Tuesday, March 04, 2008

Catching Up on the News

It's been a while since I've blogged. I always lament when I have such gaps in posting, but they are the sad inevitable reality of having to work. There are a couple of important topics I would like to discuss. First, there seems to be further bad news for America's already crippled financial sector. And second, I want to talk about (what else) the Presidential campaign.

We'll start with the bad news, and then get to the ridiculous.

It appears that the Sovereign Wealth funds might not end up bailing Citi out of its financial mess after all. Like all investors, the Arab sheiks managing billions in oil wealth, want to make sure their investment is sound, and that in addition to the money they invest, there is enough working capital otherwise to ensure the solvency of the bank. Right now, they are having doubts. If I were them, I'd have my doubts too. In the last year, Citigroup's stock has lost more than half of its value. This is better than the poster child of Subprime Mortgages, Countrywide Financial, which has lost more than 80% of its value. But Citigroup is a much larger, more diversified company, with assets that extend into virtually every sector of the financial markets.

For this reason, Citigroup is a rather scary bellwether for the financial markets in general, and especially for banks. One of these days, America is going to realize that a lack of fiscal discipline cannot be remedied by printing more money. But I don't think we are there yet. I think we are going to need a few years of significant inflation--if not hyperinflation--to regain the age-old wisdom that you cannot spend your way to prosperity. It might take 4 years of President Obama to remember that you also cannot tax your way to prosperity either, but I hope not. Indeed, there is only one path to prosperity, and it is dug with work and paved with thrift. This is a lesson we all must re-learn from time to time, both individually and collectively.

Those of us who have recently learned such lessons individually should be sounding the collective alarm to make sure the government doesn't make the same mistake.

So that brings us back to Citigroup. What happens if the Sovereign Wealth funds don't bail the banking giant out? Well, there are a few things that we can be certain of, they likely won't be allowed to file for bankruptcy. Congress might jump in, or perhaps the Fed will keep loosening monetary policy (the kind of monetary policy that created the bubble to begin with), but America's largest financial conglomerate will not be allowed to go belly up.

Some might find solace in that fact--I do not. I have this vision of a fat man drowning cold water in the Atlantic ocean and a late stage cancer patient jumping in to save him. The outcome is apparent: both of them end up drowning. The more our ailing government tries to bail out ailing companies, the more ailing our government becomes--and the macroeconomy along with it.

Citigroup needs to learn a lesson from its mistakes--so do Countrywide and others. They should be allowed to go bust. And their high-paid executives should have to sit through every bankruptcy proceeding imaginable. So should their now-retired high paid executives. But good luck finding Angelo Mozilo--he flew the coop when things started turning South. It reminds me of the story of Calvin Coolidge's wife, who was asked why her husband was not going to run for another term in the White House in 1932 and answered "Papa smells a recession." The rest is history. So is Countrywide. Citigroup might be too--and if the private sector won't bail them out, then they should be history. The market is like the mirror--he is a cruel friend. He tells you when you are fat, even if you don't believe it. But bloated corporate bureaucracies don't like mirrors anymore than bloated government bureaucracies do. Though it seems they like clear glass even less. The problems we are facing today could have been solved a long time ago with more transparency and less rose in the color of our glass.

Well, I can't think of a better transition to discussing the Obama campaign than rose-colored glasses, so let's move on. The hype just keeps getting bigger and better. The American people, desperate for leadership and inspiration, have projected a million feelings, dispositions, and opinions onto Barack Obama. The benefit of not making any substantive policy statements is he hasn't had the chance to offend many people yet. Unless, of course you are talking about trade.

My biggest objection to both Democratic candidates at this stage in the campaign is their calls for renegotiating NAFTA and other important foreign trade agreements. Even if you ignore the economics of trade (which is hard to do considering the compelling case for more trade in any circumstance, with anybody, anytime--it is always on the whole beneficial to both sides), the diplomatic nightmare that would ensue from such a policy is disconcerting enough. In spite of the recent row over whether Obama was talking to the Canadians or not--and what their opinion is, we should be concerned about the repercussions of abandoning our trading partners--and more importantly our treaty partners.

Does anybody else remember a few years ago when George W. Bush announced we would be withdrawing from the ABM Treaty with the Soviet Union since in fact there was no longer a Soviet Union? Well the Left wing threw a fit. The move was considered a damage to America's credibility and reliability in its international treaties. Apparently achieving a protectionist economic agenda for the purpose of winning the votes of displaced workers is a viable reason to destroy our international credibility, however, since both Mr. Obama and Mrs. Clinton have advocated withdrawl from NAFTA and other important trade agreements.

I shall draw this to a close, but let us not forget the lessons of history. The last major movement toward economic closure was the period between World War I and World War II. Trading partners rarely go to war with one another. With our military strapped, our national morale and attitude toward war at a relative low point, it doesn't seem like the time to start inviting the kind of foreign aggression that can ensue during periods of economic closure.

Friday, February 22, 2008

A Requiem for the Pledge

"I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all."

In the aftermath of the Bush Administration I propose the following alteration:

"I pledge allegiance to the flag of the United States of America, and to the Empire for which it stands, one kingdom under God, indivisible, with liberty and justice for those who submit to the infringements on privacy and acquiesce to undeclared foreign wars."

In advance of the Obama Administration, I propose one further amended version:

"I pledge allegiance to the flag of the United Brotherhood of America, and to the Empire in decline for which it stands, one communal entity under a central state, with liberty for none and economic justice for the unproductive."

Perhaps I'm exaggerating a bit. But I'm not, really.

People can achieve self-actualization not through the accumulation of wealth, not through the achievement of status, not by earning a living wage, not by having health coverage, but by the unending pursuit of their Personal Legends. People can only pursue their personal legends when unhindered by force and unhindered by fraud. Government should exist to prevent these evils, not be a perpetrator of them. Yet every day federal agencies in the executive branch are perpetrators of force and our Central Bank is a perpetrator of fraud.

Through taxes, excessive regulation, and with the looming prospect of an Obama presidency, even more taxes and regulations are ahead, the Government limits and inhibits the American Dream every day by confiscating people's productivity to finance a bloated federal bureaucracy and massive transfer payments to our retirees. The Bush administration has further enhanced federal power by demagoguing the War on Terror to pass such blows to freedom as the Patriot Act. We have, wholesale, tossed privacy rights out the window--and with a Socialist about to become President, that loss of privacy will be transformed into a further loss of property.

On the fraud side, the Federal Reserve cranks up the electronic printing presses every day and gigs the American people with the hidden tax of inflation. With our banking sector teetering on the edge of a precipitous collapse, we are told that everything is OK--the Fed will save us. But they will only provide the illusion of salvation. All the while we wonder why milk is so expensive, and why the dollar is at record lows against foreign currencies.

This of course is not the only fraud perpetrated by the federal government. For one, nobody wants to talk about (much less deal with) the complete insolvency of Medicare and Social Security, which we are promised will be there (even though the facts clearly do not support such assertions). We were defrauded about Weapons of Mass Destruction in Iraq. We have been defrauded about the threats of so-called man-caused "Global Warming" while being asked to "invest" in green energy (like ethanol, which is starving the Third World and sucking our water reservoirs dry).

The government wants to pacify us by writing us all checks. Like the Soviet Union pacified its oppressed population with new washing machines and nylons, the American government seems to be so divorced from an honest ethic that whatever it takes to make people think they are helping is all that really needs to be done. Dealing with our problems, after all, requires a message that isn't nearly as happy or optimistic as Obama's hope-change-future triage. And who wants to be told that we have to cut back or face fiscal destruction?

In Rudyard Kipling's poem "The Gods of the Copybook Headings," the "Gods of the Marketplace" represent what is popular, where the Gods of the Copybook Headings represent wisdom and reality. I quote this poem frequently. It is by far the most wisdom-filled piece of verse I have ever read. I know it by heart. Here is the poem. It sums up my case against Obama and the rest of the status quo in the US government (which by the way, he is just more of the same). I will keep quoting it over and over until things change or it is too late:

As I pass through my incarnations, in every age and race,
I make my proper prostrations to the Gods of the Marketplace.
Peering through reverent fingers, I watch them flourish and fall,
But the Gods of the Copybook Headings, I notice outlast them all.

We were living in trees when they met us, and they showed us each in turn,
That water would certainly wet us, and fire would certainly burn.
But we found them lacking in uplift, vision and breadth of mind,
So we left them to teach the gorillas and we followed the march of Mankind.

We moved as the spirit listed, they never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Marketplace.
But they aways caught up with our progress, and presently word would come,
That a tribe had been wiped off its icefield, or the lights had gone out in Rome.

With the hopes that our world was built on, they were utterly out of touch:
They denied that the moon was Stilton; they denied she was even Dutch.
They denied that wishes were horses, they denied that pigs had wings,
So we followed the Gods of the Market who promised these wonderful things.

