Good post on the debt ceiling negotiations

On NRO Nicole Gelinas has a very sound post on what should be next for Republicans.  Namely accept the deal.

"It would be one thing if an instant solution to our long-term fiscal, social, and economic problems were at hand, and the only thing stopping us from enacting it were the ability to borrow more money next week. But that’s not the case.

An intensification of default brinkmanship would only hurt the economy, and make longer-term problems harder to solve." 
http://www.nationalreview.com/corner/273180/another-cup-tea-nicole-gelinas

Spending cuts and State Benefit ratios

I caught a bit of Meet the Press this morning when Raul Labrador the Republican House member from Idaho was making the case for spending cuts in the debt ceiling negotiations.  Whereupon Tom Brokaw asked him the follow:

“I mean, here's an example. You know, I've been looking at the numbers across the country about what states are the beneficiaries of federal aid. You're obviously a big beneficiary for a lot of reasons. You've got national forest land. The last numbers that I saw, you get a buck 28 back for every dollar you send to Washington. Now, that additional--that 28 cent premium, what would you be willing to give up? How much of it?”

Brokaw is an esteemed member of the media so it’s never easy to know quite what he’s talking about, but I take it that Brokaw believes that because Idaho is a net recipient of federal dollars Labrador’s position against spending and for smaller government requires him to give up some of that benefit.  I don’t see how this follows.

First, if you reduce everything (revenue and expenses) by a given percentage you would be moving in the direction of smaller government but Idaho’s ratio of 1.28 to 1 wouldn’t change—the pie is reduced but shape of the slices is constant.  Second, if revenue is held constant and spending is again reduced across the board Idaho’s ratio will go down without it having to find anything unique to Idaho as Brokaw’s question suggests.

But more to the point the question is completely misguided, is ass backwards.  The proper question is to ask what it is that Federal government should do.  What results from that is what results from that.  State representation doesn’t mean a war between the states for government benefits.

As it happens, before switching to Meet the Press, I saw for the third or fourth time a Pixar/Cars themed ad for not using cell phones and texting by the Dept. of Transportation.  So let’s simplify.  Let’s say the Budget is made up of expenses for national forest land and Dept. of Transportation safe driving ads.  Further, that there are only two states; Idaho which has 1.28 to 1.0 benefit ratio because of its forests, and LA/NY/CHI which produces advertising.  Follow Brokaw and you come to the conclusion that a Rep. from Idaho espousing the need to cut expenses is obliged to favor greater cuts to forestry than government ads in order to equalize things between the states.  This is absurd.  I can see a case for protecting forestry, I doubt rather seriously whether safe driving ads have any impact whatsoever.  If that means that Idaho’s ratio goes from 1.28 to 1 to something higher so be it.

Baseball trade deadline - some thoughts

The major league baseball trade deadline comes up on Sunday, so it seems to be as good a time as any to put together some thoughts on a how a team should proceed.  For teams like the Yankees and Red Sox, of course there really isn’t a decision; you’re always in the market to add.  The following is from the perspective of the Minnesota Twins but is applicable to other teams of similar means:

1. Let’s start with the most controversial.  I take it that as a GM your first obligation is to the owner and that the benefits of winning a championship are less than the costs of being really bad.  This is an insight from behavioral economics; that the cost benefit curves aren’t the same (losing five dollars makes you feel worse than finding five dollars makes you feel good).  Interest in a club is something of a habit which is formed over years of being in contention.  Re-establishing interest after you’ve been really bad for a couple of years is really difficult both on the field (players will gravitate towards success) and with fans.  See Twins, World Series champions in ’87 and ’91 and the talk of contraction (end of the 90’s ???)
2. Supply and demand applies to baseball just like everywhere else.  Teams are going to be extremely reluctant to give up on a season by being sellers when there is still a good share of that season to be played (neither the players or the fans are going to be happy with you).  In general I’d say there are likely to be more potential buyers than sellers, which means it will be a sellers market.
3. A typical deal involves the buyer trading future prospects for a current asset, usually at a pretty steep discount rate.  It follows from the present for future aspect of these trades that the more of these you make--that is the more consecutive years you’re a buyer--the more likely it is that your future success will be imperiled.  See point #1
4. Even the really good deadline/mid-season deals should give you pause.  In ’84 the Cubs picked up Rick Sutcliffe who pitched them to the playoffs.  But they gave up a young Joe Carter.  In effect the Cubs traded Joe Carter’s career for a few good seasons from Sutcliffe.  Similarly, in ’87 the Tigers picked up Doyle Alexander whose pitching allowed them to squeak by the Blue Jays to win the AL East (they lost to the Twins in the AL playoffs).  A great deal for the Tigers, except that they traded John Smoltz to get him.
5. Beware of what I would call the weak division trap.  This is when you are in contention not because you’re an especially good team or because you’re having a good season but because you are in a bad division.  The Twins this year are a perfect example of this.  They are 5.5 games out at the moment, but look at their record and the breakdown by division:

