Powerline today has an analysis of the USA as if it were a firm applying for funds from Kleiner, Perkins. The presentation has a number of slides, which I will reproduce here.
The net worth of the US is on the right side scale. The trend is pretty obvious. The small improvement is probably a sign of some recovery in the past year.
Spending has followed historical events, such as World War II. The trend, however, is not good. After 1930, spending on entitlements began and has grown out of control.
Defense spending is blamed by leftists but there has not been a lot of defense spending since Vietnam.
Taxes have followed a steady trend line until Obama was elected. The sharp rise has not helped as costs far outstrip revenue.
What, then, is the problem ?
Entitlements.
Entitlements plus interest alone will exceed revenue by 2027. That’s 6 years from now.
The left wants to raise taxes.
How high must tax brackets go ?
How do we compare to other countries ?
Better than some and not so good as others.
Can the left stop denying reality and start to discuss the reality ?
The situation in Madison Wisconsin has been so well covered by Ann Althouse on her blog, that I have not felt it necessary to mention it. Yesterday, the situation began to change. This is what union rule would look like:
The state Senators had passed the limited budget bill that included only the collective bargaining provisions. The Democrats had blocked the fiscal portions of the bill by fleeing the state two weeks ago. Walker has had this option since they left but he and Majority Leader FitzGerald, were negotiating with the Democrats in hopes the standoff could be ended. The negotiations (not reported by the MSM, of course) broke down when it became apparent that the Democrats are nationalizing this controversy. Walker then encouraged the Senate Republicans to go ahead with Plan B. They did and the law was signed by Walker yesterday.
My prediction: 10 years from now public higher education, at least in many states, will have ceased to exist. 20 years from now state governments will realize that they still own the buildings and property on their former state university campuses and start charging us rent to use them. 25 years from now citizens will complain that they can’t afford to send their children to college–any college. But by then the peasant class will be so firmly established that it won’t really matter.
Welcome to the 19th century.
Meanwhile, the Republican criminals in Wisconsin forced through their attack on workers’ rights, leading to an uproar in Madison. (Thanks to Steve Nadler for the link.) At some point these acts of brazen viciousness are going to lead to a renewed philosophical interest in the question of when acts of political violence are morally justified, an issue that has, oddly, not been widely addressed in political philosophy since Locke. (Ted Honderich’s somewhat controversial work on Palestinian terrorism is a recent exception.)
Here is a respected academic advocating political violence on the pattern of the Palestinians. The Cloward-Piven Strategy lives again ! Naturally, the two authors were sociologists.
Why has this rather routine process in a midwest state gotten such national attention? There are at least two reasons. One is that Obama has to win Wisconsin next year to be re-elected. Wisconsin has been a blue state for many years and was the origin of Progressivism with the La Follette family. It is even the origin of the public employee unions, as the AFSCME began there. However, the Republican swept state offices in the 2010 election. Why ?
The wave of red crashed ashore in Wisconsin as well, as Republicans took over the governor’s mansion, a Senate seat, two U.S. House seats and the state legislature.
Political newcomer Ron Johnson defeated incumbent Democratic Sen. Russ Feingold by a comfortable 5-point margin, and Milwaukee County Executive Scott Walker took the governor’s office by a similar margin over Milwaukee Mayor Tom Barrett.
Republican Kurt Schuller defeated incumbent state Treasurer Dawn Marie Sass, and Republican Attorney General J.B. Van Hollen was re-elected.
Secretary of State Doug LaFollette was the only Democrat left standing among statewide officeholders. Democrats lost control of both houses of the state legislature, making Wisconsin the only state in the nation where Democrats lost a governor’s office, a Senate seat and a complete legislature, according to the Milwaukee Journal Sentinel.
State taxpayers were concerned about the fiscal situation. Walker had been left a huge deficit by his Democrat predecessor. Some of this was denied by the hard left which said that there was no deficit. This has been disproved.
To the extent that there is an imbalance — Walker claims there is a $137 million deficit — it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January.
Actually, the alleged “new spending consists of promised tax breaks for employers who bring new jobs to the state. No new jobs, no tax breaks. Democrats have trouble with these matters. It requires math. The same left claims that the Social Security Trust Fund actually contains funds.
The rebuttal:
In other words, Walker’s decisions did impact the budget — but not necessarily the budget for this current fiscal year, which is facing $137 million shortfall.
“The vast majority of the cost of those bills … will be in the next budget, the 2011-213 budget, which has not even been debated yet,” says Brett Healy, president of the MacIver Institute.
Instead, this current year’s deficit is mainly due to other factors: the nearly $60 million Wisconsin owes Minnesota, and deficits in various state departments, including the corrections department, the medical assistance program, and the public defenders’ office.
“This stuff [the Walker legislation] will add to the deficit of the upcoming budget, but it has no immediate impact,” says Healy. “Gov. Walker is trying to be responsible and actually do something to try to stop the bleeding. And for anyone to say that somehow he made the current situation worse is just plain wrong.”
Ezra Klein, a 26 year old UCLA graduate with no financial experience seems to be the source of this accusation. Mr Klein would do well to study the matter more, even carefully reading the letter he quotes, before making accusations.
Under the new law, government workers will vote annually on whether they wish to be represented by a union, and the state will not be compelled to extract union dues from employees’ paychecks on behalf of the unions. Health-care and pension benefits for government workers will be set by the people’s elected representatives outside of the union-dominated collective-bargaining process, and wage increases will be indexed to inflation. Government workers still will enjoy salary-and-benefit packages that in most cases exceed what those workers could hope to command in the private sector, along with such hard-to-price benefits as enhanced job security.
That is the real source of the rage on the left: Mandatory union representation, empowered by mandatory collective bargaining and mandatory dues deductions enforced by the state, creates an enormous flow of cash for Democratic political candidates and their pet causes. From 1989 to the present, five of the ten biggest donors to American political campaigns have been labor unions, including public-sector unions such as the National Education Association and the American Federation of State, County, and Municipal Employees. The overwhelming majority of those donations go to Democrats. The union bosses and their Democratic patrons know that giving workers more of a choice about union representation will diminish that power and reduce that cash flow. That is what this is about, for all of the cheap talk about “civil rights” — as though federal employees in Washington were being treated like second-class citizens because their unions do not enjoy the same princely powers until now wielded by Wisconsin’s
The provisions on union membership and mandatory dues collection are stilettos aimed at the heart of union political power. In Indiana, governor Mitch Daniels decertified public employee unions by executive order when he took office two years ago.
