Friday, March 08, 2013

Regulatory barriers to innovation in Britain (and elsewhere)

What do you think of when picturing an ‘innovator’? I would hazard a guess that the skinny, t-shirted frame of a computer developer forces his way into mind. He is likely in the middle of developing a new app or website, and is keen to end his summons before your mind’s eye to get on with typing inscrutable code and eating pop tarts.

This is a shame. Not the interruption of our computer nerd - who we’ll leave alone now - but the fact that innovation has become such an internet and computer centred phenomenon. It is also, however, no coincidence. The ‘techy’ sectors have enjoyed huge advances in recent years in no small part because of the relative lack of regulation and red tape they’ve faced.

This has kept start-up costs low, compliance with legislation cheap, and product development swift. The economic benefits of this business freedom have been extraordinary. In 2010 the UK internet economy contributed £121bn to GDP, in 2016 this is set to be £225bn. This is a remarkable 86% growth in 6 years. According to McKinsey in 2011 2.6 jobs were created for every (mainly high-street) job lost. It is no surprise that London’s ‘Silicon Roundabout’ has grown in notoriety in recent years. We would do well to follow the advice of Dominique Lazanski’s recent ASI paper to keep the stellar growth going.

Other sectors have not been so lucky – over the decades industries like pharmaceuticals and food production, which once saw equally impressive innovation, have been overwhelmed by creeping legislative burdens. The rise of the grisly ‘ealf and safety brigade, backed by big business eager to block new entrants, has gradually put a stop to the leaping advances. The regulatory obstacles are so great now that aspirin would not be passed by the FDA (it would be red flagged because it risks causing gastrointenstinal bleeding). Similarly, rising levels of regulation contributed to the end of so-called ‘green revolution’ in food production between the 1940s and 70s, which hugely increased yields and lowered prices.

The risk of failing to comply with standards discourages businesses from engaging in the kind of innovation that can lead to radical break-throughs. It is safer to opt for more mundane improvements safe in the knowledge that they will be allowed to make it to the market-place.

I can hear the hard-hatted inspectors and boardrooms bursting to object. ‘This regulation is designed specifically for the benefit of consumers, they clamour; in its absence people would be exposed to improperly tested, and therefore potentially lethal medicines and foods. ‘Are you in favour of sacrificing human lives at the altar of innovation?’ they ask.

I can think of two replies to this. First, in the developing world millions die of starvation and disease; if more rapid advances were allowed many more lives would be saved than lost. Second, as our President Dr. Madsen Pirie argued so persuasively on the Daily Politics, the expectation of progress and improvement is an important component of a society’s well-being. Increased optimism about the development of new life-saving medicines and lower food prices would be a welcome addition to looking forward to the new iPad.

A bonfire of regulation would attract the best innovative minds from around the world and reignite economic growth and job creation in Britain. Exit double dip recession, enter double digit levels of growth. Who knows, we might even discover another drug as effective as aspirin.



"The War"

BOOK REVIEW of "Churchill, Hitler and the Unnecessary War" by Patrick Buchanan.  Review by Jim Davies

There is little doubt that FDR was itching for a war, even though the American people were not.  So the theory (advanced below) that FDR supported Britain even before the war began is plausible -- JR

The book is about the origins of World War II, and there are very few who have no need of intense interest in that subject, for it affected hundreds of millions of lives and ended 50 to 80 million of them prematurely. My own ne plus ultra on the subject is A.J.P. Taylor's masterpiece of that title, but CHUW is a welcome and worthy augmentation. Interesting, that Buchanan often quotes from that work and clearly admires it; yet he is an Old Right conservative while Taylor was a socialist. Their common ground is to demolish the conventional wisdom that still infests government school classrooms and The History Channel. Buchanan, more than Taylor, begins by detailing the origins of the First World War, because that was the true, basic origin of the Second due to the vicious terms imposed on Germany at Versailles.

So the first two chapters of CHUW deal with the end of the 19th Century and the disastrous blunders of the European government leaders in the first decade and a half that followed it. Those chapters are worth the price of the book on their own, and far exceed in value the standard textbook on the subject, Barbara Tuchman's The Guns of August, which to my mind is hardly a history at all, rather a mere chronology.

Of particular interest to me was how Buchanan brings out the fact that there was no treaty obligation on the British government to take part, because the Anglo-French entente of 1905 was just that – an understanding, not a formal obligation. Thus, while all the other participants did have treaty obligations in that early form of Mutual Assured Destruction, the UK could have opted out – but for one factor: the Germans chose to attack France via Belgium, and there was in effect a 75-year-old treaty to guarantee Belgium's neutrality. Buchanan suggests that this was used in London as an excuse to join the war, the real motive being that without her participation, a German-Austrian victory was very probable, and domination of Europe by a German empire would have upset the stability of the worldwide British one. So entry hadn't much to do with pity for “little Belgium” as advertised, but a great deal to do with its centuries-old policy of opposing whichever nation in Europe stood poised to dominate the others.

At any rate, Buchanan analyses the moves in that terrible summer of 1914 and allocates blame – there was plenty to go around – and while a lot of mud sticks to the Brits, notably to Churchill who could ill restrain his enthusiasm for war, he shows that the Germans were the most eager to avoid a conflict if possible, and tried hardest to do so. Yet five years later, savage punishment for having started it was loaded on to them, the losers.

That fundamental injustice was forced by Clemenceau of France and Lloyd George of Britain, with US President Wilson ineffectively opposing and eventually concurring. Later, American public opinion correctly judged that the “treaty” had betrayed all the reasons Americans had had for joining the War, and turned away from European affairs in disgust.

Germans, of course, could not turn away, and the injustice rankled, and inevitably a leader emerged with promises to shred the treaty and reverse its provisions. By then – the 1930s – even most French and British pols had concluded that they were too harsh by far, so when Hitler skilfully reclaimed territory occupied mostly by German speakers who desired to live in a restored Germany, there was no wholehearted opposition. Not until Prague, that is, as Pat Buchanan shows; that was the turning point, on March 15th, 1939. Prague was not a Germanic city. Its part of Czechoslovakia was taken as a conquest by Hitler, and that was something up with which British Prime Minister Neville Chamberlain did not feel able to put. So from that date, Buchanan says, he changed his mind; from appeaser, he became an opposer.

So he leads us to his Chapter 9, dealing with the pivotal, infamous “Polish Guarantee.”

I've been puzzled by that for many years. Everyone now agrees that it was by far the biggest blunder ever made in British foreign policy; on March 30th 1939, after a brief Cabinet discussion, Chamberlain announced that Britain would intervene if Polish integrity were violated. No quid pro quo, no prior discussions, even; it came as a surprise to all, including Polish Foreign Minister Beck, and to Hitler, who was furious. Just a blank check, out of the blue. Who suggested this catastrophic error, which did indeed prove, five months later, to be the trigger for World War II? That's the mystery, which I'd hoped CHUW would reveal.

It does not. Buchanan's treatment of the motivation is reasonable, but comes down to the theory that Chamberlain was a gentleman statesman who had accepted Hitler's word six months earlier in Munich, but who now felt betrayed and humiliated by the latter's grab of Prague and his demand for access to Danzig, a Germanic port in Northern Poland. So (it's alleged) he strung that trip wire for war in a fit of pique, as the quickest way to express anger.

Well, maybe. That says Chamberlain was naïve; for he knew full well in Munich in 1938 that he was accepting the word of a man who had systematically murdered some 200 of his own supporters in 1934, to foil an intra-party coup; so he was or should have been well aware that Hitler was no gentleman whose word could be trusted.

An alternative theory is that someone put him up to it. Paul Craig-Roberts, in this recent article on some “What-Ifs” of modern history, names Churchill as the villain, and it's true that he had in the late 1930s been calling on the government to oppose Hitler more firmly. But there is no hint in CHUW of any phone call or meeting between Churchill and Chamberlain, in which the former urged the latter to issue the Polish Guarantee--nor mention of any newspaper article to that effect. Churchill did applaud the announcement at once, but a few days later he backpedalled fast, having recognized with almost everyone else that it was a colossal blunder that left the fate of the British Empire in the hands of a Polish politician.

My own theory is that FDR is the one who put Chamberlain up to it, through his London Ambassador Joseph Kennedy. I've held that view for some years, but have seen no evidence to support it. The motive would be that FDR wanted a new war in Europe, which he could lead the US to join and win, as in 1917-18, bringing huge additional worldwide influence to the USA while diminishing that of Britain. He would have persuaded Chamberlain that the time had come to stand up to Hitler, and promised that if the outcome should be war, America would under his leadership once again come to pluck England's chestnuts from the fire.

CHUW gives me no support, either; Buchanan evidently found no trace of such a meeting. However, coincidentally, another recent publication does. It's a posthumous one by Herbert Hoover, a close friend of Joe Kennedy. The key passage from his Freedom Betrayed is revealed here, and confirms that Kennedy did indeed deliver that message to Chamberlain, at FDR's behest, in spite of his own personal disinclination; he was (or said he was) much in favor of appeasement throughout his London appointment. Hence, not only did FDR provoke Japan to attack Pearl Harbor, not only did he leak the Rainbow Five plan to stimulate Hitler to declare war on the US a few days later, but from the London Ambassador himself we have evidence that he even arranged for the European war to begin in the first place. And this is the President most lauded by every Statist in the land--unless it be that other mega-murderer, Abraham Lincoln.

Buchanan seems to have missed that one, but so had everyone else until Hoover's book emerged. Blame government restrictions on what can be published about its “statecraft.”