	Wins	Loss	Total	Win %
AL East	8	19	27	0.296
AL Central	22	17	39	0.564
AL West	12	10	22	0.545
National	8	10	18	0.444
	50	56	106	0.472

Against the current playoff teams the picture isn’t any brighter:

	Wins	Loss	Total	Win %
Tigers	1	8	9	0.111
Red Sox	1	3	4	0.250
Yankees	1	2	3	0.333
Rangers	4	3	7	0.571
	7	16	23	0.304

The Twins run differential is -82 the worst in the division, across all of baseball only the Astros, Cubs, and Orioles are worse.  So yes, at 5.5 games back you’re in contention, but you aren’t good.  The latter should take precedence.

According to today’s Minneapolis Star & Tribune the Twins are currently buyers rather than sellers.  I can see why the Twins officials would say that to the public.  I just hope they’re not telling the truth.

Debt Prayer

Over on Twitter, the always entertaining Iowahawk posted a debt ceiling prayer:

"Our children who art in future
Hollow be thy pockets."

George Will on Libertarianism

Over at the Washington Post George Will reviews the new book The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong With America by Nick Gillespie and Matt Welch.  What caught my eye in this was Will's conclusion: 

"America is moving in the libertarians’ direction not because they have won an argument but because government and the sectors it dominates have made themselves ludicrous. This has, however, opened minds to the libertarians’ argument."

To my mind this is a key point which applies equally well to conservatives.  The sad fact is--sad at least if you are a conservative--is that we haven't won the argument.  To the extent that we have succeeded politically, it has been because liberalism has failed so spectacularly.  Without the abject failure of the seventies Reagan would've never won in 1980, indeed probably never would've won the Republican nomination.

I keep hearing and reading how America is a center-right nation and keep wondering what America they are talking about.  Until conservatives and libertarians actually start winning the argument, instead of being the default, when all else fails selection, nothing very substantive is going to change.
http://www.washingtonpost.com/opinions/declaration-of-independents/2011/07/29/gIQAJrUAiI_story.html

Why I'm not a liberal

John McCormack on Twitter and Jonah Goldberg draw attention to Paul Krugman's takedown of Reagan's economic performance.

Says Paul:   "First Michael Boskin, now John Taylor: there seems be an epidemic of politically conservative economists who used to be technically competent repeating the obviously wrong falsehood that Reagan ushered in an era of “unprecedented” growth.
No matter what measure you use, it just ain’t so"

Krugman's evidence is a chart showing the average multifactor productivity growth for the periods:
1948 - '73  (1.9%)
1973 - '90 (0.3%)
1990 - '95 (0.5%)
1995 - '00 (1.3%)
2000 - '07 (1.4%)
2007 - '10 (0.7%)
http://krugman.blogs.nytimes.com/2011/07/30/the-corrosion-of-the-conservative-economic-mind/?smid=tw-NytimesKrugman&seid=auto

Hilariously the comments for this are all positive.  And if you can look at the chart and think Krugman's nailed it, you too have what it takes to be a liberal. If, on the hand, you're baffled, wondering what he's talking about given that Reagan was President from 1980 to 1988 (Ford, Carter, Reagan, part of Bush I = Reagan???), there might be hope for you.

Moynihan on Political Ideas

"Political ideas must be simple.  Which is not to say they must be facile.  To the contrary, the most profound propositions are often the simplest as well.  Whitehead's [Alfred North] rule to 'seek simplicity and distrust it' is appropriately cautionary, but he did first of all say: Seek simplicity."

Daniel Patrick Moynihan, Counting Our Blessings, page 330

Some more posts on the Debt Ceiling Negotiations

Over at Contentions, John Podhoretz asks of the the House Republican nos, what is their plan:

"The problem with the caucus that wants to vote “no” and their supporters is that they have no alternative plan. Or rather, their only alternative plan is the firing squad—which is to say, the debt ceiling is not raised. In which case we are entering uncharted territory that involves not only a threat to the nation’s credit rating but also panic in the worldwide markets and a kind of triage when it comes to federal spending that could have all kinds of frightening consequences we can’t anticipate."

http://www.commentarymagazine.com/2011/07/29/whats-the-plan-2/

Over at NRO a post on financial analyst thoughts on default or near default: http://www.nationalreview.com/corner/273065/flirting-disaster-andrew-stuttaford

Megan McArdle on not raising the debt ceiling: http://www.theatlantic.com/business/archive/2011/07/what-happens-if-we-dont-raise-the-debt-ceiling/242728/

Oakeshott on Politics

"Some unfortunate people, like Pitt (laughably called 'the Younger') are born old and are eligible to engage in politics almost in their cradles; others, perhaps more fortunate, belie the saying that one is young only once, they never grow up.  But these are exceptions.  For most there is what Conrad called the 'shadow line' which, when we pass it, discloses a solid world of things, each with its fixed shape, each with its own point of balance, each with its price; a world of fact, not of poetic image, in which what we have spent on one thing we cannot spend on another; a world inhabited by others besides ourselves who cannot be reduced to mere reflections of our emotions.  And coming to be at home in this commonplace world qualifies us (as no knowledge of 'political science' can ever qualify us), if we are so inclined and have nothing better to think about, to engage in what the man of conservative disposition understands to be political activity."