When the Cambrian Measures were forming, we were promised perpetual peace,
They swore if we gave up our weapons, that the wars of the tribes would cease.
But when we disarmed they sold us, and delivered us bound to our foe,
And the Gods of the Copybook Headings, said "stick to the devil you know."

In the first Feminian Sandstones, we were promised the fuller life,
Which started by loving our neighbor, and ended by loving his wife,
Til our women had no more children, and the men lost reason and faith,
And the Gods of the Copybook Headings said "The wages of sin is death."

In the Carboniferous Epoch, we were promised abundance for all,
By robbing selective Peter to pay for collective Paul.
And though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said "if you don't work, you'll die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew,
And the hearts of the meanest were humbled, and began to believe it was true,
That all is not gold that glitters, and two and two make four,
And the Gods of the Copybook Headings limped up to explain it once more:

As it will be in the future, it was at the birth of man,
There are only four things certain since social progress began:
That the dog returns to his vomit, and the sow returns to her mire,
And the burnt fool's bandaged finger goes wobbling back to the fire.

And as soon as this is accomplished and the brave new world begins,
When all men are paid for existing, and no man must pay for his sins;
As surely as water will wet us, as surely as fire will burn,
The Gods of the Copybook Headings with terror and slaughter return.

Friday, February 15, 2008

The Imperial Presidency

Robert Nisbet, known for being "the only conservative sociologist" wrote that "If necessity is the mother of all invention, war is the mother of all necessity." As true as it is in science it is even more true in the politics. Throughout the 20th Century, and now into the 21st Century, the presidents of the United States have utilized economic unrest and war to enhance the power of the presidency. Although this is not new (look at the massive usurpation of power by President Lincoln during the Civil War), it has been particularly pronounced and dishearteningly permanent in the 20th Century and beyond.

Before we go further, I need to make a couple of points. I am not a Conservative, in the modern sense. Neither am I a Liberal, or even a Libertarian. I don't even consider myself a "Classical Liberal." I have come to firmly reject ideological labels as belying the complexities of political questions. I believe in Responsible Liberty and Responsible Government. The People should not abuse their liberty, and the Government should not abuse its power. It is my view that the eternal struggle in politics is between these two extremities. Perhaps my political philosophy could be boiled down to two quotations:

"Power corrupts and absolute power corrupts absolutely." --George Orwell

"We have no government armed with power capable of contending with human passions unbridled by morality and religion. Avarice, ambition, revenge, or gallantry would break the strongest cords of our constitution as a whale goes through a net." --John Adams

And so we see how we have gotten to the point where we are today, bringing me to the topic at-hand: the rise and ill effects of the Imperial Presidency.

I cannot possibly discuss this topic without being reminded of the account of Israel demanding that the aging Old Testament prophet and judge Samuel appoint them a king to reign over them. The following is the story from Chapter 8 of the first book of Samuel:

When Samuel grew old, he appointed his sons as judges for Israel. The name of his firstborn was Joel and the name of his second was Abijah, and they served at Beersheba. But his sons did not walk in his ways. They turned aside after dishonest gain and accepted bribes and perverted justice.

So all the elders of Israel gathered together and came to Samuel at Ramah. They said to him, "You are old, and your sons do not walk in your ways; now appoint a king to lead us, such as all the other nations have."

But when they said, "Give us a king to lead us," this displeased Samuel; so he prayed to the LORD. And the LORD told him: "Listen to all that the people are saying to you; it is not you they have rejected, but they have rejected me as their king. As they have done from the day I brought them up out of Egypt until this day, forsaking me and serving other gods, so they are doing to you. Now listen to them; but warn them solemnly and let them know what the king who will reign over them will do."

Samuel told all the words of the LORD to the people who were asking him for a king. He said, "This is what the king who will reign over you will do: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. He will take your daughters to be perfumers and cooks and bakers. He will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves. When that day comes, you will cry out for relief from the king you have chosen, and the LORD will not answer you in that day."

But the people refused to listen to Samuel. "No!" they said. "We want a king over us. 20 Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles."

When Samuel heard all that the people said, he repeated it before the LORD. The LORD answered, "Listen to them and give them a king."
To the writer of the book of Samuel, he thought it was an atrocity for the King to require a tax of 10%. My how perspectives have changed. America has more or less followed this same path. The framers of the Constitution feared a King. Washington himself exercised self-restraint, turning down the opportunity of a third term because he did not believe America should become a monarchy. This unwritten rule of honor perpetuated throughout the course of American history. It almost ended with Woodrow Wilson, but due to a massive stroke, he was physically unable to campaign for a third term. And it is going back to Wilson that we trace the origins of the Imperial Presidency.

Wilson was the foreshadowing of FDR. A temporary glimpse into the full power a President could muster, both in terms of usurped power and in terms of influence. It should not surprise us that it was during World War I that Wilson was able to make these strides. The Great Depression and World War II brought with them (after a brief hiatus during the inter-war period) even more unprecedented usurpations of power by the federal government, concentrated in the executive branch. Thus began the great emasculation of the People's House, and Congress in general. Rather than the Executive being the moderating influence on the agenda of the Congress, the Congress has become nothing more than the President's privy council, occasionally changing hands to stop the agenda of the President.

Clearly unintended (though not unanticipated) by the Founders, who gave Congress Article 1 of the Constitution to show forth the primacy of the branch of government closest to the people, the President was supposed to be the Head of State, oversee the implementation of the laws passed by Congress, and occasionally veto harmful statutes and excessive spending bills that could result from the excessive influence of "faction" in the Congress.

Instead, what we have today is a Presidency that defines the national agenda, draws up the Budget and submits it to Congress (when clearly this was intended to be the other way around), a President who is in in many cases the only political figure the average figure can even name. The President now has the de facto authority to wage undeclared wars, and invade the privacy of the average American in the name of "national security." We seem to look to the President to "fix" the economy when times are bad, to make sure income is distributed "fairly" and to punish evil corporations who are the cause of all of our individual financial woes.

The problems inherent in the imperial presidency will not pass with the change of the individual in the White House. Nay, I fear President Obama will yield the powers of the imperial presidency in new and destructive ways. And that is the problem with the concentration of power. New people merely find new uses (and abuses) for it. Indeed, the concentration of power into the hands of a single individual gives rise to a most dangerous phenomenon: messianic candidates. It is rather easy for somebody to promise deliverance from bondage at the hands of Pharaoh. It is another thing for them to part the Red Sea and make good on the promise. I would probably put more trust in Senator Obama's capacity to part the Red Sea, though, than to unite the ever fractious American population around a decidedly socialist--and bordering on Marxist agenda.

It is clear that Senator Obama likes the imperial presidency--you don't hear him promising a reduction of Government's influence over the average person, but rather a different kind of influence. This might unify a segment of the populous, but that is a unity that is more likely to be toxic than healing. Workers' revolts in the Third World are a unity of sorts, but the unity is against a common foe, rather than in favor of a common purpose. We are treading every so dangerously close to the same kind of unity if we buy into the well-veiled class warfare rhetoric of the Obama campaign. He waxes eloquent about the greatness of America, in much the same way that Ronald Reagan did. He is appealing to the latent patriotic sentiments of the left wing of America who have spent so long being unpatriotic because they felt that patriotism was being abused to prosecute an unjust war. Now that same last refuge of the scoundrel is being utilized to prosecute an unjust war against prosperity, success, and entrepreneurship with the promise of crushing tax increases, massive government spending (and crowding-out), and more entitlement programs than you could even imagine.

That patriotism consists of the confiscation of the assets of productive Americans is merely the other side of that dubious coin whose opposite number claims that patriotism consists in the destruction of privacy rights and the torture of individuals thought to have knowledge of terrorist plots. Both are a repudiation of human dignity and equality, and both are equally repugnant to the Constitutional system America is supposedly predicated upon.

In the days when I was a Socially Conservative Republican, my liberal friends used to argue that "you can't legislate morality." Yet as I hear the arguments of Senator Obama, there is a strikingly moral tenor when he talks about his platform of Robin Hood economics. It is apparently immoral for companies to make profits. Although I would argue that true justice exists when all people have their basic needs met, I believe that it is the responsibility of every individual to make their own contribution to justice than to impose justice through the ballot box. Indeed, if all of the individuals spending their time and energy campaigning for Leftwing candidates instead spent their time starting a business and amassing a fortune that they could dole out to those who they perceived were in need, then we would have a much fairer and more just society.

