The SeymourPundit

RealClearPolitics - The Future of the World Economy

2012-02-06T12:36:00.000-05:00

RealClearPolitics - The Future of the World Economy

"The next crisis could be a dollar crisis," he warns. Foreigners own roughly $23 trillion in U.S. stocks, bonds, real estate and factories; Americans own about $20 trillion in foreign assets. That's the reality of being the world's largest debtor. A loss of confidence could trigger a sell-off of American stocks and bonds that -- given the dollar's role as global currency -- would reverberate around the world.

Forewarned is forearmed - SP

Works and Days » Are You ‘Them!’?

2012-02-06T12:19:00.000-05:00

Works and Days » Are You ‘Them!’?

"Until the appearance of Barack Obama on the national scene, I knew of “them” only from an old sci-fi movie in which huge ants (“Them!”) ate people.

But there are new monsters in America, and I am starting to wonder whether I am to be considered among them: those of the uninvolved and uninformed lives, the bar-raisers, the downright mean ones, the never deserving of respect ones, the Vegas junketeers, the Super Bowl jet setters, the tuition stealers, the faux-Christians who do not pay higher taxes, the too much income makers, the tormenters of autistic children, the polluters, the enemies deserving of punishment, the targets to bring a gun against, the faces to get in front of, the limb-loppers, the tonsil pullers, the fat cats, the corporate jet owners, the one-percenters, the stupidly acting, the not paying their fair sharers, the discriminators on the “way you look”, the alligator raisers and moat builders, the vote deniers, the clingers, the typical something persons, the hunters of kids at ice cream parlors, the stereotypers and profilers, the cowards, the lazy and soft, the non-spreaders of money, the not my people people, the Tea party racists, the not been perfect and mistake makers, the disengaged and the dictating, the not the time to profiteers, the ones who did not know when to quit making money, and on and on.

My God, man, how did Barack Obama & Co. conjure up so many demons?"

Read it all.

Keystone Madness

2012-01-21T08:00:00.000-05:00

Keystone Madness

"Now, reacting to a congressional deadline to decide, Obama rejected the proposal. But he also suggested that a new application with a modified Nebraska route -- already being negotiated -- might be approved, after the election. So the sop tossed to the environmentalists could be temporary. The cynicism is breathtaking."

Indeed! - SP

13 Politically Incorrect Gun Rules

2012-01-18T10:04:00.000-05:00

guns | crime | shooting | The Daily Caller

At the top of the list:

1. Guns have only two enemies rust and politicians.

Dear Andrew Sullivan: Why Focus On Obama's Dumbest Critics? - Conor Friedersdorf - Politics - The Atlantic

2012-01-18T09:56:00.000-05:00

Dear Andrew Sullivan: Why Focus On Obama's Dumbest Critics? - Conor Friedersdorf - Politics - The Atlantic

"I submit that had Palin or Cheney or Rumsfeld or Rice or Jeb Bush or John Bolton or Rudy Giuliani or Mitt Romney proposed doing even half of those things in 2008, you'd have declared them unfit for the presidency and expressed alarm at the prospect of America doubling down on the excesses of the post-September 11 era. You'd have championed an alternative candidate who avowed that America doesn't have to choose between our values and our safety.

Yet President Obama has done all of the aforementioned things. "

Death by Wealth Tax | Hoover Institution

2012-01-17T14:43:00.000-05:00

Death by Wealth Tax | Hoover Institution

One only has to do a cursory study of the French Revolution to understand the truth of this article. If taken to the extremes that the current Administration and others in Congress (i.e most Democrats) would like to take them, not only will this country CONTINUE to suffer but it will become worse than any of us can imagine! - Sp

"Conservatives Remain the Largest Ideological Group in U.S." (And, of Late, the Dumbest) @ AMERICAN DIGEST

2012-01-15T06:21:00.000-05:00

"Conservatives Remain the Largest Ideological Group in U.S." (And, of Late, the Dumbest) @ AMERICAN DIGEST

"These people are deeply stupefied and confused. Ideology will do that to you. They seem to think, to actually believe, that this coming election is about only voting if you can vote for a candidate you like. Let me disabuse these kids of this silly notion right away. The election of 2012 ain't a conservative popularity contest. It's a war to, first, last, and always, destroy any possibility of a second term for Barack Hussain Obama.

This is not a "Vote-For" election. This is a "Vote-Against" election. This is not a "Sit-It-Out-And-Pout" election. This is a "Get-Obama-Out" election. That is what it is about and that is all it is about."

If you call yourself a Conservative you need to read and and UNDERSTAND this!! Pure ideology will NOT win this election! We ALL need to unite behind the candidate that is finally chosen and defeat the greatest threat to this country in our generation! - SP

Keystone Blue-Collar Blues

2011-12-16T06:52:00.000-05:00

Larry Kudlow at RealClearPolitics:

The payroll-tax-cut debate is not really about the payroll tax, which is a very weak-kneed economic stimulant and a lackluster job creator because of its temporary nature. Without permanent incentives at lower tax rates, these rebates don't do anything for growth and jobs.

Instead, the key to understanding the payroll-tax debate is to grasp President Barack Obama's leftist vision of taxing successful earners (the millionaire surtax) and his obsession with clean energy at the expense of fossil fuels. These are ideological positions. They support the Obama vision of class warfare and his attachment to radical environmentalism.

And the key to understanding this state of affairs is the disposition of the TransCanada Keystone XL pipeline, which Republicans cleverly threw into the payroll-tax debate as the only real job creator.

By siding with the radical greenies and standing against the Keystone pipeline, Obama has turned his back on the most traditional voting bloc in the Democratic Party: blue-collar, hardhat workers.

Manufacturing workers. Construction workers. Truckers. Pipefitters. Plumbers. The Keystone opposition coming out of the White House is completely alienating all these people, the folks who work with their hands. And it's these workers who have been decimated in the recession far more than any other group in the economy.

David Barnett, the head of the United Association of Plumbers and Pipefitters, told me on CNBC that unemployment is currently running at 20 percent to 25 percent in this blue-collar sector. He has repeatedly lobbied the White House to allow the Keystone pipeline to go through, and he notes high environmental standards in the work his men do. And yet even now, three years after the initial Keystone reviews began, the issue is still not resolved.

How can you have a jobs bill without putting blue-collar workers back to work? Answer: stubborn ideological insistence.

The Teamsters support the Keystone. So does the AFL-CIO. So do the machinists. And along with the plumbers and pipefitters, so does the Laborers' International Union of North America.

And we're not just talking about the 20,000 jobs that would accrue directly from the pipeline, but the secondary and tertiary jobs from a long supply chain that total well over 100,000.

As of this writing, the White House may dump the millionaire surtax. But that's not much of a concession, since it never would have passed anyway. Republicans are adamant. It's a nonstarter in the House, and probably the Senate, too. Meanwhile, Republican Senate leader Mitch McConnell told me the Keystone pipeline is the key to the payroll-tax-cut deal.

Both practically and symbolically, Obama's obsessive stance against the pipeline rips a huge split in the Democratic Party, and in the country as a whole. His manic support of clean energy -- just think Solyndra -- has blocked out any rational evaluation of the ongoing importance of oil and natural gas -- including the oil-and-gas-shale fracking revolution that has become a huge jobs creator in North Dakota, Pennsylvania, Texas and elsewhere.

The Obama administration recently shut down the Utica shale field in Ohio because of an Agriculture Department objection. Two hundred thousand jobs are at stake. A field in Wyoming may be shut down. New York state desperately needs jobs and growth, but is wavering because of EPA actions elsewhere.
And with the Keystone ruling delay now extending for another year, the Keystone folks might give the whole project up in the U.S., in favor of a Pacific Ocean pipeline in Canada that will sell oil to the Chinese.
While the U.S. dithers, the Canadians are taking action. As a shot across the unbalanced environmental bow, the Canadian government is opting out of the Kyoto global-warming treaty. As energy analyst Daniel Yergin writes, while the unstable Persian Gulf countries represent 16 percent of U.S. oil imports, Canada represents 25 percent.

Yergin also writes that by the beginning of the next decade, Canadian oil sands could double production to 3 million barrels per day. That means an even higher share of U.S. imports coming from our friendly neighbor and largest trading partner.

So in addition to being an economic-stability issue, this becomes an energy-independence issue and even a national-security issue.

Obama's decisions on the pipeline and other new energy breakthroughs are inimical to U.S. interests. They also are hostile to Democratic Party hardhats who may desert the president in droves come next November.

On top of all that, what may be America's leading new source of job creation will be stifled.

The Hot Race Nobody Is Talking About

2011-12-12T09:57:00.000-05:00

A battle for the soul of the Republican party?

Andrew Stiles at NRO:

The Iowa caucuses are still weeks away, but those in search of a hotly contested GOP election need look no farther than the Capitol this Tuesday, when Senate Republicans will select a new vice chairman of the GOP conference.

What may seem like a relatively mundane affair (vice chairman of the conference is the lowest-ranking leadership position), some are billing it as a monumental struggle for the very soul of the Republican party. RedState founder Erick Erickson, for example, is touting the race, which pits Sen. Ron Johnson (R., Wis.) against Sen. Roy Blunt (R., Mo.), as “the most important fight for conservatives in America.”

Erickson and other conservative activists are aggressively backing the freshman Johnson over Blunt, who is also a first-term senator, but whose 14 years serving in the House of Representatives (including a brief stint in leadership) classify him, in their eyes, as a member of “the GOP establishment.”

“I like both senators tremendously,” Erickson writes, “but for conservatives, Ron Johnson is a no-brainer here. Senator Blunt’s thinking is the same thinking that has plagued Senate Republicans for a decade now — the same old ideas and same old strategies.” Brent Bozell, chairman of ForAmerica, concurs. Johnson, he argues, is “a champion for the principles of conservatives,” whereas Blunt is a “creature of the establishment.”

Johnson supporters are quick to point out the senator’s conservative credentials via the Heritage Action for America congressional scorecard: He enjoys a 91 percent rating, compared with Blunt’s 64 percent. (Heritage Action is a notoriously tough grader; Paul Ryan rates just 78 percent.)

That said, conservative support for Johnson appears to derive less from his voting record than from his status as a true political outsider — in other words, his relative lack of political experience. Johnson, who has never held political office until now, touted his extensive private-sector experience — 31 years as an accountant and plastics manufacturer — to great effect in his campaign to oust incumbent senator Russ Feingold (D., Wis.) in 2010. In doing so, he was able to win broad support within the GOP, from both “the establishment” (the National Republican Senatorial Committee) and the Tea Party, in year that saw a fair amount of infighting between the two factions.

“I thought it was important for people from the private sector, citizen legislators, to bring that valuable perspective to Congress,” Johnson tells National Review Online. “I’ve exported products. I’ve actually created jobs. And now that I’m here, I think I can bring that valuable perspective to the leadership in the Senate.”

The case for Blunt, meanwhile, emphasizes his congressional experience. During his time in the House, which included brief tenures as majority whip and majority leader, Blunt developed close working relationships with Reps. John Boehner (R., Ohio) and Eric Cantor (R., Va.). Blunt’s supporters argue that his ties to the current House leadership would be a valuable asset when it comes to the relationship between Republican leaders in the upper and lower chambers, particularly in the (likely) event that the GOP wins control of the Senate in 2012. “Since when did experience become a negative attribute?” asks one Senate aide. “You know, it actually tends to come in handy around here.”

Blunt’s supporters also note that he would bring his own unique perspective to the Senate leadership. If elected, he would be the first chairman of the Values Action Team — a congressional coalition focusing primarily on social issues — chosen for a leadership post.

“Each one has a pretty good argument to make,” observes another Republican aide. “I’d say it’s still up in the air at this point.” Indeed, most observers predict a close vote. However, another critical factor driving support for Johnson among conservatives is the perception that “the establishment” has rigged the race in Blunt’s favor. Some suspect that Senate minority leader Mitch McConnell (R., Ky.) is actively whipping the vote against Johnson, a charge the leader’s office strongly denies.

The vice chairman’s slot initially became available in September when the current conference chairman, Sen. Lamar Alexander (R., Tenn.), announced his intention to step down from the No. 3 leadership position. Sen. John Thune (R., S.D.), who holds the No. 4 spot as policy chairman, is running unopposed to replace him. Current vice chairman Sen. John Barrasso (R., Wyo.) is expected to succeed Thune.

Johnson announced his intention to run for vice chairman just hours after Alexander’s announcement. Blunt, meanwhile, quietly began seeking support for a run of his own, but made his candidacy public only last week, after Alexander set a date for the election.

Erickson cried foul, writing: “[The election] was going to happen in January. But conservatives started gaining momentum. Naturally, Mitch McConnell had to go try to pull the rug out from under conservatives.” Sen. Jim DeMint (R., S.C.), a tea-party favorite who is backing Johnson, said he was “kind of surprised” to learn that the election was being moved up.

One Senate source contends that the decision to move the date up was made at McConnell’s bidding in a deliberate effort to help Blunt, while others insist that the vote was never officially scheduled for January and that it was Alexander who made the call. The purpose of holding the election now, they say, is to give the new leadership team sufficient time to be able to hit the ground running when Congress returns after the holiday recess.

In addition to DeMint’s, Johnson has received endorsements from Sens. Tom Coburn (R., Okla.), Lindsey Graham (R., S.C.), and Bob Corker (R. Tenn.), as well as from fellow freshman senators Marco Rubio (R., Fla.), Kelly Ayotte (R., N.H.), Mike Lee (R., Utah), and Rand Paul (R., Ky.). The endorsements from Rubio, Lee, and Paul are noteworthy because those freshman lawmakers embody the tea-party/establishment rift that characterized a number of high-profile races in 2010: Each of them defeated an establishment-backed candidate to win the Republican nomination. “There’s a broad spectrum in the conference between any party,” Johnson says. “I may be on one side, others may be on the other side.”

Having only recently announced his bid, Blunt remains mum with respect to the endorsements he has received thus far. His supporters expect a close race and note that the outcomes of such elections, which are decided by secret ballot at the weekly GOP lunch meetings, are often difficult to predict, as some senators have a habit of pledging support to multiple candidates in the run-up to a vote. Johnson acknowledges the same. “I like my chances,” he says, “but it could go either way.”

The two senators agree that, however the election turns out, 2012 will be a critical year for Senate Republicans — and for the future of the country. “America is facing a critical moment, when we’re going to decide who we’re going to be as a nation,” Blunt said in a statement announcing his bid.

“We don’t have much time,” Johnson says. “It’s absolutely crucial that the 2012 election is actually a mandate election, and we’re not just running to get over the finish line.”

Whoever gets the nod on Tuesday will certainly have his work cut out for him.

Obama on jobs: Words, not action

2011-12-11T07:39:00.000-05:00

Steve Huntley at The Chicago Sun-Times:

President Barack Obama rolled out his 2012 campaign theme the other day, a populist message with the tired mantra of Republicans as the party of the wealthy while casting himself as the defender of the middle class. “This is a make-or-break moment for the middle class,” he declared. The problem is that, as usual, his record doesn’t match his rhetoric.

A make-or-break moment for the middle class “and all those who are fighting to get into the middle class” would cry out for immediate decisive action to protect that cherished status and give a boost to all those knocking on the door of the American dream.

But that’s not the case when it comes to good-paying energy jobs.

For example, Obama decided to put off for a year construction of the Keystone pipeline to deliver oil from Canada to U.S. refineries on the Gulf Coast. That $7 billion shovel-ready construction project would generate 20,000 jobs. It’s make-or-break time but, hey, job-seekers can wait a year for a chance at an oil pipeline paycheck.

The administration is keeping the lid on oil and gas exploration since the BP oil rig accident, not only preventing new job growth but threatening more job loss. A study of oil permitting by Greater New Orleans Inc. shows that 52 percent of drilling plans in the Gulf of Mexico have been approved this year, down from the historic rate of 73.4 percent. The regulatory maze facing fossil fuels pushed the average approval time to 118 days, nearly twice the historic average of 61 days.

Saying the administration has lifted the BP-inspired moratorium “only in name,” Gregory Rusovich, chairman of the Business Council of Greater New Orleans, declared, “The governmental work stoppage has gone on long enough. Now is the time for action to prevent further job loss.”

“Now is the time for action” echoes the sentiment of Obama’s speech. But his political desire to score points with environmentalists and to promote unprofitable green energy schemes trumps this “make-or-break moment.”