Michael Oakeshott, Rationalism in Politics, On Being Conservative

Charles Krauthammer on why the Boehner Plan should pass

http://www.washingtonpost.com/opinions/the-great-divide/2011/07/28/gIQAeOtifI_story.html?hpid=z2

Boehner Plan vote and Presidential Candidates

Over at Powerline http://www.powerlineblog.com/archives/2011/07/does-boehner-have-the-votes.php John Hinderaker has a good take on the Boehner Plan.  He's not very enthusiastic, realizes that the out year spending cuts are bogus (I remarked on Twitter that I was getting in shape by running a marathon; 1.5 miles today, the rest in the out years), but concludes with "so let’s hope Boehner has the votes."

Reporting today has suggested that Boehner is in fact one or two votes short, which is why it has been delayed.  One of the no votes is Michelle Bachmann.  That pretty neatly encapsulates why I think she's a bad choice for the nomination.  A wise rep. would realize that however many reservations they may have, if the proposed bill is the best likely result, and if your vote is important, you vote yes.  Of course her no vote will probably help her in the polls, as particularly in the early weeding out primaries, the purist has a better chance of finding followers than the trimmer.

Assessment of Ken Langone, co-founder of Home Depot

Via Jennifer Rubin's Right Turn, a link to Ken Langone on CNBC.  http://www.washingtonpost.com/blogs/right-turn/post/the-must-see-critique-of-obama-and-the-debt-aholics/2011/03/29/gIQAvt5xeI_blog.html

Worth watching.  Best line: "Fat cat, the president uses it as a pejorative but I wear it as a badge of honor."

Moynihan on Liberals and Conservatives

"Somehow liberals have been unable to acquire through experience what conservatives seem to be endowed with from birth, namely a healthy skepticism of the powers of government to do good."

Is Sammy still AAA?

For most of my father’s professional career he was a banker.  Last winter we ran into the now retired owner of a local gas station and my dad told me how he came to lend him money when he was just starting out.  In what I took to be their first meeting my dad was impressed with how neat and orderly his garage was, that all the tools were put away, etc. 

Now of course having a nice garage isn’t directly connected with having the cash flow to pay back a loan.  And I can’t help but think of the scene from Support Your Local Sheriff where the mayor is showing James Garner the new jail which is immaculate.  Says the mayor of the last sheriff, he was “yellow clear through, but a good organizer.”  But my father wasn’t wrong in seeing the condition of the garage and its organization as an attribute of credit worthiness.

I think a similar viewpoint is the correct way to evaluate the federal government.  Is it operating in such a way as to reassure the credit markets, that is demonstrating credit worthiness.  Consider the standard of baseline budgeting which starts from the premise that expenditures will go up.  A “cut” in baseline budget speak is when the rate of increase goes down.  But of course baseline budgeting assumes that you actually have a budget.  As Iowahawk tweeted yesterday “The Budget Act requires the President submit a budget, and Congress to pass one.  Why aren't all these clowns being led away in leg irons?”  Leg irons is an exaggeration of course, but the point holds.  Why indeed has nothing happened from a failure to produce the most basic act of governing?  Wouldn’t something like this in a parliamentary system lead to a vote of no confidence?    

There isn’t any way around raising the debt ceiling.  Even a bad bill is better than nothing (even if it doesn’t lead to anything like a default would the scramble after not raising the ceiling suggest to you that things were in order?).  But it is high time we started governing in a manner consistent with sound credit.  And this is why all of Obama’s talk of balancing revenue with spending cuts is nonsense, as if raising taxes and cutting spending are equal demonstrations of being able to manage our political affairs.  As Mark Steyn observed today of the plan I support “The Boehner plan tells us that real fiscal discipline is impossible within the U.S. political system. At some point, the ratings guys have to call them on it.”  It’s the best we can do right now.  But he’s right.  We have to do much better very soon. http://www.nationalreview.com/corner/272924/dollar-dollar-mark-steyn

More on the Boehner Bill

Keith Hennessey on why he supports it http://keithhennessey.com/2011/07/27/why-i-support-the-boehner-bill/    His last point: "I can see no viable alternative strategy to enact a stronger bill."

