Wednesday, May 30, 2012

Germans of Character

Obviously, the most important country of the last two hundred years is the good old U. S. of A.  Talk about lucky.  The difference between South Africa and the US, I once read, was that in the US the aboriginal North American population died from European diseases whereas in Africa the Europeans died of African diseases.

But the second most interest people has to be the Germans.  You can start with Kant and Wittgenstein.  Between those two the Germans did most of the philosophizing and most of the science.  Not to mention the political science and the psychology.  Then we get to the military arts, organization, strategy and tactics.  And don't forget education.

But while the US was incredibly lucky, the Germans were incredibly unlucky.  Their practical politics stank, from Bismarck to Kaiser Bill to Adolf Hitler.  Now, of course, the poor bloody Germans are caught in the mess of the Euro.

It's easy to think of the Germans as fascist pigs until you start to read about them.  I just finished a memoir of life in Germany from 1944 to 1951, German Boy: A Child in War by a man, Wolfgang W. E. Samuel, that was 10 years old in 1945 and living east of the Oder in Sagan, a town now in Poland.  Or there is the mother of Hans von Spakovsky, who got her professional ballerina certificate in Dresden in 1944.  Both of these young people were caught in the Soviet Zone, and both had harrowing escapes.  Both seem to have grown up to be adults of almost saintly virtue.  Both, of course, came to America, Wolfgang because his mother married a sergeant in the USAF after divorcing her wayward German husband.  Hans's mother Traudel also immigrated to the US in 1951 on her status as a refugee, a Flüctling, from eastern Europe.

There are many moving passages in German Boy, including the moment just before Wolfgang and his mother and father left the Soviet Zone to sneak across the border into the West.  Wolfgang was worried about getting his grade book so that he could show the teachers in the West his status.  It wasn't until he was explaining all this to a trusted teacher in his Communist school that he realized what a terrible mistake he was making.  Fortunately his teacher told him that he wouldn't need his grade book.
"Just go. Don't say anything to anyone. Do you understand what I am telling you? Don't say anything to your friends, to other students, but especially not to any teachers. Say nothing to anyone."
It's important to remember that, in the midst of terror, in the midst of utter collapse, when children are begging for food and mothers are selling their bodies for food, there are people of profound goodness, even in December 1946 in the Soviet Zone of defeated Germany.

We often say that crisis brings out the worst in people.  But it also brings out the best in them.

Friday, May 25, 2012

How to Un-stimulate Your Economy

Our good liberal friend Paul Krugman travels the world plugging the benefits of Keynesian stimulus.  Of course he does.  He's a liberal and liberals believe in bigger government.  Increase the good things that government is doing and society will be the better for it.  QED.

But the science--leaving aside the magic tricks of John Maynard Keynes in the 1930s--is pretty clear on this, and a new report pulls some recent findings together.  The findings are collected in the final report of the 2020 Tax Commission at  Here are the results in bullet points from Alistair Heath:
  • "[E]very one per cent of GDP rise in government spending reduces private consumption and private investment by 1.9 per cent". Furceri and Sousa, 2011.

  • "[E]very one per cent rise in tax as a share of GDP is associated with a 0.14-0.27 per cent fall in GDP". Johannson et al, 2008.

  • "[O]ptimal public spending share of GDP [is] 30 per cent." Mutascu & Milos, 2009.
Really, this is not rocket science.  Of course government spending is wasteful and reduces prosperity.  It takes money away from some people and gives it to other people.

There is a grain of truth in the Keynesian stimulus cargo cult, and it is this.  In the middle of a financial panic there will be some enterprises with healthy business models that are temporarily embarrassed.  If you lend them money it will help them get over a rough patch.  That is what J.P. Morgan did in the 1907 crash.

Good for J.P. Morgan.  He bailed out corporate America with his own money.  But that is not what Keynesian stimulators do.  They hand out our money to their friends.  They give it to states to stop teacher layoffs.  They give it to their green energy cronies so they can develop uneconomic green products.  They stiff creditors of auto companies so they can give money to overpaid union members.  That is not stimulus; it is politics as usual.

It is telling that these days our liberal friends need an attack dog like Paul Krugman to push the argument for bigger government.  A generation ago liberals had good old sheepdog Paul Samuelson plugging away at his Newsweek column and John Kenneth Galbraith with his pompous best-sellers that told liberals that their brain-dead conventional wisdom was the epitome of intelligent commentary on the other guys' brain-dead conventional wisdom.  Now they need a sharper message and tighter message discipline.

