The 2011 Second Plunge Recession

Arthur Laffer makes a convincing and terrifying argument that we’re heading for an economic cliff next year. It’s going to happen. Make your plans accordingly.

"Tax Hikes and the 2011 Economic Collapse," Wall Street Journal, June 6, 2010. The subtitle: "Today's corporate profits reflect an income shift into 2010. These profits will tumble next year, preceded most likely by the stock market." When the cash for clunkers program was paying people significant incentives to buy cars, sales spiked. Lo! Incentives work! But when the program ended, sales plummeted. Much of the sales spike was just people shifting their purchase plans forward.

The same thing happened with the $8,000 that the government offered as an incentive last year for people to get out and buy a house. When the incentive ended, sales...you guessed it...plummeted. Much of what the publicly funded incentive either subsidized people who were buying anyway or concentrated in a shorter period of time sales that would have happened over a longer period. Undoubtedly it brought some people into the market who otherwise would not have entered, but Laffer's point is that the numbers are far overstated, and that we can see this in the collapse that followed the spike.

Now, consider that the Bush tax cuts are set to expire on January 1, 2011. Given that this Democratic Congress that grasps at people's money, but succeeds only at getting deeper into debt, has no plans to make those cuts permanent, people are doing what you can expect them to do in response to incentives and disincentives. They are using every means to move 2011 income into 2010, giving the misleading impression that the economy is recovering. But it's just a sugar high. 2011 will see a tremendous crash as a result of the massive tax hikes that are scheduled to hit the people who have money. Laffer details those taxes.

But, really. Obama's technocrats have it all figured out. They don't hand out Nobel Prizes like candy at a parade, you know. What could possibly go wrong? Here, Nassim Taleb, author of The Black Swan, his book on unexpected events (oh, say, housing bubble bursts, devastating oil spills, that sort of thing), has dark things to say about our economic situation and the people trying to steer us through it. Bloomberg reports that he considers President Obama "clueless."



As if that were not enough, the housing crisis is not over. The government, via the Federal Housing Administration, is fueling its continuation. Stephen Meister, in "The Next Disaster: Federal Mortgage Insurance," explains how.

In 2006, the FHA insured just 3 percent of home mortgages; today, it insures one of every three. Together with Fannie and Freddie, the FHA is putting the risk for the entire, $11 trillion US home-mortgage market on the back of the American taxpayer.

FHA also insures one in five refinances. Whereas private lenders--who are in the business of managing risk--are asking10-20 percent down when they lend at all, FHA requires as little as 3.5 percent down. As before, people in risky situations who really shouldn't be in the housing market are being facilitated into homes for political reasons, not market based ones. Also as before, many of them will default. But unlike the last time, the bulk of the loss will fall on the public treasury. That's a huge chunk of $11 trillion.

Thanks to the FHA, subprime-mortgage lending is alive and well. And thanks to Obama's latest program, private-mortgage investors will be able to pick the riskiest of their not-yet-defaulted underwater loans, and get them off their books and onto the FHA's. Bottom line: The Federal Housing Administration is continuing the toxic policies that produced the housing bubble and the subprime crisis, and putting the taxpayers on the hook for it. Expect it to be the next big bailout. 

Feeling down? Now meet the third Spirit of Crisis Yet to Come. Kevin Hassett of the American Enterprise Institute examines the Greek debt crisis and sees, if not an inevitably collapse, then at least a terribly brittle and shaky sovereign debt situation stretching from the east end of Europe to this side of the Atlantic. ("Greece's Bailout Heroes Arrive in Leaking Boats," Bloomberg Businessweek, May 16, 2010.

During the financial crisis, faith was restored in large financial institutions because toxic assets were essentially exchanged for government bonds. If government bonds become toxic, there will be no effective treatment options remaining. The collapse will have no bottom. And that collapse could happen at any moment.

Oh my. And our President is speaking to us from the Oval Office about energy-efficient windows.

A 2003 working paper by the International Monetary Fund puts in chilling perspective the debts we have been running  for the last couple of years.

The paper...studied historical sovereign-debt crises, exactly the situations that Western nations are hoping to avoid. They found that external debt levels -- money owed to foreigners -- exceeding 50 percent was a key indicator that debt default may occur. Here is the chilling fact: the average external debt as a percent of GDP among countries in their sample the year before a sovereign debt crisis was 54.7 percent, and 71.4 percent in the crisis year. The U.S. external debt on Dec. 31, 2009, was $13.77 trillion, or almost 100 percent of GDP. For much of Europe, the story is worse.

The lesson in each of these cases is that economics, something like physics, is unforgiving. There's no free lunch. Debts come due. You can put them off, but not indefinitely (though politicians like to fool us into thinking we can). The bigger you let them get and the longer you put them off, the deeper they bury you when they come back at you.

A more polished version of this appears at Worldmag.com under the title, "We're Doomed."

