The Chimera of the "Commanding Heights"

Back in the old days, statists and thug dictators wanted to control the "commanding heights" of the economy. That was Lenin's line. With the "New Economic Policy" that allowed a resumption of some capitalist enterprise after the disaster of War Communism, he needed to assure his Bolshevik comrades that he still believed in The Plan.

He told them not to worry: The reforms were relatively modest, and the new Soviet state would always retain its control over what he called the "commanding heights" of the economy.

In those days, according to Arnold Kling and Nick Schulz in "The New Commanding Heights," the commanding heights were heavy industry, energy, and transportation. Socialists fascists, and other statists all over the world were determined to control them, and they did. They did something more. They just about destroyed them. They did destroy the Soviet Union, of course.

But now the socialists and the statists are determined to control the new commanding heights of the economy: education and health care. Conservatives and libertarians aren't paying enough attention to this, and are losing the battle for control to the socialists. Even George W. Bush increased the government control of education with No Child Left Behind and Medicare Part D, write Kling and Schulz. Only now, with ObamaCare and the state budget battles, are conservative politicians and activists finally engaging on health care and education.

Let us step back a moment, and think about the big picture. First of all, our liberal friends believe in government and in political power. So their approach to politics is to seize the commanding heights of the economy for government power. That is what they do; that is what they are. But how can conservatives push back against this? The answer is: they can't, not until the commanding heights in question are broken.

Let's think back. The stunning achievements of the railroads and the steel industry were stigmatized as the work of bandits, like the robber barons of the old Alpine mountain passes that robbed travelers between France and Italy with impunity. It wasn't until government had run the old commanding heights into the ground, with the steel industry bankrupt and transportation losing money for decades that the voters came around and elected politicians to deregulate industry and transportation. Government is still up to its ears in energy, and making a complete mess of it.

The same is true about education and health care. When government offers subsidized education and health care, who is going to say: forget it? On the contrary, you would be a fool to say No. It's free isn't it?

But, of course, government is busy breaking education and health care just as it once broke heavy industry and transportation. Education is a complete mess, with about half the students going to college requiring remedial instruction. And don't even start talking about the educational mess in the inner cities. Health care? The Rand Corporation back in 1971 found that the funding of health care didn't seem to have much of an effect on health outcomes. The more money people had for health care, the more they spent.

Kling and Schulz hold out hope that conservatives are beginning to make a difference in education and health care, but I think that is missing the point. There is only one way that we will force education and health care out of the grip of government. We will get to do it when they are broken.

In a better world, voters would understand that government is force, politics is power, and government wrecks everything it puts its hands on. They would say: forget adding this program or that program; all that will happen is that government will wreck it. But in the real world, people like free services.

In the real world reformers must wait. Reform can only happen when government is broken. If it ain't broke, the voters won't let you fix it.

What Is Called "Austerity?"

When I was a lad growing up in Limeyland in the 1950s the older generation used to talk about the post WWII "austerity." I understood, of course, that they were referring to the rationing and general hard times after the war, during which Britland had to adjust to the fact that the war had pretty well eaten up the seed corn and then some.

Now we are talking about "austerity" again, particularly in the case of the Greeks, who seem, like Falstaff, to "have misused the king's press damnably."

That is to say, the Greek government has handed out tax money and borrowed money left and right and now it is going to have to cut back a bit. In response, the Greeks are rioting in outrage.

We saw a similar, though muted, action in Madison, Wisconsin, from government employees when Gov. Scott Walker (R) proposed to increase, moderately, the contributions required of said government employees to their health and pensions benefits.

In other words, "austerity" means that the government proposes to cut back a little on government benefits. And the usual response by the recipients of government benefits is to riot in the streets (Greece) or take over the State Capitol (Wisconsin).

For some reason, I find this obscene. Here we have monies taken by force from citizens and given, out of the kindness of many hearts, to deserving beneficiaries. When it turns out that there ain't any money left in the kitty, the government determines that benefits must be cut, and so the beneficiaries riot.

There is only one sensible takeaway to this. The government should not distribute benefits among the people. Recipients don't regard the benefits as a remarkable and generous benefaction. They regard them as a right, and they get violent if anyone proposes to cut back on their rights. On top of everything, these government employees are not desperately low-paid, but usually earning something like 50 percent more than equivalent workers in the private sector who, wages and benefits aside, lack the tenure and security of government employment.

