Free Markets, Free People

Daily Archives: February 15, 2011


Observations: The QandO Podcast for 13 Feb 11

In this podcast, Bruce, Michael, and Dale discuss the situation in Egypt, and CPAC.

The direct link to the podcast can be found here.

Observations

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Egypt – Remember when the military taking over, dissolving Parliament and suspending the Constitution was a bad thing?

Just sayin’.  Because to hear some in this country, that’s the best thing that’s happened since sliced bread.  Yes, the euphoria over what is happening in Egypt that has gripped an element of the fairly naïve here in this country has been truly breathtaking to behold.

Don’t get me wrong – I’d like as much as anyone to see “democracy flower” and everyone live happily ever after as true statesmen come to the fore and deliver Egypt from the tyranny of dictators and forever ensure one man, one vote, representative government and government of, for and by the people.

I just don’t live in moon pony land.  That’s not to say it couldn’t happen, but it is to say that’s very unlikely to happen. 

Why?

Well let’s consider the facts concerning this benevolent military takeover.  It hasn’t taken over anything.  The military has been in defacto charge of the country since Nasser.

Yes, Mubarak is gone.  So what?  Who replaced him?  Omar Suleiman.  He’s a product of the military, Egypt’s intelligence chief and named in a 2007 diplomatic cable found in WikiLeaks as Mubarak’s “consigliore”.  He’s been in that position in 17 years and has been the main means of the Mubarak regime’s ability to oppress opposition.  He’s now serving on the “Armed Forces Supreme Council “.

And speaking of the Armed Forces Supreme Council, others who serve on it are Defense Minister (and Lt. General) Anan and the new Prime Minister (and Air Marshal) Shafiz – both very stalwart supporters of Hosni Mubarak.

This 18 member body has dissolved the Parliament, suspended the constitution and banned labor strikes.  And although it has promised elections in 6 months, well, that’s 6 months away, isn’t it?  We really have no idea if that Council really means to actually hold the election or will find ruling the state to be much more to their taste than turning it over to the rabble.

The military  – of all institutions – played this whole thing very well.  It was in charge but it pretended it wasn’t.  It took the side of the protesters, nominally, and removed one of its own to be replaced by 18 of its own.  What has happened is a very well done defusing of a volatile situation while in reality nothing much has changed in terms of who is in charge of government.

That’s not to say some things aren’t different – for instance, that well-known “secular” organization (according to our chief of intelligence) the Muslim Brotherhood (yup, real secular name there, skippy) is attempting to take advantage of the situation as well and has applied for status as a political party.

And it appears, despite reassurances to the contrary, that the MB is setting itself up to be another in a long line of theocratic parties that use elections (at least once) to legitimize their rule.   Read these two paragraphs carefully:

The Brotherhood’s charter calls for creation of an Islamic state in Egypt, and Mubarak’s regime depicted the Brotherhood as aiming to take over the country, launching fierce crackdowns on the group. Some Egyptians remain deeply suspicious of the secretive organization, fearing it will exploit the current turmoil to vault to power.

But others – including the secular, liberal youth activists who launched the anti-Mubarak uprising – say the Brotherhood has to be allowed freedom to compete in a democracy alongside everyone else. Support by young cadres in the Brotherhood was key to the protests’ success, providing manpower and organization, though they never came to form a majority in the wave of demonstrations.

The question is, once it has competed in “a democracy” and won, does it ever plan to compete again?  Nothing has changed in the MB’s charter.  And having watched other “Islamic states” come into existence, democracy is not one of their foundations – although it would certainly be useful in a peaceful takeover vs. having to do so through violence.   Bottom line, though, the end state is the same.   See any number of authoritarian regimes (such as Venezuela or Iran) which began with “free and open elections”.

To answer the question on the minds of some reading this, no, I don’t consider myself cynical about this, I instead see my pessimism grounded in observing the experiences of like states and the results that’ve unfortunately resulted.  I consider my take to be quite realistic.  And that’s a pity as I’d like nothing more than to see a magic flowering of democracy in Egypt. 