Fashion, Faith, and the Turkish Future

The King's College in New York City sends students each year on international ventures of various sorts to engage students and political leaders on the truth and importance of liberty--spiritual, political, and economic. We have sent teams to Albania, Bulgaria, and Uganda. This May, Jane Clark joined the Turkey Venture. She published this report yesterday on the politics of headscarves there in National Review Online.

Many Turkish college students oppose repealing the ban because they believe that their fellow students want to wear the headscarf as a political statement, rather than from religious conviction. A female student from Bogazici University in Istanbul recently told me she believes the government shouldn’t cater to the scarf wearers: “For some of them the headscarf is just a trend. You can tell by the way they tie the scarves. It doesn’t represent religious conviction for many of them.”

Erol Aslan Cebeci, an AK member of parliament, concurs with those who believe religion should not be a factor in politics. Though personally a devout Muslim, Cebeci says that his religious beliefs should not affect his work. However, he does not see the repeal of the headscarf ban as a religious statement by the government. Instead, he sees it as expanding freedom of religious expression in society.

Cebeci’s argument is counterintuitive for many European secularists: He believes that loosening religious restrictions leads to stronger political secularism. But he points out that there is more than one kind of secularism: “There is American/Anglo-Saxon secularism and French secularism.” American secularism is religiously neutral. French secularism (laïcité) allows the government to control how civilians practice their religion. Since 2004, students in French public schools have been forbidden to wear “ostentatious” religious symbols — including headscarves, but also yarmulkes and oversized crosses.

Cebeci believes that American secularism is the desired model. The question before the Turkish court system is much more than whether women can cover their heads. It is whether to follow the pattern of French liberalism or American liberalism.

Read the whole thing: "Turkey, the Headscarf, and Secularism."

Grilling Kagan for Future Battles

In the Washington Times today, my colleague, David Tubbs, offers advice to the Republicans members of the Senate Judiciary Committee as the Kagan confirmation hearings get under way.

After being nominated, Ms. Kagan effusively praised Justice Stevens, remarking that the nation was "fortunate beyond all measure" to have had him on the court for 35 years. Such praise may have been prompted largely by considerations of decorum, but Republican senators should ask Ms. Kagan whether she truly holds Justice Stevens in such high regard. If her judicial views align with his, especially on matters of constitutional law, they should press her on a more fundamental issue - namely, whether those views can be reconciled with our nation's commitment to representative democracy.

Read it in, "Put Nominee on the Stevens Hot Seat."

David L. Tubbs is assistant professor of politics at The King's College in New York City. He is the author of "Freedom's Orphans: Contemporary Liberalism and the Fate of American Children" (Princeton University Press, 2007).

Dems Just Not That Into Economics

This is an expanded version of my column at WORLDmag.com (chart and video transcript).

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Daniel Klein's article, "Are You Smarter Than a Fifth Grader?" (Wall Street Journal, June 8, 2010), is one you want to clip and save for handy reference. He documents how characteristically more ignorant liberals are of basic economics than conservatives are. Politicians in general are poorly versed in the dismal science, but the further left you are on the political spectrum, the more clueless you are likely to be on the subject. This is alarming because, while politics is not reducible to economics, most of what government does involves economics, directly or indirectly, and the further left the politician, the more likely he is to occupy himself with economic matters...sadly.

Here is an example of a question Klein posed to a range of respondents:

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure. Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.


In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

Liberals generally answer with what they want to be true, what they believe ought to be true, or perhaps with what they can force to be true with properly executed legislation, not with what actually happens in the world when it is left to itself. Klein observes that, "the left has trouble squaring economic thinking with their political psychology, morals and aesthetics." May I venture to say that they don't think; they feel?

Klein ends with this: "Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us."

David Ranson provides us with an all too real example of this economic ignorance and wishful thinking in "The Revenue Limits of Tax and Spend" (WSJ, May 17, 2010).

The feds assume a relationship between the economy and tax revenue that is divorced from reality. Six decades of history have established one far-reaching fact that needs to be built into fiscal calculations: Increases in federal tax rates, particularly if targeted at the higher brackets, produce no additional revenue. For politicians this is truly an inconvenient truth.

This little nugget of the way things work even has a scientific sounding name: "Hauser's Law." On the basis of 60 years of consistent data, W. Kurt Hauser of the Hoover Institution found that there is an impenetrable ceiling on what wealth squeezing government can ring out of the economy in the form of tax revenues. No matter how we try, federal tax receipts will not exceed about 19% of GDP under the best of circumstances. Under present conditions, which are far from the best, any attempt to raise taxes will reduce GDP and thus actually reduce revenues. This article is another one for my "keeper" file.

But liberals don't care. They're not actually interested in paying for anything as long as deficit spending allows them to charge it to generations who will not be voting until after they are out of office. They are also just not that interested in economics at all. What matters to them is "fairness," even if it means bankrupting the country to pay for it.