Jennifer Rubin on what happens if the Boehner Plan passes: http://www.washingtonpost.com/blogs/right-turn/post/ten-things-that-happen-if-the-boehner-bill-gets-through/2011/03/29/gIQA1nLLdI_blog.html

Conservatives in the House and the Boehner Plan

The Buckley rule, formulated by National Review founder William F. Buckley, advised conservatives to vote for the most conservative, viable candidate in an election.  The key word in this is viable.  Something like that should be operative in considering the Boehner plan in the House.  No it doesn’t go far enough, the out year spending cuts are a joke, and the time frame of six months doesn’t substantially reduce uncertainty.  But the expectation that conservatives can address our fiscal situation as the crow flies when the other party controls the Senate and the White House is delusional, the stuff of ideological rather than practical politics.

The metaphor of this site, of porcupines huddling together at a proper distance, doesn’t specify what that distance is and not just because it is a metaphor.  It isn’t specified because like politics it is always contingent.  There is no one right distance.  This is why campaign pledges are problematic.  On the one hand we want specificity because we’ve learned through experience that anything less will be ignored after the election, but such pledges are out of place in politics where everything is dependent on everything else, and where policy should strive for some sort of coherence rather than to a rigid adherence to a single idea. 

Viewers of Firing Line may recall that Bill Buckley, in speaking of conservative principles, often spoke in terms of a presumption in favor of the idea rather than framing it as an absolute.  That’s almost certainly not as satisfying as the alternative, but it’s the proper way to speak and act in the world of politics.

Norway, a look at the actual manifesto

Over at Andrew Breitbart's Big Journalism site, a post on Anders Breivik's manifesto.  http://bigjournalism.com/edulis/2011/07/27/msm-ignores-how-oslo-shooters-own-manifesto-completely-destroys-christian-conservative-label/

If the translation and summary is accurate than it goes beyond the problem of terminology that I focused on earlier.  First to b noted is the apparent lack of interest in looking at the manifesto itself by the media in comparison to the Palin e-mails.

"Our J-school geniuses, the only people academically certified to act as gatekeepers for the widespread dissemination of information, needed more information to rebuild their narrative of Palin but don’t need more information to support their narrative of Breivik. None of the ethics lawsuits about Palin stuck while she was governor, so they needed to find something– anything– that proved Palin was as corrupt as they believed her to be (belief still maintained without a shred of evidence). And now, the narrative is Breivik = Tea Party/Bloggers/Conservatives/Christians, so his targets (Labour Party children), anti-Islamic and anti-Marxist statements, plus his Facebook profile stating he was a “Conservative Christian” is all the information they need"

Then to the manifesto:

"But Breivik’s actual words completely contradict the “Conservative Christian” caricature. Below, you can see how, to save the environment, he wants the world to rid itself of oil consumption. You can see how he wants a one-child policy, government control of private industries, the breakup of Rupert Murdoch’s media empire, the military support of Russia to prevent a possible U.S. invasion of Europe, and the removal of all U.S. military bases from European soil. Yes, the tea party platform through and through, folks!"

As they say, read the whole thing. 

Holtz-Eakin makes the Lord Byron Point

In discussing the various debt ceiling plans Douglas Holtz-Eakin makes the key point:

"Size. I have never been a member of the “size matters” club. Instead, I think that markets are more interested in the quality of the policy addressing the debt problem. The projected debt explosion is fundamentally a spending explosion, so policies that address growth will be more convincing to markets than a “large” deal that is dominated by a futile attempt to tax away the problem."

Exactly.  The markets know we can raise taxes (whether those increases result in more revenue is another question) but what hasn't been demonstrated is the ability to meaningfully cut spending.  http://www.nationalreview.com/corner/272793/grading-plans-douglas-holtz-eakin

Norway and our worn out political terminology

On the events in Norway a couple of thoughts:

a)      It is generally being described as an act of terrorism, and yet seems to not quite rise to that low level.  Consider the PLO’s kidnapping of Israelis athletes at the ’72 games.  There you had a sizable group, a political objective, and an action, however despicable, with some chance of forwarding the cause.  In this case you have a political motive, but nothing else.  The political angle of this doesn’t change it into something other than mass murder.

b)       The NY Times write up describes Breivik as a “right wing fundamentalist Christian” and a “gun lover.”  No doubt there were Times readers who would use that trifecta of “errors” to describe conservatives and were left wondering when our own right wingers would go off.  This is of course nonsense, and another example of the muddle that results from our standard political terminology.  In truth it is almost impossible to speak of politics in any short hand way without using terms like left wing, right wing, liberal, conservative.  But the thought under those terms have undergone so many changes and the historical associations are so numerous and varied as to make them virtually meaningless.

