Tuesday, April 30, 2013

The Greater Pigford Problem

Big Whoopee.  The New York Times has finally done a bit of investigating into the Pigford scandal, and found it a cesspit of corruption.

The original scandal was the the US Department of Agriculture had discriminated against some black farmers in the awarding of crop loans.  In 1999 the Clinton Administration agreed to pay $50,000 to each farmer that had been discriminated against in the period 1981 to 1996.  But it turned out that the cure was worse than the disease as tens of thousands of blacks signed up for free money.

Even Barack Obama got into the act, in 2007.
In 2007, then-Senator Barack Obama pushed for allowing late claims to be processed and setting up another billion-dollar payoff fund, in what became known as Pigford II, setting off a free-for-all. As of February 2006, “over 97,000 people had filed claims under the consent decree or requests to file late claims.”
How many black farmers had been discriminated against?  One USDA administrator reckoned, in testimony to Congress: "about fifty."

The problem here is not merely corruption, or the use of race to beat up on people making accusations about corruption.  It is the bigger problem of retributive politics.  Let alone redistributive politics.

What good does it do to hand around free money to any politically favored group when the group as a whole is cratering in the larger economy?

Here we have President Obama, the First Black President.  You'd think he'd really concentrate on formulating policy and executing on it so that the lives of black people would really improve.

You'd think.

But the results are now coming in.  Blacks are doing worse than the average American in the Obama economy.  Much worse.  In January 2009 the unemployment rate was 7.8 percent.  In March 2013 it was 7.6 percent.

For whites the unemployment rate in January 2009 was 7.1 percent.  Now it is 6.7 percent.

For blacks the unemployment rate in January 2009 was 12.7 percent.  Now it is 13.3 percent.

For black youth the unemployment rate in January 2009 was 34.8 percent.  Now it is 33.8 percent.

What we are seeing is same old same old.  From a president that promised to transform America.

You can check the numbers here.

So, what's the point of a First Black President if he can't do anything at the macroeconomic level for blacks?

Let's assume that the president really wants to help people of color.  Let's assume that he really wants to improve the lives, and especially the economic lives, of black people.

Given such a record of failure, you would have to assume that the president has pursued exactly the wrong policy to make life better for blacks.  Assuming that he honestly wants to do the right thing, you would have to assume that he doesn't have a clue what the right thing is.  Or worse, that the policy he thinks is the right thing is in fact tragically mistaken, and doesn't help blacks in the least.

In fact we had a curious confirmation of that last week when it turned out the sector that did best economically in the first two years of the Obama administration was the top 7 percent.

Why was that?  Well, the rich did well because their stocks rebounded from the 2008 crash while the home prices for the 93 percent didn't rebound.

Gee now, I wonder why?  Could it be that the average person was encouraged by the government to get way overleveraged by government programs that subsidized home mortgages?  And that the government subsidies led to a bubble in home prices?  And that the government in particular encouraged loans to sub-prime borrowers, particularly minorities?  And that minorities were hardest hit by the subsequent crash in home prices, because they had the least equity in their homes?

Do you think that maybe, after President Obama is gone and that racial minorities no longer have their racial pride to look after, that minority voters will respond to a political meme that declares the Democrats just don't have a clue what they are doing?

Because, really, the economic policy of the Democratic Party is really Pigford writ large.  Democrats believe that the way to help minorities is to find a racial scab and scratch it.  Find a racial wrong and pay reparations to the victims.

But the problem is that after the wrong has been righted and the reparations paid and the free stuff handed out to the Democratic Party supporters, the problem is still there.  

The victims have to get out and get a job.  How would they do that when the Democrats have been training them fo decades to believe in winning the political lottery as the meaning of life?

Monday, April 29, 2013

What End of Entitlement?

Now he tells us.  The age of entitlement is over; the promises are worthless.  That's the word from the Washington Post's sensible Robert Samuelson.
We had a grand vision. We didn't merely expect things to get better. We expected all social problems to be solved. We expected business cycles, economic insecurity, poverty, and racism to end. We expected almost limitless personal freedom and self-fulfillment. For those who couldn't live life to its fullest (as a result of old age, disability, or bad luck), we expected a generous social safety net to guarantee decent lives. We blurred the distinction between progress and perfection.
There were four big assumptions at the heart of this, according to Samuelson: first, that we could control the business cycle; second, that we could enjoy lifetime jobs at big corporations; third, that improving productivity could pay for bigger government; and fourth, that lifestyle choices came free.

All wrong.  So now what do we do?

No answer, of course.

Let's put it this way.  There is no way we can avoid a crack-up, because people have been told, and believe, that all you need to do, as Samuelson quotes Bill Clinton, is "work hard and play by the rules, [and] you’ll have the freedom and opportunity to pursue your own dreams."

People interpret that to mean that all they have to do is sit on their butts, doing whatever they are doing, and they deserve to get supported by government.  The system will take care of them.

But life's not like that; it never has been.  The idea that hard work and following the rules is necessary and sufficient for the good life is a political chimera.  Yeah!  I put in my time.  I got my benefits coming.  I earned them.

It is not true that all we have to do is design and build a system, whether a corporate system at General Motors or a government system for Social Security and Medicare.  That's not how the world works.  And the neo-Marxists at the Frankfurt School understood that when they said that reason was domination.  Reason is always trying to impose a system on the world, whether it is a system to understand the world, a system to dominate the world, or a system to make the world go away.

You can't reduce the world to a system.  The world changes and adapts and surprises every moment.  To live in the world you have to be willing to change, adapt, and get surprised every moment.  If you don't submit to that then you are setting yourself up to be slapped upside the head.

Like right now.

So now we must start again.  We must wipe away the tears of disappointment, and cool the rage of ill-usage.  We must clear our minds and start to deal with the world as it is, not as we were taught.  Almost all religions call on their adherents to surrender to the world.  You can see why.  You can hope for salvation and for enlightenment, but first you have to live in the world as it is.

Now, of course, we already have remarkable adaptations that humans have developed to cope with the world as it is.  One of them is the family.  Another is the division of labor.  Another is the price system. Another is the credit system.  There is the tapestry of voluntary associations and civil society.  All of these are human social constructs that fall short of rigid system, but wonderfully facilitate human cooperation and sociability.

Think of it.  People care most for those nearest and dearest by blood.  So all societies down the ages have encouraged healthy families.  All except our modern progressives.  People prefer to become master of one rather than a jack of all trades.  But Marx said that the division of labor caused alienation of the worker from his species-essence.  The price system and the credit system are wonderful devices for channeling human labor into the ways that get people what they want and need.  So liberals do everything they can to attack the price system and subvert the credit system.  And civil society is much kinder and more compassionate to human needs and suffering than the force matrix of government.  So liberals destroyed the safety net of fraternal associations that grew up in the 19th century.

Why don't we go there and embrace the social adaptations from family to civil society?  Because the serpent tempted me, and I did eat.  Everyone is a sucker for a shortcut; everyone is convinced of his own virtue and his own right to the good things of life.  Everyone likes a birthday gift, a cadeau, a regalo: free stuff.  Hey, we're owed, we're entitled.

Well, now the god of system has failed.  Now we have to pick up the pieces and start again.

The only question is whether we will suck it in or continue to squabble over the fast disappearing spoils of the administrative welfare state up to the very day that the last goodie, the last benefit, the last chunk of free stuff is gone.  Cue the Fram oil filter guy.