On his first day Daniels reversed an executive order signed by a Democratic predecessor granting collective bargaining rights to state employees. Union membership plummeted overnight. “I think they were happy to have the extra thousand dollars that would have gone to dues,” Kitchell said. Decertifying the public-employees’ union has spared Indiana pressures that have crippled other state governments. Unhindered by union demands, the governor instituted a “pay for performance” scheme, rewarding state employees who met explicit goals with raises ranging from 4 percent to 10 percent. The salaries of underperforming employees stayed flat. No one was fired, but every time a job went vacant a supervisor had to justify hiring a replacement. The number of state employees has fallen from 35,000 to under 30,000, back where it was in 1982.
Here, I think, is the heart of the Democrat/union fury at Scott Walker. Unions, especially public employee unions, are heavy hitters in politics and support Democrats almost exclusively. The push for “card check” by the Obama administration during the last Congress was an example of payback for union support. Private industry unions have found themselves unable to win elections in attempts to organize workers at non-union plants. Therefore, they have tried to get “card check” passed while the Democrats held Congress. Card check is a term for non-secret ballot elections. The voter has to make his vote public and therefore subject to the sort of pressure seen above in the video.
incoming legislators would do well to heed the public’s desire for big government and big labor to step back and allow the free enterprise system and job creators to get our economy moving again.
One of the signature issues of the election was the misnamed “Employee Free Choice Act” and its “card check” provision that would have effectively eliminated private ballot voting for employees deciding whether to join a union. Poll after poll warned that voters—including union households—would reject any attempt to circumvent the secret ballot, and they made good on their word. More than 40 candidates who had voted for, cosponsored, or endorsed EFCA were asked not to return—including at least 31 who co-sponsored the bill in the 111th Congress.
It is important to note this was an American issue, rather than a partisan issue. In the Senate, eight candidates who supported card check lost while West Virginia Gov. Joe Manchin, who came out against the bill, won. And voters in four states, Arizona, Utah, South Dakota, and South Carolina, passed measures to head off any potential efforts to kill secret ballots in their states.
This is an issue related to that in Wisconsin. Unions need money and dues are the “mothers milk of politics” to quote Jesse Unruh, late political power in California. Why do they need money, aside for political power? You will not read this in the NY Times or LA Times but unions are in deep financial trouble.
‘We spent a fortune to elect Barack Obama,” declared Andy Stern last month, and the president of the Service Employees International Union wasn’t exaggerating. The SEIU and AFL-CIO have been spending so much on politics that they’re going deeply into debt.
That news comes courtesy of federal disclosure forms that unions file each year with the Department of Labor. The Bush Administration toughened the enforcement of those disclosure rules, but under pressure from unions the Obama Labor shop is slashing funding for such enforcement. Without such disclosure, workers wouldn’t be able to see how their union chiefs are managing their mandatory dues money.
Alarm is coming even from inside the AFL-CIO — specifically, from Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, who sits on the AFL-CIO’s finance committee. Bloomberg News reports that he is circulating a report claiming the AFL-CIO engaged in “creative accounting” to conceal financial difficulties heading into last year’s Presidential election. As recently as 2000, the union consortium of 8.5 million members had a $45 million surplus. By June of last year it had $90.6 million in liabilities, or $2.3 million more than its $88.3 million in assets. “If we are not careful, insolvency may be right around the corner,” Mr. Buffenbarger warned.
Here may be the answer to the furious and violent reaction to Scott Walker. The dues provisions and annual election provision may cut union income by up to 90%, especially in a tight economy when that $1000 in dues money could come in very handy. After Mitch Daniels ended mandatory dues collection in Indiana, union dues income from public employees fell 95%. The recent furor and walkout by Democrats in Indiana concerns that new legislation would affect private unions and their dues. Daniels has suggested that the legislature delay this issue for now. The proposals would make Indiana a “right-to-work” state.
By the end of 2008, the SEIU also owed Bank of America nearly $88 million, including its headquarters loan and another $10 million for unspecified purposes. This is the same BofA that the union has spent the past months attacking as the face of Wall Street excess. The SEIU has protested outside of Bank of America offices and demanded the resignation of CEO Ken Lewis. We assume no one forced the SEIU to invest in real estate or borrow from a bank to finance it.
An SEIU spokeswoman says the union works on a four-year cycle, in which it goes “all out for the presidential election” and then rebuilds its finances. She adds the union has paid back more than $10 million of the $25 million it borrowed last year. But it’s nonetheless true that the SEIU’s liabilities have continued to climb each year from 2003 to 2008.
The dues and annual election provisions, if copied by other states in serious fiscal peril, could cut the union movement off at the knees. That is where the fury originates.
This week has seen the most amazing events unfold in Madison Wisconsin. Most of us have considered Wisconsin sort of a lost cause. The Progressive Party began there with the La Follette family and Robert La Follette who broke with Teddy Roosevelt in 1912 and later ran for president on a Progressive ticket in 1924. His family dominated Wisconsin politics, although Senator Joe McCarthy showed the odd character of their politics, too. The German socialism that influenced the Progressives has waned but the shock of the first real stand against the public employee unions has highlighted the recent changes in Wisconsin.
The Republicans swept the state as part of the 2010 electoral route of Democrats and the political left. Governor Scott Walker is not well known but his stand against the unions will make him a national figure by this weekend. The legislation he has introduced will limit the unions to bargaining for salary only. Benefits will not be subject to collective bargaining. In addition, teachers and other state employees, except those in police or firefighter unions, will be required to contribute small amounts to their pension and health care plans. My brother-in-law is a retired policeman in Chicago. My sister tells me that they have always had to contribute to his pension and the health plan. In Wisconsin, up to date, none of these employees have been required to contribute anything. Zip ! Zero !
The Republicans took over the majority in the state Senate 19 to 14. Apparently, Wisconsin law requires a super quorum including at least one member of each party to vote on legislation affecting the budget or funding state programs. As a result, the Wisconsin Senate Democrats, all 14 of them, fled the state. It turns out their hideaway was spectacular and they have announced that they may stay away for weeks.
President Obama has intervened by saying “Wisconsin is conducting an assault on unions.” In addition, his “Organizing for America” group, which has become part of the DNC, is now helping organize the demonstrations in Madison.
The state Capitol is occupied by union demonstrators who apparently plan to shut down the government. They are carrying outrageous signs and there may be violence not far below the surface. Where will this lead ?
