theme in conservatism is a nostalgia for the good old days. What happened to the good old days when conservatives were high-toned philosophers like Bill Buckley and Irving Kristol?

David Klinghoffer's piece in the Los Angeles Times is just the latest in the genre. He deplores the new generation of conservatives like the "potty-mouthed Internet entrepreneur Andrew Breitbart".

Liberals have an identical nostalgia. Not for the good old days when The New Republic and Herbert Croly bestrode the world like a colossus, but when conservatives were gentlemanly and consensual--like Bill Buckley.

Iowahawk David Burge delightfully burlesques the high-toned conservative brigade in the persona of T. Coddington Van Vorhees VII. who is always getting together with his pals "Dame Peggy Noonan" and the two Davids, Brooks and Frum, to grumble snobbishly about the rubes taking over the movement.

I never seem to hear of liberals deploring their potty-mouthed publicists. They seem to be quite happy letting the philosophers get on with philosophizing and the street fighters get on with their hand-to-hand verbal combat.

Why don't the liberals tut-tut about the low-rent liberals, from the MSNBC ranters like Keith Olbermann to the racist Reverends Jesse Jackson and Al Sharpton?

There was a time when liberals were exclusively high-toned. That was in the days of the Progressive Era, that flourished presidentially from Theodore Roosevelt (R) to Woodrow Wilson (D). But in the 1920s the Progressives went out of favor with the American voters. It was the genius of Franklin Roosevelt to create a coalition of the high-minded Progressives and the street-fighting big city machines in the Democratic Party and call it liberalism.

However they were presented to the American people, all Democratic presidents since FDR except Jimmy Carter have been frank products of political machines. Truman came from the Prendergast machine, Kennedy from the Boston Irish Mafia, Johnson from the solid Democratic South, Clinton from an Arkansas machine that he turned into a personal political machine, and Obama, the perfumed product of the Chicago machine.

These machine politicians have understand that there are always plenty of high-toned publicists ready to perfume the air around them with high-toned words. Behind the propaganda, they get on with the job of wheeling and dealing, holding their friends close and their enemies closer, and looting the public fisc.

In my view, the last few years have seen a breakout in the power of the low-rent conservatives. The unexpected eruption of the Tea Party movement is canonical. It's the power of the Internet synergizing with genuine political bottom-up rebellion.

It is telling that the Democrats all thought the Tea Parties were a put-up job, "astroturf" organized by Republican political operatives. In fact, the Republican establishment was just as surprised by the Tea Parties as anyone else, and not a little afraid of the movement.

Conservatism will never be exclusively high toned again, so the Van Vorhees chaps had better get out the air freshener.

Stop Gunning the Economy

Over the years one thing is sure. Government has interfered too much with the economy.

In the old days it was an just absolute monarch debasing the coinage to pay for his wars. In the 18th and 19th centuries it was proto-democratic governments learning how to leverage the magic of central banking and the national debt into paying for empire or for civil war.

Now we have massive fiscal distortions to shore up the mirage of the unfundable welfare state, its pensions and health care.

Always, of course, there have been inflationists urging governments to make credit cheap--for small business, for farmers, for crony capitalists.

It's time to rise up and say: Stop "helping" the economy, government. Your helping mostly destabilizes the economy. And problems in the economy mostly hurt the poor.

If the economy is in the depths of a depression then the cry goes out to stimulate the economy with cheap credit backed by big new spending projects. Or alternatively, tax cuts and spending cuts.

If the economy is emerging from a recession then the cry goes out to keep the economy growing with cheap credit and tax cuts, thus avoiding a "double-dip" recession.

If the economy is going gangbusters then politicians and special interests propose ambitious projects funded by debt backed by the ample revenues flowing into government coffers.

Of course, all this stimulus creates an inflationary boom and, eventually, the government's central bank starts fighting inflation instead of fighting recession. That leads to a credit crisis and bank failures and bailouts.

Then the cycle begins again with the demand for cheap credit to stimulate the economy.

We need a practical political agenda to get us out of this vicious circle.

In my view, we have to get government out of the credit business, except when spending money to get out of a crisis. This might be war, or it could be national disaster.

Heck, why stop there? Let's get the government out of education. Parents will naturally seek out education for their children.

Let's get the government out of health care. Women are obsessed with health care and will find a way to get it.

Let's get the government out of pensions. Middle-aged people naturally start saving so that they can stop working. Why interfere?

The great need in this generation is to develop a practical political philosophy, supported by the broad middle class, that would keep the government out of the economy.