The irony of course is the same people who said a democracy could never be established in Iraq are now saying democracy is spontaneously establishing itself in Egypt.  Of course democracy in Iraq has been established, however tenuously, by the presence of the US military.  However, in Egypt, those now ruling the country are from the military.  I’d appreciate someone – anyone – pointing out why Egypt, without a US military presence or the presence of any other entity capable of forcing the country down the road to democracy will suddenly become a democracy? 

In fact it seems the fox is guarding the hen house in Egypt.  There’ll be a lot of busy work in the interim -  a new or at least amended constitution (who is going to pass it or debate it with Parliament dissolved?  The military council?  The people?), the organization of political parties and elections, etc.   All the while, I expect the military to quietly consolidate its power over the next 6 months while others are buzzing around doing the busy work that will keep them out of the streets.

Will the military willingly turn over its power to a president elected by the people?  If I knew that I could probably make a fortune.   Let me just say it like this – if the winner of the election is a candidate that is acceptable to the military (say some military officer from “the club’’), then probably “yes”.  Accepting such a candidate would most likely keep the military’s grip on government in place, just with a new (and somewhat more benevolent) face.

If the winner isn’t acceptable to the military (such as a theocrat from the MB – one of the reasons they play this “we’re secular” game is an attempt to head off those sorts of charges.)  I expect to hear charges of vote fraud, illegal activities and arrests to ensue, along with a declared “state of emergency” after which the military will retain control and begin the inevitable crack-down on dissent.  It will also claim to want to hold new elections at some time in the unspecified future – to keep the West off its back and the people at home.

Not a rosy picture, that’s for sure – and I could be completely wrong.  But unfortunately, I just don’t think so.

Call it wisdom – intuition, experience and observation combined to come to a conclusion.  And it isn’t necessarily a pretty one.

~McQ


Budget buzz–Obama’s effort seems to be unpopular on both sides of the political spectrum (update)

All sorts of coverage on the Obama budget, most of it negative.  While the White House spin machine works overtime to attempt to fashion a message saying the effort confronts the harsh fiscal reality we’re faced with and makes tough cuts and decisions, that’s not the way others are interpreting it.

Andrew Sullivan figured out Obama’s budget is a very political one:

But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there’s some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I’d feel duped. And they were duped. All of us who took Obama’s pitch as fiscally responsible were duped.

Uh, yeah.  And it only took 3 years for Andy to figure it out. Speaking of the Simpson Bowles commission, Sullivan cites a David Brooks column where Brooks talks about a group of Senators who are taking the lead in writing up the recommendations of the commission for implementation. Says Sullivan of the effort:

They have to lead, because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road.

Lovely to see someone else finally realize that leadership is something this president knows nothing about, never has exercised and wouldn’t know how to do with a self-help book in front of him.  And, as Sullivan correctly surmises, this atrocity of a budget is firm proof of that (and no that doesn’t mean I endorse the Simpson Bowles commission – the point is about leadership).  Sullivan also finally ferrets out that the commission was nothing more than an artifice the president used to cover his rear and make it appear like he was focused on doing something about the fiscal shape of the UFederalSpending0471.002-thumb-440x330S government.  Instead we get exactly what those of us who’ve been on to this president’s act all along expected – pure politics.

John Hinderaker at Powerline gives graphic proof (left) that the media water carriers who are parroting the White House line about the President’s budget containing “steep” or “painful cuts” aren’t fooling anyone.  As you can see the only steep incline over the next few years is up.  There is nothing significant about any “cuts” or “savings” the Obama budget puts forward on the overall level of government spending except to keep the slope headed in a direction we can’t afford.

Instead it is more of the same simply couched in the same old obfuscating rhetoric that calls spending “investment” and taxation “savings”.  Someone needs to get the point across to Obama that the smoke and mirrors company in which he’s so heavily invested isn’t working for him anymore.