It has long been understood that the 2010 elections were just the beginning of the struggle to reverse America’s current decline. It will take at least two or three election cycles to correct decades of bad policy choices. We aren’t staring into the fiscal abyss because of any single policy or event, but rather the cumulative effect of dozens, if not hundreds, of flawed decisions made by fickle politicians who capitalized on the fact that the American public was largely disengaged. In the end, these decisions created a vast political class who live off the fruits of others’ labors.
When a business wants to increase its future earnings, it has to find new markets and sell more of its product. For the political class its the same, only their markets and products are government services. As a result, every year, public sector unions spend tens of millions of dollars lobbying for bigger government and filling the campaign coffers of the politicians who acquiesce to their demands. In addition to bigger government, they’ve won pay packages higher than the private sector, almost 100% job security and the ability to retire in their fifties with lifetime retirement income and health benefits. All paid for by us. Unlike private sector unions, every dollar funding government employees’ pay, pension and benefits comes out of our paychecks.
The moral hazard of public employee unions was known to Franklin Roosevelt who opposed them. John Kennedy permitted government workers to unionize by executive order. Ironically, Wisconsin, in its Progressive era, was the origin of the largest public employee union.
If there is any doubt how important the fight in Wisconsin is, look no further than the left’s reaction to it. Governor Walker’s proposal calls on public employees to pay more into their retirement fund and pay around 12% of their health insurance premiums. It also ends collective bargaining for most public employees, which mostly affects union bosses rather than rank and file members and is an important measure to forestall a future fiscal crisis.
Actually, as I understand it, the collective bargaining is still permitted for salary but not benefits.
For this, tens of thousands of public school teachers called in ’sick.’ So many, in fact, that hundreds of schools across Wisconsin have been closed for days. They pressed school children into service as fellow protesters, most not understanding the issue at hand. They drew up signs comparing the governor to Hitler and called the GOP Nazis. Several GOP Senators have faced multiple death threats. When all of this wasn’t enough to stop the proposal, their allies in the Senate simply fled the state to prevent a vote from happening.
Among key provisions of Mr. Walker’s plan: limiting collective bargaining for most state and local government employees to the issue of wages (instead of an array of issues, like health coverage or vacations); requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now) …
In an unusual move, he would require secret-ballot votes each year at every public-sector union to determine whether a majority of workers still want to be unionized. He would require public-employee unions to negotiate new contracts every year, an often lengthy process.
The result has resembled Cairo and the demonstrations seem to be building up into a national showdown with public employee unions. Scott Walker is under enormous pressure but a large part of the nation is behind him. The union tactics may well alienate an even larger share of the public.
The Hitler meme is as common as it was with George W Bush. Democrats seem to have limited imagination.
For Americans who don’t think the welfare state riots of France or Greece can happen here, we recommend a look at the union and Democratic Party spectacle now unfolding in Wisconsin. Over the past few days, thousands have swarmed the state capital and airwaves to intimidate lawmakers and disrupt Governor Scott Walker’s plan to level the playing field between taxpayers and government unions.
Mr. Walker’s very modest proposal would take away the ability of most government employees to collectively bargain for benefits. They could still bargain for higher wages, but future wage increases would be capped at the federal Consumer Price Index, unless otherwise specified by a voter referendum. The bill would also require union members to contribute 5.8% of salary toward their pensions and chip in 12.6% of the cost of their health insurance premiums.
If those numbers don’t sound outrageous, you probably work in the private economy.
This looks to be building up to a national showdown with public employee unions. I hope Scott Walker is safe and keeps his courage in spite of demonstrations on the front lawn of his and other legislators homes. He looks like he is not weakening.
More to come.
UPDATES:
1. John Fund adds some background to the story with an explanation of the issues behind the furious union response.
We re-read the fiscal bureau memo, talked to Lang, consulted reporter Jason Stein of the Journal Sentinel’s Madison Bureau, read various news accounts and examined the issue in detail.
Our conclusion: Maddow and the others are wrong.
There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it.
More on that second point in a bit.
The confusion, it appears, stems from a section in Lang’s memo that — read on its own — does project a $121 million surplus in the state’s general fund as of June 30, 2011.
But the remainder of the routine memo — consider it the fine print — outlines $258 million in unpaid bills or expected shortfalls in programs such as Medicaid services for the needy ($174 million alone), the public defender’s office and corrections. Additionally, the state owes Minnesota $58.7 million under a discontinued tax reciprocity deal.
The result, by our math and Lang’s, is the $137 million shortfall.
Sorry folks, the head-in-the-sand version is not true. The only state with a surplus is North Dakota.
3. Now, we have a doctor (or a fake) handing out excuse slips for the teachers that called in sick. This is illegal and apparently there are multiple folks in white coats handing out these slips with his name. This is practice of medicine without a license and treating (for him) patients without a good faith exam. How does he know they are or were sick ? Digging deeper and violating the first rule of holes.
4. Here is a new blog reporting on the antics of the runaway Democrat Senators.
The Governor stands firm. I understand that there are strategies in place for next steps which will shake up the stalemate….I have known him for at least 15 years, but he is different now. He is a man who has met his time and his place, and he seems to know it.
Here is a very important comment from a Newsbusters thread on the Wisconsin situation.
Would someone please note that Unions make the great lion’s share of their $ from negotiating “benefits”, not salaries… or collection of dues.
This is why the decoupling of the Salaries and Benefits so important to Unions in Wisconsin. And why the Union’s have countered the way they have. They’ll give up Salary and Jobs for Teachers in a second, but they will fight to death for Benefit negotiation position. In another life as an executive in CA, I used to do administration for two Teamster’s “Health and Welfare” benefit packages. Do your research, but you’ll find I’m correct about motivation of Unions. I also believe that the amount of money kept by Unions will be very interesting to both your viewers, and the tax payers of the US of A. The way it works is that the Unions negotiate with the “Employer” regarding how much money per member/per month they will need to support the benefit options required in Union contract. In the case of WI, they negotiate with each of the 77 counties. Then the Unions negotiate the terms of benefits with “providers”/Ins Co’s, etc. They make the lion’s share of their money off of what is called the “breakage” created by Employees choosing between plan options, and the administration of the programs.
