Saturday, September 25, 2010

Poverty does not make you happy

Dr Oliver Marc Hartwich

‘Money can’t buy me love,’ the Beatles once told us. Now economists like Jeffrey D. Sachs argue that money can’t buy you happiness, either.

In an opinion piece in Wednesday’s The Australian, the Columbia University professor recommended a closer look at the Himalayan kingdom of Bhutan. The Bhutanese attitude towards development and their government’s focus on happiness should inspire the West, he wrote.

Indeed, Bhutan is always held up by as the shining example in the quest to make the world a happier place. In the 1970s, the Bhutanese king decided that his subjects should strive to increase Gross National Happiness, not GDP. Ever since, this has been the country’s guiding principle. It is this principle that Sachs now recommends to more developed nations.

There is nothing wrong with happiness, of course. In fact, it was the Americans and not the Bhutanese who first declared the pursuit of happiness a national goal. But it’s nevertheless a bit odd to present Bhutan as the role model for global happiness and well-being.

Have the Bhutanese really reached a special stage of enlightenment the rest of the world should follow? There is reason for doubt if you believe reports in the country’s press. Not long ago, the Bhutan Times came to this harsh assessment:

"To the world beyond its borders, Bhutan is a sort of a fabled country. Happiness is the mantra of development here that has tickled the imagination of economists and social engineers near and far. Closer home, a microscopic view of things reveals that all is not so well. In the recent years, an overriding numbers of drug and substance abuse and an alarming suicide rate have been reported in the country, an indication that the pursuit of happiness is still a delusional journey for some."

Perhaps the Bhutanese are not so happy after all because they are poor. According to the country’s National Statistics Office, 23.2% of the total population are living below the poverty line of Nu 1,096 (approximately $25) a month.

Or maybe they are unhappy about their press freedom, which was ranked as one of the worst in the world in the 2009 ‘Freedom of the Press’ survey. That is, of course, only relevant insofar as they can read because Bhutanese literacy is below the South and West Asian average.

None of these figures featured in Professor Sachs’ rose-tinted survey of Bhutan. Such ignorance is a bliss that only Western tourists can afford. Maybe money can’t buy you happiness, but at least it can buy you a return ticket to Bhutan.

The above is a press release from the Centre for Independent Studies, dated Sept. 24. Enquiries to Snail mail: PO Box 92, St Leonards, NSW, Australia 1590.


A Nation of Peasants?

Victor Davis Hanson

Traditional peasant societies believe in only a limited good. The more your neighbor earns, the less someone else gets. Profits are seen as a sort of theft. They must be either hidden or redistributed. Envy rather than admiration of success reigns.

In contrast, Western civilization began with a very different ancient Greek idea of an autonomous citizen, not an indentured serf or subsistence peasant. The small, independent landowner -- if left to his own talents and if his success was protected by, and from, government -- would create new sources of wealth for everyone. The resulting greater bounty for the poor soon trumped their old jealousy of the better off.

Citizens of ancient Greece and Italy soon proved more prosperous and free than either the tribal folk to the north and west, or the imperial subjects to the south and east. The success of later Western civilization in general, and America in particular, is testament to this legacy of the freedom of the individual in the widest political and economic sense

We seem to be forgetting that lately -- though Mao Zedong's redistributive failures in China, or present-day bankrupt Greece, should warn us about what happens when government tries to enforce an equality of result rather than of opportunity.

Even after the failure of statism at the end of the Cold War, the disasters of socialism in Venezuela and Cuba, and the recent financial meltdowns in the European Union, for some reason America is returning to a peasant mentality of a limited good that redistributes wealth rather than creates it. Candidate Obama's "spread the wealth" slip to Joe the Plumber simply was upgraded to President Obama's "I do think at a certain point you've made enough money."

The more his administration castigates insurers, businesses and doctors; raises taxes on the upper income brackets; and creates more regulations, the more those who create wealth are sitting out, neither hiring nor lending. The result is that traditional self-interested profit-makers are locking up trillions of dollars in unspent cash rather than using it to take risks and either lose money due to new red tape or see much of their profit largely confiscated through higher taxes.

No wonder that in such a climate of fear and suspicion, unemployment remains near 10 percent. Deficits chronically exceed $1 trillion per annum. And now the poverty rate has hit a historic high. We are all getting poorer in hopes that a few don't get richer.

The public is seldom told that 1 percent of taxpayers already pay 40 percent of the income taxes collected, while 40 percent of income earners are exempt from federal income tax -- or that present entitlements like Medicare and Social Security are financially unsustainable. Instead, they hear more often that those who managed to scheme to make above $250,000 per year have obligations to the rest of us to give back about 60 percent of what they earn in higher health care and income taxes -- together with payroll and rising state income taxes, and along with increased capital gains and inheritance taxes.

That limited-good mind-set expects that businesses will agree that they now make enough money and so have no need to pursue any more profits at the expense of others. Therefore, they will gladly still hire the unemployed and buy new equipment -- as they pay higher health care or income taxes to a government that knows far better how to redistribute their income to the more needy or deserving.

This peasant approach to commerce also assumes that businesses either cannot understand administration signals or can do nothing about them. So who cares that in the Chrysler bankruptcy settlement, quite arbitrarily the government put the unions in front of the legally entitled lenders?

Health insurers should not mind that Health and Human Services Secretary Kathleen Sebelius just warned them to keep their profits down and their mouths shut -- or face exclusion from health care markets.

I suppose that no corporation should worry that the government arbitrarily announced -- without benefit a law or court ruling -- that it wanted BP to put up $20 billion in cleanup costs for the Gulf spill.

What optimistic Americans used to call a rising tide that lifts all boats is now once again derided as trickle-down economics. In other words, a newly peasant-minded America is willing to become collectively poorer so that some will not become wealthier.

The present economy suggests that it is surely getting its wish.



Democrat jobs cost the taxpayer a heap

They're making a bundle inside the Beltway, while across the country it takes $2 million to create a pothole-filling job. Never has Washington spent so much to get so little real work.

When the Democrats are in charge, the rich just get richer. Wait — isn't that what we're supposed to say about Republicans? Not so when federal stimulus funds are being spent.

Washington has taken trickle-down economics to a whole new level of inefficiency. Those closest — literally — to the seat of federal power get the most. By the time the funds make their long journey to paychecks for people doing productive work, there's not a whole lot left.

Take the example, revealed this past week, of how $111 million in stimulus money has so far funded a paltry 55 public-works jobs in Los Angeles. City Controller Wendy Gruel says two municipal departments, Public Works and Transportation, plan eventually to create or retain 264 jobs with that money, but the contracting process is so slow that most of the money is still waiting to be spent.

So the price tag per job is $2 million at this point. Even if the city departments meet their target of 264, it will drop to only $420,000. This is still several times what workers will actually get paid.

So where does all the money go in cases such as this? In part it goes to the capital costs and profit of the contractors. But much of it also gets absorbed into the normal process of government contracting, in which public employees are paid to ensure (ideally) that the taxpayers are getting the most for their money and aren't being cheated by favoritism.

Of course, bureaucrats typically feel no need to rush things along. They don't get paid any less if a street gets repaved a few months late.

L.A. may be worse than most at getting people to work, but its low return on stimulus spending is certainly not unique. Even projects touted by the Obama administration have this problem.

Vice President Joe Biden on Friday cited one in which the New York City Department of Transportation is spending $175 million to renovate bridges and a parking lot, putting all of 120 people to work. That's $1.46 million per job. Another job on Biden's list, a highway project in Ohio, has created 300 jobs and costs $138 million — $460,000 per worker.



Regime Uncertainty: Reports Keep Coming In

Each summer, Wall Street strategist Byron Wien convenes a meeting of high rollers to discuss the outlook for investment. This year’s meeting brought together fifty individuals, including more than ten billionaires. Their expectations, as reported by CNBC, are gloomy:
“They saw the United States in a long-term slow growth environment with the near-term risk of recession quite real,” said Wien, in a commentary to Blackstone clients. “The Obama administration was viewed as hostile to business and that discouraged both hiring and investment. Companies and entrepreneurs were reluctant to add workers because they didn’t know what their healthcare costs or taxes were going to be.”