The president uses his rhetoric to push his latest “jobs” plan, a one-year extension of a temporary payroll tax cut to be funded by a tax hike on the rich. There’s little evidence this temporary measure has helped the economy much.

A make-or-break moment calls for fundamental reform — like the economic blueprint presented by Obama’s deficit reduction commission a year ago. It got the cold shoulder from Obama. Its concept of raising more revenues for the government through a simpler tax code with lower rates and few or no deductions runs afoul of Obama’s populist rabble rousing over raising taxes for the rich.

Closing loopholes would also deliver a blow to crony capitalism in Washington and the influence of lobbyists. It would deprive Washington of avenues to pick winners and losers in the economy, a reduction in political clout that Obama and other big-government advocates cannot abide.

Obama mocked common-sense Republican assertions that the economy needs breathing room from red tape. Yet the huge expansion of government rule-making on his watch — the Dodd-Frank finance bill — failed to stop the finagling of Jon Corzine, the former Democratic New Jersey governor for whom Obama campaigned. Corzine’s financial machinations plunged MF Global into the eighth-largest bankruptcy in U.S. history with $1.2 billion in customer money missing.

A “make-or-break moment” requires more than words; it demands commitment and action.

Obama Abandons the Working Class

2011-12-08T14:38:00.000-05:00

The president is pursuing a top-and-bottom coalition instead.

Michael Barone at NRO:

Has Barack Obama’s Democratic party given up on winning the votes of the white working class? Thomas Edsall, the longtime Washington Post reporter now with the Huffington Post, thinks so.

Surveying the plans of Democratic strategists, Edsall wrote in the New York Times on November 28 that “all pretense of trying to win a majority of the white working class has been effectively jettisoned.”

Of course, an Obama campaign spokesman issued a prompt denial. No campaign wants any groups of voters to know that it has written them off.

But Edsall is plainly on to something. Obama campaign strategists have made it known that they are concentrating on states like Colorado and Virginia — states with high percentages of college-educated voters, young voters, and minorities.

Obama carried both these states in 2008, even though Republican presidential candidates had carried Virginia in every election and Colorado in all but one election between 1964 and 2004.

Not all Democrats accept the Colorado/Virginia strategy. William Galston, a top domestic aide in the Clinton White House, has argued that the Obama campaign should concentrate on states like Ohio, with an older and more blue-collar population.

Only one Democrat in the last century has won the presidency without carrying Ohio, Galston points out. If John Kerry had run just two points stronger there in 2004, he would have been elected president.

And Ohio’s demographics look a lot like those in Pennsylvania, which Obama carried by ten points in 2004 but where he is now running behind in the polls.

But Galston’s advice has been spurned, and perhaps that just reflects an acceptance of a longstanding reality.

For the Democratic party has not been the party of the white working class for a very long time. Democrats lost the support of white non-college voters starting in the late 1960s, as rioters burned city ghettos and college campuses were beset by student rebellions.

Democratic politicians responded by seeking to assuage what they considered to be righteous grievances.

For more than 50 years, from 1917 to 1968, the Democrats were the more hawkish of the two major parties, more likely than Republicans to support military intervention. Since 1968, they have been the more dovish party.

For more than 30 years, from 1933 to 1964, the Democrats pushed programs designed to help the working class: Social Security and Medicare, FHA home-mortgage loans, support for labor unions. But since the middle 1960s, when anti-poverty programs took center stage, Democrats in Washington and big cities have pushed welfare programs for the poor and lenient measures against crime.

The Democrats’ shift produced vote gains in some segments of the electorate. Blacks, who voted 62 percent for John Kennedy, have voted about 90 percent Democratic starting in 1964.

Democrats’ dovishness and liberal stands on cultural issues won them support from the growing percentage of college-educated voters. But those same stands cost them support among those who came to be called “Reagan Democrats.”

Talented Democratic strategists like pollster Stanley Greenberg and elections analyst Ruy Teixeira struggled for decades to come up with strategies to bring the white working class back to what they considered their natural political home. But even Bill Clinton was unable to get them back.

You can see the results in the 2008 exit poll. Barack Obama got a higher percentage of the total vote than any other Democratic nominee in history except Andrew Jackson, Franklin Roosevelt, and Lyndon Johnson.

But he did it without capturing the vast middle of the electorate. He won with a top-and-bottom coalition, carrying voters with incomes over $200,000 and under $50,000, and losing those in between. He carried voters with graduate-school degrees and those with no high-school diplomas, and ran only even with the others.

Obama lost among non-college whites by a 58 percent to 40 percent margin. And in the 2010 House elections, non-college whites went Republican by 63 percent to 33 percent.

So maybe it makes sense for Obama to write off the white working class. Yet he is doing it in an odd way, by enacting New Deal‒like programs and expending great energy on raising taxes on high earners.

Historically, that was the way to win working-class votes. But it plainly isn’t doing so now, and it seems poorly calculated to enthuse the top half of the top-and-bottom coalition. Class warfare is a dubious strategy when you’ve written off the working class.

Obama's Rx: Bad News for Middle Class

2011-12-08T14:19:00.000-05:00

Debra Saunders at The San Francisco Chronicle:

In his big economics speech in Osawatomie, Kan., Tuesday, President Barack Obama asserted, "This is a make-or-break moment for the middle class."

That's not good news for the middle class. What's the big problem facing Americans today? A lack of good jobs or the fact that rich people make more now than rich people used to make?

The president seems to believe the latter. He seems to think that if Democrats raise tax rates on the wealthy, jobs will become fruitful and multiply. Or if they don't, at least he can blame Republicans for not agreeing to his economic package.

"I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share (and) when everyone plays by the same rules," Obama told Osawatomie. But his actions and his words do not mesh.

Fair shot? How much help is a fair shot if the job market isn't improving? With the world's second-highest corporate tax rate, the United States should be more competitive in the global marketplace. Yet the president's answer isn't flatter tax rates that send a positive signal to investors. No, he wants "investments" in education and technology.

In this speech, Obama didn't mention "green jobs," his erstwhile jobs of the future. A June audit found that $500 million slated for training for green jobs in 2009 created a mere 1,336 jobs that lasted six months or longer.

Obama's jobs of the future would be construction workers "rebuilding our roads and our bridges."
Problem: The administration delayed a decision on the 1,700-mile Keystone XL pipeline until 2013. That's what happens when real jobs could cost Obama his job by alienating green voters.

Fair share? In the Kansas speech, Obama extolled Minnesota manufacturer Marvin Windows and Doors for laying off workers only once in 100 years. During tough times, Obama noted, Marvin's unnamed owners shared the pain of reduced compensation with their workers.

So who is Obama's jobs czar? Not the suckers at Marvin. General Electric chief executive Jeff Immelt, whose compensation doubled last year as GE was seeking concessions from workers, is Obama's go-to guy on jobs. The New York Times reported that General Electric didn't pay a dime in federal taxes in 2010 -- even though the multinational corporation earned $5.1 billion in U.S. profits.

Obama's other model rich guy is investor Warren Buffett, who frequently complains that his taxes should be higher. Now, Buffett doesn't pay what he says he should pay, but he says he wants to do so, and that's enough. Thus, Buffett is a member in good standing in Obamaland's fellow big-shot club.

Besides, Obama told the audience gathered at Osawatomie High School, under his plan the rich would only have to "contribute a little more."

This administration is dedicated to never telling voters that they have to pay for its agenda. Only the top 1 percent of income earners, who already pay 38 percent of federal income taxes, have to pay for big government -- and then just a skosh more.

Same rules? Please. The Obama way is to talk up fairness while your cronies hire a stable of lawyers and lobbyists to grease the path for favorable tax loopholes. This is where high tax rates come in handy; they create an incentive to cozy up to the administration to win tax incentives for pet training and technology.
That's the problem with Obama's prescription for the middle class. Sure, he wants to create more jobs, as long as all jobs go through Washington.

Obama vs. Capitalism

2011-12-07T06:58:00.000-05:00

David Harsanyi at RealClearPolitics:

In Teddy Roosevelt's era, President Barack Obama explained to the nation this week, "some people thought massive inequality and exploitation was just the price of progress. ... But Roosevelt also knew that the free market has never been a free license to take whatever you want from whoever you can."
And he's right. Even today there are people who believe they should have free license to take whatever they want from whomever they can. They're called Democrats.

Yet the president, uniter of a fractured nation, the mighty slayer of infinite straw men, claims that some Americans "rightly" suppose that the economy is rigged against their best interests in a nation awash in breathtaking greed, massive inequality and exploitation. Or I should say, he's trying to convince us that it's the case.

The middle-class struggle to find a decent life is the "defining issue of our time," the president went on. And nothing says middle-class triumph like more regulation, unionism, cronyism and endless spending. Hey, Dwight Eisenhower (a Republican!) built the interstate highway system, for goodness' sake. Ergo, we must support a bailout package for public-sector unions -- you know, for the middle class.

In what other ways will Obama secure the dream in this "defining" moment? Is the middle class going to be salvaged by raising the top marginal tax rates a few points on 1-percenters and adding $1 trillion to the federal budget in 10 years (equal to one year of federal deficit spending)? Or is the middle class going to rise again on the strength of a temporary tax holiday from programs it actually uses?

Surely, that won't do. If not, what are you talking about exactly, Mr. President? Give us the big plan. What program have you devised that offers middle-class Americans more opportunity, not just more dependency? How have you expanded the fortunes of the bitter, occasionally clingy bourgeois in the past three years -- by adding $4 trillion to their offspring's tab?

Smart people can grouse all they want about the supposed zealotry of the tea party or the conservative presidential field (and sometimes, they might be right), but Obama's mimicking Teddy Roosevelt's end-of-career hard left turn tells us a lot about the president's worldview. In his speech in Osawatomie, Kan., Obama dropped almost all pretenses and made the progressive case against an American free market system, which he called "a simple theory ... one that speaks to our rugged individualism and our healthy skepticism of too much government. ... And that theory fits well on a bumper sticker. But here's the problem: It doesn't work."

Obama, after all, is such a towering economic mind that in Osawatomie, he once again blamed ATMs (and the Internets) for job losses. This is a man we can trust. "Less productivity! More jobs!"

That's not to say capital isn't useful occasionally, of course. A few days ago, Obama hosted a $38,000-a-plate fundraiser for wealthy Manhattanites. The president -- with the Democratic National Committee -- has hauled in more cash from rent-seeking financial-sector companies than all Republican candidates combined. This president has supported every big-business bailout with taxpayers' money, even though he claims they shouldn't be on the "hook for Wall Street's mistakes."

But it is refreshing to hear Obama come out and give us a clear picture of this country in all its ugly class-conscious, unjust, menacing glory rather than veil his arguments with any of that soothing rhetoric that got him elected last time. It's time, my friends, for a new square deal.

Big Statism in Osawatomie

2011-12-07T06:52:00.000-05:00

Michael Knox Beran at NRO:

He’s been Lincoln, FDR, and Reagan; today, President Obama travels to Osawatomie, Kansas, to unveil his latest persona: Teddy Roosevelt, who delivered his “New Nationalism” manifesto in the town’s John Brown Cemetery in August 1910.

Obama would do well to be cautious in inviting comparison to the popular image of the “Rough Rider.” The president whom Matt Drudge delights to picture on his vacation bicycle, safety helmet in place and a Dukakis-in-the-tank grin on his face, does not compare favorably as an action hero to the man who fought at San Juan Hill.

But where economic policy is concerned, Obama and the “New Nationalist” Roosevelt are not so far apart. At Osawatomie, the former president lamented the “absence of effective state” in America and advocated a policy of paternalist “control” of the nation’s commerce. President Obama, too, wants more “effective state” in America. The difference is that in 1910 government spending amounted to about 8 percent percent of GDP. A century later it comes to around 40 percent. The country today has too much state, not too little.

H. L. Mencken’s analysis of Teddy as a Big State Man is worth pondering. The “America that Roosevelt dreamed of,” Mencken wrote

was always a sort of swollen Prussia, truculent without and regimented within. . . . He didn’t believe in democracy; he believed simply in government. His remedy for all the great pangs and longings of existence was not a dispersion of authority, but a hard concentration of authority. He was not in favor of unlimited experiment; he was in favor of rigid control from above, a despotism of inspired prophets and policemen. He was not for democracy as his followers understood democracy, and as it actually is and must be; he was for paternalism of the true Bismarckian pattern, almost of the Napoleonic or Ludendorffian pattern—a paternalism concerning itself with all things, from the regulation of coal-mining and meat-packing to the regulation of spelling and marital rights.

There is more than a whiff of President Obama in this, for he too is a Big State Man. And as such he is out of step with the time. A century after Roosevelt called for more government control atOsawatomie, the dead hand of Big Statism is destroying the economies of the West and bankrupting the treasuries. Yet President Obama and his party stubbornly resist policies to restore a more reasonable balance between state power and private enterprise.

The remedy for pernicious concentrations of power is free competition. That was true in 1910, although Roosevelt didn’t realize it; what the country needed then was not state control of commerce but an effective anti-monopoly law. (Although the Sherman Act had been on the books since 1890, anti-trust law was in its infancy.) Today, too much power is concentrated in Washington and on Wall Street, and the two concentrations reinforce one another. Wall Street helps fund the campaigns of politicians in both parties, and in exchange the politicians give Wall Street regulation that insulates the biggest banks from competition by subsidizing their failures. The remedy here, too, is not more state control, but more competition and more free, unsubsidized enterprise.

What's stopping job creation? Too much regulation

2011-12-07T06:47:00.000-05:00

Clarence Otis at CNN:

Editor's note: Clarence Otis Jr. is CEO of Darden Restaurants, parent company of Olive Garden, Red Lobster and LongHorn Steakhouse. He is a member of the board of the Federal Reserve Bank of Atlanta.

Orlando (CNN) -- "Businesses adding jobs" is a headline every elected official loves to read. Sadly, it's one that's getting harder and harder to find because of a policy and regulatory landscape that makes it increasingly difficult for businesses to see why and where creating new jobs makes sense.

That's especially true for me and my colleagues in the restaurant industry, who find ourselves facing a plate piled high with more and more federal, state and local regulations.

Regulatory mandates flowing from federal health care reform may be the most visible, but the list also includes measures such as new mandatory paid leave provisions that require us to change the way we accommodate employees who need to take time off when they are ill and ever more unrealistic requirements regarding employee meal and rest breaks that, in California for example, force our employees to take breaks in the middle of serving lunch or dinner.

This reality is the result of the best intentions. Policymakers working in silos at every level are pushing through regulations that on their face seem to address admirable goals -- that are each directed at outcomes that seem desirable.

The cumulative effect of these regulations, however, is significant damage to the hard-working Americans who are the intended beneficiaries.

Ben Stein: Get a job!

Obama: Help middle class Americans

U.S. factories face labor shortage

The employer mandate contained in the new health care reform law, for example, forces us to change the way we have offered health care coverage to our full- and part-time workers and, together with all the other looming regulations, causes us to rethink the way we schedule the hourly work force that is at the heart of how we deliver our product to customers.

Some suggest we accommodate the costs of new regulations in one of two ways: Accept lower profits, or charge customers more. Neither is a realistic alternative for many businesses, and certainly not for those in our industry. Like most in retail, low profit margins are a fact of life for us for good reason -- low margins are consistent with charging prices our customers can afford.

The difficult reality is that neither our shareholders nor our customers -- who are of course, the very working people policymakers champion -- can afford the cost of the unbridled increase in regulation we're experiencing.

This is not to say that the restaurant industry should not be appropriately regulated. Food safety and cleanliness standards are just two examples of categories of regulation we welcome given their importance in helping protect two critical elements of our promise to our guests, which are their safety and well-being.

So, what are restaurants doing about all of this? We are labor-intensive businesses and always will be, but we're relying more and more on technologies that make our businesses less labor intensive. It's an ominous development considering restaurants' role as a path to opportunity and entrepreneurship.

More than half of today's adults worked in food service at some point in their career, for example -- whether as a first job, a way to pay for higher education, a bridge to a new direction in their lives or as a path to a career in restaurant or food service management.

To preserve this important driver of economic opportunity, we need policymakers to understand the snowball effect of too many regulations. Their collective effect is to threaten job creation and prevent us in the restaurant industry from doing our part to put our economy back on its feet.