That's one of the few disappointments in CHUW, the other being a characteristic absence of relevant economic analysis. For example, Buchanan fails to expose the alleged German prosperity of the 1930s as a complete myth, being based on well-doctored statistics. However, I did learn one thing under this subject head: before FDR authorized the famous “lend lease” program in 1941, to supply the UK with badly needed materiel, he obliged Churchill to part with all the British government's gold. Not quite as altruistic as I'd thought.

Otherwise, it's a thrilling read, certain to invert many long-held suppositions. Churchill's contribution to his era is soberly analyzed, and he comes up very short. When he entered public life, Britain was astride the world, and when he left it, Britain was a second rate power, and nobody had contributed more than Churchill to the decisions that produced that decline. Time and time and time again, he blundered, and at no time more than in the early days of WWII. He had many opportunities to withdraw from that devastating conflict, but spat on them, every one. He helped achieve the destruction of one totalitarian monster, but at the cost of sicking a worse one on the whole world, as well as bankrupting his own country. Buchanan asks: “...we cannot ignore the costs of Churchill’s wars... Was it truly necessary that fifty million die to bring Hitler down? For World War II was the worst evil ever to befall Christians and Jews and may prove the mortal blow that brings down our common civilization.”

He treats Hitler impartially too, though is by no means an apologist for the Nazi liquidator of six million Jews. But he acknowledges superior statecraft when he sees it, and he sees plenty. Hitler would have waged war on the Soviets, without doubt, but at every turn in the preamble to the war with France and Britain, Hitler tried hard to avoid it. That part of World War II was completely unnecessary – and but for that part, the US would have stayed out.



Congress Goes Bipartisan —Against Civil Liberties

The parties collude to defeat accountability for the national-security state

By W. James Antle III

Civil liberties are theoretically a bipartisan concern. Conservative Republicans who don’t like Obamacare’s “death panels” should be outraged by presidential kill lists. Liberal Democrats who defend due process ought to be offended by secret surveillance law. Protectors of the First and Second Amendments should have a high regard for the Fourth, Fifth, and Sixth.

Yet restricting civil liberties is what actually commands bipartisan support in Washington. The same Congress that barely averted the fiscal cliff swiftly passed extensions of warrantless wiretapping and indefinite detention, assuring Americans that only the bad guys will be affected but evincing little interest in establishing whether this is really the case.

The same Congress that failed to come up with an agreement to avoid sequestration appears to have bipartisan majorities in favor of profligate drone use at home and abroad. Lawmakers are generally less exercised about the confirmation of likely CIA chief John Brennan than Defense Secretary Chuck Hagel.

At the very time it appears Washington is so dysfunctional that the two parties cannot get anything done, Democrats and Republicans cooperate regularly—when it it comes to jailing, spying on, and meting out extrajudicial punishments in ways that on their face contradict the Bill of Rights.

Senate Majority Leader Harry Reid argued that preserving the Bush administration’s national surveillance program—now for the benefit of the Obama administration—was more important than Christmas. Republican Sen. Saxby Chambliss didn’t even want any amendments.

The Senate overwhelmingly rejected an amendment that would apply the same protections against unlawful search and seizure to emails and text messages that already exist for letters, phone calls, and presumably the carrier pigeon.

Despite deep divisions over taxes and domestic spending, members of both parties tend to sing from the same song sheet about the Patriot Act, the National Defense Authorization Act, and the Foreign Intelligence Surveillance Act amendments.

So much for the Democrats’ bedrock belief in the right to privacy or Republicans’ convictions about limited government.

Civil libertarians are currently a rump caucus in both parties. But they are at least starting to work together. In fact, a critical mass of legislators seeks to use this week’s Brennan vote to extract additional drone memos from the Obama administration.

More promisingly, liberal Democrats like Sen. Ron Wyden of Oregon and Sen. Mark Udall of Colorado have been teaming up with such conservative Republicans as Sen. Rand Paul of Kentucky and Sen. Mike Lee of Utah, seeking to impose real checks on powers the federal government acquired to fight the war on terror—a conflict with no real boundaries or identifiable endpoint.

The core purpose of the Constitution is to balance the powers necessary for the federal government to protect the United States with the need to erect institutional barriers to protect against the abuse of those powers. But in emergencies, constitutional restraints often go out the window and it is difficult to restore them after the fact.

This is especially true when there is no transparency or public accountability. Many details about national surveillance, extraordinary rendition, and even the spending habits of intelligence agencies remain state secrets.

Some level of secrecy is undoubtedly necessary to preserve national security. But giving federal officials sweeping, routinely exercised powers without sunlight or scrutiny is an invitation to abuse. That’s why having even a small group of senators pressing for public information is important.

Eli Lake noted in The Daily Beast, “[A]t a moment when inter-party cooperation is almost nonexistent in Washington, any bipartisan alliance—especially one that includes some of DC’s most committed ideological opposites—is both unusual and noteworthy.”

Lake was referring to the bipartisan alliance between civil libertarian-leaning senators like Paul and Wyden. But until they make legislative inroads, the more usual and less noteworthy bipartisan alliance will be the one that exists between John Yoo and the Obama administration, united by a predilection for virtually unchecked executive power.




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Thursday, March 07, 2013

Some beautiful music

I know that few people share my love of early music.  Maybe this piece will persuade someone


Now Hiring Ex-Cons

My column for Defining Ideas last week stressed that antidiscrimination laws can wreak havoc on job creation. The Equal Opportunity Employment Commission, a federal agency tasked with enforcing antidiscrimination laws, has demonstrated just how destructive such laws can be. One instance of its folly is its “Enforcement Guidance” of April 2012, which has come to prominence after recent public hearings before the U.S. Commission on Civil Rights.

With the Enforcement Guidance, all private employers and all state employers must use detailed and particularized inquiries before turning down a minority applicant who has a criminal arrest or conviction on his record, even though employers can turn down a white applicant with the same past record without going through such hoops.

An Upside Down Civil Rights Case

To the unpracticed eye, the EEOC ruling looks genuinely perverse. The law that was intended to end discrimination by private parties now institutionalizes it by government. Title VII of the 1964 Civil Rights Act has, as its purpose, to make it “an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual…because of such individual’s race, color, religion, sex, or national origin.”

Thus, the newest confection out of the EEOC orders most employers to do exactly what the law forbids. It introduces an explicit classification into the hiring equation by imposing a higher standard for refusing to hire minority workers than for others. The Enforcement Guidance also applies even when it is clear that the employer’s refusal to hire certain workers is not because of race but because of the evident risk that a criminal record could present to the employer, its other employees, and its customers.

The EEOC introduces what is termed “disparate treatment” by race in its supposed effort to prevent discrimination. The results are perverse at best. To take just one example, James Bovard, writing in the Wall Street Journal, reports that in 2010, the EEOC initiated litigation against G4S Secure Solutions “after the company refused to hire a twice-convicted Pennsylvania thief as a security guard.” Needless to say, the EEOC did not offer to indemnify G4S should they be held liable for any torts of their employee while on the job.

The legislative history makes it painfully clear that in order to overcome political opposition, the Act did nothing to prevent an employer from using whatever tests it liked to select those employees whom it thought best for the job. Indeed the law contained an explicit protection for any employer “to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race…”

Owing to the major differences in education and job history, most tests do have disparate impact by race. Under the Griggs rule, the employer could use that test only if some “business necessity” required its use, and then only if it had a near-perfect predictive power, which virtually no test ever has.

Unfortunately, this pattern of facts gives no indication of how to treat potential security guards who have committed violent crimes. The EEOC’s useless Enforcement Guidance only offers far-fetched examples at best. Additionally, the guidance neglects to tell an employer, who may receive hundreds of applications for a single position, how to make a detailed “individuated assessment” of each applicant and still remain economically viable. Nor does it say whether an employer remains in violation of Title VII by turning down ten minority applicants with criminal records after hiring the eleventh.

What makes this entire approach even more bizarre is that many agencies of the federal government make the same use of criminal conviction records that the EEOC demands that all states and private employers reject. At no point, however, does the EEOC claim that these federal agencies discriminate in any way. Nor does the EEOC address why it thinks these federal agencies are misguided in making their own considered judgments regarding the hiring of employees.

Who Benefits?

At the end of the day, what good does the EEOC hope to gain from this massive undertaking?

One of the great benefits of a competitive labor market is its self-corrective nature. The correct social question therefore is not whether this or that firm decides to hire a worthy applicant with a criminal record. It is whether any firm makes a positive hiring decision for a worthy candidate; if not, in competitive labor markets, any errors made by one potential employer can be corrected by favorable decisions by another.

Ironically, however, that redundancy is undercut by the EEOC’s uniform Enforcement Guidance. Some studies already suggest that firms are “much less likely to hire minority applicants when background checks are banned.” That result should not come as any surprise. The white male workers who are not protected by Title VII can offer employees this precious guarantee: the ability to hire and fire at will. Minority workers cannot waive their ill-conceived protections under Title VII, and thus are prevented from competing along this critical dimension. The EEOC Guidance may help some minority workers in a few cases, but it will hurt even more.

And by raising transaction costs, the EEOC will continue on its mindless job-killing path. Once again, the EEOC seems utterly oblivious to the harm that it causes to the groups that it most wants to help—and indeed to everyone else.



How to end overcriminalization

In June 2011, 11-year-old Skylar Capo saved a baby woodpecker from her family's cat. "I've just always loved animals," the aspiring veterinarian told her local news station. "I couldn't stand to watch it be eaten."