Add this report to the many similar ones to which my colleagues and I have called attention over the past two years.

Of course, for mainstream macroeconomists, such evidence means nothing. In fact, they hold it in complete contempt because (1) their formal mathematical models do not have a variable called “regime uncertainty,” and (2) even if they could be persuaded to take this factor into account, the canned data on which they rely—the product of the Commerce Department’s Bureau of Economic Analysis, for the most part—do not supply them with an “official” data set for their analysis. What you can’t measure, according to their “scientific” credo, does not exist. Their de facto motto (of which I have more than once been on the receiving end) is: you’ve got no formal model; you’ve got nothing.

In my study of regime uncertainty over the past fifteen years, I have given weight to three independent forms of evidence: (

1) specific legislative, executive, judicial, and regulatory actions the government is taking, the ideology embraced by major government actors and advisors, and, in light of basic economic logic, what investors might reasonably infer about the future security of their private property rights from the government’s actions and the ideology of its leading figures;

(2) direct testimony by investors themselves, as well as relevant opinion surveys of businessmen, when available; and

(3) changes in risk premiums demanded by investors in the corporate bond markets, as shown by changes in the slope of yield curves. During the past two years, my scrutiny of these types of evidence has persuaded me that regime uncertainty has arisen and that this uncertainty probably accounts, at least in part, for the very low level at which long-term private investment has settled, with only relatively small recovery since it hit its most recent trough.

Again, however, full disclosure obliges me to warn the reader that the acknowledged experts in macroeconomics—those who work in this area at MIT, Stanford, Harvard, Chicago, Yale, Princeton, and the other esteemed universities—are to my knowledge unanimous in their disregard of the idea that regime uncertainty might be contributing to the prolongation of the present recession (or might have contributed to the prolongation of the Great Depression, as I argued in my 1997 paper).

So, if you prefer to go with the experts, you should disregard my argument and my evidence and make your bets on the basis of what the experts say. You might wish to consider, however, that these are the same experts who, virtually to a man, failed to predict the present recession (and most of the preceding ones, as well)



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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


Friday, September 24, 2010

Cutbacks in Britain!

British Conservatives set an example for America

One hundred and seventy-seven taxpayer-funded bodies are to be abolished under Coalition plans seen by The Daily Telegraph.

A further 94 are still under threat of being scrapped, four will be privatised and 129 will be merged, according to a Cabinet Office list compiled this week, while 350 other bodies have won a reprieve.

The list discloses for the first time the extent of David Cameron’s plans for the “bonfire of the quangos”, designed to save the taxpayer billions of pounds. Thousands of jobs will go as part of the reforms.

The biggest cuts concern the Department for Environment, Food and Rural Affairs with more than 50 bodies to be abolished, and the Department of Health, where about 30 bodies will be cut or have their functions transferred back to the department. These include the Human Fertilisation and Embryology Authority, the Health Protection Agency and the Commission for Rural Communities.

As already announced, the Audit Commission and UK Film Council will be scrapped along with eight regional development agencies, the list shows. The Commission for Integrated Transport, the School Food Trust and the Sustainable Development Commission are to be abolished.

The BBC World Service, the British Council and the Environment Agency are among the 94 publicly funded bodies whose fate has yet to be decided.



Some things the mass media "forgot" to tell you

By Oliver North, in Afghanistan

On Sept. 18, the Afghan people went to the polls to elect a new national parliament. It was similar to the kind of legislative election we will hold in less than six weeks -- with the same portent for political change. Yet most U.S. media coverage of Afghanistan's experiment in representative government focused on insurgent attacks aimed at disrupting the vote. Newspaper and television reports claimed "low voter interest" and highlighted "Taliban attacks aimed at reducing turnout." But, as we learned once we arrived here, those stories were simply wrong.

There were insurgent attacks -- but one-third fewer than during last year's presidential elections. According to international observers, fewer than 1 percent of polling stations had any violence at all. And those same monitors reported voter turnout -- an estimated 3.6 million, or about 40 percent of those eligible -- was actually higher than it was in the 2009 election.

Set aside for a moment that most Afghan voters had to ignore the risk of violence, walk to their local polling stations and wait in long lines -- and that turnout was higher than it is in most of our "off-year" elections. Ask instead how those who reported this story managed to get it so wrong. The answer, of course, is that there is an agenda in many of our media. Those who "shape the news" have a predisposition for the negative and make a conscious choice to ignore "good news" that contradicts their bias.

Therefore, "news" from here tends to spotlight corruption in the Karzai government, the tribulations caused by pervasive opium production and American military losses. Reports datelined "Kabul" and stories filed from Kandahar and Herat frequently cite the ineffectiveness of the Afghan National Security Forces. Yet when Gen. David Petraeus commended the ANSF after the recent elections for "safeguarding a weapon with greater potential than any other: the people's right to vote," he was all but ignored.

Thank goodness few of the warriors we are covering here in Afghanistan are even aware of the intrigues swirling in Washington or the negative news so fascinating to our media elites. The troops here are too busy fighting America's real enemies.



America In Decline

Early in his administration, President Reagan confidently asserted that "America's best days lie ahead." At the time it was true, but noted economist Thomas Sowell thinks it's no longer the case.

In his new book, "Dismantling America," Sowell argues that this nation is becoming one that many Americans no longer recognize as the country they grew up in or expected to pass on to their children and grandchildren. Rather, like Rome, America may be entering a prolonged period of decline.

Sowell sat down with IBD recently to discuss the political, social and economic forces that are leading to this decline and what, if anything, can reverse it.

IBD: What are the markers of national decline? What characteristics are different from a few decades ago that if they don't improve will lead to this country falling apart?

Sowell: One of the most serious current signs is the governing style of this administration, which is to impose as many things as possible on the public from the top down, without even letting them know what's going on.

Huge bills that fundamentally change the way the economy op erates have been rushed through Congress without hearings, without debate, and so fast that not even the members of Congress have a chance to read them. That's circumventing the notion of a constitutional government, and that's really at the heart of what the country is. The only analogy I can think of from history is when the Norman conquerors of England published their laws in French for an English-speaking nation. The utter arrogance — you're not even to know what the laws are until it is too late.

Reckless spending is another. The deficit and the national debt, as a percentage of GNP, is higher now than it was during any time except World War II. Moreover, once World War II was over we stopped the spending and started paying off the existing debt. We're going in exactly the opposite direction.

Of course, the one that trumps them all is on the international scene. That's where Iran is moving toward nuclear weapons. I'm just staggered at how little attention is being paid to that compared to frivolous things. If a nation with a record of sponsoring international terrorism gets nuclear weapons, that changes everything and it changes it forever.

Someday historians may wonder what were we thinking about when you look at the imbalance of power between the U.S. and Iran, and we sat there with folded hands and watched this happen, going through just enough motions at the United Nations to lull the public to sleep. That, I think, is the biggest threat.

Much more HERE


Socialized America

If this weren’t so sad it would be funny: full-page ads in The New Yorker urge businesses to re-locate to Canada. The ads offer the lowest corporate taxes on job-creating businesses in the G-7, the lowest government debt (2.7 percent of GDP target for 2011), and “a dynamic free-market environment.”

The United States of Obama cannot, I’m sorry to say, counter such advertisement. Now even Cuba is shedding government jobs and extricating itself from government ownership of business in grudging admission its ideology is a practical failure. Meanwhile, our president wages war against private enterprise, seeks dominion over entire industries, and moves toward unprecedented micro-managerial dictating to small businesses of almost every stripe. It took the Castro brothers a nearly interminable time to face their reality.

Fortunately, we still have real elections here. But it’s going to be awhile before we can again advertise the United States as offering a dynamic, free market, pro-business, pro-success environment.



GOP Pledge Is a Step in the Right Direction

You can read the pledge in full here. Caution: There's a lot of it

The Republicans' "Pledge to America" is an encouraging step on the road back to recapturing America. It's not enough for Republicans merely to stop Obama's disastrously destructive agenda in its tracks. This pledge is their acknowledgment that they have heard the grass roots, too -- that they are not exempt from scrutiny or accountability merely because they are the anti-Obamas.

