Monday, February 28, 2011

The Government Union Bind

Pity a poor government union leader. The glory days are over.

It was all such fun when government employees were underpaid and underappreciated. But over the last generation union leaders in partnership with their Democratic friends have made government employee unions into the big power player in state and local politics.

Kevin Williamson writes about the power of the government employee unions in chilling detail.

Public-sector unions are enormously important political players, including in those states where their collective-bargaining rights are limited or nonexistent...

Many union critics in the past few days have referenced Stanford professor Terry M. Moe’s fascinating paper “Political Control and the Power of the Agent,” published by the Journal of Law, Economics, and Organization in 2005, citing a single extraordinary fact: In the elections Professor Moe studied, union support was as valuable as incumbency in determining winners.

Now begins the long recessional. The reason is pretty simple, according to Nicholas Wade in The Faith Instinct. He is discussing the egalitarian social structure of hunter-gatherer bands.

Men like power and will seize it if they can. But if they can't rule, their next preference is that no one rule over them.

Fairly short and sweet, and it explains a lot. It helps us understand why people are indulgent towards people perceived as victims, but they combine against people that are perceived as having power to rule over them.

That is why, in this age of enormous government power, practical politicians and activists make such a big deal about how their clients are helpless victims. They are like the foxes in the henhouse insisting that there's nobody here but us chickens.

The problem with the government employee demonstrations that started in Wisconsin is that they are communicating to the American people that government employees are not helpless victims. They are communicating that they are, in fact, powerful, the rank-and-file of a very powerful political faction. In fact, as Professor Moe details, they are so powerful that their power is as significant a factor in election results as the power of incumbency.

For years and years the American people have not really understood the power of the public-sector unions. But now they are getting a lesson in the power of unions. And, according to opinion poll results, they don't like it. They want to see government-employee union power reduced.

The practical thing for the government employee unions to do would be to step back into the woodwork and negotiate some give-backs. But of course that is not how the world works. The rank and file demand that their leaders act as leaders and fight back against the give backs. Strategically that is the worst thing to do because it dramatizes the power of government employee unions in a way that is likely to unite the American people against the unions. But there's nothing the leaders can do. Their members demand to keep all their benefits. The leaders must fight. They must lead their members into a battle they they know will end in a horrible defeat. Why defeat? Because people hate the powerful and instinctively combine against them.

It all fits into my theory of politics, that the trouble with government Anything is that you can't fix that Anything until it is broken. For years we knew that Fannie and Freddie were a problem, but we could never do anything about reform until they practically wrecked the world economy. For years we conservatives have been railing about the power of government employee unions to no avail. But now that the pay and pensions of government employees are threatening to wreck the finances of state and local governments, now people are paying attention.

Which leads to my basic question. Never mind the power of the unions, or the economic damages of debt and taxes. Why would anyone in their right mind surrender their child for a 12-year term in a government child custodial facility with no possibility of parole or early release? Why would anyone in their right mind give the government custody of their retirement money? Why would anyone trust the government to do the right thing by granny in 2030 when the budget is a bigger mess than it is today?

You tell me.

Friday, February 25, 2011

Last Time the Dems Were in the Streets

I know it's terribly unfair. Last year the media was terribly troubled about the lack of "civility" in the Tea Party protests, and Democratic activists giggled over their "teabagger" pejorative. This year we have labor unions occupying state houses and assaulting women journalists and the story is all about fighting back against the Man.

But let us not be discouraged. The last time Democrats took to the streets was in the 1960s. Then as now, the media fawned over the rioters and the protesters. Remember what happened next?

The American people voted for a Republican president four out of the next five times. Until Bill Clinton came along the only time that the American people elected a Democratic president was in 1976 after the Democrats had successfully driven a president from office for doing things that your FDRs and your LBJs did as a matter of course. Yes, in case you have forgotten, starting in 1968 Americans elected Nixon, Nixon, (Carter), Reagan, Reagan, and Bush. Ordinary middle-class Americans hated the Sixties, and they hated it mainly because they knew that it was all a double standard. It was OK for liberal darlings to take to the streets and hurl epithets and tear the place up, but don't you try that, because we know where you live.

The mistake that Democrats make when they get all excited about their street action is that they only talk to each other. They live in a liberal world so they just don't have a clue about what other people think.

Now as then, liberals are thrilling to the symbolic violence of boycott and protest. Aren't we all having a jolly time!

But for millions of Americans, it is time to think about what would happen in they dared to pour into the streets, how the rules would be very different for them.

The left makes a big deal about dignity, how the workers organize and demonstrate for the right to be treated with dignity--as full human beings with full civil rights. But imagine this for a moment. The demand for dignity beats in every human breast, liberal or conservative. And one of the consequences of the "punitive liberalism" of the past generation is that liberals have been dishing out indignity to non-liberal Americans by the bucket load. Here's how James Piereson describes the sentiment driving "punitive liberalism:"

The idea developed in [liberal] minds that instead of self-congratulation the nation deserved punishment and chastisement for its manifold failures to live up to its ideals. In this way reform liberalism gave way to "punitive liberalism" and in turn to various policies that sought to punish the middle class for winning success at the expense of higher ideals.

