Free Markets, Free People

David Brooks


David Brooks: “Let’s Increase The Power Of The President, You Guys!”

It’s hard to describe this blinding stupidity as anything other than … well, blindingly stupid. I think this one sentence encapsulates the #Fail quite nicely:

This is a good moment to advocate greater executive branch power because we’ve just seen a monumental example of executive branch incompetence: the botched Obamacare rollout.

If you think Brooks is trying to get all counter-intuitive on you (a la Thomas Friedman’s wistful longing for Chinese authoritarianism), think again. It’s just full on stupidity.

Brooks’ argument is that Congress is too beholden to the “rentier groups” (i.e. moneyed interest groups and lobbyists) and that the judiciary is too involved in the process:

In the current issue of The American Interest, Francis Fukuyama analyzes this institutional decay. His point is that the original system of checks and balances has morphed into a “vetocracy,” an unworkable machine where many interests can veto reform.

First, there is the profusion of interest groups. In 1971, there were 175 registered lobbying firms. By 2009, there were 13,700 lobbyists spending more than $3.5 billion annually, and this doesn’t even count the much larger cloud of activist groups and ideological enforcers.

Then there is the judicial usurpation of power. Fukuyama writes, “conflicts that in Sweden or Japan would be solved through quiet consultations between interested parties through the bureaucracy are fought out through formal litigation in the American court system.” This leads to uncertainty, complexity and perverse behavior.

After a law is passed, there are always adjustments to be made. These could be done flexibly. But, instead, Congress throws implementation and enforcement into the court system by giving more groups the standing to sue. What could be a flexible process is turned into “adversarial legalism” that makes government more intrusive and more rigid.

In other words, because the power to form laws is relatively disbursed amongst constituents, elected officials and the court system, gridlock happens sometimes and that’s just totally unacceptable. Because, heaven knows that if Congress isn’t cranking out new laws at a fast enough pace, the world will end. (That seems to be the meme going around anyway.)

So what would be the benefits of more powerful Executive branch?

Here are the advantages. First, it is possible to mobilize the executive branch to come to policy conclusion on something like immigration reform. It’s nearly impossible for Congress to lead us to a conclusion about anything. Second, executive branch officials are more sheltered from the interest groups than Congressional officials. Third, executive branch officials usually have more specialized knowledge than staffers on Capitol Hill and longer historical memories. Fourth, Congressional deliberations, to the extent they exist at all, are rooted in rigid political frameworks. Some agencies, especially places like the Office of Management and Budget, are reasonably removed from excessive partisanship. Fifth, executive branch officials, if they were liberated from rigid Congressional strictures, would have more discretion to respond to their screw-ups, like the Obamacare implementation. Finally, the nation can take it out on a president’s party when a president’s laws don’t work. That doesn’t happen in Congressional elections, where most have safe seats.

Note the two “advantages” I’ve bolded. It’s as if things like Solyndra fiasco and the IRS targeting of conservatives never happened.

Lest there be any confusion about Brooks’ prescription, he sums it up as thus:

So how do you energize the executive? It’s a good idea to be tolerant of executive branch power grabs and to give agencies flexibility. We voters also need to change our voting criteria. It’s not enough to vote for somebody who agrees with your policy preferences. Presidential candidates need to answer two questions. How are you going to build a governing 60 percent majority that will enable you to drive the Washington policy process? What is your experience implementing policies through big organizations?

We don’t need bigger government. We need more unified authority. Take power away from the rentier groups who dominate the process. Allow people in those authorities to exercise discretion. Find a president who can both rally a majority, and execute a policy process.

At least he’s being honest about what the political and chattering classes truly want. As an added bonus, Brooks has inspired a better description of his cant than “blindingly stupid”: contemptible.


David Brooks: Mixing apples and oranges

David Brooks has a column today in which he talks about how people in the US see themselves in relationship with how other people in the world view themselves.  As  you might expect, Americans have a tendency to be a bit taken with themselves.  For instance:

We’re an overconfident species. Ninety-four percent of college professors believe they have above-average teaching skills. A survey of high school students found that 70 percent of them have above-average leadership skills and only 2 percent are below average.

Note where the two examples originate.

Moving on:

Americans are similarly endowed with self-esteem. When pollsters ask people around the world to rate themselves on a variety of traits, they find that people in Serbia, Chile, Israel and the United States generally supply the most positive views of themselves. People in South Korea, Switzerland, Japan, Taiwan and Morocco are on the humble side of the rankings.

