Sunday, September 09, 2012

Denialist Democrats

The party of government refuses to even entertain the possibility that we can no longer afford it

What was your favorite unintentionally revealing moment of Tuesday night's kickoff of the Democratic National Convention? Was it the welcome-to-Charlotte video whose narrator let slip that "government is the only thing that we all belong to"? Perhaps Illinois Gov. Pat Quinn's exhortation to "make the will of the people the law of the land"? Or former Ohio gov. Ted Strickland's thunderous, populist twaddle about "economic patriotism"?

All of these were fun, but for me the biggest direct reveal of how current Democratic rhetoric leads to bad public policy was one of the evening's honorary former Republicans, Cincinnati firefighter Doug Stern. "The Republican Party left people like me," Stern complained. "Somewhere along the way, being a public employee—someone who works for my community—made me a scapegoat for the GOP. Thank goodness we have leaders like President Obama and Vice President Biden who still believe that public service is an honorable calling."

It was classic major-party Manicheasm: Eastasians do bad things for the simple reason that their hearts are bad; Eurasians' hearts are good, so they don't do bad things.

In this idyllic landscape of Democratic magical thinking, there is no state and local budget crises, no unaffordable and underfunded defined-benefit public pension obligations, nothing at all standing in the way of "investing" in our public safety, except (in ex-Republican Stern's words) "right-wing extremists." Vallejo, California is not bankrupt because of public employee pensions, and the rest of the state is not following suit. It's a hell of a place, this Democrat-land. Wish I could live there.

Last night's speeches were notable less for what they contained and more for what they did not: any engagement with the issue of having a debt load (of $16 trillion) that is now larger than GDP, of having a long-forecasted entitlement time bomb marching northward toward 100 percent of federal spending, of having underfunded obligations in the trillions of dollars promised by politicians addicted to handing out "free" benefits.

"If you want to get America back to work, you don't fire cops, teachers, nurses and firefighters. You invest in them," said Rep. Xavier Becerra (D-Calif.). It really is that simple. Keynote speaker and mayor of San Antonio Julian Castro offered a similarly basic formula: Spend Invest more money on education, and education will improve. It's worked so well up to now.

"We have to come together and invest in opportunity today for prosperity tomorrow," Castro said, in a speech long on policy banality. "We know that you can't be pro-business unless you're pro-education." And we know that you can't be "pro-education" unless your idea of education policy involves spending more money on it.

Virginia Maryland Gov. Martin O'Malley summed up this worldview succinctly, in a question to Republican nominees Mitt Romney and Paul Ryan: "How much less, do you really think, would be good for our country? How much less education would be good for our children?" When you are unbounded by spending restraints, government budgets can be boiled down to a simple question: How much, at long last, do you care?

What makes last night's fiscal denialism even more appalling was that many of the speakers themselves have had to fight tooth and nail with public sector unions over compensation and work rules. Chicago Mayor Rahm Emanuel outraged police and fire unions by tackling pension reform and pointing out that "city government is not an employment agency." Los Angeles Mayor Antonio Villaraigosa, a former labor leader, has called teachers unions an "unwavering roadblock to reform." Newark Mayor Cory Booker has been there as well. Needless to say, such talk was absent from the podium last night.

One of the great ironies of this convention already is that speaker after speaker denounces Republicans for being unable to tell the truth or get their facts straight. Meanwhile, one of the most important truths of modern governance—we are well and truly out of money—sits neglected in the corner. This might be a great way to rally the Democratic base, but it's thin gruel for the majority of Americans who think, correctly, that the nation's finances have spun out of control.



Regulations bar upward mobility

Let's pretend that we have the political guts to expand economic opportunities for people at the lower end of the economic spectrum. What vested interests should be attacked, and what economic regulations should be targeted for elimination?

It doesn't take a lot of money to become a taxi owner-operator and earn more than $40,000 a year. One needs a car, an insurance policy and ancillary interior equipment to make a car a taxi. In New York City, to be a taxi owner you'd have to purchase a license – called a medallion – that in June 2012 cost $704,000. New York's Taxi and Limousine Commission restrictions that generate such a license price outlaw taxi ownership by people who don't have access to a $704,000 loan. By contrast, in Washington, D.C., the annual fee for a license to own a taxi is $125. I'll let you guess which city has more taxis per capita, cheaper fares and more black taxi ownership.

For decades, the Institute for Justice has been successfully bringing suit against egregious taxi regulations. Last year, it filed suit, Ghaleb Ibrahim v. City of Milwaukee. In Milwaukee, a taxi license costs $150,000. The suit will be argued before the Milwaukee County Circuit Court in December 2012.