Rep. Paul Ryan conceded as much in an interview with ABC's George Stephanopoulos when he said that the Republicans have lost their way in the past and that with this pledge, they are embracing bold steps to get this nation back on track.

That said, Ryan made clear that Republicans are not trying to reinvent the wheel. Rather, he said, "We are here trying to reclaim our country by rededicating ourselves to those timeless principles that made us exceptional." The pledge, he said, contains the basic building blocks to get us back on the right track.

Precisely correct. This is not rocket science. It's a matter of rolling back government, radically reducing spending, ensuring that taxes are not so high that they smother economic growth, repealing and replacing Obamacare, bolstering our national defense and embracing traditional values.

These are not complicated ideas, and they don't need to be. We just want to restore government to its intended role under the Constitution. These timeless principles -- not some gimmicky ideas designed by faux conservatives to appeal to "moderates" -- are what allowed America to be exceptional.

With their pledge, Republicans are reclaiming their commitment to the idea that Americans, unshackled by an oppressive government, are what made America great, not a proactive, intrusive government. This stands in sharp contrast to Obama's Democrats, who can no longer credibly deny they are the party of nearly unlimited government.




Obama makes Carter look good: "Liberals downgrade the Carter presidency as one short on transformative visions: It brought no New Deals, no New Frontiers. Instead, at its best, the Carter legacy was one of workaday reforms that made significant improvements in American life: cheaper travel and cheaper goods for the middle class. Ironically enough, the president you’d never want to have a beer with brought you better beer — and much else besides.”

The disgrace of the ruling class: "We now have confirmation that Barack Obama truly loves poor people. Because he is creating so many of them. The Census Bureau reports that America suffers with more people in poverty now than ever before in its history of reporting on poverty — 44 million. That’s up nearly 4 million in the last year alone, with the poverty rate shooting up to 14.3%. One in seven Americans now suffers in poverty.”

US Senate Republicans block campaign censorship bill again: "Republicans in the US Senate blocked for a second time Thursday a bill to toughen campaign finance rules, in a setback to President Barack Obama in the middle of a heated electoral season. Senators failed to muster the 60-vote supermajority required under Senate rules to end debate, with the roll call just short at 59 to 39. Obama had been pressing for the measure that would force special interest groups to disclose their donors when purchasing political ads.”

The pain begins: "Starting today parents will be able to keep their children on the parents’ insurance plan through age 25. But that doesn’t come for free. The Department of Health and Human Services estimates that doing so will cost an estimated $3,380 a year per child. And since employers are balking at picking up the added cost, the parents themselves will have to foot the bill. Similarly, as of today, insurers can no longer impose lifetime or annual limits on benefits or refuse coverage to children with preexisting conditions. One can argue that these new rules are the best way to deal with thorny issues — but no one can claim that insurers will do these things out of the goodness of their hearts.”

The opportunity in Haiti: "Over the last 60 years the West has provided Haiti with massive foreign aid to build infrastructure, stimulate private investment and promote good governance. But Haiti has been the graveyard of every sort of notion about how wealthy countries can help poor countries. And now some Western development experts are actually saying that this disaster is really an opportunity; a clean slate and so a chance to ‘get it right.’ But what is the ‘it’ we are going to get right? What haven’t we tried?”

The perils of “reaching across the aisle”: "According to a poll published yesterday by the Pew Research Center, nearly half of Americans admire political leaders who, rather than making compromises, ’stick to their positions,’ a result that arguably suggests a general desire for consistency and for principles. Though it isn’t at all clear what kinds of principles citizens suppose their nominal representatives ought to aspire to, it at least seems to be the case that the dissolute glad-handing euphemized as ‘compromise’ in the Beltway has grown repulsive to many if not most Americans.”

The decivilizing effects of government: "Ah for the days when the socialists believed in material progress! That is no longer the case. Now they propose poverty and advocate government regulations to bring it about — and expect us to be grateful for it. Whereas socialism could not actually work to bring about greater productivity, it can do what the ‘postmaterialist’ socialists desire. Socialistic means can work to bring about lower standards of living.”


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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


Thursday, September 23, 2010

The incomparable Pat Condell on the Ground Zero mosque


A good statement of conservative thinking

Australia recently held a federal election in which a small majority of conservative candidates were elected to the lower house. Two of those conservative candidates were however independent conservatives who decided for their own reasons to betray their electorates and join up with the major Leftist party (The Labor Party) and a solitary Green party member to form a government.

The conservative leader, Tony Abbott, is however only mildly perturbed by all that as he foresees the chaotic government that will result. He knows that the new government will blot its copybook so badly that he will be in at the next election (due in 3 years at the latest) for at least a couple of terms. So he recently summarized what he and his party stand for. I think it is a good statement of current conservative thinking in general:

The government thinks it can win the next election by lowering expectations but voters won't be satisfied by spin. During the coming term, they'll expect real tax reform to ease the burden on families and small businesses, serious job creation in viable industries, significant progress on long-term environmental problems such as water, a more assured future for regional towns and overdue infrastructure improvements in outer suburbs. Political management skills won't save the government if it can't address these problems.

For our part, though naturally disappointed, the Coalition accepts the election result as the outcome of a system of government that we profoundly respect. We rededicate ourselves to the task of opposition and are determined to be even more effective in the coming parliament than we were in the last one. Where the government delivers for the Australian people, we will give credit where it's due. Where it fails, we will be unrelenting in holding it to account, because that's what people expect of an opposition.

We are determined to be the party of ideas and of policy innovation against a government that's trapped by its alliance with the Greens and in a fiscal straitjacket because it's incapable of cutting its own spending.

Unlike Labor, the Coalition's instinct is not to see bigger government and more public spending as the answer to every problem. Government's job is to empower individuals and communities, not just to take on more responsibilities itself.

An opposition that's only a couple of by-elections or two independents' change of heart away from government has to be more than just a critic.

The Coalition took strong policies of its own to the election and will outline more in the months ahead. Almost the first task of government is to respect taxpayers' funds; hence our determination is to return to surplus by the high road of reducing wasteful spending rather than the low road of imposing new taxes.

We want direct action to improve the environment rather than new taxes dressed up as environmental benefits. We support community control of schools and hospitals. Above all, we want to foster an opportunity society rather than a welfare state by providing incentives to seniors and young people to move off welfare, and a fair dinkum [genuine] paid parental leave scheme to help families and to keep mothers in the workforce, if that's their choice.



Obamacare laws wipe out health insurance for children only

Major health insurance companies in California and other states have decided to stop selling policies for children rather than comply with a new federal healthcare law that bars them from rejecting youngsters with preexisting medical conditions.

Anthem Blue Cross, Aetna Inc. and others will halt new child-only policies in California, Illinois, Florida, Connecticut and elsewhere as early as Thursday when provisions of the nation's new healthcare law take effect, including a requirement that insurers cover children under age 19 regardless of their health histories.

The action will apply only to new coverage sought for children and not to existing child-only plans, family policies or insurance provided to youngsters through their parents' employers. An estimated 80,000 California children currently without insurance — and as many as 500,000 nationwide — would be affected, according to experts.

Insurers said they were acting because the new federal requirement could create huge and unexpected costs for covering children. They said the rule might prompt parents to buy policies only after their kids became sick, producing a glut of ill youngsters to insure. As a result, they said, many companies would flee the marketplace, leaving behind a handful to shoulder a huge financial burden.

The insurers said they now sell relatively few child-only policies, and thus the changes will have a small effect on families.

"Unfortunately, this has created an un-level competitive environment," Anthem Blue Cross, California's largest for-profit insurer, said in a statement declaring its intention to "suspend the sale of child-only policies" on Thursday, six months after the healthcare overhaul was signed.

The change has angered lawmakers, regulators and healthcare advocates, who say it will force more families to enroll in already strained public insurance programs such as Medi-Cal for the poor in California.



The Delphi Disaster: An Economic Horror Story Obama Won't Tell

The White House believes it can win back depressed and economically stressed voters by turning President Obama into the storyteller-in-chief again. But victims of Obama's Chicago politics don't want to hear any more of his own well-worn tales of struggle and sacrifice. They've got their own tragedies to tell -- heart-wrenching dramas of personal and financial suffering at the very hands of Obama.

