Archive for September, 2009

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The left is closing their bubble to exclude any other opinion.

Wednesday, September 30th, 2009

I have been reading, and occasionally posting comments at Washington Monthly, a far-left blog, since Kevin Drum moved there several years ago. Before that, he had an excellent blog called Calpundit. He was a leftist but open to other ideas and his readership was, in some instances, pretty well informed. After he moved to Washington Monthly, I found that blog’s readers less tolerant of non-leftist ideas. A comment that disagreed with the theme of the day would frequently be met with a stream of obscenity and abusive rhetoric but less logic and information than the previous blog. Kevin has now moved on to Mother Jones, another leftist magazine and blog. I read his blog there occasionally and have tried to post a comment a couple of times but the comments never appear.

My comments at Washington Monthly would often be deleted, sometimes leaving the obscene responses in place. They were responding to a post that no longer existed, an amusing situation. Now, in the heat of the health care debate, they have decided to ban my comments altogether. Today, as I attempted to post a comment, this appeared.

Your comment submission failed for the following reasons:

You are not allowed to post comments.

Please correct the error in the form below, then press Post to post your comment.

The left has closed the last leak in their bubble. They simply cannot stand to see or hear other opinions. That is not healthy. An example of the reaction to other opinions is beautifully illustrated here. Thomas Sowell is a famous and highly regarded economist but to these folks, he is just another dumb conservative.
As for Sowell’s larger point, his column argues that brilliant people “tend to overestimate how important individual brilliance is.”

It’s a problem Sowell will never have to worry about.

Beautiful !

UPDATE: This observation is so pertinent that I must quote it in full. It is the essence of the left and their worldview.

[A] lot of people have entertained the idea, that Mikhail Gorbachev was to the late great Soviet Union, what Barack Obama is to the surviving United States — the leader who reforms so many things so quickly that his country suddenly disappears.

Interesting thought that had not occurred to me.

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.

Gorbachev seemed to assume, right up to the fall of the Berlin Wall and then beyond it, that his Communist Party would recover from any temporary setbacks, and that the long-term effects of his glasnost and perestroika could only be to make it bigger and stronger.

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.

Yes, I can see this in the theories of the left. They do not understand how to actually make things, though they think they do. When they do exist in the private sector, they are often the programmers who sit in small cubicles and think they are what has created the great corporate enterprise that employs them. They do not understand what it takes to actually sell those wonderful gadgets they think up. The rest of them, and the majority, exist in government and academia where they congratulate each other on their brilliance.

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.

And while I think the U.S. has the structural fortitude to survive the Obama presidency, it will be a much-diminished country that emerges from the “new physics” of hope and change.

Yes, I fear this is indeed the case. For another view of this situation, read Michael Barone’s book, Hard America, Soft America.

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Posted in History, media | 4 Comments »

The Public Option

Tuesday, September 29th, 2009

I am as confused as most people about what is really going on with the negotiations in Congress on “health reform.” Democrats are negotiating with Democrats and much of this is going on behind closed doors. Here is a column from NRO on the Public Option. The author thinks it is dead. I am not so sure.

The truth is that Speaker Pelosi and her lieutenants are having trouble finding a majority to pass anything because their starting point is far too liberal for many rank-and-file Democrats.

Indeed, it seems the president himself doesn’t much like the House bill anymore. In his prime-time speech to a joint session of Congress earlier this month, he said he wanted a bill that costs no more than $900 billion over ten years, doesn’t increase the federal budget deficit “one dime,” and is paid for with offsets coming from within the health-care system. The House bill, as passed by three committees this summer, fails all of these tests. A back-of-the-envelope estimate indicates the House legislation would add about $10 trillion in unfunded liabilities to the federal books over 75 years.

This is one of two strong arguments against this bill or any bill with the same structure. This is basically a bill to enact a huge bureaucracy to then take over health care in a command model with bureaucrats choosing every option and market forces excluded. This did not work well for the Soviet Union but better health care may not be the true motivation of these people.