Policymakers and pundits bemoan the economic news of the day and chastise the business community for not "investing" or creating jobs to help lead us out of the recession. But through the lens of a business owner, a regulatory "perfect storm" is forming that causes even the most well-intentioned business leaders to pause.

Some industries -- including the restaurant industry -- continue to grow and add jobs, but what we see on the horizon puts that at risk. In the year ahead, the company I lead expects to open roughly 80 new locations, each with about 100 jobs. The entire industry projects adding 1.3 million jobs over the next decade, according to the National Restaurant Association.

My plea to policymakers is simple: Before you impose another well-meaning mandate, consider the burden we already bear and engage us in conversation. Regulations are not inherently detrimental to growth. Responsible companies such as ours, that have been supportive of the president and elected officials of both parties across the country, won't say "no" to everything and, indeed, what you might find is that we can help craft solutions that truly are better for everyone.

Our success depends on our ability to deliver on three promises: a promise to our guests to provide them exceptional dining experiences at appropriate value; a promise to our employees to provide them jobs with appropriate compensation, benefits and opportunity for advancement; and a promise to our shareholders to provide them appropriate returns on their investment. Our ability to deliver on these promises in the future is directly challenged by the regulations we see as we look ahead.

Gingrich was for cap-and-trade and lots of other things

2011-12-06T07:02:00.002-05:00

Jennifer Rubin at Right Turn:

Newt Gingrich says things about his career (“I was hired as an historian”) with such conviction that it’s easy to forget that he says so many things that just aren’t so. In the Mike Huckabee forum Saturday night he proclaimed, “I’ve never favored cap-and-trade.” But the Rick Perry campaign was quick to e-mail this excerpt from a Feb.15, 2007 interview on PBS:

In 2000, candidate George Bush pledged mandatory carbon caps; it was a campaign pledge. What did you think of it at the time? Were you for that?

I think if you have mandatory carbon caps combined with a trading system, much like we did with sulfur, and if you have a tax-incentive program for investing in the solutions, that there’s a package there that’s very, very good. And frankly, it’s something I would strongly support.

Remember when the hard-core right went nuts over Mitt Romney’s suggestion that human activity may play some role in climate change? Well, this was Gingrich in the same interview:

What was it that convinced you that global warming was a real and pressing problem?

Oh, I think the weight of evidence over time [convinced me] that it’s something that you ought to be careful about. As a conservative, I think you ought to be prudent, and it seems to me that the conservative approach should be to minimize the risk of a really catastrophic change.

And when did you come to that?

Well, I thought over the last eight or 10 years it was useful to move in that direction. I was strongly opposed to Kyoto treaty the way it was written; I think it was written by the Europeans as an anti-American document. I also think it doesn’t get the job done because it excludes China and India. But I felt that was a lost opportunity to talk about: How do you design a pro-science and pro-technology strategy that lowers the amount of damage the human race does to the planet? ...

He has since said that he doesn’t know whether global warming is due to human activity. But in 2007 he was ready to “design a strategy” around his conviction. But that is quintessential Newt.

Whatever the latest technology fashion or scientific trend (stem-cell research, global warming, ethanol subsidies, space colonization, electric cars, electromagnetic pulse weapons) Gingrich has always been ready to leap first, fork over taxpayers’ money and save the nitty-gritty details for later. If he actually had the power to see his ideas come to fruition (rather than just make money from books and lectures), we’d be hundreds of billions more in debt and have a mound of unintended consequences.

In this regard he’s the personification of what he inveighs against: right-wing social engineering. Unlike libertarians, who want government to do very little, or advocates of limited, energetic government — e.g., Rep. Paul Ryan (R-Wis.) — who want government to do a few more things but do them well, Gingrich wants to do lots and lots of things all at once. Everything is “urgent” and “essential” with him. Is there any reason to believe government could take on all his ventures without running up a bill and doing most of them poorly?

Like the frenetic White Rabbit (“We’re late! We’re late!”), Gingrich implores us not to dawdle and hence not to soberly evaluate the potential consequences of his schemes. There is a word for someone convinced of his own wisdom, willing to enact radical changes, indifferent to unintended consequences and certain everything will “pay for itself”: liberal.

The Welfare State's Reckoning

2011-12-05T07:00:00.000-05:00

Robert Samuelson at RealClearPolitics:

WASHINGTON -- We Americans fool ourselves if we ignore the parallels between Europe's problems and our own. It's reassuring to think them separate, and the fixation on the euro -- Europe's common currency -- buttresses that mindset. But Europe's turmoil is more than a currency crisis and was inevitable, in some form, even if the euro had never been created. It's ultimately a crisis of the welfare state, which has grown too large to be easily supported economically. People can't live with it -- and can't live without it. The American predicament is little different.

Government expansion was one of the 20th century's great transformations. Wealthy nations adopted programs for education, health care, unemployment insurance, old-age assistance, public housing and income redistribution. "Public spending for these activities had been almost nonexistent at the beginning of the 20th century," writes economist Vito Tanzi in his book "Government versus Markets."

"Survival of the fittest" no longer sufficed. Europeans have never liked markets as much as Americans do. In the 1880s, German Chancellor Bismarck created health, old-age and accident insurance: landmarks regarded as originating the welfare state. The Great Depression discredited capitalism, and after World War II, communists and socialists enjoyed strong support in part because they "had formed the backbone of wartime resistance movements," writes Barry Eichengreen in "The European Economy Since 1945."The numbers -- to those who don't know them -- are astonishing. In 1870, all government spending was 7.3 percent of national income in the United States, 9.4 percent in Britain, 10 percent in Germany and 12.6 percent in France. By 2007, the figures were 36.6 percent for the United States, 44.6 percent for Britain, 43.9 percent for Germany and 52.6 percent for France. Military costs once dominated budgets; now, social spending does.

To flourish, the welfare state requires favorable economics and demographics: rapid economic growth to pay for social benefits; and young populations to support the old. Both economics and demographics have moved adversely.

The great expansion of Europe's welfare states started in the 1950s and 1960s, when annual economic growth for its rich nations averaged 4.5 percent compared with a historical rate since 1820 of 2.1 percent, notes Eichengreen. This sort of growth, it was assumed, would continue indefinitely. Not so. From 1973 to 2000, growth settled back to 2.1 percent. More recently, it's been lower.

Demographics shifted, too. In 2000, Italy's 65-and-over population was already 18 percent of the total; in 2010, it was 21 percent, and the projection for 2050 is 34 percent. Figures for the European Union's 27 countries are 16 percent, 18 percent and 29 percent.

Until the financial crisis, the welfare state existed in a shaky equilibrium with sluggish economic growth. The crisis destroyed that equilibrium. Economic growth slowed. Debt -- already high -- rose. Government bonds once considered ultra-safe became risky.

Switch to the United States. Broadly speaking, the story is similar. The great expansion of America's welfare state (though we avoid that term) occurred in the 1960s and 1970s with the creation of Medicare, Medicaid and food stamps. In 1960, 26 percent of federal spending represented payments for individuals; in 2010, the figure was 66 percent. Economic growth in the 1950s and 1960s averaged about 4 percent; from 2000 to 2007, the average was 2.4 percent. Our elderly population was 13 percent in 2010; the 2050 estimate is 20 percent.

What separates the United States and Europe is that (so far) we haven't suffered a backlash from bond markets. Despite high and rising U.S. government debt, Treasury securities still fetch low interest rates, about 2 percent on 10-year bonds. Will that last? It's true that cutting spending too quickly might threaten a fragile economic recovery. But President Obama and Congress can't be accused of making this mistake. They do little and excel at blaming each other.

The modern welfare state has reached a historic reckoning. As a political institution, it hasn't adapted to change. Politics and economics are at loggerheads. Vast populations in Europe and America expect promised benefits and, understandably, resent any hint that they will be cut. Elected politicians respond accordingly. But the resulting inertia poses an economic threat, one already realized in Europe. As deficits or taxes rise, the risk is that economic instability will increase, growth will decline, or both. Paying promised benefits becomes harder. Or austerity becomes unavoidable.

The paradox is that the welfare state, designed to improve security and dampen social conflict, now looms as an engine for insecurity, conflict and disappointment. Facing the hard questions of finding a sustainable balance between individual protections and better economic growth, the Europeans have spent years dawdling. The parallel with our situation is all too obvious.

Time for Congress to step up on debt

2011-12-05T06:31:00.000-05:00

From Judd Gregg at The Hill:

There are defining events in all nations’ progressions. Often they are violent, such as the Battle of Britain or our own Civil War or the French Revolution. Sometimes they are just things that happen without death and destruction, such as the Smoot-Hawley trade bill which was the accelerant of the Great Depression, or the massive inflation of the Weimar Republic that led to the rise of Adolf Hitler.

When people point back in history 20 years from now, looking for the causes that led the United States into a period of economic decline and a significant erosion in our standard of living, the example most given will be the failure of President Obama and Congress to make the supercommittee work.

We are now functioning under a government on autopilot, leaderless but not without direction as the autopilot follows its very distinct course. The growth of the government and the advancing of the march of debt and deficits are locked in. The path is one where deficits will average $1 trillion for years to come, where the government as a percent of GDP will grow to European scale and where the debt will soon be a burden that will lead to some type of fiscal calamity, most likely hyperinflation and a seizing-up of our ability to sell our debt at a reasonable price.

How does this autopilot get turned off?

It is clear after the crash of the supercommittee and the disappearance of the president to Bali that the course is not going to be adjusted by those leaders who are supposedly elected and paid to make rational policy and avoid such things as the meltdown of our nation’s future prosperity.

There is, of course, the Federal Reserve, but it too is becoming timid in the face of what is now a bipartisan bashing of its independence. It seems that for many elected personages it is a free shot to beat up on the Fed as a conspiratorial group dedicated to manipulating the lives of Americans in a manner that has caused most of the fiscal problems in our society.

This allows such personages to avoid looking in the mirror to assess blame. Thus, the Federal Reserve becomes cautious for fear that taking assertive action might lead to Congress actually doing a de facto takeover of the printing presses through “oversight.”

This leaves us with the people. There’s not a whole lot of hope there, given the tendency to demand more in services, especially when it affects you, than the country can afford. It’s hard to do the right thing if it means slowing the flow from the entitlement spigots.

Thus we must return to Congress.

Maybe it is time for the 37 senators and 100 House members who signed the important and thoughtful letters calling on the supercommittee to go for a big deal to step forward and turn off the autopilot.

That is a significant number of members of Congress. It is, for all intents and purposes, a working majority. They should consider convening as a group. They should probably do this in Philadelphia at Independence Hall to re-enforce the seriousness of their effort and the threat to the nation.

They should agree that they will not leave until they have reached an agreement that reduces the deficits and debt over the next 10 years by at least $4.5 trillion, because that is what is required to put our debt to gross domestic product ratio at a responsible and survivable level.

They should not call themselves Republicans or Democrats or organize as such but instead call themselves “Elected Representatives of a Free People and Great Nation” or the “Founders’ Movement.”

They should deliver on the true hopes that Americans have for their government, which is that it will protect them from avoidable chaos and pass on to our children a more prosperous and safer nation. It is their job. It is time for some rational people to take charge and do it. The names are already there on the letters. Now let’s ask them to follow through on their language with action that will give our people confidence in our nation.

Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and as ranking member of the Senate Appropriations subcommittee on Foreign Operations. He also is an international adviser to Goldman Sachs.

Hill Poll: Cut lawmaker salaries, but make them work longer, say voters

2011-12-05T06:23:00.000-05:00

At The Hill:

More than two-thirds of likely voters think members of Congress should have their salaries cut and their pensions eliminated, although nearly that many also want them to work longer, according to a new poll commissioned by The Hill.

Sixty-seven percent said the $174,000 base salary for members should be lowered instead of raised or left as it is, and 69 percent want members’ pensions discontinued.

The poll’s findings reflect the public’s ever-darkening view of Congress, now at record lows, and perhaps the respondents’ tepid views about their own financial prospects: In the same survey, 40 percent said they expect their personal finances will get worse in 2012 while another 40 percent said they only expect them to remain the same.

Sixty-four percent of respondents said Congress should work more days than it does now to pass legislation, suggesting the public perceives that it is not getting enough done under its current calendar.
The supercommittee’s recent failure to produce a deficit-reduction plan and Senate and House failures to agree on a budget surely contribute to this perception also.

When it comes to the change wrought by a new Republican majority in the House, 38 percent of likely voters said it changed Washington for the worse, while 28 percent said it changed for the better and 28 percent said it made no difference.

The findings were based on a nationwide survey of 1,000 likely voters conducted last Thursday by Pulse Opinion Research, an independent polling firm,with a margin of error of plus or minus 3 percentage points.

Men are more likely to think the Republican takeover of the House was a good thing than women, the poll found. Thirty-three percent said it was a good thing, while 31 percent said it changed Washington for the worse and 28 percent said it made no difference.

Among women, however, 44 percent said the GOP House has changed things for the worse, while only 24 percent said it has improved Washington.

Women also tended to feel more strongly that Congress should work more days, with 72 percent in agreement versus only 56 percent of men. Men were more likely to say members’ base salary should be lowered (69 percent, to 66 percent for women) and that congressional pensions should be discontinued (71 percent to 66 percent).

The congressional pension system was first created in 1942, repealed because of criticism and reinstated in 1946 with the argument that it would encourage older members to retire.

Under the current system, members are eligible for pensions at age 62 if they have completed at least five years of service, and at 50 if they have completed 20 years of service.

The current base salary of $174,000 was arrived at in 2009, up from $169,300.

While strong majorities of likely voters making less than $100,000 favored cutting congressional salaries, respondents making more than $100,000 annually were fairly evenly split, with 47 percent wanting the salaries reduced and 42 percent wanting them to stay the same.

Those making less than $20,000, perhaps surprisingly, were more interested in seeing congressional pensions done away with (80 percent) than in lowering congressional salaries: Only 6 in 10 favored cutting members’ pay, compared with the roughly 8 in 10 with that view among respondents making between $20,000 and $60,000.

On members’ pensions, voters aged 18 to 39 were more sympathetic than older voters. While 59 percent said they should be eliminated, 18 percent said they should be kept and 23 percent said they were not sure.
Among voters aged 40-64, 76 percent said pensions should be abolished, with 13 percent in favor of keeping them, and among voters aged 65 and older, 73 percent wanted them abolished with 15 percent in favor of continuing them.

Click here to view data from The Hill Poll.

Choking on Obamacare

2011-12-04T06:44:00.000-05:00

George Will at The Washington Post:

In 1941, Carl Karcher was a 24-year-old truck driver for a bakery. Impressed by the large numbers of buns he was delivering, he scrounged up $326 to buy a hot dog cart across from a Goodyear plant. And the war came.

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Democrats need to get real about U.S. energy policy

2011-11-30T08:14:00.000-05:00

The former generation of Democratic legislators would have embraced the energy opportunities before the U.S. now. Whoever is president in 2013 will have a rare chance to transform the energy picture.

From Charles Ebinger at The LA Times:

Let me say upfront that I have always been a Democrat. However, I also vote my conscience and have supported independent candidates. Today, energy policy is one area where I think my party is wrong.

I wasn't always a disillusioned Democrat. For decades, the party's policies ensured that the United States had adequate supplies of domestic oil, natural gas, coal, hydroelectric power and uranium to fuel our growing economy while providing good-paying jobs to the men and women who produced our energy and transported it. These policies helped create America's affluence of the 1950s, 1960s and early 1970s.

Even before then, it was a Democratic president — Franklin D. Roosevelt — who transformed the lives of many of our poorest citizens by creating the Tennessee Valley Authorityand the Bonneville Power Administration. These projects brought electricity and industrialization to areas that lagged the rest of the country economically. It was Lyndon B. Johnson and not a "free-market" Republican who transformed East Texas through electrification, setting off an economic boom responsible for the economic success of Texas to this day.

When the oil price shocks hit the United States in the 1970s, many Democratic stalwarts supported the Nixon and Ford administrations in their attempts to enact comprehensive energy policies. They understood that energy is not a partisan issue but rather one that draws people together to ensure the future health and security of the nation. Democratic senators, congressmen, governors and President Carter supported myriad energy technologies, policies and projects, including nuclear power, conservation, renewable energy development, the Trans-Alaska pipeline and the lifting of oil and natural gas price controls.