Taxi regulations such as those in New York, Milwaukee, Chicago, Boston and other cities just didn't happen. There are people with vested interests who benefit from keeping outsiders out and therefore enrich both companies with large fleets and single taxi owners at the expense of would-be owners and the riding public through higher prices.

Suppose you are affiliated with a poor congregation and wish to sell them caskets as did the Rev. Nathaniel Craigmiles. Casket retailers neither perform funerals nor handle dead bodies, but the state of Tennessee required anyone selling caskets to be a licensed funeral director, which takes years of costly training, including learning how to embalm. The Institute for Justice brought suit, Craigmiles v. Giles, and successfully got the law repealed. The institute has attacked and is attacking similar regulations in other states.

What kind of money does it take to get into the business of African-style hair braiding? The main inputs are the skills and a place in which to braid. However, in some states – such as Utah, Minnesota, Mississippi, Ohio and California – a person had to spend thousands of dollars in tuition and anywhere from 1,500 to 2,000 hours at a cosmetology school to obtain a beautician's license. Safety is not an issue, because African-style braiders do not use chemicals, shave or give facials. Most of what's in cosmetology school curricula is irrelevant to hair braiding. As a result of Institute for Justice lawsuits on behalf of hair braiders, a number of restrictive state licensing laws have been struck down or repealed by state legislators under the threat of suits. Nonetheless, hair braiding restrictions remain in some states.

As I have documented in my recent book "Race and Economics" (2012), historically, occupational licensing and economic regulation have been used to keep blacks out of particular trades. For example, the Plumbers, Gas and Steam Fitters Official Journal, in January 1905, wrote, "There are about 10 Negro skate plumbers working around here (Danville, Va.), doing quite a lot of jobbing and repairing, but owing to the fact of not having an examination board (licensing agency) it is impossible to stop them, hence the anxiety of the men here to organize." Black scholars Lorenzo Greene and Carter G. Woodson said, "A favorite method of barring (Negroes) from plumbing and electrical work was to install a system of unfair examinations which were conducted by whites."

Today we don't hear racist intentions for restrictive economic regulations and licensure laws, but the intentions behind those laws do not change their effects. Their effects are to prevent people with meager means and little political clout from getting a foothold on the bottom rungs of the economic ladder. Politically, it's preferable to give handouts than attack these and many other vested interests.



Those who will not learn from the past .....

Here’s a letter to the Washington Post from economist Donald Boudreaux:

E.J. Dionne praises Elizabeth Warren for “presenting government Wednesday not as an officious meddler in people’s lives but as an ally of families determined to help their children rise. Government, Warren said, ‘gave the little guys a better chance to compete by preventing the big guys from rigging the markets’” (“Bill Clinton’s tutorial on the need for government,” Sept. 6).

Ignore here the countless ways that government does meddle in people’s lives not only officiously but also obnoxiously – actions such as rampant imprisonment of non-violent drug ‘offenders,’ hiking the cost of food through agricultural tariffs and other farm programs, and abuse of eminent domain to enrich large corporations with property confiscated from middle-class families.

Focus instead on the fact that Mr. Dionne’s “Progressive” view of government really isn’t so progressive. Its premise was known to, and rejected by, America’s founding generation. Here’s Thomas Paine:

“Almost everything appertaining to the circumstances of a nation, has been absorbed and confounded under the general and mysterious word government. Though it avoids taking to its account the errors it commits, and the mischiefs it occasions, it fails not to arrogate to itself whatever has the appearance of prosperity. It robs industry of its honours, by pedantically making itself the cause of its effects; and purloins from the general character of man, the merits that appertain to him as a social being.”*

Thomas Paine and America’s other founders were never so na├»ve about the essence of government – nor as incognizant about the nature of society – as are Prof. Warren and Mr. Dionne.



Russia is bulking up its gold reserves

I can’t imagine it means anything cheerful that Vladimir Putin, the Russian czar, is stockpiling gold as fast as he can get his hands on it.

According to the World Gold Council, Russia has more than doubled its gold reserves in the past five years. Putin has taken advantage of the financial crisis to build the world’s fifth-biggest gold pile in a handful of years, and is buying about half a billion dollars’ worth every month.

Putin’s moves may matter to your finances, because there are two ways to look at gold.

On the one hand, it’s an investment that by most modern standards seems to make no sense. It generates no cash flow and serves no practical purpose. Warren Buffett has pointed out that we dig it out of one hole in the ground only to stick it in another, and anyone watching this from Mars would be very confused.