After rescuing the bird, Capo kept it by her side in a small cage for a few days to make sure it wasn't injured. She even took it along on a family trip to the local Lowe's hardware store. With the hot sun beating down overhead, Capo decided to carry the cage inside the store so the tiny woodpecker wouldn't get overheated in her car.

Little did she know, these acts of compassion violated a federal statute against the "possession" or "transport" of a migratory bird -- or that a Virginia game warden would be on her family's doorstep days later demanding payment of a $535 fine.

Because this story involved a little girl and a baby bird it made national headlines. But the underlying problem of overcriminalization rarely receives such attention -- which is just how big government likes it.

The proliferation of needless criminal statutes makes lawbreakers of ordinary people who have no ill intentions. As Tim Lynch of the Cato Institute puts it, they "find themselves on the wrong side the law without even realizing it."

Take Eddie Leroy Anderson, a retired logger from Idaho whose only crime was loaning his son "some tools to dig for arrowheads near a favorite campground of theirs," according to the Wall Street Journal. Anderson and his son found no arrowheads, but because they were unknowingly on federal land at the time they were judged to be in violation of an obscure Carter-era law called the Archaeological Resources Protection Act.

The government showed no mercy. Wendy Olson, the Obama appointee prosecuting the case, saw to it that father and son were fined $1,500 apiece and each sentenced to a year's probation. "Folks do need to pay attention to where they are," she said.

Statutory law in America has expanded to the point that government's primary activity is no longer to protect, preserve and defend our lives, liberty and property, but rather to stalk and entrap normal American citizens doing everyday things.

After identifying three federal offenses in the U.S. Constitution -- treason, piracy and counterfeiting -- the federal government left most matters of law enforcement to the states. By the time President Obama took office in 2009, however, there were more than 4,500 federal criminal statutes on the books.

"Too many people in Washington seem to think that the more laws Congress enacts, the better the job performance of the policymakers," Lynch notes. "That's twisted."

Not long after Skyler Capo's battle with Virginia game wardens, former U.S. Attorney General Edwin Meese joined Lynch in testifying before a House committee exploring the problem of overcriminalization. "The federal criminal code is overly extensive," Meese testified. "There are more laws than are needed or could possibly be enforced. There are too many redundant, superfluous and unnecessary criminal laws. They should be consolidated and/or eliminated."

A compelling new study on overcriminalization by University of Tennessee professor Glenn Reynolds (of Instapundit fame) shows that there are many solutions to this problem, including an end to prosecutorial immunity, "loser pays" legislation and a ban on plea bargains.

But more drastic measures may be required. Reformers should really begin by going through the entire body of federal criminal law -- starting with all statutes that carry jail time -- operating under the presumption that every statute should be eliminated unless it can be justified as essential. The federal government, especially, has no business duplicating state functions or applying criminal penalties to advance mere social engineering objectives.



Chris Christie and the future of the GOP

It's a safe bet that most conservative Republicans would rush to support a political leader with the following record, especially in a traditionally Democratic state:

-- Reversed a $2.2 billion deficit and brought it into balance without raising taxes, largely by reduced spending and eliminating wasteful and unaffordable programs, allowing for a projected fiscal 2014 budget surplus of $300 million.

-- Bipartisan pension and benefits reforms, saving the state $120 billion over 30 years.

-- Streamlining government by eliminating 5,200 government jobs.
-- Vetoing tax increase bills three times while cutting taxes for job creators.

-- Reforming the nation's oldest teacher tenure law by making it conditional on teacher performance in the classroom.

-- Reduced property tax increases to a 21-year low and capped them at a maximum 2 percent.

There's more, but shouldn't conservative Republicans be ecstatic by this record compiled by New Jersey Republican Governor Chris Christie?

Not the folks at the Conservative Political Action Conference (CPAC), which decided not to invite one of the party's superstars to its annual gathering in Washington. Apparently, the reason had to do with Christie upsetting conservative orthodoxy by saying something nice about President Obama for approving emergency aid to distressed New Jerseyans affected by Super Storm Sandy.

I'm all for orthodoxy, which some call principle. I am orthodox in many things, but in politics compromise in the pursuit of ultimate goals does not necessarily make one a compromiser.

Gov. Chris Christie is no liberal. He is proving his ideas work, which is why, according to a recent Quinnipiac University poll, he has a 74 percent approval rating in one of the bluest states in the country.

Most politicians would, as they say, "kill" for a number like that, but instead CPAC organizers "killed" Christie from their list of speakers.

Conservative Republicans have a unique opportunity to present a positive, forward-looking and reform-minded agenda at a time when most voters' approval of government is scraping rock bottom. Americans are aware of the current dysfunction in Washington and may be ready for a creative message if Republicans could show them how a 21st-century model would mutually benefit themselves and the nation.

Former George W. Bush aide Peter Wehner offers some suggestions in a Time magazine essay:

"First, Republicans should make front-and-center their plans to reform public institutions that were designed for the needs of the mid-20th century. Our health-care and entitlement system, tax code, schools, immigration policies and regulatory regime are outdated, breaking down, and creating substantial wreckage. If I had to boil it down to a single sentence, I'd urge the GOP to develop its reputation as the party of reform and modernization. Second, Republican leaders at every level need to conduct themselves in a manner that not just reassures voters but appeals to them. As former Indiana Governor Mitch Daniels has put it, 'as we ask Americans to join us on such a boldly different course, it would help if they liked us, just a bit.' ... Third, Republicans must resist the temptation of defeatism, enervation, and turning against the country. It is entirely within the power of the GOP to both remain principled and appeal to a majority of Americans. An intellectually self-confident party would, in fact, be energized by a challenge of this scale."

Read this line again: "It is entirely within the power of the GOP to both remain principled and appeal to a majority of Americans."

A bold agenda that does these things reflects Gov. Christie's record in New Jersey. By not inviting him to speak, CPAC invites comparison with a pessimistic and hypercritical political environment of the past. If the Republican "tent" isn't large enough for Chris Christie, then it will resemble a pup tent for some time to come.

Republicans should be focused on deconstructing failed liberalism and styling their alternative in positive terms, not rejecting one of their own. Hating President Obama is not a policy. Intellectually defeating his policies is.



The campaign against free and fair elections

The elections are only a few months behind us, but Democrats are already busy working to ensure citizens and non-citizens, the dead, felons and those registered in two or more states can cast a ballot in the next political contests.

These “new Americans,” as Democratic rising star and Maryland Gov. Martin O’Malley calls illegal immigrants, used-to-be Americans, those who gave up their voting rights after committing a crime and those extra-engaged citizens have one thing in common. They like Democrats.

That is why the left is busy pushing voter “access” from the top down. President Barack Obama said in his inauguration speech that, “Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote.” And in his state of the union speech he proposed a commission to study electoral reform to make voting faster and easier.

But that is really not the mission. The average wait time around the country is 14 minutes, hardly an overwhelming burden.

The real issue is finding ways to ensure Democratic hegemony for decades to come. That is why the party and liberal activists want federal and state reforms allowing same day registration and voting and expanded early voting – but go postal over laws requiring voter identification and refuse to acknowledge fraud and election security issues.

Instead, they say the real problem is a vast conservative conspiracy to prevent minorities and the poor from voting.

There is plenty of evidence of fraud, however. Wendy Rosen, a Democrat who ran for Congress in Maryland last year, withdrew from her race after news broke that she voted in both Florida and Maryland. The New York Daily News found that 46,000 snowbirds, mostly Democrats, were registered in both New York City and Florida. Its analysis exposed that up to 1,000 of them voted in both states in multiple elections. As the paper wrote, “The finding is even more stunning given the pivotal role Florida played in the 2000 presidential election, when a margin there of 537 votes tipped a victory to George W. Bush.” And a group in Minnesota found by comparing criminal records with voting rolls that over 1,000 ineligible felons voted in the state’s 2008 election where the U.S. Senate seat, won by Democrat Al Franken, was decided by 312 votes.

Waiting in line to vote is an inconvenience, but reducing the wait time to zero is not worth it if it jeopardizes the integrity of elections across the United States. If those on the left truly cared about free and fair elections, they would focus their efforts on ensuring those allowed to vote have appropriate identification and that voter rolls do not allow people to vote in multiple states.

Couching the lie of “voter suppression” in the guise of “voter access” makes it no less dangerous




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Wednesday, March 06, 2013

Dead in the Water: The Federal Flood Insurance Fiasco

By almost any analysis, the National Flood Insurance Program (NFIP)—the recipient of a $9.7 billion bailout in the wake of Hurricane Sandy—doesn’t work. It is poorly conceived, it’s terribly mismanaged, and it encourages harmful behavior.

Of course, the same can be said for dozens of other federal efforts. What sets the NFIP apart is that, in looking to address what was at the time a clear market failure, Congress created a program that has so influenced the course of society these past four and a half decades that getting rid of it would be nearly impossible.

Before Congress set up the NFIP in 1968, only a handful of very small insurance companies wrote flood coverage as part of conventional homeowners’ policies. Although a demand for flood insurance clearly existed, nobody would sell it. This was a market failure as almost any economist would describe it. And it happened for several reasons.

Insurance works best when a large number of people who face similar but uncorrelated risks pool their risk together. But floods are heavily correlated. While they aren’t a serious concern in many parts of the country, they can be a constant menace in areas near river valleys or along coasts that face threats from tropical storms. In an era when small, local insurers that served one or two states provided most insurance, a single big flood could drive many of them out of business.