Consider this golden moment during the final stages of the 2008 Democratic primaries. Barack Obama, saying what he knows the American people believe and want to hear him say, but what is completely alien to his way of operating, says he believes in paying as you go. But in response to Charles Gibson's question, he shows his complete indifference to economic constraints when it comes to the egalitarian moral imperative of "fairness."

GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton," which was 28 percent. It's now 15 percent. That's almost a doubling, if you went to 28 percent.

But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.

OBAMA: Right.

GIBSON: And George Bush has taken it down to 15 percent.

OBAMA: Right.

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.

We saw an article today which showed that the top 50 hedge fund managers made $29 billion last year -- $29 billion for 50 individuals. And part of what has happened is that those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That's not fair.

And what I want is not oppressive taxation. I want businesses to thrive, and I want people to be rewarded for their success. But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don't have it and that we're able to invest in our infrastructure and invest in our schools.

And you can't do that for free.

OBAMA: And you can't take out a credit card from the Bank of China in the name of our children and our grandchildren, and then say that you're cutting taxes, which is essentially what John McCain has been talking about.

And that is irresponsible. I believe in the principle that you pay as you go. And, you know, you don't propose tax cuts, unless you are closing other tax breaks for individuals. And you don't increase spending, unless you're eliminating some spending or you're finding some new revenue. That's how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy. And it's going to change when I'm president of the United States.

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. It depends on what's happening on Wall Street and how business is going. I think the biggest problem that we've got on Wall Street right now is the fact that we got have a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.

And if we can stabilize that market, and we can get credit flowing again, then I think we'll see stocks do well. And once again, I think we can generate the revenue that we need to run this government and hopefully to pay down some of this debt.

Senator Obama weaves back and forth between advocating fairness at the expense of revenue considerations, and sounding fiscally responsible for the right-of-center American voter. But the two come crashing together in an embarrassing display of either contradiction or hypocrisy--Gibson caught it--when he says, "But what I also want to make sure is that our tax system is fair and that we are able to finance health care for Americans who currently don't have it and that we're able to invest in our infrastructure and invest in our schools. And you can't do that for free." In other words, we want a tax system that seems fair to a progressive liberal, and yet one that can pay for the generous social programs which that same sense of fairness requires.

The Senator likely just didn't see the contradiction because he is what Klein calls progressive/very liberal, and so he thinks primarily in sentimentally moral terms,* not economic ones, and simply expects economic reality to support those judgments. That is also how Obama the President has been behaving. Wall Street ought to be punished, even though a crippled and fettered Wall Street cannot fuel a recovery. BP ought to be prosecuted and pillaged as soon as possible, even though a bankrupt BP can neither clean up the spill nor compensate anyone for damages.

That, at least, is the generous interpretation.

*One can also think rationally about morality, of course, but liberals will have nothing to do with it because it leads to moral absolutism, which they absolutely abhor.

Park the Baby While You Shop

Annette Sorensen, a young actress, was visiting New York from Denmark with her 14-month old baby, Liv, and stopped to catch some lunch. She parked baby and stroller outside the restaurant’s plate-glass window amidst the café tables, and withdrew inside to dine. She managed to sit just three tables from the window, so was actually just six feet from the child. Not long afterwards, however, she was under arrest for child endangerment. The story was a nationwide scandal. Janie Bennett, 41, a teacher from Queens, told the press, "You can't leave your kids unattended in New York City. You aren't in Denmark…you're in New York." (for photo of Annette Sorensen with daughter, Liv, see BAX LINDHARDT, AP (May 22, 1997)

That was 1997, but it is still common throughout Scandinavia for a mother to leave her baby sleeping in a carriage outside a store while she does her shopping or drinks her coffee. You might see a line of babies parked on the sidewalk while mothers go about their business indoors without a care. And the babies are safe.

Here is a scene from outside a Copenhagen café. The woman who posted this picture explained the calm with which Danish mothers entrust their children to the community when they shop.

Nobody here would ever take a baby...oh, yes it actually happend in 1967- a women wanted a child so very much that she stole the small infant...and it was a story so unheard of that I know it, although it was many years ago! ((This winter a guy stole a cargo bike in front of a shop...and he didn't know that there were children sleeping in it...and as he found out he returned the children and the bike to the parents feeling very sorry....)).

Parents also go shopping with their children outside in the prams...and they can not always see the prams. That's okay...then they will go to the door from time to time to see if the baby still is sleeping . You don't have to watch your child ALL the time...nobody will hurt or take them...but you'll have to check if they wake up...several times I've seen people 'pop into a shop' saying: 'There's a baby crying out here...'...and a mother/father hurries outside. And people also place the prams with their children sleeping in them outside their houses etc.

So all in all Denmark is (still) a safe place in that respect. (A Polar Bears Tale)

It is quite common in Iceland, even at subzero temperatures. (See Reykjavik Daily Photo Blog.)