Nobody knows how it will all turn out.  But we can work, and we can hope.

Thursday, April 25, 2013

Bush's Legacy

As the good and the great attend the opening of President Bush's presidential library people are suddenly discovering that Bush wasn't so bad after all. No kidding!  You mean he wasn't a complete failure and extremist as we have all been ordered to believe?

I suppose that President Bush's biggest failure is that this decent and cooperative president didn't do enough to counter the Democratic campaign to make him into a crazed warmongering extremist.

Because the fact is that the overwhelming majority of his policies were mainstream and bipartisan.  He pushed No Child Left Behind, a centralization and federalization of education that Democrats had to love.  He passed the Medicare Part D drug bill, that had been a Democratic issue for years.

He pushed back on 9/11 to spank the mullahs in Afghanistan, and did regime change in Iraq, which you may recall was Clinton administration policy.  What he did not do was cut and run in 2006 when his Iraq policy was in ruins.

If we turn to the financial crisis, that wasn't about "fighting two wars on a credit card. "

Earth to Democrats: all wars are fought on a credit card.  Ever heard of the National Debt?  What is really bad is running the whole welfare state on a credit card.  As in trillion dollar deficits as far as the eye can see.

No, the big problem was the easy credit policy that had obtained ever since the Plaza Accord of 1985 ended the hard money policy of the Paul Volker Fed and ended in the Fannie Freddie sub-prime mortgage orgy of the mid 2000s.  What should Bush have done about that?  Hard to say, because the rest of the political establishment was pushing cheap credit right up to the last minute, from Nancy Pelosi complaining about a "jobless recovery" in 2002 to Barney Frank calling for another roll of the Fannie dice in 2004 as the Bushies pushed for reform.

Many conservatives fault Bush for not being conservative enough.  They forget that the country wasn't in a mood for conservatism when Bush ran.  That's why he called himself a "compassionate conservative."  People were all jazzed about the federal budget surplus in 1998 and were ready to loosen the budget strings a little.  So Bush went with the consensus.  After 9/11 Bush felt that he should work on unifying the country for a long twilight war against Islamic extremism, and didn't want to create division.  That's what he meant with his line that he was a uniter not a divider.  Pity that Democrats had other ideas.

The fact is that Bush was a mainstream president, pushing a little to the right, and that is what the nation wanted at the time.  What it needed is something else.

What the nation needs is to get off the death-ride of the administrative welfare state.  What conservatives need to do is persuade the American people that the conservative prescription of limited government and unlimited civil society is a good thing that will both be good for them as individuals and families and good for the nation as a whole.

The problem is liberals.  They own the culture, and they will demonize anything that conservatives propose to "do something" about the mess we are in.  They are the ruling class and that's what ruling classes do.

When we talk about a "pre-revolutionary" situation we mean a situation in which the authority of the ruling class is coming into question.  It means that ordinary people are beginning to question whether the ruling class knows what it is doing.

Think France in the decades coming up to 1789.  The old ruling class of the monarchy and the Church and the nobility went from disaster to disaster and people started to coalesce under the leadership of a new class of thinkers and publicists.  It was the "new class" that is still today the ruling class in the West.

Nothing can change until the present ruling class has staggered from disaster to disaster for a decade or so and had lost its "mandate of heaven."  Then we shall see.

By then, of course, President George W. Bush will be remembered practically as a saint.

Tuesday, April 23, 2013

Watching Obama Fail

It's been a grueling 10 years, since the Dems went on the Bush offensive.  It has seemed as though nothing conservatives could do would stop the onslaught.

And the worst of it is that Democratic failures are all put on President Bush.  You can blame Bush all you want for Iraq, but everything else is bad Democratic ideas, from No Child Left Behind to cheap mortgages to stupid stimulus to cheap money and gargantuan deficits.

So conservatives can view the end of the Big Push with relief.  Now, maybe, as the Obamis fumble and bumble, the American people will be willing to listen to a conservative message.

The trouble is that it's not enough.  It is not enough for the American people to give up on liberals about once a generation and vote, sadder and wiser, for a Reagan or the Great White Hope of 2016.  We have seen what ended up after the rebirth of the Reagan Revolution.  It ended up with the locust years of Obama.  The American people voted twice for the most left-wing president since Roosevelt, twice.  And they are getting the same economy as the Roosevelt economy.  Twice.

We know what the problem is.  It's the culture.  No matter what conservatives put forward, it gets buried by the cultural hegemony of the ruling class, the educated class.

It's said that if you have to explain your position you have already lost.  Yes.  No doubt.  But it's important to realize that the Democrats have the media and the schools and Hollywood to do their explaining for them.  The only thing they need to add are the talking points.

Can conservatives ever hope even to an equality in the culture wars?  Probably not.  That is why people like me are reduced to predicting a moral revolution.  It is our only hope.

A moral revolution means that a critical mass of people in America make a moral turn in their lives and coalesce in a religious movement that starts to carry the rest of America with them.  It would not necessarily be a church-based movement, but something more like the civil-rights movement or the pro-life movement.

You can see right away the problem such a movement would have.  It would have to bulldoze through all the attacks from the liberal ruling class.  It would have to be Churchillian, and never, never, never, never give up.  In my view it would have to be a movement of young-to-middle-aged women.  They would have to be insisting on a woman's right to live a woman's life: a life based on love, devotion, chastity, and family.  Why?  Because anything else ends up brutalizing and objectifying and marginalizing women.  Or emptying woman's life of meaning.  I mean life as a career, sex as recreation, life without children.

As we see Obama fail, as he must, because of the poverty of his ideas and the emptiness of the liberal ruling class, we hope for better days.  But until women -- who usually do what they are told until it is too late -- rise up and demand a modern world that respects the life of women and things that have meaning for women, the years after Obama will only be a respite from the reduction of social life to an administrative life, and from association to domination, from society to state.

Until the revolution, then.

Monday, April 22, 2013

Just Say the Word

Foreign policy analyst Michael Ledeen has a good piece on our ruling class and its inability to face the fact of Islamic terrorism.  It just can't say that Islamic terror is a problem.  Take Iran, he writes.  We don't really need to deal with Iran militarily.  We just need to say the right words.
We can do a lot just by pronouncing the right words, like “we want a free Iran,” and “we support the Iranian people,” or “the Iranian regime is our enemy.” Those words would give hope to the regime’s opponents, and it would–as it would have in Boston–improve the quality of our own government’s investigators, analysts, and strategists.
The right words are important not just because truth-telling is important, but because it sends the right message to the bureaucratic functionaries.   Why?  Well look what happens when you discourage thinking about the "I" word.
The people who do counterterrorism shy away from seeing such terrorists, or potential terrorists, because if they point to such people, several bad things (from the investigators' and analysts' standpoint) happen.  First, the policy makers aren't going to do anything; second, the investigators and analysts aren't going to get promoted, or rewarded with bonuses; third, they may get sued or sent to the bureaucratic equivalent of Siberia.
 Yeah.  Why stop there?  The problem is that the whole nation is being strangled by a kind of liberal cultural totalitarianism.

Young Suzy Lee Weiss writes a funny article in The Wall Street Journal about the hypocrisy of the college application process, and the Today Show has her on to sneer at her and marshal experts to say that she's spoilt. (And read the comments: most of them have drunk the liberal KoolAid.)