Not that the business of home insurance has ever been particularly lucrative. Over nearly any given 10-year period, the property and casualty insurance industry as a whole pays out in claims roughly as much as it takes in in premiums, and the home insurance business is one of the least attractive from an underwriting standpoint. Insurers earn their returns mostly by investing premium dollars in high quality, low-yield bonds. With very thin margins, in those years when the business is profitable at all, the main attraction to insurers of offering home insurance—required of everyone who has a mortgage—is the chance to cross-sell more lucrative products, like investments, life insurance, and automobile insurance. Indeed, no company of any size sells only homeowners’ insurance.

Most important, the data that insurers needed to make good underwriting decisions about flood risks didn’t really exist at the time Congress created NFIP. Before air conditioning and the near-elimination of malaria-carrying mosquitos made them pleasant places to live, wet areas were mostly the domain of poor “river rats” who couldn’t afford homeowners’ insurance. Because the flow of water continually changes the contours of flood-prone areas, mapping such areas remains inherently difficult and expensive and was nearly impossible given the technology of the time. And it follows that the paltry returns they expected to earn on flood insurance offered little incentive for insurers to invest in and improve these systems.

Government policy made things worse. Since the 1920s, nearly all states have passed laws to regulate how much insurers are allowed to charge. Although these laws have eased slightly since the 1960s—and vanished entirely in Illinois—they still make insurers very reluctant to take on new types of risks. They have a legitimate fear that state governments may not let them charge enough to cover their costs and, thus, face the no-win choice of either “nonrenewing” their customers or losing money.

Even worse, from the standpoint of any insurer contemplating entering the flood insurance business, Sen. Prescott Bush (father and grandfather of the Presidents Bush) succeeded in convincing his colleagues in Congress to pass a law creating a flood insurance program in 1956. While the program was never funded, its very existence in statute provided a powerful reminder that the federal government planned to nationalize flood insurance and thus was a disincentive for anyone who might otherwise have thought of investing in the market.

This combination of the nature of the flood risk, the insurance business, the limitations of technology, and the regulatory climate made it impossible to provide flood insurance in most of the country. Spurred on by the GI Bill, the new interstate highway system, and the FHA mortgage insurance created by the Housing Act of 1949, an exploding population began moving into brand new suburbs, many of them constructed in naturally flat flood-prone areas where building was easy.

Flood damages began to rise, and Hurricane Betsy in 1965, the first post-World War II storm to do more than $1 billion in damage, provided an additional potent incentive for the federal government to do something about flood insurance.

On paper, the flood insurance law passed by Congress in 1968 looked sensible: It required participating communities to take steps to avoid building in disaster-prone areas, left requirements loose enough that private companies could take on risk if they wanted to, assured that rates on all future construction would be “actuarially adequate,” and promised that the federal government would draw up the maps that the private sector needed in the first place. As an incentive for people to buy the insurance, it denied all federal aid to those who qualified for the program but didn’t buy in. Although its creators allowed it to borrow funds from the Treasury—a stop-gap measure, lest major floods had hit in its first few years—the program was intended to break even over time and, some thought, might eventually be sold off to the private sector.

Almost none of these good intentions proved justified. The requirement to purchase insurance or lose federal aid fell by the wayside as soon as hard-hit areas came crying to Congress. Government definitions of “actuarial adequacy” ended up leaving out most of the costs private companies would factor into their rates. While communities wishing to let their residents buy into the program did have to discourage the most obviously foolhardy building, poor mapping and the natural clout of local developers made these requirements a triviality. So much for a financially responsible program. “Temporary” subsidies became permanent. Congress periodically forgave the program’s debts and, following Hurricanes Katrina, Rita, and Wilma in 2005, authorized it to borrow $20 billion from the Treasury that it had no chance of ever paying back. On the eve of Hurricane Sandy, the NFIP still owed the Treasury more than $17 billion, with another chunk of debt taken out to pay claims from Hurricane Ike in 2008.

With Congress expected to re-authorize the program every five years, many aspects of the NFIP grew worse over time. Even as Congress corrected obvious absurdities—such as subsidies for writing insurance on coastal barrier islands and other areas likely to wash away entirely—members added various benefits and even made the private insurance industry a beneficiary of the program. Under a “write your own” (WYO) program that pays them to adjust claims and service policies, private insurers get to keep about a third of the total premiums collected, but take on no real risk. While this program isn’t enormously lucrative for insurance company home offices—the tasks they’re asked to undertake are reasonably labor-intensive—it’s not a money loser either. Most large, well-known national property insurers participate in this WYO program, and not a single one was willing to step forward and offer to take on any risk when lobbyists and activists surveyed them about the topic last year.

Over the NFIP’s 45 years of existence, moreover, it has influenced the built environment to such an extent that full-scale privatization couldn’t happen, even if insurers were willing. For those whose mortgages were issued by federally chartered banks, or were purchased by Fannie Mae or Freddie Mac, policy requires the purchase of flood insurance if a property faces at least a 1 percent chance of flooding in a given year. Because NFIP rates have been kept artificially low for decades, millions of people now live in places that wouldn’t be inhabited at all absent the program’s subsidies.

Under Congress’s budget rules, eliminating the program outright would actually cost more money than keeping it operating. Once it finishes paying claims from Hurricane Sandy, the NFIP will owe nearly $30 billion to the Treasury. So long as those loans are outstanding, they don’t count toward the federal budget. Discontinuing the program, on the other hand, would leave taxpayers on the hook for that debt (and for scheduled mapping improvements) without any new premium dollars coming in the door.

The legally binding insurance contracts the program offers, likewise, make it impossible for Congress not to offer bailouts like the one that took place earlier this month. Had Congress not approved the funding, flood insurance policyholders would have gone to court and won judgments ordering the government to pay the claims anyway. Furthermore, the program, to the extent it will repay its debt at all, will never reach the point where it would look attractive to private suitors.

Everybody who has taken a close look at the NFIP realizes that the program is a mess. Once the symbolic votes to end the program had passed, both Democrats and Republicans came to basically the same conclusions that changes needed to happen. A set of reforms that became law last summer was written jointly by the moderate Republican Rep. Judy Biggert (R-Ill.) and far-left Maxine Waters (D-Calif.). That bill promises to improve maps, phase out some premium subsidies, and allow the program to transfer some of its risk to private reinsurers (insurers for insurance companies).

All of these changes make sense, and no sizable organized group stood against them, but they’re hardly the kinds of radical reforms that the program would need to put itself on firm fiscal footing for the long term. Even if all of the proposed changes work as promised, the program’s finances will remain such that any state regulator who looked over its books would forbid it from operating if it were a private company, on the basis that it can’t pay the claims it will reasonably expect to receive. At best, it will take an additional round of reforms—reforms that are unlikely to until the current program expires in September 2017—for the private sector to seriously begin assuming the liability. And that assumes Congress has the political will to ask coastal property owners to see their property insurance bills soar.

Better by far that the program had never been started. International examples show that private flood insurance can work. Germany and the United Kingdom, among other countries, write almost all flood insurance through private parties. While the business isn’t a major profit center for the insurance industry, it, at least, isn’t a taxpayer liability. And building is deterred in the most flood-prone areas.

More than anything else, the NFIP offers a stern warning to anybody who wants government to solve every problem. In the case of flood insurance, even the existence of a market failure didn’t mean the public sector necessarily had a better solution. For the foreseeable future, America is stuck with the NFIP.



The New Swedish Model

Among policy nerds back in the day, “Swedish model” meant the brand of social democracy practiced in Sweden in the second half of the twentieth century. (Somebody would usually crack wise about Anita Ekberg whenever the phrase was uttered.) But for a very long time, whenever the problems of socialism were discussed, it was common to hear people say as a kind of shut-up argument: “Ah, but socialism works in Sweden; what about the Swedish model?”

Swedish social democracy created an extensive welfare state—including comprehensive health care, generous unemployment benefits, and marginal tax rates commonly in excess of 70 percent. But that followed years of relatively free-market policies in the early twentieth century, which generated impressive economic growth. Government intervention in Sweden didn’t really get going until the 1960s.

The Economist on “Northern Lights”

Interventionists in the United States could learn something from what’s going on now in Sweden (although I fear they won’t). According to a recent spread in The Economist magazine:

"Sweden has reduced public spending as a proportion of GDP from 67 percent in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%."

Compare these rates with the U.S. tax rates, under the 2013 tax law, of 39.6 percent on incomes above $400,000 (filing single) and 35 percent on corporations.

But in some sense the current dramatic policy changes in Sweden are just a continuation, after an interruption of several years, of a dis-interventionist trend that began in the 1990s. The “new” Swedish model is not really that new. Indeed, Sweden has climbed to 30th out of 144 countries in economic freedom according to, compared to the United States, which has fallen to 18th, just ahead of Germany (31st) and far outpacing France (47th) and China (107th).

So What About the United States?

The federal deficit numbers in the United States, however, look worse compared to Sweden’s. Again, according to The Economist:

"Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period."

The current federal deficit—the annual excess of government spending over tax revenue—is around $1.1 trillion.

The accumulated debt of the United States federal government now exceeds $15 trillion, which is roughly equal to the current gross domestic product (GDP), the dollar value of all goods and services produced in the U.S. economy in 2012. That means that the federal debt as a percentage of GDP is now slightly more than 100% percent (compared to 37 percent in Sweden).

The United States does compare favorably to Sweden in federal spending as a percentage of GDP. For the United States, that’s about 39 percent, versus over 50 percent for Sweden. Including state and local spending boosts this figure somewhat over 40% percent of GDP for the United States, but that’s still significantly below Sweden's figure. Sweden, though, with one-thirtieth the population of the United States, has a per capita GDP of $57,091 to the United States’s $48,112.