The practice is not limited to Scandanavia, but is also the way in France. Here the babies are unmistakably in the strollers. (Chez Thompson, someone's travel weblog)

I remember when a French woman got in trouble in Toronto for this same cultural faux pas, my mother told me that women used to it all the time in Scotland in the 1950s when she was young. Here is an old photo from England.

But lest you develop too much sympathy for the disoriented Danish mom, you should know that customers and waiters alike urged her to take her baby inside the restaurant, but she brushed them off. She had fair warning. Also, she was not on a five day sightseeing tour. She was in the city for a month, so she was more aclimated to New York ways that one would at first suspect. If that seems to be asking alot, it is not asking too much of her companion at the time to fill her in on what's done here and what's not. She was with her husband (actually, he was only "the baby's father"), Exavier Wardlaw, "a movie production assistant, who lives in New York," according to the news story. The fuller picture presents them as quite a pair. But that's their business.

Our business is to wonder how it is that these European societies have cultural norms that govern so widely and so effectively that mothers can leave their babies unattended in public in this way, whereas we cannot. My wife and I would not even put an "It's a girl" sign in front of our house when our eldest was born for fear that a local, childless, crazy woman might somehow sneak in and steal her. New parents. But we decided based on what we knew was happening. Is it the strength of their families that produces lawful people? What would account for that strength? Does their social democracy and pervasive statism account for people keeping their hands to themselves? Is there a low crime rate generally? Canada and Britain are more statist than America, but less so than Scandinavia. Does their social trust mirror that middling position?

Our society used to be a lot safer than it is now. In Georgetown, Ontario, I used to walk to school across town in the second grade with my fourth grade sister unattended. I won't let my kids, the eldest of whom is ten, walk two blocks on their own to a small park here in this nice Long Island neighborhood. Yes, it was Canada, but things have changed up there as well. What has changed? Can we restore what we have lost?

The Call to Constitutional Conservatism

In January 2009, just before Barack Obama took office as president, Peter Berkowitz called for conservatives to focus on first things and rally around the Constitution rather than fire up passion over this and that social issue. ("Conservatives Can Unite Around the Constitution," Wall Street Journal, January 2, 2009.)

Indeed, while sorting out their errors and considering their options, conservatives of all stripes would be well advised to concentrate their attention on the constitutional order and the principles that undergird it, because maintaining them should be their paramount political priority.

A constitutional conservatism puts liberty first and teaches the indispensableness of moderation in securing, preserving and extending its blessings. The constitution it seeks to conserve carefully defines government's proper responsibilities while providing it with the incentives and tools to perform them effectively; draws legitimacy from democratic consent while protecting individual rights from invasion by popular majorities; assumes the primacy of self-interest but also the capacity on occasion to rise above it through the exercise of virtue; reflects, and at the same time refines, popular will through a complex scheme of representation; and disperses and blends power among three distinct branches of government as well as among federal and state governments the better to check and balance it. The Constitution and the nation that has prospered under it for 220 years demonstrate that conserving and enlarging freedom and democracy depends on weaving together rival interests and competing goods.

I don't see how we can ignore the social issues, but when the Constitution is under assault, there can be no other rallying point in a time of civil cold war when those under oath of office to defend it don't actually believe in it.

Tea Party 101

This is my "Understanding the Tea Party Movement" column over at WORLDmag.com, but with some extra information thrown into the middle.

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You cannot understand American politics today without understanding the Tea Party movement. Especially after Tuesday's Republican primaries, everyone from The President and the House Speaker down to the voting citizen should get a handle on it. Get it wrong, and you get everything wrong. It is a truly American movement. It is popular in origin, protective of property, rooted in the Founding, and morally serious.

The movement began as a protest against exponentially-more-than-usual runaway government spending. The Washington Post's David Montgomery traces it back to Mary Rakovich, an unemployed middle-aged automotive engineer, standing outside a Fort Myers stadium in Florida on February 10, 2009, protesting the president's $787 billion stimulus bill that he was promoting at a "town hall meeting." It was just Mary and her husband, a handful of co-belligerents, and a cooler full of water. The sun was cruel, but providence was smiling. Fox News called to invite her to be interviewed on Neil Cavuto. Similar protests began budding in other cities.

About a week later, CNBC's Rick Santelli accidentally provided the movement with a name in a rant from the floor of the Chicago Board of Trade. This got an enthusiastic response from the traders around him.

"I have an idea. The new administration's big on computers and technology. How about this, president and new administration? Why don't you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers' mortgages or would we like to, at least, buy cars and buy houses in foreclosure and give them to people that might have the chance to actually prosper down the road, and reward people than could carry the water instead of drink the water."