While other Democratic voices sometimes argued that energy policy leaned too heavily toward conventional fuels and not enough toward conservation, fuel economy or efficiency standards, few party leaders opposed specific forms of energy or played to the galleries of anti-industry activists.

How far we have fallen from those days. Today's Democratic leadership has reached a nadir in rational energy policymaking. In the last several years, congressional party leaders have squandered opportunities for a nuclear waste management storage program and have shown opposition to shale gas production. This month, the party reached a new low: The Obama administration's delay of the Keystone XL pipeline from Canada, in spite of its promise of an additional 750,000 barrels of oil per day and the thousands of new jobs it would create, was an inexcusable political decision unbecoming of a pragmatic leader.

The former generation of Democratic legislators would have embraced the energy opportunities before the United States today. Whoever is president in 2013, it will be the first time in 40 years that the United States has a serious chance to transform its energy landscape. The previously accepted inexorable decline in U.S. oil and gas production is being reversed: New "tight oil" — resources trapped in low-porosity formations such as shale rock — could provide the country with several million barrels of oil per day in the coming decades, and the country's abundant and accessible shale gas reserves may leave us gas independent for up to a century. There also are still conventional reserves to be tapped, most notably in Alaska, where the Beaufort and Chukchi seas and the North Slope hold an abundance of hydrocarbon reserves.

Exploitation of these resources would have a number of benefits. Increased domestic oil production, coupled with growing imports of Canadian oil sands, would result in a reduction of non-North American oil imports, leading to a significant improvement in the country's yawning trade deficit. Increased gas production would be valuable for cleaner electricity generation (when compared with coal) and could also signal a revival of the U.S. industrial and petrochemical sectors. Further, if natural gas can be deployed in the commercial heavy-duty vehicle fleet, we would be able to reduce our oil imports dramatically. We may even be able to export gas to our allies and trading partners.

This is neither a repetition nor a promotion of the Republican refrain to "drill baby, drill."

This is also not a denial or marginalization of the environmental challenges we face. In the wake of the disastrous 2010 Macondo oil spill in the Gulf of Mexico, it is clear that any energy production must be done to the highest environmental standards. That means spending more money and acquiring additional regulatory staff resources, not less (as the Republicans champion).

But we must embrace these challenges pragmatically and economically. We must move aggressively on energy efficiency, spread smart-grid technologies and invest in our electricity grid. We must push curbs that encourage less oil consumption, such as a targeted (to limit the effect on the less fortunate) federal gasoline tax.

I know many of my friends — Democratic and Republican — may dismiss my ideas as too far-reaching or as pie in the sky. But we need a vision now that all Americans accept and one they are ready to help make a reality. The Democratic leadership must start facing the hard truths about energy and stop proselytizing that renewable sources of energy can replace the fossil fuels currently in use. This is not to argue that the reduction of fossil fuel emissions is not an urgent priority. However, the emphasis must be on job creation and on building the 21st century energy infrastructure that will reestablish America's primacy in the world. The size of our energy resources gives us the wherewithal to make this transition.

To paraphrase Winston Churchill: Give the American people the tools and they will finish the job.

Charles K. Ebinger is director of the Brookings Institution's Energy Security Initiative.

Obama 101

2011-11-30T07:27:00.000-05:00

Few presidents have dashed so many illusions as Obama.

Victor Davis Hanson at NRO:

In the last three years, the president has taught us a great deal about America, the world, and himself.

Before Obama, many Americans still believed in massive deficit spending, whether as an article of fairness, a means to economic growth, or just a lazy fallback position to justify an out-of-control federal government. But after the failure of a nearly $800 billion “stimulus” program — intended to keep unemployment under 8 percent — no one believes any more that an already indebted government will foster economic growth by taking on another $4 trillion in debt. In other words, “stimulus” is mostly a dead concept. The president — much as he advised a barnstorming President Bush in 2005 to cease pushing Social Security reform on a reluctant population — should give it up and junk the new $500 billion program euphemistically designated as a “jobs bill.” The U.S. government is already borrowing every three days what all of America spent on Black Friday.

Obama has also taught us that prominent government intervention into the private sector often makes things worse, and invites crony-capitalist corruption. Nearly three years into this administration, it is striking how seldom Barack Obama brags about Cash for Clunkers, the Chrysler and GM bailouts, or Solyndra. He either is quiet about them or sort of shrugs, as if to say, “Stuff happens.” Even creative bookkeeping cannot mask the fact that the auto-company bailouts (begun, to be sure, by the Bush administration, but made worse under Obama) will prove a huge drain on the Treasury. No one even attempts any more to convince us that we will like Obamacare once we read the legislation, or that it will save us costs in the long run, or that it will cheer up businesses so that they will invest and hire. All that was dreamland, 2009, and this is reality, 2011, when we hear only “It could have been worse.”

Obama has also taught us that a president’s name, his father’s religion, his ethnic background, loud denunciations of his predecessor, discomforting efforts to apologize, bow, and contextualize past American actions — none of that does anything to lead to greater peace in the world or security for the United States. And by the same token, George Bush’s drawl, Texas identification, and Christianity did not magically turn allies into neutrals and neutrals into enemies.

Israel, Britain, and Eastern Europe are not closer allies now than they were in 2008. Iran is still Iran — and may be even a more dangerous adversary after the failed Obama outreach. Putin’s Russia, despite “reset” (a word we no longer much hear), is still Putin’s Russia. China still despises the U.S., and feels in 2011 that it is in a far better position to act on its contempt than it was in 2009. North Korea never got the “hope and change” message. Europe is collapsing, reminding the world where the United States is headed if it does not change course. Outreach didn’t seem to do much for the Castro brothers, Hugo Chávez, or Daniel Ortega. We are helping Mexico to sue our own states, but that does not seem to persuade its leaders to keep their citizens home. Muslim Pakistan went from a duplicitous ally to a veritable enemy. The more we bragged about Turkey, the more we could feel it holds us in contempt. We hope that the Libyan rebels and the Cairo protesters are headed toward democracy, but we privately admit that they seem to have no more interest in establishing it than we have in promoting it. In other words, Professor Obama reminds future presidents that the world will transcend their rhetoric, their pretensions, and their heritage. Other nations always calibrate their relations with the United States either by their own perceived self-interest, or by centuries-old American values and power, or both.

Barack Obama has taught us a great deal about dealing with radical Islam, an ideology not predicated on what presidents do or say. There will be no shutting down of Guantanamo as promised, and no end to either renditions or preventive detentions and tribunals. Khalid Sheik Mohammed will never be tried, as promised, in a New York courtroom not far from the scene of his mass murdering. The so-called Ground Zero mosque — once so dear to sanctimonious members of the Obama administration — will never be built; either liberal New Yorkers will quietly prevent it, or the architects of the scheme will be exposed as financial as well as cultural con artists. Obama will never again give an interview to Al-Arabiya expanding on how his own heritage will ameliorate relations with Arabs. The Cairo speech will go down in history not as a landmark creative effort to win over Muslims, but, to the extent it is remembered, as one of the most ahistorical constructs in presidential history. The Obama legacy in the War on Terror is as Predator-in-Chief — boldly increasing targeted assassinations tenfold from the Bush era, on the theory that we more or less kill the right suspected terrorists; few civil libertarians care much, apparently because one of their own is doing it.

We have learned from Obama that the messianic presidency is a myth. Obama’s attempt to recreate Camelot has only reminded us that JFK’s presidency — tax cuts, Cold War saber-rattling, Vietnam intervention — was never Camelot. We shall see no more Latinate presidential sloganeering (“Vero Possumus”), no more rainbow posters. Gone are the faux-Greek columns, the speeches about seas receding and the planet cooling — now sources of embarrassment rather than nostalgia. Chancellor Merkel won’t want another Victory Column address from someone who ducked out on the 20th anniversary of the fall of the Berlin Wall. Obama himself will not lecture crowds any longer about the dangers of their fainting when he speaks; Michelle will cease all the nonsense about “deign[ing] to enter the messy thing called politics” and finally acquiring pride in the U.S. when it nominated her husband. Even Chris Matthews’s leg has stopped tingling. There will be no more Newsweek comparisons of Obama to a god. Even the Nobel Prize committee will soon grasp that it tarnished its brand by equating fleeting celebrity with lasting achievement.

“Green” will never be quite the same after Obama. When Solyndra and its affiliated scandals are at last fully brought into the light of day, we will see the logical reification of Climategate I & II, Al Gore’s hucksterism, and Van Jones’s lunacy. How ironic that the more Obama tried to stop drilling in the West, offshore, and in Alaska, as well as stopping the Canadian pipeline, the more the American private sector kept finding oil and gas despite rather than because of the U.S. government. How further ironic that the one area that Obama felt was unnecessary for, or indeed antithetical to, America’s economic recovery — vast new gas and oil finds — will soon turn out to be America’s greatest boon in the last 20 years. While Obama and Energy Secretary Chu still insist on subsidizing money-losing wind and solar concerns, we are in the midst of a revolution that, within 20 years, will reduce or even end the trade deficit, help pay off the national debt, create millions of new jobs, and turn the Western Hemisphere into the new Persian Gulf. The American petroleum revolution can be delayed by Obama, but it cannot be stopped.

One lesson, however, has not fully sunk in and awaits final elucidation in the 2012 election: that of the Chicago style of Barack Obama’s politicking. In 2008 few of the true believers accepted that, in his first political race, in 1996, Barack Obama sued successfully to remove his opponents from the ballot. Or that in his race for the U.S. Senate eight years later, sealed divorced records for both his primary- and general-election opponents were mysteriously leaked by unnamed Chicagoans, leading to the implosions of both candidates’ campaigns. Or that Obama was the first presidential candidate in the history of public campaign financing to reject it, or that he was also the largest recipient of cash from Wall Street in general, and from BP and Goldman Sachs in particular. Or that Obama was the first presidential candidate in recent memory not to disclose either undergraduate records or even partial medical. Or that remarks like “typical white person,” the clingers speech, and the spread-the-wealth quip would soon prove to be characteristic rather than anomalous.

Few American presidents have dashed so many popular, deeply embedded illusions as has Barack Obama. And for that, we owe him a strange sort of thanks.

Christie rips Obama over deficit talks: 'What the hell are we paying you for?'

2011-11-30T06:40:00.000-05:00

From The Hill:

By Justin Sink - 11/29/11 08:27 AM ET

New Jersey Gov. Chris Christie ripped President Obama for the failure of the debt supercommittee, calling the president "a bystander in the Oval Office" in comments Monday.

“I was angry this weekend, listening to the spin coming out of the administration, about the failure of the supercommittee, and that the president knew it was doomed for failure, so he didn’t get involved. Well, then what the hell are we paying you for?” Christie said in Camden, N.J. " 'It’s doomed for failure, so I’m not getting involved'? Well, what have you been doing, exactly?”

Christie was contrasting the Tea Party and Occupy Wall Street movements, saying both stemmed from "anger" with government's inability to respond to the financial crisis. But while Christie said "both parties deserve blame for what's going on in Washington, D.C.," he pointed the finger squarely at Obama for failing to strike a budget deal.

“Why the president of the United States refuses to do this is astonishing to me. If he wanted to run for Senate again and just be one of a hundred, I’m sure he could have gotten reelected over and over again in Illinois,” Christie said. “He’s the one in Washington, and he’s got to get something done here. And it’s not good enough just to say, ‘Well, I’ll get it done after the election.' "

Christie said that the template for fixing budget deficits existed at the state level, where balanced-budget requirements and divided governments often force governors and state legislatures to compromise.

"In New Jersey, the reason why they got done is because I called people into the room and said we’re going to solve this problem and I had people of good will on the other side who said they believed it was their obligation, regardless of party, to get done things like pension and benefit reform,” Christie said.

The popular and outspoken New Jersey governor has endorsed former Massachusetts Gov. Mitt Romney for the Republican nomination for president.

Barney Frank: Good riddance

2011-11-29T06:40:00.000-05:00

Jennifer Rubin at Right Turn:

I’ll not be sniffling over the departure of Rep. Barney Frank (D-Mass.), who announced he’s not running for re-election in 2012. The good news for conservatives seems to be that he threw cold water on the notion that his party could be back in the majority anytime soon. Politico reported:

The kind of inside work I have felt best at is not going to be as productive in the foreseeable future,” Frank told reporters at a news conference in Newton, Mass. “To my disappointment, the leverage you have within the government has substantially diminished.”

Frank also told reporters that his newly drawn district would have been an uphill battle for him.

“It would have been a tough campaign,” Frank said. “I would have a hard time justifying to myself to do it.”

In other words, he might lose and/or his party might not take the majority so he’s throwing in the towel.

My lack of sorrow is really based on two primary objections to his tenure. First, he was an extreme and irresponsible foe of defense spending. Last Friday, he issued yet another blast revealing his indifference to national defense: “Cutting military spending is really essential if we are going to accomplish some of the things the Occupy movement wants to do in terms of fairness.” And who can forget that in 2003, with two ongoing wars, he called for a 25 percent cut in defense spending? He rarely even bothered to make the case that such cuts wouldn’t harm national security. He simply didn’t care; he wanted the money to use for liberal statism.

But his real legacy will be his cluelessness and indifference to reforming Freddie Mac and Fannie Mae. As Phil Klein put it: “‘These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,’ the New York Times quoted Frank as saying in 2003. ‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’ Frank received $42,350 in campaign contributions from Fannie and Freddie between 1989 and 2008, according to the Center for Responsive Politics.”

In October 2010, Peter Wallison of the American Enterprise Institutewrote:

Beginning in 1992 and continuing through 2007, Fannie and Freddie were required to meet affordable housing goals established by the Department of Housing and Urban Development. For most of these years, Frank was the staunchest defender of this policy.

An “affordable” housing mortgage was a loan made to a borrower who was at or below the median income in the area where the home was located. A special sub-goal also required the GSEs to make loans to borrowers who were at or below 60 percent of the median income. These requirements were gradually tightened over time, so that by 2007 55 percent of all mortgages Fannie and Freddie acquired had to be “affordable” under this standard.

There are only so many borrowers with good credit who are at or below the median income in the areas where they live, and there was a lot of competition for Fannie and Freddie.

Of this total, the federal government was responsible--through Fannie and Freddie, FHA, and the CRA--for 19 million of these deficient and risky loans. . . .

On September 29, just before Congress recessed for the election, a few Democratic members of Congress introduced legislation that would extend the CRA to all financial institutions--not just banks. And Barney Frank declared that this bill would be his top priority in the lame duck session after the election.

This was very confusing. If Frank thought it was a “great mistake to push low income people into homes,” why would he favor extending the CRA to the entire financial system? That would mean insurance companies, auto finance companies, credit card firms and securities firms would be required to provide credit and other services--not just mortgages--to the same people who couldn’t afford to repay their mortgages.

Here’s my guess: despite my initial impression, Barney Frank actually doesn’t get it. Instead, his real views had only been imprisoned for the election. When the idea of extending CRA came along, they escaped.

To that neglect and active opposition to reform of Freddie and Fannie one can add his support for a monstrous, unintelligible piece of legislation, “Dodd-Frank,” which is a model for excessive regulation that engenders unintended consequences.

I don’t even bother with his ethics problems stemming from paying a male prostitute who operated out of his home. That the scandal disgraced him and Congress was small potatoes compared to the damage wrought by his policies and those that would have followed had his colleagues gone along with some of his most irresponsible proposals.

To paraphrase William F. Buckley, Jr., Massachusetts would be better served by picking a name out of the phone book than by another two years of Barney Frank. Hopefully, they’ll get someone (Democrat or Republican) a heck of a lot better.

Anarchy in the U.S.A. The roots of American disorder.

2011-11-25T07:28:00.000-05:00

A great historical piece on the roots of the OWS crowd. Read and learn! -SP

Matthew Continetti at The Weekly Standard:

Ever since September, when activists heeded Adbusters editor Kalle Lasn’s call to Occupy Wall Street, it’s become a rite of passage for reporters, bloggers, and video trackers to go to the occupiers’ tent cities and comment on what they see. Last week, the day after New York mayor Michael Bloomberg ordered the NYPD to dismantle the tent city in Zuccotti Park in Lower Manhattan, the New York Times carried no fewer than half a dozen articles on the subject. Never in living memory has such a small political movement received such disproportionate attention from the press. Never in living memory has a movement been so widely scrutinized and yet so deeply misunderstood.