None of this is remarkable. Joseph Schumpeter wrote half a century ago that democracy is the rule of the politicians and politicians, before anything else, are people good at winning elections. They promise anything, if it will help them get elected. The problem comes later, when the extravagant promises must meet reality, usually in a recession.

Center-left philosopher Jürgen Habermas has attempted to differentiate between "representational culture" where "where one party [e.g., the king,] sought to "represent" itself on its audience by overwhelming its subject," and "Öffentlichkeit" culture, "a public space outside of the control by the state, where individuals exchanged views and knowledge." The representational culture is pure strategic/instrumental reason, one side trying to use the other as a means, to get something out of them. The Öffentlichkeit culture Habermas calls a process of communicative action, of two sides in a conversation of equals trying to tease out a path to social agreement through discourse. Wikipedia:

Unlike "representational" culture where only one party was active and the other passive, the Öffentlichkeit culture was characterized by a dialogue as individuals either met in conversation, or exchanged views via the print media.

The interesting thing about the administrative state is that it is clearly a "representational" culture, where only one party is active, although our liberal friends go on endlessly about dialog and national conversations.

When are our liberal friends going to catch up with the ideas of their greatest thinkers, release their white-knuckle grip on political power, and allow free and equal dialog about the great political and social questions of the age, most notably the bankruptcy of their administrative welfare state? If we can get to a bit of Öffentlichkeit as a result of all this "austerity" it will be worth the pain and the rioting in the streets.

What "Deleveraging" Means

The point, if there is a point, to Keynesian stimulus is to carry the economy over a temporary slump where asset values have been reduced to panic lows. But what about a situation where asset values are permanently reduced, as in the current housing slump?

Chances are that there is no way that house prices will recover to their 2006 highs any time soon. That means that people with underwater mortgages are screwed. They must either continue to pay their mortgages down and eat the loss, or they must take the loss now and walk away from their underwater mortgages.

That, you may say, is their problem. But it is our problem too. So long as the housing market is depressed and there are millions of underwater mortgages, so long will the economy sputter along. It's easy to see why.

When borrowers are above water, then everything is fine. The borrower is making payments and anyway, if the borrower were to get into trouble, the borrower could sell the asset and still repay the loan. When the borrower is underwater, then creditors know they are in danger of losses. They cannot trust the current borrowers because the borrowers are likely renege on their loans. That makes creditors more conservative; they must create a reserve against losses to protect their own financial position and are thus less able and less likely to loan money.

Creditors in this position are "deleveraging." They are reducing the amount of credit they are extending. Debtors too are doing the same thing. They are reducing their indebtedness to reduce the risk of default.

In the US, according to Michael Pento, the temporary stimulus of 2008 to 2010 is spent. "Government intervention can only temporarily circumvent the deleveraging process that is necessary for viable growth."

In other words, sooner or later, all Americans must adjust their financial assets to the new reality after the crash. They must reduce their debt or increase their equity so that their balance sheets show a healthy positive net worth.

Of course, one of the purposes of the government printing money is to lower the value of the dollar and the underwater mortgages so that the nominal dollar value of houses will increase. The problem with that is that, so far, the inflationary money creation has increased commodity prices like oil, gold, silver, copper, and grains and left house prices underwater. Meanwhile the strict regulatory regime of the Dodd-Frank financial reform has made banks less inclined to make risky loans.

We are seeing, to coin a phrase, the euthanasia of Keynesian economics. It is easy to sneer, as Keynes did, at the "rentier" class, the holders of government bonds, and call for their "euthanasia." Maybe back in the 1920s there were just a few of them and it served them right. But today the rentier is the ordinary middle-class saver, the government employee with a stake in a pension fund. Is that what the ruling class wants? To euthanize the ordinary middle-class striver and saver?

The current sluggish recovery is a shocking indictment of everything we have been taught to believe about the ability of government to manage the economy. In fact, the government should observe the Hippocratic oath, do "do no harm," because that is all that it can really achieve, long term. But that kind of policy wouldn't help politicians buy votes.

What Liberals Know That Isn't So

The latest installment in this ongoing saga is the Crash of 2008. Liberals say that it was caused by greedy bankers and their derivatives operating in a climate of deregulation. Just yesterday, a liberal acquaintance was anxious to talk about derivatives bears and lax SEC enforcement. What do you expect the SEC to do, I replied? They are bureaucrats.