Kinda hits the spot, doesn't it?

Sooner or later, the worm turns, on dignity for non-liberals as on so many things. And the worm could be turning right now.

Thursday, February 24, 2011

The Laws of History

Oh goody! Virtue is rewarded! My "Radical Suits and Their Suckers" just got a mention at Instapundit, and the money quote was

Not to get too Marxist about this, but we are talking about the inevitability of a law of history. The productive forces are changing, and the social superstructure is going to have to change too. The liberal and the radical suits can help their Big Unit followers through the change or they can drive them into the ditch. It’s their choice.

Rather nice, don't you think?

I am trying to take the strategic view of the current situation. What is going to happen to the present correlation of forces in the United States? Are the liberals and Democrats going to be able to stop the spending cuts with the semi-violence of mass protests and sporadic thuggery? Or will the new spirit of retrenchment sweep all before it?

Here's Timothey P. Carney writing that the Democrats just don't get the new populism.

The Left has misread the postbailout populist sentiment all along, assuming public anger was directed at the rich. But American anger, I suspect, is directed not at some people who have money or success, but at those who profit through cronyism and their connections to power.

But Brian Doherty at Reason takes a darker view.

Wisconsin is an early sign of the stresses that will either shift our system of government action and spending to something unrecognizable to those who lived in the post-WW II boom years or tear that system apart. And everyone seems ready to fight about this necessary shift...

We may not be France yet, but there are disturbing signs that Americans may be ready to take to the streets angrily in defense of their government deals and giveaways.

But that gets back to the laws of history. If there isn't any money to pay the government workers then there isn't. And don't forget that the government workers are peanuts compared to Social Security and Medicare.

Here's another thought. I'd say that a very large proportion of government workers are women: teachers, nurses, social workers, paper pushers. I just don't believe that women are going to take to the streets to defend their perquisites; it's just not the female way.

What will happen is that there will be a big sorting out. And many of the people that have tagged along on the Democratic gravy train are going to be eating the paint off the walls. That's something that our liberal friends have not thought about. The fact is that government benefits are not ownership rights. They are given at the discretion of Congress, as the Supreme Court has ruled. So what the government giveth, the government taketh.

A couple of years ago, a young Democrat told me that he was glad of Social Security because it wasn't subject to the vagaries of the stock market. That was a clever thing to say in the fall of 2008, but I'm afraid that as the government fiddles around with the entitlements in the next few years, probing the American people for the soft spots, this young chap, now older, will wish he had some sort of ownership rights on his government benefits.

In any case, it ain't gonna be pretty. Prettiness only obtains where people refuse the temptations of political power and limit their actions to peaceful cooperation. The whole point of the administrative welfare state is political power for the educated class and clientage for the great unwashed masses. On the one side the serpent. On the other side a million Eves. I need hardly remind my readers that the story of the Garden of Eden did not end happily.

Wednesday, February 23, 2011

The Liberal Perfect Storm

When I voted for Barack Obama in 2008 it was for reasons of national-security hygiene. I believed that the Democrats had been demagoguing on national defense and they needed to take the reins of power. They needed a rendezvous with reality. So Iraq was a mistake and Afghanistan was the real war; so Bush was a bumbling Texas cowboy. There was no way of resolving the question without putting the Democrats in charge of the national security apparatus and let them make some real decisions.

As we have seen, practically the entire edifice of liberal national-security doctrine has been vitiated. Iraq was a success, after all; Afghanistan is maybe important. Gitmo is still there; the Patriot Act is still in force. But the whole issue of nation building and democracy is back on center stage because it matters whether, e.g., Egypt goes radical Islam. The world is safe for democracy when the major states of the world practice democratic capitalism rather than thug dictatorism or some other pre-modern politics. So the liberal line on national security in the 2000s is pretty well blown to smithereens. Liberals didn't listen, didn't think conservatives had anything to say on national security, and now they are digging themselves out of a hole.

But now we see the liberals start to pay the price of ignoring conservative ideas on domestic policy for the last generation, as in:

