Reality 101 for Nov 3, 2010

Politics is always an argument about "reality," in the modern sense of the approved point of view. Let's get one thing clear, writes Timothy Dalrymple. The Tea Party isn't brand new, whatever liberals say.

Raise your hand if you’ve heard this before: “If the Tea Party activists were really upset about spending, where were they when Bush was running up the deficits?” The alleged inconsistency -- that conservatives were perfectly content with big government under Bush but are outraged now -- is a key component of the liberal argument that the Tea Party is actually driven by more nefarious motives.

Plenty of conservatives were unhappy with Bush's spending. But nobody gave them no never-mind. But we reality-based chaps are going to have to hammer this out, again and again. Because liberals will do anything rather than admit that the tide had turned and that they must now take a back seat in the political bus.

My version of reality aligns with Dalrymple.

Back in the 1990s under the Gingrich Congress, spending was not cut, but the rate of increase was sharply decreased. The result was a small federal budget surplus in 1998. But then the political tide changed. People started to think: wow, things are getting better. Maybe now it was time to open the spending spigots a little and do the things we couldn't do when the deficit was threatening to eat us alive. So when George W. Bush ran he ran as a "compassionate conservative," and supported big-government initiatives like No Child Left Behind and Medicare drugs. Conservatives hated this, and I hated it too, although I understood that any Republican would have to run like that. The stern budget-balancing politics of the early 1990s had run its course.

When the Democrats ran in 2006 and 2008 they ran as budget balancers. Nancy Pelosi vowed "no new deficit spending" in 2007.

So nobody can really be surprised that a conservative anti-spending movement got started in 2009 the moment that it became clear that the Obama administration was not going to balance the budget but simply open the spigots wide and pump money as fast as possible into the buckets of every liberal interest group in the nation.

Now, of course, we have the mother of all debt problems and the mother of all spending problems and the real problem of an economy that isn't expanding rapidly after the meltdown of 2008. Americans are frightened about big government spending like they have never been frightened in the past and they are right to be afraid.

The question is: what comes next. Do we really do something about spending, which means entitlements, or do we fudge one more time?

That is the point of this election and the election that comes after it.

It is a battle for the hearts and minds of women and minorities. White men have been persuaded about the follies of big government for some time. No surprise there. White men are the people expected to pay for a big government that counts women and minorities as its darlings.

There comes a time in the trajectory of every minority when it ceases to respond to the tune of big government and its patronage. It says I don't need the political machine to protect me from the big bad world any more.

This truth is the great truth of the modern city and the modern economy. The modern world is not a world of robber barons, whatever left-wing writers say. It is a world that has the least amount of robber barons in history. All you need to get along is to pay a little attention in school and get yourself a skill and learn to be trustworthy. Then you will thrive.

All we need to do in the years ahead is to unwind slowly all the entitlements and special privileges created in the century of big government. If we can do that America will thrive. If we don't unwind all those privileges then government will default on its debt and the weak and the poor will go to the wall.

Conservatives and the White Working Class

The white working class in America used to be the politician's darling.

First the Republicans had their votes, starting in the McKinley election of 1896. McKinley had helped out union members accused of rioting when a young lawyer and he was a tariff man, favoring high wages.

Then the Democrats won the working-class vote in the chasm of the Great Depression.

But there's a problem about being the toast of the men's club. Once you lose your youthful good looks the men look for fresher meat.

There's a saying that puts it well, and it's not a new idea: Put not your trust in princes.

The white working class has been wandering around in the electoral wilderness now for about a generation. In 1980 they abandoned the Democrats that had led them into a nasty recession and became Reagan Democrats. But somehow the Republicans didn't do it for them, and so they returned to the Democrats to try and kindle the old flame in 2006-08.

Last week The Economist took a look at the white working class and its fickle voting pattern. It is clearly back in the Republican column. But The Economist does not try to deal with the why of it.

The problem with the white working class is the old one. They exchanged their birthright for a mess of pottage. They threw away the authentic social insitutions they created in the 18th and 19th century, the benefit clubs, the friendly societies, the labor unions, in exchange for the promises of politicians.

The politicians told the white working class that they didn't need to do the hard work of learning to thrive in the city. Politicians would force economic justice for them out of the profits of the employers. They would lower the work week, end the competition of child labor, provide education, unemployment benefits, and pensions.

But there turned out to be one problem with all this. The workers didn't get to own these benefits; they were owned by the politicians.