Not the key word (“self-esteem”).

Yet even from this high base, there is some evidence to suggest that Americans have taken self-approval up a notch over the past few decades. Start with the anecdotal evidence. It would have been unthinkable for a baseball player to celebrate himself in the batter’s box after a home-run swing. Now it’s not unusual. A few decades ago, pop singers didn’t compose anthems to their own prowess; now those songs dominate the charts.

American students no longer perform particularly well in global math tests. But Americans are among the world leaders when it comes to thinking that we are really good at math.

We’ve talked about this before.  The “my precious” syndrome – where every little munchkin under the sun is told everything he or she does is special and wonderful and that they are just a unique special person who just can’t do anything wrong.  This has spawned sports games with no score, baseball leagues where everyone gets a trophy, and everyone is as talented, smart, able and unique as anyone else.

Except that’s not true at all.  And most of us know that.  Much of it is fostered upon children in the schools where we see them go overboard to ensure that every student feels his or her work is extraordinary even when most of it is, at best, adequate.   We’ve come to believe that it is more important to shelter most kids from the reality of their mediocrity than to challenge them to overcome it.

And that has a tendency to shape behavior and attitudes like those reflected above.  

The institution of education isn’t the only entity to contribute to this syndrome, obviously many parents are on board too.  And they buy into the premise that it is okay to hide reality from kids because, well, they’re kids and it hurts them to realize they aren’t super-stars.

The two results of that are overindulged children who do have talent feeling the need and having the permission (given how they’ve been encouraged in their short lives) to act out as the baseball player does in the batter’s box.  

The other result is when the less talented kid’s brittle self-esteem meets reality and shatters like a window pane hit by a rock.  They’re not emotionally prepared for that reality because it’s been hidden from them and when it finally is sprung upon them, the results can be devastating.   The “my precious” syndrome fosters emotional immaturity that unfortunately retards the development of kids who’ve been raised as such. 

However, even the talented who act out as the baseball player does will eventually meet with a dose of reality.  The next time he steps into the batter’s box he can count on being hit somewhere other than in the bat.  If he is smart he will learn quickly not to do something like that.  He may be “my precious” among his intimate circle but outside of it he’s a show off deserving of a lesson.  And he usually gets it.

So:

In short, there’s abundant evidence to suggest that we have shifted a bit from a culture that emphasized self-effacement — I’m no better than anybody else, but nobody is better than me — to a culture that emphasizes self-expansion.

Writers like Twenge point out that young people are bathed in messages telling them how special they are. Often these messages are untethered to evidence of actual merit. Over the past few decades, for example, the number of hours college students spend studying has steadily declined. Meanwhile, the average G.P.A. has steadily risen.

Exactly right.  However, that doesn’t mean or lead to this:

Most pervasively, I wonder if there is a link between a possible magnification of self and a declining saliency of the virtues associated with citizenship.

Citizenship, after all, is built on an awareness that we are not all that special but are, instead, enmeshed in a common enterprise. Our lives are given meaning by the service we supply to the nation. I wonder if Americans are unwilling to support the sacrifices that will be required to avert fiscal catastrophe in part because they are less conscious of themselves as components of a national project.

Perhaps the enlargement of the self has also attenuated the links between the generations. Every generation has an incentive to push costs of current spending onto future generations. But no generation has done it as freely as this one. Maybe people in the past had a visceral sense of themselves as a small piece of a larger chain across the centuries. As a result, it felt viscerally wrong to privilege the current generation over the future ones, in a way it no longer does.

It’s possible, in other words, that some of the current political problems are influenced by fundamental shifts in culture, involving things as fundamental as how we appraise ourselves. Addressing them would require a more comprehensive shift in values.

Did you understand all of that and how he’s trying to tie the “my precious” syndrome with the fiscal mess we’re in today?  Do you agree that there is an unwillingness to support the sacrifices necessary to avert fiscal catastrophe tied to the self-esteem mess?  Is this “enlargement of self” the reason we’ve gotten into the position we’re in and are likely to stay there?  Have we undergone a fundamental shift in values?

Well, if we have, much of it comes from those 94% of college professors who think they have above average teaching skills – and all the answers.