But like the Fram entitlement guy used to say.  You can pay me now, or you can pay me later.

Wednesday, May 23, 2012

Think of Private Equity as Healthcare for Business

I've been thinking.  At least I hope I have.  I've been thinking about how to explain private equity to the American people.

After all, until Mitt Romney came along I should imagine that the average American voter had never thought about private equity before.  In campaign-speak, therefore, the Obamis are trying to define it for the American people before Mitt Romney does.  They want us to think of a vampire sucking the blood out of good union jobs at good wages.

The vampire metaphor probably does have application in some cases.  After all, there are bad apples everywhere--even in left-wing politics.

But I propose a new metaphor.  Think of private equity as healthcare for business.

Let's think about health care for a moment.  There are two key times of life when you really need health care.  You need it at birth, and you need it in your last months on earth.  Health care at birth is the reason that women now have a longer life expectancy than men: they no longer die in childbirth.  And healthcare is the reason that we don't have half of babies dying in their first year of life.

Why, that's just like private equity!  One of its key contributions is to help start-up companies, providing start-up capital and management advice.

In healthcare, obstetric and pediatric care is pretty straightforward.  Where things get messy is with the diseases of aging: geriatric care.  When you get sick, you look for the healthcare system to save you from early death and from serious disability, and that might mean surgery, cutting out a cancerous growth, or reaming out your coronary arteries or putting in a stent.  Guess what.  Very often, there's nothing the doctor can do for you.  He may order an expensive operation but you might still die anyway.

Here's a shocking fact.  When you get a doctor to operate on you, you pay him whether he fixes you up or not. He doesn't suggest an equity deal where he gets a cut on every extra month of life he's given you.  Talk about greed!

Just like aging humans, aging corporations are often a mess.  They may be paying their employees too much; they may be paying their executives too much.  They probably got into debt to tide them over a couple of rough patches.  Now they are really in trouble. and they can't get any more money from the bank.  Enter the leveraged-buyout guys.  They come in with new money, new management, new ideas, and try to save something from the wreck.  Like the doctor doing surgery, they want to get paid for their expertise.  Like anyone doing a high-risk business deal, they want a big payout if they succeed.

It's a pity that the Obama administration wants to teach the ordinary American voter that private equity stinks.  But you can understand why.  Almost everyone in the Democratic coalition is sitting on some sort of government benefit, whether the benefit of union intimidation or subsidy or straight out pay-for-play.  The politicians and the activists promised them lifetime security and told them they had a moral right to that security.  But now the money is running out, and the rest of the American people are getting a little restless about, e.g., paying government workers 45 percent more than private sector workers.  The only way they can keep the money going for a while is with demagoguery.

The Obamis can do this because the Democratic faithful still believe.  They believe what their leaders taught them, that they have a moral right to their handouts and their benefits.  And President Obama believes that too.  He believes in "spreading the wealth" through government programs.

In the end, of course, the whole Democratic political power will collapse into ruin, as every other empire has done.

But for ordinary people that aren't plugged into the national Democratic machine things are different.  What's wrong with the private-equity guys helping the start-up you work for?  What's wrong with a leveraged buyout when your employer is teetering on the edge of bankruptcy?

Not everyone gets a lifetime government job with tenure and lifetime benefits.

Monday, May 21, 2012

Welcome to the Julia Crow Era

Nietzsche was the guy that gave resentment a fancy name: ressentiment.  When people are angry because history has passed them by, it's not just resentment.  It's something more.

In the US we saw it in the Jim Crow era.  The Southern whites had lost the Civil War, and they had lost the profits of slave-grown cotton plantations.  They visited their ressentiment on the black freedmen to keep them subservient and prevent them from using their numbers to end the era of white domination in the post-war South.  The Jim Crow era only finally came to an end in the 1950s and 1960s when the federal government--led by liberals--broke the back of white racial domination in the US South.

Perhaps it is more compelling to describe the Jim Crow era in the language of modern psychobabble.  The white Southerners in the late 19th century were in denial about the fact that the glory years of ante-bellum slave plantations were gone forever.  So they vented their rage and their disappointment upon the people they used to own and exploit.  You could even say that they projected their own faults--developed during the lazy hazy days of life presiding over the plantation--upon their former slaves.