  • Economic Policy. The kernel of truth in Keynesianism is that, in a financial meltdown, the government must step in to prevent a breakdosn of the financial system. That means printing money and bailing out the underwater financial players. But the whole edifice of "stimulus" to get the economy going again is rubbish. What is needed after a meltdown is smaller government, a smaller weight on the productive enterprises of the nation. What we call "stimulus" is really handouts to economic actors in the hope that the economy will recover and provide them with jobs again.
  • Liberal special interests. The fact is that liberals have been dealing themselves and their clients a ton of money over the last half century and it's got to stop. Conservatives have been warning that government employees are way overpaid for at least a decade. But liberals wouldn't listen. Now they are going to pay the price, big time.
  • Entitlements. Everyone knows that the entitlements have to be reduced. But liberals have been demagoguing on Social Security and Medicare for half a century. Now it's coming up to crunch time and the people hurt by retrenchment will be the people that liberals have encouraged to rely on the government. Apart from the political chicanery here, there is a bigger issue. People get dignity and a sense of self worth by providing for themselves and their family. If government does all that for you then, unless you are a creative artist, you are denied much of the satisfaction of life. The entitlements need to be recast as proper savings programs. They don't need to be totally individualized, but they do need to designed, in form and in fact, as money that people save against old age and infirmity.
  • Education. Education is a mess and has been ever since teachers started seriously unionizing. Again, the kids being hurt here are lower-income kids, the very ones that need education to convert from peasants into literate, numerate city slickers. For over a generation conservatives have argued that we need to break up the government monopoly in education and liberals have refused to listen.
  • Welfare and the poor. After a generation of argument, President Clinton signed a modest welfare reform in 1996. But in the last two years President Obama has pretty well reversed the welfare reforms. And we can see, in the off-the-books problem, that work and welfare for the low-paid is an unjust, corrupt, cruel mess.
  • Science and technology. Liberals think they are so smart on science, because they believe in evolution and conservatives believe in creation. But liberals have politicized science wherever they have touched it, from nuclear power to fossil fuels to transportation to global warming to the environment. And now the chickens are coming home to roost.

I could go on and on, but you get the point. Liberals are facing a perfect storm in the next few years, and it could all have been avoided if they had the decency and the humility to actually listen occasionally to their political opponents.

But still, I am surprised by the left-wing madness of the Obama administration. It's one thing to truckle to your base in the run-up to an election, but another thing to let the crazies take over the government. For that strategic error, the liberals are going to pay for a generation.

But then, the Greeks didn't fuss on about hubris for nothing.

Tuesday, February 22, 2011

Liberals Jump the Shark

In the end, I had to check Wikipedia about the meaning of "jumping the shark" and I learned that it referred to an episode of the TV sitcom Happy Days where a water-skiing Fonzi jumps over a confined shark.

Usually, this sort of thing occurs in a sitcom in terminal decline, when "a particular production effort has surpassed its relevance and reached a point of decline in quality that it is incapable of recovering from."

Hello liberal teachers in Wisconsin!

And now we read that President Obama and the Democratic National Committee are backing away from support of the demonstrating government workers in Wisconsin. Throwing 'em under the bus, eh, Mr. President?

I suppose that all political movements reach this point, where people demonstrate in the street, all riled up with indignation, utterly innocent of the fact that the once noble movement has become a tired, corrupt political conspiracy, a routine operation designed to fleece the taxpapers and line the pockets of the powerful.

Politics is peculiarly subject to this kind of thing, and I think it is because politics lives uneasily between the mailed fist of force and the velvet glove of inspiration. A political movement begins as a moral movement of renewal; it is full of its moral mission. And when political activists are out of power they only have the power of persuasion--assuming that they stop short of armed struggle. But the problem with government is that government is force. A political movement, once it gains political power, is tempted every day to use the arts of war instead of the arts of peace. It is tempted to roll over its opponents using its sovereign power instead of persuading them with arguments.

Conservatives have an answer to this problem. It is called limited government. There are many injustices and hardships in the world. But how many of them can really be solved with force? That is the question that conservatives ask. We don't ask ourselves that out of great moral insight, but out of practical concern.

Do we really want to get political power and government force into, e.g., the education of children? When we ask that question we are saying nothing against the importance of education. We are saying nothing against the idea of helping the poor to afford education. We are just asking, from a practical standpoint: do we want to do this by force. Because if government is involved then we are going to be educating children by force.

Well, our liberal friends crossed the Rubicon on that one decades ago. They are committed to force in just about every societal issue you could imagine. And now the whole edifice is wobbling.

Yes, but where shall we go, what shall we do? Andrew Biggs in NRO advises liberals to start reforming entitlements now, because it will only get worse.

And over the long term — well, if we don’t get on top of these issues soon, there won’t be a long term: All the entitlements will effectively fix themselves by going broke.

Like I keep saying, we conservatives don't have a dog in this race. It is the faithful Democratic voters that have organized their lives around government benefits that are going to be devastated by the default option, that of waiting until the entitlements go broke.

We care. We care that the Wisconsin demonstrators are cutting off their noses to spite their faces. Those government employees need, nay deserve, to have a soft landing from the impossible promises made to them by the politicians and the union bosses. That is what Gov. Scott Walker, (R) is offering them. It's a shame that they don't understand how generous and accommodating his plan is.

But if they don't appreciate now how generous the proposed soft landing is, then they will learn later.

Monday, February 21, 2011

Off-the-books Benefit Fraud

Back in December 2010 I wrote about "Off-the-books America", the growth of unregulated work and the curious disinterest of liberal America in doing anything about it. What is going on here, I wondered. "How can our liberal ruling class, that lives to regulate everything that moves, allow this to happen?"

