Monday, December 31, 2012

Barefoot and Pregnant Dem Voters

Our liberal friends have dined out for decades on the proposition that conservatives are patriarchs that want to keep women barefoot and pregnant.  It's the usual mean-spirited insult, of course, that expresses the idea that conservatives don't bellieve women are the equal of men and don't want women out in the work force doing the things that men do.

But when I read President Obama on the fiscal cliff, reducing the entitlements crisis to the notion that:
it is very difficult for me to say to a senior citizen or a student or a mom with a disabled kid, ‘You are going to have to do with less but we're not going to ask millionaires and billionaires to do more.’
You see, what the president is cunningly omitting here is the context.  He is leaving out the $50-100 trillion unfunded mandate on entitlements, the difference between the government's promises on Social Security and Medicare and the funds available to deliver them.  There is not one word in his remarks, nor in any other Democrat's statements, to prepare the Democratic voters for their upcoming years of responsibility, years when the money just won't be there for Social Security and Medicare as we know it.

In other words, Democrats don't want their voters to get out in the world and get an education in public finance--which they could easily get at for free.  No they just want them barefoot and pregnant, dependent on their government benefits until the next election.

Of course, politics is all about hypocrisy, projection and any pop-psych notion you can imagine.  But it is still galling.

There's a lesson here: conservatives need to understand that the overwhelming Democratic base is never going to "get" the idea of an entitlement crisis.

Thus when someone like Kevin Williamson urges conservatives to understand that, e.g., most Democrats are much more risk-averse than Republicans, he has a point.  Yes it's true that savings accounts and bonds and Social Security are attractive to the low-risk folks.  That's because they believe what authority figures have told them.

The problem is that government programs and benefits are a lot more risky that the average Democratic voter understands.  Bonds?  Superfragilistic as long as you have a government that will maintain the currency at par with gold.  Social Security?  Low risk, as long as the government doesn't default on its debt, and governments often do.

Let's just take a look at my situation, aged 66.  Social Security?  Yes, but what will happen down the road?  Bonds?  But what happens when the money supply expands to match the quadrupling of the monetary base since 2008?

My point is that relying on bonds and Social Security in 2013 is a risky bet.  It would be much lower risk, over the medium term, to rely on dividend stocks backstopped by a spot of gold.  Why?  Because in my view, it is harder for the government to loot people of their gold and their stocks than loot their bank accounts and their bonds denominated in dollars.

But when will people get that?  Only when the checks stop coming.

Back to Ben Franklin: Experience keeps a dear school, but they will learn in no other.  Risk-averse people won't warm to the Republican agenda until they have experienced for themselves the huge risks hidden in the supposed risk-free agenda of the Democrats.

Friday, December 28, 2012

Jonathan Rauch, Hypocrite

Comes now liberal writer Jonathan Rauch to argue that the one way of doing things is wrong. (H/T Dynamist).
Whenever anyone tells you, 'I've got it right. I've got the one true answer and everyone else is wrong and I'm going to enforce it,' that person is not only a menace to freedom but, more important, a menace to human thriving and human knowledge.
Golly.  Of course, Rauch doesn't mean it with respect to government programs.  He just means that in the university there should be a full and free discussion of ideas and that nobody should be allowed to get away with being "offended" by free speech.

Also, Rauch meanders on to say what a wonderful thing the conversation about gay marriage was, and how it "persuaded" the American people.  As if.  As if the "conversation" about gay issues, like the conversation about race, has not been at every moment about liberal bullying, liberals stigmatizing anyone that disagrees with them as bigots and racists and homophobes.

I wonder how many people in Washington State voted, like me, for gay marriage on the principle of Ben Franklin, that experience keeps a dear school, but they will learn in no other.

If you truly believe  that "the one true answer" is a problem then you have to believe that almost any government program is a disaster.  Because almost any government program says: Look chaps, we've been thrashing around with this problem, everyone going his own way.  Now we need to stop all that and force everyone to do it the same way, our way.

In Government's End, Rauch argued that government was stymied by special interest rent seekers which prevented government from being the flexible problem solver it could be.  But that completely misses the point.  It was 50 years ago that Buchanan and Tullock dissected government in The Calculus of Consent, and showed how the game of forcing others to pay for your pet projects works. Special interests are to government what eggs are to bacon.  As far as the system will allow, special interests will try to game the system to acquire rent.

The only political question, then, is how much do we limit government?  Within those limits, we should understand, it is a special interest feeding frenzy.

When you don't limit the government you get what we have right now, a government barreling to inflation and default.  Why?  Because there is no established limit to how much the government can take, and how much the government can give.

And that's because our ruling class, the educated elite, gets its power from cultivating the resentments and the envies of the average American into well manured, husbanded, and till'd government programs with lots of jobs and power for the ruling class.

So the ruling class, like Jonathan Rauch, can talk a good line about the horrors of the one way, but when it comes to the crunch, they are all in favor of more government, the one forced way for everything.

Thursday, December 27, 2012

Getting Supporters to the Polls

Reporters and pollsters tend to talk about percentages when they talk about elections.  But real politicians talk about numbers.  They know that the name of the game is getting people enthusiastic enough to get out to the polls and vote.

Obviously there are two sides to this equation.  You want your supporters to be enthusiastic and you want their enthusiasm to rub off on the swing voters.  You also want the opposition to be demoralized so they won't bother to vote.