If Sweden Can Do It, Can the United States?

Some fear that a debt-to-GDP ratio above 100 percent places the United States past the fiscal “point of no return”—that is, past the point where in modern times governments have been able to significantly reduce the percentage of debt to GDP. How did things get so bad?

Milton Friedman brilliantly characterized the main alternative politico-economic systems as follows:

1) spending my own money on myself (capitalist model)

2) spending my money on someone else (Christmas model)

3) spending someone else’s money on myself (rent-seeking model)

4) spending someone else’s money on someone else (socialism)

He went on to say that the problem with socialism is that eventually you run out of other people’s money.

But if Sweden, a country in which the welfare state has been so entrenched over so many decades, can make such dramatic, even radical, changes in its interventionist habits, why couldn’t the United States? A comparably dramatic reform here—perhaps “revolution” comes closer to describing what would be needed—is certainly possible, despite staggering institutional barriers, tenacious entrenched interests, and sheer economic ignorance.

The biggest obstacle, as I see it, is not having the strength of will to sustain the relentless intellectual and political battle needed to overcome all those other obstacles. And in all honesty, I find it hard to be very optimistic about that.

The Greek Model

Well into my sixth decade of life, one of the things I think I’ve learned is that radical change and the will to see it through are indeed possible—beyond any so-called point of no return—but only when it’s clearly a matter of life and death. There has to be a sense of urgency, even desperation, to the extent that you become willing to do whatever it takes to survive. But of course desperation is tricky; desperate people can easily make matters worse. It’s perhaps during crises, moments of widespread desperation, that a well-developed philosophy of freedom can have its finest moment by guiding desperate people toward real solutions.

So does the United States have to follow, say, hapless Greece—with its bloated welfare state, strangling regulation and taxation, and monetary profligacy—before our crony-capitalist system develops cracks wide enough for enough of us to see that embracing liberty and rejecting statism is our last, our best, and our only hope?

I’m afraid our economy will have to look much more like the Greeks’ before we’ll muster the will to follow the example of the Swedes.




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Tuesday, March 05, 2013

How Liberals Live

It's all about control.  Liberals can control the poor by patronizing them but the middle class are a bit pesky

The Democratic Party has two reliable groups of adherents: the rich and the poor.  Not all of the rich, of course. Not all of the poor, either.

But a large swath of wealthy people, especially those whose wealth was inherited rather than earned, wouldn’t dream of voting for a Republican. Ditto for a large number of poor people who have discovered how to sign up for various welfare programs and intend to remain on the dole for the rest of their lives.

What do these groups have in common? Nothing. They rarely meet. And if they did they wouldn't like each other.

You might be inclined to think that the political union of these two groups is an accident of modern electoral politics. But there may be something else involved. Both groups have little use for the middle class -- the poor envy them and the wealthy disdain them.

To test the idea the there might be some sort of weird sociology involved, I decided to look in on some communities where limousine liberals are firmly in control and have no fear of being ousted in the next election by middle class voters with middle class values.

Welcome to the People's Republic of Boulder, Colorado.  When you ask the residents what they like about Boulder, they are quick to respond. "You won't find any large billboards telling you where the nearest Target is," I was told. And, "Where you might find a McDonald's or a Taco Bell in some other city, in Boulder you are more likely to find Starbucks or Whole Foods."

To make sure that things stay that way, Boulder has virtually destroyed any possibility of new housing that people who shop at Target and eat at McDonald's would find affordable. Through tight zoning restrictions, the city has virtually legislated new, middle class housing out of existence. The city has even purchased large tracts of land to make sure development doesn't occur.

As a result, the average price of a home in Boulder is $375,000, in contrast to an average price of $220,000 in Colorado Springs.

Boulder has its own global warming policy. In fact, it is one of the few cities in the country that is about to jettison a private electric utility company for a publicly owned one. The reason: the private electric company isn't "green" enough. This would be comical until you stop to realize that Boulder has a lot to atone for on the climate change front. Two thirds of all the people who work in Boulder must drive to work from outside the city because they cannot afford to live there.

That's 60,000 automobiles spewing carbon dioxide into the atmosphere every morning and every evening of every congested business day, thanks to Boulder's land use planning.

While Boulder forces its middle class workforce to live in neighboring communities, it is surprisingly generous to the poor. A multimillion dollar homeless shelter is so luxurious, it actually attracts vagabonds from other Colorado cities. As one local writer explains:

    "Boulder Shelter for the Homeless is a multimillion dollar facility of recent construction. It has a spacious day room, a TV room, washing machines ($1 per load) and dryers (free) available, showers, a few dozen small storage lockers, and a large kitchen/dining room… It has a 160 person occupancy limit, and the nightly "overflow" is accommodated by a network of local churches and a synagogue managed by Boulder Outreach for Homeless Overflow.

There is also an active program to provide subsidized housing to low-income families. One development on prime real estate with a mountain view is estimated to have a market value of $500,000 per unit. In other words, low-income families are living in housing units that are worth considerably more than the average home in Boulder! Unfortunately, poor families cannot sell their homes to the highest bidders, however. Were they able to, they would immediately become non-poor and the property would go to its highest valued use.

Maximizing the value of property, however, is not the goal of the citizens of Boulder. If you have a house built, say, before 1950, there's a good chance the Landmark's Board will designate it a historic preservation site and not allow you to modify it. For new houses and renovations, the city virtually dictates how big the house can be. It also tells you what kind of fireplace you can have and what you can or can't burn in it. If you want to tear down an existing structure, you can't just bulldoze it. You have to disassemble it and recycle all the pieces.

When the owners of a trailer park decided to use the property to build condominiums instead, the trailer owners appealed to the city leaders, who rezoned the property so that it could only be used as a trailer park.

Then, of course, there is the nanny state desire to tell everyone what to do with their personal lives. Smoking in Boulder is banned in almost all indoor facilities and also outside on the sidewalk.



Economic growth centered in America's more conservative States

In the wake of the 2012 presidential election, some political commentators have written political obituaries of the "red" or conservative-leaning states, envisioning a brave new world dominated by fashionably blue bastions in the Northeast or California. But political fortunes are notoriously fickle, while economic trends tend to be more enduring.

These trends point to a U.S. economic future dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.

Overall, these corridors account for 45% of the nation's land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.

Historically, these regions were little more than resource colonies or low-wage labor sites for richer, more technically advanced areas. By promoting policies that encourage enterprise and spark economic growth, they're catching up.

Such policies have been pursued not only by Republicans but also by Democrats who don't share their national party's notion that business should serve as a cash cow to fund ever more expensive social-welfare, cultural or environmental programs. While California, Illinois, New York, Massachusetts and Minnesota have either enacted or pursued higher income taxes, many corridor states have no income taxes or are planning, like Kansas and Louisiana, to lower or even eliminate them.

The result is that corridor states took 11 of the top 15 spots in Chief Executive magazine's 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.

Energy, manufacturing and agriculture are playing a major role in the corridor states' revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Over the past decade, Texas alone has added 180,000 mostly high-paying energy-related jobs, Oklahoma another 40,000, and the Intermountain West well over 30,000. Energy-rich California, despite the nation's third-highest unemployment rate, has created a mere 20,000 such jobs. In New York, meanwhile, Gov. Andrew Cuomo is still delaying a decision on hydraulic fracturing.

Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an "American Ruhr." Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.

Korean and Japanese firms are already swarming into South Carolina, Alabama and Tennessee. What the Boston Consulting Group calls a "reallocation of global manufacturing" is shifting production away from expensive East Asia and Europe and toward these lower-cost locales. The arrival of auto, steel and petrochemical plants—and, increasingly, the aerospace industry—reflects a critical shift for the Southeast, which historically depended on lower-wage industries such as textiles and furniture.

Since 2000, the Intermountain West's population has grown by 20%, the Third Coast's by 14%, the long-depopulating Great Plains by over 14%, and the Southeast by 13%. Population in the rest of the U.S. has grown barely 7%. Last year, the largest net recipients of domestic migrants were Texas and Florida, which between them gained 150,000. The biggest losers? New York, New Jersey, Illinois and California.

As a result, the corridors are home to most of America's fastest-growing big cities, including Charlotte, Raleigh, Atlanta, Houston, Dallas, Salt Lake City, Oklahoma City and Denver. Critically for the economic and political future, the growth corridor seems particularly appealing to young families with children.

Cities such as Raleigh, Charlotte, Austin, Dallas and Houston enjoy among the country's fastest growth rates in the under-15 population. That demographic is on the wane in New York, Los Angeles, Chicago and San Francisco. Immigrants, too, flock to once-unfamiliar places like Nashville, Charlotte and Oklahoma City. Houston and Dallas already have more new immigrants per capita than Boston, Philadelphia, Seattle and Chicago.

Coastal-city boosters suggest that what they lose in numbers they make up for in "quality" migration. "The Feet are moving south and west while the Brains are moving toward coastal cities," Derek Thompson wrote a few years ago in The Atlantic. Yet over the past decade, the number of people with bachelor's degrees grew by a remarkable 50% in Austin and Charlotte and by over 30% in Tampa, Houston, Dallas and Atlanta—a far greater percentage growth rate than in San Francisco, Los Angeles, Chicago or New York.

Raleigh, Austin, Denver and Salt Lake City have all become high-tech hubs. Charlotte is now the country's second-largest financial center. Houston isn't only the world's energy capital but also boasts the world's largest medical center and, along with Dallas, has become a major corporate and global transportation hub.

The corridors' growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.