I went on to describe a recent experience with an off-the-books fencing contractor, and did a bit of math to figure out why a small-time contractor might want to skip out on all the bother and expense of paying his taxes:

Suppose you are about to start on the bottom rung of the construction business, as a one-man residential fencing contractor. If you hire American laborers, they might want to work as formal employees. Let's just figure out what that would cost in Washington State, at the minimum wage of, say, $7.00 per hour. There's the FICA tax of 7.65%. There's the unemployment tax that, for a construction firm, is probably at the limit of 6 percent. Then there is workers compensation. That's presently at $1.30 per hour for Landscape Construction and Renovation, or 18.6 percent of the hourly wage! All told, we are paying the government 32.2% in payroll taxes! You think that a seat-of-the-pants start-up contractor is going to pay all that (let alone plow through the bureaucratic forms)? No, he's going to hire illegal workers, because they want to get paid in cash. Bank account? Forget it: he'll cash checks at The Money Tree.

Last week I got an email from a reader who told me that I didn't really know what I was talking about. He said that the real problem is all the citizens working off the books and the citizen-owned businesses that refuse to pay employees on the books. The worst two segments are the automotive industry, dealers and repair shops, and construction/landscaping industry, he wrote.

He wrote about his own experience trying to get an on-the-books job in the automotive industry.

In the automotive world, at least in the Southeast it is pretty hard to find a job as a tech on cars or motorcycles on the books unless you work for a branded dealership such as Ford or whoever, and in the buy-here pay-here car lots it is almost all cash paid to salesmen, car lot boys, retailers, repairs, body shops! Many of the independent repair shops pay either 100% cash no 1099 or nothing; some will pay partial on the books and off the books. I bet it is a good 60-70% of the independent shops that do this in central and east coast Florida. I have covered a 80 miles radius looking for a auto tech job on the books. It is hard to find any automotive tech job on the books there! Even places like Aamco end up paying some off the book pay.

Frankly, I felt there was something missing here because, as a student of economics, I don't believe that employers can force off-the-books employment on the entire low-income workforce. Something else must be in play.

I soon found out what that was. Over the weekend I talked to a friend, and he reminded me of his brother's bankruptcy. His construction business had failed, but in the bankruptcy process the state gets involved in unpaid taxes. He had employed a couple of off-the-books employees and the government wanted its taxes before it would accord him the privilege of relief on his debts.

Well, whaddya know! One of the off-the-books employees was claiming unemployment as he worked of the books, and another was claiming disability as he worked off the books.

So now we know what is really at the center of the off-the-books phenomenon: benefit fraud.

I know what you are thinking. Surely it can't be that hard to check up on employers to keep track of benefit fraud, or at least prosecute some employer every couple of months on the principle of shooting one person to scare a million? Exactly. How hard could it be?

So we are led to the most obvious reason why the government isn't chasing down off-the-books employment and benefit fraud. Our liberal ruling class of politicians, MSM journalists, and progressive activists condone the benefit fraud. After all, if you are a Democratic elected politician the whole point of elective politics is to rain down benefits and social gains on your supporters. Who cares if it's done through on-the-books benefits like Social Security and Medicare or double dipping by off-the-books workers claiming unemployment or disability?

When I first started my CCUWD project, the fight against the welfare state and its cruelty, its corruption, its injustice, its waste, and its delusion, I admit that I was playing with words. But the fact is that it's all true: it's worse than you think.

So we are left with the honest truth. The liberal welfare state is an abomination, and it shall not stand.

Friday, February 18, 2011

Suppose Alinsky Has It Wrong?

In the last three years of Obama, conservatives writers have loved to terrify the conservative base with Saul Alinsky and his Rules For Radicals. The Alinsky tactics, particularly in Rule #13--"Pick the target, freeze it, personalize it, and polarize it"--are held up as a sinister force against which honest conservatives are helpless. Now we see President Obama using Organizing for America in the battle of Wisconsin, the effort by Governor Scott Walker (R) to roll back organizing rights for public-sector unions.

But Alinsky's rules are nothing more than common sense. Gov. Chris Christie (R-NJ) uses them in his battle with the education blob in New Jersey. In fact he is very good at it. Some clueless state worker will complain about having to pay for health care premiums out of a 2 percent raise, and Christie talks about the 9 percent of workers in New Jersey that don't have jobs. He makes the state worker look like a complete fool.

In other words, Alinsky's tactics are the tactics that anyone uses in a political fight, whether an election or a battle in a state legislature. You want to make your opposition look like fools.

But in my view the bigger issue is that the idea of organizing the poor and the oppressed, as a political principle, is a loser. Let's take a look, starting at ground level and then taking a bigger and bigger perspective.

Suppose you lose? The point of political organizing is to mobilize your supporters for a fight. That is what politicians do routinely at election time. The idea is to divide the electorate so that you get at least 51 percent and the other chaps get the rest. We have elections scheduled regularly, so that we can divide, determine the winner, and get back to business. But the problem with provoking a fight is that you might lose. And I would argue that the history of most left-wing organizing is that the radical suits provoke the workers into outrages, which don't really help. Then after the protests, the radical suits head off to their next gig and the workers are left just as badly off as before. In the Battle of Wisconsin, the danger for President Obama and his union base is that they might actually provoke a counter movement that overpowers their movement. Remember? That's what happened after the Sixties. The American people hated the hippies and the lefty agitators, and voted for Richard Nixon.