The confusion of government price setting with efficiency really goes to the heart of the entire debate. Yes, Medicare does dictate payment rates to hospitals, physicians, and others. On paper, that can, for a time, look cheaper. But hardly anyone believes that is really the solution to our long-term cost problem. In fact, a consensus is finally forming that Medicare’s current fee-for-service payment systems are really the problem, not the solution. Medicare’s payment rules are arbitrary, shift costs to others, promote fragmentation and autonomy among health-care providers instead of integration, and reward volume instead of quality and efficiency. A growing chorus, including the leaders of the Mayo Clinic, says what’s really needed is a far-reaching reform of how health care is actually delivered to patients. The last thing we need is for more of the health-care system to adopt Medicare’s payment rules.

This is the second and more important reason why it is a bad bill. It does nothing to modify the complex and self-defeating Medicare reimbursement methodology. There are two ways to do this. One is to adopt something like the French system where market forces can help control costs. The system pays a flat rate but patients may choose to pay more for services they value more highly. We already see how the market system has worked in plastic surgery and ophthalmology. Insurance does not pay for cosmetic surgery and for procedures to correct myopia. Both services are provided in a cash market that is highly efficient and which has seen prices fall as competition becomes more active.

You can argue that it is difficult to negotiate price when you are having a heart attack. That is true but insurance was invented to apply to uncommon events like heart attacks and not to common and optional events like office visits for routine checkups. We don’t use our auto insurance to pay for oil changes. There actually are market mechanisms developing to deal with routine care outside the insurance and Medicare world. These are appearing as a response to inadequate reimbursement as the government tries to cut costs by cutting payment. I have already discussed this development in another post. This is a growing trend and may continue to grow if the Democrats use Medicare and Medicaid reimbursement schedules to try to control costs in a vast new program. If so, we will see, as usual, the poor take the brunt of their patrons’ ignorance of economics.

Of course, then there is the issue of government-driven rationing of care. Sector-wide price controls always lead to a reduction in the number of willing suppliers of services. If proponents of widespread adoption of Medicare’s payment schedules really got their way, it would only be a matter of time before demand far outstripped supply for any number of critical services and procedures. And waiting times would get much longer.

Yes, but that may not matter to Democrats. Ideology seems to drive them on Honduras and maybe health care is another area where logic fails to impress.

The Washington Post, inadvertently I’m sure, seems to agree with me. Rationing is often misdefined by leftists who assert that price is one form of “rationing.” Actually, the definition is dependent on “A regulated allocation of resources among possible users.” Who regulates ? Not the user.

The largest potential area for savings — up to $600 billion a year — is the great “unexplained” variation in hospital procedures such as the number of Caesarean sections and coronary bypass surgeries performed. Vaginal delivery is far safer than a C-section, and prescription medicines can stabilize many heart patients without dangerous surgical complications, Rosof said. Less invasive and risky alternatives are also less expensive.

“We will eliminate a lot of harm that comes from the overuse and inappropriate use and misuse of medical interventions,” he said. “This is not about rationing. This is about practicing evidence-based medicine.”

I agree with “evidence based medicine,” as I have pointed out before. The key is who pays and does the patient have an option or are all decisions made by bureaucrats?

In theory, Joseph Antos, a health policy scholar at the American Enterprise Institute, agrees. One classic example, he said, is the widespread use of full-body scans “by middle-class people who are probably a little neurotic.”

“If they want to spend their money on that, that’s fine. If they want to spend our money on that, we ought to think about it,” he said. “The problem is, there are very few examples of things like full-body scans where it is a no-brainer. When you get down to the specific individual cases, it’s very difficult.”

There is a way to do this. The health plan pays for those items that are supported by evidence based medicine. The patient and the doctor have the option to negotiate about the rest. The only problem is with the control freak bureaucrat. Why do we need them ?

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Posted in health reform | 2 Comments »

Global Warming is Dead

Monday, September 28th, 2009

New data has now become available that shockingly discredits the Mann “Hockey Stick” graphic used by Al Gore and others in the hysterical climate camp.

rcs_chronologies1

The next graphic compares the RCS chronologies from the two slightly different data sets: red – the RCS chronology calculated from the CRU archive (with the 12 picked cores); black – the RCS chronology calculated using the Schweingruber Yamal sample of living trees instead of the 12 picked trees used in the CRU archive. The difference is breathtaking.