20 years ago today: Operation Showtime:  "On February 28, 1993, the Alcohol, Tobacco, and Firearms Bureau raided the home of the Branch Davidians, a religious sect just outside Waco, Texas. The agency, which has suffered bad press due to sexual harassment and racial discrimination scandals, made sure reporters were there to witness its planned heroics and dubbed the raid 'Operation Showtime.' The agents sought to apprehend sect leader David Koresh, whom they deemed a dangerous cult leader, but who, as an integrated member of the community, they could have easily arrested peacefully on his regular jog or during one of his frequent visits to the bar."

Waco: 20th Anniversary of the ATF attack on the Branch Davidians:  "Today is the 20th anniversary of the ATF’s attack on the Branch Davidians outside Waco, Texas. I thought Waco might be the most important public education lesson of the 1990s, but I don’t see the learning curve yet. Most Americans forgot or never undertstood Waco, paving the way for politicians to commit other grave abuses in the following years. Following are a few pieces I did on Waco back in ‘95, when some members of Congress briefly acted like they gave a damn about the carnage."

The coming default:  "I think it's more practical to address those who continue investing, through the purchase of government bonds, in the debts run up by Obama, Reid, Boehner et. al. and let them know that the likelihood of making their money back over the long haul passed 'slim'quite some time back and as of now is right at 'none.' Sooner or later -- probably much sooner than most people think -- that debt is going to be defaulted upon and repudiated. There is no 'if' involved, only an unspecified 'when.' Heck, it may even be this generation! Regardless of when the when is, one thing is certain: You don't want to be holding T-Bills when it arrives."

Lincoln’s inversion of the American union:  "By 1860, a choice lay open between either re-negotiating the compact between the states in order to form more perfect unions, as John Quincy Adams counseled should happen, or a powerful section would have to conquer the whole and reconstruct it into its own image, subordinating all else to its own interests. Everything in the older American tradition of the self-government of peoples points to the former path. Lincoln chose the latter path, and in doing so was in step with the nineteenth- and twentieth-century trend of industrial society to consolidationism."

NY: Bloomberg booed at annual St. Patrick’s Parade in storm-ravaged Rockaways:  "Mayor Bloomberg was booed yesterday as he walked in the annual St. Patrick’s Parade in the hurricane-ravaged Rockaways. The jeers grew so loud toward the end of the Queens parade that mayoral candidate and City Council Speaker Christine Quinn appeared to break away from the mayor to march separately. ... The mayor wasn’t the only politician crossed by paradegoers. Revelers heckled Democratic Sen. Chuck Schumer after he cheered through a bullhorn, 'Let’s hear it for the Rockaways.' 'Send money, pal. Send money!' one heckler yelled back. 'Talk is cheap!'"

CA: Smart kid designs compact nuclear reactor:  "Eighteen-year-old Taylor Wilson has designed a compact nuclear reactor that could one day burn waste from old atomic weapons to power anything from homes and factories to space colonies. The American teen, who gained fame four years ago after designing a fusion reactor he planned to build in the garage of his family’s home, shared his latest endeavor at a TED Conference in southern California on Thursday. 'It’s about bringing something old, fission, into the 21st Century,' Wilson said. 'I think this has huge potential to change the world.' He has designed a small reactor capable of generating 50-100 megawatts of electricity, enough to power as many as 100,000 homes."

Switzerland: Voters approve limits on “fat cat” executive pay:  "Swiss voters approved some of the world’s toughest limits on executives’ pay in a referendum, a move critics say could make Switzerland less attractive to multinational corporations. ... The proposal gives shareholders an annual ballot on managers’ pay. It eliminates sign-on bonuses, as well as severance packages and extra incentives for completing merger transactions. The initiative also includes rules punishing executives who violate the terms with as long as three years in jail."

From Hollywood to Kansas, drones flying under the radar:  "They hover over Hollywood film sets and professional sports events. They track wildfires in Colorado, survey Kansas farm crops and vineyards in California. They inspect miles of industrial pipeline and monitor wildlife, river temperatures and volcanic activity. They also locate marijuana fields, reconstruct crime scenes and spot illegal immigrants breaching U.S. borders. Tens of thousands of domestic drones are zipping through U.S. skies, often flouting tight federal restrictions on drone use that require even the police and the military to get special permits."

There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc



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Monday, March 04, 2013

Pictures, pictures, pictures!

Every now and again I find a picture, graphic or toon that amuses me in some way and I put it up on this blog or on one of my other blogs.  I have just put together what I see as the "best" of my pictures for the period of July to December last year.  You can access it here or here


False Prophets and the End of the World

 Krista Kafer

Remember back in 2011 when radio broadcaster and end-of-the-world prognosticator Harold Camping predicted the world’s end on October 21 yet the day passed with nary a sign of Armageddon?

Last year, the ancient Mayans and a few North American self-proclaimed prophets like Warren Jeffs had various dates in December pegged for the end. Imagine the surprise of their true believers when the sun came up the next day. Did they feel relief? Disappointment? Skepticism (somewhat overdue) toward their leaders? Some no doubt have left the cult while others wait in trepidation for their prophet to predict a new date of apocalypse.

More recently, what did those who believed in the sequestration end-of-the-world feel when they woke up this morning and everything was as they left it last night? Air traffic controllers are still directing flights and no planes have fallen from the sky. Medical research is still going on. Teachers are on their way to work as are health inspectors. National parks are open. Children are getting vaccinated. Government satellites continue to orbit the earth. The day will go on as every other day before it. No need to stay in the bunker.

As for the true believers, are they experiencing relief that the $85 billion cut—a mere 2.3 percent from this year’s $3.6 trillion budget—has not thrown the country into crisis? Or disappointment that the great federal government is not so indispensable that its growth rate cannot be trimmed a little without dire consequences? Will they feel skepticism (somewhat overdue) toward the self-interested politicians who use scare tactics to get what they want and the press that hypes fears for ratings? Some no doubt are now tuning out the fear mongering while others wait for the politicians to cry Armageddon once again.

During the past couple of “crises,” politicians’ fear mongering has successfully prevented any spending cuts while justifying tax hikes. It’s been “A tournament, tournament, a tournament of lies” to quote R.E.M.’s manic song It's the End of the World as We Know It (And I Feel Fine). Tales of fiscal cliffs and government shut-downs have distracted from the real problems ahead like the $16 trillion in national debt, Social Security and Medicare’s fragile financial footing, and yearly trillion plus dollar deficits.

While sequestration may not be the best way to cut an irresponsible $3.6 trillion budget, it has become the only way that politicians will do what is right. Only the House of Representatives has had the courage to cut spending, but it cannot act alone. Incredibly, Senate Democrats and the White House tried to pass a bill yesterday that would have increased spending and raised taxes. Didn’t Congress just raise taxes? Without sequestration, the status quo remains unchallenged and that is a truly scary situation.

In the end, however, sequestration is insufficient to adequately reduce the deficit. Because it is only a cut in the growth of spending, the government will still spend more taxpayer money next year than it did this year. More cuts in discretionary spending are long overdue and there are countless examples of duplicative and ineffective federal programs and endless corporate and farm subsidies from which lawmakers can choose. Half of the budget, however, is devoted to mandatory spending—Medicare, Social Security, Medicaid, and interest on the debt—all of which is exempt from the sequester. It is clear that lawmakers must summon the will to reform these programs in order to balance the budget now and for the long term. In 2020,interest on the federal debt will rise to $1 trillion a year. Over the next decade the Social Security disability fund and Medicare hospital insurance run out of reserves. In another ten years, Social Security will run dry. The sequester does nothing to stave off these daunting budget crises.

The sequester does, however, prove that government spending can be cut without triggering the end of the world. It shows the crisis mongering on the Left for what it is—a con designed to milk the public for more money.



Leftist obfuscation and deception

Emmett Tyrrell
I have long contended that public policy issues are as complicated as they appear because the giants of Capitol Hill like it that way, particularly the giants of the left. Bills can be written more simply. Decisions can be phrased with a certain lucidity. Yet, if they were, the electorate would mull them over and, after a cup of coffee, make a decision on them. As things stand today, with talk of budget imbalance and of esoteric matters such as "sequestration," voters scratch their heads, blink their eyes and walk away. Who gives a hoot? It is time for my morning nap, perhaps, two naps.

This is another anti-democratic way that Washington politicians have bootlegged our legislative process. Make policy so confusing to normal people that they will take little or no interest in it. It is all a game reserved exclusively for the political class. Al Gore in his new book, prosaically titled "The Future: Six Drivers of Global Change," bangs on about the power of lobbyists and giant corporations in shaping legislation -- do you know anyone who sits on more corporate boards than Gore? Has he considered the unwieldy nature of the legislation in the first place? Debt piled atop debt that even Warren Buffett cannot conceptualize. Sequestration, indeed -- why not segregation or constipation? It is a geek to me.

Then there is another of Washington's ways, lying. Or merely indulging in double talk until it reaches the point of lying or at least of deceiving. Both Republicans and Democrats do that all the time, though the number one Democrat is showing himself to be a master in the art. Now, however, he is going over the top. I believe, in his current row over sequestration, he has misstated the truth so shamelessly that he is in danger of destroying the one thing he as a politician needs the most, credibility. Once that is gone, he will have critics and even friends raising doubts about what he says on matters vast and puny.