But instead, these supposed proponents of social justice clamor for a messiah who will by the stroke of the pen cause everything to be better. This is not only naive, but also very dangerous. During the entirety of the Bush administration, my Republican friends chastised me for being "soft on terror" because I opposed many of the invasions of privacy rights (like the Patriot Act), the power of the President with respect to undeclared wars, etc. But as I always replied "Just remember that although you think Bush wields these powers justly, you will not think so when a Democrat occupies the White House." And that is where we are today. Faced with the prospect of an ideological idealist whose principles are more aligned with Lenin than Lincoln, all of those who wanted to be tough on Islamic terror will be regretting the unintended consequences they wrought when we are presented with the awesome might of governmental terror.

The solution to this dire problem is not to elect the right President, but to diminish the President's usurped powers. The solution is that the People's House be more representative, more assertive, and take back the right to set the nation's agenda. This is what Madsion envisioned, and it is what makes us who we are. The 20th Century legacy of the Imperial President, if not supplanted by a resurgence of democracy, will undoubtedly be succeeded by an age of decline.

Monday, February 11, 2008

Looking for Change in All the Wrong Places

Since World War II, five Presidents were elected to bring change to the country and particularly to Washington: Kennedy, Carter, Reagan, Clinton, and Bush II. They all ran as some sort of an outsider. Washington is still the same; in fact, it's gotten worse. A lot worse. Now we have another change candidate promising us the moon--a different political culture in Washington, an end to all of our problems. "America, our time is now," is the vacuous call to action of Illinois Senator Barack Obama as the latest in a long history of failed reformers who have run for, and often won, the Presidency.

Yet we continue our long march to the fate of Rome and the British Empire. Our once hallowed halls of Congress are filled with charlatans and snake oil salesmen and in many cases good 'ol fashioned crooks. Our bureaucracy serves our people less and less while serving themselves more and more. That bureaucracy rivals that of the ancient civilizations, whose rulers padded his payrolls with minions to keep the masses in line. We face bankruptcy both individually and as a nation. And as we look to the East, we find not a savior, but two looming rivals in China and India.

The globe cannot ignore America, but we are no longer the steadfast father-figure of the world, helping the cause of justice, but rather the aging leader making disastrous mistakes in his senility, ignoring calls to step aside, and trying to just enjoy the little time he has left. Knowing that creditors can't call him in the grave, America keeps running up the credit card tab, and hoping it doesn't max out before he dies.

In the face of these problems we are now being asked by many of our peers to trust Sen. Barack Obama to save us. Now I have been pretty tough on Sen. Obama, and I think for good reason. I don't have anything against him personally--and in fact, I think he's probably quite well-intentioned. I loathe cliches, so I will spare my reader the line about the road to hell and good intentions, but cliches become overused because they are true.

The problem is not so much with Senator Obama himself, but with the people who support Senator Obama. I'm not sure I trust Ted Kennedy to lead the charge for reform in the Senate chamber. It's like running on the platform of reform when you're the incumbent.

But even if Senator Obama were the rogue, a veritable Jimmy Stewart character going to Washington naive and taking on the the special interests, I wouldn't give him much of a chance of success. I've read through his platform--the 64 page PDF document where he promises everything from ending special interest influence in politics to magically making America healthy to miraculously solving our economic woes while raising taxes and closing off trade with foreign nations. There's just one problem for Mr. Obama: if he gets elected, he will be pretty much alone. He'll be even more alone after the first 100 days.

Here's what will happen if he wins. All presidents like to lead with the sexy elements of the platform, and especially the elements they spent the most time talking about on the campaign. Now I've watched a lot of Obama speeches, I've listened to him in the debate, and when he isn't waxing poetic about hope and change and all of that empty nonsense, he's demanding we get out of Iraq, raise payroll taxes, eliminate the Bush tax cuts, and implement national health insurance.

If he doesn't immediately withdraw troops from Iraq (the only thing he can do without Congressional cooperation), his honeymoon will be immediately over with the radical left, which has comprised his earliest and most fervent supporters. If he does withdraw the troops immediately he will alienate at least 40% of the people who strongly oppose even a timetable for withdrawl, much less an immediate withdrawl. The reality is that the public is still radically split on the issue of the war, and he is doomed one way or the other on this issue within his first 100 days, either by acting or failing to act. I bet he does withdraw the troops. Jimmy Carter was our Dovish tragedy; Obama will be our Dovish farce.

On the issue of taxes, Obama stands to incite, perhaps for the first time in modern history, the worst class warfare we have seen. His position on payroll taxes and corporate income tax will not only offend, but economically crush middle and upper-middle income Americans--the small business owners who employ vast numbers of people in this country. Layoffs and downsizing will become even more commonplace as employers are unable to keep on those marginal employees . At that point, he will at least have lost every moderate Republican and many independents remaining after his move on Iraq.

Health Care Reform will subsequently languish in Congress and likely die a filibuster's death in the Senate, or more likely in committee. With Obama's supporters disheartened and deflated, and everybody else infuriated, the hot air that has filled his balloon so far will not lift anybody up, and it will be back to business as usual. Just as it was back to business as usually after unprecedented unity behind George W. Bush in 2001. The cold hard reality of Washington politics will dash the dreams of another generation of dreamers.

But this is not a reason to lose hope. Rather, it is a reason to stop misplacing hope. Rather than looking for one man to bring about change, and rather than hoping that it will all happen in one fell swoop, those who truly want American politics to be fairer, more representative, and more responsive, must resolve to be an agent of change, and en masse reject the people who hold, and should hold, the real power in Washington: Congress.

The Republicans had their chance to change Washington, and they blew it. Now the Democrats are taking their turn, and it is a dismal failure (look at their record settingly low approval rating). If insanity is doing the same thing over and over while expecting a different outcome, then the American voter is clinically crazy. Something has to change on Capitol Hill if there is to be change in our system. But don't look for it to come from Nancy Pelosi and Ted Kennedy or John Boehner and Mitch McConnell.

Sunday, February 03, 2008

A Lesson from Childhood: There is No Such Thing as Magic

Perhaps the average voter has been reading too much Harry Potter as of late. For some unknown reason I decided to give myself heartburn a few minutes ago by reading user comments to an online New York Times article about Maria Shriver's endorsement of Barack Obama. I shall repost a few of them so you get a flavor of why I have this wretched feeling of unease:

I am still awed and thunderstruck after watching the rally in Los Angeles on the UCLA campus I know so well. OBAMA is certainly destiny’s child — I saw him in Albuquerque two days ago and he had that anointed glow.

— Posted by lotario castillo

All I can say is that when she showed up, people were like “woah”.

— Posted by KD

That rally was AWSOME !!!

— Posted by Fast Eddie

An historical event today! California is on fire as is America. Incredible women and role models, all of them. I was moved to tears and feel hope for my daughters, America’s daughters.

— Posted by Jen, St. Paul, MN

Gosh. I hope this helps with the women voters in California ! Oprah, Caroline Kennedy - all those women governors from the middle of the country and senators who’ve endorsed Obama. If this doesn’t win some women voters, then I don’t think there’s anything left to do in this short amount of time.

I have seen anecdotal evidence from canvassing for Obama in the northeast for the last month that African American women are now overwhelmingly supporting Obama. I just got back from knocking on doors for Obama in Bridgeport, Connecticut, where I met African American women in their late 80s and 90s who had been torn between Clinton and Obama but have decided to vote for Obama. They told me that they wanted to be part of “history.” It brought tears to my eyes.

— Posted by Sally

What a fabulous election. At last someone we can vote for without holding our noses. Go Demos!!!
Go Obama!!!

— Posted by Anita Lefkort

One inspiring speaker after another, shown only on CSPAN as far as I can tell. Too bad, because their speeches were some of the best of the campaign (aside from those given by Obama himself).

Maria’s right, this is “a moment” for us all– a time in history when we can believe again in the American dream, transcend the partisan divide, and restore our image around the world.

Yes we can!

— Posted by Karen S

I was watching and the whole rally was powerful. When I saw Maria Shriver come in I knew Barack is going to be our next president.

“As California goes, so does the country” I believe that.

Barack in ‘08

— Posted by Bry


OK....enough of that. Everybody is so caught up in the inspirational aspects of the Obama campaign. "Destiny's child"? I'm sorry but it's starting to go a bit far--the Obamaniacs need to chill out and ask: Senator Obama, what do you actually believe? And what kind of policy are you going to implement to help remedy the most important fiscal issues facing this country? How are you going to help stave off the worst financial disaster in 100 years? Or perhaps more importantly...do you even realize we are facing the greatest monetary crisis in America's history?

I'm afraid we wouldn't really get any answers if Obama were put on the spot. We would get rhetoric about what's wrong with Washington and how American can have hope again. I personally have little hope in the face of a prospective President of the United States who relies on vapid rhetoric, his good looks, and his speaking skills to win a national election. I know that American likes glitz and glamor, but it has to be backed up with substance if we are to continue to have hope.

