Friday, September 09, 2011

Obama's Combative Save-My-Job Speech

Targeted tax credits for businesses and individuals (not all of which are bad ideas, but that economists agree won't make much of a dent). Infrastructure spending on highways, bridges, and schools. Bailouts to states to help save government jobs. Mortgage bailouts. Job training programs. Unspecific regulatory reform. Not all of these proposal are necessarily bad, but not one of them is new.

It was the 2009 Recovery Act all over again, except with a smaller (but still gargantuan) price tag -- and without any acknowledgement of the previous stimulus and its abject failures. As Body Snatcher Obama tends to do, the president spoke tonight as if this was his very first jobs plan. Relevant, inconvenient context (think "shovel ready jobs") was nowhere to be found. Indeed, if this were such an obvious, "not controversial" set of ideas, why didn't Democrats pass them easily when they controlled every elected lever of power in Washington for two full years?

The tone and tenor of the address, which was sprinkled with superficial appeals to bipartisanship, was highly political and practically unhelpful. Strawmen were introduced and torched at record pace. Lost in the shuffle, the cost of this grand scheme somehow jumped from $300 Billion on Tuesday to nearly $450 Billion today. Those are estimates, of course, because there is no tangible legislation yet. Which means it can't be passed "right away," nor can it be scored by the CBO. As we've learned many times in recent months, the CBO cannot score a speech. But not to worry, America. Everything is paid for! How? I'll let the president explain the nitty-gritty specifics:
The agreement we passed in July will cut government spending by about $1 trillion over the next ten years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I’m asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan – a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run. This approach is basically the one I’ve been advocating for months.

That's right, Obama punted the heavy lifting to the super-committee, and pledged to introduce another general deficit plan in twelve days. How, or if, this will differ from his unanimously-defeated February budget, or his dreadful April deficit speech, is anybody's guess. He does give us a big clue, though: It's "basically the [same ideas] I've been advocating for months." This likely means very modest changes to unsustainable entitlement programs and big tax hikes on the rich. Absolutely nothing new. In short, Obama insisted on a nationally-televised joint session address to describe an old plan which will be funded by a plan he'll describe later. What a joke.

Two quick examples that illustrate why this entire spectacle was a sham:

(1) Obama lamented teacher layoffs: "While they’re adding teachers in places like South Korea, we’re laying them off in droves. It’s unfair to our kids. It undermines their future and ours. And it has to stop. Pass this jobs bill, and put our teachers back in the classroom where they belong." But later in the speech, he went out of his way to condemn budget fixes like Wisconsin's, which limited collective bargaining "rights" for government employees, but has saved thousands of teachers' jobs.

(2) The president demanded swift action on three pending trade agreements, heavily implying that Congress has been dragging its feet on these items: "Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia, and South Korea..." But the reason these agreements have stalled is because he refuses to send them to Congress unless Republicans agree to lard them up with special goodies for labor unions.

Republicans should help pass the acceptable and benign features of this plan, insist that it's all really paid for (without raising taxes in a recession), and resist its worst elements.

Yuval Levin summarizes: "Spend $450 billion dollars now, it will create jobs, and I’ll tell you how I’m going to pay for it a week from Monday. If you disagree, you want to expose kids to mercury."



Rick Perry knows his history

But putting history into reverse is a big ask

In an article last Friday, Washington Post columnist Michael Gerson wrote an interesting article entitled “Rick Perry’s Campaign Against the New Deal,” in which Gerson pointed out several radical things that Perry has stated in the past about Franklin Roosevelt’s famous program.

According to Gerson, Perry told Newsweek last fall, “I happen to think that the Progressive movement was the beginning of the deterioration of our Constitution from the standpoint of it being abused and misused to do things that Congress wanted to do, and/or the Supreme Court wanted to implement. The New Deal was the launching pad for the Washington largess as we know it today.”

Gerson also observes that Perry has pointed out that Social Security, which is the crown jewel of the New Deal and the modern-day welfare state, is a “Ponzi scheme,” a “monstrous lie,” and a “failure” that “we have been forced to accept for more than 70 years now.”