A look at the recent presidential elections in the US shows this enthusiasm at work.  Let's get the vote numbers from  First the Democratic vote.

Presidential popular vote in millions
Election Year198019841988199219962000200420082012
Dem Vote35.537.641.844.945.651.059.069.565.6

Now let's look at the Republican presidential vote over the same period.

Presidential popular vote in millions
Election Year198019841988199219962000200420082012
Rep Vote43.954.548.939.137.850.562.059.960.9

The politicians are right. It is the total vote count that is really interesting.  If you look at the Democratic vote, it has steadily increased every year since 1980, except for one.  The big years were the 2000s when the Dems went from 51 million in 2000 to 69.5 million in Obama's great year, 2008.  But then Obama lost 4 million votes in his reelection.

The Republican vote is different.  It has seesawed up and down.  It peaked at 54.5 million in Ronald Reagan's Morning in America year of 1984.  Then it dived down into the 30s, with the terrible elections in the 1990s when Ross Perot split the conservative vote.  But under George W. Bush and his "architect" Karl Rove the GOP vote almost doubled to 62 million in 2004.  Since then it has flatlined at about 60 million.

How did the Democrats manage their extraordinary climb from 35 million in 1980 to 70 million in 2008?  I'd say it has been mostly hard work, identifying supporters and building the infrastructure to get them out to vote, and also making it easier to vote, with Motor Voter and absentee voting.

What's the story with Republicans?  Is the flatline a temporary pause, or are Republicans just running out of white people?

Back before the election I estimated that the Dems would lose 5 million votes and the Republicans would gain 5 million.  Well I was half right.  The Dems lost most of the 5 million I prophesied.  But the campaign of Mitt Romney failed to pick up the 5 million it needed.

Maybe the only hope for Republicans is that Barack Obama is busily minting new Republicans as he fails to ignite the economy, year after year, with his redistributive economics.

Wednesday, December 26, 2012

Obama's Anecdotes

Classicist and farmer Victor David Hanson calls Obama's style "The Anecdotal Presidency" for the way that the president reduces our great national challenges to anecdotal fluff.  From deficits to immigration the president's response is a plausible but insufficient story: let the rich pay a little more; give the illegal-immigrant children of illegal immigrants a break.
The Obama presidency is one of anecdotes in lieu of solutions. It might be a comforting thought that jailing a reactionary filmmaker, or raising taxes on the suspect few, or providing amnesty to the college undergraduate, or taking away Ted Nugent’s guns will solve our mounting problems, but such anecdotes mean little in the real world of difficult choices that would offend friends as well as opponents.
We expect our politicians--or at least the politicians of the other party--to act responsibly to solve national problems, but I always come back to this.  Democracy is not the rule of the people, for the people cannot rule.  The only thing the people can do is to choose who will rule over them.  In our age these are elected politicians, experts in persuasion.  Their skill is not governing, it is running for election.

A chap like Barack Obama runs for election as someone who can get you free stuff, and it stands to reason to his supporters that if the rich paid a little more there would be enough for all.

A chap like Mitt Romney, or any Republican, runs as someone that will fix the profligate government, and it stands to reason to his supporters that if we just cut a little from all the waste, fraud, and abuse that there would be plenty of money for the government to discharge its proper responsibilities.

Which is right?

Well, neither.  The result of a chap like Barack Obama is that the government gets into real fiscal difficulty and confiscates the wealth of the people through inflation and debt default to try and pay its bills.  The result of a chap like Mitt Romney is that the government's affairs become so comfortable that people think we can safely increase government spending and subsidies.

And thus the whirligig of time brings in his revenges.

Tuesday, December 25, 2012

Merry Christmas, Suckers

The official liberal myth is that liberals, through selfless concern for the poor, have lifted the unfortunate out of misery, the brutality of the time clock and the speedup, the 12-hour day, the unsafe workplace.

Another way to tell the story is that the new ruling class of liberals gets its power by tempting the poor with free stuff.  Liberals don't care about the poor; they care about political power and comfortable sinecures that liberal politics delivers to them.

The latter story fits with the description of democracy in Joseph Schumpeter's Capitalism, Socialism, and Democracy.  Democracy cannot be the rule of the people, Schumpeter writes, because the people cannot rule.  All they can do it vote to elect the people who will rule them, and it follows that the people competing for the right to rule will become experts, professionals, in the art of getting elected.  Thus it is that democracy is really the rule of the politicians, professionals whose lifework is getting elected to public office.

Conservatives like me profess to be puzzled that Democrats seem to be uninterested in "fixing" the entitlements.  After all, it is Democratic voters that have the most to lose if the government runs out of money.

But the Democratic disinterest in entitlement reform makes complete sense if you think of the Democrats as elected politicians.  All they are interested in doing is saying the right things to get elected.  What comes next is beside the point.  Now humans are beings that like the idea of getting "free stuff."  They are also beings that hate the idea of giving up "free stuff."   So you tell me what would happen to Democrats that told their supporters to cinch in their belts.

Now comes an article in The New York Times that worries about the poor and college.  It turns out that many poor students rack up a pile of student debt and then don't graduate.  Golly, who could have seen that coming!

And it all filters down to the dreaded problem of rising "inequality."
Thirty years ago, there was a 31 percentage point difference between the share of prosperous and poor Americans who earned bachelor’s degrees, according to Martha J. Bailey and Susan M. Dynarski of the University of Michigan. Now the gap is 45 points.