So now we have the liberal welfare state hitting the wall.  Do the liberals turn upon themselves, find a scapegoat, and move on to a politics that acknowledges the truth of the conservative and economic critique of big-government liberalism?  No, they do not.  Instead they write "hate speech" laws to make criticism of liberals a crime.  They demonize private capital firms that try to clear the arteries of failing unionized firms hooked on government subsidy and intimidation.  They erect a crony capitalism to reward their friends.  They respond to government failure with more government programs.  They call people that oppose them "extremists" while they send their union and Occupy goons out to intimidate them.

I've thought of a name for this twilight era of liberalism.  I call it the Julia Crow era, after the faceless woman in the Obama campaign's "Life of Julia."

It took the best part of a century to beat back the ressentiment of the Jim Crow era.  The old white Southern elite was well entrenched and taught the poor whites to fear the black hordes that threatened to engulf them.  It took face-to-face federal power to put a stop to the Jim Crow era and defeat it.

Let us hope that the Julia Crow era will not last as long.  The best way out would be for liberals to admit to themselves that their day is over, that their ideas have been exploded, that their top-down big government welfare state is unjust.  But I am not that optimistic.  History is littered with the wreckage of dog-in-the-manger elites that refused to give up their grip on political power until forced to.

In the 1950s, America decided that it was nobler, better than the meanness and the injustice of Jim Crow.  Let us hope that by 2050 we will have also put the Julia Crow era behind us and reasserted our faith in American exceptionalism, America as the last best hope of mankind on earth, the lodestar, the inspiration of those who must have freedom.

Friday, May 18, 2012

The Liberal Con

Everyone in the political elite knows that "entitlements" are really welfare.  So when middle-class voters talk about having "earned" their benefits, well, here's the New York Times:
Anecdotes about citizens’ demanding that government “keep its hands off Medicare” are Exhibit A in the prosecution’s case. In July 2009, for example, President Obama informed an audience that he had received a letter from a woman who wrote, “I don’t want government-run health care, I don’t want socialized medicine, and don’t touch my Medicare.” Such demands, wrote Timothy Noah at Slate, reflect a politics of “infantile denial.”
Except, writes William Voegeli, it was the liberals and Democrats that taught Americans to believe that Social Security and Medicare were just like an insurance policy.  You put your money in so you can take it out later.
Central to liberalism at high tide was a rhetorical effort to establish the untruth that Americans receiving social-insurance benefits were getting back nothing beyond what they had already paid for...

Vincent M. Miles, one of the inaugural members of the Social Security board, explained the basis of this right in a 1936 speech: The program’s old-age benefits “are best understood if we compare them to insurance.” The monthly checks from the government are “like the installments on annuities from an insurance company.” And, “like an insurance-company policy, the worker’s old-age benefit from the government must be paid for in advance. Instead of weekly, monthly, quarterly, or yearly premiums, however, the government collects weekly or monthly payments which are called ‘taxes.’”
 Of course, this was a lie, a liberal "con."  Social Security has never been run like an insurance policy.  It has always been run like a welfare program.  Taxes have been arbitrarily set based on the overall immediate payout needs, and benefits have always been skewed to provide a basic benefit to the low-paid and the contributor that has only paid in for a few years.  Medicare is worse, because it is not an actuarial program based on simple mortality, but on the future demand for health care and the demands of the health care practitioners.

Yet now our liberal friends are sneering at the simple-minded people that bought the "con."

Nothing remarkable here.  Confidence artists have always regarded their "marks" with disdain, and rightly so.  Because you can only get taken in by a confidence man if you want the something-for-nothing that the confidence man offers.

But that doesn't change the fact that liberals lied about their welfare state entitlement programs.  They lied because that was the only way that they could get proud and independent Americans to buy into their programs, and get Americans to exchange their birthright for a mess of pottage.

Wednesday, May 16, 2012

Why Obama is "Even Close"

Columnist David Brooks was well chosen to be the gentle voice of conservatism for The New York Times.  He's careful to write in a way that makes his ideas at least acceptable to his knee-jerk liberal readers.

So when he asks the rhetorical question: why is Obama even close in the  presidential opinion polls, he provides comfortable words for the NYT faithful.   After backing and filling for 700 words he leaves them with this fudge.
I’d say that Obama is a slight underdog this year: the scuffling economy will grind away at voters. But his leadership style is keeping him afloat. He has defined a version of manliness that is postboomer in policy but preboomer in manners and reticence.
But the best thing to do when thinking about Obama is to do the Bush substitution.  Imagine that President Bush was presiding over 8 percent unemployment and sluggish 2 percent growth.