Pity that New York Times reporter Gretchen Morgenson and financial analyst Joshua Rosner, in Reckless Endangerment, agree with the conservative line that it was Fannie, Freddie and the Community Reinvestment Act wot did it, as Mona Charen writes.

Of course if you want the full story on 48 Liberal Lies About American History you should go to the full version written by Larry Schweikart. But Larry doesn't include the liberal line on the late, great, financial crisis.

But while we are on the subject let's rehearse some of the biggies, for history is a narrative of power written by the ruling class, and when you want to start a revolution you need to start chipping away immediately at the reigning ruling class narrative.

FDR got us out of the Great Depression. This fib has been modified recently to say that, true, FDR didn't get us out of the Depression economically but he saved the US from fascism or communism. Well who knows? But his price and wage controls in 1933-34 were a bust, and the Wagner Act sent union wages skyward just in time to meet the new 2 percent payroll tax for Social Security in 1937 and a fresh recession within a depression.

JFK was killed by a climate of right-wing hate in Dallas. No he wasn't. JFK was killed by a lefty who'd been to the Soviet Union and Cuba and married a Russian woman.

The Fifties were... Make your mind up liberals. Was it an age of conformism and racism or was it a golden age of equality, as chaps like Paul Krugman now want to insist?

Supply-side economics is a buncha baloney. Liberals have been pushing this line since the days of the celebrated "amiable dunce," and now they are about to hit an economic and political brick wall with their Keynesian big government spending in 2012. In another couple of years liberals will be saying that we are all supply siders now.

I could go on, but I gotta write a book.

Who Is Kidding Whom?

I remain unfazed by the doings of the National Labor Relations Board (NLRB). It is, no doubt, the poster boy for those that said all along that Barack Obama was a left-wing radical, and not the centrist healer of his campaign. In fact I am unfazed by all the extremist politics of Obamaland, from the stimulus that was really a payoff to supporters to the ObamaCare that will lead to government rationing of health care.

I am enough of a Clausewitzean to believe that you can't win a war without a decisive battle, and the best way to win a decisive battle is when your opponent is way over-extended.

It is a sign of the times when even the liberal Denver Post thinks the NLRB has gone too far with its publication of regulations to make it easier to organize the workplace. Writes the Post:

The compressed time frame would deprive employers of the full ability to communicate with employees about the effects of collective bargaining, and it would give employees less time to thoughtfully consider all the issues.

The Post editors are even copacetic with the idea of Boeing building "airplanes in a state with lower costs that is thrilled to have the company."

The reason that I remain unfazed by the Obama administration is that I believe that the Obamis are leading their supporters off a cliff. The result of ObamaCare will be to reverse the decades-long government takeover of health care. The result of the stimulus will be to give stimulus a bad name. The result of the rogue NLRB will be legislation that limits the privileges of labor unions. The liberals don't care. They will do fine; they will find liberal billionaires to fund the Democratic Party. But the union members will be thrown under the bus. The folks without health insurance will find that it's not as easy to game the health care system as it used to be. The government employees will be paying more for their benefits.

It's a shame, of course, because these folks really believed the politicians when they said they cared.

Bill, Amity, and Mort on Jobs

Good old Bill Clinton has just come out in Newsweek with a 14 point program on jobs to highlight his Clinton Global Initiative meeting in Chicago. The former president's plan treads delicately, as he doesn't want to tread on Obama's toes. But he does have some good ideas: Cash for business startups, which would reduce the current problem that aspiring startups can't tap home equity, because they don't have any; and copying Rep. Ryan on lowering the corporate income tax rates. But there's a lot of silly stuff on green energy, which is perhaps marginally less silly than the president's green energy program. The big problem with the economy is the economic detritus from a century of government meddling. That is something that politician Clinton just doesn't get, as he proposes to pile on with more, and still more government meddling with the economic system.

Forgotten Man author Amity Shlaes takes us through the 1970s and a Federal Reserve that was always behind the curve on monetary inflation, until Paul Volcker came in and slammed on the brakes in 1979. We'll need someone to do that this time, she argues, and it won't be Gentle Ben Bernanke. Double dip recession? Not quite yet, I'd say. The Fed is still fighting recession, and probably won't start fighting inflation until after the 2012 election.

USAToday honcho Mort Zuckerman does the numbers on employment and they ain't pretty. The fact is that businesses are afraid to hire on permanent staff.