While both groups improved their odds of finishing college, the affluent improved much more, widening their sizable lead.
 Golly.  Why could that be?
Likely reasons include soaring incomes at the top and changes in family structure, which have left fewer low-income students with the support of two-parent homes. Neighborhoods have grown more segregated by class, leaving lower-income students increasingly concentrated in lower-quality schools. And even after accounting for financial aid, the costs of attending a public university have risen 60 percent in the past two decades.
The charming innocence of these liberals.  Thank goodness they haven't read Coming Apart by Charles Murray.  Or they might cotton on to the idea that their administrative welfare state has done wonders for the income and prospects of well-born liberals.  But it has hammered the very people it is supposed to help.  As in:

Item: The poor, through the workings of the welfare system, experience extremely high and variable marginal tax rates.  That's because as you generate more wage income you lose your welfare benefits not gradually, but chunk by chunk.

Item: We now learn that the people that have been hurt the most in the real estate crash are African Americans.  And no wonder.  It was the "redlining" of minority neighborhoods that the Community Reinvestment Act and the subprime real-estate loans were supposed to fix.  The result was that many people got loans that didn't have a hope in hell of servicing them.

Item: The wonderful and compassionate entitlements like Social Security, Medicare, and Unemployment insurance have the perverse effect of sterilizing the savings of the poor and the near poor.  The money that normal people would save against a rainy day, or starting a business, or putting a big down-payment on a home, or sending a kid to college, is sequestered by liberal program administrators to be given back later.  Meanwhile, liberal politicians have the use of the money in bribing the voters with "free stuff."

It was well said by the neo-Marxist Jürgen Habermas that the administrative welfare state is a system of internal colonization.

One day an American politician will figure out how to explain all this to the suffering American people.  My guess is that we already know this politician; he is already beginning to be a household word.

Will he make his move in 2016?  Or 2020?  Who knows?

But never forget the Instapundit Rule: "Something that can't go on forever, won't. Debt that can't be repaid, won't be. Promises that can't be kept, won't be."

Monday, December 24, 2012

Obama the Great Divider

Just in time for Christmas, Hugh Hewitt has a piece on Obama the Great Divider.  Obama has successfully eliminated Speaker Boehner as a negotiating partner for his second term, he writes.
Having managed to lose 4 million votes between 2008 and 2012, the most partisan and relentlessly negative president of modern times doubled down on all of his least generous instincts and went "full Lee Atwater," embracing completely the advice that if your opponent is on the ground with a broken arm, step on it.

Atwater, of course, intended his counsel for the period before elections, but the permanent campaign requires permanent pummeling.
President Obama is the guy that sent the bust of Winston Churchill back to the British Embassy.  Perhaps the most famous apothegm attributed to Churchill is this:
In War: Resolution; In Defeat: Defiance; In Victory: Magnanimity; In Peace: Good Will.
Now why would the pugnacious Churchill propose such a dictum?  Because he was a good guy?  Because he had a weakness for a good turn of phrase?

I suggest that he proposed it because it is good practical advice for anyone in high politics.  When you are fighting you need courage and perseverance.  When you are victorious in war you want to co-opt the losers and discourage them from forming a new head of rebellion.

President Obama seems to think that he doesn't need the goodwill of the loyal opposition, and maybe he is right--for now.  And he has the advantage of a cultural elite that is completely in the tank for him.

But what happens down the road when things turn bad for him and his party?  When the politicians he has humiliated get their chance to stab him in the back?

The central idea in the politics of the left seems to be the act of protest.  It supposes that the left is a powerless group of the marginalized desperately reaching for a moment of publicity in which to announce their grievances to an uncaring world.  In other words, it is 1825 and the workers are working twelve hours a day underground in ill-ventilated mines.

In fact, of course, the left, in its liberal instantiation, is the ruling class of today, not a ragged band of the powerless.  It would, if it were sensible, try to co-opt its adversaries in order to reduce the effectiveness of the opposition.

My guess is that liberals are still reeling from the experience of the Reagan administration.  Here was something inconceivable: an amiable dunce that won the Cold War and ended the stagflation of the 1970s.  If it was real, it would mean that the administrative welfare state of the liberals was a mistake and a chimera, and the whole project was based on a delusion.  So liberals have closed their minds to the idea that Reagan was right, and have returned to their government expansion project like a dog to its vomit.

So now we have President Obama, determined to complete the liberal agenda against all odds and against all opposition.

Here is the problem for liberals in this policy.  It means that conservatives don't have a dog in the fight.  It means that there is nothing in the entire sweep of government policy that reflects conservative ideas and sentiments.  Given our druthers, conservatives would not continue Social Security: we would replace it with a genuine private-sector based savings program with maybe some sweeteners for the low-paid.  We would not continue Medicare and Medicaid, but move to a consumer-based rather than third-party-based healthcare insurance scheme.  We would not continue the government monopoly education system, and we would reform the welfare system at a minimum to reduce the high marginal tax rates on the poor.

Why then would conservatives consent to pay taxes for all these liberal programs?

When you are utterly shut out of the government spending racket and you don't have any dog in the fight then you start to rail at the injustice of it all.  You start to look for alternatives.  You start to gather a head of rebellion.