The conclusion ?

This comparison to CRU archive data illustrates the most extreme example of scientific cherry-picking ever seen. As Steve writes in comments at CA:

Also keep in mind the implausibly small size of the current portion of the Yamal archive. It would be one thing if they had only sampled 10 trees and this is what they got. But they selected 10 trees out of a larger population. Because the selection yields such different results from a nearby population sample, there is a compelling prima facie argument that they’ve made biased picks. This is rebuttable. I would welcome hearing the argument on the other side. I’ve notified one dendro of the issue and requested him to assist in the interpretation of the new data (but am not very hopeful that he will speak up.)

See the complete report on this new development in the sordid story of tree ring proxies used for climate interpretation at Climate Audit. And while you are there, please give Steve a hit on the tip jar. With this revelation, he’s earned it.

What this means is that data from Russian tree rings has been cherry picked to yield a conclusion that the earth is warming and this is the hottest period in measurable records.

The volume at Climate Audit is so huge that the server is down. This is the global warming equivalent of a pimp and prostitute asking ACORN to help them set up an underage brothel.

UPDATE: More on this story,

While widely published in such prestigious publications as Science, Briffa has consistently refused to release the raw data on which his studies have been based. That alone should have been enough to disqualify him, as that is about as serious a breach of the scientific method as you can commit. But, perhaps because his studies undergirded the received wisdom regarding climate change, he got away with it. Until he published a paper in a publication of the Royal Society. The society has a policy:

As a condition of acceptance authors agree to honour any reasonable request by other researchers for materials, methods, or data necessary to verify the conclusion of the article… Supplementary data up to 10 Mb is placed on the Society’s website free of charge and is publicly accessible. Large datasets must be deposited in a recognised public domain database by the author prior to submission. The accession number should be provided for inclusion in the published article.

Steve McIntyre, a statistician and noted climate-change skeptic who has been repeatedly denied access to the data by Briffa for 10 years, wrote the Royal Society, which was embarrassed that this requirement had not been enforced. Briffa was eventually forced to comply (the details of McIntyre’s pursuit of the data he should have been given freely can be found in narrative form here). It appears (and I am no statistician, let alone a dendrochronologist) that the data was seriously cherry-picked to produce a desired result. When a larger and more logical data set is used, the hockey stick disappears (scroll down to see the chart). The late 20th century does not look any different from earlier times.

More yet here.

“1. I don’t believe this data plays into the “it’s worse than we thought” meme. This data is the basis of the hockey stick graphs that assert recent temperature changes are unnatural and AGW is blasting the graph above anything seen in human history.
2. The temperature history of the past thousand years or so is 2000 samples. The 12 trees are the basis of the late 20th century part of that history – the blade of the hockey stick.
3. Trees from the far north are used because their growth is assumed to be primarily limited by temperature. This should make them better treemometers than ones further south which have plentiful sunlight, a long growing season, and may be limited more severely by water availability, nutrients, or being blocked by neighboring trees. Still, they are only valid as treemometers if most of the population shows the same pattern. Once it is shown that the majority of the trees in that area don’t show the same 20th century pattern…
4. McIntyre has repeatedly focused on how the proxies represent current warming vis-a-vis the medieval warming period that some AGW ultraorthodox refuse to admit existed. He is not claiming that this work disproves AGW. I think he is claiming that with proper proxies the MWP can be seen to have been hotter than today.

5. Schweingruber is a colleague of Britta who took samples from the same type of tree in an area within the range of the Yamal samples. The addition of these samples gave a more robust result than the 12 samples Britta used.

6. Neither Britta nor Schweingruber archived samples they collected but decided not to use, but the assertion was made that one expedition would have collected far more samples than were kept. This leads some people to infer that cores were selected based on their conformity to the hockey stick theory.

This is really enough but it won’t be.

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Posted in energy, politics, science | Comments Closed

Top 10 cities for political activity.

Monday, September 28th, 2009

US News and World Report has Mission Viejo as one of the top 10 cities for political activity in the nation. The article also notes that it is the safest city in America. Coincidence ?