Exactly.  Back in 2002 the Democrats and their willing accomplices in the media were screaming blue murder about 3 percent growth and 6 percent unemployment.  Imagine what they would be doing if a Republican president had President Obama's numbers.  They would be pulling the place down.

The reason that President Obama is even close is not that he has defined a "new version of manliness" but that up to now he hasn't really experienced any serious opposition.  That's the way with US politics.  Republicans only get to talk to the moderates and independents for about six months before an election, when they pay for the privilege.  The rest of the time the MSM is pushing its liberal agenda from the horrors of climate change to the cruelty of budget cuts and the mean-spirited policies of eevil Republicans.  That's all that non-political people get to see on their TV news.

Guess what.  Here we are, about six months out from the November election and the Republicans have selected a candidate and his campaign is starting to get into gear.  That means that the independents and moderates are finally beginning to get a message from the Republicans.

Guess what his campaign theme is.  "Believe in America."  It's as gauzy as "Hope and Change," but you can see the difference.  "Believe in America" is a direct appeal to American nationalism, the American idea, and American exceptionalism.

It suggests that the Obamis don't believe in America (Ya think?).

David Brooks is right.  Right now the election is pretty close, and it's pretty remarkable.  But I don't think things are going to stay that way.  Watch when the needle starts to move.  Then the wailing and gnashing of teeth will start in earnest.

Sunday, May 13, 2012

Arianna's Greek Fantasy

If you want a native's eye view of the Greek crisis why not turn to America's favorite Greek, Arianna Huffington.  That's what The New York Times did.
When I was growing up, my family was a tiny microcosm of the current Greek economy. We were heavily in debt; my father’s repeated attempts to own a newspaper ended in failure and bankruptcy. Eventually, my mother took my sister and me and left him...

Further austerity was coming, but my mother was clear about one thing: she would cut back on everything except our education and good, healthy food...

As I contemplate the statistics — especially the 54 percent unemployment rate among young Greeks — I think of all the stories behind this appalling data. All the dreams dashed. All the promise unfulfilled. And all the guilt, shame and fear that so often go hand in hand with intractable unemployment and little hope for a better future.

The punitive path of austerity and relentless economic contraction is, not surprisingly, likely to lead to further stagnation in 2013 and cannot be allowed to continue...

Argentina, which defaulted and restructured beginning in 2001, offers a point of comparison. The austerity crowd warned that Argentina would collapse if it stopped pegging the peso to the dollar and defaulted on its debt. There are many differences between Argentina and Greece. But Argentina’s default was followed by a few short months of economic crisis and then many years of steady economic growth — a dramatically different direction than the one Greece is now taking toward a potentially endless path of contraction that is destroying millions of lives and crippling the indomitable Greek spirit.
Er, no Ariana, darling.  Maybe you should check the stats.  Argentina's GDP went from $269 billion in 2001 to $102 billion in the trough of 2002.  That's a decline of over 60 percent.  So far the Greeks have only experienced three years of GDP decline from the peak of $341 billion: 2% in 2009, 4.5% in 2010 and an estimated 3% in 2011, around $290 billion.

In Greece, as the saying goes, they ain't seen nothing yet.  I don't know what Ariana Huffington reckons as austerity, but I'd say that contracting the GDP from around $300 billion to $100 billion in one year, as the Argentines did "in a few short months of economic crisis", counts as something a little worse than Paul Krugman's dreaded "austerity."

The problem for Greece has is that, tied to the Euro, it can't steal money from its people right now and reduce government entitlements by 50 percent.  To do that it needs to cut loose from the Euro and devalue the currency, as Argentina did in the 2001-2002 crisis by converting dollars in Argentine bank accounts to pesos.  People riot in the streets if you cut their benefits, but a devaluation is a fait accompli.  If you look at the chart, Greek GDP will probably decline from the current $300 billion to about $125 billion, one way or another.

The problem for the politicians in a debt crisis is how reduce the weight of government without the people burning the place down.  The best thing is not to create a big government in the first place, but it's now a bit too late for that, for Greece and for many other countries.