Churchill's dicta are the practical politician's way of preventing rage from breaking out in the opposition.  President Obama's way is the ideologue's clumsy way of riling up the opposition.

Most likely the near term result will be that the president will leave office in 2017 with the Democratic Party in ruins.

And don't forget the Instapundit Rule: "Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be."

Friday, December 21, 2012

Plan B Failure a Disaster? Or What?

The MSM consensus on the failure of Speaker Boehner's "Plan B" last night seems to be that Boehner was humiliated and the Republicans are in disarray.

So now the president and the Democrats can go to the country and crow that Republicans want to increase taxes on the middle class.

Who knows?

The basic correlation of forces is still what it was after the election in November.  The American people have chosen not to go for reform of the welfare state.  Not yet.

The logical result of that is to increase taxes, but not not too much, and keep all the rent-seeking spending going for now.

I was watching a Peter Robinson UncommonKnowledge interview of John O'Sullivan and Jonah Goldberg last night.  Someone said that you only get to curb the spending and the rent-seeking after a military defeat or a civil war.

It's obvious really.  The spending and rent-seeking in the modern administrative welfare state represents the real power balance in the western world.  If you want to change it you have to have the power to move the current power-holders and their supporters off dead center.  Realistically, you can only do that when the current power-holders are off their balance.

Maybe a financial meltdown would have the same effect as a war.

At any rate, if the economy isn't doing too well by the end of the Obama administration then you can expect the American people to be in a nasty mood.

And nobody will remember the details of Boehner's Plan B.

Thursday, December 20, 2012

Robert Bork and Liberal Paranoia

The other day I mentioned to a liberal enthusiast for public transportation that, in my view, personal transportation is guaranteed in the Constitution.  Of course, I admitted, it's probably not right there in the text.  But I'm sure that I could find it in a "penumbra."

It was penumbras in the Constitution that empowered the US Supreme Court to find a right to privacy and thus a right to abortion, back in the day of Roe v. Wade.  The idea of penumbras comes from the dominant liberal approach to the Constitution, developed by the Progressives at the turn of the 20th century, that modern conditions required a "living constitution" that could adapt to the new world.

Conservatives have come to regard the "living constitution" doctrine in less flattering terms.  Conservatives regard it as giving liberals a free hand to interpret the Constitution any way they want.  So it stands to reason that some conservative would come up with an opposing doctrine, that the constitution means what the writers originally meant, and that if you want to change the Constitution you need to do it the hard way, by formal Constitutional Amendment.

The recently deceased Robert Bork was a principal architect of this "originalism."

Bork was a law professor at Yale for a couple of decades and then President Reagan appointed him, in 1981, to the US Court of Appeals.  In 1987, right after the Democrats had retaken the US Senate, Reagan nominated him to the US Supreme Court.  Democrats, led by Judiciary Committee Chairman Joe Biden and liberal lion Ted Kennedy, saw their chance and they took it.  They successfully calumniated this mainstream conservative judge as a conservative extremist and defeated his nomination.  Thus the tactic of personal calumny became neologized as the verb: to Bork.

This week The New Republic has run a piece regretting the tactics of 1987 but condoning the result: keeping a very conservative judge off the Supreme Court.
It’s a good thing that the man who Bork became after his defeat wasn't confirmed to the Supreme Court: If he, instead of Anthony Kennedy, had been the swing vote between 1987 and 2012, America would indeed have been a more illiberal place.
Right on liberals.  Still, there is room for regret.
But it’s bad for the country that Bork was Borked in the way he was. American courts, judges, and constitutional law have been paying the price for the past twenty-five years, and the future looks even more bleak.
You will not be surprised to learn that the commenters at TNR were not so circumspect.  They parroted the sentiments taught to them over 30 years ago by Sen. Edward Kennedy and others, that Bork was a dangerous extremist that should never have been nominated to the Supreme Court.

But here's a more telling commentary on Robert Bork and conservative jurisprudence, from John O'Sullivan:
At one point in the 1960s, Bob Bork and the other conservative law professor in Yale Law School approached its director to argue for the appointment of a third conservative to the faculty. They were told that although their candidate had excellent credentials, the selection committee had decided with agonized regret not to appoint him. They were afraid that the 60-strong faculty might be “swamped” with conservatives.
So who, really, are the pathologically paranoid ones in America?

If liberal professors are going to get their knickers in a twist over the prospect of 3 conservative professors in a faculty of 60, you can begin to see the problems that America is going to have, when it is time to show its liberal ruling class the door some day between now and eternity.

Wednesday, December 19, 2012

Think Like a Democratic Voter

If you are a Republican or and independent voter, the current fiscal cliff negotiation seems like a exercise in futility.  We solid citizens understand that a deal must be done on entitlements--principally Medicare--and that "something must be done" about runaway spending.

So we say, like the Wall Street Journal edit page, that the "budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later."

Some conservatives think that this amounts to a monstrous betrayal by Speaker Boehner (R-OH), but I think that we are asking too much of the Speaker and his Republican colleagues.  They are trying to move the Democrats, and the Democrats know something that we ordinary middle-class folks don't know.  To understand where the Democrats are coming from you have to think like an ordinary Democratic voter.

The average Democratic voter reckons "we are owed."  I got into trouble with an African-American acquaintance over this.  Never heard anyone say that, he said.  Yeah, so those chaps muttering about reparations are just talking about nothing.