There is no worse hope than a false hope, and that is what Obama represents: the false hope of a return to Camelot, the false hope of unity, the false hope of change. It is laughable to me that people are so enamored with this man. He is just another in a long line of charlatans who have tried to capture the nation's attention with a pretty speech.

There is no doubt America is in desperate need of an articulate and charismatic leader. Unfortunately Obama seems to be the person filling that void. Yet, he is not really a leader. He is not inspiring anybody on the Right to unity, and we can expect one of the most bitterly divided elections in America's history--yet again. The problem is that Obama wants to push his radical socialist, anti-market agenda by convincing half of the country to vote for him.

What we really need is a leader who can get the entire country behind a non-ideological pragmatic policy platform that is neither Left nor Right, but will move America in the direction of restoration. Sadly, there isn't one right now.

Thursday, January 31, 2008

Bill's Big Blunder

Bill Clinton, not known for gaffes, made a statement today that will have repercussions perhaps causing the ultimate destruction of his wife's campaign for the White House. In a speech in Denver while campaigning for Hillary, he said:

"We just have to slow down our economy and cut back our greenhouse gas emissions 'cause we have to save the planet for our grandchildren."

There will be a particular contingent on the Left that will laud the former President's bold statement. The people who have become followers of the Green Faith, whose leader is Pope Al Gore will no doubt be lured more towards the Clintons. Unfortunately for Billary, most Americans do not fit into this category, and are more concerned about how they are going to pay their bills and save for retirement than whether or not the dubious claims about Climate Change are followed by stout action to stave off some supposed global catastrophe.

It will be interesting to see how Hillary responds to questions about Bill's comments. It may decide her fate--at least in the general election.

Monday, January 28, 2008

John Fitzgerald Obama?



I saw this picture on the Web earlier and thought it was rather interesting. I am not so sure if Obama really has that much in common with JFK or if people just wish it were the case. After all, it has been decades since the Left had their love affair with Robert and John Kennedy. The old middle aged hippies who came of age in the Kennedy Era have joined forces with the young wanna-be 60s hippies who have gotten their kicks opposing the Iraq War as if it were Vietnam II.

Without a doubt, many youthful Republicans had a similar experience with George W. Bush, as if they were falsely nostalgic for Ronald Reagan. But the important thing to remember about 2nd Comings is that unless they are 2nd Comings of the same person, then they aren't the same person, and nobody has ever been the 2nd Coming of somebody else who ended up being that great.

Bush was supposed to be Reagan. He wasn't.

Clinton was supposed to be JFK II. He wasn't.

Now Obama is supposed to be the return of Camelot--but he won't be. In fact, we really don't know much about what he *will* be, and that's what should be concerning to Democrats (many of whom seem prepared to run a candidate who has never had a significantly contested general election campaign against a Republican in his career), and to the American public.

As America's attitude towards Party Politics evolves, I believe many Americans residing in the non-partisan center (which are now a third of all Americans) will begin to look at the two parties' candidates and make determinations about whether or not they trust those parties to select the right person for the job in their primaries. If Obama is elected and proves to be a disaster, then the Democrats will pay dearly both in the mid-term elections in 2010 and especially in the 2012 Presidential election and beyond.

The law of unintended consequences seems to have greater caution against an unknown like Obama than against a very known quantity like Hillary Clinton. Since the end of the World War II era, the Republican Party has held the White House for 36 years, the Democratic Party for 20. Bill Clinton was the only Democrat during this time to be elected to two full terms, whereas Eisenhower, Nixon, Reagan, and George W. Bush were elected to two full terms on the Republican side. This is partially because of the disastrous presidencies of Lyndon Johnson (especially the Vietnam War) and Jimmy Carter (economic policy and extreme weakness in foreign policy), who seemed to have marred their parties' future chances. Even Watergate wasn't enough for the Democrats to convince the American public that it belonged in the White House for very long.

The Democrats have done themselves no favors. They have nominated a pacifist (McGovern), an idiot (Carter), a tax-happy wonk (Mondale), and joke (Dukakis), a bore (Gore), and a gold-digging, botox-injecting Vet who betrayed his fellow sailors (Kerry). Are they really ready to nominate an untested, inexperienced law professor from Chicago just because he talks pretty?

The damage that could be done to the Democratic Party is perhaps greater than could be done to the country if Obama is nominated (and especially elected). If he is really terrible, the country will put another party in charge of Congress (whether it is the Republicans or an emergent 3rd party remains to be seen), and he will be immobilized for the last 2 years of his term, and then like Jimmy Carter he will lose in a landslide, and the Republicans might be back in power for another decade or more.

In the coming days, this blog will examine, in-depth, the policy statements and claims made by Obama on his website, and see if the country really knows what its getting into if it decides to elect him as President.

The Long Tail Promotes Better Art: Why We Should Reject Hollywood Once and For All

I read an excellent letter letter to the editor in Salon about the dumbing down of Hollywood. The letter makes an excellent point: Hollywood's increased focus on appealing to global market "blockbusters" has caused a dramatic increase in simplification of the films. The letter concludes brilliantly:

One doesn't succeed in this marketplace of ideas and entertainment by being simplistic and going for the greatest common denominator, but by finding your niche, exploiting it, and celebrating whatever you have that is fresh and different from everyone else. Seen from that angle, the fact that the Hollywood movie machine, in its relentless quest to maximize profits, is dumbing down so as to extricate the greatest profit from the greatest number, is just another signal of the long-term irrelevance and ultimate failure of a business model whose moment in the sun will soon be over.


The future of entertainment is in the Long Tail--appealing to a niche with thoughtful, provocative entertainment value. On occasion something will catch the eye of the masses and become a blockbuster hit. That's how it used to be. But the focus on the blockbuster has declined as a viable business model because the blockbusters became more about their hype than about their quality. With the growth of distribution of content over the Web, and the economies of scale now available in Web distribution, the Long Tail model will not only continue to make sense for distribution, but also for creation.

This isn't good news for the people who make millions promoting movies like "Spiderman 3" and other filth that passes for entertainment these days, but good riddance to traditional marketing agencies. Go get a real job.

"Low budget" will not longer be an epithet, but a badge of honor, and the new form of blockbuster--the one that naturally arises from genuine quality and popularity, will take hold. Few and far between, but truly enriching--like The Iliad and the Odyssey of old.

Supply & Demand at Work: Oil Slides to 3-Month Low, Expected to Go Lower

The cooling economy is sending oil prices lower, and speculators are backing out of their futures and options contracts. As a result, oil prices have declined to $85 per barrel, and they are expected to go lower. Although the long-term issues with oil supply and the increase of demand from India and China require attention, the Chicken Littles of the Environmental Movement who have predicted that "the end of oil" is nigh seem to have been wrong.

The moral of today's story is that the forces of Supply & Demand actually work. Without government intervention, the price of oil has declined. Why? Because prices outpaced demand. The buyers and speculators took note and began to sell. Insofar as oil has been very slightly responsible for the inflationary pressures in the economy, they will now back off a bit. This will have a positive effect on the rest of the economy as well. Unfortunately in our instant gratification, consumerist culture that is entirely devoid of patience, the people clamor for government action before the markets have time to adjust, and in the process they make the problems even worse.

We will learn our lesson one day...

Sunday, January 27, 2008

Losing Our Back Yard: Why the Bush Administration has Failed in Latin America

Little commentary is needed. The Marxist-Socialist threat in Latin America has returned. Hugo Chavez has capitalized on the ineptitude of this Administration's foreign policy, especially the War and the mishandling of US-Latin American relations. These sorts of moves will have tremendous ripple effects on our economy as countries become convinced of our instability. We need leadership in the White House to shore up our economic situation, not just through national policy, but through national leadership: the kind of leadership that inspires people to conserve rather than consume, to invest rather than spend, and to be responsible stewards of their monetary resources.

Read the details:

Chavez pushes for Latin American withdrawal of Dollar Reserves

Strange Change: The Establishment Votes for Reform?

For all of you Obama fans out there, clamoring for change and completely enthralled with the charisma of Barack Obama, I entreat you to consider something. Today, Ted Kennedy endorsed Obama. See for yourself. For somebody who talks about how messed up Washington is, Obama sure has some entrenched establishment figures endorsing him (Ted Kennedy and Patrick Leahy for example).

It reminds me of the scene in O Brother Where Art Thou? when Governor Pappy O'Daniel is sitting in a restaurant with his son and two advisers. The dialog goes like this:

Pappy O"Daniel: "We need a shot in the arm. You hear me boys? In the god-damn arm! Election held tomorrw, that son of bitch Stokes would win it in a walk!"
Junior O'Daniel: "Well' he's the reform candidate, Daddy."
Pappy O"Daniel: "Yeah."
Junior O'Daniel: "A lot of people like that reform. Maybe we should get us some."
Pappy O"Daniel: "Reform? Reform? I'll reform you, you soft-headed son of a bitch. How we gonna run reform when we're the damn incumbent? Is that the best idea you boys can come up with? Reform?! Weepin' jesus on the cross. That's it! You may as well start drafting my concession speech right now."