Unemployment? Very nice, but the money all goes to the government. A worker can't save that unemployment tax and then invest it in his own business. Education? Very nice, but working-class people don't benefit much from a system that is oriented towards the professional classes. They would do better to work in their teens as apprentices and go to school occasionally to pick up the odd skill. Pensions? Very nice too, but the government owns the money. Unions? What good has pro-labor law done except destroy the steel industry and the auto industry?

There's an opportunity here for conservatives to work with the working class and get them out of the clutches of the government, to take the money out of taxes and benefits and give them back to the working class. There must be a way to structure this and sell it. There must be a way for the white working class to thrive again.

There's one thing as certain as death and taxes. Today's politician's darling becomes tomorrow's painted bar fly. Because a politician doesn't care about you. He just cares about your vote.

Muslims and the Eternal Fear of Strangers

This week it's Juan Williams getting fired from NPR for voicing the most visceral human fear there is: the fear of the stranger. Earlier in the week it was Chancellor Angela Merkel saying that multiculturalism had failed in Germany with regard to its 3.5 million Muslim immigrants.

In the US, of course, we've been worried about immigrants since before the founding. Alexander Hamilton, first Secretary of the Treasury, was an immigrant and was mistrusted by the anti-federalists for that reason.

Since then the US has never had an era in which it wasn't scared of immigrants. By the mid 1800s it was the Catholic Irish. Then it was Jews and Italians. There has always been a fear of the Negro. Now we are afraid of Hispanics and Muslims.

There is, of course, a rational concern behind the visceral fear. Every new immigrant wave is an invasion of the city by peasants with pitchforks. That is, the immigrants come to the city unprepared for city life. They are socialized for the country life, so people worry whether they will ever "get" how to make it in the city without tearing it down? In the US, scientists say, it takes about a century for an immigrant family to go from immigrant manual workers to doctors and lawyers.

In The New Americans Michael Barone compares the troublesome immigrants of 1900, the Irish, the Jews, and the Italians with their replacements today: blacks, east Asians, and Hispanics. Irish and blacks come from severe oppression; Jews and east Asians from highly literate traditions; Italians and Hispanics from strong family cultures. Today, Irish-Americans, Jewish-Americans and Italian-Americans are almost un-hypenated Americans, but not quite.

Is there anything particularly different today? Well, there is. Today we have the political and cultural elite, our liberal friends, actively encouraging today's immigrant groups in separatism. That will probably slow their assimilation and cause hardship for the groups in question.

But the bigger view that we must never forget is the immense power of our capitalist democratic culture that is working on every immigrant mind every instant. There seems to be safety in the immigrant's cultural ghetto, yet there seems to be opportunity in assimilation. What is a young person to do? The answer is relentless, and you can hear it in the accents of the children of immigrants. They speak idiomatic American and they grow up to live and work in the majority culture they find around them. Many of them "marry out."

What about Muslims?

In recognizing our fears about Islam, as Juan Williams so honestly did, we should not forget the huge fears that Muslims must feel for the survival of their own culture. After all, it is Judeo-Christian democratic capitalism that has swept the world in the last five centuries. And now it looks like China and India, the big holdouts, have decided to join 'em rather than fight 'em. What hope has Islam if the Confucians and the Hindus have given up the fight?

Here's the Big One. In China, the Christians, now over 100 million and expanding at seven percent a year, feel that it is their job to bring Christianity "home to Jerusalem," i.e., Christianize the Muslims. Think of that.

First ClimateGate, now CopyGate

Talk about the gang that can't shoot straight.

First we had Climategate, the purloined emails from the British Climatic Research Unit headed by Phil Jones. The Climategate emails showed rather clearly that the top global-warming scientists were not doing science. They were doing politics, playing an inside game to discredit climate skeptics and deny them access to scholarly journals.

The Climategate controversy also exposed the evident mediocrity of the scientists engaged in climate science.

Now we have Copygate. It involves Raymond Bradley, a co-author with Michael Mann of the notorious MBH98 Hockey Stick paper that proposed a slowly declining global temperature over the last millennium followed by a sudden and unprecedented temperature rise over the last century.

Bradley complains that the Wegman Report, which critiqued the statistical methods used in MBH98, plagiarized his textbook Paleoclimatology. The argument is not that Wegman failed to reference Bradley but that he glossed whole paragraphs of Bradley's book in his recapitulation of paleoclimatology.