But really, that's what the average Democrat keeps getting told.  You are owed.  That's what egalitarianism and redistribution means, if it means anything.

You can tell, from the outrage of the public employees of Wisconsin last year and the outrage of the unions in Michigan this year that the average rank and file Democrat never thinks about where the money comes from.  They are just owed.  Rush Limbaugh had a running joke for months after the 2009 stimulus, riffing off an interview of African Americans lining up for some free stuff.  Where does the money come from, a reporter asked?  Obama's stash, came the answer.

Which confirms my argument that government is nothing more than a looting expedition.  That's what a stash is: a place to hide the proceeds of piracy and plunder.

Think of the average Democrat voter.  She or he lives off the government teat.  She has a government job, most likely, and is plugged into various liberal government scams from health care to housing.  Now the point to remember, which we ordinary middle-class folks don't get, is that a voter like that has all her eggs in one basket.  Suppose she is a teacher, a nurse's aide, a social worker.  What in the world will she do when the government has to cut spending by a trillion a year?  It is unthinkable.

Then there are the Social Security and Medicare recipients like me.  Better not touch our benefits: we earned them: We are owed!

So which Democratic politician is going to be the one that addresses the Democratic faithful in some high-school gym and says: sorry about all that, but there is no more money?

Now the irreducible truth about the first four years of the Obama administration is that the federal government was spending about $1 trillion more each year than it was collecting in taxes.  Thinking in terms of my looting metaphor, Obama was distributing $1 trillion more in benefits to his supporters from his "stash" that he was collecting in his predations upon the private economy.

And that's how he got reelected.  There could be more money available in his stash if only the rich would give a little more.

And don't forget, we are talking about people that have put all their eggs in the government basket.  If you are a private sector person you have probably moved around a bit from job to job: you understand your skills and your marketability.  But a woman with a government job would probably have to take a massive pay cut if she had to get a job in the private sector.  If you have retired you have Social Security plus your 401k plus your savings.  But the government worker has only her government pension.

If you are a Final Glide American you have carefully organized your life to land on the government aircraft carrier secure in the knowledge that you are owed.  It is unthinkable that your benefits could ever be cut.  After all, you are living on a fixed income.  You have nowhere else to turn.

When the money runs out and the government can no longer spend more than it collects in taxes, then there will be an almighty fight over the remaining spoils.  It might be a good idea for the prudent if they can afford to walk away from their government benefits.  If only to avoid stray bullets.

Meanwhile, I'm not sure that it matters what deal Speaker Boehner cooks up.  It will all end in tears, anyway, because the Democrats cannot afford to tell the truth to their supporters.

Tuesday, December 18, 2012

The Beautiful Dream of American Exceptionalism

President Obama taught us all a lesson a while back.  When asked about American exceptionalism in 2009 he replied:
"I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism."
Yeah.  In other words, it's a nationalistic fantasy.

But, of course, the president is wrong: the United States is an exceptional nation.  It was founded upon an idea, the rising idea of its age, of republican self-government, on the Axial Age concept of the "responsible self."  From that idea came the whole exceptional package: limited government under law, separation of powers, the "Dutch finance" of Alexander Hamilton, the whole idea of civil society, of a middle ground of free association between the government and the individual.

But there is one brute fact about exceptions.  They are exceptions to the rule.  If the United States was born as an exceptional nation, then it stands to reason--and experience--that the United States will eventually become ordinary: "regression to the mean" is the official term.

Our liberal friends, of course, think that American exceptionalism is a bad thing: nationalism, anti-intellectualism, the gun culture, Babbitry, boosterism, the money culture.  They want to get back to being a normal nation, like the Europeans and their social democracy.

The libertarian "instapundit" Glenn Reynolds likes to quote the science-fiction author Robert Heinlein at this point:
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as "bad luck."
The point is, of course, that "extremely small minorities" are people like Albert Einstein or Steve Jobs; they appear for a moment, like a blinding flash of light, and then they are gone.  Sometimes they are revered; often times, as in the case of a Rockefeller or a Morgan, they are reviled.  Then the world reverts to the mean.

I like to say that the United States is founded upon the exceptional idea of "Dutch finance" in which the government bases its finance on promoting the health of the rest of the financial and credit system.  The normal way of government finance is "French finance" where the government games the financial system to ward off the consequence of its overspending.  Dutch finance builds a strong nation; French finance leads to sovereign default, hyper-inflation, riots and revolution.

Under President Obama the US is heading as fast as politically possible down the path of French finance.  That is the meaning of unsustainable entitlements; that is the meaning of cheesy "fiscal cliffs;" that is the meaning of trillion dollar deficits.

And it will be the "little people" who will end up "eating the paint off the walls."

All exceptions come to an end.  But it is a bitter thing to be living through the end of one so glorious and luminous as the American Exception.

Friday, December 14, 2012

Who Are the 1%?

When the president calls for the rich to pay a little more, what does he mean?  Who does he mean?  That is what Mike Bauer, from David Horowitz's shop, wants to know.  He sent me the following questions:
  1. What number and percentage of Americans earn over $250K?
  2. What number and percentage of Americans have a net worth over $250K?
  3. What number and percentage of Americans earn over $1M?
  4. What number and percentage of Americans have a net worth over $1M?
The simple answer is: it does not compute.  Because as soon as you start asking about "number and percentage of Americans" you get into questions of persons, households, adults, residents, income-taxpayers, "undocumented workers," and all the rest.  Despite the best efforts of governments to make their peoples "legible" it is still hard to know what is going on.