So Obama wants reform, but he is pointing to all of the "experienced" people who support him...what exactly do you think you're going to get when he has to go pay the piper after the election? Does America really want a President who is indebted to Ted Kennedy? This should be a sign to the Democrats that Obama is the wrong person for the nomination. After all, Ted Kennedy also endorsed John Kerry in 2004.

SmugMug: The Best Photo Utility on the Web

I don't frequently review products, but I have started exploring a lot of the new tools available in the social computing space and I am absolutely in love with SmugMug. It is the most elegantly-designed, easy-to-use photo utility for sharing pictures on the Internet. If you are a Mac user, you are going to love "MacDaddy," which allows you to rapidly upload photos in the simplest, fewest steps method I have seen to date to get pictures from your iPhoto to the Web. They have a similar tool for Windows users.

The site, which requires a small yearly subscription, is completely ad-free.

Everybody should go try out a 14 day trial today.

SmugMug

Barack's Pie in the Sky and Romney's Delusion

The Romney Delusion

Mitt Romney praises Bush, draws inspiration from Bush Sr. and Reagan, yet in 1994 when he was running against Ted Kennedy, he said he didn't support the policies of Reagan-Bush. See for yourself:



Courting the Republican base (the 30% of people in America who are blinded enough by their partisanship to give the President a positive approval rating), Romney has said whatever he thought he needed to say to prove that he is a real conservative. He touts his business experience and his experience as governor of Massachusetts as proof that he can handle the nation's economic problems, yet he endorses the Keynsian economic policies of this Administration that have thrust us into the most substantive inflationary economy since the Carter years.

Unfortunately, Romney doesn't realize that every time he says nice things about George W. Bush the Democrats are saving those videos, and all they will have to do in the general election is re-play Romney's own words, in debates and on the stump. No commentary will even be needed. Romney may be helping solidify the nomination by praising Bush, but it will be hard to run away from those comments in a few months. He has put himself into a precarious position--one that even his pomade and sweet-talking Mormon fakeness won't be able to get him out of.

At this point, the Republicans need to just suck it up and vote for McCain. He's not the second coming of Bob Dole...he's not a lot better, but he could be a lot worse.

Pie in the Sky: Barack's Naivete

Barack Obama's vapid rhetoric never ceases to dazzle the fat-minded masses. It also never ceases to nauseate me. He may have the delivery skills of Martin Luther King, but he doesn't have the substance.

"It's not about rich versus poor, young versus old and it's not about black versus white. It's about the past versus the future," Mr. Obama told the crowd that chanted, "Race doesn't matter."

"We are up against conventional thinking that says your ability to lead as president comes from longevity in Washington or proximity to the White House. But we know that real leadership is about candor, and judgment, and the ability to rally Americans from all walks of life around a common purpose — a higher purpose."

The trouble with Mr. Obama is that he has failed to define what that higher purpose is, or how we would get there. He has mentioned repealing the tax cuts. He has discussed massively raising social security taxes. And he has mentioned universal health care, but only in vague and undefined terms. If he is going to use such grandiose rhetoric to describe what his Presidency would be like, then he must explicate precisely how he intends to achieve that dream. Otherwise it is just more empty promises.

George W. Bush and Bill Clinton both ran on "changing Washington." So did Ronald Reagan and Jimmy Carter. They were the outsiders--the Governors who knew how to run a good state and thought they could change Washington. Yet they didn't change Washington. They didn't change it in tone or policy. The American train continues towards the inevitable cliff, and it has only gained in momentum.

No one person can change Washington. In fact, the only way to change Washington is to fire Washington--and only the American people can do that. In order for things to truly change, we must reject the stalemate that has emerged as a result of the Two Party System, and we must get a new Congress. That is the only way to change Washington--retake the people's house, send the pork barrel Senators home, and start afresh. 1994 was an attempt to do just this, but what happened is that in the aftermath of Newt Gingrich's departure, the Establishment came back and Dennis Hastert was annointed Speaker. As if to hearken back to George Orwell's classic novel Animal Farm, Hastert taught the pigs to sleep in human beds and to walk on two legs. And then Jack Abramoff was exposed--and Enron collapsed--and the War brought the lament of the Republican Establishment to a fever pitch and in 2006 the people said no more. So they put the Democrat Establishment back into power and they are equally (and by most measures more) unhappy with Congress now.

America doesn't need any more rhetoric--we don't need any more good speeches. What we need is good policy, and we need it fast. The cliff gets more inevitable by the day.

Saturday, January 26, 2008

George W. Bush, the Republican Jimmy Carter

Marx once said "History repeats itself: the first time as tragedy, the second time as farce." As we are now reaching the twilight of the George W. Bush administration, an administration I (regrettably) supported not once, but twice, on the promise of less government, controlled spending, and lower taxes (and thrice burned--inflation has more than wiped out the tax cuts), I have come to a rather depressing conclusion: George W. Bush is the Republican Jimmy Carter.

Let's follow the historical comparison (at least as far as it can take us). Richard Nixon was a wildly popular president when he was first elected. He was elected and then re-elected in Electoral College landslides. So was Bill Clinton. Richard Nixon was a phenomenal diplomat and foreign policy President. So was Bill Clinton. Nixon's problem was his arrogance--so was Clinton's. And both Nixon and Clinton got themselves into scandals that more or less completely wounded them (and their successors) irrevocably. Both men regained popularity and likability after being out of office (though it has not taken Clinton as long as it took Nixon). Al Gore was the Democrat Gerald Ford--he stood by the scandal-ridden President and so calls for change in the name of "honest" government seemed to stick. Both men lost their attempts to win a Presidential election.

Enter Jimmy Carter. Affable Southern Governor, devout Christian, not the most charismatic or articulate speaker, and completely devoid of judgment and common sense during his presidency. He wrecked the economy with bad policy, perpetuated foreign policy disasters (especially in the Middle East), and was a laughing stock in the international community during his presidency. Nobody took him seriously. This will be the legacy of George W. Bush. Jimmy Carter's foreign policy was inept because he was too weak, George Bush's because he tried to be too strong.

(Oh...I forgot to mention...they both took a beautiful opportunity to rebuild their party after almost a decade of opposite party rule, and ruined it.)

Peggy Noonan wrote yesterday in the Wall Street Journal that George W. Bush destroyed the Republican Party. I concur. But he did something worse--he contributed to the further destruction of America. He accomplished this killing of two birds with bad policy--on all fronts. As I reflect on his record of Keynsian economic policy, complete lack of courage or character on the nation's real fiscal crisis (the unfunded liabilities in Social Security and Medicare), and a war policy that has befuddled strategists, tacticians, and pundits on both sides, I can only conclude that the man simply didn't have it in him to be President. He was elected twice as a lesser of two evils. These sorts of people rarely turn out to be great.

Now we face a national debt that is nearly double what it was just 8 years ago, we have a budget deficit equal to what the surplus was 8 years ago, the unfunded liability crisis has increased by almost 50%, and our educational system and national infrastructure have been all but ignored. Our foreign policy is in shambles, and our diplomatic or "soft" power is diminished to its lowest point since the Vietnam War.

George W. Bush ran as the Second Coming of Reagan, but he was not a political Christ, but rather a political Antichrist. He was not the Second Coming of Reagan, he was the Second Coming of Jimmy Carter. He betrayed the Conservative-Libertarian base that elected him, and worse, he destroyed the Republican Party's credibility on both economics and national security--just as Jimmy Carter did in the 1970s.

Fortunately for us, George W. Bush will not be on the Ballot in November. But he has left a tall order for the Republican nominee--run away from the last 8 years and try to convince America that the Republican Party is in fact not the party of George W. Bush. I do not think this is an achievable goal.

The silver lining for those who don't want a Democratic President is that the Democrats are going to nominate one of the two most unelectable (Obama for his lack of experience, Hillary *because* of her experience) candidates in modern history. John McCain *could* beat either of them, but it will be another 50-50 election--2000 all over again, with probably not one but ten Floridas.

The nation will continue to be divided, and Washington will continue to fiddle while America burns.

"This is the way the world ends.
This is the way the world ends.
This is the way the world ends.
Not with a bang but a whimper."
-T.S. Eliot

Saturday, January 12, 2008

What Would Reagan Do? Or Why Rudy and Romney Don't Get Foreign Policy

If you have been paying attention to the Republican presidential primary debates, you will notice that Ronald Reagan's name has been invoked many times, almost in the manner of a deity. There is this clamor to be like Ronald Reagan in such a way as to hearken one's mind to religious comparisons--potential successors to a deceased prophet trying to out-do even the prophet himself. This of course is why all Calvinists are more rigid than Calvin himself, why all Marxists are more radical than Marx, Kantians more skeptical than Kant, and so on.