You can forget claims that it’s “real” money. There’s no such thing. Money is just an accounting device, a way of keeping track of how much each of us produces and consumes. Gold is a shiny and somewhat tacky looking metal that is malleable, durable and heavy. A recent research paper by Duke University’s Campbell Harvey and co-author Claude Erb raised serious questions about most of the arguments in favor of gold as an investment.

But there’s another way to look at gold: As the most liquid reserve in times of turmoil, or worse.


It is perfectly clear why Putin is buying gold. The way the Fed has been printing gushers of new dollars all dollars have got to lose a lot of their buying power not far down the track. Gold is more likely to retain its buying power. I bought a reserve of gold years ago



Record 88,921,000 Americans ‘Not in Labor Force’—119,000 Fewer Employed in August Than July: "The number of Americans whom the U.S. Department of Labor counted as “not in the civilian labor force” in August hit a record high of 88,921,000. In July, there were 155,013,000 in the U.S. civilian labor force. In August that dropped to 154,645,000—meaning that on net 368,000 people simply dropped out of the labor force last month and did not even look for a job. There were also 119,000 fewer Americans employed in August than there were in July. In July, according to the Bureau of Labor Statistics, there were 142,220,000 Americans working. But, in August, there were only 142,101,000 Americans working."

Norris: “1,000 years of darkness” if Obama wins: "A video released this weekend by action movie hero Chuck Norris claims that America faces '1,000 years of darkness' if President Barack Obama is reelected. 'If we look to history, our great country and freedom are under attack,' Norris warns, standing next to his wife. 'We’re at a tipping point and, quite possibly, our country as we know it may be lost forever if we don’t change the course in which our country is headed.' The pair go on to explain that Obama won in 2008 because more than 30 million evangelical Christians stayed home on Election Day."

Canada: Separatist party wins power in Quebec: "A separatist party won power in the French-speaking province of Quebec on Tuesday night, but another referendum to break away from Canada isn't expected any time soon after the party failed to win a majority of legislative seats. Parti Quebecois leader Pauline Marois, who becomes Quebec's first female premier, replaces Liberal Jean Charest, Quebec's leader for nearly a decade."

Israeli “skunk” fouls West Bank protests: "Imagine taking a chunk of rotting corpse from a stagnant sewer, placing it in a blender and spraying the filthy liquid in your face. Your gag reflex goes off the charts and you can't escape, because the nauseating stench persists for days. This is 'skunk,' a fearsome but non-lethal tool in Israel's arsenal of weapons for crowd control. It comes in armored tanker trucks fitted with a cannon that can spray a jet of stinking fluid over crowds who know how to cope with plain old tear gas. While the army calls skunk an attempt to minimize casualties, rights groups dismiss it as a fig-leaf for the use of deadlier force against protesters in the occupied West Bank."

Why liberals should love low taxes: "You can say two things for certain about modern liberals -- they love spending government (read: your) money, and they hate the wealthy. Which makes the liberal loathing of low taxes especially baffling. For the truth of the matter is that lower tax rates often bring in more, not less, revenue for the federal government. And when they do, that revenue is overwhelmingly plucked from the pockets of the 'millionaires and billionaires' whom liberals constantly decry."

TSA: Keeping America safe … from Ron Paul?: "Congressman Ron Paul, of course, famously introduced the 'American Traveler Dignity Act' to rein in this unaccountable agency and its goons; while his son, Senator Rand Paul, has similarly vocally led the charge to abolish the TSA .... Yesterday, TSA took its revenge, detaining and demanding a thorough search of the Paul family and plane, over the objections of their pilot."

NH cleared by feds to implement new voter ID law: "The U.S. Department of Justice has cleared the way for the state to implement its new voter identification law for the upcoming elections. New Hampshire is among a group of states, including Mississippi, Louisiana and Alabama, that are required under the Voting Rights Act of 1964 to submit any election law changes to the Department of Justice for review to determine whether they would result in racial discrimination."

DNC: Less hope, more “rope-a-dope”: "The Democratic National Convention, held in Charlotte, N.C., is playing out as scripted this week. It was good to see that the Democrats chose the U.S. as the host country for their event again this year, narrowly defeating bids from France and Venezuela. ... The size and scope of the DNC had to be scaled back considerably. At first the Dems thought they needed the Charlotte Motor Speedway, capacity 165,000, to hold all of Obama's loving fans. When they realized that the 'mainstream' press corps is not that big, they looked for smaller venues."


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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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