But Question 1 is fairly easy.  The IRS has lots of tax stats here with lots of Excel spreadsheets.  Here's one: 10in01pl.xls.  It says that 2.7 million 1040 tax returns out of 143 million reported $250,000 adjusted gross income or more.  So that works out at 1.9 percent.  Unfortunately, the spreadsheet doesn't go above $250,000.  So to answer Question 3 we'll have to find another one.  Here is 08in05tr.xls, which has the income that qualifies you for the ought point one percent.  Its last year is 2008, but it took $837,708 to get in the club.  Back in 2007 at the height of the evil unsustainable Bush boom--engineered by greedy bankers with which community activists and Fannie and Freddie had nothing to do-- you needed $1,039,732 to get in the 0.1% club.

Now wealth for Questions 2 and 4..  The data isn't so easily available on this.  But the Census Bureau has Table 721 on Family Net Worth, and the median family net worth in 2007 was $120,000.  Then there is Table 717 on top wealth holders.  It shows 2.7 million with wealth over $1.5 million.  Now the Census Bureau has 115 million households for 2007-2011.  So you can say that 57 million households had more that $120,000 net worth, and 2.3 percent have net worth more than $1.5 million.

So let's get back to the four questions:
  1. What number and percentage of Americans earn over $250K?
    Answer: 2.7 million and 1.9 percent.
  2. What number and percentage of Americans have a net worth over $250K?
    Answer:  About 25 million households and 25 percent.
  3. What number and percentage of Americans earn over $1M?
    Answer: 142,000 and 0.1 percent.
  4. What number and percentage of Americans have a net worth over $1M?
    Answer: Over 3 million households and 3 percent.
Of course, Americans in general have suffered more in the Great Recession than these numbers suggest. Minorities and women hardest hit. And it will get worse, much worse, as the Fed's money printing starts a huge bear market in bonds and a huge inflation in consumer prices.

Tuesday, December 11, 2012

Cliffhanger Budgeting

Back in 1995 Bill Clinton discovered the advantages of cliff-hanger budget battles.  He shut down the government rather than agree to the evil Republican appropriations of the newly elected first-Republican-Congress-in-40-years.

And he won!  He got the American people to agree that it was Congress that shut down the government, not his veto.

So it is not surprising that President Obama has used and perfected the same tactic.  He got himself a cliff-hanger debt crisis in the summer of 2011 and now we have the "fiscal cliff" crisis of December 2012.

Part of the game plan is to have some poor victim group that will suffer if the crisis isn't resolved.  This time it's the folks on long-term unemployment benefits.  Wouldn't you know that they are scheduled to expire four days after Christmas!

For years and years people used to complain about the venal process of Congressional appropriations, the deals, the log-rolling, the Iron Triangles.

But now it seems that we have got to a worse place, a world in which Democrats in Congress don't bother to obey the law (the Budget law that Democrats passed in the 1970s to put a curb on President Nixon) and all appropriations are rolled into a single continuing resolution and a crisis between Congress and the president.

You have to wonder: is this really the world that Democrats want?

Who knows?  Like I wrote in my American Thinker piece this week: despite appearances, the Democrats are hurting. They are no longer the confident ruling class they used to be.  That is why they have to cheat.  And that is why they have to resort to transparent shenanigans to get elected, dishing out more and more entitlements and benefits to keep their support.  That is why they have to stage big publicity crises to panic the American people into more spending.

Now even liberals like Nicholas Kristof are discovering the rotting culture that the administrative welfare state promotes.

But really, liberals are not going to stop doing the Obama, dancing to get the biggest state with the biggest entitlements that the politics of the moment can obtain.  That's what they know; that's what they do.

And that's why big government never goes quietly into the good night.  It always end in default, riot, and mayhem, when all of a sudden the game is up.

But the Obama years do the impossible.  They make the old Congress of powerful committee chairmen and old bulls seem like a kinder, gentler age.

Monday, December 10, 2012

Queen Hillary?

I suppose that it's to be expected.  That the media would be doing a boomlet for Hillary Clinton for President in 2016 in the lame-duck days of December.

Don't even bother, you Rubios and you Ryans, because Hillary has it all sewn up.  First woman president, and all that.

But let us not forget the head winds facing a three-in-a-row for the Democrats.

First there is corruption.  The modern Democratic Party is built on a coalition between the 19th century big-city political machines, the chaps that organized the Irish immigrants into US politics, and the goo-goo Progressive reformers.  It was a match made in heaven.  The Progressives would come up with the ideas for big government and spending other peoples' money, and the machines would deliver the votes.  But it is horribly corrupt.  People on the outside looking in really don't like that.

Then there is cruelty.  The Progressive-machine coalition exists by promoting a soft form of civil war: class war and race war, and the war on religion.  The result is that the Democratic Party has been busily making enemies of whites, middle-class achievers, and Christians for the last couple of generations.  That is how you get social conservatives and Reagan Democrats turning up, unannounced, in the Republican Party.