Consider the real-life horror story of 20,000 white-collar workers at Delphi, a leading auto parts company spun off from GM a decade ago. As Washington rushed to nationalize the U.S. auto industry with $80 billion in taxpayer "rescue" funds and avoid contested court termination proceedings, the White House auto team schemed with Big Labor bosses to preserve UAW members' costly pension funds by shafting their nonunion counterparts. In addition, the nonunion pensioners lost all of their health and life insurance benefits.

The abused workers -- most from hard-hit northeast Ohio, Michigan and neighboring states -- had devoted decades of their lives as secretaries, technicians, engineers and sales employees at Delphi/GM. Some workers have watched up to 70 percent of their pensions vanish.

John Berent of Marblehead, Ohio, lost one-third of his pension: "I worked as a salaried employee for GM (30 years) and Delphi (10 years). After 40 years of dedicated service, I was forced to retire. Then Delphi terminated my health care, life insurance, vision, dental, then terminated the pension plan. Everything I worked 40 years for was wiped out."

Kelly Fabrizio of Franksville, Wis., saw her pension reduced by 55 percent after working 30 years at Delphi/GM: "I am truly scared for my future. Every day I wake up, shake my head and say out loud -- This Is Not How It Was Supposed To Be."

Roger Hoke of Columbus, Mich., and his wife were both longtime Delphi workers. His pension shrunk by more than 40 percent: "After 33 years with GM and another 10 with Delphi, what did I do wrong to deserve such a fate?"

Paul Dobosz of the Delphi Salaried Retiree Association recounts how they got screwed: "The Auto Task Force knew that the only thing standing in the way of GM getting what they wanted out of Delphi was the already frozen pension obligations." They hatched a plan to dump those pensions on the federally run Pension Benefit Guaranty Corporation, while at the same time "devising a clever way to make the UAW pensions whole using GM and TARP money to accomplish it. The scheme was documented in sworn depositions (that) revealed ... that some groups of workers were more 'politically sensitive' and would be afforded special treatment (i.e. subsidy using TARP money) while others less politically worthy would be left out."

In other words: Obama's team of auto-crats -- stocked with Big Labor-friendly appointees and self-admitted know-nothings about the car industry -- decided to "cherry pick" (one Obama official's own words) which obligations the new Government Motors company would assume and which they would abandon based on their own political whims and fealty. Due process and equal treatment of union and nonunion workers be damned. Administration officials assert that the Delphi workers' pension fund was underfunded, but two separate actuarial analyses undercut the claim.

The Delphi workers sued the feds and will have a day in court on Sept. 24. They are not asking for a bailout. They are simply asking for fair treatment under the rule of law. Delphi supporters also point out that the very scheme used to "top up" the union workers' pensions with taxpayer subsidies was challenged by the federal government and ruled illegal by the Supreme Court in the 1990s.

A separate investigation by TARP inspector general Neil Barofsky, announced last week, will also probe "whether political considerations played a role in favoring hourly over salaried retirees." It shouldn't take long to unearth the facts. Obama's own former auto czar Steve Rattner admitted in his new memoir that "attacking the union's sacred cow" could "jeopardize" the auto bailout deal.

While Obama conducts his worker empathy tour at staged town halls and rallies across the country, his Treasury Department continues to stonewall and refuses to answer questions about the Delphi disaster. But many workers left out in the cold know the truth: Lip-biting, yarn-spinning Obama doesn't feel their pain. He caused it.




I have put up a fair bit lately on my Paralipomena blog -- including one of the great scenes from British TV comedy. But you may have to "get" British humour to see how utterly mad it is

Obama: US changing battle plan on poverty: "Addressing a global conference on poverty, President Barack Obama said Wednesday that the United States is changing its approach to development and will use diplomacy, trade, investment and other policies to help poorer countries instead of just giving them money. ‘Put simply, the United States is changing the way we do business,’ Obama said as he announced the administration’s new development policy in a speech at the outset of a three-day visit to the United Nations.” [The mid-terms seem to be freaking Obama into occasional flashes of sense]

CIA Afghan paramilitary force hunts militants: "A U.S. official in Washington confirmed reports that the CIA is running an all-Afghan paramilitary group in Afghanistan that has been hunting al-Qaida, Taliban, and other militant targets for the agency. A security professional in Kabul familiar with the operation said the 3,000-strong force was set up in 2002 to capture targets for CIA interrogation. A former U.S. intelligence official said members of the covert Afghan force are used for surveillance and long-range reconnaissance and some have trained at CIA facilities in the United States.”

FL: Appeals court strikes down homosexual adoption ban: "A Florida appeals court Wednesday struck down a state law barring gay men and lesbians from adoption on the basis of equal protection under law. The Florida 3rd District Court of Appeal upheld a trial court ruling that Florida’s explicit ban was unconstitutional, noting that the state’s adoption law required officials to assess potential adoptive parents in ‘the best interests of the child.’”

Federal make-work jobs betray teenagers: "Politicians now pretend that government spending can solve any and all ills. Sloshing out federal funds for local summer job programs exemplifies this delusion. Uncle Sam first began bank-rolling summer jobs for urban teens in 1964. It was decided that government should hire any low-income teen who couldn’t find a job on his own.”

Government is America's growth industry: "Everywhere one looks there is building going on in Washington DC. No vacancies and for rent signs appear on each block the way they do in every other city. The trains going to and from are full at every hour of the day including the 2 am arrival in New York, and all the restaurants are bustling with activity. Scaffolds and cranes seem to surround all the monuments, executive buildings, and lobbying areas. They said that 25% of all the world’s cranes were being used in Dubai 3 years ago, but now they must all have moved to D. C. But this boom can be predicted to last.”

Public employes vs. the public will: "The word is out. It is now mainstream opinion that public employee salaries, benefits, and pensions are crippling state governments from coast to coast. When a group of comedians performed a ‘2010 Public Employee of the Year Awards’ sketch — wherein lumpen freeloaders compete at Harrah’s in Atlantic City for the title of ‘Surliest and Least Cooperative State Employee’ and so on — the performers were not the after-dinner entertainment at FreedomFest but the Not Ready For Prime Time venerables of Saturday Night Live. The sketch died. The rage lives on.”

Hooray, the recession is over!: "Some days, it’s embarrassing to be a professional economist. On Monday, the National Bureau of Economic Research (NBER) officially declared that our recession had ended — 15 months ago. Yes, that’s right, just as more and more analysts are worried about the economy imploding again, the NBER announces that the recession ended back in June 2009. The whole episode underscores the crudity of mainstream economics.”


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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


Wednesday, September 22, 2010

Can the Tea Partiers push back the tide of ever expanding government?

As Frederick Hayek and the great Austrian economists taught us, socialism in all forms -- be it the "International Socialism" of the Communists of the "National Socialism" of the Nazi Party -- is an attempt to extend politics into the economic realm. In order to create perfect equality or end class divisions or establish the 1000-year Reich or whatever the reformers are promising, it is necessary to take control of economic activity and once that happens, human freedom ends. After all, what has any radical reform movement been except a demand that says, "Give all power to the government and then give me control of the government." As Hayek wrote in one of the most significant sentences of the 20th century, "The person who advocates government planning of the economy always assumes that it is his plan that will be put into effect."

What we have been witnessing in this country, then, is a slow but steady erosion of individual freedom through the gradual centralization of everything in Washington. This has not been achieved by one big blow, like the Russian Revolution, but is the cumulative effect of a thousand little movements, each intent on achieving its own piece of "reform" by demanding that decision-making be centralized in order to accomplish their agenda. Each faction soon discovers that by bringing their small and perhaps even unpopular effort to the Capital, they can attain the greatest amount of leverage with the smallest amount of resources.

Look at the environmental movement. Environmentalism has always been an issue whose support is a mile wide but an inch deep. Everyone is in favor of clean air, clean water and protecting mother earth, but if it comes to paying an extra 50 cents for gasoline or buying a toilet that has to flush twice to do its job, support quickly evaporates. Therefore government mandates are necessary. I recall reading a book written in the early stages of environmentalism where the author was counseling his fellow nature lovers on how to grow their effort. "When we think of implementing an environmental agenda, our thoughts turn to government regulation," the writer said. "And when we think of government regulation, our thoughts naturally turn to Washington." No point in trying to persuade your fellow citizens. Just get down to Washington and start making law.