Let me explain with an example: A Union begins by negotiating with the Employer/State. They’ll claim their buying leverage will afford Employer significant savings. They’ll end up with a 3-tiered cost structure which allows the Union a profit even with the highest benefit option available as Union already has a very good idea about what Providers will be charging. But it gets even more lucrative for Unions at this point. Let’s say high-end Blue Cross PPO coverage costs $400 for the Family tier. What a Union will do is require $425 from Employer, plus a loaded in admin fee, as a charge for all Families in the employer group. So far, so fair? But, the Union will also offer a few other plans for Employees to choose from. The Union will also have developed relationships with a few cheaper HMO plans, and lesser PPO benefit structure plans that charge, as an example, $325 and $375, respectively.
At an Open House, employees will choose what fits their needs and the Union is in line for the “breakage“. The left over breakage is then, to my experience, placed in a fund where only the Union has the checkbook. Cars, Vacations and Condo’s, oh my. The Union also makes a “commission” off of things like Pre Legal, Dental and Term Life. As another profit source, the Union also leans on the Administrator for favors I’d rather not list, but usually involving idiocy like buying thousands of dollars of “raffle tickets” and leasing cars for the Union’s Business Agents, not entirely above board. Of course I am relating my experience, and what little I know of others who also did Union administration. I’d expect any simple research by an actual reporter would open up a Pandora’s box of Slush in the Badger State.
Very revealing comment. This is why “benefits” is such a life and death issue for the unions.
Egypt’s escalating tensions amount to the first real foreign crisis for the Obama administration that it did not inherit. The crisis serves as a test of Obama’s revamped White House operation. Daley, a former Commerce secretary in the Clinton administration, is now running a staff that is briefing Obama regularly on Egypt.
They have handled it badly. This is a very dangerous time for us. The Egyptian Army seems to be siding with the protesters. That may or may not last.
The left-wing Israeli newspaper Haaretz says that Egyptian army officers in Cairo’s central square have tossed aside their helmets and joined the crowd. “The Army and the people are one,” they chanted. MSNBC’s photoblog shows protesters jubilantly perched on M1A1 tanks. The real significance of these defections is that the army officers would not have done so had they not sensed which way the winds were blowing — in the Egyptian officer corps.
And even as Mubarak tottered, the Saudi king threw his unequivocal backing behind the aging dictator — not hedging like Obama — but the Iranians continued to back the Egyptian protesters. The Saudi exchange tumbled 6.44% on news of unrest from Cairo. Meanwhile, the Voice of America reports that Israel is “extremely concerned” that events in Egypt could mean the end of the peace treaty between the two countries. If Mubarak isn’t finished already, a lot of regional actors are calculating like he might be.
But Washington will not be hurried. The San Francisco Chronicle reports that President Obama will review his Middle Eastern policy after the unrest in Egypt subsides. The future, in whose spaces the administration believed its glories to lie, plans to review its past failures in the same expansive place. Yet time and oil wait for no one. Crude oil prices surged as the markets took the rapid developments in. U.S. Energy Secretary Steven Chu observed that any disruption to Middle East oil supplies “could actually bring real harm.”
Of course, Mr Chu should not worry as we have wind and solar to take up the slack. Actually, we get our oil from Canada and Mexico but the price of oil shifts with the world’s supply.
The present Obama commitment to Afghanistan is ironic since he promised to bring troops home but he has declared that Iraq was NOT necessary and Afghanistan is. This is slightly crazy. The Iraq invasion was an example of US power being applied in a critical location; right in the middle of the Middle East. Afghanistan is a remote tribal society reachable only through unreliable Pakistan. It has minimal effect on world events. We went there to punish the Taliban for harboring the people who attacked our country. Thousands of them have been killed. We have little of interest there now. We should have left last year.
With a Shi’ite dominated government in Iraq, Hezbollah in Lebanon, and a Muslim Brotherhood that may keep Egypt in neutral or tacitly accept Teheran’s leadership, how could things possibly get worse?
They can if Saudi Arabia starts to go. And what response can the U.S. offer? With U.S. combat power in landlocked Afghanistan and with the last U.S. combat forces having left Iraq in August 2010, the U.S. will have little on the ground but the State Department. “By October 2011, the US State Department will assume responsibility for training the Iraqi police and this task will largely be carried out by private contractors.” The bulk of American hard power will be locked up in secondary Southwest Asian theater, dependent on Pakistan to even reach the sea with their heavy equipment.
This is not where we want to be. The problem is that Obama and Hillary and the rest of this administration have no concept of strategy.
The Obama administration made fundamental strategic mistakes, whose consequences are now unfolding. As I wrote in the Ten Ships, a post which referenced the Japanese Carrier fleet which made up the strategic center of gravity of the enemy during the Pacific War, the center of gravity in the present crisis was always the Middle East. President Obama, by going after the criminals who “attacked America on 9/11? from their staging base was doing the equivalent of bombing the nameless patch of ocean 200 miles North of Oahu from which Nagumo launched his raid. But he was not going after the enemy center of gravity itself.
For all of its defects the campaign in Iraq was at least in the right place: at the locus of oil, ideology and brutal regimes that are the Middle East. Ideally the campaign in Iraq would have a sent a wave of democratization through the area, undermined the attraction of radical Islam, provided a base from which to physically control oil if necessary. That the campaign failed to attain many of objectives should not obscure the fact that its objectives were valid. It made far more strategic sense than fighting tribesmen in Afghanistan. Ideology, rogue regimes, energy are the three entities which have replaced the “ten ships” of 70 years ago. The means through which these three entities should be engaged ought to be the subject of reasoned debate, whether by military, economic or technological means. But the vital nature of these objectives ought not to be. Neutralize the intellectual appeal of radical Islam, topple the rogue regimes, and ease Western dependence on oil and you win the war. Yet their centrality, and even their existence is what the politicians constantly deny.
Events are unfolding, but they have not yet run their course; things are still continuing to cascade. If the unrest spreads to the point where the Suez and regional oil fall into anti-Western hands, the consequences would be incalculable. The scale of the left’s folly: their insistence on drilling moratoriums, opposition to nuclear power, support of negotiations with dictators at all costs, calls for unilateral disarmament, addiction to debt and their barely disguised virulent anti-Semitismshould be too manifest to deny.
Leftism is making common cause with Islamic terrorism. Why ? I don’t really know. Some of it may be the caricature of Jews making money and being good at business. Some may simply be the extension of animosity to Israel extending to all Jews. The people behind Obama are not free of these sentiments. His Justice Department is filled with lawyers who defended terrorists at Guantanamo. Holder seems uninterested in voting rights cases if a black is the offender. He was even unwilling to say that Islamic terrorism was behind 9/11.