In fact, just to make the point even more evident, take a look at this chart by Doug Ross.  The yellow line you see (right) are the “steep” and “painful cuts” the president and some of the media are trying to pretend his budget is making.   Tough stuff, no?  No.  His steep and painful cuts are a veritable drop in the bucket and really do nothing structurally to actually cut spending to affordable and sustainable levels.  As Rep. Paul Ryan has said, Obama “punted” with this budget.110214-budget

Megan McArdle thinks, given this budget by the president, that it may finally be time to panic.

I was a laconic hawk when the deficits shot up in 2008, 2009, 2010.  A few years of deficits in an unprecedented crisis weren’t going to kill us; we had time to get them under control.

But I’m starting to think that it’s time to panic.  This deficit is $700 billion higher than the CBO projected in August 2009, of which $500 billion is lower tax revenues, and $200 billion is new spending.  It’s also $500 billion less revenue and $100 billion more spending than the CBO was expecting as late as August of last year, thanks to the extension of the Bush tax cuts.  For all that I keep hearing about deficit reduction and PAYGO rules, somehow those "fiscally responsible" Democrats have given us the largest peacetime deficit in history, one that keeps growing beyond all expectations–and for all their alleged worries about the budget deficit, so the Republican role in all of this has been to goad Democrats into cutting taxes even further, so that the wealthiest earners could enjoy their fair share of our collective fiscal insanity.

I know the arguments for stimulus, but at this point, I don’t think we can afford the luxury of a more stimulating economy.  Our politicians can’t be trusted to do the right thing later; we need to make them do it now.

I can’t emphasize that last sentence more.  If ever there was a time to do what is necessary to take a knife to the bloated government budget, it is now.   The public is as much on board as it will ever be and while it may whine and even scream and holler about some thing’s, most of the voters in this country know something pretty drastic must be done and done soon.

Even “Johnny one-note” Paul Krugman isn’t happy – for the usual reasons:

Andrew Leonard is right: the Obama budget isn’t going to happen, so in a sense it’s irrelevant. But it still has symbolic meaning. What is Obama saying here?

The important thing, I think, is that he has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.

My favorite line in the Krugman piece was this:

What’s extraordinary about all this is that stimulus can’t have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending.

Remember, what was spent was about $300 billion more than Krugman recommended.  But if it never happened I assume Krugman will now quit attempting to say that the trillion dollars which was thrown out there to stop the fall and stimulate growth did it’s job, right?  That was his previous stance and all that was needed was more spending to have an even greater effect.  Correct?   Now he’s in the middle of rewriting history:

Yes, I know, it’s argued that Obama couldn’t have gotten anything more. I don’t really want to revisit all of that; my point here is simply that everyone is drawing the wrong lesson. Fiscal policy didn’t fail; it wasn’t tried.

MIA – a trillion dollars.  Yeah, it “wasn’t tried”, was it?  About the nicest thing Krugman can muster to say about the Obama budget (in another article) is it isn’t the Republican budget:

It’s much less awful than the Republican proposal, but it moves in the same direction: listening to the administration, you’d think that discretionary spending, not health care, is at the heart of our long-run deficit problems — and you’d also think that the job of rescuing the economy was done, with unemployment still at 9 percent.

It could be worse — the GOP proposal is — but it’s hardly something to cheer about.

Well, we’ll see how much either is to cheer about when we take a look at the Republican budget.

Finally, to inject a little humor into a basically humorless debate – even if the humor is unintentional – read Jonathan Chait’s piece in The New Republic.  You get the idea he was on his third or fourth scotch and up late when he wrote it.  It is the journalistic equivalent of trying to turn a sow’s ear into a silk purse and coming up with an ugly fuzzy pouch that smells like bacon.  Even his title points to a very tentative approval, something he had to talk himself into in order to make the attempt:  “Why Obama’s Budget Is OK”.   And while some of his points are valid (the president’s budget is a political document) how he got from some of his observations to some of his conclusions can only be explained by booze and sleep depravation.

UPDATE: Steve Eggleston has a good post up full of charts that makes the point with the government’s own numbers that Paul Ryan was right yesterday – “doing nothing would be better than passing [Obama’s] budget”.

~McQ