I know what you are saying. What's the big deal? A congressional report like the Wegman Report is bound to copy and paste stuff. It's not as if a report like that is an academic paper or book that is snitching somebody's ideas and taking credit for them.

Now there's a twist on Copygate. It turns out, according to climate critic Steve McIntyre, that Raymond Bradley copied reams of a previous book on paleoclimateology, Tree Rings and Climate by H.C. Fritts, including a number of figures.

It all backs up my growing feeling that, all too often, government-financed scientists aren't up to much.

Certainly the Hockey Stick Team really needs to accept the fact that they just aren't up to playing in the same league as Steve McIntyre.

No Compromise, Says Rush

Rush Limbaugh told the Republican elite in no uncertain terms yesterday that compromise with President Obama is not the solution.

Apparently the top Republicans are telling major donors that they will work with President Obama for a decent compromise on their differences.

Rush says: No! If top Republicans compromise on principles they will create a third party. 2010 is not 1994, says Rush:

In 1994, Americans were not out of work. Their government wasn't bankrupt. The health care system was not being dismantled... Americans were not flooding town hall meetings... There was no Tea Party movement back then. There weren't a whole lot of political protest rallies numbering in the millions. They had not produced an organic grassroots movement like the Tea Party that could, if double-crossed, create a conservative political party that would bring an abrupt end to the GOP. That was not possible in 1994.

Quite so. But I'd say that it all depends on the results on November 2. If there's a 55 seat GOP gain then we are talking compromise. If there's an 80 seat gain then we are talking major pushback. If we get to a 100 seat gain, then it is: "Mr President, the people have spoken, and they will not be denied. I'd like to compromise with you but the people demand change. Real change. They are saying: Cut the spending, cut the debt, end the bailouts. And that is what we, as the servants of the people, must do.

There's a nice little commentary on the situation here by Frank J. Fleming. You could call it a conversation about suckonomics.

AMERICANS: “So, the economy is pretty bad and there’s high employment. You think you can do something about that?”

DEMOCRATS AND OBAMA: “We can spend a trillion dollars we don’t have on pork and stuff.”

AMERICANS: “No … that’s not what we want. We’d really like you not to do that.”

DEMOCRATS: “You’re stupid. We’re doing it anyway.”

AMERICANS: “That’s not going to help us get jobs!”

DEMOCRATS: “Sure it will; millions of them … though they may be invisible. You’ll have to trust us they exist. And guess what else we’ll do: We’ll create a giant new government program to take over health care.”

AMERICANS: “That has nothing to do with jobs!”

DEMOCRATS: “We don’t care about that anymore. We really want a giant new health care program. We’re sure you’ll love it.”

AMERICANS: “Don’t pass that bill. You hear me? Absolutely do not pass that bill.”

DEMOCRATS: “Believe me; you’ll love it. It has … well, I don’t know what exactly is in the bill, but we’re sure it’s great.”

AMERICANS: “Listen to me: DO. NOT. PASS. THAT. BILL.”

When you completely ignore the American people it really sucks. And the American people have to do something about it, something that will stick in the minds of politicians for a generation or more.

The only question is, how large a GOP gain in the House will it take to get the attention of the Ruling Class?

I'd say the threshold is somewhere in the range of 80 seats.

Yes We Can -- Cut Government

President Obama is famously worrying about his fellow Americans right now. In tough times, he told the New York Times, when people are scared, "facts and science and argument does not seem to be winning the day all the time."

The trouble with a statement like that is simple. Everyone thinks they have "facts and science and argument" on their side.

The thing about the president's critics is that we believe that, especially on economic policy, the president is on the side of rabbit feet, superstition and exploded Keynesian science.

Keynesian economics says that, whenever you are in a jam the government should print money and spend more on vital infrastructure. Conservatives say that the science is in on that: it does not work. It did not work in the 1930s and it did not work in the 1970s, and it will not work now.

What is needed now is to cut wasteful government spending and get back to hard money.

Now we have three case studies, thanks to Reason, about three western governments that cut spending and got their national economies on track.

Case 1: US after WWII. Arnold Kling writes that:

Government spending plummeted by nearly two-thirds between 1945 and 1947, from $93 billion to $36.3 billion in nominal terms. [In spite of the Keynesian multiplier] GDP increased almost 10 percent during that period, from $223 billion in 1945 to $244.1 billion in 1947. This is a rare precedent of a large drop in government spending, so its economic consequences are important to understand.