Because it will hit them where it hurts, in the lifestyle they somehow thought came from some permanent Western prosperity that was beyond the power of their fecklessness to destroy. It will be interesting to see if anyone can fill up their cars with carbon credits when the oil tankers stop coming or when black gold is marked at $500 a barrel. It is even possible that within a relatively short time the only government left friendly to Washington in the Middle East may be Iraq. There is some irony in that, but it is unlikely to be appreciated.
I would add a bit to this from one of my favorite essays on the topic. It compares Gorbachev to Obama.
Nor are the two men, themselves, remotely comparable in their backgrounds, or political outlook. Gorbachev, for instance, had come up from tractor driver, not through elite schools including Harvard Law; he lacked the narcissism that constantly seeks self-reflection through microphones and cameras, or the sense that everything is about him.
On the other hand, some interesting comparisons could be made between the thuggish party machine of Chicago, which raised Obama as its golden boy; and the thuggish party machine of Moscow, which presented Gorbachev as it’s most attractive face.
Both men have been praised for their wonderful temperaments, and their ability to remain unperturbed by approaching catastrophe. But again, the substance is different, for Gorbachev’s temperament was that of a survivor of many previous catastrophes.
Yet they do have one major thing in common, and that is the belief that, regardless of what the ruler does, the polity he rules must necessarily continue. This is perhaps the most essential, if seldom acknowledged, insight of the post-modern “liberal” mind: that if you take the pillars away, the roof will continue to hover in the air.
In another passage:
There is a corollary of this largely unspoken assumption: that no matter what you do to one part of a machine, the rest of the machine will continue to function normally.
A variant of this is the frequently expressed denial of the law of unintended consequences: the belief that, if the effect you intend is good, the actual effect must be similarly happy.
Very small children, the mad, and certain extinct primitive tribes, have shared in this belief system, but only the fully college-educated liberal has the vocabulary to make it sound plausible.
With an incredible rapidity, America’s status as the world’s pre-eminent superpower is now passing away. This is a function both of the nearly systematic abandonment of U.S. interests and allies overseas, with metastasizing debt and bureaucracy on the home front.
The turmoil in Egypt is a test that, I fear, Obama and his Secretary of State, will not pass.
Elections will be held. The primary U.S. objective is to guide a transition period that gives secular democrats a chance.
The House of Mubarak is no more. He is 82, reviled and not running for reelection. The only question is who fills the vacuum. There are two principal possibilities: a provisional government of opposition forces, possibly led by Mohamed ElBaradei, or an interim government led by the military.
ElBaradei would be a disaster. As head of the International Atomic Energy Agency (IAEA), he did more than anyone to make an Iranian nuclear bomb possible, covering for the mullahs for years. (As soon as he left, the IAEA issued a strikingly tough, unvarnished report about the program.)
Worse, ElBaradei has allied himself with the Muslim Brotherhood. Such an alliance is grossly unequal. The Brotherhood has organization, discipline and widespread support. In 2005, it won approximately 20 percent of parliamentary seats. ElBaradei has no constituency of his own, no political base, no political history within Egypt at all.
He has lived abroad for decades. He has less of a residency claim to Egypt than Rahm Emanuel has to Chicago. A man with no constituency allied with a highly organized and powerful political party is nothing but a mouthpiece and a figurehead, a useful idiot whom the Brotherhood will dispense with when it ceases to have need of a cosmopolitan frontman.
The Egyptian military, on the other hand, is the most stable and important institution in the country. It is Western-oriented and rightly suspicious of the Brotherhood. And it is widely respected, carrying the prestige of the 1952 Free Officers Movement that overthrew the monarchy and the 1973 October War that restored Egyptian pride along with the Sinai.
The military is the best vehicle for guiding the country to free elections over the coming months.
Two distinguished Stanford professors of Economics have published an analysis on where the stimulus money went. The results are not surprising but the details are interesting.
During the recent recession, the U.S. Congress passed two large economic stimulus programs. President Bush’s February 2008 program totaled $152 billion. President Obama’s bill, enacted a year later, was considerably larger at $862 billion. Neither worked. After more than three years since the crisis flared up, unemployment is still very high and economic growth is weak. Why have such large sums of money failed to stimulate the economy? To answer this question, we must look at where the billions of stimulus dollars went and how they were used.
Keynesian stimulus packages come in three basic types. In the first type, the federal government puts money directly into the hands of consumers. The hope is that consumers will use the money to increase their purchases of goods and services. In the second type, the federal government directly purchases goods and services, including infrastructure projects, equipment, software, law enforcement, and education. In the third type, the federal government sends grants to state and local governments in the hope that those governments will use the funds to purchase goods and services.
In each case, according to Keynesian theories, the increase in purchases will stimulate additional economic activity over and above the initial increase in purchases. The 2008 stimulus was mainly of the first type, while the 2009 stimulus was a mix of all three types.
The 2008 (Bush) stimulus was of the first type. The Obama stimulus was mixed.
Take a look at Graph 1, which shows both income and consumption in the economy as a whole from the start of 2007 to the present. You can see the big blip in disposable personal income in the spring of 2008 as checks were sent out. But consumption did not increase at all around the time of the stimulus payments. What happened to the money? It went to pay down some debt or was simply saved rather than spent on consumption.1
This should not have surprised anyone. Long ago, the Nobel Prize–winning economists Milton Friedman and Franco Modigliani explained that individuals do not increase consumption much when their income increases temporarily. Instead, they save most of the funds or use the money to pay back some of their outstanding debts. Friedman and Modigliani demonstrated that most people, when deciding how much to consume, consider more long-lasting, or permanent, changes in income. Because one-time increases in transfer payments and temporary tax rebates are, by their very nature, temporary, people should not have been expected to alter their consumption patterns. The Friedman-Modigliani theory, called “the permanent income” or “the life-cycle” hypothesis, profoundly influenced macroeconomic thinking for decades. It was, oddly, ignored in the development and enactment of the stimulus of 2008.
The Bush stimulus was a waste but, at least, it went to taxpayers and was relatively modest compared to what followed.
The American Recovery and Reinvestment Act of 2009 (ARRA) repeated this mistake. The amount paid out to households was smaller and delivered over a longer period of time than the 2008 stimulus, but the largest portion of increased payments was made in the spring of 2009. You can see the resulting blip in income in Graph 1.