That’s not exactly the kind of rhetoric that is common to conservatives — well, at least not for the past several decades. That’s the way libertarians talk! For years, we’ve been pointing out that Roosevelt’s new-fangled program that he foisted on the American people was nothing more than a socialist-fascist system, one that rejected the principles of economic liberty, private property, and limited government on which America was founded.

Consider, for example, Roosevelt’s National Industrial Recovery Act, which established cartels for American businesses and industries, cartels that would work in partnership with the federal government to set prices, wages, production, and working conditions.

How could such a system not be considered fascist? It’s precisely the type of program that Benito Mussolini was establishing in fascist Italy.

Moreover, Roosevelt’s infamous Blue Eagle campaign, with its program of threats and intimidation against businessmen who refused to participate, was straight out of Mussolini’s playbook.

For an excellent analysis of Roosevelt’s socialist-fascist program, I recommend the book Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933-1939 by Wolfgang Schivelbusch.

Here’s a review of the book by David Boaz of the Cato Institute entitled “Hitler, Mussolini, Roosevelt.”

Hitler? Yes Hitler, whose program of National Socialism included Social Security, public works, a military-industrial complex, government health care, public schooling, and government-business partnerships. Why wouldn’t he love Roosevelt’s new-fangled program for America? Consider this passage from John Toland’s biography of Hitler:

Hitler had genuine admiration for the decisive manner in which the President had taken over the reins of government. “I have sympathy for Mr. Roosevelt,” he told a correspondent for the New York Times two months later, “because he marches straight toward his objectives over Congress, lobbies and bureaucracy.” Hitler went on to note that he was the sole leader in Europe who expressed “understanding of the methods and motives of President Roosevelt.”

Consider this personal note that Hitler sent Roosevelt through U.S. Ambassador Thomas Dodd on March 14, 1934, reflecting the economic philosophy shared in common by Hitler and Roosevelt:

The Reich chancellor requests Mr. Dodd to present his greetings to President Roosevelt. He congratulates the president upon his heroic effort in the interest of the American people. The president's successful struggle against economic distress is being followed by the entire German people with interest and admiration. The Reich chancellor is in accord with the president that the virtues of sense of duty, readiness for sacrifice, and discipline must be the supreme rule of the whole nation. This moral demand, which the president is addressing to every single citizen, is only the quintessence of German philosophy of the state, expressed in the motto "The public weal before the private gain."

So, what will Perry do now? Will he call for the immediate dismantling of a system that he himself knows is immoral and destructive? Or will he do what most every conservative has done since the 1930s — abandon his principles and meekly support Social Security, Medicare, and the entire welfare state he himself condemns?

My hunch: He’ll throw in the towel, in order to appear more mainstream, more credible.

Why do I say that? Because ever since the New Deal, conservatives have always caved. That’s been their modus. In the 1930s and 1940s, there were still conservatives who talked like we libertarians talk today, but as the years went by they realized that to speak the truth about the New Deal and, later, the Great Society, might well cost them votes, influence, money, and political power.

Thus, conservatives learned to seal their lips and, even worse, began promoting the idea to their children and others that Roosevelt’s socialist-fascist program was actually a much-needed reform that saved America’s free enterprise system.

Gerson gives two examples of conservative cave-ins.

In his 1976 presidential campaign. Ronald Reagan stated, “Fascism was really the basis for the New Deal.” But his presidency, Gerson points out, was “an extended accommodation with the New Deal…. Social Security spending rose dramatically during the Reagan years.”

In his 1964 campaign, Barry Goldwater stated, “I think Social Security ought to be voluntary.” But when challenged, Goldwater answered, “I don’t know where you ever got the idea.”

What’s interesting is that Perry is a devout Christian. Why, just recently he hosted a national prayer session in Houston in which thousands attended. If he caves, which is likely, how is he going to reconcile his religious devotion with his support of a program that he himself knows is immoral and destructive? How does he resolve it within his own conscience? How does he explain his abandonment to God?

The amusing part of this controversy is that for years the mainstream has marginalized libertarians for speaking the truth about what Roosevelt did to our nation with his socialist-fascist program, and yet here is a mainstream presidential candidate leading the polls in the Republican Party spouting the same things we libertarians have been saying for decades. How’s that for funny?