The most recent statistics are unsettling and dismaying, despite the increase of 54,000 jobs in the May numbers. Nonagricultural full-time employment actually fell by 142,000, on top of the 291,000 decline the preceding month. Half of the new jobs created are in temporary help agencies, as firms resist hiring full-time workers.

Like I've said. The Obama administration is going to wake up pretty soon and realize what a deep hole it is in for 2012. Then you can expect a really bone-head Hail Mary play to try to make the economy look good for a few months. There's only one problem with that. I doubt if the Republican House of Representatives will want to go along with it.

We have come to the end of the government's ability to manipulate the economy to shovel money at its supporters. We are coming to the point where government is just going to have to start stiffing the government employees, the benefits recipients, the subsidy mavens, and the crony capitalists. Because that is the only way that we are going to get the economy moving again. But there is one thing certain. The ruling class will try every trick in the book before it actually starts to acknowledge the real problem. Government is too big, and it spends too much, and just about everything the government spends is waste.

Obama and Thomas Kuhn

Can President Obama still pull it out? That's what Walter Russell Mead is asking. The president needs to lead, needs to define the national problem and represent the solution to the problem.

Look, we know that the "blue social model" has failed. The American people need to know what is going to replace it.

Americans are realistic enough to understand that the breakdown of the blue social model is a messy process and that perhaps no president can deliver a pain free transition to the next stage. But what they aren’t hearing from President Obama is a compelling description of what has gone wrong, how it can be fixed, and how the policies he proposes will take us to the next level.

But really, can he? Can he reverse and say, hey, all that stuff about benefits and greedy bankers and make the rich pay a little more? Forget all that. All that stuff that we Democrats dispensed over the last century is inoperative. Conservatives have been right all along. We need to get the government out of the lives of the American people and rely on that good old American can-do spirit to get us moving.

That is just not how the world works.

To understand the politics of today we need to look at the theory of Thomas Kuhn and his Structure of Scientific Revolutions. Normal science, he wrote, was the patient advance of knowledge using the accepted paradigm. But when a paradigm starts to break down then the world splits in two. The old generation keeps faithfully on with the old paradigm and the new generation tries to understand the world in terms of a new paradigm.

But the new paradigm only wins when the old generation dies off. Why? Because the old generation has all the powerful jobs. Only when they retire, or are kicked out, can the new paradigm come to full flower.

It is bootless to imagine that President Obama can abandon the blue social model that today's Democrats took with their mothers' milk. The new era of smaller, limited government will only come about after the utter discrediting of the blue social model in the minds of not just conservatives but moderates and independents. Democrats will still believe, of course, but they will be demoralized and ashamed.

If President Obama were to come up with a narrative that moved on from the blue social model now, he would probably split his party, and maybe even provoke a third party effort on the left. If he were to do that, Democrats might suffer an utter wipeout. No, the best thing for him to do is to keep to his left-liberal beliefs. He may go down to defeat 55-45 or even 57-43. But at least he will hold his party together.

Then, after a monumental defeat, then and only then will Democrats be ready to move on from the blue social model and join the rest of America.

E.J. Nostalgic for Bush

Our liberal friends are always nostalgic for the previous generation of Republicans. They were so moderate! Not like the current crop of extremists. Now E.J. Dionne has got all nostalgic about President George W. Bush.

The 2012 GOP presidential field on display Monday offered not one idea about how to solve the problems facing our country that didn’t boil down to cutting taxes, slashing regulation or eliminating large swaths of government.

What troubles E.J. is that Rep. Michele Bachmann, the extremist, no longer looks that extremist in the middle of the current crop of GOP presidential candidates.

That’s why I felt nostalgia for Bush, especially the guy who was a candidate for president in 2000. Unlike this crowd of Republicans, Bush acknowledged that the federal government can ease injustices and get useful things done.

Of course, Dionne continues, he has no nostalgia for the later, war-mongering Bush. Oh no.

But I appreciate what E.J. said, partly because he indicates that liberals are getting nervous. You see, they don't get nostalgic when extremist Republicans are running around getting nowhere. They only get nostalgic when the new breed of extremists looks like they might actually win. When Nixon looked like winning, they got all nostalgic about Ike. When Reagan looked like winning they got all nostalgic about Tricky Dick. When George W. Bush looked like winning they got all nostalgic about Poppy Bush.