On the other hand, you have to hand it to Arianna Huffington.  Her father may have failed in the newspaper biz, but she is doing fine--not in old-fashioned newspapers, but in new online media.

Friday, May 11, 2012

Marriage: It's For the Next Generation

Right now, I'm reading Mrs. Gaskell's Wives and Daughters.  This 19th century novel is about broken families and step-parenting.  Of course, back in those days you didn't have divorce.  But you did have 17-year-old Molly Gibson, who wakes up one day to realize that her widower father is going to remarry.  Just like today's children of divorce, Molly is not happy about this.  In fact she is devastated.

There is a reason that stepmothers get such a bad press and are such a tempting target for novelists.  Once you get beyond the situation of a child being raised by its biological, married parents--or its married adoptive parents--you get to less-than-optimal child-raising conditions, and you get the stuff of drama.

And for all the focus on poor little rich kids, the people that really suffer when being raised by a single parent or parent and step-parent are the children of the lower class.

Just about everything we do these days in the modern welfare state is damaging to children.  We divorce, we have careers that keep us, men and women, away from home.  We dump children in government child custodial facilities.  We marginalize low-income men by making it profitable for women to marry the state rather than the unskilled father of her child.

Then, of course we valorize childlessness, in many different ways.  The cult of creativity, for a start, that goes back at least to the Romantic movement.  Why not create abstract works of art instead of living and breathing children?  It's the modern way of sneering at people who get their hands dirty at work.

The welfare state encourages politicians to buy votes by offering free stuff, and by legislating morality for powerful pressure groups.  Sometimes that is a good thing, when the powerful pressure group is Martin Luther King Jr. and the black civil rights movement helped along by white liberals.  Or it is the worthy goal of decriminalizing homosexual behavior.

But the trouble with political movements--and government bureaucracies--is that they never just get their issue passed and then go home.   The leaders and the activists get a taste for power and influence and search for ways of keeping the movement going.  So the civil rights activists became race hustlers and the gay rights community has gone beyond achieving toleration for gays to the bullying of everyone that doesn't endorse the gay marriage agenda.

Back in the old days of clan and land, young people were married young, before they could object, and they were married in accordance with the clan or family agenda.  The idea for the clans, just like in dynastic royal marriages, was to cement clan alliances in the next generation.  For landowning families the goal was to concentrate family wealth in the oldest son in the next generation.  Otherwise clan power or family wealth would dissipate away.

But the rise of the bourgeoisie changed all that.  The bourgeoisie does not play with political power or sit on land.  It lives by its wits, by trade, by making things, by serving people.  So it changed the rules from arranged marriage to companionate marriage based on the love between man and woman.  But the point of their marriages was still the next generation.  That is the point of marriage.  To protect children and the mothers that love them from the instinct of men to play the field.

The trouble with no-fault divorce, with cohabitation, with gay marriage, and with the polyamory that is probably next on deck, is that the focus is on the needs of sexual adults rather than the next generation.  You'd expect that in the modern era because necessity, the basics of food and shelter and survival, have receded in importance as capitalism has increased income from $2 per day to $100 per day.

When you are poor and you do something stupid at $2 per day, that may be all she wrote.  But to be rich in any society, or middle-income in today's society of $100 per day, allows you the scope to do stupid things and keep doing them for quite a while without getting rubbed out.

In the old days, stupidity in the rich was symbolized by eldest sons getting deep into debt so dad had to mortgage the ancestral estate or even sell it.  Today we see it in the selfishness of the "me" culture.  People do stupid selfish things, and usually, if they are in the upper 20 percent, they can afford it.  Their children may be furiously angry with them, but the children still get educated and live useful lives.  As you go down the batting order things are not so cheerful, and that is what Charles Murray writes about in Coming Apart. But his take is nothing new.  We read back in the 70s that the children of the rich recovered pretty well from their Sixties hippiedom.  It was the children of the no-so-rich that ended up as casualties of sex, drugs, and rock-and-roll.  We didn't get to read much about the children of the hippies until much later.  They didn't enjoy hippiedom too much.

The liberal "lifestyle" culture is best understood as our modern version of the eldest-son-behaving-badly syndrome.  Only, of course, since the liberals dominate the culture, they represent their selfish culture as creativity or finding your identity, just as they boosted the Sixties counterculture half a century ago.