Other important factors that play into political participation are the quality of education in a community and the level of incomes. Cities on this list tend to be more educated and well off than nearby cities or the country as a whole. They also tend to be residential suburbs of cities with service-based economies. Those characteristics lead to greater political interest not only because wealthier people with children tend to care more about public affairs. Such interest also stems from the fact that prosperous, tight-knit communities are natural breeding grounds for political activity.

One other factor, mentioned by one of the community activists of Mission Viejo, is to have a “dysfunctional city council.” Yes, that does help. The comments on this local blog expand a bit on the city council’s role in stimulating political activism. I got interested in 2000 when I became aware of some very nasty campaign stunts funded by city vendors who were in cahoots with the then council majority. We had seen some questionable spending decisions, such as a very expensive city hall and a city library that was a showplace. The city council seemed to be under the impression that this was Beverly Hills. A couple of years later, they were outside, looking in.

Unfortunately, we all learned that Lord Acton knew what he was talking about when he said “Power Corrupts.” The new council members we had worked so hard to elect became almost as corrupt as the old group. Community activism took a nosedive for a while. The Tea Parties seem to be bringing it back to life.

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America in 1964.

Sunday, September 27th, 2009

I have begun to read the two volume series The Age of Reagan by Steven Hayward. The first volume is subtitled, “The Fall of the Old Liberal Order.” This is obviously a play on the title of the first book of Schlesinger’s three volume series on FDR, which I have also read. That book is called “The Crisis of the Old Order,” and is chiefly interesting as a view of things from the left as many of its insights have been superseded by Amity Schlaes’ book, The Forgotten Man. I recommend reading all three books.

Anyway, the first chapter is about 1964 as the “Apogee of Liberalism.” John Kennedy has been assassinated and LBJ is now president. What is the country like ? Since I remember this period well, I will intersperse my own observations with the author’s. First, the federal budget in 1964 was $100 billion. That’s right. The US budget was the same as California’s budget deficit in 2009 ! The GDP was $576 billion and the growth of the economy that year was 7%. Inflation was 1.2 % and the chief concern of the public was International Relations at 51%. This was still the time of the Cold War and the Cuban Missile Crisis had been only two years before. Seventy per-cent of Americans were confident that the government would “do the right thing” and this was Walter Cronkite’s America.

Personally, I watched the Huntley-Brinkley Report, sponsored by Texaco. I was a third year medical student, married still without children although my first would arrive in March, 1965. We were living in a two bedroom house in Eagle Rock, on Oak Grove Drive, for which we paid $100 per month rent. It was in a small compound of homes on a hill side and from the living room window, I could see the San Fernando Valley in the distance. We were driving an old VW bus I had bought from another student. My wife taught school in east LA and dropped me off each morning on her way to school. We managed on $200 a month from our parents plus a small amount I could earn doing routine histories and physicals in a local hospital plus a few insurance physicals.

Per capita income was $2,592 and the average manufacturing job paid $ 2.53 per hour. The Dow-Jones Industrial Average was 800. The IBM 360 mainframe computer came out and used microchip circuits. I had programmed an IBM 650 in 1959 when I worked for Douglas Aircraft Company in El Segundo. It had vacuum tubes and the memory was a spinning drum covered with magnetic tape material. It had 2000 addressable memory units, each with ten digits. First class postage was 5 cents and Zip Codes were introduced. The Ford Mustang was introduced and helped Ford recover from the Edsel fiasco. In 1968, flush with my surgery resident’s salary, I bought a Mustang convertible for $3050. The car payment was $95 per month for three years. I had put $50 down.

Jack Kemp led the Buffalo Bills to the AFL championship. The Supreme Court had banned prayer in public schools in 1962 but 88% of the public disagreed and 63% said they prayed regularly. Out-of-wedlock births were at 5% although, among blacks, they were up to 25%. Less than 10% of households were headed by single mothers. The divorce rate was 25%. The Hays Office was still censoring movies but LSD was legal and would be so for another two years. In 1966, the medical school Dean called me in to talk. I was student body president and he wanted to talk about a developing drug problem among medical students. He told me that 24 students in the sophomore class (of 68) were using drugs, mostly LSD. Several had been found crawling around on all fours in the student dorm barking like dogs. One student told him that he would take LSD and sit at the beach to hear the waves talk to him. The Dean told him that these hallucinations could be vivid. The student replied that, oh no, the waves were really talking to him. A half dozen of that class would either never graduate or not take an internship, lost to medicine. I didn’t know what to do about it either.