What these liberals don't do is figure that it might be something liberals are doing that is helping elect these Republicans that seem, in each generation, more extremist than the last one. Let us answer the unposed question. What is it that liberals are doing that makes the Republican Party more and more extremist, and reduces it to a party of cuts: "cutting taxes, slashing regulation or eliminating large swaths of government"?

Here is the telling phrase: "the federal government can ease injustices and get useful things done." Here is the line between liberals and conservatives, between Democrats and Republicans.

Sure the federal government can "ease injustices" but Republicans believe that government can only do something about the really big injustices: e.g., slavery and legally enforced segregation. But when it comes to regulating the details of the workplace, when it comes to gigantic entitlement programs that hugely increase the cost of hiring workers, then Republicans say Enough Already!

It comes down to this. When we suggest "the federal government can... get useful things done", the answer that Republicans make is: "not much." Why? Because most useful work in this world is about making products and services that people want and are willing to pay for. Government at all levels is really bad at doing these useful things that require flexible and adaptive response to changing needs, tastes, and market conditions. That is why all government programs end up as subsidies for powerful producer interests. Nobody goes to government to start up a useful program that people are willing to pay for. They go to government to start up a program that they and their friends believe is useful, but that, for some reason, business has failed to produce at the price that the advocates want to pay. Then, when the program doesn't deliver much of anything, the advocates sneer that program opponents are "mean spirited" or don't care about kids.

Of course, this is a charitable analysis of E.J. Dionne's nostalgia. When we talk about "injustices" and "useful things" the fact is that people disagree profoundly about what counts as an injustice and what counts as a useful thing. The great political conflicts are precisely about deciding what injustices are serious enough for the government to ease, and what useful thing the government ought to get into. But E.J. Dionne will need to get nostalgic about another couple of GOP political generations before he gets to realize that.

2012 and Mediscare

Are Republicans vulnerable on Medicare? Should they cave on Medicare and wait for it to crash or should they fight back? Some people reckon that Democrats will demagogue on Medicare from now till November 2012, so there is no way of avoiding a fight.

Perhaps it is telling that Marco Rubio (R), junior US senator from Florida, the second-biggest Medicare state, has chosen to come out strongly in favor of the Ryan Plan. Reports Marc Thiessen:

For those who criticize Ryan, Rubio asks: “If it’s not the Ryan plan, well then what plan is it? The White House has not offered one. The Senate Democrat leadership has not offered one.. . . They have not offered a budget, much less a plan to save Medicare.”

Rubbish, writes Stanley Kurtz. The Democrats do have a plan. It is called IPAB; it is a monster, and Republicans should attack it 24-7.

What the GOP hasn’t yet done is go on offense against IPAB (the Independent Payment Advisory Board), the clique of Obamacare bureaucrats who are going to ration Medicare into the ground. IPAB is what’s really going to push granny off a cliff, giving her far less control of her fate than the Ryan plan.

Mediscare works best in the later stages of a campaign when Democrats get a chance to stampede seniors with scare talk. But if Republicans get started establishing a message now then the late-campaign Mediscare won't work.

It was Sarah Palin that first articulated Kurtz's strategy when she called the IPAB a "deeath panel." The president wants unelected bureaucrats and political cronies to determine who lives and who dies. Rationing means that you have to line up to get benefits. Unless you have a political pal in high places on the IPAB. How hard can it be to attack this monstrous policy?

The president has a plan for Medicare. His death panel will decide who lives and who dies. The government will decide who gets care and who doesn't. That's not just the end of Medicare as we know it. It's the end of Medicare, period.

There's another factor to consider. The presidential campaign season forces the mainstream media to ventilate Republican proposals and sound bites, if reluctantly and illuminated with unflattering light. Plus the paid media of Republican candidates puts the Republican message into America's living rooms. That makes it much harder for the Democrats to win on Mediscare.

Anyway, what's the point of being a Republican if you just run and hide whenever the Democrats try to electrocute you on entitlements. The whole point of Republican politics is that Americans are sturdy but cooperative individualists. They are proud of their independence, proud of caring for their own, and proud of giving a helping hand to those in need.

Entitlements are the opposite of Americanism. They are the politics of serfs and peasants, doffing caps to the lord of the manor as he drives by in his expensive gas-electric hybrid, hoping that he'll fight for them when grannie get sick. Because, after all, he did promise.

Revolt Against the Empire of Lies

Why not use the rhetoric of the American revolution to report today's politics? In that case, according to Andrew Klavan:

The week just past was a great one for the New American Revolution — that guerrilla assault by alternative media minutemen on the amassed redcoats of the Empire of Lies.