If income equality is the new political religion, occupied Zuccotti Park was its Mecca. Liberal journalists traveled there and spewed forth torrents of ink on the value of protest, the creativity and spontaneity of the occupiers, the urgency of redistribution, and the gospel of social justice. Occupy Wall Street was compared to the Arab Spring, the Tea Party, and the civil rights movement. Yet, as many a liberal journalist left the park, they lamented the fact that Occupy Wall Street wasn’t more tightly organized. They worried that the demonstration would dissipate without a proper list of demands or a specific policy agenda. They suspected that the thefts, sexual assaults, vandalism, and filth in the camps would limit the occupiers’ appeal.

The conservative reaction has been similar. A great many conservatives stress the conditions among the tents. They crow that Americans will never fall in line behind a bunch of scraggly hippies. They dismiss the movement as a fringe collection of left tendencies, along with assorted homeless, mental cases, and petty criminals. They argue that the Democrats made a huge mistake embracing Occupy Wall Street as an expression of economic and social frustration.

A smaller group of conservatives, however, believes the occupiers are onto something. The banks do have too much power. Wages have been stagnant. The problem, these conservatives say, is that Occupy Wall Street doesn’t really know what to do about any of the problems it laments. So this smaller group of conservatives, along with the majority of liberals, is more than happy to supply the occupiers with an economic agenda.

But they might as well be talking to rocks. Both left and right have made the error of thinking that the forces behind Occupy Wall Street are interested in democratic politics and problem solving. The left mistakenly believes that the tendency of these protests to end in violence, dissolute behavior, and the melting away of the activists is an aberration, while the right mistakenly brushes off the whole thing as a combination of Boomer nostalgia for the New Left and Millennial grousing at the lousy job market. The truth is that the violence is not an aberration and Occupy Wall Street should not be laughed away. What we are seeing here is the latest iteration of an old political program that has been given new strength by the failures of the global economy and the power of postmodern technology.

To be sure, there are plenty of people flocking to the tents who are everyday Democrats and independents concerned about joblessness and the gap between rich and poor. The unions backing the occupiers fall into this group. But the concerns of labor intersect only tangentially with those of Occupy Wall Street’s theorists and prime movers. The occupiers have a lot more in common with the now-decades-old antiglobalization movement. They are linked much more closely to the “hacktivist” agents of chaos at WikiLeaks and Anonymous.

When the police officers and sanitation workers reclaimed Zuccotti Park, Occupy Wall Street’s supporters cried, “You can’t evict an idea whose time has come.” Whether the sympathizers or the critics really understand the idea and the method of the movement is a good question. The idea is utopian socialism. The method is revolutionary anarchism.

It was February 25, 1825, and the U.S. Capitol was under occupation—sort of. Robert Owen, a successful Welsh businessman and socialist, wasn’t standing in the Rotunda holding up a placard. He was addressing a joint session of Congress from the dais of the House of Representatives. President James Monroe and president-elect John Quincy Adams were present for at least a portion of the speech. As Joshua Muravchik explains in Heaven on Earth, a history of socialism, the elected officials were mesmerized by Owen’s plans.

In the speech, Owen shared his dream of cooperative villages where workers would see their poverty alleviated and their spirits transformed. Inspired by the success of his New Lanark community in Scotland, where employees lived in hospitable conditions and the children of laborers received early childhood and primary education, Owen hoped to bring to America exquisitely planned spaces where a new, improved mankind would come into being. Owen thought his scientifically organized village would “lead to that state of virtue, intelligence, enjoyment, and happiness, in practice, which has been foretold by the sages of past times, and would at some distant period become the lot of the human race!” Utopia, according to Owen, was not confined to the printed page. Utopia could be realized.

The site of his American utopia would be New Harmony, on the Wabash River in southwest Indiana. Owen welcomed residents to his colony that April. “I am come to this country,” he told them, “to introduce an entire new state of society, to change it from the ignorant, selfish system, to an enlightened social system which shall gradually unite all interests into one, and remove all cause for contests between individuals.” There would be no 1 percent versus the 99 percent in New Harmony.

Things did not work as planned, however. Structuring a community along rational lines was extremely difficult. There weren’t enough skilled laborers. Many of the residents were lazy. Shortages were commonplace. Central planning hampered the efficient allocation of meals. Factions split off from the main group. The community closely monitored the activities and beliefs of every member. Alcohol was banned. Children were separated from their parents; one later said she saw her “father and mother twice in two years.” Owen expelled malcontents. Only his generous subsidies held New Harmony together.

And not for long. Owen’s “new empire of peace and good will to man” fell apart within four years. But the socialist utopian impulse lives on to this day. America in particular has a long and storied tradition of individuals coming together to create perfect societies. In these earthly utopias, competition is to be replaced by cooperation, private property is to dissolve into communal ownership, traditional family structures are to be transformed into the family of mankind, and religion is to be displaced by the spirit of scientific humanism. The names of these communities are familiar to any student of American history: Brook Farm, Oneida, the North American Phalanx. None of them lasted. None of them realized the ecstasy their founders desired.

Historian J.P. Talmon wrote in Political Messianism (1960) that the American and European utopians “all shared the totalitarian-democratic expectation of some pre-ordained, all-embracing, and exclusive scheme of things, which was presumed to represent the better selves, the true interests, the genuine will and the real freedom of men.” The men and women behind the utopian movements drew inspiration from the French Revolution, which proclaimed the liberty, equality, and fraternity of all, and from the political philosophy of Jean-Jacques Rousseau, who taught that individuals born free and equal were made subservient and estranged through the institutions of society and private property. Lost freedom could be recovered by dismantling the obstacles that prevent man from being true to himself. The reconstruction of society along rational lines would allow us to reclaim the state of natural bliss that had been lost.

Utopianism attracts goofballs as light attracts moths. The postrevolutionary thinker Charles Fourier was a classic example. “He was an odd old bachelor,” Talmon writes, “a denizen of boarding houses, with the ways of an incurable pedant, loving cats and parrots, tending flowers; rather frightening with his uncanny fixed habits and air of mystery; brooding in immobile silence, but flying into a temper when anyone interfered in the slightest with his routine.” Fourier’s vision was mindboggling. If his plans were put into effect, Fourier believed, “anti-lions” and “anti-crocodiles” would one day transport people across the globe. Hens would lay so many eggs that the British national debt would be paid off in months. The possibility existed, in Fourier’s mind, that the oceans would turn into lemonade.

The basic unit of social organization in Fourier’s dream world was the phalanx. Six million of them would be enough to encompass all of humanity. Fourier planned each aspect of his fantastic environment in intricate detail. Every structure—from dormitories to stables to restaurants—was precisely designed. Once men lived in the phalanx, there would be no need for property or law or God or family or restraint. Every person would live in accord with his fellow man and nature. This self-regulating community would unleash the creative potential in every human heart.

Children were the clay from which Fourier would sculpt new men. “The phalanx containing an exceedingly great variety of occupations,” he wrote, “it is impossible that the child in passing from one to the other should not find opportunities of satisfying several of his dominant instincts.” There would be no resentment in Fourier’s ideal community, no envy of others. The passions would flow freely. Every want would be fulfilled. It would be, indeed, paradise.

When he looks at the world, the utopian is repelled by two things in particular. One is private property. “The civilized order,” Fourier wrote, “is incapable of making a just distribution except in the case of capital,” where your return on investment is a function of what you put in. Other than that, the market system is unjust. Economics is a zero-sum game. One man holds possessions at the expense of another. For another nineteenth-century French utopian, Pierre-Joseph Proudhon, property was theft.

Private property embodies the chains of society that keep man down. As Talmon put it, for the utopian, property is “an instrument of irrational and selfish exploitation; instead of a vehicle for enlarging our personality, a tyrannical master to both the haves driven by insatiable cupidity, and the have-nots, whose lives were being stunted by want and alienated through bondage.” And because property is the source of inequality, only through the communal redistribution of goods can true equality be achieved.

The utopian’s other great hatred is for middle-class or “bourgeois” culture. Monogamy, monotheism, self-control, prudence, cleanliness, fortitude, self-interested labor—these are the utopian’s enemies. “Morality teaches man to be at war with himself,” Fourier wrote, “to resist his passions, to repress them, to believe that God was incapable of organizing our souls, our passions wisely.” What were called the bourgeois virtues had been designed to maintain unjust social relations and stop man from being true to himself. Thus, to recover one’s natural state, one “must undertake a vast operation of ‘desanctification,’ beginning with the so-called morality of the bourgeoisie,” wrote the twentieth-century utopian Daniel Guérin. “The moral prejudices inculcated by Christianity have an especially strong hold on the masses of the people.”

It is therefore necessary to liberate individuals from their social and sexual mores. “The family will no longer be the exclusive unit, as it is in civilization,” wrote Talmon. At Brook Farm in Massachusetts, which lasted from 1841 to 1847, men and women were encouraged to interact as complete social, political, and sexual equals. Residents of the Oneida Community (1848-1880) in upstate New York engaged in “complex marriage,” in which older members of the commune “introduced” younger members to sex. The Oneidans engaged in selective breeding. These practices, radical at the time, have been characteristic of left-wing movements ever since. The free love associated with the New Left and student rebellion in the 1960s, for instance, is today so deeply embedded in American culture that only social conservatives pay it any mind.

The persistence of certain features of utopian socialism over 200 years is impressive. Only the dress codes and gadgets change. If Charles Fourier emerged from a wormhole at the Occupy Wall Street D.C. tent city in McPherson Square in Washington, he’d feel right at home. The very term “occupy” or “occupation” is an attack on private property. So are the theft and vandalism widely reported at Occupy Wall Street locations. The smells, the assaults, the rejection of the conventional in favor of the subversive, and the embrace of pantheistic spirituality flow logically from the utopian rejection of middle-class norms. The things that Mayor Bloomberg found objectionable about the encampment in Zuccotti Park—that it “was coming to pose a health and fire safety hazard to the protesters and to the surrounding community”—are not accidental. They are baked into the utopian cake.

Over the course of the nineteenth century the quest for the ideal society took many directions that can be clustered in two broad categories. There were the Marxian attempts at “scientific socialism,” in which the proletarian vanguard sought to overthrow the bourgeoisie to bring about the classless society as ordained by the laws of history. And there was the revolutionary anarchist project of achieving utopia by leveling hierarchies and abolishing authorities.

The two overlapped on certain points. But for the most part the Marxists looked at the anarchists as boobs and the anarchists looked at the Marxists as totalitarians—which of course they were. Scientific socialism is more famous than revolutionary anarchism, if only because in the twentieth century it succeeded in taking over much of the world. The incalculable human cost of communism has obscured the destructive activities of the anarchists, but they were considerable.

Anarchism is often dismissed as merely the rationalization of hooligans. But that is a mistake. Anarchism has a theory and even a canon: Bakunin, Kropotkin, Goldman, and others. Anarchism’s purpose is to turn the whole world into one big Fourierist phalanx. “At every stage of history our concern must be to dismantle those forms of authority and oppression that survive from an era when they might have been justified in terms of the need for security or survival or economic development, but that now contribute to—rather than alleviate—material and cultural deficit,” writes Noam Chomsky in an introduction to Daniel Guérin’s classic,Anarchism. Dismantle “the system.” Then we’ll be free.

The anarchist sees no distinction between free enterprise and state socialism. He cannot be happy as long as anyone has more property or power than someone else. “Any consistent anarchist must oppose private ownership of the means of production and the wage-slavery which is a component of this system,” Chomsky writes, “as incompatible with the principle that labor must be freely undertaken and under the control of the producer.” What Chomsky is saying is that you can justly grow your own tomato, but you can never hire anyone else to pick it.

An anarchist does not distinguish between types

of government. Democracy to him is just another form of control. Here is Chomsky again: “Democracy is largely a sham when the industrial system is controlled by any form of autocratic elite, whether of owners, managers and technocrats, a ‘vanguard’ party, or a state bureaucracy.” (Or bankers!) The ballot, wrote Guérin, is “a cunning swindle benefiting only the united barons of industry, trade, and property.”

This permanent rebellion leads to some predictable outcomes. By denying the legitimacy of democratic politics, the anarchists undermine their ability to affect people’s lives. No living wage movement for them. No debate over the Bush tax rates. Anarchists don’t believe in wages, and they certainly don’t believe in taxes. David Graeber, an anthropologist and a leading figure in Occupy Wall Street, puts it this way: “By participating in policy debates the very best one can achieve is to limit the damage, since the very premise is inimical to the idea of people managing their own affairs.” The reason that Occupy Wall Street has no agenda is that anarchism allows for no agenda. All the anarchist can do is set an example—or tear down the existing order through violence.

Just as hostility to property is inextricably linked to utopian socialism, violence is tightly bound to anarchism. “Anarchists reject states and all those systematic forms of inequality states make possible,” writes Graeber. “They do not seek to pressure the government to institute reforms. Neither do they seek to seize state power for themselves. Rather, they wish to destroy that power, using means that are—so far as possible—consistent with their ends, that embody them.” What seems aimless and chaotic is in fact purposeful. By means of “direct action”—marches, occupations, blockades, sit-ins—the anarchist “proceeds as if the state does not exist.” But one who behaves as if the government has no reality and the laws do not apply is an outlaw, not to say a criminal.

When you see occupiers clash with the NYPD on the Brooklyn Bridge, or masked teenagers destroying shop windows and lighting fires in downtown Oakland, you are seeing anarchism in action. Apologists for Occupy Wall Street may say that these “black bloc” tactics are deployed solely by fringe elements. But the apologists miss the point. The young men in black wearing keffiyehs and causing mayhem are simply following the logic of revolutionary anarchism to its violent conclusion. The fringe isn’t the exception, it’s the rule. The exception would be “direct action” that took care to respect the law.

The unstable nature of revolutionary anarchism has meant that movements based on these tactics quickly flame out. Consider the case of the International Working People’s Association, an anarchist group in 1880s Chicago. As Michael Kazin details inAmerican Dreamers, his history of the U.S. left, the IWPA held an adversarial attitude toward government, markets, and elections. They didn’t run candidates for office. They blew things up. “Men and women could organize their affairs quite well, they believed, without the aid of any boss or master, even that of a workers’ state.” But rejecting democratic politics was a dead end. And violence was the natural consequence: In 1887, four IWPA leaders were executed for the murder of eight policemen in the Haymarket Square bombing. The organization collapsed soon after.

Attempts to establish a socialist utopia through revolutionary anarchism tend to be short-lived. The last great outbreak in America was in the late 1960s and early ’70s, with the urban riots, terrorism, and street actions of the New Left and the Weathermen. The tide turned with the rise of conservatism in American politics and the end of the Soviet empire. The utopian ideal seemed discredited. The teachings of Fourier and Chomsky seemed confined to the academy. Little did we realize that the stage was being set for a new anarchism—the variety that confronts us today.

David Graeber identifies January 1, 1994, as the birth of the antiglobalization movement. That was the day the North American Free Trade Agreement went into effect, and the Zapatistas launched their revolt in Chiapas, Mexico. The model for twenty-first century anarchism was established. “The Zapatistas,” Graeber writes, “with their rejection of the old-fashioned guerrilla strategy of seizing state control through armed struggle, with their call instead for the creation of autonomous, democratic, self-governing communities, in alliance with a global network of like-minded democratic revolutionaries, managed to crystallize, often in beautiful poetic language, all the strains of opposition that had been slowly coalescing in the years before.” In a “flat” world, where borders and national governments counted for less and less, the new anarchism would reject the idea of seizing state power by force. Anarchist forms of organization, Graeber wrote, “would involve an endless variety of communities, associations, networks, projects, on every conceivable scale, overlapping and intersecting in any way we could imagine, and possibly many that we can’t.”

The engine powering the new anarchism was economic and political globalization. A worldwide movement devoted to undermining the institutions of “neoliberalism”—the IMF, World Bank, WTO, EU, NAFTA, G20, central banks—gathered force. Anarchists appeared at the World Trade Organization meetings in Seattle in 1999, at the Democratic National Convention in Los Angeles in 2000, at the G8 summit in Genoa, Italy, and in bankrupt Argentina in 2001, at the World Economic Forum meeting in New York City in 2002, and at the Republican conventions in New York City in 2004 and St. Paul 2008. For a time during the George W. Bush years, the “global justice” movement was intertwined with the antiwar movement. But, as President Obama has said, “the tide of war is receding” (or so it seems). With the Great Recession and financial panic of 2008, with the onset of austerity policies and the crisis in sovereign debt, economics has returned to the foreground of political life.