That was, as the Age of Reagan, points out, the end of a golden era of post war prosperity and cultural ease that affected all but black members of the population. The Vietnam War would end a lot of that but the social policies of Lyndon Johnson would also exacerbate social pathology that still plagues us as a nation. Probably the worst effect of Lyndon Johnson’s presidency was inflation, aggravated by Jimmy Carter, it would change the way we all live. I bought my first house in 1969, just before the birth of my younger son and third child. I paid $35,000 with $3500 down and a second trust deed for another $3500. My house payments were $204 per month. Fifteen year later, that small house (1500 square feet) would be listed at $595,000. My house in MIssion Viejo, bought for $67,000 in 1972, would see a similar inflation. My medical school tuition in 1962 was $600 per semester or $1200 per year. Now USC medical school tuition is $40,000.

Crime, drugs and the failure of public education were further developments that I will discuss as I go through the book.

UPDATE: Fred explains what happened in a lot fewer words than I could. More from John Derbyshire. I’m not quite as pessimistic as those guys but I am close.

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Posted in financial, general | 11 Comments »

The Washington Post’s Shocking ‘Secret’

Saturday, September 26th, 2009

By Bradley J. Fikes

Its reporters and editors lean left. Of course, it’s no secret at all. The great majority of journalists have left-wing views. But as a card-carrying media member, people like me are not supposed to mention that fact. If we don’t tell the public, they’ll never figure it out.

The public has long seen through that threadbare pretension. But Post editor Marcus Brauchli has stuck his head back in the sand again. He’s ordered his staff to stop posting anything smacking of personal political opinions on social media.

Brauchli’s order was prompted by the politically oriented Twitter postings of Raju Narisetti, described by the Post’s ombudsman as one of the newspaper’s top editors.

The most offending Tweet of all?

The most offending Tweet of all?

(more…)

Posted in media, politics | 5 Comments »

Is this our future ?

Saturday, September 26th, 2009

Theodore Dalrymple, the non de plume of physician Anthony Daniels, has another piece today on the decline of Britain. I have previously commented on the British teenagers’ loss of history and the loss in the entire society, which has a much longer history to remember. He places much of the blame on the educational system.

Although we spend four times as much on education per head as in 1950, the illiteracy rate has not gone down. I used to try to plumb the depths (or shallows) of youthful British ignorance by asking my patients a few simple questions. Fifty percent responded to the question “What is arithmetic?” by answering “What is arithmetic?” It is not that they were good at doing something that they could not name: When I asked one young man, not mentally deficient, to multiply three by four, he replied “We didn’t get that far.”

That’s not very far. We are not much better.

The political system isn’t doing very well, either.

It is doubtful whether any major country has had a more incompetent leader than Gordon Brown for many years. The product of a pleasure-hating Scottish Presbyterian tradition, he behaves as if taxation were a moral good in itself, regardless of the uses to which it is put; he is widely believed to have taken lessons in how to smile, though he has not been an apt pupil, for he now makes disconcertingly odd grimaces at inappropriate moments. He is the only leader known to me who combines dourness with frivolity.

Early in his disastrous career in government he sold the country’s gold reserves at a derisory price, against all advice, driving the price lower by the manner in which he arranged the sale. A convenience-store owner couldn’t, and almost certainly wouldn’t, have done worse.

This sounds familiar. Barack Obama is weak in economics although he has a high opinion of himself in almost every sphere.

For example, he was famously asked by Charles Gibson in one of the debates his policy on capital gains taxes.

GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.

So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.

And again:


GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

OBAMA: Well, that might happen, or it might not.

Yes, stuff happens and there is little reason to expect that Obama knows why.

Then we come to foreign policy. Today the Telegraph, in Britain, published this column on its web site.