Ralph Nader was the first person of his generation to perceive this. When Nader started out in the early 1960s, the common career path for an ambitious young lawyer who wanted to enter politics was to go back to his hometown, start a legal practice, make a name for himself and run for town council around age 28. If things went well you could move up to the state legislature at 32 and run for Congress by 35. Then you could go to Washington and start influencing national policy.

Nader perceived that all this was unnecessary. All you needed was a law degree and a small office near the Capitol. Start poring over the Congressional Record. Target some small bureaucratic agency, broadcast the news that their lack of oversight was creating a "crisis" and you're on your way. The more you prove the agency isn't doing its job, the bigger it grows. And the bigger it has to grow, the easier target it becomes. Bring a lawsuit and pretty soon you may be running the agency yourself through court orders.

This has been America's history over the last half century. Failing to muster enough support at the grassroots level, thousands of political reform movements have found the best way to advance their agenda is to centralize decision-making in Washington and then concentrate their small but dedicated resources on dictating policy to the rest of the country.

So here, at last, is Tucker's Law: "The less support a group has for its agenda in the general population, the more intent it will be on centralizing authority so that its limited leverage will have the largest impact."

Where does the Tea Party fit into this? Very simple. The Tea Party is made up of people who have no special interests but only a general interest in moving decision-making out of Washington so they can go back to living normal lives. They are the antithesis of all the hundreds and thousands of special interests that have migrated to Washington over the past half-century. Their only interest is not to be bothered by Washington and not to have federal bureaucrats interfering with their lives.

All the Tea Party people I have ever met have been ordinary people who are already successful at something else. These are not people you usually meet in politics. What you almost always encounter are political junkies, hooked on elections, wedded to policy-wonking or crusading for their particular vision of the world. Tea Party activists are just the opposite. They already have careers as insurance agents, software engineers, furniture salesmen or small business owners. They never had any concern for politics -- or time for it -- until they realized Washington was taking nearly half their income and using it to drive the country toward national bankruptcy. That's when they decided to get involved.

All the statistics bear this out. Tea Party members are more successful than the general run of the population. They are more educated and have more income. They have very little political experience and no interest in expanding the government. They are "anti-politicians." This reverses a long tradition in American history going back to the early days of the Republic when Alexis de Tocqueville wrote, "In America there are so many ways of making a living that a man doesn't usually enter politics until he has failed at everything else."

Can such a movement succeed? Sadly, the career path of such reform efforts is drearily familiar. Time and time again, reformers from both parties have won election by preaching the virtues of small government, only to resume their place at the table and begin carving out their same portion. This has happened over and over.

Yet this time it feels different. The Tea Party is steeped in the traditions of the Founding Fathers and the American Revolution. One of the most powerful myths of that era was of George Washington as Cincinnatus, the Roman farmer who abandoned his fields to lead a successful defense of his country, then renounced his authority and returned to his plow only sixteen days later.

Can Tea Partiers save the Republic from bankruptcy and then return to their fields to resume their regular occupations? If they do the job right, they will find their ordinary lives waiting for them when they get back.



The Politics of Resentment

By Thomas Sowell

Few things have captured in microcosm what has gone so painfully wrong, where racial issues are concerned, like the recent election for mayor of Washington, D.C. Mayor Adrian Fenty, under whom the murder rate has gone down and the school children's test scores have gone up, was resoundingly defeated for re-election.

Nor was Mayor Fenty simply a passive beneficiary of the rising test scores and falling murder rates. He appointed Michelle Rhee as head of the school system and backed her as she fought the teachers' union and fired large numbers of ineffective teachers-- something considered impossible in most cities across the country.

Mayor Fenty also appointed the city's chief of police, Cathy Lanier, who has cracked down on hoodlumism, as well as crime. Either one of these achievements would made mayors local heroes in most other cities. Why then was he clobbered in the election?

One key fact tells much of the story: Mayor Fenty received more than 70 percent of the white vote in Washington. His opponent received more than 80 percent of the black vote.

Both men are black. But the head of the school system that he appointed is Asian and the chief of police is a white woman. More than that, most of the teachers who were fired were black. There were also bitter complaints that black contractors did not get as many of the contracts for doing business with the city as they expected.

In short, the mayor appointed the best people he could find, instead of running a racial patronage system, as a black mayor of a city with a black majority is apparently expected to. He also didn't spend as much time schmoozing with the folks as was expected. So what if he gave their children a better education and gave everybody a lower likelihood of being murdered?

The mayor's faults were political faults. He did his job, produced results and thought that this should be enough to get him re-elected. He refused to do polls and focus groups, and he ignored what his political advisers were warning him about.

No doubt Mayor Fenty is now a sadder and wiser man politically. While that may help him if he wants to pursue a political career, Adrian Fenty's career is not nearly as important as what his story tells us about the racial atmosphere in this country.

How did we reach the point where a city is so polarized that an overwhelming majority of the white vote goes to one candidate and the overwhelming majority of the black vote goes to the opposing candidate? How did we reach the point where black voters put racial patronage and racial symbolism above the education of their children and the safety of everyone?

There are many reasons but the trend is ominous. One key factor was the creation, back in the 1960s, of a whole government-supported industry of race hustling.

President Lyndon Johnson's "war on poverty"-- a war that we have lost, by the way-- bankrolled all kinds of local "leaders" and organizations with the taxpayers' money, in the name of community "participation" in shaping the policies of government. These "leaders" and community activists have had every reason to hype racial resentments and to make issues "us" against "them."

One of the largely untold stories of our time has been the story of how ACORN, Jesse Jackson and other community activists have been able to transfer billions of dollars from banks to their own organizations' causes, with the aid of the federal government, exemplified by the Community Reinvestment Act and its sequels.

Racial anger and racial resentments are the fuel that keeps this lucrative racket going. How surprised should anyone be that community activist groups have used mau-mau disruptions in banks and harassed both business and government officials in their homes?

Lyndon Johnson once said that it is not hard to do the right thing. What is hard is knowing what is right. We can give him credit for good intentions, so long as we remember what road is paved with good intentions.




Obama: Skepticism of government 'healthy': "Democratic leaders have repeatedly tried to cast "tea party" candidates as extremists, but President Obama on Monday said the movement exhibits some of the "healthy skepticism about government" that led to the American Revolution and that is now part of "our DNA." "I think there's also a noble tradition in the Republican and Democratic parties of saying that government should - should pay its way; that it shouldn't get so big that we're leaving debt to the next generation," Mr. Obama told a crowd gathered at the Newseum in Washington for a televised "Investing In America" town-hall meeting. "All those things, I think, are healthy." [He can talk the talk but can he walk the walk?]

GOP Senators filibuster repeal of “don’t ask, don’t tell”: "A Republican-led filibuster on Tuesday blocked efforts to repeal the ‘don’t ask, don’t tell’ policy on gays in the military, shelving an Obama administration priority at least until after the November election. The measure repealing the military policy banning gays from serving openly was part of the 2011 Defense authorization bill.”

Top economic adviser to leave White House: "President Barack Obama’s top economic adviser, Lawrence Summers, plans to leave the White House at the end of the year, a move that comes as the administration struggles to show an anxious public it’s making progress on the economy. While administration officials Tuesday quickly sought to paint the announcement as an expected development, Summers’ departure shakes up an economic team that has been under fire for its handling of the recovery.”

Yemen launches fierce offensive against al Qaeda: "Yemen has launched a wide-scale offensive against al Qaeda in the country’s southeastern province, a government official said Tuesday. The Yemeni government ‘dispatched forces backed by heavy weaponry, jets and choppers to surround a mountainous area,’ said the official, who asked for anonymity because he is not authorized to speak to the media.”