Suppose you're wrong? The universal presumption on the left is that political power is the only way that the poor and the marginalized can get justice. The system is rigged against them by the corporations or the money power or discrimination, and the only way to end it is by political action followed by legislation to give the workers the social gains they are being denied by the injustice of the system. This goes back, of course, to Marx's immiseration theory and beyond. Obviously, from this point of view, if the bosses are making lots of money they are doing it on the backs of the workers. Thus the only way for the workers to get their fair share is by force. This theory dies a hard death; Deirdre McCloskey in her Bourgeois cycle has a good recent rebuttal. How can you get from $3 per day to $120 per day in two centuries by docking the workers of, say, $1 per day in wages? You can't make the arithmetic add up. That's because the prosperity of the modern era comes from innovation that benefits everyone.

Is politics the answer? The really big question overhanging everything is the modern faith in politics. And make no mistake, a faith in politics is a faith in force. It says that the way to get ahead in the world is by force, because government is force. Leaving aside the Biblical warnings about force, that he who lives by the sword will die by the sword, and Christ's final Temptation for power over all the nations of the earth, the record of political power is not that good, particularly if you look at recent American groups that have sought political power. There is the educated class, that now is the ruling class in America. It has brought us big government and now presides over us all with a disgusting corruption that it represents as high-mindedness. There is the working class, that spent the 19th century building authentic social institutions, and then wrecked itself when tempted by the educated class. There are African Americans, that were tempted by liberals right after the civil rights era and now are trapped in the liberal plantation. There are the feminists foolishly pursuing the chimera of comparable worth and proportionate representation in government and now the sciences. And now we have gays chasing the chimera of gay marriage. All these groups are in various stages of finding out that in pursuing political power they are drinking from a poisoned chalice. The point of human society is not to grab your pound of flesh, or hunker down like a dog in a manger, but to openly and generously contribute to the greater good.

President Obama doesn't know it yet, but the chances are that his Alinsky tactics will unite the majority of Americans against him. Chances are that he will go down as the president that led the Democratic Party and the progressive movement into the political wilderness for a generation.

I just hope that when the liberals and the Democrats finally reach the Promised Land they will have learned something from their years in the wilderness.

Wednesday, February 16, 2011

From Goldwater to Reagan Redux?

It's pretty obvious what President Obama is doing in his budget. He is running for reelection and he is challenging those mean-spirited Republicans to balance the budget on the backs of the poor. So he is doing nothing about entitlements, hoping to set up the Republicans for a fall as soon as they touch the third rail of American politics.

And maybe it will all work out for him, as Republicans appear willing to accept the challenge he has flung down. As Robert Costa and Andrew Stiles report:

As of Monday early afternoon, House Republicans were officially undecided as to whether they’d take on entitlements when they write the budget this year. Fiscal-hawk extraordinaire Paul Ryan, the chairman of the House Budget Committee, danced around the issue in a meeting with reporters... [J]ust as he was reluctantly deflecting the question, House majority leader Eric Cantor was dropping a bombshell in a pen-and-pad briefing with reporters elsewhere in the Capitol: Republicans, Cantor said, are all-in on entitlement reform.

Let's be candid about this. Democrats are going to demagogue this. They are going to try and do a rerun on the 1964 Presidential election when they successfully framed Barry Goldwater as a mad bomber that would get us into nuclear war. The result was the Vietnam War and the liberal belch of 1965 with Medicare and Medicaid and the War on Poverty.

The liberal belch of 1965 is what set the stage for the current entitlement crisis, because Medicare and Medicaid are now set to eat the budget.

As we know, President Obama and the Democrats have doubled down on the current system of administrative centralism with ObamaCare--which they claim, and presumably believe, will bend the cost curve down even as it ups the bureaucratizing and regulating of the health care field, and increases the number of people with subsidized access to health care.

Frankly, I suspect that President Obama and the Democrats are going to win this one, this time. They will demagogue the proposed Republican fixes to health care entitlements and President Obama will win election. But then the long-term will start to bite and by 2016 the American people will be in full revolt against everything Obamian and Democratic. We will see nasty inflation, we will see sky-high interest rates; we will see pervasive cronyism and out-front liberal corruption; we will see escalating problems with health care.

Then in 2016 the Goldwater moment of 2012 in which the liberals win by pure demagoguery will turn into the neo-Reagan era of 2016 and the sunny uplands of 20 years of growth and prosperity. We don't know who the Reagan will be, but this is America, the exceptional nation, and this is a nation that finds its Washington, its Hamilton, its Lincoln, and its Reagan in its hour of need.

So I say to the House Republicans: go ahead. Put your proposals on the table. Realize that many of you in the front ranks will fall the to musket balls of the Obamis and their willing accomplices in the media. Understand that in the strategic picture your sacrifices will lay the groundwork for the victory of 2016.