Yeah, that is one way of reporting Andrew Breitbart's exposure of Rep. Anthony Weiner (D-NY) as "a lowlife and liar." The problem with Breitbart, for the Empire of Lies, is that he is fearless.

Then, writes Klavan, there is Glenn Beck, who will be starting his own on-line network GBTV when he finishes with FoxNews. Beck has been replaying some of his on-air predictions, "predictions for which he was sometimes called crazy and which have more often than not come true."

Then there is Ann Coulter and Demonic, arguing "the thesis that the American left is the party of the mob." I wonder why she thinks that?

Klavan finishes with this:

The Mainstream Media’s Empire of Lies is still an empire, after all. They still have most of the money and almost all of the air. The alternative media is still, as it were, taking potshots at them from behind rocks and trees.

But last week — man oh man! — it sure looked like Lexington and Concord to me.

And, as I suggested to an e-mailer, using a different colonial metaphor: There are definite signs out there that "the natives are restless."

Wait Till Medicare Crashes

The upshot of NY-26 and the Democratic successful demagoguing of Medicare reform, featuring the delicate cinematography of The Agenda Project's commercial of Rep. Ryan pushing grannie of a cliff, is simple, according to John Derbyshire. It means that we can't reform Medicare. "There's nothing for it but to wait for the crash."

And that means, if you weren't paying attention, we can't reform Medicare until Medicare crashes the federal government's finances. Greek City, AZ, in other words.

It's tempting to accuse the Democrats of shameless demagoguery on Medicare, but I think we should give them credit for believing in their belief system.

Democrats believe that the way to help the poor and the marginalized is with comprehensive and mandatory government programs inspired and directed by the educated class.

They honestly look at the premium subsidy program of Rep. Paul Ryan and say: well what about the people who can't afford any Medicare premium? What about seniors, e.g., with dementia, who can't even rationally decide what Medicare option to choose?

The liberal conceit is that, given the fact that someone is going to fall through the cracks, a government program is the answer, a government program inspired and directed by evolved, educated people like themselves.

This is the central faith of our liberal, educated elite. Liberals are the most educated, evolved people in America. By virtue of their education and their advanced social views and their rational ethics they are the only people with the standing to decide all social and political matters, and to design rational and equitable programs to implement their advanced and evolved views.

That is why John Derbyshire's remark rings true to me. We Americans are not going to be able to resolve the central political questions of our time until our liberal friends have crashed in ruins. They may--they probably will--still cleave to their liberal faith after the crash. But nobody else in America will believe.

Conservatives never did believe in the liberal faith, but moderates weren't sure. Up to now these go-along-to-get-along folks have picked up the liberal faith as the default option. You go with the belief system implied in the TV news, on your worker's rights published on the bulletin board at work, and in your government schooling because that is what you do as a practical, conforming, social animal. And anyway, if the government is offering free stuff, why not?

But when you, as a moderate, find that you life is ruined, your savings account wiped out, your job evaporated, your Social Security capped, your Medicare rationed, then you look around for someone to blame. You do more than that. You lash out and you go after the first person that looks like they could be to blame. When that happens, any rational person will know who to blame: Greedy bankers.

Yeah. That's the great task of conservatives in the next few years. It is to make sure that liberals don't find some convenient scapegoat and dodge the blame for national bankruptcy and the failure of all their government-centric welfare state programs.

Liberal Hall Pass Expires

It must be the longest-lived get-out-of-jail-free card ever. For all my adult life liberals could get away with things that would sink a conservative in a minute.

Did FDR skirt the law on a bunch of stuff? Too bad. Did Lyndon Johnson have bolt holes in the Capitol where he could entertain young women? Hey, panty waist, what's your problem? Was JFK running girls through the White House like an escort service? Did Bill Clinton lie about sex? Did Anthony Weiner?

Yes, it's come to this. Finally, a Democrat is being held to account for his lies. The hall pass has expired.

What it took was the whole panoply of new media and a tough take-no-prisoners new generation of center right media mavens, epitomized by Mr. "Big," Andrew Breitbart, and his BigGovernment.com, BigJournalism.com and the rest of the Big websites. Actually, of course, the Breitbart empire is minuscule. The "Big" thing is a joke, son.

Thanks, Andrew. You won one for the Gipper.