Never in the history of the United States has a president worked so actively against the interests of his own people – not even Jimmy Carter.

Obama’s problem is that he does not know who the enemy is. To him, the enemy does not squat in caves in Waziristan, clutching automatic weapons and reciting the more militant verses from the Koran: instead, it sits around at tea parties in Kentucky quoting from the US Constitution. Obama is not at war with terrorists, but with his Republican fellow citizens. He has never abandoned the campaign trail.

I have to agree. His performance at the UN was depressing. I have previously expressed my concerns about this administration and its policy toward Israel.

I would suggest that Obama consider the consequences of convincing Israel that they are alone, or worse, that we sympathize with their enemies. For the consequences, you might read this report by Anthony Cordesman of the Center for Strategic and International Studies.

He expects, writes Martin Walker of United Press International,

some 16 million to 28 million Iranians dead within 21 days, and between 200,000 and 800,000 Israelis dead within the same time frame. The total of deaths beyond 21 days could rise very much higher, depending on civil defense and public health facilities, where Israel has a major advantage.

It is theoretically possible that the Israeli state, economy and organized society might just survive such an almost-mortal blow. Iran would not survive as an organized society. “Iranian recovery is not possible in the normal sense of the term,” Cordesman notes. The difference in the death tolls is largely because Israel is believed to have more nuclear weapons of very much higher yield (some of 1 megaton), and Israel is deploying the Arrow advanced anti-missile system in addition to its Patriot batteries. Fewer Iranian weapons would get through.

The report also points out that Israel, backed into a corner, would most likely strike at its other potential enemies, including hostile Arab states. The fallout would probably mean the end of the Age of Petroleum, since the oil fields in the Middle East would be unusable for decades.

I don’t think Obama is equipped to make these judgements. He is starting down a very dangerous road with no evidence that he understands the risks. Neither did Chamberlain.

In 1939, the appeasers had the excuse that World War I was widely believed to have arisen from hasty mobilization and misunderstanding that more time and patient negotiation might have avoided. We now have the experience of that failure of appeasement, especially when dealing with an opponent who lacks historical balance or who has been mislead to believe that he runs no risk of opposition. The president of Iran has shown lack of historical balance and he represents a regime that has as a spiritual tenet that martyrdom is to be desired. Militant Islam has an unreasoning hatred of Jews dating, I believe, back to a rejection of Mohammed as he was founding Islam as a derivation of Judaism. This has now reached a psychotic stage in which a nation state of 66 million is governed by a small clique who believe that a millennium will come about by civil disaster, such as nuclear war. We have never seen as dangerous a delusion in the minds of leaders so close to the possibility of such weapons.

We see western governments that are so inept that they cannot educate the populace and they cannot understand the basic facts of economics or foreign policy.

UPDATE: This discussion of the coming financial meltdown shows just how difficult this problem is. Do not expect to see any logical discussion of this from the left.

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Posted in education, History, politics, terrorism | Comments Closed

Pro-ACORN Study Performed by Left-Wing Academics

Thursday, September 24th, 2009

ACORN has been unfairly targed by conservatives, assisted by a compliant media, according to a  study by two academics, Christopher R. Martin and Peter Dreier. An opinion piece praising the “exhaustive study” appeared in today’s Washington Post, by columnist Harold Meyerson.

But in any study regarding politics, the views of the authors should be taken into account. Click the links at Martin’s and Dreier’s names and you’ll see that they advocate a left-wing agenda, which the study supports. Meyerson makes absolutely no mention of this information.

The link at Dreier’s name goes to an article he wrote defending ACORN and calling for more activism, published in August by The Nation, “We Need More Protests to Make Reform Possible.” In August. In The Nation. Well, if you know what the “study” is going to say because you’ve made up your mind, “research” is pretty easy. You just leave out anything that contradicts what you want to prove:

“In recent years, right-wingers have been more willing to protest, whether their allies were in or out of power. With Obama in the White House and the Democrats in control of Congress, they’re exercising their memory muscle for creative dissent–and getting more media coverage than their liberal counterparts. . . .