The White House and the president have claimed that the Republicans have raised the present hullabaloo over sequestration. It was their idea, according to the White House and the president. That struck me as odd because, according to my recollection in the summer of 2011, the White House devised the idea of sequestration to ease both Republicans and Democrats into a deal enabling them to raise the debt ceiling -- remember the debt ceiling? Furthermore, if memory serves, included in the 2011 deal was a provision to bar any further tax increases. The president himself endorsed the idea. Actually, in his third debate with Mitt Romney he specifically said, "The sequester is not something I proposed." No, "It is something that the Congress proposed."

Now he is continuing to misstate the truth, but in so doing he casts doubt on Bob Woodward's latest book, and that has aroused Woodward. Says Woodward, "My extensive reporting for my book, "The Price of Politics," shows the automatic spending cuts [sequestration] were initiated by the White House and were the brainchild of [Jack] Lew [at the time White House chief of staff and now Obama's nominee for secretary of the treasury] and White House congressional relations chief Rob Nabors ... " And more: "Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid. They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved."

President Obama, you are being watched. I would not resort to such tricks typical of a community organizer but not so easily resorted to by a president. Too many people are watching. Bill Clinton could advise you on this. It is not wise to play cute with the historic record.

President Obama has a problem on Capitol Hill. He is not trusted. The Republicans do not trust him and Democrats are wary. My guess is that this administration is going to find the years ahead painful.



Study Says Free Lunches Expensive, Lack Nutrition‏

A controversial government study today revealed an astounding conclusion: free lunches are expensive and lack nutrition. All copies of the study have since disappeared and the members of the blue-ribbon panel which produced it have not been seen since it was released.

President Obama condemned the results, alleging that the panelists were "receiving bread under the table from the restaurant industry."

"It's nonsense," said the president. "Michelle and I get free lunches all the time and they don't cost us a thing. As far as not being nutritious, well, can anyone believe that after seeing the size of my wife's..." The president was interrupted by a loud noise off stage before completing his thought.

Other critics were less tactful than our unifying president.

"Their conclusion is ridiculous!" claimed Mora Forrus, president of Free Stuff Distribution Employees Union, a nationwide labor organization, which represents workers who help distribute free lunches.

"Just think about it: 'free' means it don't cost anything, so it's free! And 'lunch' is food, which means it's nourishing. Put them together and you get a nourishing free lunch! It's not rocket science!"

"This is right wing propaganda designed to deprive people of their free lunches!" said Forrus, whose union is threatening to strike unless their demands for a wage increase are met. "Distributing free lunches is a tough job - you can't expect us to work for NOTHING!"

"I have never read anything so heartless and insensitive in my life" stated Willie Cheatem, spokesperson for the Lunch Manufacturers Association, a food processing and repast fabricators trade group.

More Here


A thug union

 What would you say if a group of employees working the Alzheimer’s ward in a health care facility deliberately switched the name tags on patient’s doors making patient identification difficult and removed dietary instructions from the patient’s room, putting patients at risk?

Would it matter that these actions were deliberately taken as part of a labor dispute?

That is exactly what happened at HealthBridge, where SEIU members engaged in a deliberate campaign of sabotage against the company, targeting patient’s health in a “work action.”

HealthBridge for their part, refused to let the offending SEIU local that sanctioned the attack on their patient’s safety, back to work.

Pretty clear cut situation, and truth be told, each of the offenders should have been hauled off to jail for reckless endangerment.

But that isn’t what happens in Obama’s America 2013.

In Obama’s America, his National Labor Relations Board (NLRB) appointees ruled that HealthBridge had to take back the nearly 700 striking “workers.”

HealthBridge is now asking the Supreme Court to take up the case, with a request they have submitted to Justice Antonin Scalia.

But Obama’s NLRB rulings of the past 16 months are in trouble for a different reason.  The U.S. District Court of Appeals in the Noel Canning versus NLRB decision threw the NLRB’s ability to make decisions into question as they found that Obama had illegally bypassed the Senate confirmation process in putting three members on the Board in Jan. 2012.

This seemingly benign decision has massive ramifications for the NLRB and all of its rulings over the past year and a half due to a separate Supreme Court case known as New Process Steel.  In New Process Steel, the Supreme Court ruled that the NLRB needed to have a quorum of at least three out of five members in order to make any decisions or rulings.

If the Canning decision is upheld by the Supreme Court, then all of the NLRB decisions for the past year and a half will become null and void.

This is certainly good news for the patients at HealthBridge, who deserve quality care, rather than being endangered by union shenanigans.



Detroit faces the music

 Michigan’s Rick Snyder has appointed an emergency city manager to do for Detroit what Obama, Biden, the UAW, GM, Chrysler, the city’s council and mayor have not been able to even with a $80 billion bailout of the automotive industry.

“Snyder’s decision comes after a state review team report concluded last week that Detroit is in a financial emergency that it cannot fix on its own,” reports the Detroit Free Press. “The report detailed $14 billion in long-term bond debt and retiree pension and health benefits the city owes in addition to a $327-million accumulated deficit Detroit has been unable to tame. That figure could inflate by $100 million by July.”

The city has been powerless to stop plunging tax revenues. According to the Detroit News almost half of the city’s homeowners have not been able to pay property taxes:

“The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city's taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.”

The article notes that delinquency is so bad that in one stretch of 77 blocks only one owner had paid their taxes.

And it’s not just that residents can’t pay. It’s that many of the taxpayers say they won’t pay taxes for services they aren’t getting.

More from the Detroit News:  "Why pay taxes?" asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. "Why should I send them taxes when they aren't supplying services? It is sickening. … Every time I see the tax bill come, I think about the times we called and nobody came."

But at least the average American can take satisfaction that we have a thriving automotive industry, leading an American comeback in manufacturing.  Right?

Nope.  CNBC reported this week that the average Americans family can no longer afford to buy new cars.

According to a report by, there is only one major city where the average household income is sufficient to buy a new car.

Bingo!  You guessed it: Washington, DC.

“According to the 2013 Car Affordability Study by,” says CNBC via Yahoo Finance, “only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.”

Only the countries of Lichtenstein and Qatar enjoy higher per capita income than DC’s median income of $86,680 a year.

Thank goodness. All this time, I thought that the runaway federal spending was just fueling a sense of entitlement, privilege and contempt for us commoners amongst the people who run our government.  




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Sunday, March 03, 2013

People who are less reflective are more religious?

I would have thought that religious people reflect on things all the time but Hey Ho, Nonny O

Following is the "Cognitive Reflection Test", a set of riddles.  Maybe you might like to try answering the questions yourself.

 * A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost?

 * If it takes five machines five minutes to make five widgets, how long does it take 100 machines to make 100 widgets?

 * In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would ittake for the patch to cover half of the lake?

 * Correct Answers: Five cents, five minutes, and forty-seven days.

Most people get the "wrong" answers.  That is the point of the test.  It is claimed that people who get the answers right, however,  have a general tendency towards "reflective" thinking.  The source article for the test is here.

But as the authors acknowledge, it is basically a measure of mathematical IQ, though a particular subset of it.  So therefore any correlations with it could be explained as the outcome of general mathematics ability as well as a particular subset of mathematics ability.

But when Huffpo notes that religious people do poorly on the test,  they make large inferences from that, claiming that religious people are not critical thinkers.  Unbelievers, on the other hand are "reflective".

As I have always struggled with mathematics but am as atheist as you can get, I found that rather amusing.  So I looked up the research on which Huffpo hung its hat.  There was only one study that gave the correlation between religion and test score while also controlling for general IQ.  It is here.

And it sure is amusing.  Even BEFORE controlling for IQ, the correlation between test score and belief in God was .14, which is  of only marginal statistical significance (significant on a one-tailed test only despite N=large) and of negligible significance in any other sense.  And controlling for IQ reduced the "relationship" even further, of course.

So, to put it plainly, it is all hokum. Religious people are about as likely to get the questions right as are atheists. Hey Ho, Nonny O indeed.  I could make other criticisms of the research concerned (sampling etc.) but I can see no point in flogging a dead horse.


I cannot tell a lie


A nasty, brutish, imperial presidency

Thomas Hobbes wrote that the life of man is “solitary, poor, nasty, brutish and short.” Today’s White House definitely isn’t poor, lavishly feeding off the wealth of the American taxpayer, and the current presidency certainly isn’t short, with nearly four more years to run. But it is undeniably nasty and brutish, as veteran Washington Post reporter Bob Woodward has found after questioning President Obama’s narrative on the sequester issue.

Woodward, one of two reporters who broke the Watergate story that led to Richard Nixon’s downfall (immortalised in the 1976 Oscar winner All The President’s Men), has revealed to CNN's Wolf Blitzer that the White House warned him that he would “regret” his recent remarks on the sequester, made in a Washington Post column. (Read the exchange of emails between White House economic adviser Gene Sperling and Woodward posted by Politico here.) Woodward is hardly a conservative, and has been at the heart of the liberal media establishment for decades. He is, however, not afraid of challenging the status quo, as he did with his 2010 book Obama’s Wars. Woodward is not alone. Lanny Davis, another liberal columnist and former special counsel to Bill Clinton, who has penned several pieces critical of Obama’s policies, has also spoken out against similar White House tactics.

The threats being dished out to Woodward, Davis and others are extremely disturbing in a free society, and are a reflection of an imperial presidency that acts with impunity and is highly intolerant of dissent. The heavy-arm tactics that Obama’s team have deployed for years against conservatives are now being increasingly implemented as well against liberals questioning the president’s record.

Leading US political analyst Michael Barone predicted all this in a piece for National Review Online back in October 2008, when he wrote about “The Coming Obama Thugocracy.” It is an article that is strikingly accurate in its predictions. Here’s what Barone had to say before Obama even entered the White House:
“I need you to go out and talk to your friends and talk to your neighbors,” Barack Obama told a crowd in Elko, Nev. “I want you to talk to them whether they are independent or whether they are Republican. I want you to argue with them and get in their face.” Actually, Obama supporters are doing a lot more than getting into people’s faces. They seem determined to shut people up.