At the end of this clip, notice that Santelli refers to our nation's founders. "If you read our Founding Fathers, people like Benjamin Franklin and Jefferson, what we're doing in this country now is making them roll over in their graves." He claims that what the government is doing in its attempt to solve the current economic crisis is not only economically foolish, but also politically a betrayal of our founding principles.

In the middle of all this, Santelli mentions offhandedly, "We're thinking of having a Chicago tea party in July." From all that he says, it is clear that he has in mind a protest against not only the high levels of government spending by the new Obama administration, but also the counterproductivity, political infidelity, and moral injustice of it.

Michael Barone emphasizes the moral aspect of Santelli's founding document of rant in "The Transformative Power of Rick Santelli's Rant" (June 9, 2010).

A recent statement by Phillip Dennis, a Texas Tea Party leader and advisor to the National Tea Party Coalition ("Tea Party Leader: What We Want," CNN, April 16, 2010), gives some insight into what has developed in the following year.

"The federal government is addicted to spending, and the consequences are now staring us in the face." He cites two politically neutral and authoritative sources to underscore the dimensions of the crisis that has provoked the national Tea Party uprising. In July 2009, Congressional Budget Office director Doug Elmendorf described our current budgetary course as "unsustainable." On his Director's Blog, he wrote:

Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. Although great uncertainty surrounds long-term fiscal projections, rising costs for health care and the aging of the population will cause federal spending to increase rapidly under any plausible scenario for current law. Unless revenues increase just as rapidly, the rise in spending will produce growing budget deficits. Large budget deficits would reduce national saving, leading to more borrowing from abroad and less domestic investment, which in turn would depress economic growth in the United States. Over time, accumulating debt would cause substantial harm to the economy.

 In April 2010, Federal Reserve Chairman Ben Bernanke was also using the word "unsustainable."

To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.

He sees the protest as a response to “decades of irresponsible government fiscal behavior.” He does not say how many decades back he is thinking, but he echoes Ronald Reagan’s concerns when he says, “We have gone from a nation of self-sufficient producers to a nation divided between overburdened taxpaying producers and some nonproducers who exist on welfare from cradle to grave.”

But again, Dennis's focus is not simply economic. He makes reference to the Founding Fathers and constitutional principles. “America has moved away from the vision of our Founding Fathers who advocated for a nuanced balance between federal and state power. As America has drifted from constitutional values, federal power has grown.” He speaks not only as a fiscal conservative, but more importantly as a constitutional conservative.

When he moves from complaints to concrete proposals for renewal, he strikes a revolutionary (counter-revolutionary?) stance.

Federal spending must immediately be drastically slashed across the board: Abolish the useless departments of Education and Agriculture, among others; get rid of the EPA; and repeal the stimulus bill and other pork spending. These are millstones around the neck of the American taxpayer and our economy.

Send all responsibilities of these agencies back to the states where they can be better and more efficiently managed. Foreign aid and Pentagon spending must be equally constrained and reduced.

Second, the number of government jobs must be substantially cut, and those employees must return to the private sector. Overpaid bureaucrats with fat benefits and pensions not found in the real world are simply not needed. Or wanted.

Third, fraud and welfare waste must be eliminated. Welfare and unemployment benefits must be drastically cut.

Welfare, health and education services for illegal immigrants must be eliminated.

The Center for Immigration Studies recently reported that 33 percent of immigrant households use some kind of "welfare." Again, who pays? The American taxpayer!

Government must get completely out of the private sector. Market freedoms must prevail for America to be successful. Government control over our financial and insurance industries, major manufacturing, health care and energy is a sure recipe for disaster.

It would be interesting to know how much agreement each of these ideas registers among the 27% of the country that supports the Tea Party movement, according to an May Washington Post/ABC poll.

Anyone like Paul Krugman who dismisses Tea Party activists as "crazy" and an "AstroTurf" movement, i.e., a fake grass roots movement ("Tea Parties Forever," New York Times, April 12, 2009) is arguing away an incoming electoral missile and will likely soon be doing the same with his demise in the political hereafter.

Obama's First Oval Office Speech

In his first Oval Office speech, President Obama tells us we're a bunch of oil junkies in need of green detox. Inspiring.

Because there has never been a leak of this size at this depth, stopping it has tested the limits of human technology. That is why just after the rig sank, I assembled a team of our nation’s best scientists and engineers to tackle this challenge...As a result of these efforts, we have directed BP to mobilize additional equipment and technology. In the coming days and weeks, these efforts should capture up to 90% of the oil leaking out of the well.

In other words, the president was quick off the mark with a science team. He lost no time. For its part, however, BP was foot dragging and directionless. But after Team Obama figured everything out scientifically, the president and his people took control, told BP what to do, and now the gusher will soon become a trickle. Hurray!

But anyone who has agonized through the drama of these eight weeks knows that this account is a fiction. There was a period when the administration was simply not engaged. Then there was a monitoring of the situation as BP attempted various capping methods. Then followed the present period of bluster as the administration became aware of how bad it looked politically to be simply looking on with concern.