Case 2: New Zealand, 1980s Maurice McTigue writes that:

The government’s share of GDP was 45 percent, unemployment was 9 percent (it would later peak at 11 percent), the top tax rate was 66 percent, and the rate of economic growth was a sluggish 2 percent.

A decade later, New Zealand had one of the most competitive economies in the developed world. The government’s share of GDP had fallen to 27 percent, unemployment was a healthy 3 percent, and the top tax rate was 30 percent. The government went from 23 years of deficits to 17 years of surpluses and repaid most of the nation’s debt.

How was it done? By privatization, reducing civil service by 66 percent(!), "eliminating capital gains taxes, inheritance taxes, luxury taxes, and excise duties," halving tax rates, reducing deductions, making government agency heads accountable, and getting people off welfare.

Case 3: Canada, 1990s. The Liberal Party cut the increase in government spending and as a result "From 1992–93 to 2000–01, Canadian spending on federal programs fell from 17.5 percent of GDP to 11.3 percent." Debt went from 68 percent of GDP to 29 percent of GDP.

The great question facing President Obama is precisely the questions of "facts, science, and argument" relating to the best economic policy for a healthy growing economy.

And frankly, Mr. President, you are on the wrong side. What these case studies show is Yes We Can deal with the problem of a huge government and sluggish growth. The only problem is that it means throwing out everything that you and the Ruling Class believe--as myth, superstition, and self-serving hypocrisy.

Obama Behind the Curve

The problem with politicians is that they instinctively want to do the wrong thing. They want to increase spending, inflate the currency, and raise taxes.

There is one occasion when this makes sense, when the politicians are merely a guerrilla group in the jungle fighting a war of liberation. The American version of this is the Revolutionary War.

OK. There's one other occasion when it makes sense. It's when the nation is threatened by another power and has to fight a war.

My point is that the natural instinct of a politician is always the instinct of the guerrilla in the jungle. He needs money, so he requisitions from the peasants in the jungle. He needs to keep his supporters fed and happy, so he spends money on them. If he can, he borrows, up to the limit of the possible.

Obviously, in normal times, a government must do the opposite. It must pay down the debt run up in the previous war and it must forsake the feeding of its supporters for the general good.

Let's express all this in a law.

The instinct of governments is to spend money on their supporters, tax the money of everyone else, and borrow to the limit. The essence of good government is retrenchment in spending, reduction in taxes, and getting out of debt.

Now we see why President Obama is now behind the curve and why the rest of his single administration will be a horror show, not just for him but the whole American people. Let's rehearse the reasons for this:

Spending. Government spending in the 2000s was excessive because the Bush administration spent about $200 billion a year on the war on terror and ran an easy money policy at the same time. After getting over the Crash of 2008 the government needed to retrench on spending. Obama had an opportunity to do this in the winter and spring of 2009 and blame the whole thing on the Republicans. Even his progressive cohorts might have bought that. Instead, he unleashed the stimulus monster, and then the health care monster. That puts him behind the curve.

Taxes. Taxes are needed to fund the national debt, that's for sure, but mostly taxes are a charge upon the income of the American people. The more you raise in taxes, the more you waste the energy of the American people. Raising taxes in the middle of a lack-luster recovery is not going to help the economy and not going to help President Obama get elected. That puts the president behind the curve.

Debt. The only reason for a government to go into debt is to finance a war. Then, of course, it must raise taxes to pay down the debt. The current game of using debt to pay for social programs, and to promise social benefits far into the future is a policy that will end in tears. It will end in government debt default through "rescheduling" and inflation. That puts the president behind the curve.

This weekend I got to read the now famous New York Times Magazine piece on "The Education of a President." It showed to me a president and his inner circle focusing on tactics instead of grand strategy. Maybe they have a grand strategy but they aren't telling. Somehow I doubt it. The chatter in the article is all about the commonplaces of liberal governance: the programs, the legislation, the issues agenda.

But we are past all that now. We are entering a new era in which the shibboleths of the last century will not serve, not at the level of grand political strategic vision nor at the ground game of getting out the vote.

It has been well said that Obama is not a socialist, not an extremist. He is just a conventional liberal with the liberal faith in administrative government as a social model. But Obama and his people, and indeed the whole of liberal America, have no clue about any other vision of government, even when the Tea Party is staring him in the face. That is why the president seems to see himself running a conventional campaign against a conventional rival.

Somehow, I don't see the presidential election of 2012 being a conventional election. Somehow I see 2012 being an election about "America isn't working and liberalism is why."