Again, there was no noticeable effect on consumption. Instead, individuals used the money to shore up depleted bank accounts or pay off overextended credit card bills. As had been true a year earlier, the temporary cash payments failed to create consumption and, as a consequence, failed to increase production and employment.
Graph 1 also illustrates the failure of another recent stimulus attempt: the 2009 “cash for clunkers” program. For a temporary period, this program provided a one-time subsidy if individuals purchased a qualifying new car and simultaneously traded in their old car. The program’s objective was to increase the demand for new cars to spur production and employment.
By definition, a one-time subsidy cannot cause a permanent increase in consumer demand. So what happened? Consumers merely shifted forward in time the purchase of a new car by a few months. This behavior is evident in the lower-right-hand part of Graph 1. Consumption rose sharply as consumers responded to the temporary subsidies, then came right back down. There was no net increase in consumption to bolster the recovery.2
Read the rest.
To sum up:
To sum up: the federal government borrowed funds that it mainly sent to households and to state and local governments. Only an immaterial amount was used for federal purchases of goods and services. The borrowed funds were mainly used by households and state and local governments to reduce their own borrowing. In effect, the increased net borrowing at the federal level was matched by reduced net borrowing by households and state and local governments.
So there was little if any net stimulus. The irony is that basic economic theory and practical experience predicted this would happen. If policymakers had only remembered what Milton Friedman, Franco Modigliani, and Ned Gramlich had said, we might have avoided these two extremely costly policy failures.
If Harry Reid has his way, the lame duck session will continue until Christmas. He is trying to get all the left wing legislation that Democrats were afraid to pass before the election, passed now that they have lost the election. There is some question about the ethics of this but ethics do not rank high on Senator Reid’s priorities. Looking at the behavior of his family in Nevada is a hint of that state of mind. Nancy Pelosi does not require explanation.
The Tax bill- The “Bush Tax Cuts” were the rallying cry of leftists since 2002 and 2003. Even Senator McCain, to his discredit, campaigned against “tax cuts for the rich” in 2000 when he was running against Bush. Many forget just what the economy was like in 2000. The Clinton Boom, as even Republicans refer to it, was a combination of holding the line on taxes after his initial tax increase in 1993, and the internet bubble. Even Hillary took her final bonus from the Rose Law Firm on December 31 to avoid her husband’s tax increase that was to be retroactive to January 1. That tax increase and the health care project Bill Clinton entrusted his wife with, were the reasons for the Republican takeover of Congress in 1994. The result was pretty dramatic.
That is a pretty interesting chart. First, it shows that the Clinton bull market only began after the 1994 election. I had invested in gold stocks when Clinton was elected and they did quite well. Everybody anticipated a typical Democrat inflation. Unfortunately, I did not anticipate what George Bush and Alan Greenspan would do to the dollar to try to keep the Clinton crash in 2000 from continuing. Even Greenspan was heard talking about reflating the economy after 2000 with a housing bubble. Anyway, the Clinton boom was due to the Republican Congress. After 2000, they lost their way.
The chart also shows a comparison to the 1929 crash which was also a low interest rate consequence. Benjamin Strong, the president of the New York Fed, was trying to balance gold flows between the US, England and Europe, especially Germany and France. The US had a huge hoard of gold after World War I. To try to keep the gold from all flowing into the US, he kept interest rates low. He might have seen the danger in time but he died of tuberculosis in 1928.
Had the tax rates increased on January 1, there was considerable risk of a “double dip” recession. Now, I think that risk is lessened. Obama seems to be recognizing that his course was untenable. Not so the other Democrats in Congress, especially the House.
Harry Reid was shocked when he failed to get his monstrous budget resolution passed in the Senate. To grease the skids, he had included earmarks requested by Republican Senators earlier in the year. I have read that Daniel Inouye, Chair of the Appropriations Committee of the Senate, included those earmarks without any request from the Senators involved. The Senators wavered but responded to the entreaties of Mitch McConnell for unity. Now, the new Congress will be able to shape the new budget and start the reform.
The DREAM Act has been sold to the public as applying to college students and volunteers for the military but it is far wider than that. Actually, it applies to anyone under 35 and all they have to do is swear they have applied to college or to the military. There is no actual obligation to serve or to enroll and attend college classes. Wisely, it was blocked although it will keep coming back. Ultimately, a limited amnesty might be achieved once the border is really secured with a fence. There is no point in considering such legislation until we have border security. We also need better treatment of applicants of legal immigration.
The DADT bill was passed repealing the federal policy. There was a persistent misunderstanding that this was military policy. It was not and efforts were made to confuse the issue by those opposed to the military. Some of the elite colleges that had expelled ROTC in the 60s are making noises that they will allow ROTC programs once again now that the policy has been repealed. We will see. The gay issue was only the latest excuse for the anti-military views of left wing faculty and I expect to see more obstacles appear.
The economy would respond to real evidence that spending will be cut and taxes will remain stable at present levels. The anti-business tone of this administration will remain and we will see if Obama can restrain the temptation to intervene by executive order, like the EPA attempt to regulate carbon. I hope that will be slapped don by the new Congress.
I hope the START treaty is stopped as it is unnecessary and may be harmful to efforts at ballistic missile defense, which the left opposes on general principles. Hopefully that will end the lame duck session.
The deficits are being blamed on the collapse in revenues by the Democrats. Certainly they are aggravated by the drop in revenue but is that all the reason ?
NO NO NO NO NO !
The spending line is in constant dollars. Had revenue not dropped (The dotted green line) the deficits would still be huge.
People make jokes about lawyers but the law is foundation of prosperity in this and all prosperous societies. Joel Mokyr, in his books on the history of economics and technology, concludes that the reason why technology and progress in the Roman empire ended with the fall of Rome was the lack of laws that protected inventors and those who developed new technology. A working steam engine was invented in Alexandria in about 62 AD by Heron (often spelled Hero) of Alexandria. It was used to open temple doors and there were other applications. Inventions continued through the Middle Ages but the Industrial Revolution required laws, including patent laws, so that people who did the work would be rewarded in some logical way. In addition, another example may well be the revocation of the Edict of Nantes by Louis XIV in 1685, which sent the Huguenots fleeing to other countries, principally England and Holland. The exodus included 400,000 Protestants who were among the most inventive and industrious of France’s citizens. With them, went the Industrial Revolution.
Why do I bring this up now ? The Obamacare legislation is an attack on the rule of law in this country’s health care economy.