Instawife Dr. Helen Smith writes about the war on men at the university.  She points out that men have only themselves to blame:
The discrimination will continue because there is no push back. If 5-10 percent of men fought back, stood up and started realizing that men’s rights are human rights and that they are not victims for daring to believe that their voices in gender and reproductive equality are just as important as a woman’s is, then maybe things will start to change. Until then, the kangaroo courts and angry feminists will have their day.
Yeah.  Aren't men supposed to have the courage to face up to the bullies and tell truth to power?

As I write in my American Thinker piece this week, we are coming to the end of the current liberal Big Push.  Liberals are intellectually exhausted after the big offensive that got President Obama elected, Obamacare passed, and the president reelected.  And all the pretty stories that they wrote are starting to fray at the edges: Osama dead, guns bad, immigration vital, health care just a matter of the right system.

Not to mention the bigger stories: getting a look at the seedy side of abortion in the Gosnell case, what you might call the Age of the Liberal Coathanger.  Who knew?

There are lots of other liberal narratives that are coming apart at the seams.  Only the truth struggles to get out, because liberals don't want to talk about it.

Someone has written that the Marxists tell the best stories.  Well, maybe.  I've just been reading a book on Marxism, leavened by a look at sociologists Emile Durkheim and Max Weber.

And what is coming through to me is the Marxist insistence on turning everything into a mud-hole.  The division of labor is held out to be a monstrous culture of alienation, the separation of mankind from its true nature.  But Durkheim points out that a division of labor is the most natural thing in the world, for it issues from natural human sociability.  If humans are gathered together, it is natural that Bill will go off into one corner and concentrate on one part of the problem, while Suzy will work on another problem.  At the end of the day, people will gather together and discuss what has been accomplished.  That is supposed to be alienation?

The end of the recent liberal Big Push will provide conservatives with a new chance to bring the tawdry liberal lies into disrepute and, more important get our own glorious story out there in the public square.

Of course that is what I do every hour of every day.

Friday, April 19, 2013

The Injustice of the Administrative State

So sad.  The administrative barbed wire entanglement of the Senate's gun control bill, offered by Senators Manchin (D-WV) and Toomey R-PA), has gone down in flames.  It was a bill made up in administrative secret and bounced on the Senate in all its 800 page glory.  Next up is Sen. Schumer's Gang of Eight immigration bill, another administrative monster full of plans and guidelines and timetables.  How many pages does it have?

But don't forget the granddaddy of them all, the Affordable Care Act, with its veritable northern forest of administrative provisions stretching to the far horizon.  The 2800 page Act itself is merely a demonstration forest compared to the vast bureaucratic continent that will be planted to implement it.

Some of the wisest minds have recognized that the legalistic politics that we now practice is problematic.  It's wonderful to use science in our political deliberations, but what about the human factor?  Here we have our ruling class setting out rigid rules to solve all kinds of problems, from gun violence to immigration to health care.  But has anyone seriously thought about whether an administrative system is a suitable approach to these issues?

Karl Marx worried that the naked exploitation of the capitalist economy inevitably alienated mankind from its natural culture.  Max Weber saw the modern age as an age of rationalization, in capitalism and in government.  But haven't we created an "iron cage" with this rationalization?  The Frankfurt School chappies noted that man uses reason to dominate, both nature and other men.

And so we come to my mantra: government is force; politics is division; administration is domination.

You can see this in the way that our liberal friends exempt themselves from administrative oversight.  Michelle Malkin has a piece on how this works in the abortion industry.
The Pennsylvania Department of State was “repeatedly confronted with evidence about Gosnell” — including the clinic’s unclean, unsterile conditions, unlicensed workers, unsupervised sedation, underage abortion patients and over-prescribing of pain pills with high resale value on the street — “and repeatedly chose to do nothing.”
Or this:
And an inspector for the National Abortion Federation, the leading association of abortion providers that is supposed to uphold strict health and legal standards, determined that Gosnell’s chamber of horrors was “the worst abortion clinic she had ever inspected” — but did nothing. 
It's the same as regulation of the finance industry.  How could we get a financial crash like 2008 with all those regulatory agencies?

Or immigration.  How come that liberal cities are allowed to declare themselves "sanctuary cities?"  How come I can't declare myself a "tax sanctuary" and refuse to abide by the tax laws?

The answer is pretty simple.  Everyone is equal, but some people are more equal that others.  Some people are the favorites of the ruling class and they get a pass from the regulatory enforcers.  In the case of abortion providers, they get cover from the pro-choice activist community.  In the case of the finance industry, its distortions and vulnerabilities are baked right in by the government, which likes a loosey-goosie credit system for its own convenience.  In the case of illegal immigration, Democrats are the national political home of recent immigrants, legal or illegal.

The problem is that the administrative state always has and always will play favorites.  As soon as you have administrative boards and committees and a collapse of the market into bureaucratic ukase then you are going to get arbitrary decisions based upon political power.

That's not a bug, it's a feature.

The magic of capitalism is that it dissolves this injustice; it combines reason with sentiment.  It forces its practitioners to think about the other guy, about how its customers might be inconvenienced by its arbitrary decisions, and how it might pay in losses for a foolish decision.

That doesn't apply to bureaucratic administrators.  They only have to think of what might prevent them from collecting their pensions.

The good thing is that the administrative state is grinding to a halt.  It just can't adjudicate the complexities of the modern world.  That is why its bills must be drafted in secret and then sprung upon the legislature with a full court press of lobbying and bullying.

But we believe in a better America.  An America that has climbed past the administrative state to the sunny green uplands of freedom and responsibility.

Thursday, April 18, 2013

After Boston: Taxonomy of Political Conflict

When a nation state has a problem with another state, a problem that can't be resolved by diplomacy, it cranks up the printing press and goes to war.  That we understand.  But what about lower-level disagreements?

For instance, what about guerrilla movements?  Here you have an armed group dedicated to the overthrow of an existing government.  But a non-state actor like a guerrilla group cannot go head to head against a government in a full-scale war, so it must fight an "asymmetric" war, making life difficult for the government with raids on government facilities and enticing the people to withdraw support from a government that can't keep the peace.  Of course, very often a guerrilla group is financed by a state.  In fact, it is likely that very few guerrilla groups can survive without some sort of support from a state that wants to stir up trouble.

Then there are simple terror groups, that don't have the finance or the popular support to hide out in the country and maintain a permanent force under arms.  These groups are still groups with political agendas, but without the means or the ambition to conduct a full-scale guerrilla campaign. They really got going in that late 19th century when the combination of explosives and modern publicity made it possible to kill one person and frighten a million.  But you gotta give them credit.  You can really lower the prestige of a government with some well-placed bombs.  Maybe you can get the government to spend trillions of money for little return, like the US in the years after 9-11.

Then there's the lone wolf copycatting the terror conspiracies.  Perhaps Major Nidal Malik Hassan, the Fort Hood bomber, comes into that category.  A man is inspired to imitate others, and does so.

But let's not forget the left-wing activist group.  It is the cadre group representing itself as a spontaneous uprising of the people.  It is a political tradition of "peaceful protest" designed to project the impression in the media that injustice is abroad in the land and that helpless victims need relief.  The left-wing activist group is seldom popular, but achieves notoriety and momentum for its agenda through media facilitation.

Then we have the popular movement like the Tea Party that represents a genuine stirring in the people, and that moves fairly quickly to influence electoral politics.