“How can progressives help put an end to this legislative gridlock? What can we learn from the experience of the Depression and the New Deal?”

If Martin and Dreier were conservative professors slamming ACORN, reporters would make sure the word “conservative” was prominently attached to their names, like a scarlet letter. But since they’re leftists, the media uses another standard. You see, leftists can’t be biased.

Posted in media, politics | 3 Comments »

Taxes and the Depression

Tuesday, September 22nd, 2009

Arthur Laffer, author of supply side economics in the Kemp-Roth tax cuts proposed in the late 70s and finally passed in 1981, has a column today on the origins of the Great Depression. Books have been written on the subject and recent books have revised much history. Today Laffer points out that tax policy had a powerful effect on the collapse. We all know the theories of Keynes, about how falling demand led to the contraction. We have read (many of us have, anyway) Amity Schlaes book and realized that regulation and the effort to keep wages high contributed. Schoolchildren of my generation knew about the Smoot-Hawley tariff and how it led to trade wars and decreased world trade. Laffer now contributes another factor. Taxes.

While Fed policy was undoubtedly important, it was not the primary cause of the Great Depression or the economy’s relapse in 1937. The Smoot-Hawley tariff of June 1930 was the catalyst that got the whole process going. It was the largest single increase in taxes on trade during peacetime and precipitated massive retaliation by foreign governments on U.S. products. Huge federal and state tax increases in 1932 followed the initial decline in the economy thus doubling down on the impact of Smoot-Hawley. There were additional large tax increases in 1936 and 1937 that were the proximate cause of the economy’s relapse in 1937.

I had not previously thought of Smoot-Hawley as a tax but, of course, it was. Until the 16th Amendment, tariffs were the government’s principle source of revenue.

In 1930-31, during the Hoover administration and in the midst of an economic collapse, there was a very slight increase in tax rates on personal income at both the lowest and highest brackets. The corporate tax rate was also slightly increased to 12% from 11%. But beginning in 1932 the lowest personal income tax rate was raised to 4% from less than one-half of 1% while the highest rate was raised to 63% from 25%. (That’s not a misprint!) The corporate rate was raised to 13.75% from 12%. All sorts of Federal excise taxes too numerous to list were raised as well. The highest inheritance tax rate was also raised in 1932 to 45% from 20% and the gift tax was reinstituted with the highest rate set at 33.5%.

Raising taxes in a recession is not only an illogical idea, Keynes says government should run a deficit in recessions, but is a proven cause of the Depression. Roosevelt, as in so many other areas, followed Hoover’s lead.

In 1934, during the Roosevelt administration, the highest estate tax rate was raised to 60% from 45% and raised again to 70% in 1935. The highest gift tax rate was raised to 45% in 1934 from 33.5% in 1933 and raised again to 52.5% in 1935. The highest corporate tax rate was raised to 15% in 1936 with a surtax on undistributed profits up to 27%. In 1936 the highest personal income tax rate was raised yet again to 79% from 63%—a stifling 216% increase in four years. Finally, in 1937 a 1% employer and a 1% employee tax was placed on all wages up to $3,000.

It has been written that Roosevelt took great delight in those high tax rates on his fellow members of the inherited wealth class. He was widely hated in return but the hate seems to have gone both ways.

The states also made their contribution to the collapse.

In 1929, state and local taxes were 7.2% of GDP and then rose to 8.5%, 9.7% and 12.3% for the years 1930, ’31 and ’32 respectively.

If there were one warning I’d give to all who will listen, it is that U.S. federal and state tax policies are on an economic crash trajectory today just as they were in the 1930s. Net legislated state-tax increases as a percentage of previous year tax receipts are at 3.1%, their highest level since 1991; the Bush tax cuts are set to expire in 2011; and additional taxes to pay for health-care and the proposed cap-and-trade scheme are on the horizon.

I believe that the only way this warning will be heard is if the Republicans take Congress next year. Hopefully, they have learned their lesson from the early years of this decade.

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More inexplicable behavior.

Monday, September 21st, 2009

The Obama administration continues its inexplicable campaign against Honduras. Today, the WSJ astute columnist, Mary Anastasia O’Grady, tries to make some sense of the policy.