Rudy and Romney like to invoke the name of Reagan perhaps more than anybody--perhaps because they are the candidates who least resemble him, and therefore they are a bit self conscious. (I find this is also true of Christians...the ones who find it necessary to wear it on their sleeve all the time are most usually the ones who least resemble both the life and teachings of Christ himself).

For some reason there is a myth amongst Republicans that Ronald Reagan was this great war hawk. Actually, the opposite is true. Reagan believed in "peace through strength." That is, having a military large enough that it never had to be used. This is dramatic contrast with Rudy and Romney, who are saber-rattlers extraordinaire. Rudy is calling for massive increases in the size of the U.S. Military--a 50% increase in personnel, a build up to a 300-ship navy, and so on, but simultaneously calling for immediate military action against Iran. Perhaps the brilliance of Reagan's foreign policy is that he adapted Mark Twain's old adage "'Tis better to remain silent and be thought a fool than to open your mouth and remove all doubt." In foreign policy terms, Reagan never really used the military, except as a threat-deterrent. "Tis better to be thought an unbeatable power than to use that power and prove otherwise." Which is precisely what has happened in Iraq.

The reason Iran is so defiant is that they know a) the U.S. doesn't have the domestic political support to justify military action against Tehran and b) Even if the U.S. did invade Iran, Iran would probably win.

I'm not sure that there is anything more uncivilized about Rudolph Giuliani than his constant call for more military and more war and the continual justification of pre-emptive strike, as if America needs to "prove something" to the world and show that we still have our "manhood." I would rather show our manhood through massive economic strength, and being the cultural and soft-power leader in the world who people follow because they love us--which is what happened in the aftermath of World War II, when we really were viewed as liberators--instead of invaders.

Reagan understood this well. The Soviet Union was a threat--but he knew better than to call for military action against the Soviet Union. The most saber-rattling Reagan ever did was jokingly test out his radio mike (unaware he was live) by saying "My fellow Americans I have just signed legislation outlawing Russia forever. We begin bombing in five minutes."

Yet it's obvious that Romney and Rudy don't get it. Reagan called for a strong national defense. Romney and Rudy's rhetoric calls for a "stronger military." Seemingly, this is a splitting hairs, but there is an obvious underlying motive that is different. Romney and Rudy contemplate a military that can invade our enemies before they invade us. Their language is reflective of this. They talk of taking the fight to radical jihadism, rather than defending America from foreign threats.

The trouble for Rudy and Romney is that even if they were advocating Reagan's actual foreign policy, it wouldn't work today. This is not 1980. We do not live in a bipolar world, where the Soviet Union and the United States are the world's two superpowers, duking it out in a cold war where merely building a larger military helped to bankrupt the enemy. It shows that, for two people who talk so much about terrorism and "radical jihadism," they don't understand much about the necessity of new strategies to deal with such threats--especially strategies that do not involve the pre-emptive invasion of sovereign countries.

The only Republican who seems to truly understand the Islamic world is (regrettably) Ron Paul. The reason they hate America is not because we love freedom. That is a weird fantasy that a lot of Republicans seem to have frequently. Rudy and Romney say these sorts of things often. No, the Islamic world really does hate us because we have military bases in their territory--we have a long history of intervention in their region, and we have made it clear, under the Bush Doctrine, that we are going to keep doing it forever. When Ron Paul says this in the Republican debates, Romney responds with flash point garbage like "Well Ron, it's apparent you've been reading Ahminejad's latest press releases," and "If they just hate us because we occupy their countries, then why did the jihadists assassinate Benazir Bhutto?"

If the only way to combat terrorism is unending imperial wars, then I'm afraid we're in for some trouble.

In connection with my post from this morning, I'd like to start synthesizing some of my points about what is at stake in this election. Depending on who the Republicans nominate, this country will face a presidential election that puts us squarely between the Scylla of worsening our fiscal crisis through socialized health care and the Charybdis of worsening our fiscal crisis through imperial overstretch abroad. These two choices, though seemingly very different given the rhetoric of each side, are actually two sides of the same coin. They both promise security--but they go about it in different ways. The Republican mindset is that security comes through the prevention of threats from abroad. The Democrat mindset is that security comesthrough the prevention of the ills that plague humanity by its very nature: disease, sickness, and hunger.

To both the Republicans and Democrats, I paraphrase Benjamin Franklin "a people who would sacrifice freedom for security deserve neither."

Unfortunately both want to sell us out--just in different ways. When will there be somebody who wants to actually preserve America--rather than gain power by playing on people's fears?

Then The Gods of the Market Tumbled...

For those of you who didn't see the article in the Financial Times yesterday (and, I'm sad to say, I can't provide you with a useful link because FT nukes their content after 24 hours, except for subscribers), the U.S. government is in danger of losing its Triple A credit rating for the first time since it was originally assessed on U.S. government debt in 1917. With all of the other economic statistics barreling out in the mainstream U.S. media about unemployment, the U.S.'s credit rating may not seem like an extremely important factor, yet it is perhaps the most critical indicator that the 70+ year ponzi scheme that the federal government has justified with smoke, mirrors, and most importantly an ignorant voting public, is finally showing signs of cracking.

Having a Triple A credit rating means that the U.S. can borrow money at extremely favorable interest rates, primarily because it means that the risk of non-repayment is very low. A reduction in that credit rating by the actuarial gurus would mean that those financial wizards believe that there is an increased risk that the U.S. government might default on its debt. Fortunately, the credit rating has been affirmed, for now. But that there was a question is, in an of itself, a worry.

The United States is in uncertain fiscal territories. Those who say it is on the "brink of disaster" are perhaps sensationalizing things. The likelihood of a massive meltdown is quite small. After all, the U.S. is a $15+ Trillion economy, meaning it can withstand substantial shocks and not fall into some sort of precipitous decline. However, there are real risks on the immediate horizon. The U.S. currently has a national debt that is

with an additional $75 Trillion in long-term unfunded liabilities in the Social Security and Medicare accounts. With the Baby Boomers retiring, the specter of those bills coming due should haunt actuaries and accountants not only of the people responsible for America's check book, but also America's creditors.

As proof that I'm not just making this stuff up, I highly recommend you watch David Walker, the U.S. Comptroller General (Chief Accountant) talk about the crisis the country is facing (this video is a bit old, so the numbers are lower than they are today):



America's likely comeuppance for its fiscal malfeasance will be in the form of a gradual decline. Our international creditors will start charging higher rates for borrowing money, and our annual deficit will begin an even greater uptick as we maintenance the debt. Social Security and Medicare will bleed dry the current taxpayer, and the federal government will be faced with a situation where they simply cannot raise taxes any more and simultaneously dread the political disaster of non-payment of benefits to the highly motivated voting populace that is the elderly. So they will do what every government since the beginning of man has done in such a crisis: print more money. It's much easier today than it was a hundred years ago. The computers at the Federal Reserve can effortlessly create fiat money ad infinitum.

Prices will begin to go up, and the Dollar will continue to slide. And it will keep sliding and sliding, prices will keep rising and rising, until one day the world decides to stop holding their reserves in dollars. This is already beginning. It will continue.

And then things will get really good. We will experience something not seen in our lifetimes: hyperinflation. Prices will skyrocket by the minute. Americans have forgotten how bad this can really be. Russia experienced hyperinflation after the fall of the Soviet Union, and it was said that people preferred buses to taxis because you pay at the beginning of a bus ride and at the end of a taxi ride, and by the time you got to where you were going, the prices would have doubled, so it was advantageous to pay at the beginning. Think this can't happen in America? Continue to ignore history, then.

Eventually the hyperinflation will burn itself out. People will stop spending except on basic necessities. The rest of the economy will collapse and then prices will plummet as fast as they went up--only this time, nobody will take the greenback seriously. The people will begin to resort to hard currencies as the only trustworthy method of payment. "If you can't pay me in silver or gold coins, you aren't buying anything from me" will become a commonplace phrase.

This entire cycle: hyperinflation followed by hyperdeflation is what economist Ludwig von Mises called a "Crack-Up Boom." It is a scenario that seems impossible in our world of government salvation of all of our problems--but that is the trouble. It is the government salvation of our problems that has led to our ultimate demise. As the saying goes "all is not gold that glitters."

Unfortunately, this problem exists already--even without new entitlement programs. And in a year when it seems that everybody is rushing toward "Universal Health Care" and "Universal Health Insurance," which is just code for "Taxpayer-funded health care" that its advocates ignore what an extraordinary exacerbating effect it will have on the present crisis.