Lastly we have the "mentally ill" single shooter, who doesn't have a political strategy, but just wants the notoriety of a bloody deed.

Everyone from the president on down is stigmatizing the perpetrators of the Boston Marathon bombing as cowardly and cynical.  No doubt they are right.

But all opponents of a political regime face the same problem.  They want to replace the government.  Government, let us not forget, is force, and politics is division.  So any political actor that wants to replace the current regime of force must follow a strategy of division that ends up with his group taking over the levers of force and coercion.  Until the day of the final victory, he must divide the people from the government.

Clearly, this strategy of division must usually include creating the notion that the government has lost control and cannot keep the peace.  At the state level, this allows the opponents of the regime to rail about the waste of war.  At the guerrilla level they rail about the inability of the government to control its own territory.  At the terror bomb level, they demonstrate the inability of the government to protect people on the street from cowardly murderers.  At the left-wing protest level, people rail about the continuing stain of injustice.

At each level of insurrection, the actors are using the weapons that they believe are most effective for them, given the political and financial assets at hand, to make their point and delegitimize the government.

Force is force, and division is division.  Sometimes bloody deeds succeed; sometimes they don't.

But if you ask me, I'd say that far too many people think that they can improve life for themselves and the world through politics.   For the vast majority of people, the best way to improve life for themselves is to follow the advice of Rupert Murdoch and "produce something that other people are willing to pay for."

Maybe, if you do that, you can be a part of the movement that has got people in the United States from $3 per day in 1800 to a life of $120 per day right now.

That would be making a difference.

Tuesday, April 16, 2013

Liberal Fingerprints All Over It

Our liberal friends think of themselves as caring, but rather overwhelmed idealists: fighting hard to make a better world against the WASPs at the country club and the bigots at the megachurch, but overwhelmed by their rather charming academic disorganization.

In reality, we live in the house that liberals built, from the schools to the culture to the safety net.  And it ain't in too good a shape.  There are signs of cracking, and the porch is leaning dangerously.  But don't look for liberals to agree to repairs.  They have other plans for the maintenance money.

Meanwhile the bad news keeps coming.

There's the Gosnell abortion case.  A black businessman in Philadelphia ran an abortion mill for decades, apparently marketing to poor black women, and now he's in the dock for botched late-term abortions and a host of regulatory infractions.  But where were the diligent regulators of whom we've heard tell?  Well, it seems that the regulators were leery about regulating abortion businesses.  You can see why.  They knew that they could get into trouble with liberal activist groups, and that is something that a bureaucrat understands in her bones is the one thing to be avoided in her smooth progress towards that defined-benefit pension.  Jennifer Rubin has a lot to say about this.

For a conservative, the Gosnell case is breathtaking.  Here we have liberals telling us that nobody can be trusted, that regulators are needed to keep and eye on everyone. Health care?  We gotta have universal health care so the government can make sure that everyone is covered.  But guess who doesn't get regulated?  Liberals' pet abortionists.

Then there is the utter mess in the economy and the culture.  It's lucky that liberals are the ones that have cratered marriage in the lower orders, have blitzed a generation of men by allowing them to moulder away on long-term unemployment.  Imagine if Republicans were in charge right now.  Why back in the 2000s then House Minority Leader Nancy Pelosi started blaming Bush for the "jobless recovery" ere the Nation Bureau of Economic Research had pronounced on the end of the recession.

But let us set the stage with a chart of workforce participation of mature Americans in the last century from Blackrock.
Here's the article link.  It shows how men 55-64 have reduced their participation in the workforce from the 90 percentile to 70 percent over the last century, while women in the 55-64 group have increased their participation enormously.  Meanwhile men over 65 have reduced their workforce participation from 75 percent down to 20 percent while women over 65 have actually increased their participation.

So the great Social Security revolution has principally helped older men (while you could say that Medicare has really helped women).

But then there is the family.  Robert Samuelson presents an even-handed analysis using a Third Way analysis from some liberals and the libertarian case from Charles Murray and Coming Apart.

Samuelson presents Murray's argument thus:
Having a child out of wedlock became more common and acceptable; the sexual revolution enabled men to get sex without marriage. The waning power of religion undermined the importance of family. Feminism and expanding welfare programs made it easier for women to survive -- through jobs or aid -- on their own. Liberalized divorce led to more breakups.
And here is the liberal line:
In a paper for Third Way, a liberal think tank, economists David Autor and Melanie Wasserman of the Massachusetts Institute of Technology attribute the decline of marriage -- which, like Murray, they say is concentrated among the poorly educated -- to the eroding economic heft of men compared with women. Women are more independent economically; men are weaker. Marriage has lost much of its pecuniary pull.
Is it the culture or the economy?  And did we just fall into the creek, or were we pushed?

The missing link, in my view, is that the whole question about humans as social animals is: what to do with the men.  In the last century we have reversed the question and asked what to do about the women?  But that is nonsense.  Women are never a problem; they always do what they are told.  Men, on the other hand, are like dogs; they get into mischief unless they are given a job to do.

In the hunter-gatherer culture men worked pretty much as full time border warriors, rather like chimpanzees.  So when the agricultural age opened, with the enlargement of the zone of peace, what was there for the men to do?  Well, it turned out that women were particularly ill-suited for plowing: they tended to suffer miscarriages.  So there was the solution.  Men could do all the heavy work around the farm.

Then came the modern era of the city and the industrial revolution.  Now what to do, especially after mechanization started to reduce the amount of heavy labor?  The answer was the Protestant answer, the idea of work as a calling, work made into a religious duty.  Now men could be sent off, not to the border wars or the army or the plow, but to the factory or the office where they could compete with each other for the glittering prizes: money, power, and the love of beautiful women.  Well, at least it kept them out of mischief.

But it worked so well that activist liberal women wanted in on the action.  The result, a century later is that women have invaded the "workplace" and transformed it from a place where men compensated for the lack of wars to fight to a place where women enforce the values of the community of women, discouraging bluff competition and requiring sensitivity.

We have turned the world upside down.  We have created a welfare state that discourages poor men from working and poor women from getting married.  We have destroyed the culture that helped men to sublimate their battlefield aggression into marketplace competition.  At least for the lower orders, closely patronized and supervised by the liberal administrators of the welfare state.

The rich and educated of today, of course, work and marry like mad.  Just look at this story about the two Thatcher grandchildren.  Surrounded by wealth and privilege they are devout Christians and obsessive hard workers.  Why is that, you ask?  Because the rich these days cannot just repose on their estates or their "funds."  They must work and excel; otherwise they will fall back into the the ordinary suburban middle class, and who wants that?

Drip by drip, creak by creak, failure by failure, the liberal cultural and political edifice is starting to fall apart.  Conservatives better be ready to offer an alternative when the revolutionary moment arrives.

Monday, April 15, 2013

There Is No Cunning Plan

Some Republicans seem to be frightened that President Obama is enticing them into a trap with his FY 2014 federal budget, what with his proposed chain-weighted CPI for Social Security inflation adjustments.  They think he is baiting a trap with this teenie-weenie entitlement reform to force them into agreeing to tax increases.

Then there are the House Democrats that seem convinced that the president's chain-weighting proposal is going to lead them into a frightful trap in the 2014 elections.  They fear that the House Republicans have a plan to beat them like a drum on Social Security.