When you think about it, this couldn't have come at a better time for conservatives. We are going into an election season when many of the Democrats' ideological chickens will be coming home to roost. Everything that the Democrats know that isn't so is crowding in on them. Whether it is Keynesian inflationism now revealed as bankrupt, or crony capitalism with unions and green energy corruptocrats wasting tens of billions of dollars, or the headline entitlements running out of money, the message is all the same: Democratic ideas stink.

Underneath the progressive carapace of caring and compassion is a bare-knuckle culture of compulsion, a faith in power and a will to dominate. Politics is power, government is force, and anyone that wants to increase government spending is someone that kneels at the throne of power for the chance to crack heads with the billy club of force.

We conservatives, we few, we happy few, believe that mankind is born onto this earth for something higher, something better that the crude rule of force. We believe that humans are social animals, not just regimental animals. And that is why we fight the corrupt liberal culture of compulsion and its endless hypocrisies.

"See the USA"

I think it was Dinah Shore that sang the good old jingle, "See the USA in your Chevrolet." Yes, it was. And a grand idea it was.

Now unannounced presidential candidate Sarah Palin is doing the same and everyone who is anyone is sniffing with nose high in the air. "Unschooled," says Charles Krauthammer. And the mainstream media is all upset that she's not laying on full campaign services for them on her current bus tour.

It's comical. One of the great acceptable national fibs is a candidate for president affirming that he "hasn't decided" whether to run for president. It's all supposed to be good fun and an inside joke between the candidate and the media.

But with Sarah Palin, it's supposed to be scandalous.

Look fellahs. It seems pretty obvious to me that it makes no sense for Gov. Palin to become a full-fledged candidate right now. She does much better flitting around on a royal progress pressing the flesh and demonstrating that she knows more than the average liberal about American history.

The campaign professionals are convinced that she's not running because she hasn't set up a campaign organization on the ground. OK, that's their view of the elephant.

But I suspect that when Palin actually announces for president, people will be running to her, begging to be allowed to set up a campaign organization in their state or city. Not to mention that there is a Palin organization in place already. It is called the Tea Party and I suspect that Palin has pretty good connections with that unorganized organization.

In all the fuss and feathers of the coming months, the thing to keep in mind about Sarah Palin is that she is a seasoned and resourceful elected politician. Anything else is reckless misunderestimating.

Mistake of 1937, Mr. Krugman

Sooner or later, President Obama is going to go for the long bomb to try to get his team over the goal line in 2012. With a Republican House, good luck with that, Mr. President. The economy for 2012 is probably already baked.

Conservatives have argued that the trouble with the president's economic policy is that it has boosted uneconomic things like ageing Detroit automakers and state and local governments and frank money printing instead of cutting taxes and wasteful spending, clearing away the detritus of the old boom and preparing the ground for new growth.

But liberal columnist Paul Krugman is worried about the "mistake of 1937."

For you young 'uns, a bit of history. The New Dealers cranked up a huge pre-election boom in 1935-36 that boosted the deficit and federal spending in real 2005 dollars from $72 billion in 1934 to $107 billion in 1936. The federal deficit was 4.76 percent of GDP in 1936. Then the Feds took a breather in 1937 and reduced spending to $98 billion in 1937. Combined with tighter monetary policy this brought on a nasty recession and the Dems lost 70 seats in the 1938 midterms.

So you can imagine that Paul Krugman is nervous. The Dems ran their stimulus in 2009-10 and now the stimulus is running out of gas. Maybe they shoulda waited a couple years!

The "mistake of 1937" notion misunderstands the problem. The New Deal of 1933-36 wasted billions of treasure on politically motivated crony capitalism and wars on businessmen and made the US a more expensive place to do business. They passed the Wagner Act to make union labor much more expensive. They passed Social Security and the 2 percent tax on payroll started in 1937.

The "mistake" was not in 1937. The mistake was in 1933-36.

In our case the mistake was the government-sponsored boom in housing that pumped trillions into risky mortgages that are now underwater. The second mistake was throwing good money after bad with subsidies for the wasteful and the politically connected. We are not going to get out of the mess until the housing market clears and the underwater mortgages start to float again.

In case you were wondering, that's what QE1 and QE2 and probably the QE3-to-come are all about. They are trying to devalue the dollar so that house prices will go up and "reflate" asset values.