I think it would be great if everybody could have health insurance--but I'm not willing to risk the existence of the republic for a few years of health coverage for all. It is simply too high a price to pay.

As people go to the polls in the primaries and in November, it is imperative not only that we pressure all of the candidates to take our fiscal crisis seriously, but also that we vote for candidates who are tough enough to withstand the mounting political pressure to fix our short-term health care problems with new entitlement programs and as a necessary adjunct to those programs, more unfunded liabilities. We cannot have our cake and eat it too. And if we continue down the present path, there won't be any cake at all.

Wednesday, January 09, 2008

The Pollsters Got It Wrong or How New Hampshire Proved Again They Aren't Lemmings

Adding to their already spotty record in recent memory of failed electoral predictions, pollsters were embarrassed by their "double digit" projections of an Obama victory in New Hampshire. Rasmussen was the closest of the national pollsters, and he still had Obama winning by 7--far from Senator Clinton's 2-point victory. How did they get it so wrong, and what does that say for the rest of the campaign?

First, Hillary dispatched The Former President in full force in New Hampshire, and I firmly believe that is and will continue to be the most potent weapon in her arsenal. Bill Clinton forcefully, but articulately bashed the Obama "Fairy Tale," and Democrats listened. They long for the days of a Clinton Presidency again, and for better or worse, they still trust Bill. Bill also brings to the table 8 years of experience as President and people are reminded that Hillary is "Two Presidents for the Price of One."

Second, Obama's record is slowly being brought into the fore. Hillary is no longer letting him get away with his "hope" rhetoric without reminding people that he is a political neophyte. Although Clinton herself has never held executive office of any kind, being First Lady is a substantial look into how executive power operates. She would do well to actively point out that Obama has never run anything--except perhaps the Harvard Law Review (not exactly what I call "executive experiend.")

Third, New Hampshire voters do not like being told who to vote for. They revolted against Fox News's exclusion of Ron Paul from the Republican Debates, and they rejected Romney's massive spending as an attempt to merely buy the election. They also rejected the Iowa Bounce. Uneducated Iowa farmers were simply not going to tell this New England elite what to do. So this begs the question--does the independent streak of voters continue beyond New Hampshire? If history is any guide, Obama may have gone from "also ran" to "front runner" too quickly. For Howard Dean, this happened prior to the Iowa Caucuses. For Obama, it may have happened afterward. I would contend that the same people who followed Governor Dean are the ones actively behind Obama--the radical, unpragmatic ideological Left, the anti-war youth vote, and a handful of people easily led astray by a good talker.

Fourth, the situation proves that the media are the real Lemmings, not the voters. The media as quickly jumped off the Clinton bandwagon and onto the Obama bandwagon as soon as a poll suggested they should--after all, that's what gets the good ratings. Now the media doesn't know what to do--Obama or Clinton? I'm sure they will sit in their studios picking plastic daisies apart saying "Do we live him? Do we love him not?" The mass media has been in steady decline for the better part of the last fifteen years, but 2008 may be the end of its significant influence. The rise of the Internet, blogging, YouTube, etc., have made it much easier for people to get "the whole story" rather than what fits into a 30 minute news program.

Fifth, Democrats find themselves in a quandry. I don't think they have really decided amongst themselves who the "better candidate" is to face the still unknown Republican nominee. For those who have studied game theory, we have here (for the first time in memory) a two-level game in the race for the White House. There is no incumbent or Vice President on the ticket on either side. Consequently, both races being wide open has caused confusion in picking the pragmatic candidate--which is perhaps what led to Obama's victory in Iowa. A compelling case could be constructed either way. There is no doubt that Hillary is a massive motivator of the Democratic base--though I think Obama would do the same if he were the nominee. Hillary is more likely to motivate the Republican base in response, however. At the same time, the general election voter has still not really been polled--and he is a rather different animal from his cousin the primary voter. A general election voter could very well look at Obama and say "Hmmm, not just yet--come back in 8 years" or they could look at Hillary and say "Eh...something doesn't feel right about her." Not knowing who the Republican nominee will be complicates the matter immensely. Though it is increasingly looking like Romney, Thompson, and Giuliani are soon to be has-beens. McCain and Huckabee are the Republicans' best opportunities for a win in '08, though each presents his own unique challenges for the Republicans and their Get Out The Vote efforts in November.

However, both have the ability to bring back some of the old Reagan Coalition--blue collar rust belt voters who are economically liberal but socially conservative. They are neither one warmongers like Rudy and Romney, but they are not too Dovish like Obama or Clinton. They may be "just right" for Ohioans, Pennsylvanians, and Michiganders. That begs the question then: who is the stronger Democrat to face off against McCain or Huckabee in the swing states? Do Union workers in Michigan care about race or gender more? Do retirees in Florida trust Hillary or Obama to protect their entitlements more? Which candidate can handle foreign policy better? (The clear answer to the last question is Hillary--because she has Bill)

These are questions Democrats must answer seriously--and correctly. That is, unless they want 8 more years with a Republican in the White House.

Tuesday, January 08, 2008

So we left them to teach the Gorillas...

"A leader is a dealer in hope." --Napoleon

"We were living in trees when they met us, and they showed us each in turn,
That water would certainly wet us, and fire would certainly burn,
But we found them lacking in uplift, vision and breadth of mind,
So we left them to teach the gorillas and followed the march of mankind.

We moved as the Spirit listed, they never altered their pace,
Being neither cloud nor wind-born, like the Gods of the Marketplace.
But they always caught up with our progress, and presently word would come,
That a tribe had been wiped off its icefield, or the lights had gone out in Rome..."
--Rudyard Kipling

"But they were all of them deceived." -The Lord of the Rings

For 7 years, America has yearned for a more articulate, more eloquent President. I sometimes think that people are so blinded by the superficialities of candidates that they are able to ignore their substantive shortcomings. Not that all candidates don't have shortcomings, but it seems that if the candidate is attractive and articulate that the nation is more apt to gloss over their problems on substance.

And therein lies the causes of Hillary Clinton's Iowa catastrophe. No offense to the Senator and former First Lady, but she is not particularly attractive, and though she is not inarticulate, she is frequently shrill, mean-sounding, and angry. There is no doubt in my mind that Hillary Clinton is one of the most capable political maneuverers of our time, but she is not the kind of person that strikes the general populace as a likeable leader. Enter Barack Obama.

Everybody thought he was really running for 2012 or perhaps for the Vice Presidency when he got into this race. I knew better. First, the Clintons do not reward people who challenge them, and so if the Obama candidacy was to gain any traction, his chances of being #2 on a Hillary Rodham Clinton ticket would be next to nothing. And why would Obama run for President in 2008 when it would make more sense just to wait if he were really aiming for 2012? After all, given his last rock-star performance at a Democratic National Convention, he would probably be invited back. He could spend time building his grassroots, formulating an agenda and national organization, and using the Senate as his bully-pulpit to foment a 2012 or 2016 campaign--and he's plenty young for that strategy to work.

But he, and very few others, saw the great opportunity in Hillary's weaknesses--likeability. With his young personality, great oratory skills, and message of "hope," he knew that if he stayed in there long enough, he could bring down Goliath. And it appears that he has. I knew Hillary would be in trouble when billionaire David Geffen and long-time Bill Clinton financier abandoned the Clinton Coronation to take a chance on upstart Obama.

Obama's win in Iowa has now propelled him into the hearts of millions of Americans--especially young people. In one article I read this week, Obama's candidacy was compared to that of Robert F. Kennedy's campaign with respect to the intensity of support and even mania surrounding it. Obama's message of Unity and Hope might just be the ticket to the White House. I believe that people really are genuinely tired of politics as usual in Washington. People are tired of us vs. them, rich vs. poor, corporations vs. unions, republicans vs. democrats, christians vs. secularists, etc.

The last person to unite the country around a message of unity and hope was a man who said that it was "morning in America again." Ronald Reagan's vision of optimism and hope propelled him to unseat Jimmy Carter in a landslide after a hard-fought primary against a "more experienced" George H. W. Bush. He of course went on to win the largest electoral college landslide in American history in 1984.

Many people have compared Clinton to Reagan--amazing speaker, wonderful orator, uniter of his party, etc. I think that comparison is misplaced. Ronald Reagan emboldened his party--he made it to be OK to be a Republican again after the desolation the party faced in the wake of Nixon and Watergate. Reagan created a new coalition of people that lasted well beyond his tenure, and his Vice President was handily elected to the Presidency in 1988. Reagan laid the foundation for the Gingrich Revolution in 1994 when the Republicans took both houses of Congress.