I’d like to think that this time things will be different. I’d like to hope that Perry will be one conservative who won’t surrender, who won’t reject his own beliefs, who won’t trade himself for a mess of pottage, one who will call for the immediate dismantling of Social Security, Medicare, and the rest of the socialist-fascist scheme that Roosevelt foisted upon our nation. I’m not holding my breath.



Prophecies of an egalitarian utopia based on false assumptions

As the British parliament rose for its summer recess this year, Opposition Leader Ed Miliband handed the members of his shadow cabinet some holiday homework. He told them to read a book that has been capturing the attention of the Left, not only in Britain but across the Western world.

Written by a couple of socialist academics, Richard Wilkinson and Kate Pickett, the book is called The Spirit Level. The clue to why so many on the Left have been drawn to it is in the subtitle: Why Equality is Better for Everyone.

This book seeks to reinstate radical income redistribution at the heart of the Left's political agenda. Socialists always have believed in greater equality, of course, but until now their case has rested on an ethical principle that it is morally wrong for some people to have a lot more money than others.

As with all ethical principles, this can be challenged. Why should people who work hard have the fruits of their labour taken away to be given to lazier folk, for example? The Right points out that hard work and risk deserve reward, and equalising shares can be quite immoral.

The Spirit Level aims to break away from these ethical conundrums and to replace them with the authority of science. It says governments should redistribute incomes, not because it is moral but because equality produces happier people and better-functioning societies. It claims everybody stands to benefit from income redistribution, rich and poor alike.

If this claim were true, it would pull the rug from under the feet of the Right. If a radical redistribution of income and wealth really did benefit everybody, how could the Right continue to hold out against it? The case for high taxes, big government and massive income transfers would be unanswerable. But it's not true. This book has many flaws (even though Miliband, and others on the Left appear blind to them).

The book's evidence consists of a series of graphs apparently showing that people in more equal countries live longer, are less likely to get murdered, enjoy higher literacy rates, suffer less mental illness and trust each other more. These findings are repeated for the 50 US states, where the authors find that states with the widest income spread have worse outcomes. But little of this evidence stands up to critical scrutiny.

Their sample of countries is biased. It excludes nations such as South Korea, where strong social outcomes coexist with high income inequality, as well as those such as the Czech Republic, with poor social outcomes despite a compressed income distribution.

Their choice of measures is also biased. Community strength is measured by whether people say they trust their neighbours, but membership of voluntary organisations is ignored. Drug dependency is included as an indicator of social pathology but not alcohol abuse. Murders likewise are in, but suicides are out. Prison numbers are analysed, but not crime figures. Government aid to foreign countries is included as a measure of generosity and compassion, but not private donations to charities. High teenage births are analysed as an indicator of family dysfunction, but not high divorce rates.

What is striking about this list of inclusions and exclusions is that, in every case, the measures that Wilkinson and Pickett selected fit their argument while the alternative measures would have undermined it. In short, they cherry-picked.

Their data analysis, too, is suspect, for they allow extreme cases to create the appearance of an association where there is none. For example, they claim that inequality produces a higher homicide rate, but this depends entirely on the US, where the murder rate is three times higher than anywhere else. Look beyond the US and you often find the most equal countries, such as Sweden and Finland, have a worse murder rate than less equal ones, including Britain and Australia. Yet appealing to their misleading graph, the authors claim Britain's murder rate would be three times lower if it had Scandinavian levels of income inequality.

The Scandinavians, it is true, do fare better than the "Anglo" countries on many of their measures, but this is not because inequality is lower in Scandinavia. It rather reflects the homogeneity of the Nordic countries as against the diversity of the Anglo nations, for the greater the social mix, the weaker the social bonds tend to be. We see this clearly in the variations between US states. Wilkinson and Pickett find the more equal states (usually those in the northeast) do better than the less equal ones (concentrated in the south).

But had they taken account of the ethnic mix of these states, they would have found ethnicity is a much stronger predictor of social outcomes than income distribution. Ethnicity is 18 times more powerful in predicting a state's infant mortality rate, for example.

The issue of equality is important, and it generates strong and impassioned arguments on both sides. But The Spirit Level is little more than polemic. It is to be hoped that we do not allow its spurious claims to scientific status to muddy the waters of our political and moral debate.



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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