For example in the current debt ceiling negotiations we have one side intent on keeping all current programs in their existing form and the other trying to reduce some of these programs with the intention of maintaining or increase the liberty of individuals.  A person familiar with the historical and philosophical roots would conclude that the former are the conservatives, the latter the liberals, and they would be quite wrong.   Sadly donkey and elephant symbols now work as well or better than our political terminology as they have the advantage of not leading us into making invalid associations of the kind that right wing and fundamentalist Christian invite. 

Airplane tax breaks and The West Wing

A good post over at NRO on the subject of private jet tax deductions.  The West Wing angle isn't really surprising as the show was an idealized version of a liberal administration.  No surprise either that the one we've been waiting for has turned out to be an ideologue. http://www.nationalreview.com/corner/272743/even-ithe-west-wingi-rejected-obamas-private-jet-meme-charlie-cooke

Of course the tax treatment on jets, which is really a determination of an appropriate amortization schedule, should be based on the asset and change only when the effective life of said asset changes. 

Fred Thompson, debt ceiling negotiations

A typically smart column on the debt negotiations by Fred Thompson.  I still think Thompson should've been the Republican nominee rather than McCain, never finding the objections--that he didn't run hard enough???--particularly convincing.  Any way, read it here: http://www.nationalreview.com/articles/272744/open-letter-house-gop-fred-thompson?page=1

Debt Ceiling Negotiations

"As the sole sign of man being in his senses
Is learning to reduce his past expenses."

Lord Byron, Don Juan, Canto x, verse 31

Balanced Budget Amendment

I take it that in the debt ceiling negotiations I am on the Republican side.  But the inclusion of a balanced budget amendment as one of the conditions is daft.  Today's column by Rich Lowry is a good summary of the arguments against.  The best point that he makes, because it is not a practical argument, is simply one of appropriateness:

"The Constitution is meant to set out the basic rules of the road for American governance. It’s not an appropriate vehicle for enshrining transitory or controversial policy preferences. This is what the 18th Amendment establishing Prohibition did, and so ensured widespread defiance of the nation’s foundational law."

As Lowry documents the version being floated stipulates that spending not exceed 18% of GNP with various exception clauses for emergencies such as a declaration of war.  But all of that is immaterial as against the specificity which doesn't belong.  We have too much debt, we spend too much, but an unconservative approach to achieve conservative goals, especially at the constitutional level, isn't the way to go.

The article is here: http://www.nationalreview.com/articles/272154/against-balanced-budget-amendment-rich-lowry

Golf and British Open Courses

I can tell you with almost metaphysical certainty where my first complaint this year over the golf course, it’s absurdity, it’s poor design, it’s complete, ridiculous unfairness will occur.  It will be on the 8^th green at NGC next week, and it will have taken that long only because next week will be the first rounds of golf I will have played this year.   And I will not be completely wrong.  After all golf is a test of skill and as such attempts to reward good shots and punish bad shots, which at the very least implies a course set up that can distinguish between the two.

And yet the British Open and the courses on which it is held serve as a yearly reminder that I won’t be completely right either, that what constitutes a proper golf hole isn’t quite as clear and straight forward as the modern, American golfer might think.  The typical Open bunker is so deep that the player is quite often forced to play out of them either sideways or away from the hole.  And the route into said bunker may be because your drive has hit the fairway, hit one of the fairway contours and caromed into the bunker where you find yourself without a shot.  Unlucky? Surely.  But unfair, or to be more precise wrong, that is a much more difficult question to answer if you think about it. 

Consider St Andrews and perhaps its most famous hole, the 17^th or the Road Hole.  Mind you St. Andrews is hallowed ground, the Mecca of golf.  Good god, Queen Anne, as in Elizabethan England, supposedly swung a club here.  And what does the 17^th at St Andrews entail?  Only a drive over the corner of a hotel.  It was I believe Nietzsche (decent player, but not especially long off the tee) who first pointed out that if the most famous hole at the Mecca of golf calls for a drive over a hotel all is permissible

Feynman on the economy

"reality must take precedence over public relations, for Nature cannot be fooled."

Actually, it's the conclusion of his report on the Challenger disaster but it's a fair description of the political economy as well, with the additional understanding that the feedback loop in economics can be a long one.

Richard Feynman, What Do You Care What Other People Think

Miller Coors, Minnesota - A Confederacy of Dunces

One of the great book titles of all time is John Kennedy Toole’s A Confederacy of Dunces.   It would make a fitting headline for a story in today’s Minneapolis Star & Tribune, although the Strib would never see it that way.

“The MillerCoors brewing company landed in the cross hairs of Minnesota's government shutdown Wednesday when state officials said it would have to stop selling its beer in the state because of expired licenses.