Let's talk about injustice.  The fact is that government is always and everywhere a system of power and domination.  What moderns want with enlightenment reason is to dominate nature and other men.  It was a couple of lefties that wrote that.  Big government means big injustice, and it's getting worse all the time.  We don't get to see it that clearly because the mainstream media is running interference for the Democrats and the liberals, but sooner or later it is going to pop onto the national radar.

Then there is waste.  Everything the government does, from the Pentagon down to the littlest program, to kill barred owls in order to save the spotted owl, is pure waste.  Now there is no question that we need the Pentagon and the police, because all human societies need protection from enemies foreign and domestic.  Otherwise you get the modern equivalent of the Vikings sailing up the rivers in the fall, just after the harvest.  But everything else is something that we ought to be doing for ourselves or for each other without the government forcing us to do it.

Finally there is delusion.  Yes, our liberal friends busily tell each other that they are the reality-based community.  But every ruling class sustains itself by telling itself lies.  The Brits told themselves that they were really bringing India into the modern age.  Liberals tell themselves that they are the most evolved, educated Americans, and that only they know to do the right thing for anti-intellectual America.

Underneath all the propaganda and the hoopla these irreducible facts are working away.  Just like the Soviet Union, our Democratic friends look unbeatable right now.  They have the best propaganda that money can buy and Chicago bullies can intimidate.  But then one day the whole thing collapses.

That is the faith that sustains us, and that is the reason that 2016 may be too late for Hillary Clinton.

Thursday, December 6, 2012

Republicans' Only Hope?

Everyone is full of advice to Republicans on how to enlarge the coalition.  "Be nice" seems to be the consensus, especially "be nice" to Hispanics.

But really, can Republicans ever compete with Democrats when it comes to sharing out the loot?

The irreducible fact of the US two party system is that, at least since the Civil War, the Republican Party has been the party of the "typical American" and the Democratic Party the party of the hyphenated American.  Typical Americans think that the system works pretty well; hyphenated Americans have a beef with the system.

This plays into the two basic narratives of the modern era: the Invisible Hand narrative and the Exploitation narrative.

As Michael Barone writes in The New Americans Americans tend to start out as embattled, exploited immigrant communities; as they begin to succeed they feel less embattled and thus become less likely to "fight" for their rights.  But some groups--think Jews and blacks--retain their sense of apartness longer than most.

The fact is that blacks and Hispanics are the latest additions to the American stew and they typically feel that the deck is stacked against them, and reckon their chances better with the share-out-the-loot party.  That is likely to continue for a while.

But history tells us that, despite everything, immigrants get fed up with the loot party.  It happened with the Reagan Democrats in 1980.  No doubt it will happen again when the "blue social model" starts to run out of other peoples' money.  For instance, what happens when the money starts to run out for state government pension systems?  Is is a "blue civil war," as Walter Russell Mead suggests, as Democratic Party supporters fight over the disappearing spoils?

Probably the more likely near-term outlook is denial.  After all, it's what liberals famously accuse everyone else of.  As amateur observers of liberal psychology, we should think of this as "projection."  And it is clear that President Obama's "rich pay a little more" policy is nothing but denial.

But nobody should expect the Democrats' blue coalition to cry "uncle" and back off on its loot philosophy until long after disaster is staring it in the face.

Meanwhile we should expect some groups to peel off from the Democratic coalition: perhaps the upper-income professionals, social liberal and economically conservative, that will overlook the down-market social conservatism of the Republican Party as the Obama taxes start to bite.

And let us not forget the big takeaway from the 2012 election: white voters that didn't turn out.  Who were they?  The likeliest argument is that they were working-class whites demoralized by the Romney-is-an-uncaring-plutocrat Obama ads.

So thank goodness that the GOP's leading contenders for 2016, Rep. Ryan (R-WI) and Sen. Rubio (R-FL), are lifetime professional politicians that never went near the planet Pluto or ever learned how to run a business.

Still, it's a shame.  Businessmen are the people that converted the $3 per day economy of 1800 into the $120 per day economy of today.

Why in the world would the average person be afraid of chaps like that?

Wednesday, December 5, 2012

Poor Having Fewer Babies

Few things have worried the bourgeoisie more than the excess birthrate among the poor.  It probably started with worry about all those starving children, but by the turn of the 20th century and Margaret Sanger and all it reduced down to the problem of the unfit.  That's what Planned Parenthood was all about, remember.  And it worked.  To this day Planned Parenthood maintains a heavy presence in lower-income neighborhoods.

The interesting backstory to this is told by Gregory Clark in A Farewell to Alms.  It turns out that before 1800 in England the poor had less surviving children than the rich, for obvious reasons.  Since the Gerald O'Hara rule then applied, that "land is the only thing that lasts," primogeniture dictated that the younger children of the rich, the landed warrior class, were kicked downwards into the professions.  And the younger children of the professions were downwardly mobile too.  And so on until we get to the landless laborer.

But that all changed with the industrial revolution.  The poor started having more children than the rich and the children of the poor moved up in the social scale: an upwardly mobile society.  Hence the Sangerite panic a century later.

But now, according to Ross Douthat in The New York Times, the poor and the immigrants are having less children:
American fertility plunged with the stock market in 2008, and it hasn’t recovered...