So the president has decided to go to war: "we will fight this spill with everything we’ve got for as long it takes." He will fight it on the beaches! Having done FDR with the recession, he is now Churchill with the oil spill. He lays out a "battle plan." He has authorized deployment the National Guard (even to help with clerical work). These "troops" along with "thousands of ships and other vessels" and 30,000 additional personnel are a "mobilization" to fight back "the approaching oil" which he calls a "siege."

Of course, this is not a war that the government is capable of fighting. Only BP has the expertise and technology to get the job done, and that has proven to be shaky. But Democratic governments, especially one headed by Barack Obama, cannot stand to be viewed as anything less than omnipotent. So the president has turned to frothy declarations of being in charge.

From the bluster stage, we enter a stage of new danger: government threats, bullying, and revenge as political theatre.

I refuse to let that happen. Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness. And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party.

Notice the self-reference: "I refuse to let that happen." "I will...inform him." Is he forcing BP into this arrangement based on his personal authority? Is there any legal basis for this? I haven’t heard of any. Have we departed completely from the rule of law to gangsta gov’ment?

Then he assigns a share of blame to the American people for our "addiction to fossil fuels." (He says it twice.) Addiction? We have a prosperous way of life that requires energy derived from oil and coal. Where's the addiction? Is it in our unwillingness to live they way they do in Afghanistan? Or is it our "century-long" refusal to switch to cleaner, greener forms of energy because we get the shakes if we're not burning the black stuff? No, that makes no sense. It was a presidential backhand across the public face. "Get off the oil, ya dumb slut!" Picture an alcoholic so desperate for a belt that he's drinking shoe polish. Similarly, he tells us that we are so desperate for oil and we have so depleted the earth's reserves that we are drilling a mile below the surface of the water...and now this! He doesn't mention that BP was out there with the other companies because his environmentalist dominated government wouldn't let them drill in the shallows, to say nothing of ANWAR in Alaska. No, we're the problem, and the president is going to help us dry out.

Our recovery from addiction will take a long time and will be expensive, but so was World War II and the space program that landed a man on the moon, he reminds us. So let's rise to challenge! Those were clear national security threats, however. The one involved Nazi Germany and Imperial Japan, and the other the USSR. The addiction threat is not so clear. Tonight, America was ready for an oil-spill-and-what-we're-doing-about-it speech. The connection between the oil spill and the need to get off oil entirely will strike most people as a leap, as indeed it should. If the president's goal tonight was not to let a crisis go to waste, but to mobilize a panicked American public behind his carbon capping and taxing legislation, he will close out the week a very disappointed man.

And here's news. Chris Matthews and Keith Olbermann laying into Obama for his speech.



Where's the leadership? No tingle here.

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James Fallows, 25 years with The Atlantic and former Jimmy Carter speech writer, gives us three ways the Obama speech failed. Interestingly, he reminds me that George W. Bush in his 2006 State of the Union address told us, "America is addicted to oil." I guess that didn't upset me because he did not have a record as a chide who is constantly apologizing for his country. But he had no business making the charge either.

P.S. I also noticed those flapping hands at the bottom of the screen. Didn't they do a once through? Why wouldn't someone catch that, and advise him to keep his hands still?

Clive Crook, also of The Atlantic, says, "he would have been wise to give no speech rather than this speech."

And we'll give the final word to George Will: "Word Spill: Our Demosthenes is Alibi Ike." He says, "The news about his speech is that it is no longer news that he often gives bad speeches. This one, however, was almost magnificently awful." Whoever wrote this speech should be fired, and whoever asked for it (the guy who delivered it) should feel life changing embarrassment.

E-Trade Baby-o-Rama!

These are the funniest commercials in a long time. I'm putting them on the blog so I can have them all in one place, and help brighten my spirit under the awareness of the fiercest conflict raging in our civil cold war.

If you find too much of the left hand side of each video cut off, likely because of my three column format, go to my Townhall version of this blog: principalitiesandpowers.blogtownhall.com for a more complete experience.

First E-Trade Baby



Shankopotomus



It's Not the Venue



Shocked Face



Haunting



Milka-what?



There are others, of course, but these are what I think are the best.

We are Engaged in a Great Civil War

The depth of our political divide in America constitutes a civil war, the one side preserving the regime and the other side working to overthrow it. But thankfully it's a cold war, not a shooting war. All that we need for preserving the republic against it's progressivist overthrowers is to re-school the American public in their heritage of liberty.

I have been writing recently about the movement of American government in dangerous directions toward a subtle, seductive, but very real form of despotism. Most recently I published "The Temptation to Dictatorship" at WORLDmag.com, a further reflection on what I wrote here in "The Dictatorship of Hope and Change." We hear Tom Friedman and Andrea Mitchell musing openly on Meet The Press about the public benefits that would result from allowing Barack Obama and his soul-mates in Congress to suspend the Constitution for a day and really put things right. This was not a careless thought. Friedman was just following up on what he stated in one his recent books. But only Paul Gigot expressed shock and incredulity. When he did, the political cognoscenti around him just blinked and went on.