And if, despite the best efforts of the Obamis and the Democrats, Republican reforms go through in the next two years, well, sometimes virtue is rewarded in this life rather than in the next.

Tuesday, February 15, 2011

Can Obama Do a Clinton?

The conservative reaction to President Obama's budget is fear. Fear that Obama will do a Clinton on the Republicans and set up a government shutdown that the voters will blame on mean-spirited conservatives.

What we need, says Thomas Sowell, is a Rocky Marciano, who knows how to take the punches but has the patience to wait for the opportunity to land the big one.

On the other hand, Daniel Foster has House Majority Leader Cantor stepping up to the plate with this comment:

Your question about the budget itself and the entitlement inclusion, yes, we will include entitlement reform provisions in our budget, again, unlike the President, and unlike Harry Reid who doesn’t even admit there needs to be any reform of Social Security.

We have to look at the bigger strategic picture. And that includes preparing the battlefield. Republicans and conservatives need to get the line out that the sooner we do entitlement reform, the less it will hurt, and the less it will hurt the poor and the elderly. The battlefield preparation may involve tactical defeats, which is a polite way of saying that there will be casualties. Bright, promising politicians will be defeated before they have a chance to realize their potential.

The outline of the future is clear; it has been worked out by Rep. Paul Ryan (R-IL). He proposes to convert Medicare from a defined benefit to a fixed subsidy. Senior citizens will get an annual amount to apply to the health insurance of their choice. Left unsaid, I suspect, is the obvious follow-on, that Congress will eventually demand that richer Americans will get less of a subsidy that poor Americans.

Yes, but what about the poor and Medicaid. My solution is Wal-Mart-care. Think of health care today as a world of corner stores and department stores. Very nice, and all that. But most people don't shop at corner stores and department stores any more. They go to the big-box stores.

Wal-Mart is already putting in-store clinics into its stores. It already has a fixed monthly fee for all-you-can-eat generic drugs. Expect that the genius of American innovation will find new ways to deliver health care on the big-box model.

Meanwhile, what are we talking about when we say that Republicans just don't know how to play the sound-bite wars? Who was it who came up with "death panels," who talks about "common-sense conservatism" and even "common-sense constitutional conservatism?" And now Sarah Palin has described President Obama's policy as "a bullet train to bankruptcy."

I tell you. The future is so bright, I gotta wear shades.

Monday, February 14, 2011

President Obama Behind the 8-Ball

With the release of the his FY12 federal budget President Obama is reaching a do-or-die moment.

The key to the budget is the new estimate of the deficit for FY11, the current fiscal year, from $1.2 trillion to $1.6 trillion. You can see the problem here, using's Federal Budget Analyst.

BudgetFY 2012
$ billion

No, it ain't pretty. And it's all the consequence of the two strategic errors made by the Obama administration in 2009. Let's list them:

  1. Orthodox Keynesian Stimulus. Stimulus has a point when you are trying to rescue the banking system from a meltdown. But the idea that you can stimulate the economy with government spending is laughable. Liberals just can't wean themselves away from the notion, and this time, it is going to cost them big time.
  2. Full-on liberal agenda. Obama and his chaps just put the pedal to the metal in 2009 with gigantic expansions of traditional liberal special-interest spending plus ObamaCare, a huge weight on the economy, and all the educated class agenda on high-speed rail, clean energy and taxing and regulating conventional fossil fuels. It was a gigantic mistake, and liberals will be paying for it out to the horizon.

The basic problem for President Obama is that Americans are frightened. They are frightened that the big spending and the big deficits are going to hurt the economy and take away their jobs and their retirement.

In that, the American people are right.

Maybe the economy, with the inflationary QE2 and the Fed printing money like mad, will improve enough by 2012 to get President Obama home for reelection. But maybe not.

In any case, the Liberal Hour is over. Whether President Obama gets reelected or not, the American people are souring on big government programs, especially as they feel, rightly, that they don't benefit them. That means that a second-term Obama would be in office, but not in power. And that would mean a mid-term election which could reduce Democrats to numbers not seen for over a century.

Thursday, February 10, 2011

"Turmoil in their Ranks"

The chaps at The New York Times are eager to report that all is not well with the House Republicans. In "House Republicans Battle Turmoil in Their Ranks" Tom Hulse reports that:

Under pressure to make deeper spending cuts and blindsided by embarrassing floor defeats, House Republican leaders are quickly discovering the limits of control over their ideologically driven and independent-minded new majority.

For the second consecutive day, House Republicans on Wednesday lost a floor vote due to a mini-revolt, this time over a plan to demand a repayment from the United Nations. Earlier in the day, members of the party’s conservative bloc used a closed-door party meeting to push the leadership to go well beyond its plans to trim about $40 billion from domestic spending and foreign aid this year, demanding $100 billion or more.

So? What's not to like? There is a word to describe this situation. It is "democracy."

The elections of 2010 sent 63 new Republicans to the House of Representatives. It's the biggest turnover in a couple of generations. Obviously, it will change the game in Washington. But how? That is what Republicans are discovering as they stumble into the future.