UPDATE: The Obama supporters, like this New York Times reporter have a laughingly ignorant concept of what the rule of law means.
Representative Paul D. Ryan, Republican of Wisconsin, alluded to “The Road to Serfdom” in introducing his economic “Roadmap for America’s Future,” which many other Republicans have embraced. Ron Johnson, who entered politics through a Tea Party meeting and is now the Republican nominee for Senate in Wisconsin, asserted that the $20 billion escrow fund that the Obama administration forced BP to set up to pay damages from the Gulf of Mexico oil spill circumvented “the rule of law,” Hayek’s term for the unwritten code that prohibits the government from interfering with the pursuit of “personal ends and desires.”
The law, of course, is written down. The problem is with people who don’t follow it. Such is the state of knowledge at the New York Times.
On September 30th, Janet Adamy reported for The Wall Street Journal that McDonald’s was considering canceling its health insurance plan for nearly 30,000 hourly restaurant workers unless new Obamacare regulations were waived. The White House pushed back hard with U.S. Department of Health and Human Services spokeswoman Jessica Santillo claiming: “This story is wrong. The new law provides significant flexibility to maintain coverage for workers.” But this Tuesday we learned that Adamy was correct. According to Bloomberg News McDonald’s had sought, and eventually won, a waiver from the upcoming Obamacare regulations. This allows them to continue providing health insurance coverage to 115,000 workers. In fact, McDonald’s workers were just some of the over 1 million of Americans who were spared losing their current health care coverage thanks to one-year waivers from the Obama HHS.
The big companies are gaining waivers while small business will face all the onerous regulations of the bill.
a letter HHS Secretary Kathleen Sebelius sent to the nation’s health insurers threatening to exclude them from the yet to be implemented Obamacare health exchanges. The letter warned there “will be zero tolerance” for “falsely blaming premium increases” on Obamacare. And who would determine if premium increases were or were not due to Obamacare? The Obama administration of course.
So health insurance companies can be excluded from participation if they tell subscribers that the new legislation will raise premiums. What law authorizes this ? None.
We now know that 22,000 bureaucrats will be hired to write regulations that no one knows now and which are based purely on the bureaucrat’s opinion. The law will be entirely enacted by “Administrative Action”. There is no law saying what the principles should be. Congress passed a bill it had not read and which establishes a framework for bureaucrats to write the laws.
Enactment of PPACA is the first step to this control; the law must be implemented by administrative action. While it is detailed in some instances, PPACA is largely aspirational; it directs the Administration to achieve various universally desired goals—better quality of health care, improved access to care, and increased efficiency of delivery. It constructs the scaffolding of federal control and gives the Administration very broad authority to achieve these aspirations.[3] Each of the many actions taken to implement it will determine the shape of that control. Implementation will be technically difficult and politically charged.
PPACA is based on the premise that the federal government can—and must—regulate the details of the health care financing and delivery systems. With its enactment, health care has been thoroughly bureaucratized—since it must be implemented by public servants—and politicized by the Administration and Congress. Bureaucratization and politicization are the inevitable characteristics of government action.
Health care is infinitely complex. Patients and those who provide and pay for their care engage in millions of discrete but interrelated transactions. It is hubristic to believe that the federal government can determine the one “right” approach to organizing the health care system. Yet PPACA attempts to do just that. PPACA represents an effort to impose a uniform template on the health care system. It significantly reduces the ability of patients and providers to choose how to accommodate their different circumstances and individual desires.
If you would like an example of what happens when people ignore the rule of law in commerce, here is one. Dubai is one of the United Arab Emirates. It was an oil state but, as the oil flows has declined, the ruler decided to build a commercial center. Many rushed to invest.
Today, Dubai has emerged as a global city and a business hub.[7] Although Dubai’s economy was built on the oil industry, currently the emirate’s model of business, similar to that of Western countries, drives its economy, with the effect that its main revenues are now from tourism, real estate, and financial services.[8][9][10] Dubai has recently attracted world attention through many innovative large construction projects and sports events. This increased attention has highlighted labour rights and human rights issues concerning its largely South Asian workforce.[11] Dubai’s property market experienced a major deterioration in 2008 and 2009 as a result of the worldwide economic downturn following the Financial crisis of 2007–2010.[12]
In fact, its property market collapsed. Now some investors have discovered that getting their money back may be very difficult as the laws are changing every month.
Dubai’s real estate regulators have issued a flurry of rules since 2008 to clarify the situation and to comfort potential investors. But new rules sometimes contradict others issued just months earlier, often in ways that leave developers with the advantage and property buyers in a legal limbo, making many wary of ever investing in Dubai again.
Without the rule of law, no one knows what anything is worth or what sort of return one might expect from an investment. The Obama Administration seemed to have taken its approach to law from the Dubai model.
UPDATE: Here is a very good article by Amity Schlaes on the sanctity of contracts. Harding and Coolidge ended a severe recession after World War I by cutting government spending and leaving the economy to pull itself out of the ditch. That worked much better than FDR’s efforts or Obama’s stimulus.
There has been quite a bit of discussion on various blogs about the rising cost and declining utility of a college education, especially outside the “hard sciences.” Even the left is beginning to notice some of the problems.
And if colleges are ever going to bend the cost curve, to borrow jargon from the health care debate, it might well be time to think about vetoing Olympic-quality athletic facilities and trimming the ranks of administrators. At Williams, a small liberal arts college renowned for teaching, 70 percent of employees do something other than teach.
Complaints about athletics are old news in leftist publications but that number for non-teaching employees is an eye opener.
No one can look at that curve and miss the magnitude of the problem. Roger Kimball has a nice summary of the problem and the comments are almost as interesting as his post.
I went through college and medical school mostly on scholarship. I did lose my scholarship one year through the effects of too much extracurricular activity. I was taking a calculus course from this little Indian professor. He was difficult to understand but I thought we had an agreement. If I got an A on the final, I would get a B in the course. I had been delinquent in turning in homework assignments but had finally seen the light. The final exam came and, since I had finally begun to study systematically, I got the A. All my life, I had gotten by with minimal study. I was finally motivated enough to do the work necessary instead of just enough to “get by.”