Long-term joblessness, especially among the college-educated, and subpar economic growth not only created a pool from which the new anarchists drew recruits, but also made it harder to distinguish the radicals from their anguished fellow travelers. The technological advances that allowed information and capital to travel between continents at the speed of light also provided the means by which the anarchists could disrupt markets and governments. The black bloc tactics of riot and destruction had their Internet equivalent in the denial of service attacks on government and industry computer servers by the hackers collective Anonymous and the unauthorized release of classified information by WikiLeaks. As we saw in the urban riots in England last summer and elsewhere, social media platforms like Facebook and Twitter allow people to mobilize quickly and stay one step ahead of the police. The new anarchism finds no contradiction between its critique of property and capitalism and its embrace of technology created by capitalist corporations. How can there be contradiction, after all, when there are no rules of order or logic in the first place?

Unsurprisingly, the call to occupy Zuccotti Park went out over Twitter, and the masked spokesmen of Anonymous publicized the movement on YouTube. An intellectual, financial, technological, and social infrastructure to undermine global capitalism has been developing for more than two decades, and we are in the middle of its latest manifestation. Occupy Wall Street’s global encampments are exactly the sort of communities David Graeber had in mind when he wrote about the Zapatistas. The occupiers’ tent cities are self-governing, communal, egalitarian, and networked. They reject everyday politics. They foster bohemianism and confrontation with the civil authorities. They are the Phalanx and New Harmony, updated for postmodern times and plopped in the middle of our cities.

There may not be that many activists in the camps. They may appear silly, even grotesque. They may resist “agendas” and “policies.” They may not agree on what they want or when they want it. And they may disappear as winter arrives and the liberals whose parks they are occupying lose patience with them. But the utopians and anarchists will reappear—next year’s party conventions will no doubt be a flashpoint—and it is wrong to coddle, appropriate, or dismiss them. They must be confronted, not only by law but by ideas. The occupation will persist as long as individuals believe that inequalities of property are unjust and that the brotherhood of man can be established on the earth.

Matthew Continetti is opinion editor of The Weekly Standard.

Superfrauds

2011-11-24T06:48:00.000-05:00

David Harasanyi at RealClearPolitics:

Our government has the time to worry about school lunch menus in Boise, Idaho, but the Senate hasn't found the time to pass a budget in Washington, D.C., in nearly three years. H.L. Mencken famously wrote that every decent man is ashamed of his government. This one gives you little choice.

Gridlock is ordinarily the most constructive and moral form of government, but with entitlement programs on autopilot self-destruct, we're in trouble. So Americans turned their weary eyes toward a dream team, a supercommittee, a 12-member panel of our brightest lights, charged with identifying a measly $1.2 trillion in deficit savings over 10 years. Save us.

Alas, for Democrats, it boiled down to the most important issue facing the nation -- maybe ever: "revenue enhancement."

Politico reported that during the supercommittee hearing, both sides agreed to produce "wish lists" to offer some notion of where negotiations might go. Republicans -- believe them or not -- claimed to want to save $700 billion by block granting Medicaid, another $400 billion in spending cuts, $1.4 trillion in cuts to some mandatory health care programs, and about $150 billion in cuts to the federal workforce.

Democrats, on the other hand, reportedly wanted to pass a new $447 billion spending bill (perhaps forgetting that this was a wish list for a deficit reduction committee) and $1 trillion in tax hikes on those 1-percenters. Since Washington spent $1 trillion more than it took in just last year, this would provide nearly no purpose over 10 years -- well, other than a political one.

Senate Majority Leader Harry Reid -- taking a break from fending off fictional goblins, Kochs and Norquists -- laid out his position, explaining that Republicans had undermined the entire process by insisting "on expanding President Bush's tax giveaways to millionaires." The good Lord, you see, created every dollar for the U.S. Treasury to spend wisely; what you keep is a gift -- a giveaway. Every tax cut is temporary, and every tax increase is a new base line. That's just how it works.

And the good senator from Nevada must be making a compelling case. A new poll by Quinnipiac University claims that 44 percent of Americans blame Republicans for the supercommittee's failure, whereas 38 percent blame Democrats. This, notwithstanding the fact that the same poll shows, by a 49-39 percent margin, Americans prefer closing the deficit with spending cuts only. (That is what democracy looks like.)

The committee's failure allegedly means that an automatic $1.2 trillion in cuts should kick in. It won't happen. Some Republicans are already grousing about defense cuts, and the newly involved Barack Obama -- the guardian of frugality -- has warned Congress that he would veto any cuts to the automatic cuts. Will anyone slash any defense spending before an election? Doubtful.

Granted, the GOP talks a big game about reform but offers very little in the way of specifics. Republicans do, however, deserve credit for stopping tax increases until both parties start the discussion on entitlement reform. One side doesn't define what compromise should look like. The supercommittee's failure is victory because any so-called compromise would have meant the institution of tax hikes, and spending cuts would only be as good as the next Congress' emergency or new priority.

But everyone understands that this entire process was theater. If members of Congress, with a $15 trillion debt and a trillion-dollar yearly deficit, can't find $1.2 trillion to cut in 10 years, the only reason is they aren't serious.

The next financial crisis will be hellish, and it’s on its way

2011-11-17T14:09:00.000-05:00

If you're not scared yet, read this.

"There is definitely going to be another financial crisis around the corner," says hedge fund legend Mark Mobius, "because we haven't solved any of the things that caused the previous crisis."

We're raising our alert status for the next financial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management.

Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world's major banks are tangled up.

Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius' guess of 10 times the world's annual GDP. "Are the derivatives regulated?" asks Mobius. "No. Are you still getting growth in derivatives? Yes."

In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.

What could it be? We'll offer up a good guess, one the market is discounting.

Seldom does a stock index rise so much, for so little reason, as the Dow did on the open Tuesday morning: 115 Dow points on a rumor that Greece is going to get a second bailout.

Let's step back for a moment: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn't pay back 100 centimes on the euro?

That's a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it's scary enough that the European Central Bank has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.

That was the preferred solution among German leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout — 30 billion euros on top of the 110 billion euro bailout it got a year ago.

It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.

And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here's another factor behind our heightened state of alert.

"Through quantitative easing efforts alone," says Euro Pacific Capital's Michael Pento, "Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS)."

Think about that for a moment. The Fed's entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.

"As the size of the Fed's balance sheet ballooned," continues Mr. Pento, "the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet.

"Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out."

Mr. Pento's and Mr. Mobius' views line up with our own, which we laid out during interviews on our trip to China this month.

To Increase Jobs, Increase Economic Freedom

2011-11-16T14:24:00.000-05:00

Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders, including employees and communities.

John Mackey at The Wall Street Journal:

Is the United States exceptional? Of course we are! Two hundred years ago we were one of the poorest countries in the world. We accounted for less than 1% of the world's total GDP. Today our GDP is 23% of the world's total and more than twice as large as the No. 2 country's, China.

America became the wealthiest country because for most of our history we have followed the basic principles of economic freedom: property rights, freedom to trade internationally, minimal governmental regulation of business, sound money, relatively low taxes, the rule of law, entrepreneurship, freedom to fail, and voluntary exchange.

The success of economic freedom in increasing human prosperity, extending our life spans and improving the quality of our lives in countless ways is the most extraordinary global story of the past 200 years. Gross domestic product per capita has increased by a factor of 1,000% across the world and almost 2,000% in the U.S. during these last two centuries. In 1800, 85% of everyone alive lived on less than $1 per day (in 2000 dollars). Today only 17% do. If current long-term trend lines of economic growth continue, we will see abject poverty almost completely eradicated in the 21st century. Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders—customers, employees, suppliers, investors and communities.

So why is our economy barely growing and unemployment stuck at over 9%? I believe the answer is very simple: Economic freedom is declining in the U.S. In 2000, the U.S. was ranked third in the world behind only Hong Kong and Singapore in the Index of Economic Freedom, published annually by this newspaper and the Heritage Foundation. In 2011, we fell to ninth behind such countries as Australia, New Zealand, Canada and Ireland.

The reforms we need to make are extensive. I want to make a few suggestions that, as an independent, I hope will stimulate thinking and constructive discussion among concerned Americans no matter what their politics are.

Most importantly, we need to radically cut the size and cost of government. One hundred years ago the total cost of government at all levels in the U.S.—local, state and federal—was only 8% of our GDP. In 2010, it was 40%. Government is gobbling up trillions of dollars from our economy to feed itself through high taxes and unprecedented deficit spending—money that could instead be used by individuals to improve their lives and by entrepreneurs to create jobs. Government debt is growing at such a rapid rate that the Congressional Budget Office projects that in the next 70 years public money spent on interest annually will grow to almost 41.4% of GDP ($27.2 trillion) from 1.4% of GDP ($204 billion) in 2010. Today interest on our debt represents about a third of the cost of Social Security; in only 20 years it is estimated that it will exceed the cost of that program.

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Corbis

Only if we focus on cutting costs in the four most expensive government programs—Defense, Social Security, Medicare and Medicaid, which together with interest account for about two-thirds of the overall budget—can we make a significant positive impact.

Our defense budget now accounts for 43% of all military spending in the entire world—more than the next 14 largest defense budgets combined. It is time for us to scale back our military commitments and reduce our spending to something more in line with our percentage of the world GDP, or 23%. Doing this would save more than $300 billion every year.

Social Security and Medicare need serious reforms to be sustainable over the long term. The demographic crisis for these entitlement programs has now arrived as 10,000 baby boomers are projected to retire every day for the next 19 years. Retirement ages need to be steadily raised to reflect our increased longevity. These programs should also be means-tested. Countries such as Chile and Singapore successfully privatized their retirement programs, making them sustainable. We should move in a similar direction by giving everyone the option to voluntarily opt out of the governmental system into private alternatives, phasing this in over time to help keep the current system solvent.

In addition, tax reform is essential to jobs and prosperity. Most tax deductions and loopholes should be eliminated, combined with significant tax rate reductions. A top tax rate of 15% to 20% with no deductions would be fairer, greatly stimulate economic growth and job creation, and would reduce deficits by increasing total taxes paid to the federal government.

Why would taxes collected go up if rates go down? Two reasons—first, tax shelters such as the mortgage interest deduction used primarily by more affluent taxpayers would be eliminated; and secondly, the taxable base would increase considerably as entrepreneurs create new businesses and new jobs, and as people earn more money. Many Eastern European countries implemented low flat tax rates in the past decade, including Russia in 2001 (13%) and Ukraine in 2004 (15%), and experienced strong economic growth and increased tax revenues.

Corporate taxes also need to be reformed. According to the Organization for Economic Cooperation and Development, the U.S.'s combined state and federal corporate tax rate of 39.2% became the highest in the world after Japan cut its rates this April. A reduction to 26% would equal the average corporate tax rate in the 15 largest industrialized countries. That would help our companies to use their capital more productively to grow and create jobs in the U.S

Government regulations definitely need to be reformed. According to the Small Business Administration, total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year. While some regulations create important safeguards for public health and the environment, far too many simply protect existing business interests and discourage entrepreneurship. Specifically, many government regulations in education, health care and energy prevent entrepreneurship and innovation from revolutionizing and re-energizing these very important parts of our economy.

A simple reform that would make a monumental difference would be to require all federal regulations to have a sunset provision. All regulations should automatically expire after 10 years unless a mandatory cost-benefit analysis has been completed that proves the regulations have created significantly more societal benefit than harm. Currently thousands of new regulations are added each year and virtually none ever disappear.

According to a recent poll, more than two-thirds of Americans now believe that America is in "decline." While we are certainly going through difficult times our decline is not inevitable—it can and must be reversed. The U.S. is still an extraordinary country by almost any measure. If we once again embrace the principles of individual and economic freedom that made us both prosperous and exceptional, we can help lead the world towards a better future for all.

Mr. Mackey, co-founder and co-CEO of Whole Foods Market, is a member of the Job Creators Alliance, a nonprofit devoted to preserving free enterprise.

Conn Carroll: Facts show Fannie, Freddie led mortgage market to the collapse

2011-11-12T07:46:00.000-05:00

At The Washington Examiner:

"We are delighted to participate in this historic event, and we are particularly proud that a substantial portion of the $8 billion commitment will directly benefit lower income Americans," Countrywide Financial President Angelo Mozilo said at a July 8, 1992, press conference.

"We look forward to the rapid fulfillment of this commitment so that Countrywide can sign another record-breaking agreement with Fannie Mae," Mozilo finished.

Mozilo's almost 20-year-old quote is relevant again thanks to the uproar New York Mayor Michael Bloomberg caused last week when he criticized Occupy Wall Street's view of the financial crisis.

Bloomberg said, "it was not the banks that created the mortgage crisis. It was, plain and simple, Congress, who forced everybody to go and give mortgages to people who were on the cusp. ... They were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will."

The usual suspects on the left went crazy. The New York Times Paul Krugman called Bloomberg an "ignoramous," citing liberal blogger Mike Konczal's Fannie defense:

"The first thing to point out is that the both the subprime mortgage boom and the subsequent crash are very much concentrated in the private market ... [Fannie and Freddie] were not behind them," Konczal said.

Is Konczal right? Are Fannie and Freddie innocent of causing the mortgage crisis?

This we do know: Thanks to the widespread belief that the federal government would bail them out, Fannie and Freddie were able to borrow money at below-market interest rates.

This gave them a significant competitive advantage over private-sector firms which, by 1992, the two government-backed corporate entities had turned into an almost 70 percent share in the mortgage securitization market.

That same year, at the direction of the Congress, the Department of Housing and Urban Development began setting "affordable" mortgage goals for the agencies.

Countrywide was a growing force in the mortgage industry when it partnered with Fannie in 1992. But after Mozilo's firm secured a steady government buyer for their loans, business exploded. Revenues went from $92 million in 1992, to $860 million in 1996, to $2 billion in 2000. By 2004, they were the nation's largest mortgage lender.

The secret to Countrywide's success was no mystery: They shredded standard industry lending practices, giving home loans to virtually anybody who asked. Fannie Mae not only knew this, Fannie rewarded it.

In 2000, the Fannie Mae Foundation honored Countrywide for "Outstanding Achievement" in the industry. The foundation's 2000 annual report noted: "When necessary -- in cases where applicants have no established credit history, for example -- Countrywide uses nontraditional credit, a practice now accepted by [Fannie]."

Countrywide continued to be the biggest supplier of loans to Fannie Mae all the way through the height of the housing boom. In 2004, 26 percent of the loans Fannie bought were from Countrywide. In 2007, that number had risen to 28 percent.

In his 1993 Nobel Prize lecture, economist Douglass North said, "If the institutional framework rewards piracy, then piratical organizations will come into existence; and if the institutional framework rewards productive activities then organizations -- firms -- will come into existence to engage in productive activities."

From 1992 through the height of the housing bubble, Fannie Mae and Freddie Mac used their monopoly position in the mortgage securitization industry to reward firms like Countrywide for making bad bets in the housing market. Countrywide's success was a signal to other market participants to lower their standards as well.

Wall Street banks are not blameless for the financial crisis. But they were only responding to the incentives set up by the federal government. Ignoring this history will help no one.

Conn Carroll is a senior editorial writer for The Washington Examiner. He can be reached at ccarroll@washingtonexaminer.com.

OCCUPIER DEVOLUTION

2011-11-11T07:29:00.000-05:00

At Powerline:

If you have ever wondered what would happen in a society consisting entirely of liberals, the Occupier movement is providing the answer: devolution. It is almost impossible to keep up with the downward spiral, but here are some of the highlights of the last 24 hours:

* In Portland, an Occupier was arrested for throwing a Molotov cocktail down the stairwell of a building.

* In London, employees of St. Paul’s Cathedral have had to clean up human waste left by Occupiers inside the cathedral. (What is it with the Occupiers and toilet issues?)

* In Portland, another drug overdose.

* In Vermont, a man was shot to death at the Occupy Burlington encampment.

* At Occupy San Diego, a citizen journalist was violently assaulted.

* In Atlanta, tuberculosis has broken out among the Occupiers.