A couple of years ago, after Democrats had won 55 seats in the House over two election cycles, they reckoned it gave them a mandate to crank federal spending up to 24 or 25 percent of GDP. On reflection, it is probably fair to say that they were mistaken. On balance. That's because the vast majority of Americans are worried about jobs and worried about deficits. They see big government as a threat to their livelihood.

Now the Republicans have swept to control of the House. These Republicans represent people who think that "something must be done" about wasteful spending and big deficits. So they are starting on that project. The GOP leaders, not surprisingly, are rather less gung-ho than the freshman class. They remember the Gingrich years and the firestorm they went through when they tried to cut spending with President Clinton in the White House. What we are seeing is the Republicans come to a consensus about just how tough they are going to get on spending.

In any case, all this is penny-ante stuff. The real story is the long-term budget outlook. As this chart from shows, the real question is health care: Medicare and Medicaid.

Obviously, the growth of Medicare and Medicaid cannot go on like this forever. They run into Herbert Stein's law: "If something cannot go on forever, it will stop." Somehow, in some way, the growth in government health care spending will stop.

Years from now we may look back on the budget battle of 2011 and see the seeds of the Great Repudiation--of big government.

Or maybe not.

Wednesday, February 9, 2011

Don't Think MultiCulti is Dead

Everyone is nodding approvingly at British Prime Minister David Cameron's attack on multiculturalism at Munich. Douglas Murray points sensibly to the double standard in multiculturalism.

In Britain, for instance, this meant that if you were a white English girl born into a white English family and your family decided to marry you against your will to a randy old pervert, the state would intervene. But if you had the misfortune to be born into an "Asian-background" family and the same happened, then the state would look the other way.

Now that the great and the good agree that "something must be done" about extreme Islamism, the tolerance for non-Western cultural practices seems like folly.

But let's not be in a hurry to declare multiculturalism dead. Look for the next version of the cultural attack on democratic capitalism to rise out of the ashes of multiculturalism.

It is important to understand that the cultural double standard is a constant on the left. It is the Schwerpunkt of their war on democratic capitalism. It started in the 19th century when the left declared that, because the working class was exploited, they couldn't be expected to conform to middle-class morality and culture. The working class had its own authentic culture and we ought to respect it.

Notice how this political program works for the left on several levels.

  1. By rallying to the support of the working class, in the middle of its struggle out of rural indigence, the left earns the grateful support of the working class.
  2. It discourages the working class from adopting the culture and mores of the competent, disciplined, rule-following middle class. This keeps the working class in a kind of working-class cultural and economic ghetto, and thus easily led by the left.
  3. It supports the main left-wing narrative of exploitation. If the working class is confined in a ghetto, that proves the left's assertion that the working class is deprived of a fair participation in the capitalist economy and therefore the government should have the power to loot the private sector to pay reparations to the exploited working class.

And so on. The same strategy works for any group that the left defines as marginalized and exploited. But it is a cruel and unjust strategy. The mores and the rules of middle-class democratic capitalism are not a cunning trick to keep the middle class in power and evil corporations profitable. They are the culture that has made the world what it is today, where ordinary people can apply themselves to serving other people economically and make a decent living out of it. On the margins, of course, some people by innovation jolt the economy into the stunning leaps from horsepower to steam power to gasoline power to nuclear power. That is what gets us from a $3 per person per day economy to a $100 per person per day economy.

For the past generation the left has been playing their game with the Moslems that are immigrating in their millions out of hopelessness in their native countries to the vibrant economy in the West. They are encouraging the Moslems to believe that they can have their pre-modern traditional culture and their western wealth as well, just as they encouraged the working class a century ago.

But there is no way for the immigrants to the city to have their cake and eat it too. Sooner or later they must submit to the culture and the rules of democratic capitalism if they want to make it in the city.

And no left-wing lies will change that.

Tuesday, February 8, 2011

It's Not Just the Money

The video of Gov. Chris Christie (R-NJ) explaining to a black policeman why he's going to have to pay for a third of his health care costs out of a 2 percent pay increase will become a classic.

It's a classic on many levels, including the demonstration of political skill. Christie walks out his ground, getting applause from the audience as he goes, building the case for spending cuts. He includes the case of municipal employees that got $900,000 on retirement from cashing in their unused sick leave. But still, the policeman didn't care. All he cared about was that he was looking at a big increase in his health care costs and he wasn't being made whole.

It's the basic problem of all government programs. Everyone signs up when there's free money going, and everyone acts outraged when the free money gets taken back.

But there's a bigger problem that I'm trying to understand. It is this. If you look at government operations, they are utter failures from top to bottom, starting with foreign policy. That's understandable, because foreign policy is always a fight between the good guys and the thug dictators. Wars usually start with the most appalling losses and retreats.

Then we get to ordinary government programs like education. There's a fuss right now about for-profit colleges. The Government Accountability Office has investigated 15 for-profit colleges for encouraging applicants to commit fraud when applying for federal aid. Investor Steve Eisman is also railing on the for-profit vocational college industry.