Well, I went over to the Math office (In those days a small bungalow painted a dreary sunshine yellow as all the temporary university buildings were.) and the posted grades were up. I had gotten a C. I needed that B to keep a B average and my scholarship. I was doomed. I made an appointment to talk to the professor. He didn’t show up. I made another with the same result. A couple of days later, I was walking down University Avenue when I saw him across the street. I called to him and started to cross. He saw me, his eyes bulged and he started to run the other direction. I didn’t think I would improve my grade by chasing him so that was it.
In those days, there were no student loans except some private funds that I knew nothing about. My father had left high school at the age of 15 to join the Navy in World War I. I have a picture of him in his uniform. When the war ended, he wanted out of the Navy so he told them he was only 15. He never went back to school, which is a shame because he was a very bright man and could have been a very good engineer. As it was, he did pretty well in the middle years of his life and disdained education. I never saw him open a book.
My mother had graduated from high school (In 1915) and from “Business College,” which taught her to type fast enough to be a legal secretary. She could type my high school papers as I dictated them at normal speaking speed. She encouraged me to study and to think about college but nobody knew how you went about it. I knew I wanted to be an engineer and I knew I wanted to go to Cal Tech, to me the pinnacle of engineering (I still think so).
I can’t believe how naive I was about getting funding but I just didn’t know anything. My father declared himself early. He took me down to his basement bar and recreation area and had a serious talk with me. “Son, I want you to get this idea of going to college out of your head.” He wanted me to be a golf pro. One of his standard greetings to me was “Get your nose out of that book !” so this was no surprise. I had never counted on him, anyway. I didn’t know at the time that he would have one more blow to administer to my hopes.
That year, 1956, was the first year a new national scholarship program was in effect. It was called The National Merit Scholarship Program and that became my chief goal. Of course, I didn’t realize there were only 100 scholarships that year. It began with the SAT. There were no SAT prep courses then. We were lined up one day and marched into the study hall, a classroom that was unique in that it had theater style seating. We took the exam and about a month later, I was notified that I was a finalist for the National Merit Scholarship.
What I didn’t know was that a packet was sent to the parents of finalists. One item in the packet was a statement of income, although the scholarship was not based on need, apparently that was one criterion. My father refused to fill it out. It was no one’s business how much money he made, which wasn’t very much by that time. His prosperous career was pretty much behind him. A few months later, I got a letter congratulating me, and informing me that, since I did not need financial aid, I was getting a certificate of achievement. In the meantime, I had been interviewed by a Cal Tech professor who traveled to Chicago, my dorm room had been assigned and I was ready to go except for the lack of ability to pay the tuition. I look back in wonder at my own naivete in not contacting the school after my mother told me about the uncompleted financial statement. Maybe they would have helped. I just didn’t know enough.
A month or so later, I was contacted by the Chicago group of USC alumni. I was vaguely familiar with the University of Southern California and, since my prospects were otherwise dim, I accepted. I was interviewed by Robert Brooker, then a vice-president of Sears, and was awarded a full scholarship plus a $500 stipend for living expenses. My high school’s unfamiliarity with my new university was exhibited by the fact that they sent my records to UC, Berkley. I got a letter from Berkley accepting me for admission and asking me to submit an application. We finally got that straightened out and I arrived in Los Angeles about two weeks before classes began to find a place to live.
I eventually, settled in a fraternity house, Phi Gamma Delta, because, in those days at least, fraternity houses were the cheapest place to live and, of course, the fact that they asked me. I had been staying there at the request of my local sponsor, a UCLA Phi Gam alum, while I looked for an apartment. USC in those days had almost no dorms for men, unless they were football players. When I was asked to pledge, I accepted. It was a good decision in many ways (I needed socialization) but it didn’t help studying. I often wonder how I would have turned out if I had made it to Cal Tech.
Engineering at USC was a weak department but I did not take sufficient advantage of what was there. When I lost the scholarship, I was somewhat at sea. What was I to do ? The tuition was $17 a unit, about $272 a semester. I didn’t have it but, at that time, it wasn’t out of reach like it is now. I got a job. I went to work for Douglas Aircraft at what was called a Mathematician I. This was a junior engineer. I had a couple of fraternity brothers who were working there, working their way through the last year of engineering school. In those days, and the point of this stream of consciousness, is that you could work your way through school in those days, even a private university.
My job was in the wind tunnel facility. I spent most of the day with a Marchant desk calculator and the rest programming an IBM 650 computer. This was about the era when the term “bug” was first used for computer malfunctions. We were told that it derived from the fact that one of the COBOL programmers had spent weeks trying to solve a programming error only to find that a moth had gotten into the machine and was contacting random connections.
After six months at this job, I decided to go back to school at night. I was lying on the beach at Playa Del Rey (now under the take-off zone of LAX) in January talking with my roommates about my future. They were both pre-med majors. I had begun thinking about it several years before, even before dropping out of school. John Paxton, whose father was a surgeon, suggested I take a basic biology course (My high school had zero biology) and another advanced course called “Comparative Anatomy.” The latter was a junior level course and maybe too tough for me but, he said, it would be the closest thing to medical school I would find in undergraduate.
I signed up for both courses, paying the $119 tuition myself. It was a good decision. That was January 1960. A year later, I had been accepted to medical school.
Now, there is no way I could do that and the alternative would be thousands of dollars in debt.
I am a confirmed pessimist. I was sure that the Republicans would screw this up before November. You know something ? They may pull this off, after all. Not because they are Republicans, of course. They have just enough sense to get out of the way of a movement with little precedent in this country’s history. John Fund gets it.
In the past, more secular Tea Party types might not have showed up at a religiously-themed event like “Restoring Honor.” Similarly, many of the devoutly religious people I met at Saturday’s rally probably would in the past have shunned an explicitly political event such as Friday night’s Freedom Works meeting. But I kept bumping into the same people at both gatherings.
“I happen to be opposed to gay marriage, but our peril is so great that goes on the back burner,” Debbie Johnson of Georgia told me on Saturday. Bruce Majors, a gay real-estate agent from Washington D.C., had a different take. He told me earlier this year that he felt perfectly comfortable working with the Tea Party on bringing the size of government under control. “We’re both about freedom and we have a common short-term goal,” he said. Indeed, in Washington this past weekend the more libertarian and the more socially conservative elements of the Tea Party seemed to get along just fine.
I still think there is time to screw it up but the force of history seems to be too powerful. I posted before on John Boehner’s talk on economics that could not have been better. Many of us have thought for years that a real experiment with socialist policies might have a salutary effect on those who are vague liberals but not hard left ideologues. The problem was that it would be too dangerous to the country. Well, it happened !