Liberal attack dog Paul Krugman is baying at the moon. The American people are going to have to pay for the mistakes of their political leaders, and we might as well get it over now. Chances are that the cost will only get bigger the longer we put it off. And since the problem goes back to Democrat-favored economic policy mistakes, it is right that Democrats should take the blame.

When Nations are in Trouble

When people are in trouble they reach back to the tried-and-true ideas of their past. They instinctively grasp for a reed in the turbulent current of the rapids. If selfishness and recklessness seems to have piled you up on the rocks then maybe the answer is sobriety and faithfulness.

Nations do the same. When Germany lost World War I it couldn't believe that "the most advanced nation in the world" could be in such trouble. So Germans reached back into the past, to the idea of the old German nation united by blood. And it returned to the atavisms of blood and soil, particularly the conquest of Lebensraum in the East, echoing the Drang nach Osten of the previous millennium--the Teutonic knights, the conquest of Prussia.

The result was an even worse disaster.

Now the US is in trouble and people are looking back to the past for things that worked. And that is where American exceptionalism comes in. For when Americans think about going back to the past it means going back to the ideals of the Declaration of Independence, the US Constitution, and the Emancipation Proclamation. Our glorious past is not atavistic, Blood and Soil, but modern, the bright shining city on a hill of the great American Revolution and its stunning political institutions. And there is the example of Alexander Hamilton's implementation of the Dutch financial system of hard-money central bank providing a solid foundation for the bond and stock markets.

When a populist politician like Sarah Palin goes on a nostalgia tour she visits Mount Vernon, the Liberty Bell and the founding documents: America before it was corrupted by the Big Government of the educated elite, America of Alexander Hamilton's "perfect system" before it was mucked up by the easy money chaps.

Or, if we look back a mere generation we can return to the solutions to the 1970s stagflation implemented by President Reagan.

President Obama and the Democrats are folks that ever hanker for another New Deal. They think that the New Deal was the great solution to the problem of the Great Depression of the 1930s. After all, that's what liberal historians have been telling them for 70 years. So they implemented an economic program that they thought would repeat the best of the New Deal. Problem is that they are wrong. The New Deal was not economic salvation but an economic disaster that kept the Depression going for years. You could look it up in Amity Shlaes' The Forgotten Man or at my own US Stuck on Stupid.

As stagflation rears its ugly head and gathers momentum in the next year Americans are going to be looking desperately for new leaders and the new leaders will be looking at solutions from out of the past. Fortunately, in this exceptional nation, unlike the poor bloody Germans, there are solutions in the past that really work. Cut regulations. Cut tax rates. Cut spending and put the funding of the National Debt on a sustainable basis. Get back to the principles of the Founding.

Funny thing. It's worked every time it's been tried.

Who Will Bell the Cat Obama?

Writes Victor Davis Hanson: it is becoming clear how the president intends to run for reelection.

Obama’s campaign will focus on three general themes: a) the 2008 meltdown of the economy on Bush’s watch; b) conservative heartlessness in gutting cherished entitlement programs; and c) racial bias behind any criticism of Barack Obama.

Let's shorten this down even further.

1. Blame Bush
2. Conservatives are heartless
3. Conservatives are racists

So the question is, who would be the candidate that would best neutralize those themes? Mitt Romney? Well, the Obamis are already neutralizing him as the author of RomneyCare in Massachusetts. No point in electing a guy if he basically agrees with the president on health care. Tim Pawlenty? Well, he's a nice guy but he's a racist underneath. Bound to be. He's white isn't he?

But then we come to Sarah Palin. Blame Bush? I don't think so. Palin will hang the economy around Obama's neck. Heartless conservative? Why do you think Palin's second book was called America by Heart? Why do you think that Palin is running around the Northeast in a "One Nation" bus, and holding Pizza Summits with Donald Trump. (Wasn't it convenient that Palin was pictured looking towards the camera and Trump looking away but clearly listening carefully to Palin?)

But the biggest thing is race. Here is why the race card isn't going to work on Palin.

The fact is that it is Obama that has to tread carefully on the race issue. He can't afford to look like the big black man roughing up a delicate white woman. Yeah, I know. It's the hoariest racial stereotype since Othello and Desdemona. But the whole point about stereotypes is that they resonate in our hearts and unconscious minds.

Of course, what with the inflationary monetary policy and the uber-regulatory state and the jobless recovery, Obama may already be toast.

Still. Sarah Palin looks like a winner to me. Call her the darling of the white working class. Oh gee. I guess I already did.