I doubt it.  I don't think the president is that smart on the budget.  I think he is just doing what he has to do.  He has to show something on entitlements, like his Social Security plan.  He also has a bunch of less visible cuts on Medicare.  And what else is he going to do but propose massive tax increases?  After all, the alternative is to take a meat-ax to the entitlements and the crony capitalism and all the programs that dish out lovely grants to liberals.   That would be like running up the white flag.

And House Democrats doubtless think that the sun rises and sets on entitlements.  So they naturally fear that someone, somewhere has a cunning plan to deep six them and their noble constituents that have staked their lives on government benefits.

I lean on the old Hollywood saying about what makes a hit movie.  Nobody knows nothing.  In national politics it's a bit different.  Everyone knows what needs to be done, but nobody dares to move.  Democrats can't ask their supporters to eat entitlement cuts.  Republicans won't ask their supporters to bail out the unsustainable entitlements with tax increases.

The net result is that the officers are standing on the deck in the storm watching the ship of state crash its way onto the rocks.  Nobody dares to order the grumbling crew to do anything, because the officers are afraid of mutiny.

The ruling class is right to be afraid of mutiny.  Nobody said anything about financial mayhem and shipwreck when they promised Social Security and Medicare as a basic human right.  Anyway, all the money that people paid into FICA is locked away in those Trust Funds, right?

Nobody knows how all this will turn out.  No doubt that cunning politicians will find ways of winning and losing elections as we stumble on into the future.  And the cunning politicians on one side will outfox the cunning politicians on the other side.

One thing is for certain.  The folks that put their trust in government are going to find that their trust was misplaced.  It's the old story: women and minorities hardest hit.

Thursday, April 11, 2013

What Grand Bargain?

Some people are talking about a grand bargain on the federal budget.  Joe Klein, for instance.

You can look at the president's FY14 budget at usfederalbudget.us.

Well, sorta.  Joe says that Congress is fed up with the broken budget process and may do a deal this year.  He sees a moderate compromise of entitlement cuts and increased revenue.  And President Obama may possibly join in.  He's apparently "stopped trying to bang his head up against John Boehner and the Tea Party crowd."

Really?  The chap who's planning to flip the House of Representatives in 2014 with Organizing for America?

If the president were planning on a grand bargain, he would have started months, maybe years ago.  To get Democrats to sign on to entitlement reform and Republicans to sign onto tax increases would have required the patience and the political skills of -- well, a Reagan.  And President Obama is not that kind of politician.  He made his chops as a community organizer, riling up the welfare-state beneficiaries to demand their "rights."  And that's what he likes doing.

The death of Margaret Thatcher this week shows what I mean.  Thatcher came into office with a program, and she diligently and doggedly stuck to her guns for nearly 12 years.  This meant a huge effort in developing the intellectual horizon of what she wanted to do and then implement it in the hard daily grind of political and administrative details.

In President Obama we do see an intellectual horizon.  It's the liberal horizon of a bigger and bigger administrative state.  To the extent that we see the evidence of a hard daily grind it is clearly devoted to implementing that liberal vision.

Why would President Obama compromise anything away now?

Liberals will only be ready to compromise when they see political power slipping away, and today, they are very far from that.  In fact, liberals think the have an "emerging Democratic majority" of minorities, women, educated and the young, that will make them the default party of government for the next generation.

The job of Republicans right now is to be the Party of No.  Entitlement cuts?  Maybe, but not if it means anti-growth tax increases.  That's because the bottom line for Republicans, as the party of the People of the Responsible Self, is that Republican voters should have an economy in which they can make an honest living.

Democrats live and die on the free stuff they have won for their clients.  Republicans live and die on the ability of their voters to work and thrive.  Don't look for a grand bargain until one of the two parties fears annihilation at the polls.

Maybe in 2015 after the Democrats get annihilated by the unpopularity of ObamaCare?

Wednesday, April 10, 2013

Live by the State, Die by the State

There are two narratives out there about Margaret Thatcher.  The conservative line is that Maggie saved Britain.  The liberal line is that she divided the country and cratered manufacturing, wiping out the working class.

For a conservative view of the wipeout, let's turn to Brit-born John Derbyshire.
Mrs. Thatcher’s defeat of the frankly communist National Union of Mineworkers was a triumph for economic sense, but left mining towns and villages without work. Most of them remain in that condition today. As the grandchild of two coal miners from just such places, I know what has been lost.
The great virtue of John Derbyshire is that he tells it like it is, without shading his views in deference to the Zeitgeist.  That's what got him fired at National Review: saying something non-PC about race.

But he got me to thinking.  What did those miners think they were doing, joining a political strike against the government?  Didn't they understand that they were essentially engaged in civil war?  Didn't they get that, but for the left-wing press, they would have been tagged as rebels?  What did they think happens to defeated rebels in this sub-lunar world?

It's a bit rich to complain about your miseries after you've been defeated in a civil-war-by-other-means.

And the same goes for all those who worked for the failing nationalized industries in the 1970s.  What did those folks think would happen in the end, long after government had "saved" their jobs?   What did they think happened to the competitive qualities of their employer after he's been rescued by the government?  Did they think they could go on forever producing substandard products and services for their fellow Brits?

One of the great cruelties of our age is that lack of truth-telling from our educated elite.  And one of the failures on the truth front is the failure to tell people that when they get the government to bail them out they are forcing the rest of society to cut checks to them for doing, well, not very much.  A small business cannot survive at all not doing very much.  A big corporation cannot last very long without satisfying its customers. True, a government can go for quite a while by taxing and borrowing and spending.  But in the end it all collapses in inflation and default.

Our educated elite won't tell ordinary people just how much they risk by sucking on the government teat.  Because in the end a Pharaoh will arise that knew not Joseph, and will decide that it is too much trouble to continue the customary subsidies.  Anyway, he has other supporters he needs to look after.

What about the truth, from Deirdre McCloskey, that it is capitalism, not government, that brought us in 200 years from $3 per day to $120 per day?

There is no substitute for a robust independence and competence, in individuals, in families, in businesses, in nations.  When you work for years and years for some big corporation or government bureaucracy you get further and further from reality, where reality is the market wage you could earn if you got laid off tomorrow.

If you want to know why the ranks of people on Social Security Disability are expanding so rapidly, that's where you start.  With people who have been taking a paycheck for years at some long-established employer, but not really producing, not really keeping their skills up, not really making themselves useful and employable.

On the other hand there is capitalism and the market.  There is no doubt that capitalism is a stern taskmaster.  It operates by profit and loss.  If you can offer a product or a service to the market at a profit, you get to live another day.  If you can't, they you'd better think of something else.  But what alternative do you propose?  Do you propose to impose yourself on your fellow citizen and force them to support you, because this is such a cruel hard world?

Margaret Thatcher had an interesting take on earning a living, as she experienced it, growing up as the daughter of a shopkeeper.
For them [the critics] capitalism was alien and harsh: for me it was familiar and creative. I was able to see that it was satisfying customers that allowed my father to increase the number of people he employed. I knew that it was international trade that brought coffee, sugar, and spice to those who frequented our shop. And, more than that, I experienced that business, as can be seen in any marketplace anywhere, was lively, human, social, and sociable: in fact, though serious, it was fun.
Come on, fellahs.  The basic social contract is that we work to serve others, so that we may earn our own living from that service.  The alternative is the life of the robber, to hold up others and take their money.  But life is not so hard after all.  If you surrender to the rules of capitalism you can break through the seriousness of it all, and transform the struggle into fun.