The Congressional Research Service has analyzed Obama’s claims that the Honduran Supreme Court was part of a “coup d’etat” in removing lame duck president Zelaya.

“The Supreme Court of Honduras has constitutional and statutory authority to hear cases against the President of the Republic and many other high officers of the State, to adjudicate and enforce judgments, and to request the assistance of the public forces to enforce its rulings.”

—Congressional Research Service, August 2009

No help there for Obama.

Ever since Manuel Zelaya was removed from the Honduran presidency by that country’s Supreme Court and Congress on June 28 for violations of the constitution, the Obama administration has insisted, without any legal basis, that the incident amounts to a “coup d’état” and must be reversed. President Obama has dealt harshly with Honduras, and Americans have been asked to trust their president’s proclamations.

Now a report filed at the Library of Congress by the Congressional Research Service (CRS) provides what the administration has not offered, a serious legal review of the facts. “Available sources indicate that the judicial and legislative branches applied constitutional and statutory law in the case against President Zelaya in a manner that was judged by the Honduran authorities from both branches of the government to be in accordance with the Honduran legal system,” writes CRS senior foreign law specialist Norma C. Gutierrez in her report.

Do the facts matter? Fat chance. The administration is standing by its “coup” charge and 10 days ago, Secretary of State Hillary Clinton went so far as to sanction the country’s independent judiciary. The U.S. won’t say why, but its clear the court’s sin is rejecting a U.S.-backed proposal to restore Mr. Zelaya to power.

Why is Obama doing this? Is Hugo Chavez that close an ally ? The Hondurans know they do not want to live in another Venezuela.

But it may be that Americans should be even more concerned about the heavy-handedness, without legal justification, emanating from the executive branch in Washington. What does it say about Mr. Obama’s respect for the separation of powers that he would instruct Mrs. Clinton to punish an independent court because it did not issue the ruling he wanted?

Since June 28, the U.S. has been pressuring Honduras to put Mr. Zelaya back in the presidency. But neither Mrs. Clinton’s spurious “rule of law” claims or the tire iron handed her by Mr. Obama to use against this little country have been effective in convincing the Honduran judiciary that it ought to abandon its constitution.

It seems that Mrs. Clinton is peeved with the court because it ruled that restoring Mr. Zelaya to power under a proposal drafted by Costa Rican President Oscar Arias is unconstitutional. Thus, the State Department decided that in defense of the rule of law it would penalize the members of the Supreme Court for their interpretation of their constitution. Fourteen justices had their U.S. visas pulled.

Now, Obama’s own Congressional Research Service denies he legal basis for his action. There are ways to show Honduras that we support them and that our national government does not represent the opinion of the people. Zelaya is now claiming to be back in the country, perhaps hiding in the Brazilian embassy.

Mr. Zelaya, a close ally of Venezuela’s populist President Hugo Chávez, was ordered arrested by Honduras’s Supreme Court in June after he pushed an illegal constitutional rewrite that critics worried would have allowed him to stay beyond his term. But the soldiers sent to arrest him feared his detention would spur bloodshed and instead put him on a plane to exile, also violating the country’s constitution.

Mr. Chávez on Monday hailed Mr. Zelaya’s return and said his oil-rich country stood ready to help him return to power. “Now let’s do what we have to do,” Mr. Chávez told Venezuelan TV.

In Washington, the Organization of American States, which suspended Honduras shortly after Mr. Zelaya’s ouster, said it was holding an emergency session to deal with the ousted president’s surprise return.

In Tegucigalpa, people were nevous but calm, said Moises Starkman, an adviser to the interim government. Others said they didn’t believe Mr. Zelaya’s words about having come in peace. Now, we are siding with leftist dictators.

Here is a blog with links to organizations in Honduras.

Here is a list of organizations that will get help to the people of Honduras.

UPDATE: More pro-Honduras sites.

I don’t know what is the matter with Obama. He seems more comfortable with ACORN than democracy. He grants visas to Burma’s dictators but not to elected representatives of Honduras. It’s almost like he doesn’t like democracy.

There is more here about Zelaya and his media campaign.

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