This dangerous indifference to the institutions of liberty is not limited to a few reckless talking heads on a Sunday news show. It pervades the liberal establishment. And if it were only indifference, we would be in better shape than we are. George Will has drawn national attention to the principled hostility toward our very form of government that has characterized the Democratic Party for almost a hundred years, and which Barack Obama has raised to the level of mortal struggle.

Today, as it has been for a century, American politics is an argument between two Princetonians -- James Madison, Class of 1771, and Woodrow Wilson, Class of 1879. Madison was the most profound thinker among the Founders. Wilson, avatar of "progressivism," was the first president critical of the nation's founding. Barack Obama's Wilsonian agenda reflects its namesake's rejection of limited government.

In my WORLDmag.com column today, "Our Present Civil Cold War," I continue Will's train of thought to what I think is its implied but unstated conclusion. (Michael Lind at Salon.com responds to Will's thesis here.)

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What Wilson began, the Great Depression interrupted, but Franklin Roosevelt took it up again with great energy in the New Deal. Lyndon Johnson carried it forward with the Great Society, and now Barack Obama has raised this war against limited, constitutional government to the level of mortal struggle.


Now we are engaged in a great civil cold war. It is a political war between the advocates of limited and unlimited government, between those who support the Founding and the Constitution as amended and the self-described progressives who, by definition, reject what the Founding Fathers bequeathed to us in favor of what Chief Justice Earl Warren called “evolving standards of decency that mark the progress of a maturing society.”

Will takes his prompt from a new book by William Voegeli, Never Enough: America’s Limitless Welfare State. In the progressive view of politics, there is no limiting principle for government. Writes Voegeli, “Lacking a limiting principle, progressivism cannot say how big the welfare state should be but must always say that it should be bigger than it currently is.” We can see this in President Roosevelt’s 1944 “Economic Bill of Rights” speech, in which he declared the commitment of his government to, among other things,

...the right of every family to a decent home; the right to adequate medical care and the opportunity to achieve and enjoy good health; the right to adequate protection from the economic fears of old age, sickness, accident, and unemployment; the right to a good education.

Thus rights become government entitlements that don’t limit government, but instead empower and expand it.

For progressives, the purpose of government is not to protect certain natural rights that in turn limit the government itself. This is the political theory of the Founding and the Constitution. Rather, government’s job is to discover new rights that come to light as we morally evolve, i.e., as we progress.

Our choice is between two very different forms of government. Limited government stands opposite progressive government of unlimited reach. Individual liberty stands opposite federally guaranteed personal security. Our system of checks and balances stands opposite the popularly unaccountable and trans-political bureaucracy. In the Great Civil War, we fought—as Lincoln put it—for “government of the people, by the people, and for the people.” This new struggle is a domestic cold war for that same understanding of freedom. We need to be clear that there is a fundamental difference between these politically divergent ways of life, and that the choice is now clearly before us. Otherwise we will simply slip peacefully into what Alexis de Tocqueville called “soft despotism,” the way a freezing man welcomes the embrace of death like a comforting lover.

*****************

Reading List:

Alexander Hamilton, John Jay, James Madison, The Federalist Papers.

Alexis de Tocqueville, Democracy In America.

Walter McDougall, Freedom Just Around the Corner: A New American History (HarperCollins, 2004).

R.J. Pestritto. Woodrow Wilson and the Roots of Modern Liberalism (Rowman & Littlefield, 2005).

Amity Shlaes, The Forgotten Man: A New History of the Great Depression (HarperCollins, 2007).

Matthew Spalding, We Still Hold These Truths: Rediscovering Our Principles, Reclaiming Our Future (ISI, 2009).

William Voegeli, Never Enough: America’s Limitless Welfare State (Encounter, 2010).

James Caeser, Nature and History in American Political Development (Harvard UP, 2008).

Also, anything by Martin Diamond, Charles Kesler, Forrest McDonald, or Herbert Storing.

You should also explore through these websites and catalogues the considerable labors that thoughtful patriots have undertaken over that past two generations or so in the re-schooling of America in its education for liberty.

Ashbrook Center for Public Affairs
The Constitution Society
The Federalist Society
The Founders' Constitution
The Heritage Foundation
The Intercollegiate Studies Institute
The Jack Miller Center
Lehrman American Studies Center
Liberty Fund

Why America Needs Baseball

I think it was Ronald Reagan who once complained that there are not more happy, edifying stories in the news. Of course, generally, those stories don't attract readers. Murders, corruption, and earthquakes do.