OK, I’m being a bit sarcastic.  Obviously I don’t buy into the belief  that says we must praise every mediocre thing little Johnny does as “special” and “wonderful.”  I also don’t believe that problem has fundamentally changed American culture or how American’s view citizenship.   Michael Barone wrote a book called “Hard America, Soft America” in which he details pretty successfully how we manage to reorient victims of the “my precious” syndrome.   The few that slip through the cracks, unfortunately, are usually talented in some way or the other.   And because they’re talented, they’re indulged to a far greater degree than others (take our current president for example).  At some point we all meet with “hard America”, i.e. reality – no matter how special someone has been told they are or how talented they think they are, there are limits to how far that will take you. 

The bratty baseball player learns not to celebrate in the batters box when he gets tired of getting cracked ribs after every time he does.  Hard America.  The stud athlete who was an indulged college star finds he’s just an average player, for the most part, when he steps onto the NFL field for the first time.  Hard America.  The kid who was told he was tough finds out what it is to become a member of the team in basic training and AIT, or washes out to his eternal shame.  Hard America.  The child who was told how smart he is and how everything he does is wonderful fails his college entrance tests because his effort falls short of the unforgiving and unmovable mark.  Hard America.

We have a culture that handles that part fine.  And has for years.   Our literature is full of stories of the pampered and indulged child who finally meets up with the real world and learns how it works and what he has to do to be a part of it.  I don’t think that has changed significantly.  But I don’t see that as a reason for what is going on today politically.

While there may be a cultural reason for what is happening, I think it is more along the line of our culture not knowing how to handle politics or politicians who have indulged themselves (in your name and, supposedly “for you”) with your money.  And there’s a reason for that.  Until the ‘70s or so, we didn’t have to worry about it.  For the most part, our political culture matched our national culture. 

But then something happened.  Not to the overall American culture, regardless of what Brooks tries to paint in the beginning of his article, but with the political culture.  A dramatic shift in both focus, priority and power took place.   The focus changed from a government focused mostly on protecting us and our rights to one that believed it was the purpose of government to engineer our lives and grant us “rights” and indulge them.  We went from equal opportunity for all to social justice.   And to do that the government needed power and money.  Because that change of focus was very gradual and sounded benign, we mostly ignored it and went on with our lives. 

The fiscal crisis changed all that.  All of a sudden people who hadn’t given government a second thought for most of their lives were forced to take a look at what these successive generations of politicians had done over the intervening decades.

And, for the most part we realized that’s not the government we want.  But we haven’t really figured out how to change that.  So this isn’t so much a denial of the need to sacrifice by the citizenry as it is anger about being in the position we’re in because we made the mistake of trusting those in power to do the right thing and they didn’t.    It is also discovering, for a good portion of the population, just what a mess we’re in.

It’s also frustration.

What we haven’t figured out yet in Hard America is how to teach the the lesson that needs to be learned by our politicians and government(s).  Yeah, we can fire politicians and replace them, but that doesn’t seem to solve the problem.  Crack the ribs of the bratty ball player and he either learns the lesson or he suffers it again.  At some point though, he’ll modify his behavior.

Whose ribs do we crack to modify the behavior of our political system? How do we cause enough pain to force behavioral change?  It is that answer our citizenry seems to be searching for.  Witness the three past wave elections. 

Brooks, I think, interprets that search for a solution to modifying governmental behavior as a refusal to make sacrifices.  It is instead an electorate that has just been awakened to a huge problem and is casting around for a compromise solution.  That’s why you get mixed messages in polls.  They say overwhelmingly that spending must be cut, programs must be eliminated, etc.  But then you hear, but they don’t want to give up this or that.

That’s simply the process of deciding what government should actually be, something most of the citizenry hasn’t worried about for decades.   Suddenly, their worried.

So no, Mr. Brooks, this isn’t a result of the inflated view of ourselves some of us have, or the result of the “my precious” syndrome, it’s an awakening.  And it is an awakening that has just begun, is disorganized and is still finding its legs.  Hopefully it is one which will snatch us back from the abyss to which our so-called leaders have led us.  Hopefully we’ll figure out a way to crack the ribs of the system enough to modify its behavior and put it back on the right track. 

Because I think we’ve all realized that if we don’t, it won’t matter how much or how little we think of ourselves once we fall off that cliff our politicians have put us on, that just won’t matter very much.