In contrast, Bill Clinton never won a majority of the popular vote, and in 1992 garnered only 43%. His party, after 40 years in control of the House, was decimated in 1994 and was out of power until 2006. He compromised most of his party's principles to avoid a catastrophic loss in 1996, signing massive states rights welfare reform, supporting free trade, and finally acquiescing to the calls for a balanced budget after forcing Congress to shut down the government in the wake of his refusal to cut spending. And perhaps most of all, Clinton was utterly despised and hated by rank-and-file Republicans during his entire tenure. Reagan was more or less beloved even though the press loathed him.

Obama, I think, has the potential to become the Democrats' Reagan. I hate to say this, or admit it, because I rather loathe Obama. I think his policy proposals would be disastrous for the nation's economy, and I think he could shape up to be a rerun of Jimmy Carter on foreign policy. And that's the kicker:

Obama has not run on policy. He has run on this vague message of hope and optimism. In fact, little of this year's campaign has come down to policy on the Democrat side. Perhaps that's because all of the Democrats have roughly similar policies. So if Obama gets the nomination, and ultimately the Presidency based on non-policy, he will have to figure out exactly how it is he plans to govern. For this reason, he is a wild card--an unknown quantity. We genuinely have no idea what he will do when he is elected.

I earnestly hope America is not led astray by merely good oratory...

"Then the gods of the market tumbled and their smooth-tongued wizards withdrew,
And the hearts of the meanest were humbled, and began to believe it was true,
That all is not gold that glitters, and two and two make four,
And the gods of the copybook headings limp up to explain it once more."
-Rudyard Kipling

Sunday, January 06, 2008

Lessons from Dogs


Yesterday, as I was engaging in the ever-difficult task of getting my 7 month old Catahoula Leopard Dog, Adelaide (the one on the left in the picture above), to go into her crate before leaving the house for the day, I stopped to think about her behavior in relation to the American electorate. Most of the time I have to drag Adelaide kicking and screaming into her cage so she doesn't terrorize the house in my absence. But when I'm not in the mood for that I just say "Adelaide, want a treat?" and get her excited about the treat. I go to the cabinet, get a Milk Bone treat about 2 inches long and a half inch in diameter and I dangle it over her crate. She goes right in, I close the door to the crate, and then give her the treat. For the next few hours she loses her freedom, and for the low price of a 3 oz. wafer.

Our Red Bone Coon Hound, Aries, on the other hand, prizes her freedom. Fortunately, she doesn't have to be locked in her crate because she is responsible with her freedom in our absence, but she loathes taking showers. It is the ultimate loss of freedom, it would seem, for her. No treats, toys, prizes, gimmicks, or anything will get her into the bathtub or shower. She has to be hauled in, and if there isn't a closed door, it's a two-man job. She then resents you for the rest of the day for putting her through such torture. She really loves her freedom, and it doesn't have a price.

They aren't much different than most Americans, it's sad to say. Aries is the Good Steward American--the one who works hard, saves, spends wisely, who when she messes up (like eating leftover Chinese food out of the trash can) feels guilty and owns up to her mistakes, is calm and dutiful, and never complains about her existence. She just wants to be left alone most of the time, and merely acknowledged the rest of the time.

Adelaide is like everybody else--give her an inch, she demands miles upon miles. Let her play with a t-shirt and she wants to tear up all of your socks, too. Let her play outside and she digs holes to get under the fence. Her treat isn't enough--she thinks she deserves Aries's treat too. And most egregiously she is willing to continuously, without fail, sacrifice her freedom for a lousy Milk Bone treat. (This isn't to say I don't absolutely adore Adelaide-and think she's incredibly cute, but she is frustrating sometimes...)

Is the American voter really quite ready to hand over even more of its freedom for some sub-standard, government-sponsored health care? The average American already spends 5 months in his metaphorical cage every year paying off Uncle Sam. And even so, Uncle Sam is broke--beyond broke. He can't balance his short-term check book or his long-term check book. So we continue running multi-hundred billion dollar budget deficits every year and keep ignoring the structural debt of over $75 trillion in unfunded liabilities in Social Security and Medicare.

It would seem that the people who are buying into the Santa Claus rhetoric of the Clinton, Obama, and Edwards candidates are not only saying they are willing to go into their cage for an indefinite amount of time, but they don't even realize there isn't going to be a treat when they get there.

Even my dog isn't that stupid...

Friday, January 04, 2008

After Iowa: The Challenge for Huckabee

Today is more important than yesterday. What happened in the Iowa Caucuses will have less to do with who wins New Hampshire than how the victory is utilized by the victors moving forward. Let's look at the challenges ahead for the Huckabee campaign.

For Huckabee, Iowa accomplished a few things. First, it established him, without question, as a first tier candidate and at least for now, THE front-runner. He would have been considered it all along if he had had some money in the bank. Second, it helped fix the problem to which I just alluded: it will help him raise some much needed money to strengthen his national organization in advance of South Carolina, Florida, and Michigan. Third, it put Romney squarely on the defensive. Given Romney's propensity (thus far) for negative campaigning, I predict he will implode.

So where does Huckabee go from here? If Romney loses New Hampshire, it's game over for Mormon Mitt. Huckabee will then likely have to contend with an emboldened McCain, who will likely have been endorsed by soon-to-be-former candidate Fred Thompson. Giuliani will still be around until Florida, but if he loses there, he'll bow out too--my guess is he won't be making any endorsements. That puts Huckabee in the same position George W. Bush was in after New Hampshire 2000: a virtual head-to-head match-up against John McCain.

Like Bush, Huckabee has strong credentials with evangelical voters, and McCain is simply mistrusted both by that demographic and conservatives at-large. Unlike Bush, Huckabee already has a natural appeal to moderates and independents, who view his populism as a breath of fresh air. But that brings us to the person who may be the Achille's heel of the Republicans (even though I am largely sympathetic to his economic ideology): Ron Paul. Especially if Romney and Thompson are out, Ron Paul will likely pick up some stragglers: people who liked him already but wanted to vote for a "more electable" candidate who still shared much of their economic agenda. If Romney and Thompson are out, that agenda is no longer represented, and many Republicans may hold out as protest voters through the end of the election, thereby delaying the certainty of the Republican nominee.

If this happens, it is bad new the Republicans, because if Obama steams ahead to successive victories and cuts off the fundraising ability of Edwards and Hillary (which, though unlikely, could very well happen given the present political climate), then he will be able to get a lot of more or less undisputed air time while the Republicans are still fighting amongst themselves about who will be the nominee.

So here is what Huckabee has to do, not only to win the primary, but to do it quickly enough that he doesn't have a late-starter disadvantage against Obama heading into the general election:

Huckabee started smartly: he pitched to his super niche, white evangelicals. Most evangelical voters are not rich Republicans--they are blue collar or middle class folks with a mortgage, a car payment, two kids, the prospect of paying college bills in a couple of years, who go to Sunday School every week. There are lots of these people in the country--but not enough to win a Republican Primary, and certainly not enough to win a general election. He needs to immediately shift his focus (though not all of his attention) away from his super niche.

He has now secured his natural audience: the people who should love him and be enthusiastic for him simply for who he is. His next audience should be the pragmatists: the people who will vote for whichever Republican they perceive can win in November. This is not a difficult sell, but it will require some explanation. Mitt Romney, Rudy Giuliani, John McCain, and Fred Thompson are conventional candidates. So is Hillary Clinton. They run negative ads, they play into the Conventional Wisdom, and they are focused too much on policy (bad policy, to boot). Huckabee has always played to his own strengths: personal charisma, charm, wit, abilities on the stump. He has to turn that into an asset that can be bought by the Republican primary voters.

He's folksy enough to appeal to the common guy but (much unlike the current President) he can not only string together a coherent sentence, but is among the most articulate speakers in politics today. This is a quality lacked by Obama and Hillary--there's nothing folksy about them. Their Ivy League pedigrees are looked upon with suspicion by people in The Heartland. Huckabee has to convince Republicans that this matters and that he is the pragmatic choice.

Additionally, he has to convince non-evangelical conservatives that the only way the Republicans can win is to nominate somebody who can secure the South (as a Southerner, a Christian, and former Governor he can do that) as well as win the key battleground states. Ohio, Pennsylvania, Michigan, and Iowa will vote a for a Republican like Huckabee--they won't vote for a guy like Romney. As Huckabee himself said on Leno the other night "people want to vote for a guy who is more like a guy they work with than the guy who laid them off." A Huckabee candidacy will radically complicate the Democrats' agenda on so-called "kitchen table issues" in the upper Midwest and Pennsylvania.

After he has secured the pragmatists, he will likely have won over enough people to have the nomination locked up--and that's where it gets tricky. Then he has to minimize the impact of the people who actively dislike him--free market libertarians and social moderates. Part of this can be remedied by choosing a Vice President who is one (or preferably both) of those things.

Or, he could take an alternative route--pick a bipartisan Democrat Vice President and completely neutralize the independent vote. Sam Nunn and Joe Lieberman come quickly to mind.

More to come soon...