* In Salt Lake City, four were arrested after a melee broke out in the Occupy encampment.

* In San Francisco, police expressed concern about escalating violence among the Occupiers, following incidents including gun possession, assault on a city worker and trespassing on the new holiday ice rink.

And this is just a smattering of today’s headlines! The Occupiers are conducting a sort of experiment in the viability of left-wing ideas, and the results aren’t pretty.

Deficit Accounting Is a Generational Ponzi Scheme

2011-11-08T14:57:00.000-05:00

From Laurence Kotlikoff at The Fiscal Times:

Our county is in far worse fiscal shape than our politicians are disclosing. Our official debt in the hands of the public is huge, totaling 70 percent of GDP. But our official debt leaves out most of our nation’s liabilities.

These unofficial debts refer to our future mandatory and non-mandatory spending obligations. Mandatory spending references Social Security, Medicare, Medicaid and other entitlement benefits. Non-mandatory spending includes defense expenditures, civil servants' salaries, highway and other infrastructure costs, and government-sponsored research.

Of course, the government can also count on future taxes to help pay these bills. The difference between our government's total liabilities -- its official debt plus unofficial debt (measured in present value) -- less its official assets plus its unofficial assets (the present value of projected future taxes) -- is call the fiscal gap.

The fiscal gap tells us whether our government's long-term finances are in balance -- whether its assets can cover its liabilities. Unfortunately, the answer is no. In fact, our country's fiscal gap, calculated based on the Congressional Budget Office's June 22, 2011 long-term forecast (known as the Alternative Fiscal Scenario) is simply enormous. It's $211 trillion or 14 times GDP!

The fiscal gap is our nation's credit card bill. If we don't pay it or at least interest on it, it will get bigger. And it is getting bigger. It rose by $6 trillion between this year and last. Closing the fiscal gap by raising taxes alone requires an immediate and permanent 64 percent increase in the personal income tax, the corporate income tax, the FICA payroll tax, the estate and gift tax, and all federal excise taxes. Closing the fiscal gap by cutting spending, other than interest on official debt, requires an immediate and permanent 40 percent cut in all mandatory and non-mandatory expenditures.

Measured relative to GDP, the U.S. may actually have the largest fiscal gap of any developed country. By comparison, Greece's fiscal gap is about 12 times GDP, and Germany's is about 3 times GDP. This is true notwithstanding our more favorable demographics.

Why is our real fiscal gap so large? About 60 percent of the gap reflects faster projected future growth in federal healthcare spending than is projected for GDP. The CBO projects spending on Medicare, Medicaid, Child Health and Infant Protection, and the new Health Exchanges to rise over the next seventy-five years, from 5.6 to 19.4 percent of GDP. Hence, one painless way to cut the fiscal gap is to keep federal healthcare spending even with the size of the economy.

Why hasn't the fiscal gap shown up in the official debt figures? Our politicians have been very careful to keep most of the promises they've made us off the books. They've done this by taking "taxes" from young workers and promising them large benefits in retirement in return. Had they called the monies so taken "borrowing," our official debt would be vastly larger than is now reported, an estimated $211 trillion. Yes, trillion

In economics, the debt is also a figment of
language rather than a fundamental concept .

Unfortunately, nothing in economics pins down how the government should label its receipts and payments. This is called the economics labeling problem. As in physics, where time, distance, and mass all depend on the frame of reference or language of the observer, in economics, the debt is also a figment of language rather than a fundamental concept. The infinite horizon fiscal gap, in contrast, is a fundamental concept. Its size is invariant to the government's fiscal labeling conventions.

All Ponzi schemes rely on fraudulent accounting, and postwar generational policy is a Ponzi scheme, plain and simple. This is not to deny the enormous benefits provided to those on the receiving end of the scheme, many of whom are highly deserving and would otherwise have languished in poverty with little or no healthcare.

How we treat our first, second, third, and
future borns -- is the moral question of our day.

Unfortunately, we are now reaching the end of the chain letter with too few young workers earning far too little to buy into our politicians' unaffordable promises. Whether or not you prefer my proposed means to eliminate the fiscal gap, one thing is clear. We can't leave a $211 trillion bill to our children, grandchildren, and future descendants. The bill is simply far too large for them to handle. And how we respond to this crisis -- how we treat our first, second, third, and future borns -- is the moral question of our day.

How we got here is instructive. But where we go from here is critical. Congress and the White House are now engaged in a highly publicized effort to achieve budgetary savings of $1.2 trillion over the next ten years, while the fiscal gap just rose by $6 trillion in a single year! They are getting away with their fiscal child abuse by measuring our fiscal challenges based on economically meaningless official debt figures rather than the fiscal gap. The fiscal gap has its own challenges, relying as it does on projections far into the future. But it is the only measure of a nation's solvency that is free of the labeling problem and, thus, the only reasonable guide to the actual fiscal policy we are conducting.

To move away from fraudulent federal bookkeeping and force politicians to focus on the fundamentals of our generational policy, I’m asking readers to endorse the Purple Generational Balance plan. Purple is the combination of red and blue, and both red Republicans and blue Democrats have an equal stake in and responsibility toward our American's children. The Purple Generational Balance plan calls not for meaningless budget balance. It calls for a) fiscal gap accounting, b) generational accounting, which shows how both current policy and proposed policy changes are impacting and will impact current and future generations, and c) the adoption of policies that achieve generational balance, which requires that each cohort pay, over its adult lifetime, the same share of its lifetime labor income in taxes net of transfer payments received.

No one can get blood from a stone, and no economy can tax its young more than 100 percent of what they earn. We are not there yet, but we are heading in that direction. Hence, achieving generational balance is not only a moral imperative. It's a matter of economic survival.

In addition to his current work on generational accounting, Lawrence Kotlikoff, professor of economics at Boston University, has developed “Purple Plans” on taxes andhealthcare.

Conservatives: Don’t Play into Alinsky’s Hands

2011-11-08T12:58:00.000-05:00

Dr. Helen Smith at PJM:

Make the enemy live up to their own book of rules. You can kill them with this…
Saul Alinsky, Rules for Radicals

I read with disappointment Andrew Klavan’s post entitled “Why We Should Be Unfair to Herman Cain” in which he explains that it is the right, not the left who must be fair:

And yes, it’s unfair. But there’s a reason it’s unfair—a reason it should be unfair. There’s a reason we right wingers vet our candidates while the left adulates theirs, a reason we condemn our miscreants while the left elevates theirs, a reason our news outlets cover stories that the left covers up.
The reason is: we’re the good guys. We have to do what’s right. The left doesn’t. Sorry, but that’s the way it works. It’s the price you pay for defending what’s true and good, the price of holding yourself to a high moral standard. Our politicians have to be better than their politicians. Our journalists have to be more honest. Even our protesters have to behave with decorum and decency—and still suffer being slandered—while theirs can act like animals and commit acts of violence and lawlessness and spew anti-semitic filth and still find themselves excused and glorified…
Herman Cain is going to have to run the gauntlet, not just of a racist and dishonest left that wants to destroy him but of a fair-minded and decency-loving right that wants him to come fully clean and let the voters decide how we should proceed. The fight for truth, liberty and morality requires sacrifice and self-examination. The self-righteous quest for power over others does not.
The world is just as unfair as you think it is. You’ll never catch the devil hanging on a cross.

Bullshit. What Klavan is advocating is political suicide. He might as well have taken his playbook from Saul Alinsky’sRules for Radicals where Alinsky’s fourth rule is “Make the enemy live up to their own book of rules. You can kill them with this…”

Mr. Klavan, telling the right that they have to live up to some impossible standard while excusing the left is laughable. All it will get you is defeated. Do you remember the Fresh Prince of Bel Air episode where Will Smith’s Uncle Phil was running for political office? His opponent, the guy who played George Jefferson in The Jeffersons bad-mouthed Uncle Phil all over the media. The family told Uncle Phil that he needed to fight back but Uncle Phil stated that he was “not going to sink to that level.” He lost the election by a landslide. He did eventually get appointed to the office when his opponent died by the governor but that’s not the point.

The point is, we must not let the left use our morality to hold us hostage. You may never catch the devil hanging on the cross, but your double standard will leave the right hanging in defeat, just like Uncle Phil, but without the safety net of his opponent dying. Life isn’t a nostalgic TV show or fiction book. The good guy doesn’t always win just because you want him to. And though you can feel noble about being the honorable one, honor is no substitute for the loss of freedom, increased government regulation, and economic woes that our country will suffer if the left wins on election day.

Who Are These Fat-Cat Few at the Top?

2011-11-05T08:12:00.000-04:00

A successful society neither idolizes nor demonizes its rich.

Victor Davis Hanson at NRO:

First lady Michelle Obama the other day railed at “the few at the top,” who do all sorts of bad things. A few months ago, we began hearing of the “1 percent” who are responsible for the current economic mess. “They” apparently make all their money at the expense of the other 99 percent. Are they the same as last year’s villains, who had not paid “their fair share” while making over $200,000 in annual income?

Do they include the greedy doctors, who, the president once asserted, recklessly lop off limbs and yank tonsils for profits? Is my urologist a dreaded one-percenter? He found out what was causing my kidney stones but probably makes good money. Was a nearby farmer one, too? I bet he makes over $200,000 but, like many other growers in this area, has found a way to produce beef and cotton more cheaply and efficiently than farmers in almost any other part of the world, thereby enriching his county, state, and nation.

I am writing this essay on a MacBook Pro laptop. So I wonder, was the late Apple CEO Steve Jobs a suspect billionaire? Should I be mad or grateful that he made billions by permanently replacing my old scissors, paste, and bottle of Liquid Paper of the 1970s?

Did Johnny Depp really have to earn $50 million last year alone — or Leonardo DiCaprio $77 million? Couldn’t they have settled for $2 million in salary in 2010, and thereby passed on a little bit of the savings to their ticket-buying fans? What kind of system would allow Oprah Winfrey or the late Michael Jackson each to accumulate nearly $1 billion? Is left-wing filmmaker Michael Moore — reportedly worth $50 million — a one-percenter? Why does such an enemy of capitalism need so much capitalist largesse?

Do this administration and its supporters really wish to separate millions of diverse Americans by a moral divide of the “few at the top”? Are liberals like Sens. John Kerry and Dianne Feinstein — among the richest in the U.S. Senate — in that elite group?

How about Warren Buffett and Bill Gates, together worth over $100 billion? They are certainly philanthropists. But their charities are predicated on two assumptions: They both apparently trust the private sector more than government to administer their vast estates, and neither sees much of a problem in avoiding billions in inheritance taxes that would one day be due to a now-broke federal treasury.

Is George Soros a “corporate-jet owner”? He nearly broke the Bank of England by shorting the British pound and was convicted in France of insider training. Rather than comply with new federal financial-disclosure regulations, he told some of his outside investors just to keep their money. Is Obama’s former director of the budget, Peter Orszag, a “fat-cat banker”? He left the administration to enter the “revolving door” of Wall Street, where he is now a rich banker for Citigroup.

So do we really want to go down this them-vs.-us road? Using a new financial red line to crudely divide us is a tricky business. Those most likely to fly in corporate jets are precisely the elite who show up at the president’s mega-fundraisers and play golf with him on the world’s most exclusive courses — or visit Martha’s Vineyard and Vail, where the first family sometimes vacations. They don’t all wear pinstripes and Gucci, but may hang out at Occupy Wall Street rallies as actors, rappers, and filmmakers in jeans and baseball caps.

In a larger sense, we should remember a few things about the new orchestrated envy of, and animosity toward, the better-off. Most Americans each day depend on our medical care, our retirement packages, our food, our gas, and our computers from exactly these “few at the top” who seem to enrich rather than prey on society.

The BMWs or Porsches of the one-percenters aren’t that much faster, quieter, or safer than our Chevys and Hondas. Damning the wealthy nonstop is often an embarrassing symptom of one’s own longing for, even obsession with, the perks and attention that wealth brings. And if we really want more tax revenue, there is far more to be had from the nearly 50 percent of American households that pay no federal incometax than from the 1 percent that now pays 37 percent of all the collected revenue.

In short, a confident, successful society neither idolizes nor demonizes its rich, but instead believes that wealth can be created rather than taken from others. And it simply judges the better-off by the content of their characters, not the size of their wallets.

The Only Thing Missing From "The New Declaration of Independence": Any Sense That Adults Are Responsible for Their Choices

2011-11-02T14:20:00.000-04:00

Matt Welch at Reason.com:

I linked to it yesterday, but there was something about Salon.com's "New Declaration of Independence," something reminiscent of a lot of Occupy Wall Street-inspired commentary, that stuck in my craw. It was the common theme running through these sentences:

What unites the outraged 99 Percent is that we have all "played by the rules," only to learn belatedly that the game was rigged. Having been promised modest rewards for working within the system, by taking on debt or voting the party line, we find ourselves, bluntly, shit out of luck. Let the facts be submitted to a candid world:
For the young, higher education was said to be a ticket to class mobility, or at least a secure career. Instead, middle-class students have taken on billions of dollars of inescapable debt during a prolonged jobs crisis. Lower-income students are blatantly ripped off by usurious scam artists working for educationally dubious for-profit schools. Even those seeking to join the professional class, through medical school or law school, find themselves with mountains of debt and dwindling job prospects. The rapidly rising cost of higher education pushes bright students into lucrative but socially destructive fields, like finance. [...]
For millions of middle-class and striving blue-collar American families, the promise of homeownership as the world's safest investment became another money-making bubble for Wall Street that remains Main Street's intractable mess. Those members of the middle class unfortunate enough to do as an industry of wise men counseled them and invest in the stock market and real estate have seen the fruits of a lifetime's worth of labor evaporate in multiple busts and crashes that the wise men always escape from economically intact. [...]
It is not in the national interest to force the impoverished to become wage slaves to pay off insurmountable debts owned to payday lenders and hugely profitable bankers. [...]
Every other rich nation on earth heavily subsidizes higher education. We force mere kids to mortgage their futures, then ensure that the debt follows them the rest of their lives, regardless of their living circumstances. [...]
Even millions of homeowners who "did everything right" find themselves underwater, or illegally foreclosed upon by banks running roughshod over the rights of homeowners by robo-signing fraudulent foreclosure documents by the thousands.

Who are these wise men, and what are theserules, these promises, this ticket to class mobility, or at least a secure career, this singular notion of the one "right" way to do things? At the risk of going all "Generation X is sick of your bullshit" here, count me as one Gen Xer who does not recognize the world that Alex Pareene and the Salon staff (many of whom are even older than me!) have sketched out here.

Cradle-to-grave employment (at least outside the public sector) has been dead since at least the end of the Cold War. Undergraduate degrees in English and Film and Sociology and Philosophy (and a thousand other subjects) have had debatable workplace utility for as long as I've been alive. There have even been previous housing bubbles and busts in Alex Pareene's lifetime.

I don't recall anything like the promises so cruelly unkept in Salon's list. I do remember my father warning me that an engineering degree would be much more useful in the workplace than English, to which I uttered a phrase available to 18-year-olds everywhere: Thanks, Dad; not your call. Ditto for the legions of well-meaning adults urging me to finish my undergraduate degree, to sign up for the Selective Service, and even (when I finally attained a decent living in the second half of my 30s) to pay a mortgage instead of paying rent. One of the best perks about being a grown-up is that you get to make your own choices, and to own the results, good and ill.

Which is why phrases like "wage slaves," "inescapable debt," and "force" "force" "force" leave me feeling like a brother from another planet. Adult human beings have agency, the ability (even responsibility!) to run their own cost/benefit analyses and choose accordingly. You could go to a state school (or community college) instead of an over-inflated prestige mill. You could pay for a 10-year-old car in cash, instead of a new one on installments. You could try to make it in Minneapolis before living the dream in Williamsburg. You could stare into the face of a no-money-down, adjustable rate 30-year mortgage at the tail end of a housing-price run-up and conclude "Maybe that one's not for me." You could even choose to turn down a bad if high-paying job when you're living below the poverty line. If we indeed live in a "candid world," let us state bluntly that offloading 100% of the blame for your own mountain of debt on a group of Greedy McBanksters who "forced" you to "play by the rules" is more than a little pathetic.