~McQ


David Brooks: austerity, “death panels” and spending exemptions

David Brooks helps demonstrate the problem we face in doing anything meaningful about the fiscal mess our government has gotten itself in.  To give him his due, he is trying, at some level, to address the problems facing the country. But he manages to end up putting himself in precisely the position which seems  prevalent today among those not really serious about doing what is necessary to put the fiscal house in order (but like to pretend they are)  – that is “we want budget cuts but don’t touch my favorite programs”.

Let me give you an example from his column today entitled “The New Normal”.

He begins by acknowledging that there is going to be (needs to be?) a whole lot of deficit cutting over the next few years.  And, his first principle of austerity, as he calls it, is that lawmakers must, as he inartfully but correctly puts it, “make everybody hurt”.  He’s right – no exemptions.  Every program, department, echelon, you name it, associated with government (yeah, that means you public sector unions) are going to have to sacrifice something.  Fine to that point.  When you’re looking at 1.3 trillion in a single year deficit, everyone does have to “hurt” if you hold any hope of eliminating it.

However, in this column  he launches into his second principle of austerity and loses me immediately.

A second austerity principle is this: Trim from the old to invest in the young. We should adjust pension promises and reduce the amount of money spent on health care during the last months of life so we can preserve programs for those who are growing and learning the most.

This “principle”  is based in a very nasty premise that “we” are in control of all the money “spent on health care” during the last months and should use that power to help balance the budget (and the fact is, with Medicare, that premise is true).  In other words, “we” will decide to pull the plug on the treatment for oldsters in favor of treatment/”investment” in youngsters.  Not the old folks themselves, mind you.  They’ll have no say in it. He’s talking about the collective “we”.  But don’t you dare say “death panels” you hear me?  And note, he immediately violates his first principle of making “everyone hurt” by claiming that if we throw the oldsters under the bus, we can “preserve programs” for the young.  Where’s the cut in spending when we’re “preserving”?

Oh, it’s not “spending” … we’ll call it “investing”, shall we?

Brooks then expands his “for the children” campaign with this bit of nonsense where he takes a shot at House GOP members:

In Washington, the Republicans who designed the cuts for this fiscal year seemed to have done no serious policy evaluation. They excused the elderly and directed cuts at anything else they could easily reach. Under their budget, financing for early-childhood programs would fall off a cliff. Tens of thousands of kids, maybe hundreds of thousands, would have their slots eliminated midyear.

You’d think Brooks, someone the NYT pays to be informed about how government works, would understand that the legislation he questions isn’t a budget, but a continuing resolution (CR) to fund government in the current fiscal year.   That’s not where you make “serious policy evaluations”.  You do that in budget legislation, something which the Democrats in the House failed to pass last year.   The government has been running on a series of CRs all year.  That doesn’t remove the crying need for cuts in spending, but the only spending under their control in a CR is discretionary spending.  And that’s where they’re cutting.

Brooks prefers to ignore those facts in favor of the emotional argument that they’re going after children in favor of old folks.

What is instructive about the Brooks argument is this is precisely the type arguments that you’re going to see from now on.  Arguments like the one Brooks puts forward here are going to begin with statements like “we must make cuts” and then spend the entire rest of the time arguing against making them.   And 90% of those arguments are going to be based in emotion, not facts or sound reasoning.

Mr. “Make Everyone Hurt” then advances his third austerity principle:

Which leads to the third austerity principle: Never cut without an evaluation process. Before legislators and governors chop a section of the budget, they should make a list of all the relevant programs. They should grade each option and then start paying for them from the top down.

I don’t necessarily disagree with the point, but it is again inconsistent with his first principle, isn’t it?  If everyone has to “hurt”, then something must come from every spending point – to include children’s programs and education.  What Brooks wants is some sort of arbitrary “evaluation” which will – wait for it – justify or rationalize exempting certain programs, policies, departments from spending cuts.

Any guess as to which programs he wants exempted?  Certainly not those effecting older Americans.

Brooks isn’t really serious about cutting spending.   Like many politicians and pundits, he mouths the words and makes the point about all of us sacrificing something, but he really doesn’t mean it. When pressed, he falls right into the “cut everything else but don’t cut my favorite program” group in which you find much of the populace today.  That’s not “shared sacrifice”.

Its hard to take someone seriously who doesn’t seriously address the fact that we have massive debt, massive deficits staring us in the face, a huge new entitlement program on the books and and conclude there’s an urgent need to cut spending in all areas, period.   Brooks should have stopped with his first principle, if he actually wanted to be taken serious.  That is the “new normal”.