The Department of Public Safety told the brewer it must stop distribution in Minnesota and devise a plan to pull its product from the shelves, including Coors, Coors Lite, Miller Lite, Miller High Life and 35 other name-brand beers. That would decimate choices for consumers. MillerCoors supplies 38 percent of the beer sold in Minnesota.”

As the story details, licenses need to be renewed every three years.  So how did this slip by MillerCoors? 

“MillerCoors attempted to renew in mid-June, but, according to company officials, sent the state a check for more than the required amount [note: if you think getting the amount correct is easy, you haven’t done these sort of things before, trust me]. Green said the company followed up with a new check, which the state received June 27.

But on June 30, one day before the government shutdown, the company received a letter from the state that its brand licenses had expired. State employees who would typically renew those licenses have been deemed noncritical during the shutdown and laid off.”

Yeah those tea party people who want less government are clearly nuts.
http://www.startribune.com/politics/statelocal/125526248.html

Benefits for the Middle Class

“I might want more revenues and fewer cuts to programs that benefit middle-class families that are trying to send their kids to college…”  Barack Obama, 7/11/11 press conference

It is curious, but no longer surprising, that this statement doesn’t warrant any attention.  Correct me if I’m wrong here, but wouldn’t middle class families be in the middle?  It seems reasonable to conclude that a) the country’s real standard of living should approximate what the middle can afford and that b) except perhaps in the case of unforeseen emergencies, the middle class should be able and called on to manage their own affairs. 

Now I don’t doubt that modern life requires some income transfer from rich to poor and, to a lesser extent, from middle to poor, and that while I think it would be better if this were done privately the reality is that government is going to be the primary vehicle for these transfers.  But I don’t see how the U.S. middle class has a legitimate claim to take, by law, the wealth and property of the upper class.

But I suspect that is only a small part of what is going on here.  What is happening is the crisscrossing of dollars and money illusion that Buckley describes in the earlier, Up From Liberalism quote.  The middle class family needs assistance in paying for their kid’s college education because they’ve paid for everyone else’s college education, and because government assistance has seriously diminished economic discipline on both the supply and demand side of college education.

And finally, providing assistance to the middle class, if it is real net-net assistance, is essentially allowing the majority of the population to live beyond its means which is how an extraordinarily wealthy nation like the United States can find itself in a debt crisis.  As Herbert Stein observed, something that can't go on forever, won't.

"Stuff that everybody welcomes--like new programs"

"some time in the near future, Cayuga County apple pickers will be making it possible for Manhatten elevator operators to ride to work for fifteen cents, even though it costs the Transit Authority twenty cents to carry them.  In due course, the political representatives of Cayuga apple pickers will appeal, cogently, for increased off-season benefits for apple pickers; whereupon it will become necessary to increase the taxes of subway riders.  Keep this up, you will readily see, and the skies are dark with crisscrossing dollars.  A dispassionate accountant, viewing the purposeless pell mell, would surely wonder what on earth is this all about?  It is liberalism on the wing.

What, concretely, is wrong with the economy of the crisscrossing dollar?  Well for one thing there is the well known fact that any time a Cayugan sends a dollar down to New York it is going to stop at Albany for an expensive night on the town.  But aside from the leakage...?

The principal objection is that we have here an economics of illusion, made possible by the systematic mystifications of politicians.  The second is that it permits economic profiteering by politically mobilized economic groups at the expense of those not mobilized.  The third is that it diminishes the influence of the individual in the economic marketplace, transferring what the individual loses to politicians and ideologues."

William F. Buckley, Up From Liberalism (1959)

Obama Press Conference: asides that give the game away

Charles Krauthammer, John Steele Gordon and others have rightly focused on Barack Obama’s statement that “in fact, I’m able to keep hundreds of thousands of dollars in additional income that I don’t need.”  The former notes that this means that income you get to keep resides in government forbearance, while the latter points out the economic illiteracy of this comment, that “income you don’t need” is the source of investment.

But this wasn’t the only revealing statement made by the President.  One seemingly off-hand comment that deserves attention was Obama saying “I'd rather be talking about stuff that everybody welcomes -- like new programs…”  But of course everybody doesn’t welcome new programs.  Some—they’re called conservatives or libertarians—think we have more than enough programs right now, thanks and that as I posted earlier “refuse to hand over the destiny of a society to any set of officials but also consider the whole notion of planning the destiny of a society to be both stupid and immoral.”   On top of which it should be obvious that the reason we are in this terrible bind is because politicians--Obama is a prominent example--have been all too happy to talk about and pass new programs. 

Later in the presser Obama says “that’s what the revenue debate is about.  It’s not because I want to raise revenues for the sake of raising revenues, or I’ve got some grand ambition to create a bigger government.”   A person who believes that we all welcome new programs isn’t very convincing in disavowing an ambition to create a bigger government. 