And since when have right-thinking liberals from the creative class bragged about "playing by the rules" anyway? Is it really my imagination that the point used to be something closer to the opposite? I am old enough to remember when the whole aspiration–or at least the defiant self-acknowledgment of status–was to declare yourself a marginalized "one percenter." As Jane's Addiction sang, in a less playing-by-the-rules kinda time:

All the people I know wanna be left alone
Some people! I don't know
They won't leave you alone
You gotta be just, be just like them
Biggest gang I know they call the government
Gang is a weapon
That you trade your mind in for
You gotta be just, be just like them
The gang and the government
no different
The gang and the government
no different
The gang and the government
no different
That makes me 1%
That makes me 1%

I totally understand that it would be frustrating to emerge with a university degree into this lousiest-in-three-decades economy, even though you're still much better off statistically being credentialed than not. And higher education is too often too damned expensive, though some of that is the inevitable result of the federal government trying to make it cheaper (paradoxical, I know!). I even think that exempting student loan debt from bankruptcy protection is both unwise and unlikely to last, given thealarming trends and the political climate. Unemployment and poverty are awful, soul-wrenching experiences.

But. The Organization Man died decades ago, long may he rot. There are no "rules," and even if there were, you don't get an extra pat on the head for playing by them. Your "Debt Jubilee" will not be a party, unless your idea of a wild time is to eliminate consumer credit as we know it. And if you have any intention of building up a political case for bailing out your bad decisions, you might start with taking even one percent responsibility for them.

Ambushing Herman Cain

2011-11-01T11:40:00.000-04:00

At The New York Post:

Looks like the political world really is starting to take Herman Cain seriously: Anonymous “sexual harassment” charges have been exhumed against him by Politico, the left-tilting, Web-centric press organization.

How else to explain the weekend hit piece, which reported that Cain -- now riding high in the polls -- was the target of sexual-harassment allegations some 15 years ago while head of the National Restaurant Association?

Cain strongly denies the allegations, insisting that “I have never sexually harassed anyone” -- though he acknowledges that a complaint had been made.

EPA

Herman Cain

And he says the Equal Employment Opportunity Commission investigated and found “no basis” to support the charge.

However, the eatery trade group apparently delivered a “five-figure” payday to the two women who brought the charges.

Cain says he was unaware of any payments, largely because he’d recused himself and left the matter to the group’s counsel and human-resources department.

But, he said, “it couldn’t have been very much money, or I would have had to know about it.”

As for the story itself, Cain was adamant: It’s “a witch hunt.”

Clearly, questions remain unanswered.

But it’s certainly not up to Cain to provide the details.

He was ambushed anonymously -- neither of the women who reportedly accused him have been named -- though Politico says it knows who they are and is respecting their “privacy.”

As for alleged improprieties, it’s hard to understand what happened.

According to Politico: “There were also descriptions of physical gestures that were not overtly sexual, but that made women who experienced or witnessed them uncomfortable and that they regarded as improper in a professional relationship.”

Whatever the hell that means.

Politico certainly is no help -- one of the story’s authors yesterday declared: “We’re just not going to get into the details of exactly what happened with these women beside what’s in the story.”

Which leaves Cain trying to explain -- what exactly?

As he reportedly told his campaign manager: “Where there are facts, bring them to me, let me face my accusers and we will do this then.”

Fair enough.

Until then, Cain -- given the support he was receiving yesterday from those who have worked with him and say such allegations are unthinkable -- deserves the benefit of the doubt.

He won’t get it, of course.

But the incident just underscores why, increasingly, people are choosing not to run for high office -- especially the presidency.

There are always the bushwhackers.

Smoking-Gun Document Ties Policy To Housing Crisis

2011-11-01T09:18:00.000-04:00

From Paul Sperry at Investors Business Daily:

View Enlarged Image

President Obama says the Occupy Wall Street protests show a "broad-based frustration" among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis.

"You're seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place," he complained earlier this month.

But what if government encouraged, even invented, those "abusive practices"?

Rewind to 1994. That year, the federal government declared war on an enemy — the racist lender — who officials claimed was to blame for differences in homeownership rate, and launched what would prove the costliest social crusade in U.S. history.

At President Clinton's direction, no fewer than 10 federal agencies issued a chilling ultimatum to banks and mortgage lenders to ease credit for lower-income minorities or face investigations for lending discrimination and suffer the related adverse publicity. They also were threatened with denial of access to the all-important secondary mortgage market and stiff fines, along with other penalties.

Bubble? Regulators Blew It

The threat was codified in a 20-page "Policy Statement on Discrimination in Lending" and entered into the Federal Register on April 15, 1994, by the Interagency Task Force on Fair Lending. Clinton set up the little-known body to coordinate an unprecedented crackdown on alleged bank redlining.

The edict — completely overlooked by the Financial Crisis Inquiry Commission and the mainstream media — was signed by then-HUD Secretary Henry Cisneros, Attorney General Janet Reno, Comptroller of the Currency Eugene Ludwig and Federal Reserve Chairman Alan Greenspan, along with the heads of six other financial regulatory agencies.

"The agencies will not tolerate lending discrimination in any form," the document warned financial institutions.

Ludwig at the time stated the ruling would be used by the agen cies as a fair-lending enforcement "tool," and would apply to "all lenders" — including banks and thrifts, credit unions, mortgage brokers and finance companies.

The unusual full-court press was predicated on a Boston Fed study showing mortgage lenders rejecting blacks and Hispanics in greater proportion than whites. The author of the 1992 study, hired by the Clinton White House, claimed it was racial "discrimination." But it was simply good underwriting.

It took private analysts, as well as at least one FDIC economist, little time to determine the Boston Fed study was terminally flawed. In addition to finding embarrassing mistakes in the data, they concluded that more relevant measures of a borrower's credit history — such as past delinquencies and whether the borrower met lenders credit standards — explained the gap in lending between whites and blacks, who on average had poorer credit and higher defaults.

The study did not take into account a host of other relevant data factoring into denials, including applicants' net worth, debt burden and employment record. Other variables, such as the size of down payments and the amount of the loans sought to the value of the property being bought, also were left out of the analysis. It also failed to consider whether the borrower submitted information that could not be verified, the presence of a cosigner and even the loan amount.

When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.

Still, the study was used to support a wholesale abandonment of traditional underwriting standards — the root cause of the mortgage crisis.

For the first time, Washington's bank regulators put racial lending at the top of their checklist. Banks that failed to throw open their lending windows to credit-poor minorities were denied expansion plans by the Fed in an era of frenzied financial mergers and acquisitions. HUD threatened to deny them access to Fannie Mae and Freddie Mac, which it controlled. And the Justice Department sued them for lending discrimination and branded them as racists in the press.

"HUD is authorized to direct Fannie Mae and Freddie Mac to undertake various remedial actions, including suspension, probation, reprimand or settlement, against lenders found to have engaged in discriminatory lending practices," the official policy statement warned.

The regulatory missive, which had the effect of law, advised lenders to bend "customary" underwriting standards for minority homebuyers with poor credit.

"Applying different lending standards to applicants who are members of a protected class is permissible," it said. "In addition, providing different treatment to applicants to address past discrimination would be permissible."

To that end, lenders were directed to "make changes in marketing strategy or loan products to better serve minority segments of the market." They were also advised to "change commission structures" to encourage brokers and loan officers to "lend in minority and low-income neighborhoods" — a practice Countrywide Financial, the poster boy of the subprime scandal, perfected. The government now condemns the practice it once encouraged as "predatory."

FDIC warned banks that even unintentional discrimination was against the law, and that they should be proactive in making "multicultural" loans. "An ounce of prevention is worth a pound of cure," the agency said in a separate advisory.

Confronted with the combined force of 10 federal regulators, lenders naturally toed the line, and were soon aggressively marketing subprime mortgages in urban areas. The marching orders threw such a scare into the industry that the American Bankers Association issued a "fair-lending tool kit" to every member. The Mortgage Bankers Association of America signed a "fair-lending" contract with HUD. So did Countrywide.

HUD also pushed Fannie and Freddie, which in effect set industry underwriting standards, to buy subprime mortgages, freeing lenders to originate even more high-risk loans.

"Lenders should ensure that their loan processors and underwriters are aware of the provisions of the secondary market guidelines that provide various alternative and flexible means by which applicants may demonstrate their ability and willingness to repay their loans," the policy statement decreed.

"Fannie Mae and Freddie Mac not infrequently purchase mortgages exceeding the suggested ratios" of monthly housing expense to income (28%) and total obligations to income (36%).

It warned lenders who rejected minority applicants with high debt ratios and low credit scores to "be prepared" to prove to federal regulators and prosecutors they weren't racist. "The Department of Justice is authorized to use the full range of its enforcement authority."

It took a little more than a decade for the negative effects of the assault on prudent lending to be felt. By 2006, the shaky subprime mortgages began to default. In 2008, the bubble exploded.

Clinton's task force survived the Bush administration, during which it produced fair-lending brochures in Spanish for immigrant home-loan applicants.

And it's still alive today. Obama is building on the fair-lending infrastructure Clinton put in place.

As IBD first reported, Attorney General Eric Holder has launched a witch hunt vs. "racist" banks.

"It's a more aggressive fair-lending enforcement approach now," said Washington lawyer Andrew Sandler of Buckley Sandler LLP in a recent interview. "It is well beyond anything we saw during the Clinton administration."

Tom Perez, assistant attorney general for civil rights, recently testified that his division "continues to participate in the federal Interagency Fair Lending Task Force." And he and the task force are working with the newly created Consumer Financial Protection Bureau to "enhance fair-lending enforcement."

The fair-lending task force's original policy paper undercuts the notion the financial crisis was all about banker "greed," though it certainly played a role after the fact. Rather, it offers compelling evidence that the crisis evolved chiefly from government mandates and threats to increase lending to applicants who could not afford them.

"Occupy" Is No Tea Party

2011-10-30T07:52:00.001-04:00

Billie Tucker and Edwin Feulner at RealCLearPolitics:

President Obama this week compared the Tea Party to the Occupy Wall Street protests, telling ABC News’ Jake Tapper, “in some ways they’re not that different.” We beg to differ. The Tea Party and the protestors are almost exact opposites.

We understand that the President is in a dilemma. He sympathizes with the protesters because many if not most of their goals are also Mr. Obama’s. He thus wants to associate the Occupiers with the Tea Party, a movement that has resonated with the American people.

But there’s the rub. Barack Obama identifies with the Occupiers because, as pollster Doug Schoen put it this week, they reflect “values that are dangerously out of touch with the broad mass of the American people … and are bound by a deep commitment to radical left-wing policies.”

That’s not the Tea Party. That’s the opposite.

It is hard to generalize about the Tea Party. One of its major strengths, however, is that it is a mass movement that eschews central control; it is propelled from the ground-up. Indeed, its structure reflects its philosophy of respect for the wisdom and freedom of the American people and their traditions.
Unlike the Occupiers, the Tea Party has a unifying set of principles. Those are articulated clearly in America’s founding document, the Constitution. It lays out a system for limited government, delegating specific powers to elected leaders and prohibiting them from exercising responsibilities beyond these enumerated powers.

The Tea Party’s heroes are therefore the Founding Fathers (as you may have noticed from the three-cornered hats some of the most colorful Tea Partiers wore). The Tea Party is all about the small-government, personal responsibility and conservative philosophies espoused by Adam Smith, Edmund Burke, Russell Kirk and Milton Friedman.

The Tea Party is not an anarchist, anti-government group. We agree with Barry Goldwater that “the legitimate functions of government are actually conducive to freedom. Maintaining internal order, keeping foreign foes at bay, administering justice, removing obstacles to the free interchange of goods-the exercise of these powers makes it possible for men to follow their chosen pursuits with maximum freedom.”
The Tea Party, lastly, reveres the values of this country, which are respect for the law and private property, freedom of expression, assembly and religion, self-government, self-sufficiency, hard work, and the belief that the family is the major institution in society, not the federal government. We know America’s success has stemmed directly from these values. It’s what sets America apart from all others.

The Occupiers want many things, and the vast majority of the ones we’ve heard would deviate America from its historic course. Their hero, by the look of their tee-shirts at least, seems to be more Che Guevara, a psychopathic killer, than Madison, Jefferson and Franklin.

Let’s analyze how the protesters’ demands would make our country less free and more dependent on an ever-growing government.

Heading this week’s “99 percent declaration” (and virtually all previous lists of grievances emanating from this group) is the demand for a ban on political contributions by individuals and political speech by associations and groups, including companies and unions.

This is no apple pie proposal. Such a change would leave us less free and show a woeful contempt for the First Amendment. As the Supreme Court rightly found in the Citizens United case, this is about the right to engage in free speech, particularly political speech, and the right to freely associate. The Court rejected the very idea that the government can decide who gets to speak, and ban some from speaking at all, particularly those doing their speaking through associations of members who share their beliefs. This is about one of the fundamental freedoms in the Bill of Rights.

The Occupiers decry bailouts, but they seem to reject them only for companies and industries they don’t like. Their grab-bag of special interests looks like Mr. Obama’s, including a special exemption for any corporation that claims to be “green.” Meanwhile they want to give authoritarian powers to the Environmental Protection Agency “to shut down corporations, businesses or any entities that intentionally or recklessly damage the environment.”

The list of baddies is long, and recognizable: the pharmaceutical industry, “corporations engaged in perpetual war for profit,” the “fossil fuel industry.” Sound familiar?

And by the way, the Tea Party was repeatedly, and quite libelously, portrayed in the media as racist, unruly and rabble-like. Never was any proof of this shown. On the contrary, Tea Partiers brought their own trash bags and cleaned up for themselves after every protest, and then went home to their jobs and families. Has anyone seen the anti-Semitic signs and comments many of these protesters are making—the violence, arrests, park occupation, police car defecation and store vandalism?

We could go on, but we think our case is made. The Tea Party represents (and respects) America. The Occupiers may be well intended, but their demands would be very different from what the Founding Fathers gave us and would dramatically change America.

Any comparisons between the Tea Party which desires to liberate We the People from big government and the Wall Street Occupiers who want more government regulation is either misguided or made to intentionally confuse Americans.

Ms. Tucker is co-founder of the First Coast Tea Party and Dr. Feulner is President of The Heritage Foundation.

For liberals, income inequality is the new global warming

2011-10-29T07:26:00.000-04:00

James Pethokoukis at The Enterprise Blog:

Liberals think there are lots of ideas that intelligent Americans just aren’t supposed to challenge. If they do, they’ll be labeled “deniers,” intentionally raising a nasty comparison to Holocaust rejectionists. It’s politics at its absolute lowest.

Among the unchallengeable dogmata: the Obama stimulus created millions of jobs, Obamacare will save trillions of dollars, Dodd-Frank prevents future bank bailouts, and policy uncertainty isn’t an issue hampering the recovery. And, of course, global warming poses an existential threat to civilization and humanity. Make that an “undeniable” threat.

You can now add “income inequality” to the list, thanks to New York magazine’s Jonathan Chait. In a column headlined “The Ideological Fantasies of Inequality Deniers,” Chait writes: “Rising income inequality, like climate change, is an ideologically inconvenient issue for conservatives. … The underlying facts, like the facts of climate change, are stark. Over the last few decades, income growth for most Americans has slowed to a crawl, while income for the very rich has exploded.”

In a way, Chait is correct that income inequality really resembled global warming. Both are issues that, to the extent they are even problems, could be be fixed though faster economic growth. And both serve as handy excuses for the Left to raise taxes and expand government.

The reality about “exploding income inequality” and wage stagnation is far different than what Chait, the Obama White House, and Elizabeth Warren (D-Occupy Wall Street) contend. One example: Brand new research from the University of Chicago’s Bruce Meyer and Notre Dame’s James Sullivan finds “median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009. … Our results provide strong evidence that the well-being of the middle class and the poor has improved considerably over the past thirty years.”

Those results aren’t above challenge. But there certainly seems to be legitimate counter-arguments and evidence to the “exploding income inequality” meme. Indeed, differing household demographics and differing inflation measures between incomes levels means the “rise in American inequality has been exaggerated both in magnitude and timing,” according to Northwestern University’s Robert Gordon. That and other studies undercut a new CBO analysis showing massive income gains for the “1 percent” at the expense of everyone else. But maybe Gordon is a denier, too; another guy on the Koch-RNC payroll. Except Gordon is an Obama supporter.

America needs an informed debate on how the American middle class can prosper in the future the way it has in the past—even if it is ideologically inconvenient for Chait and other liberals.

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