~McQ


Immaturity Or Genuine Anger?

A few days ago, David Brooks wrote an op-ed in the New York Times entitled “The God That Failed” which is still bubbling in various blogs. Here’s how Brooks began his piece:

During the middle third of the 20th century, Americans had impressive faith in their own institutions. It was not because these institutions always worked well. The Congress and the Federal Reserve exacerbated the Great Depression. The military made horrific mistakes during World War II, which led to American planes bombing American troops and American torpedoes sinking ships with American prisoners of war.

But there was a realistic sense that human institutions are necessarily flawed. History is not knowable or controllable. People should be grateful for whatever assistance that government can provide and had better do what they can to be responsible for their own fates.

That mature attitude seems to have largely vanished. Now we seem to expect perfection from government and then throw temper tantrums when it is not achieved. We seem to be in the position of young adolescents — who believe mommy and daddy can take care of everything, and then grow angry and cynical when it becomes clear they can’t.

Glenn Greenwald and a host of other lefty blogs are now assuring us that this “hysteria” over the crotch bomber is a result of our immaturity as a nation because of our concerns about terrorism:

This is what inevitably happens to a citizenry that is fed a steady diet of fear and terror for years. It regresses into pure childhood.  The 5-year-old laying awake in bed, frightened by monsters in the closet, who then crawls into his parents’ bed to feel Protected and Safe, is the same as a citizenry planted in front of the television, petrified by endless imagery of scary Muslim monsters, who then collectively crawl to Government and demand that they take more power and control in order to keep them Protected and Safe.  A citizenry drowning in fear and fixated on Safety to the exclusion of other competing values can only be degraded and depraved.

Nonsense. This outrage isn’t just about terrorism and our fear of it. In fact, this isn’t a regression. It is a reaction to the continuing failures of a government which has repeatedly claimed it is the answer to all problems and repeatedly fails to live up to its claim. It is also an indication of the growing citizen anger at its continued unchecked expansion.

Brooks says:

In a mature nation, President Obama could go on TV and say, “Listen, we’re doing the best we can, but some terrorists are bound to get through.” But this is apparently a country that must be spoken to in childish ways. The original line out of the White House was that the system worked. Don’t worry, little Johnny.

Really? Well let’s think about that for a second, shall we? Prior to the complete takeover of airline security by the federal government, any president might certainly have been able to stand up and said that. And most of us would have likely agreed.   Airlines, which were responsible for their own security screening at that time, would certainly have reacted appropriately and taken new measures designed to heighten safety. And naturally, airlines which didn’t would most likely see passengers vote with their feet since a heightened chance of having your planes routinely blown out of the sky, when compared with the competition, isn’t good for business, is it?

Instead –and it happened under a Republican administration- the Fed decided that only it can properly provide the security necessary to ensure airline safety. A huge and costly system with its attendant bureaucracy was put into place based on that premise. And the implicit promise of the premise was that while under the airlines, “some terrorists are bound to get through”, under government, it would be safer than that. That was the purpose of the takeover.  And it is that which both Greenwald and Brooks miss.

In the case of this particular incident, you couple that with a little stupidity (Napolitano: “the system worked”), a dollop of denial (Obama: “an isolated extremist”) and typical non-responsive overreaction (TSA: stay in your seat the last hour with your hands in your lap) and you begin to understand why the president couldn’t go on TV and say something like Brooks claims he could say in a “mature nation”.  This has nothing to do with the maturity or lack thereof of the nation.  It has to do with an inept government unable to fulfill it’s promise and the righteous anger that causes.

This incident is just one of many which are awakening the public to the falsity of the pernicious myth that government is “the answer”. It was the financial crisis that began the process. As it developed, people were suddenly confronted with the realization that those who had assured us they were in control and knew what they were doing really didn’t have a clue. Add that with the rapid takeover of the financial sector and GM, TARP and the “stimulus”, extended trillion dollar deficits, health care “reform” and cap-and-trade legislation and now this airline security failure and you begin to understand both the rising alarm and the rising anger.

I’m sure there are those out there who still think the Tea Parties were about health care and/or Obama and the Democrats. In fact, they were an early outward manifestation of the phenomenon – the rapidly growing realization that a) government can’t fulfill its promises but b) despite that, it continues to attempt to accrue more power and c) really doesn’t care if the public wants it or not.