IL: Jackson hit with new allegations about US Senate bid: "U.S. Rep. Jesse Jackson Jr.’s long-held desire to become mayor of Chicago ran smack into the controversy over his last hot pursuit of a political prize when he was forced Tuesday again to deny allegations that he sought to buy a U.S. Senate seat. Adding to the troubles are revelations that a longtime political supporter told federal investigators he paid to fly a female ’social acquaintance’ of Jackson’s to Chicago at the congressman’s request.”

GOP moves to strip RINO of Energy post: "Senate Republicans on Tuesday moved to strip Alaska Sen. Lisa Murkowski of her post as top Republican on the Senate Energy and Natural Resources Committee, further punishing her as she mounts a write-in bid to try to hold onto her seat. Murkowski already has stepped down from her leadership role in the GOP caucus and could lose her Energy Committee position as soon as Wednesday if the 41-member Republican caucus votes to remove her in a secret ballot.”

SCOTUS clears way for execution : "The U.S. Supreme Court refused Tuesday to block the execution of a woman convicted of two hired killings, clearing the way for the state’s first execution of a woman in nearly a century. Teresa Lewis, 41, is scheduled to die by injection Thursday for providing sex and money to two men to kill her husband and stepson in October 2002 so she could collect on a quarter-million dollar insurance pay out.”

Judge to rule on lesbian’s return to US Air Force: "A lawyer for a decorated flight nurse discharged for being gay urged a federal judge Tuesday to reinstate her to the Air Force Reserve, and the judge indicated he might have no other choice. U.S. District Judge Ronald B. Leighton said he would issue a ruling Friday in the closely watched case of former Maj. Margaret Witt. As her trial closed, he expressed strong doubts about government arguments seeking to have her dismissal upheld.”


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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


Tuesday, September 21, 2010

Union thuggery lives on

On September 8th, the SEIU launched a “strike” against Sodexo on the campus of George Mason University, a public university in Northern Virginia. Oddly, Sodexo does not recognize the SEIU Local 32BJ that organized the “strike”. Sodexo is a private food services provider that was contracted by George Mason University to provide cafeteria and food services for students. The SEIU has been trying to draw attention to tough anti-union laws and attempted to use George Mason University as a pawn in their fight to overturn collective bargaining laws.

Virginia has some of the toughest public-sector union collective bargaining laws in the nation. So strong are the laws in Virginia that it is a crime for a public official to enter in to a collective bargaining agreement with a union. Thus, unions are extremely weak in Virginia.

There are several issues regarding the “strike” that broke out at GMU. First, the “strike” resulted in several university food operations being shut down affecting services that students had paid for up front at the beginning of the fall semester. The SEIU proved that they cared less about the money that students had spent for these services and instead sparked near revolution on campus through chants such as “No justice, no peace!”

Second, the SEIU organizers admitted that they had bussed in strikers from other universities around the country. Union thugs were brought on to the GMU campus from Ohio State, Georgia Tech and other various universities.

Third, and by far the most troubling, was the support that was lent to the event by State Senator Dave Marsden, a Democrat whose district is in Northern Virginia. Marsden went so far as to attend a “speakout” held on campus by the SEIU on the second day of the strike. We contacted Marsden for comment but he did not return our call.

For years, the SEIU has been funneling millions of dollars in legislative races to overturn the tough collective bargaining laws. Marsden is one such official in Virginia that the SEIU has been attempting to persuade through donations. Clearly, those investments have paid off as Marsden has sided with the unions when he endorsed their “strike” at GMU, and it is likely that the SEIU will be able to count upon Marsden to aid and abet any SEIU operations when they try to overturn those laws.

According to an interested parent, “If Dave Marsden had one ounce of honor he would return the SEIU money and defend the students and their parents against the ruthless power grabs by the union.” Several people affected by the situation expressed concerns about the “strike” and the meaning of the protests. The SEIU thugs that were allowed to roam around campus posed a danger to students — as they have an extensive track record of violence.

Just as troubling, the SEIU may have illegally used public-sector property at Mason to attempt to organize inside of Sodexo. Which begs the question, why did Mason allow the SEIU to run wild across the campus for the better part of a week? If any other group were to come on campus to recruit folks they would need explicit permission from the university. We have been unable to ascertain the reasons that the SEIU was allowed this privilege.

The SEIU appears to have packed up and moved on from their “strike” theatrics at Mason for the time being. But they are pulling these antics in other states attempting to influence the government officials that keep the union out of the public sector. The SEIU might just be coming to a university near you. So be on the lookout for the purple shirt brigade.



The German Miracle: A reminder

Earlier this summer George Soros and some leading Keynesian economists criticized what they regarded as Germany's overly strict fiscal discipline. Yet Germany's real output expanded at a robust 9% annual rate in the second quarter, while the U.S. economy grew at an anemic 1.6% rate. So is Germany now a role model for how to recover?

In a June op-ed, German Finance Minister Wolfgang Schäuble justified his government's decision to cut spending, citing "aversion to deficits and inflationary fears, which have their roots in German history in the past century." He was presumably making a reference to the destructive hyperinflation of the 1920s.

Yet Mr. Schäuble might have cited another relevant episode from his nation's history. Sixty-two years ago Germany became a role model for recovery from a very different crisis. In the aftermath of World War II, Germany's cities, factories and railroads lay in ruins. Severe shortages of food, fuel, water and housing posed challenges to sheer survival.

Unfortunately, occupation policy makers actually perpetuated the shortages by retaining the price controls the Nazi government had imposed before and during the war. Consumers and businessmen battled against the bureaucratic regime of controls and rationing in what the German economist Ludwig Erhard described as Der Papierkrieg — the paper war. Black markets were pervasive.

Germany's new Social Democratic Party wanted to continue the controls and rationing, and some American advisers agreed, particularly John Kenneth Galbraith. Galbraith, an official of the U.S. State Department overseeing economic policy for occupied Germany and Japan, had been the U.S. price-control czar from 1941-1943; he completely dismissed the idea of reviving the German economy through decontrol.

Fortunately for ordinary Germans, Erhard — who became director of the economic administration for the U.K.-U.S. occupation Bizone in April 1948 — thought otherwise. A currency reform that he helped to design was slated to replace the feeble old Reichsmark with the new Deutsche mark in all three Western zones on June 20. Without approval from the Allied military command, Erhard used the occasion to issue a sweeping decree abolishing most of the price controls and rationing directives. He later told friends that the American commander, Gen. Lucius Clay, phoned him when he heard about the decree and said: "Professor Erhard, my advisers tell me that you are making a big mistake." Erhard replied, "So my advisers also tell me."

It was not a big mistake. In the following weeks Erhard removed most of the Bizone's remaining price controls, wage controls, allocation edicts and rationing directives. The effects of decontrol were dramatic.

The shortages ended, black markets disappeared, and Germany's recovery began. Buying and selling with Deutsche marks replaced barter. Observers remarked that almost overnight the factories began to belch smoke, delivery trucks crowded the streets, and the noise of construction crews clattered throughout the cities.

The remarkable success of the reforms made them irreversible. A few months later the French zone followed suit. The Allied authorities went on to lower tax rates substantially.

Between June and December of 1948, industrial production in the three Western zones increased by an astounding 50%. In May 1949 the three zones were merged to form the Federal Republic of Germany, commonly called West Germany, while East Germany remained under Soviet domination as the German Democratic Republic.

Growth continued under the market-friendly policies of the new West German government. Erhard became the Minister of Economic Affairs, serving under Chancellor Konrad Adenauer from 1949 to 1963. The West German economy not only left East Germany's in the dust, it outgrew France's and the United Kingdom's despite receiving much less Marshall Plan aid. This was the era of the Wirtschaftswunder or "economic miracle."

Between 1950 and 1960 the West German economy's real output more than doubled, growing for a decade at a compound annual rate of nearly 8% per year. Econometricians who have tried to parse the various factors contributing to this remarkable record found that not all of it can be attributed to a growing labor force and investment flows, or to "catching up" from a low initial level of output. A large chunk of the period's growth is explained by superior economic policy.

Erhard succeeded Adenauer in 1963 and served as chancellor for three years. His electoral success was an endorsement of the policies that had unleashed the Wirtschaftswunder.