And isn't that what the whole of human life is about?  It is a brave and resolute gesture against the awful truth, that we are just pond-scum living on the margin of a great rock in space, and that every one of us will soon return, dust to dust, ashes to ashes.

But meanwhile, let us live life as a glorious gift, and live and work and love, giving the grim reaper and our fears no more than a grudging respect.

Monday, April 8, 2013

Margaret Thatcher, RIP

Of the Great Three of the 1980s, Margaret Thatcher, perhaps, had the most distinguished ancestry.  Her father was a grocer.

Ronald Reagan's father was the town drunk, and Karol Wojtyła's father was a sergeant in the Austro-Hungarian army. But Thatcher's father was a respectable grocer in Grantham, northern England, a Methodist and sometime alderman.

So Margaret Thatcher, grocer's daughter, united left and right: the Tory upper crust and the lefties both hated her.

Margaret Roberts graduated from a British grammar school, meaning a government school that emphasized academics, and went to Cambridge to get a degree in Chemistry.

When she decided to go into politics, it took her ten years to find a Conservative seat.  In those days, the local party ran the candidate "selection" and the old-school Tories didn't really like the bright young woman graduate.  But she eventually got to become the MP for Finchley, then a middle-class suburb of north London.  Twenty years later she was Prime Minister.

Looking back, it is remarkable to realize how well the left recovered from the debacle of the 1970s, the decade of stagflation, and how resolutely they determined not to learn the lessons of the Eighties.

The lesson was that it's all very well to want to fight inequality, but big government won't do the job for you.  That's because the only thing that government can do is take money from one person and give it to another.  It cannot build wealth; it cannot educate children; it cannot lead the poor out of poverty.  All it can do is tempt the voters with free stuff at election time and then govern by handing the lolly out to its supporters.

Oh, there are exceptions.  You can have a great reform and staff it with enthusiasts for a while. But eventually the enthusiasts leave for another gig and you are left with the time servers and the pension addicts.  Just as we have today in education and in local government.

The trouble with socialists, Margaret Thatcher said, is that "they always run out of other people's money."  The reason is that government doesn't produce anything; it doesn't produce or serve in response to market demand.  It merely takes money from people and goes through the motions of producing and serving.  You would too if you got your check whether you produced or served up anything of value.

The great achievement of the 1980s and Ronald Reagan and Margaret Thatcher is that they showed the world that hard money and market economics will usher in strong economic growth.

But the left could never accept that, because if you accept the Reagan-Thatcher achievement then the whole point of the Liberal Ascendancy, the rule of the educated class, is demolished.  Why, maybe parents could get together to educate their children, as home-schoolers do today.  Maybe people could save their own money for retirement.  Maybe charity and neighborliness could relieve the poor.

So the left has turned its face against the great reforms of the 1980s.  In Britain and in the US the parties of the left have swamped the country with new immigrants off the farm, and new immigrants have reliably voted for free stuff ever since the Irish tumbled onto the shores of North America from the coffin ships of the 1840s.

Now we are heading for a rendez-vous with reality, as the pathetic Obama economy stumbles along in a four-year misery of a jobless recovery.  Millions of Americans have given up and got themselves on disability.

But socialism, or identity liberalism, or progressivism, or whatever you want to call it, always runs out of other people's money.  That's because humans are social animals, not government slaves.  We thrive according to Adam Smith's invisible hand: we get what we want by doing things for other people, things that they are prepared to pay money for.  The whole point of big government is that the invisible hand won't do the job.  What you need to make a better world is force.

Of course, there is a sense in which capitalism confirms the jeremiad of Horkheimer and Adorno: "What men want to learn from nature is how to dominate it and other men."  But these pessimists miss the point about the nature of a social animal.  The point about social animals is that they don't merely dominate, and don't merely reduce their lives to a mechanical exchange of force.  They cooperate.  They pay attention to the needs of others, and act upon it.

Capitalism is the human adaption to the fact of cooperation beyond the face-to-face cooperation of the hunter-gatherer camp or the agricultural village.  It is cooperation based upon a radical expansion of the horizon of trust from blood kin to all the people in the world that demonstrate trustworthiness.

Of course capitalism doesn't end exploitation, and people suffer under capitalism as under any social system.  And capitalism is ruthless on people that don't want to make stuff for other people.  And its focus on specialization does tend to make people smaller.

But capitalism is like democracy.  It is the worst way of organizing the economy except for all the alternatives.

That's what Margaret Thatcher stood for and that is why we will always remember her.

Friday, April 5, 2013

Throttlebottom Obama Economy

Here we go with another sluggish employment report.  Yes, the unemployment is down to 7.6 percent, but the nasty is in the Household Survey employment numbers: Labor force down 496,000.  Employment down 206,000.

Not good.  You don't want to get the unemployment rate down by shrinking the labor force more than the shrinkage in the number of jobs.  Not nohow.

And how now about that Keynesian policy mix of deficits and cheap money?  Liberals should have learned from Ronald Reagan, who did the opposite, with tight money and domestic spending cuts, and started a 20 year boom.

This isn't rocket science, liberals.  It certainly isn't climate science.

Look.  Keynesian economics has its point.  When the economy is truly contracting, then it's a good idea to keep government spending going and loosen the credit strings.  But as soon as the credit system turns the corner and the economy starts to improve then it is time to cut government spending.  Because all government spending is waste.

Yes, I know.  There are some wonderful things that government does.  But in the end it all comes down to distributing free stuff to your political supporters.

Supply-sider economist Alan Reynolds has a good piece on the difference between the PIIGGS countries (Portugal, Ireland, Italy, Greece, Great Britain, Spain), the BRIC countries (Brazil, Russia, India, China), and the MIST countries (Malaysia, Indonesia, South Korea, Thailand).
All PIIGGS have two things in common. First of all, government spending grew dramatically — from an average of 43.2% of GDP in 2007 to 52.6% by 2010... [Second,] The highest income tax rate was recently increased in every one of the troubled PIIGGS except Italy[.]
 What about the other nations, the BRICs and the MISTs?
Government spending is frugal in these countries, averaging 32.1% of GDP in the BRICs and 27.4% for the MIST group...  Rather than raising top tax rates, all but one of the BRIC and MIST countries slashed their highest individual income tax rates in half; sometimes lower.
In the PIIGGS countries, governments are struggling with sluggish growth; in the BRIC and MIST countries growth is good.

So what's the lesson, according to Reynolds?
 What works, these successful economies discovered, is (1) to prevent government spending from growing faster than the private economy that supports it, and (2) to reduce rather than increase the highest, most damaging tax rates. 
Really, you wonder.  What is so hard about this?

I will tell you want is so hard.  It's no secret.  Governments all over the world, since the dawn of time, have operated like pirates and plunderers, looting the fisc to pay off their supporters with free stuff.  From time to time this looting gets out of hand, taking more from the economy than the economy can stand.

So you get a government standing around wringing its hands about greedy bankers and the rich paying their fair share.  Because all politicians know is taking money from the moneybags to give to their supporters.

When we look back at the Obama administration we can only hope that this was the moment that liberals, after suffering devastating losses in 2014 and 2016, finally abandoned their pedal-to-the-metal faith in the wonders of stimulus, cheap money, and government "investments."