This time, the birthrate has fallen fastest among foreign-born Americans, and particularly among Hispanics, who saw huge amounts of wealth evaporate with the housing bust.
But here's the clincher:
Among the native-born working class, meanwhile, there was a retreat from child rearing even before the Great Recession hit. For Americans without college degrees, economic instability and a shortage of marriageable men seem to be furthering two trends in tandem: more women are having children out of wedlock, and fewer are raising families at all.
 So all the worriers about the survival of the unfit can go home.  The unfit are having less unfit babies.  Back to the good old days of the pre-1800 downwardly mobile society.  But I don't think this will end well.

You only have to read Charles Murray's latest book, Coming Apart, to see why.  Life is peachy-keen among the educated class: that's you and me.  We get married, we have children, we get divorced less than average.  But in the lower orders, things are not good.  Fifty percent of children are living with one parent, and working-class men are leaving the workforce.  All the statistics show that children of single parents present more pathologies than children of two-parent families.  My favorite is that children of single parents suffer six to 30 times more from physical abuse than the children living with their married biological parents.  And then there are the men.  Single men do worse than married man, much worse.

Says Instapundit: "Sooner or later, you run out of other people’s money. Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be."

But that misses the main point.  If the lower orders are doing worse then that amounts to the failure of the welfare state.  The whole point of the welfare state was to tax the rich in order to help the poor.

It goes deeper than that.  It means that the welfare state has turned out to be profoundly unjust.  Sooner or later the lower orders will bust out of their welfare-state ghetto with rage.  You'd like to think that they would focus their rage on the people that tempted them with welfare state goodies and in the process wrecked their families, their work ethic, and their prosperity.  But they probably won't.  They will probably go after the Mitt Romneys of the world, the uncaring capitalists that create the jobs in this world, on the prompting of some latter-day community organizer.

That would be a shame.  For all of us.

Tuesday, December 4, 2012

Who is Going Over the Cliff?

The problem for any spectator of events is that of discrimination.  Which events are important and which events are mere noise?

That's the question after the late election.  Who is in more trouble, the Republicans or the Democrats?  It depends, in the end, on what the American people want.

Do they want a land of freedom where people launch themselves into the world to try and serve it?  Or do they want a land of power where people fight to get their fair share?

Of course, there is a bit of each of these in all of us.  We want freedom for some things and we want to force our way in others.

Is the Republican Party finished as a national party?  Probably, except that the experts are always predicting the end of the Republican Party, and it always refuses to die.

But look at the Democratic Party.  For years and years it represented Everyman, the working stiff who went off to work everyday with his lunch-pail to build the houses, dig the coal, smelt the steel and produce the products.  Now it represents everyone who is not really working gainfully, from college professors to government employees to all the crony capitalists that feed at the government trough.

In my view the Democrats made a fateful decision back in about 1990 when it seemed that the Reagan revolution had dealt a fatal blow to the party.  That's when they really kicked the race thing into gear, and the secular thing, and the effort to boost the Hispanic population and vote by turning a blind eye to illegal immigration and passing the Motor Voter Act to make it easy to register to vote.

Meanwhile there's a problem.  While Democrats have been desperately demagoguing their way back into power they have allowed all their social programs to develop into corrupt monstrosities: Social Security corrupted by fraudulent disability claims, Medicare a bottomless pit that will eat the budget, welfare a yearly trillion dollar incentive against work.

When you see  gigantic areas of corruption you have to think end-of-an-era.  When you see the annual staged budget crises, Debt Crisis followed by Fiscal Cliff, you have to think that things are worse than we know.

But how and when does it all change?   Who knows?

And it's all such a shame.  This great nation is bulging with possibilities and potential.  Instead we are diverted by cunning stratagems and pummeled by political slugfests.

At least we know this.  The Democrats have opted for cheap money and higher taxes.  That always ends in a cliff.  That's a shame, because the American people deserve better.

Monday, December 3, 2012

The World According to Medicare

When you are 66, like me, you start to think about what life will be like when you are really old.  Yeah,  I know: you young 'uns think that 66 is really old already.

No, I am talking about people in their 80s that are falling apart.  It could be dementia; it could be physical problems, like balance or glaucoma or a heart condition.

Life looks very different to you and the people that look after you when you get to that age.

Whatever the situation, you and your nearest and dearest must deal with the immense frustration that you are less that a full human being.  You can't get around.  Or you can't be left alone.  Or you can't communicate properly.

Of course, the same applies to children.  But with children there is this:  every day they grow and become more competent and independent.  With an older person the opposite is true, and this is very frustrating for all concerned.

Then there is the expense.  In the old days, people took to their beds and then fever or something soon took them off.  You nursed the invalid or you could afford a slave or a servant to care for them at a minor expense.  Today we have technology and government and institutions, and they are very expensive.  There has to be a better way.

The trouble with the expense is that we all have to turn to government: for medical costs, for care-giving, for drugs.  Nothing wrong with that, of course, except that government is force, and anything rendered unto government ends up as force: one-size-fits-all, bureaucracy, guidelines, and crony capitalism.  There has to be a better way.

Some day in the future, people will look back on our age and marvel at our stupidities:  the way we confine children in child custodial facilities, the way we barrack the sick in hospital factories, the way we warehouse the aged in "independent/assisted living facilities."  It's as though the gang system of the slave plantation and the factory had taken over the whole of society.

Wouldn't it be great if baby boomers like me could find a better way to deal with old age other than big budgets, big government and big warehouses.

Don't hold your breath.  The defining principle of the baby boomers has always been: we break it; you fix it.