Erhard drew his ideas from free-market economists centered at the University of Freiburg, particularly Walter Eucken, who developed a classical liberal philosophy known as Ordoliberalism (named after ORDO, the academic journal where the economists published their ideas). Interest in Ordoliberal ideas waned in Germany after 1963, eclipsed by interest in Keynesian economics. The welfare state grew. The economy became clogged with interest-group policies. Not coincidentally, economic growth also waned. From 1960 to 1973 growth was about half as great as it had been in the 1950s, and during the period from 1973 to 1989 it was halved again to only 2% per year.

Interest in Ordoliberalism began to revive among academics in the 1970s and 1980s, and it continues to have an institutional presence in Freiburg at the university and at the Walter Eucken Institute. Greater interest among politicians might be the best thing for reviving German economic growth over the long term.

If Mr. Schäuble is sincere when he says that, by comparison with U.S. policy makers, "we take the longer view and are, therefore, more preoccupied with the implications of excessive deficits and the dangers of high inflation," he can find a useful model in the policies of his predecessor 60 years ago.



The Death of Medical Privacy

By Arie Friedman, MD

As I have read through the Patient Protection and Affordable Care Act of 2010 (PPACA, aka ObamaCare), I have been repeatedly struck by the disregard the law has for patient privacy. Time and time again, the PPACA authorizes the federal government to obtain information about patients directly from their health care providers. A particularly vivid example is Section 4302, "Understanding Health Disparities: Data Collection and Analysis." Section 4302 literally opens up almost every medical record in this country for government review and data collection. Let's go through the section with an eye towards patient privacy issues:

(1) IN GENERAL- The Secretary shall ensure that, by not later than 2 years after the date of enactment of this title, any federally conducted or supported health care or public health program, activity or survey (including Current Population Surveys and American Community Surveys conducted by the Bureau of Labor Statistics and the Bureau of the Census) collects and reports, to the extent practicable--

(A) data on race, ethnicity, sex, primary language, and disability status for applicants, recipients, or participants;

(D) any other demographic data as deemed appropriate by the Secretary regarding health disparities.

There is no pussyfooting around in this first portion of Section 4302. Within two years, the Secretary of Health and Human Services will be obtaining extensive health and demographic data about every patient who participates in federally supported programs or who interacts with a public health department. This would encompass every single patient who participates in Medicare, Medicaid, TRICARE, or the Supplemental Children's Health Insurance Program (SCHIP). It is also a good bet that data will be obtained from the Veterans' Administration, government employees' health insurance programs, and patients receiving medical care at local Boards of Health. Lastly, I suspect that various regulatory mechanisms will empower state and local Public Health Departments to collect this data on everyone.

It is worth noting that the description of data to be collected is quite broad. Aside from the laundry list of information to be collected, paragraph (D) authorizes the Secretary of HHS to obtain any additional information whatsoever if it fulfills the purpose of investigating health "disparities." Nowhere in this section is there an actual definition of "health disparities." As a result, one can begin to get a picture of the limitlessness of this mandate.

Much more HERE



Bad news for Airbus: "The pilots of a Qantas jet involved in two terrifying nosedives that caused more than 100 injuries have joined a lawsuit against aircraft manufacturers Airbus. The night flight between Singapore and Perth, QF72, was forced to make an emergency landing at Learmonth after a defect in the Airbus A330s autopilot mechanism caused two sudden drops in altitude. Passengers and crew were thrown from their seats against the cabin ceiling. Nine crew and 106 passengers and crew were injured, and the plane's captain was so traumatised by the experience he has been unable to fly since. The plane's captain told investigators that the A330s computer put the plane into an unexpected steep dive twice, then refused to let him take over the controls."

The case for a “Repeal Amendment”: "In its next session beginning in January, the legislature of Virginia will consider proposing a constitutional ‘Repeal Amendment.’ The Repeal Amendment would give two-thirds of the states the power to repeal any federal law or regulation. Its text is simple: ‘Any provision of law or regulation of the United States may be repealed by the several states, and such repeal shall be effective when the legislatures of two-thirds of the several states approve resolutions for this purpose that particularly describe the same provision or provisions of law or regulation to be repealed.’”

Electronic cigarettes: Who is the FDA working for?: "About the time a friend was putting together an ‘electronic cigarette’ package to send me, the US Food and Drug Administration was mailing letters to several manufacturers/sellers of e-cigs, informing them that the regulatory hammer is about to come down. I’m dismayed, but hardly surprised, to learn that the US government, the tobacco companies and their ‘non-profit’ anti-smoking counterparts are conspiring to keep me (and millions of other Americans) on tobacco. Smoking, and pretending to oppose it, are big moneymakers for the political class.”

In defence of speculation in food: "The anger of the mob, the righteous indignation of the ignorant, is being stirred up again. You can hardly open a copy of the Guardian or Independent but someone is lecturing you on the evil of speculation in foodstuffs. How dare these people trade in futures, commodities, when there are hungry people in the world? Surely there are some things which it is too important to have markets in? Well, as Mr. Venning always said, the correct answer to any question which begins ‘Surely’ is ‘No.’ And the reason for the no in this case is that speculation in foodstuffs stops people from starving.”


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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


Monday, September 20, 2010

Some non-partisan background on Sarah Palin

I'm not even sure that I can be classified as a "Palin fan", but I am kind of an observer. An old school buddy of mine has worked within the Alaska legislature for the last twenty years or so. He's a registered Democrat and has worked on projects that allowed him to cross paths with her going back when she was a city commissioner, as the mayor, and as the governor.

He told me that the picture painted of her as a mindless ideologue is about 180 degrees off base. He said that over the years, he'd probably dealt with her a couple of dozen times and that her input and/or decisions were always supported by law and not by personal beliefs.

The thing he told me about her that really peaked my interest of her was her ability to process information and then to quickly forge a plan with the information she was given. He said she was a living, breathing CPM chart. He said he had seen her on multiple occasions on a variety of subjects instantly absorb input from others and then respond with cogent solutions to problems. He said if you put her in a room with a bunch of people, the chances would be great that she'd be the smartest one in the room.

He told me that when he saw her debacle with Katie Couric, his first thought was, "who is that Sarah Palin imposter?" He said that was not the Sarah Palin he had worked with for years. He was sure that the interview was highly edited. It came out later that there was almost six hours of the interview that people didn't see.

He told me that if I really wanted to get a feel of who she is and how she dealt with powerful people, I should read the book, "Sarah Takes On Big Oil". It was released in October, 2008 and written by two of the state's top oil & gas editors. The lady they described had no fear to stand toe-to-toe with heavyweights and leave them slinking away with their tales between their legs. She told them that she was the advocate of the citizens of Alaska and there would be no deal making that would adversely affect them. The big boys at Exxon-Mobile and BP folded like a cheap suit.

One other thing he told me that still amazes him was how she managed to get people to work together. According to him, she could take two people with opposing opinions, sit down with them, listen to them, offer her solutions, and both guys would leave happy and not feeling that they had compromised their position at all.

He laughed at the "she doesn't read" meme. He said it is well known in the capitol that she was a voracious reader. She truly did read most of the national mags and newspapers, mostly on line, as well as a dozen or so energy trade magazines. According to him, there were stories about how she would take home stacks of papers and reports to prepare for a next-morning meeting and it was as if every word of those reports were stamped into her brain when she sat down at the meeting.

He told me not to be fooled by her syntax or her colloquialisms because they were not a fair barometer of her smarts. He said if people would just listen and not try to read between the lines, she was easy to understand. He said he'd love to see her and Obama in a debate about energy or even healthcare. He said she'd clean his clock. He even said that if she were given a day or two to prepare for a debate on foreign affairs, his money would still be on her.

He said she was the epitome of a leader. She assembled her staff, listened to their advice, allowed opposing ideas to be heard, and then acted accordingly. As a manager, she advocated making a plan based on the best info available, budgeting the plan, working the plan, measuring results, and quickly adjusting the plan if it was determined it wasn't working as expected. She believed in the First Law of Holes.

He thought her biggest struggles in the 2008 campaign were the product of trying to endorse McCain's positions on issues. She was able to voice her dissenting opinion on ANWR because her views were known, but on everything else she was expected to toe the McCain line. He said that she lacked the ability to shovel crap and sell it as perfume.