But this is one the Gipper would have liked. Trust baseball to provide it. I thank my friend Warren Smith at World magazine for having the spiritual discernment to see it and write it.

Even if you don’t follow baseball, you may have heard the story.

On Wednesday, Detroit Tigers journeyman pitcher Armando Galarraga—whose 21-18 career record is hardly spectacular—was one out away from that rarest of baseball achievements: the so-called “perfect game.” Twenty-seven batters up and 27 down. It has been done only 20 times in major league baseball history.

Galarraga had retired 26 batters when the Cleveland Indians’ Jason Donald stepped into the batter’s box. Donald then sliced a grounder to the right side of the infield, forcing first baseman Miguel Cabrera to field the ball. Cabrera threw the ball to Galarraga, who ran over to cover first. Everyone in the ballpark knew Donald was out by a half step.

Everyone except umpire Jim Joyce. Joyce called Donald safe. The blown call ended Galarraga’s bid for major league baseball’s 21st perfect game.

What follows is a story of what Smith calls "character and grace." Right there on national display. "[T]he story of Galarraga and Joyce will, I predict, be told as long as the game is played, perhaps even as long as we imperfect human beings strive for and occasionally achieve moments of transcendence. And that’s why I love baseball."

Read Warren Cole Smith's story at WORLDmag.com, "Baseball's Transcendent Moment."

Consent and res publica

As most of you know already, John Locke stands as something like John the Baptist to the political geniuses of the American founding, a prophet of the coming of a never-before-seen constitutional republic. His political teaching became the summary statement of early modern liberalism, in much the same way as Francis Bacon’s earlier teaching on the scientific method helped form the base from which modern science and technology was launched. But though both Locke’s and Bacon’s positions have been controverted in the last four hundred years, Locke found his nemesis in the very next generation in David Hume, a near contemporary of the American founding, who was particularly exercised to see to it that the “Whiggishness” Locke spoke for did not become entrenched in the mind of the British public.

Hume was a severe critic of the state of nature/social contract theory for the grounding of political authority and rights. Central to the contract story is the moral equality of all human individuals, and hence the necessity for consent in government—no one is born with a presumptive right to rule over his fellows. The principle is admirably stated by the Lockean acolyte Thomas Jefferson, who acutely observed that “the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” Jefferson aimed this shot at the likes of Hume (if not Hume specifically), whom he in his typically bombastic fashion considered an enemy of mankind for the content of his wildly popular essays and magisterial six volume History of England (still very worth reading). Hume’s analysis of the matter led him to this conclusion:

My intention here is not to exclude the consent of the people from being one just foundation of government where it has place. It is surely the best and most sacred of any. I only pretend, that it has very seldom had place in any degree, and never almost to its full extent.

Hume died in 1776, just as things were getting interesting on this side of the Atlantic, and so did not witness the birth of a nation making explicit its embrace of Lockean consent as the center piece of legitimate government. And yet, contra Jefferson, Hume wrote that he considered himself “American in my principles”, while being skeptical of abstract thought, especially political, ideological abstractions. Looking to history for guidance, which is what any self respecting empiricist historian would do, Hume saw no evidence that any group of people had ever gathered, recognized their meager and dangerous prospects as individuals, and consented to cede their individual prerogative to take matters into their own hands and to place their trust in a government to protect their rights. And yet this is almost precisely what the American colonies did vis-à-vis the overbearing George III and Parliament. Declaring that the King was menacing their rights instead of protecting them, they sought to form a government that would protect their rights and be responsive to the principle of consent.

Hamilton, a noted fan of Hume (and like Hume Jefferson’s enemy), counted consent the “pure original fountain of legitimate authority” (Federalist 22), channeling the spirit of Locke as accurately as Jefferson ever did. And though the Wilsonian Progressives and their ideological descendants are wont to claim Hamilton’s patrimony of large ideas for energetic government, and a large scope for it too; they yet have little use for the consent of the governed, preferring the rule of experts to guide the hapless and sadly incapable mass of the people who need to be “nudged”, in Cass Sunstein’s phrase, in order to get to the right conclusions. None of these philosophers and statesmen—Locke, Hume, Madison, Hamilton, Jefferson—though distrustful of human frailty and moral shortcomings, were so literally dismissive of the consent of the governed as our present day elites. That the elites of our time, both inside and outside the government of our constitutional republic, eschew the role of the public in the res publica, “the affair of the people” as the ancient Latin has it, is both dangerous and remarkable. This mindset undermines not only the constitution, but the thinking that underpins it; and thus the Lockean natural rights /state of nature /social contract understanding that suffused the thinking of the Founders and yielded the unambiguously best constitution in history, gives way to a Humean theoretical skepticism regarding our own actual beginnings—a most unhistorical and un-empirical view.

But what is that to the dilettantes running the joint, immersed in rationalist abstractions like “History” and utterly oblivious and dismissive of Nature, and Nature’s God?