If there is any divine justice in this world then liberals should be kept out of power for a generation.

Because the people that suffer from this monstrous policy are, of course, not the greedy bankers and insurance companies and Big Oil, but the rank-and-file Democratic voter that puts their faith in the charismatic leader promising free stuff.

But don't hold your breath.

Thursday, April 4, 2013

Democrats: End of the Big Push

You remember World War I.  The Brits developed a term they called the Big Push.  The Battle of the Somme was a Big Push.  The great offensive in Flanders in 1917, featuring the Battle of Paschendaele, was a Big Push.

The point about Big Pushes is that, after a while, they peter out.  It doesn't matter how many millions of soldiers, or millions of shells, or thousands of tanks you have.  In the end, the whole thing peters out: people are exhausted.

Now in my view we have just seen a ten year Big Push from the Democrats.  It was one last effort to unite the party and defeat the wascally Wepublicans and put them in a permanent minority.

Maybe it started in the rage of 2000 when the "stupid" George W. Bush beat the Democrats by a hair.  Maybe it started after the humiliation of 2004 when Karl Rove pulled out an astonishing increase in the Republican vote to win the election over a slightly less astonishing increase in the Democratic vote.

It was certainly going at full blast in the 2006 midterms when Democrats achieved astonishing message discipline to damn the Republicans as extreme and corrupt, and the Democratic rank-and-file advanced over the political battlefield under cover of a 1,000 gun artillery barrage from the mainstream media.

The roar of battle continued with the 1,000 barrel gun-line firing non-stop through the 2008 election and 60 million Democratic hearts beating as one for America's first black president. With the solid seven  point victory of 2008 it seemed natural to keep on rolling ahead, demolishing all resistance and push stimulus, Obamacare, and Dodd-Frank right down out-of-touch Republican throats.

In 2010 there was a pushback, as Americans elected a Republican House in the biggest pickup in seats since 1938.  But the Democratic army didn't flinch, and kept fighting shoulder to shoulder right through a four point reelection victory for President Obama in 2012.

But now the Big Push is over.  You can feel it.  It is not just the sequester, it is not that the Dem troops are exhausted.  It's just that the whole Democratic coalition just wants some leave and some rest and relaxation.  They are just tired of the constant coordination of messaging.  They just want to enjoy life again.

The Obama campaign team, of course, is breaking up, now that reelection is over.  And Obama himself, no longer disciplined by the goal of reelection, will unwind his intensity.

The Democrats and their willing accomplices in the mainstream media did a bang-up job of selling the American people on the notion that Bush was a fool, the Iraq War was a disaster, and the Crash of 2008 was Bush's fault.  After all, Bush was not a great communicator, the Iraq War was a mess as all wars are, and the Crash happened on Bush's watch.

And then they did a bang-up job selling the American people on the idea that Mitt Romney was an unfeeling rich guy that didn't care about people like them.  You gotta give them credit for putting that one over, given that Mitt Romney is in fact a man who has given his life to serving others, as a man must do in the Mormon church.

But now all that is history.  The Big Push is over, Obama is reelected, the economy is limping along, and Obamacare is hanging like a black cloud over the nation.

Remember this: Social Security and Medicare worked because everyone got a piece of the action.  It's called Kristol's Law.  If you want to help the poor you must deal in the middle class.

But Obamacare just helps the supposed 30 million without health insurance.  People that already have health insurance are going to get a haircut.  And the 30 million without health insurance don't go without health care.  They just don't have insurance, probably because they don't have assets that need to be protected from health care costs.  If you don't have assets, then you don't need health insurance.  So there's a real chance that almost everyone will be really pissed of at Obamacare by 2016.

Nobody knows whether the political current has changed, or whether it has merely paused.  All we know is that the Big Democratic Push of 2002 to 2012 is over.  We are entering a new era.

Wednesday, April 3, 2013

The Economy: What Should Obama Have Done?

Obviously, all is not well with the economy.  The recovery from the Great Recession has been agonizingly slow.  But why?

In the American Spectator Peter Ferrara puts it all down to Keynesianism.  But I think that is too simplistic.

There are three analyses out there that claim to account for the failure of Obamanomics:
  1. Not enough stimulus.
  2. Not enough tax and spending cuts.
  3. Don't be so impatient.
Reason One is the Keynesian response, that government spending (and cheap money) kick-starts the economy, and the Obama stimulus wasn't enough.  Conservatives like Ferrara say that Keynesianism didn't work in the Great Depression and it won't work today.  But in fact it did work, for a while, with 12 percent real GDP growth in the election year of 1936.  The only thing was that after the stimulus was removed, in 1937, the economy crashed into the Recession within a Depression.

The real point of Keynesianism is to borrow money to keep things going, in the hope that the economy will recover and lift all boats.  It's a short-term thing, for a year or two.  Obviously, it hasn't worked out over the longer term, as in four long years of subnormal growth.

Reason Two is the supply-side response, that government spending and taxes add up to nothing more than a burden on the economy.  So the sooner you remove the burden, the better.  Also, the tax system naturally tends towards increasing complexity and carve-outs for special interests, so the sooner you chop that stuff away the better.

The only caveat is that you probably don't want to cut spending until the economy has clearly turned the corner.  We do not mean here that unemployment is back down to 6.5 percent, as the Federal Reserve currently proposes.  We mean that you don't start cutting spending until the risk of meltdown has clearly ended.  In the current context, that would be about January 1, 2010.

Reason Three is the argument of Reinhart and Rogoff in This Time is Different.  They argue that after a major banking crisis it takes about six years for the economy to shake off the doldrums.  That's because it takes that long for all the underwater debtors to de-leverage, either by paying down their debts or by going broke or a combination of the two.  You can't have a vibrant economy when a ton of people have questionable credit: counter parties can't exactly be sure how "sound" they are, and the debtors themselves are constrained by their lack of equity.

What about Obama?  Let's give him the benefit of the doubt.  The Great Recession was worse that the 1980-82 recession because of the banking and real-estate meltdown.  So it's misleading to task him with the stunning growth of the Reagan years.  But almost everything Obama has done has retarded the recovery.  Here would be my list of stimulus policies:
  1. Immediate cut in individual and corporate income tax rates followed in about two years by cuts in deductions and credits.  Temporary cuts in the business side of payroll taxes.
  2. Immediate cuts in crony-capitalist spending followed by real entitlement reform in a couple of years.
  3. A "bad bank" to take up all the underwater mortgages, and thus get the banking system healthy.
  4. Programs to float the underwater mortgages as quickly as possible.  That would be by both encouraging people to abandon their underwater houses instead of hanging on like grim death, and also to sweeten the pot by writing mortgage principal down.
  5. A general pruning of government spending.
Notice what we are doing.  We are changing the rules now, and cleaning up the garbage later.  We are recognizing that, after a big financial crisis, we are poorer and can't afford the luxury of all those big government programs.  Something has to give.  And we are doing positive things to repair the credit system.  A credit system is healthy when a) nearly all debtors are making their payments, and b) nearly all debtors are above water.

Note that Obama is pretty well 0 for 5 on this program, although he has done some muddy things to write down mortgages (good) while hindering the banks from foreclosing on non-performing loans (bad).  It's not surprising that the result is a F grade for economic policy.