Liberal writers write benevolently of polyamory, but liberal wives like Hillary Clinton and John Edwards' wife Elizabeth weren't quite as nonchalant about the polyamorousness of their liberal husbands.

The net result of all sexual license is that women get screwed, with disease, with heartache, and with children that never got a childhood or never got to live.  Some day, women will see through the liberal snow job and get clarity on this.  Until then conservatives will be fighting a strategic retreat, and many ordinary people will get chopped up by the sabers of the pursuing cavalry.

Thursday, May 10, 2012

We're Overseas about "Overseas"

Today I'm in Greenwich, Connecticut, for the roll-out of my daughter Beatriz Williams' debut novel, Overseas.  There's an event at the Greenwich Library tonight at 7pm EDT, but right now we are listening to an author interview on "The Business of Living" AM1490 WGCH.  It's a delight: Beatriz comes across as knowledgeable, confident, articulate, with a good radio voice.  Just how you'd want your daughter to come across.

So what's Overseas all about?  Here is an interview in the Greenwich Citizen.  Says Beatriz:
"Overseas" is a sweeping love story about a First World War infantry officer who follows the woman he loves across time to contemporary Manhattan. It really crosses over genre lines, with elements of historical fiction, mystery, contemporary romance, and a touch of the paranormal.
Or, as I like to pitch the book: Overseas is about young Kate Wilson in Manhattan in the 2000s.  She's fallen in love with this guy Julian that runs a $20 billion hedge fund, but then she gets a book in the mail about a family in World War I.  And her Julian looks exactly like a British infantry officer that was killed in the Battle of the Somme!  What gives?

Real estate, they say, is all about three things: location, location, location.  Book publishing is similar.  It all comes down to three things: publicity, publicity, publicity.  So whatever people are saying about the book, whether it's on your website, on Amazon, Barnes & NobleTwitter, Facebook, GoodReads, radio, newspaper, it's all good.  The only thing that's bad is when nobody is talking about you!

But publishing a book is not all fun and games.  Being the father in question you have to expect a little gentle ribbing.  You find that your fatherly advice comes back to haunt you.  Here's where I come in, the sorrowful father with gloomy advice as recalled by Beatriz Williams:
If you must write, he told me, with a sorrowful shake of his head, go off and do something else first. Otherwise you'll have nothing to write about except writing.
Well.  Thank goodness that my daughter took my advice.  Children very often do, you know, for better or worse.  So you should be careful when you dish it out.  They are listening, even when they are teenagers and pretending that they don't hear a word you say.

Wednesday, May 9, 2012

A 60-40 Year?

The big question in any election is: who will turn out to vote?  That is the dirty little secret that the pollsters keep under wraps in their "turnout models."  That's why it is meaningless to show, right now, that the presidential race is tied.  Because the pollsters really don't know who will turn out in November.

But now we are beginning to get a look at things.  The 60-40 defeat of 80-year-old Senate incumbent Dick Lugar (R-IN) in the Republican primary sends a message.  The 60-40 success of a man-woman marriage amendment sends a message.  The majority piled up by Gov. Scott Walker (R-WI) against all of his Democratic primary opponents sends a message.

The message is that it looks like Republican voters are coming out to play.  So if I were a Democrat, or if I were President Obama's campaign managers, I would start to get really worried.

On top of everything, it feels like Republican presumptive nominee Mitt Romney is hitting his stride.  He is starting to articulate an economic message, and he is starting to tout his business experience as an asset. (Imagine that!)  He is even taking a swipe at Julia, life of.

In my view it is serendipity that in the slowest recovery since the Great Depression the Republicans are running a candidate whose whole business experience is about starting up new businesses and trying to reorganize failing businesses.  Think about it.  As the economy struggles to create new jobs what else would be more timely that a politician in charge who really understands how jobs are saved and created?

I wonder if the American voters agree?

Monday, May 7, 2012

Endgame of the Welfare State

So the French decided to toss their "conservative" President Sarkozy for the Socialist Hollande.  And M. Hollande promises to end "austerity" with growth--in government spending.  In other words the French want to spend the Germans' money for them.

And the Greeks are turning to a neo-Nazi party.  Of course they are.  What do you do when socialism doesn't work?  You turn to national socialism.