Perspective on the law and Casey Anthony case

I liked this column on the Anthony case and much else from Fred Thompson.  http://www.nationalreview.com/articles/271499/why-i-wish-eric-holder-watched-anthony-trial-fred-thompson

Our always adversarial press

Here are the questions from yesterday's press conference.  Not a single one is unsympathetic to the President's position.  Poodles.

Q    Ben Feller:  Two quick topics. Given that you’re running out of time, can you explain what is your plan for where these talks go if Republicans continue to oppose any tax increases, as they’ve adamantly said that they will?  And secondly, on your point about no short-term stopgap measure, if it came down to that and Congress went that route, I know you’re opposed to it but would you veto it?
Q    Do you see any path to a deal if they don't budge on taxes?

Q    Chip Reid:  You said that everybody in the room is willing to do what they have to do, wants to get something done by August 2nd.  But isn’t the problem the people who aren’t in the room, and in particular Republican presidential candidates and Republican Tea Partiers on the Hill, and the American public?  The latest CBS News poll showed that only 24 percent of Americans said you should raise the debt limit to avoid an economic catastrophe.  There are still 69 percent who oppose raising the debt limit.  So isn’t the problem that you and others have failed to convince the American people that we have a crisis here, and how are you going to change that? 
  Q    Do you think he’ll come back to the $4 trillion deal?

Q    Rich Wolf:  You keep talking about balance, shared sacrifice, but in the $4 trillion deal that you’re talking about roughly, it seems to be now at about four-to-one spending to taxes; we’re talking about $800 billion in taxes, roughly.  That doesn’t seem very fair to some Democrats.  I’m wondering if you could clarify why we’re at that level.  And also, if you could clarify your Social Security position -- would any of the money from Social Security, even from just Chained CPI, go toward the deficit as opposed to back into the trust fund? 

Q    Sam Stein:  With unemployment now at 9.2 percent and a large chunk of those lost jobs coming from the private sector, is now a really good time to cut trillions of dollars in spending?  How will we still create jobs?  And then to piggyback on the Social Security question -- what do you say to members of your own party who say it doesn’t contribute to the deficit, let’s consider it but not in the context of this deal? 
Q    Are there things with respect to Social Security, like raising the retirement age, means testing -- are those too big a chunk for --

Q    Lesley Clark: Have you -- you’ve talked with economists, you said that economists have agreed that a deal needs to be made.  Have you worked with new U.S. business leaders at all to lobby Congress to raise the debt ceiling?  And if so, who are you talking to? 
Q    Can you say, as the clock ticks down, whether or not the administration is working on any sort of contingency plans if things don’t happen by August?

Q    George Condon:  Mr. President, to follow on Chip’s question, you said that the Speaker faces tough politics in his caucus.  Do you have complete confidence that he can deliver the votes on anything that he agrees to?  Is he in control of his caucus?  
Q    So your confidence in him wasn’t shaken by him walking away from the big deal he said he wanted?

Q    April Ryan:  Mr. President, hi.  I want to revisit the issue of sacrifice.  In 2009, you said that -- expect the worst to come; we have not seen the worst yet.  And now with these budget cuts looming, you have minorities, the poor, the elderly, as well as people who are scared of losing jobs fearful.  And also, what say you about Congressman Chaka Fattah’s bill, the Debt Free America Act?  Do you support that bill?  Are you supporting the Republican bill that is similar to his, modeled after Congressman Fattah’s bill?  

What's liberal about liberalism

Suppose I go up in the attic and find a chair that dates from 1900.  In due course, I have to change the upholestry, replace the seat, the back, and two of the four legs.  Is it the same chair, that is, can I still say that my chair dates back to 1900?

That philosophical question (Plato I believe) comes to mind when I read Mark Steyn's post at NRO.  It seems our Energy Secretary has justified the ban on incandescent bulbs with the following:
 

"We are taking away a choice that continues to let people waste their own money."

I don't know what the right term is, but I'm pretty sure that what goes by the label of liberalism isn't liberal any more. http://www.nationalreview.com/corner/271470/light-motif-mark-steyn



Investment in Housing

Economist Greg Mankiw has a post on the relative cost in investing in housing vs business.  As long as I can remember my father has talked about this. 