OK. Let's investigate fraud and prosecute it wherever it is found. But why just the for-profit colleges? What about government colleges? How well are they doing? And what about K-12 education? How well are the public schools doing in the inner cities? Where are the undercover investigations exposing the shoddy practices of the public sector education industry?

The discouraging truth is that it is almost impossible to criticize a government program until it breaks. That's because every government program is protected by a special interest lobby, and if you dare to criticize the program you will find yourself accused of slandering teachers or farmers, or policemen, or firefighters.

That's a shame. The truth is that all productive activity should be constantly adjusted and improved to deliver better service. You get that in the private for-profit sector, because if you don't you go out of business. But in government you get a slow death. A program may start out full of promise and hope but it descends inevitably into a producer protection racket. All that matters are the paychecks going to the government workers. And if the service isn't any good, that is just an argument for more funding.

In the end, we are going to have to pull all service-type activity out of the government. That's if we have any notion of getting health care, education, pensions, and welfare that works.

But it will take a revolution to get there.

Friday, February 4, 2011

A Jobless Recovery

The news that unemployment dropped to 9.0 percent last month is actually terrible news--for America and for the Obama administration. It means that the economy, now in a mild recovery for the last two years, still hasn't started to generate new jobs.

Back in the early days of the recovery in 2002 and 2003 after the tech bubble recession, Democrats like Nancy Pelosi would howl about the "jobless recovery." Now it's the Republicans' turn to howl, and Rush Limbaugh, for one, isn't slow to do so. You can see the situation from these two charts. The first one shows the US labor force for the last ten years.

It shows that the labor force is flat, continuing the flatness of the past three years. The second chart is total US employment for the last then years.

This shows the staggering bloodletting in the Great Recession. It shows we are still down nine million jobs from the peak of the economic cycle in 2006-07. It shows that the Democratic whining about a jobless recovery 8 years ago was ridiculous. In 2003 the labor force was climbing strongly, as people came into the labor force, and employment was climbing moderately. Contrast that with the current recovery, in which the labor force is flat, and the employment gain is also flat, and down nine million from four years ago.

Of course, conservatives have a simple explanation of the jobless recovery. President Obama and the Democrats thought, back in 2009, that all they had to do was pass a stimulus bill and jobs would magically appear. That's what Keynesian economics told them and that's what their tame economists told them.

Unfortunately, Keynesian economics is baloney. The government needs to keep its hands off the economy. It needs to promote a healthy credit market, which it has not done for the last century. And it needs to promote a healthy business climate, which it has not done from the start of the Obama administration.

If there is a good thing about all this, it may be that the overall losses to Democratic power in 2010 and 2012 will be so severe and so shocking that Democrats will abandon their inflationism, their interference in the credit markets, and their faith in Keynesian economics and come, grudgingly, to accept Reaganomics. But don't hold your breath.

Wednesday, February 2, 2011

Free Speech. Yes, But How?

Radio host Dennis Prager reminds us just how unfree we are when it comes to free speech. In America, you don't say anything that might offend left-wing ears, because it can get you into trouble.

In the past generation, the left has controlled so much speech and behavior that these controls are now assumed to be a normal part of life.

There's the telling point: "a normal part of life." And frankly, if you are a corporate exec, or an employee in a medium-to-large corporation, it would be disloyal to your employer to breach the left-wing speech codes. You might be willing to get yourself in trouble, but that is not the end of the story. For sure, your local HR department will be all over you like a cheap suit if you say the wrong thing. But your frankness can get your employer in trouble. And the fact is that most of us, the 80 percent of Americans who are not liberal, don't feel that our employer has it coming. We know how hard it is to create a profitable company, and we know how hard it is to keep a company profitable. So we really don't want to do anything that could harm our employer and get him in trouble with the PC police.

But the fact is that you can't say "Merry Christmas"; you can't talk about "innate differences between men and women"; you can't talk about black violence; you can't criticize homosexuality. It gets down to the bizarre. Apparently they are now Photoshopping out cigars from Churchill photos and cigarettes from FDR photos and Beatles photos.

What's to be done? Writes Prager:

If you love liberty, you must target the left and put its totalitarian tendencies in your cross hairs. We must shoot down political correctness and wage a crusade for truth and liberty.

That means that nice people have to get a little nasty. When you are around your liberal friends you have to short out the censor, and talk as if men and women are different, Christianity is a good thing, homosexuality is problematic, blacks have bought themselves a problem by living on the liberal plantation. And so on.

If you don't have the courage to violate the liberal speech codes you can try irony and code words. Just a couple of days ago, I exchanged greetings with an older couple, and we commented on the snow storms up north. "Global warming," I said. "Climate chaos" came the replay.

My own strategy is to turn the left's words against them, using their slogans to mean something different. And I always make it a point to talk about "girl stuff" and "boy stuff" when the opportunity arises.

But it still comes down to courage. We have to refuse to play the left's game. We have to "speak truth to power."