Europe's Big Problem, and ours, is that politicians have promised the moon in entitlements to the voters and now the voters are mad that they aren't going to get the moon.  Or even much in the way of green cheese.  We've known this would end in tears; we've known it for decades.  But from the point of view of the welfare-state beneficiary, none of that matters.  If s/he can keep the gravy train going another five, or ten, or fifteen years, then to hell with nation, to hell with the economy, to hell with the grandchildren: just keep those monthly payments going.  Tax the rich, tax the corporations, print the money.  Just don't cut my benefits, 'cos I earned them.

Here's what is needed.  What is needed is for the left-wing parties to admit (privately) that they were wrong and reform their welfare state so that it runs itself without detailed government supervision.  Government can proudly preside over the economy and pretend that it is giving out all kinds of benefits, but in reality it lets the market economy run itself.  Government demands the most frightful payroll taxes from evil, greedy employers, but the money all goes into private accounts for the workers and the workers get whatever pensions and health care and unemployment and disability their contributions yield.

That, of course, is what the German Social Democratic Party started to do under Gerhard Schroeder. They relaxed employment regulation.  They lowered unemployment benefits.  They didn't do it because they wanted to. They did it because they had to, and the German voters immediately voted them out of office.  But it was the right thing to do, and now the Germans have the only healthy economy in Europe.  They have even cut their green energy subsidies.  And the Social Democrats will be back as soon as the Germans get fed up with Frau Merkel.

No doubt the French socialists will be forced to do the same thing, and probably sooner rather than later.  But not until they have got the French economy completely in the ditch.

You might ask: why put the French people through such a nightmare?  The answer is that it's the only way to convince the welfare-state beneficiaries to loosen their grip on the public purse.

People will only agree to take half a loaf when they can see, beyond a doubt, that there is no chance in hell that they are going to get the whole loaf.

Friday, May 4, 2012

Rasmussen Misses Point on 50-50 Elections

Pundits often excoriate politicians as self-serving hacks that betray the noble American people.  Here's pollster Scott Rasmussen writing about the lack of decisive elections recently.
As voters, however, Americans experience a government that is unresponsive and catering to the interests and whims of politicians...

Nothing will be resolved until the political class catches up to the American people. That will require a major change in the way government and politics work.
Er, no, Scott.  The reason we are in this mess is that the American people can't make up their mind.  They can't decide whether to vote for an intensification of the welfare state of the last century or whether to cut government down a bit and take more responsibility for their lives.

And the symbol of this uncertainty is the white working class that has shuttled between the Republican and Democratic parties for the last couple of decades.  Do they want to stay with the grand old entitlements that FDR and LBJ designed for them?  Or do they go with the social conservative patriotism of Reagan and Bush?  It's a tough call, because the white working class hasn't quite adapted to the free-enterprise world; it still hankers for the safety of living in a close village community under the patronage-distributing lord of the manor or the urban village's precinct captain.

The point is that there are two elites competing for the votes of the American people.  There is the Progressive elite and its big-government agenda that started with Theodore Roosevelt.  Its ideal is the Life of Julia so ably described by the Obama campaign.  On the progressive view the great milestones in your life are the wonderful government programs that help you in education, in health, and in retirement.

Then there is the conservative movement that argues a small-government agenda.  Big government is the "road to serfdom" and sooner or later it will run out of other peoples' money.  In addition to that, conservatives argue, big government corrodes society, turning everyone into a dependent whose social thinking doesn't go beyond voting for the politician that offers the most free stuff.

Back in 1990 conservatives thought that they had won the overall argument about big government, and the Clintonian liberals were certainly modest about their arguments for big government, at least they were after the failure of HillaryCare.  They were the new, non-partisan Democrats that hated the divisive conservatives of the Christian Right.  Then they got into power and went pedal-to-the-metal to implement their big-government agenda before an election could stop them.

Rasmussen is right to complain about the "trench warfare" of today's politics.  But the politicians are the wrong people to blame.  The politicians are merely putting themselves at the head of the various interests battling for the soul of America.

The state of Wisconsin shows us what is at stake.  Government employees have dealt themselves a pretty cushy situation with wages and benefits well above the norm in the private sector.  Some politicians want to reform that imbalance.  Others want to defend the government employees.  The result is the political donnybrook we have seen in Madison, Wisconsin over the past year and a half.

Eventually the American people must decide what they want.  And they will.  Look for two or three really decisive elections in the next few years.  Maybe the first one will be this November.