    … Once upon a time, liberals prided themselves, with considerable reason, as the staunchest defenders of free speech. Union organizers in the 1930s and 1940s made the case that they should have access to employees to speak freely to them, and union leaders like George Meany and Walter Reuther were ardent defenders of the First Amendment.

    Today’s liberals seem to be taking their marching orders from other quarters. Specifically, from the college and university campuses where administrators, armed with speech codes, have for years been disciplining and subjecting to sensitivity training any students who dare to utter thoughts that liberals find offensive. The campuses that used to pride themselves as zones of free expression are now the least free part of our society.

    Obama supporters who found the campuses congenial and Obama himself, who has chosen to live all his adult life in university communities, seem to find it entirely natural to suppress speech that they don’t like and seem utterly oblivious to claims that this violates the letter and spirit of the First Amendment. In this campaign, we have seen the coming of the Obama thugocracy, suppressing free speech, and we may see its flourishing in the four or eight years ahead.
Will American liberals now stand up to the Obama White House and condemn its blatant attempts to suppress criticism and free speech? I doubt it. The Washington Post has provided relatively little coverage of the story, despite the fact that one its own star writers has been targeted. The New York Times is, unsurprisingly, completely silent (with the exception of a small mention in a single blog) on the issue. Ironically, most of the reporting of the White House’s attempts to intimidate liberal critics has come from the conservative press, led by the Drudge Report, which has propelled the story to national prominence. Both conservatives and liberals should be rallying to the defence of free speech and freedom of the press, holding the Obama presidency to account. All Americans should be concerned by government attempts to stifle press criticism in the land of the free, tactics which undermine the very foundations of liberty.



The lesson of the Iraq war is that benign intervention can work

An unusual POV from Britain below but he has a point

Ten years after the start of the Iraq war, it is often overlooked that Britain’s participation in the highly complex military operation to overthrow Saddam Hussein’s dictatorial regime was deemed to be an unqualified success.

Because of the bitter controversies over the legality of the invasion in March 2003, as well as the non-existent stockpiles of WMD, all the attention tends to focus on what happened after Saddam’s removal from power, rather than what went before. For, in purely military terms, Operation Iraqi Freedom, the US-led campaign to remove Saddam, achieved remarkable results. Within the space of just 21 days, American forces, backed by a 10,000-strong British combat division, overthrew the Ba’athists and delivered the country in a still functioning state to the Iraqi people.

But then winning military campaigns has always been the easy part of the West’s various attempts to intervene in failed states. From the original post-September 11 intervention in Afghanistan to France’s more recent involvement in tackling al-Qaeda in Mali, Islamist militants rarely offer much resistance against well-organised Western forces equipped with devastating firepower.

It is after the fighting ends that the really difficult challenges arise. In Afghanistan the Taliban simply fled across the border and regrouped in Pakistan, while in post-Saddam Iraq the wilful failure of the Americans to impose order resulted in the country’s rapid descent into sectarian conflict. The French may have enjoyed early military success in Mali, but already Islamist militants are making their presence felt by launching suicidal attacks against French and Malian army positions. No matter how great the provocation, though, French commanders insist that a resurgence in Islamist activity will not affect their withdrawal strategy, which is due to begin this month.

We will see whether the French find the process of leaving Mali as painless as their arrival, but this desire to speed the departure is certainly motivated by a determination not to repeat the mistakes of Iraq, a conflict in which the French declined to participate.

And so far as Iraq is concerned, it is undeniable that the initial, post-Saddam administration of the country was a disaster. By meddling in Iraq’s internal affairs, with ill-considered policies such as the de-Ba’athification programme, coalition forces overstayed their welcome, with the liberators quickly turning into occupiers in the eyes of the resentful populace.

Indeed, the country was only saved from the devastation of all-out civil war by the military surge masterminded by former US General David Petraeus in the summer of 2007, which succeeded in destroying al-Qaeda’s attempts to turn the Sunni heartlands into a self-contained Islamist state and reduced the violence to manageable levels.

There will be those who argue that, with an estimated 1,500 Iraqis still losing their lives to sectarian conflict each year, that country could hardly be described as a haven of security and stability. But then its people have always had a tendency towards violence. During the 1920s, when the British created the kingdom of Iraq, the Royal Air Force was regularly ordered to bomb Shia villages to keep the natives in check.

But, for all the traumas, it is also worth remembering that Iraq today has far better prospects than it would ever have had under Saddam. The government of Prime Minister Nouri al-Maliki might have inherited some of his Ba’athist predecessor’s taste for corruption and brutality, but Iraq has a constitution that enshrines democratic principles – whether Mr Maliki likes it or not – and obliges the government to uphold the rule of law. But arguably the country’s greatest asset is its booming oil-based economy, with predictions that it could enjoy double-digit growth for the rest of the decade – so long as it can steer clear of further sectarian infighting. The lesson of Iraq, therefore, must be that, handled the right way, interventionism works.

There will certainly be many who have participated in the Arab uprisings of the past two years who now cast covetous glances at the legacy the West has bequeathed to Iraq. Egyptians, Libyans and Syrians – to name but a few – would dearly love to have the freedoms that are enjoyed by post-Saddam Iraq. But without Western help, they have little chance of fulfilling their dreams.



The Nordic economic example

 Take Estonia: its response to the crash was to make immediate and deep savings in the cost of government, while keeping taxes flat and low. Its economy quickly bounced back and its deficit vanished. Jürgen Ligi, its finance minister, does not need to make speeches blaming the eurozone for various national ills. He has been bold enough to make his own luck.

Estonia’s economy is smaller than Birmingham’s, so it can be written off as a curiosity. It is harder to dismiss Sweden, which is transforming itself from the most socialistic nation in the continent into a land of sun, snow and supply-side economics. The hero of its economic reforms is Anders Borg, who looks more like someone you might see protesting outside a meeting of European finance ministers than someone setting the agenda inside. He sports an earring and ponytail, as if to illustrate his cheery contempt for received wisdom. He showed this when he responded to the crash with a permanent tax cut for the low-paid, a move regarded across Europe as a bizarre gamble.

“Everybody was told 'stimulus, stimulus, stimulus’,” Borg said to me later. Britain and Spain followed this advice, and Borg now points to both as an example of what not to do. “Very little of the stimulus went to the economy, but they are stuck with the debt.” As a former chief economist of SEB bank, Borg approached his job with almost clinical detachment. The political clamour to borrow, spend and bail out companies made no sense to him (he briefly set up a blog to take on critics and explain why). The problem lay not so much with economic demand, he argued, but with the supply of workers. If he targeted tax cuts at the low-paid, they would have a greater incentive to move off welfare and into work.

So it was to prove. Before long, Sweden was celebrating the abolition of its deficit and the fastest economic growth in Europe. The tax cut, which almost entirely paid for itself, came alongside deeply controversial cuts to welfare, but Borg felt he had to make a choice. It was elegantly summed up in a new campaign slogan: “We are the new workers’ party.” That is a claim that many can make, but Borg had given low-paid workers the equivalent of an extra month’s salary a year. Good economics became good politics, and the Swedish Conservatives were re-elected for the first time in history.

The Nordic way has been to come up with policies that are radical, but sound dull. Borg has posed not as a ponytailed Thatcher but a slightly bored economist prescribing basic medicine. His tax cuts were justified not by grandstanding slogans (they came later) but by a 270-page book on labour market policy. His latest move, an instant, deficit-financed trimming of corporation tax from 26 per cent to 22, was described as an obvious way to “protect” the tax base. Borg has ensured the success of the Swedish pro-growth revolution by making it sound like most self-evident thing in the world.



More on Joe McCarthy

Thanks to Joe McCarthy, many Americans whom the left angelicized as "free thinkers" or "liberals" were finally unmasked as hardened Soviet agents. These would include, to take 10 examples from M. Stanton Evans' masterpiece, "Blacklisted by History: The Untold Story of Senator Joe McCarthy and His Fight Against America's Enemies," Solomon Adler, Cedric Belfrage, T.A. Bisson, V. Frank Coe, Lauchlin Currie, Harold Glasser, David Karr, Mary Jane Keeney, Leonard Mins and Franz Neumann.

As for "Have you no sense of decency, sir?" This tiresome catchphrase may quiver with righteousness on history's eternal wavelength, but it is probably the biggest crock of all. As Evans writes, Army counsel Joseph Welch famously hurled the question as an accusation at McCarthy. McCarthy's transgression, we are supposed to believe, was outing Welch's young legal associate, Frederick G. Fisher Jr., as a former member of the National Lawyers Guild, a notorious communist front group.

The truth is quite different. Six weeks earlier, Welch himself was quoted in The New York Times, confirming that Fisher had belonged to the communist front and that, as a result, Welch himself had "relieved (Fisher) from duty." Welch's hearing-room histrionics, in other words, were a lot of hot air. But they worked. To this day, the truth remains lost to most people, while this thinnest fiction is immortal.

Failing to unmask the McCarthyism libel for what it is and always was -- bunk and agitprop designed to demonize conservatives, from Joe then to Ted [Freshman Republican Sen. Ted Cruz of Texas] today -- does exactly what conservatives continue to take pains to disavow. It slanders a patriot -- Joe McCarthy -- by cavalierly associating him with an odious and politically radioactive "ism."   It's time to thank the man instead.




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