If we had a mainstream media worthy of the name we would know all this, and the whole nation would be demanding a practical and pragmatic economic policy.  But we don't, so the economy suffers.  

In the long term, it probably doesn't matter.  The American people will eventually turn against Obamism, not because they understand the president's mistakes but because they will know that it didn't work.  

But we could have saved a lot of suffering with better policies to get us out of the worst economic crisis in just about anyone's lifetime.  So far.

Tuesday, April 2, 2013

When the Ruling Class Gets It Wrong

What do you do when you are ruled by an upper crust that is getting it wrong, and doesn't know what to do?

Our ruling class has messed up the financial system, has messed up the health care system, has messed up the education system.  But they don't know what to do about it, except keep on keeping on.

That's the reality of life today.  Our ruling class, from liberal to semi-conservative, believes in a top-down administered society.  The ruling class sets up programs, from pensions to banking to health care, using the ideas from the best minds available, and then goes on to the next gig, on the assumption that they have solved the problem in question.

But the basic problem of human existence is that you can never just set up things and then go on to the next gig.  Human life is a constant adaption to changing conditions, whether it is life as a hunter gatherer, an agricultural worker, or an industrial mass-production worker.  Someone has a bright idea, and everyone adapts.  But the bright idea is not the answer to everything; it is not even the answer to one thing.  Pretty soon people realize that the new idea, while good on the whole, has created some unexpected problems.  So we need to change and adapt.

But the problem with government is that the Stage 2, the unanticipated consequences, are almost impossible for government to deal with.  The system is already in place.  The ruling class has gone onto the next gig.  What do you mean there is something wrong?

The problem is that politics and government have a very small bandwidth.  Whereas millions of consumers and thousands of producers can make daily adjustments in their behavior, a national government is a committee of 535 people.  And its laws direct the government bureaucracy to produce uniform decisions based on a rulebook of regulations.  Forever.

People in government respond to all problems as a loss of control.  Soaring health-care costs are due to out-of-control insurance companies.  Financial crises are caused by greedy bankers or reckless speculators.  What's needed is a more rigorous system of control, to make sure that the bad actors don't go rogue.  So we get Sarbanes-Oxley when a couple of corporations start cheating when things go south.  We get Dodd-Frank when the government's subsidies of home mortgage lending put the whole economy underwater.  We get Obamacare when people respond to the natural incentives to their first-dollar health insurance by treating health care as a free resource.

But what do you do about it?  Here we are marching to disaster, and nobody is doing anything about it.  The truth is that there is nowhere for all of us to hide from the march of folly.  When the bust-up comes we will all suffer the consequences.  And we will all be called upon to help those utterly devastated by the collapse and the turmoil.

I guess that the only thing to do is to keep your ship ship-shape, with the masts properly stayed, the rigging properly renewed, the sails new, the hull caulked, the engine properly maintained, the food well protected.

And you keep telling the world that it doesn't have to be like this.  We know how to keep an economy on an even keel.  We know how provide for the poor.  We know how to protect the environment.  And we know how to do it all without big government.

So why don't we just do it?  Because we are all too human.  We believe in a world of good and evil, and we are eager to punish the evildoers identified by our leaders, be they bigots, greedy bankers, Marxists or union thugs.

Maybe we should stop searching for villains and just get to work.

Monday, April 1, 2013

Jack Kemp and Minority Outreach

Let's get back to the days of Jack Kemp, says Larry Kudlow, and reach out to minorities.
Nobody, in my lifetime, in either party, has reached out with a message of hope, growth and opportunity to minorities better than Jack Kemp. 
While Jack Kemp reached out to middle-class whites with tax rate cuts, he reached out to minorities with goodies like Enterprise Zones in big cities.  You got big tax breaks if you moved a business into an Enterprise Zone.  With that sort of policy, Kemp could reach out to black liberal pols like Charlie Rangel and race-based interest groups like La Raza.

But that misses the point.  Great: Jack Kemp could get blacks and Hispanics to buy into free stuff, Republican style.  But did it do a blind bit of difference to move blacks and Hispanics off the Democratic plantation?  Not at all.  The fact is that the overwhelming majority of black and Hispanic voters respond to free-stuff and racist identity politics.  Maybe Republicans can peel off a few percent of the vote to make a difference in a close election.  Nothing wrong with that.  It just doesn't change the politics of America.

The fact is that blacks and Hispanics think in terms of patronage politics.  They think in terms of attaching themselves to a powerful patron and dining off the scraps from his table.  They experience themselves as weak and helpless in the brutal business of the city, like every newly-arrived immigrant group in the US for the last 150 years.

Typically, after a generation or two of struggle, the immigrant group rises into the middle class and its members begin to experience themselves as competent and responsible selves.  Then they find that the Democratic Party doesn't do it for them; they say, like Ronald Reagan, that they didn't leave the Democratic Party, the Democratic Party left them.

Thus the Religious Right came over to the dark side when the Dems went anti-religion, and now working-class white men after the Dems decided that working-class whites were the ones to pay the price for centuries of racism.

The strategic problem for conservatives is that liberal politics amounts to a cunning plan (whether deliberate or not) to keep "women and minorities" in a permanent dependency status, sucking on the government teat forever.  So it seems that they will never rise to a competency, and come to believe that the government is a wasteful cesspool of corruption.

So what should conservatives do?  Well, one thing would be to wreck the finances of the welfare state. That's the subtext when David Stockman, Reagan's Budget Director, rails at Republican policies in his new book, The Great Deformation: The Corruption of Capitalism in America, excerpted in the New York Times. He even takes off after Ronaldus Magnus:
The destruction of fiscal rectitude under Ronald Reagan — one reason I resigned as his budget chief in 1985 — was the greatest of his many dramatic acts. It created a template for the Republicans’ utter abandonment of the balanced-budget policies of Calvin Coolidge and allowed George W. Bush to dive into the deep end, bankrupting the nation through two misbegotten and unfinanced wars, a giant expansion of Medicare and a tax-cutting spree for the wealthy that turned K Street lobbyists into the de facto office of national tax policy.
Gosh, you'd almost think the evil Republicans wanted to crash the government's finances!

But maybe it's working.  After all, President Obama, like a deer in the headlights, has kept the entitlement state going full speed ahead towards the icebergs of Greece and Egypt, without a thought of shaving a bit off the government fisc to make room for growth.  Without a course correction, Captain Obama will crash the welfare state, and women and minorities will be hardest hit.

Make no mistake.  A rising middle class of African Americans and Hispanics needs economic growth.  Newcomers to the economy need newcomer opportunities.  They need spaces left by the established classes, leads in the ice, into which they can rush and grow and thrive.  Think of the Jews creating the movie industry.

The problem is that newly arrived immigrants have never believed in the capitalist road to economic competence.  They always believe in the charismatic leader, the FDR, the Hugo Chavez, the Barack Obama.  And very often they keep on believing in face of the evidence.

But there is hope.  Usually, by the middle of a second term the "low-information" voters are ready for a change.  Things just don't seem to be working out for them, and they get restless.  With Obama safely reelected we are now reading that black leaders are starting to get restless about black unemployment in the Obama economy.

And in the end, the folks that believe in a miraculous political solution to their problems give up on politics and go back to work.

Jack Kemp was a great guy, and a great supporting actor in the Reagan era.  But the fact is that he couldn't turn his Kempism into a presidential campaign.  That may tell us something about the politics of minority outreach.