Wednesday, May 2, 2012

What I Want From Romney

You don't get to read too much about the presumptive Republican candidate for president from the mainstream media: who is is and what he stands for.  That's because they aren't much interested in Mitt Romney and his agenda.  Those chaps have another agenda.

That's why you have to get past the mainstream media and actually look at the candidate's speeches to figure out who he is and what he means for America.  Now that Romney is the presumptive Republican candidate we can get a glimpse of how he proposes to run for president rather than run for the Republican nomination.  Our first look at his general election campaign came on Tuesday night, April 24, 2012, at Romney's victory speech in Manchester, New Hampshire, after he won primaries in five eastern states.

What I want to see is for Romney to step up to who he is.  Democrats have made a big deal about his years leading Bain Capital, as if it is shameful to be a capitalist creating new companies and trying to resurrect failing companies.  Republicans cannot continue to shy away from support of capitalism. And I want Romney to take on the "fairness" issue.  So long as Democrats can go on about fairness and not get push-back so long will the unaffordable welfare state get bigger and bigger until it collapses.  Then the real "unfairness" will start.

In Romney's Manchester speech he made a start on both these themes.  Said he, about his business experience:
Only in America could a man like my dad become governor of the state in which he once sold paint from the trunk of his car.

I’d say that you might have heard that I was successful in business. And that rumor is true. But you might not have heard that I became successful by helping start a business that grew from 10 people to hundreds of people. You might not have heard that our business helped start other businesses, like Staples and Sports Authority and a new steel mill and a learning center called Bright Horizons. And I’d tell you that not every business made it and there were good days and bad days, but every day was a lesson. And after 25 years, I know how to lead us out of this stagnant Obama economy and into a job-creating recovery!
OK.  I'd call that a start.  Here's what I'd like him to say next. I'd like him to say that his business centered around two things.  First, he helped create new start-up companies, based on new ideas, with new money.  Then he helped try to turn around and rescue companies in trouble, by reorganizing and recapitalizing.

When you do that, you are putting yourself on the line, because there are going to be failures to balance the successes.  But if you don't do something, risk something, then you can't get to success.  Here in America, we need someone like that, someone with experience in turning around failing companies.  Because the United States is not in a good place.  In fact it is in a turn-around situation; we have to change now or we risk losing it.  We need not a community-organizer-in-chief but a reorganizer-in-chief.

Then there is Romney on "fairness."
This America is fundamentally fair. We will stop the unfairness of urban children being denied access to the good schools of their choice; we will stop the unfairness of politicians giving taxpayer money to their friends’ businesses; we will stop the unfairness of requiring union workers to contribute to politicians not of their choosing; we will stop the unfairness of government workers getting better pay and benefits than the taxpayers they serve; and we will stop the unfairness of one generation passing larger and larger debts on to the next.
Now we are talking.  The basic fact of the big-government welfare state is that it is unfair.  It is a system of looting.  You get in power and then you hand out the loot to your supporters.  So the more we limit the looting, the better for all Americans.  Right now, the biggest chunk of government loot is going out to baby-boomer seniors like me.  But why?  Seniors are the richest kind.  We shouldn't be looting the younger generation for our Social Security and Medicare.  Romney doesn't mention that, of course, because he dare not.  But he does hit the Obamis where they are most vulnerable.  On lousy urban schools, run by Democrats.  On crony capitalism, giving out money to campaign contributors.  On the gigantic disaster of government employees looting the state treasuries with their unfunded pensions and retiree health care.

Jonah Goldberg is out with a new book this week on The Tyranny of Clichés.  He argues that liberals use clichés to shut down political speech.  There are two problems with this liberal habit.  First of all it stops the other guys from talking to the American people.  That's a pity.  But then it puts liberals into an idea-free cocoon.  They never get to defend their ideas in an open forum.  They are always sneaking around looking for the chance to lead with a rabbit punch.  That's a shame.  Because one day conservatives will break through to the American people with some new idea and liberals won't know how to counter it, because they have never had to honestly defend their ideas.  Maybe that is happening right now.

Mitt Romney has started out the general election campaign with some good themes.  Things can only get better from here.  Is that possible.  One of the campaign consultants working against Romney in 2008 said this.  He said that the Romney campaign in 2008 learned so fast it was scary.

What's so remarkable about that?  That is how capitalism and business works.  That is how you get to be successful in business. You learn and adapt every day or you go out of business.  Or, as Mitt Romney said in his speech: "there were good days and bad days, but every day was a lesson."