"Investment in owner-occupied housing faces an effective marginal tax rate of just 3.5 percent. In contrast, investment in the business sector faces an effective tax rate of 25.5 percent. This leads to a tax-induced bias for capital to flow into housing-related uses rather than other types of projects. As a result, businesses are less likely to purchase new equipment and less likely to incorporate new technologies than otherwise might be the case. Less business investment results in lower worker productivity and ultimately lower real wages and living standards. While the housing sector provides employment and has other positive effects on the overall economy and on society, the resources employed in the housing sector displace investment that would otherwise occur in the business sector were it not for the favored tax treatment of housing. The resulting distortion in the allocation of capital likely lowers overall output, because resources are allocated based on tax considerations rather than economic merit. In effect, the United States has chosen as a society to live in larger, debt-financed homes while accepting a lower standard of living in other regards."  http://gregmankiw.blogspot.com/2011/07/housing-tax-subsidies.html

The argument here isn't that business investment should be favored in order to raise the standard of living--that is an enterprise association argument--but rather that policy should be neutral.  The standard comment in favor of a housing oriented policy, that it is the dream of every american to own their own home, makes the mistake of pre-supposing that government should be in the dream realization business.  That in turn requires government to prioritize among dreams, which should be beyond its purview.

King James Bible

Rich Lowry has an interesting column on the King James Bible. http://www.nationalreview.com/articles/271337/bible-translation-changed-world-rich-lowry  He mentions two books on the subject to which I would add a third, Adam Nicolson's God's Secretaries.  http://www.amazon.com/Gods-Secretaries-Making-James-Bible/dp/0060838736/ref=sr_1_1?s=books&ie=UTF8&qid=1310317173&sr=1-1  

I'm told, by someone who would know, that more modern translations are not only easier to understand but more accurate, however my sense is that the loss in "majestic lift" has been considerable.

Employment, thank God were not in a recession.

Check out the employment to population graph posted on Mankiw's site and note that we aren't technically in a recession.  I think this is what Plouffe meant when he said people don't pour over Dept. of Labor reports to guage how things are going.  In this case, they probably aren't too hung up on the definition of recession.

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg58aDevUCBLjmGAeCehVQYI3fQKNV7ZJmxGg63uHB0oQ1p-RrGmHVmSJjUK4CT0rrC78819zBSkz7hBDZg6NZ28VwBZI7le8skTZNbYbkhcJuiVB_lMEgm1pgjl0kHolzC1c2AXUhcF5c/s1600/employment+pop+ratio.png

Assessing the Political Parties - Boxer gets three Pinochios

The Washington Post had a very interesting and informative fact checker article on Barbara Boxer's claim that democrats should be completely credited with achieving our last balanced budget and surplus.  http://www.washingtonpost.com/blogs/fact-checker/post/barbara-boxers-gross-rewriting-of-history/2011/06/30/AGFGVqsH_blog.html  I heard pretty much the same claim made by a liberal friend of mine who was comparing Clinton to George W Bush.

What the article points to is that assigning credit or blame to one of the political parties is not a straight forward process, although arguments are often made as though it is.  In this case the fact checker disagrees with Boxer, by pointing out that Clinton's goal wasn't to balance the budget, that Bush I actually produced a more stringent budget before Clinton, and that Clinton and the Democrats were beneficiaries of a significant and unexpected increase in capital gains tax revenue which was separate from the tax increases added to the budget, along with the pressure to balance the budget that came about because the Republican gains in the mid-term elections.

One could add that Republican objections to the '93 budget bill were centered on the tax increases not the spending restraint and if one recalls correctly the timing here was important.  The dire predictions turned out to be wrong, but the context was a proposed tax increase just as the economy was starting to come out of recession (the recession that largely doomed Bush I's re-election). 

Extending the idea, I don't think it is even particularly clear where responsibility resides when one party controls both congress and the White House because elections tend be centrist affairs.  Thus the prescription drug benefit was passed by Republicans but the impetus behind it came from the left.  And a further complication is that in a bill like that, if a person looks at the vote totals they may get a distorted view of things because a) Democrats might not support it because it doesn't go far enough, not because they're opposed to the program itself b) if they know it will pass, the can vote against to play to their base, and so on.

To maintain, as Boxer claims that one should turn to the democrats for budgetary discipline is to ignore what has been driving the democratic party for over a century.  That's worthy of at least three pinochios

Another quote for the 4th--sort of

"What he [Oakeshott] called 'rationalism' was any political doctrine that purported to apply to human beings as such.  Take Jefferson's famous remark about the self evident character of the right to life, liberty, and the pursuit of happiness:  It is both the foundation of American civilization and also complete nonsense.  Even in its own time, it hardly referred to much south of the Mason-Dixon line.  If you had in those days used it as a conversational gambit with a Chinese mandarin, a Hindu, a tribesman in the Sahara, or anyone else outside one particular area of Western Christendom you would have been thought deranged.  That is still pretty much true."

Ken Minogue, review of Rationalism in Politics.

Quote for the 4th

"What is the purpose of seeking truth if not acting on it?  It would be preposterous for America to suggest we have discovered all truths.  But it would be ungrateful to suggest we have not discovered some of them.  People have died for those truths that we have happened upon in the American experience, and others are prepared to die for them once again."

Cruising Speed, William F. Buckley