He reminded me that anyone who denies the accuracy of her "death panel" metaphor should go back and read her exact words, both her initial FB post and her rebuttal of Obama's attack on her words. He said "read what she wrote, not what someone wrote or said what she wrote". Her words in those posts have already been proven to be true.

He said that "divisive" is not a word that should be used to describe her. He said that was just a simple use of Alinsky's rule #13. He said, "look at all the issues. Her position is in line with the majority on virtually all of them".

He told me she wasn't perfect, but if I read something or heard something that was negative, I should check it out a little closer. He shared a lot more, but I'm afraid I've already rambled on for too long.

Should she run in 2012? I really don't know. Would I vote for her? It depends who she's running against. Will she drive the agenda if she doesn't run? Yes, for a long time.



Trouble in Welfare-State Paradise: France, Sweden and Cuba

Welfare states are unstable, and tend either to give way to free market reforms and liberalization, to collapse under their own weight, or to fall down the slippery slope of interventionism and degenerate into authoritarian regimes.

For as long as I can recall, and certainly for decades before I was born, the American left had a romantic attachment to the welfare states of the rest of the world. Unsatisfied with America’s own burgeoning 20th-century entitlement systems, left-liberals would point to the more domestically interventionist governments abroad as examples showing that some form of social democracy, or even outright socialism, was preferable to the United States’s alleged free market. In these more civilized countries, so goes the progressive narrative, health care and jobs are provided by the government, no one has to pay personally for anything that’s really important — a “safety net” would prevent people from growing old without financial support or getting sick without the comfort of subsidized health care.

This narrative typically neglects America’s own history with welfare, which demonstrates that the market and voluntary community will produce a far better, more humane, efficient and reliable, safety net than anything we can expect from the state. Instead, we were supposed to look to places like France or Sweden as inspiration of what government could do here in America. We should even look to Cuba, where something akin to mild communism was allegedly working well.

Well, in France, the government is on the brink of raising the retirement age to 62, much to the impassioned cries from the French left. Much as in the case of America’s own socialist retirement program, the accounting never adds up as promised. Idealists protest this effective cut in government benefits, but such cuts cannot be avoided forever. Meanwhile, another news story illustrates the fact that welfare states, even admired and civilized ones such as France, tend to have a police state side.

The issues are connected, as a government that cares for all cradle to grave, a state that acts as a parent, must also exercise control over its subjects, and show a great interest in who is coming into the country or leaving, and what they are doing with their lives and bodies. So France is in hot water for its round ups and deportation of Gypsies. The nation’s leaders understandably resent the comparisons to the Nazis being thrown around. The Nazis did, in fact, go much further in their brutality. And they also went further in their welfare statism and economic regulation—a truth often forgotten.

As an aside, anti-immigration voices in the U.S. often point out that most other countries have even more severe border controls and immigration policies than are found in the United States. But do we want to be more like France, either in immigration policy or welfare policy? It is revealing that in American history, the further we have moved from free markets and limited government, the more anti-immigration scapegoating has been manifested in actual crackdowns.

We used to have more open immigration and less welfare. The more America becomes a full-blown welfare state, the more pressure there is for America to resemble the rest of the welfare states in their exclusion of immigrants. There is a logic here for the left to consider: If you champion the human rights of immigrants, rethink your devotion to the inherently nationalistic welfare state. If we go the route of France in terms of entitlements, increased social tension and worse nativism will be on their way.

Looking over to Sweden, we see this left-liberal utopia on the verge of major privatization plans. Their system, too, is unsustainable as it is. And their welfarism has also bred police state approaches to immigration, drugs and other social issues.

The very far-right anti-immigration party has been gaining ground, and it looks like the center-right coalition will have a firm grasp of the state after the elections next week. The greens and social democrats are teeming up with former communists to try to maintain power. But the center-right, which has been running the government and whose tax cuts and reform approach to welfare have been associated with improvements for the economy, looks like a shoo-in. As the AP puts it:
Swedish politics used to be like a long marriage with brief spells of infidelity.

Voters always returned to the long-governing Social Democrats – guardians of the Nordic country’s high-tax welfare state – after short-lived flirts with center-right coalitions.

That love story, it appears, may be coming to an end as Sweden heads into national elections Sept. 19.

Update: The conservative coalition fell just short of an overall majority and the anti-immigration Sweden Democrats gained an unprecedented 20 seats, making them the kingmakers. The socialists lost big-time -- JR

But what about Cuba? The more daring progressives have always pointed to this purported example of even something resembling communism working. Well, although he has apparently retracted his statement somewhat, Castro himself admitted publicly that the Cuban model is a failure. He has also apologized for his regime’s unspeakably brutal treatment of gays. This raises another point for the left to consider. The regime they have long defended as enlightened and progressive had some of the most notoriously cruel policies toward gays—but this is often shrugged off as irrelevant to the question of Cuba’s political economy. If George W. Bush had been 1/10 as criminal in enforcing policies against gays, it would have been held up as a prime example of the inhumanity behind his entire alleged ideology of compassionate conservatism. If an American conservative were as bad on homosexual rights as Castro was, he would not be embraced by practically any leftist, no matter what else he stood for. But the Cuban regime has long gotten a pass, because of its free health care system.

We must remember that it is big governments—almost always with the bought support of the people through welfare-state handouts—that segregate, crack down, round up, deport, torture, mass murder and exterminate. It is not usually small governments that do these things. Just as with every socialist state in the modern era, Cuba’s welfarism and its police statism are inextricably linked.

But there is hope for Cuba, that it will liberalize and its socialism will give way to something more humane and economically manageable. Castro seems to be speaking out of both sides of his mouth, but you don’t have to take his word for anything. Actions speak louder than a dictator’s utterances. Cuba is cutting one million public sector jobs—a significant and clear reduction in the size of government, especially considering the nation’s entire population of about eleven million.

The age of the modern entitlement state appears to be in a transition period—and maybe, let’s hope, its final stage. It looks like most of the welfare states around the world are changing, either giving way to rightwing politics, for better and worse, liberalizing voluntarily, or otherwise demonstrating the unsustainability of their current forms. Sweden is no longer a social democratic model. France is turning toward conservatism. Cuba is slashing government. Moreover, there have been welfare riots and strikes throughout much of Europe. And of course China, while still nominally communist, has been liberalizing radically ever since the Mao years—providing the world with perhaps the most inspiring modern example of a nation moving from enslavement under the total state toward freedom, and particularly when we consider how many people’s lives are at stake.

But one country is not moving toward liberalization and free markets, and that is the United States. While the world’s socialist and welfare states are retreating from the politics of entitlement, the U.S. is still on its century-long course in that dismal direction. Last year, Putin famously warned Obama not to travel down the road of socialism, which had brought so much misery to the Russian people. And it’s not just Democrats getting such embarrassing warnings. After the 2008 financial bailouts, Venezuela’s socialist President Hugo Chavez backhandedly called President George W. Bush his “comrade” who was “to the left of me now.”

Let us hope things turn around sooner rather than later. The U.S. welfare state will give way eventually, but it will be none too pretty should the collapse of the U.S. entitlement state be delayed much longer.




Russia signs $3.7 billion deal for 50 Boeing 737s: "A Russian state-owned company said Friday it will pay $3.7 billion for 50 new Boeing 737 Next Generation airliners that will then be leased to the national carrier Aeroflot. Russian Technologies, which manages the government’s stakes in a dozen regional airlines, said in a statement that the deal includes an option to buy a further 35 jetliners.”

Old theory of Keynesian stimulus comes up against hard new facts: "The Republican alternative to more fiscal stimulus says [Dana] Milbank, is for government to ‘do nothing, and let the human misery continue.’ Any doubts about the efficacy of fiscal stimulus, he argues, were discredited by the remarkable discovery that recessions still happen: ‘Economists offering alternatives to Keynes devised mathematical models showing how markets would behave efficiently. But those ideas collapsed along with everything else in 2008.’ This is ignorant nonsense. Efficiency never meant markets can’t be surprised and crash. Besides, academic criticism of fiscal stimulus is mainly based on fact, not theory.”

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


List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)


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