They also are beginning to realize the mammoth cost of the leviathan in place is bad enough (and it is only going to get worse).  And they are terrified of the cost of what is being promised as the government takes over more and more of our lives.

You can begin to understand why the growing anger is directed at this administration and government in general is the result. The attempted bombing incident and the resultant anger is no more just another indicator of that general anger and dissatisfaction.

What Brooks and Greenwald don’t seem to understand – and I’d think it is a safe bet to make the same claim about Republicans – is this isn’t anger just directed at this administration or Democrats alone. They’ve simply managed to bring it to a head with their over-reaching. It is anger, in general, at the depth, breadth, cost, intrusion and control government has and seeks to broaden. In a larger sense, what Greenwald and Brooks would like to write off as an immature tantrum about a security failure is just another manifestation of the growing anger and discontent directed at government in general and as result of the swiftness and scope of the recent expansion.

The culture of dependency that politicians have  carefully engineered over the last 80 years is finally seeing a backlash. Ironically it is the financial crisis and the Democratic ascendancy, along with their attempts to broaden that dependency, which has suddenly alarmed and angered the public. As dependency was incrementally increased over the decades, the public’s alarm at government’s increased powers was muted. With the sudden power and control grabbed by the government, precipitated by the financial crisis, the alarm –and anger- is no longer muted.

That, by any measure, is a good thing. What it isn’t, however, is an immature reaction. It is, if anything, not strident enough.

~McQ




The “Pay Czar” Diversion And How That Works With Health Care

David Brooks has an article today in which he takes on the concept of a “pay czar” and opines that human arrogance is about to play into the law of unintended consequences in a huge and, most likely, unwanted way.

Arnold Kling takes the opportunity of the Brooks column to change the subject slightly and point out that while what Brooks says is true, the “pay czar” nonsense is really a diversion to keep us fr-om looking and focusing on one of the most serious problems in the financial meltdown – the government’s Freddie Mac and Fannie Mae:

The further into this crisis we go, the greater the share of subprime loans and mortgage losses are turning out to be located at Freddie and Fannie. Even one year ago, if you had asked me, I would have told you to expect at least 2/3 of the losses to be at companies like Citi and Bear, with less than 1/3 at Freddie and Fannie. It now looks quite different. Conservatively, 3/4 of taxpayers losses will be at Freddie and Fannie. Perhaps as much as 90 percent of taxpayer losses will be there.

Given the large role of Freddie and Fannie, it makes sense for politicians to create as large a diversion as possible. Hence, the brouhaha over bonuses at bailed-out banks.

Remember what supposedly started this meltdown was subprime loans. As Kling points out, guess where most of them are located? And, given the government role in these institutions (not to mention the “why” for such loans in terms of policy and incentives fr-om government) it isn’t at all surprising that -as it tries to convince us that government is the best choice for running health care- government tries to divert our attention fr-om its huge role in the meltdown to a group that may have only had a limited role but is a very unsympathetic group in the public’s eyes.

In fact:

I am not sure if I wrote this on my blog, but I did write in a chapter of the forthcoming Fr-om Poverty to Prosperity (with Nick Schulz) that none of the major regulated institutions was involved in subprime.

But they are indeed the focus of the public’s ire thanks to the government’s demonization of them. Meanwhile, Freddie and Fannie escape both scrutiny and blame.

Which, Kling says, is similar to what is going on in the health care debate concerning the pubic option:

Incidentally, the debate over the “public option” in health reform also can be viewed as an exercise in symbolic politics and diversion. The point is to divert attention away from the bankruptcy of Medicare.

Absolutely correct. It is the point I continue to wonder about and see nowhere in any of opinion or fact based pieces concerning this subject. We are talking about turning over the rest of our health care to an institution that has run the piece it has had for decades into 52 trillion dollars of future debt. Yet we’re being told, by them, that they can run it more efficiently and for less money than private insurance. And, even in the face of evidence that it’s not true, a good portion of us have chosen to believe them.

It boggles the mind.

~McQ


Questions and Observations #4

For new readers, the title is what the shortened “QandO” stands for.

  • I thought one of the things the Obama administration was promising it wouldn’t do was use signing statements to ignore the law? Apparently not.
  • It would appear that a witch-hunt for “extremists” in the military is building. First we had the DHS warning claiming veterans might be recruited by right-wing extremist organizations. Then Alcee Hastings proposes law (a law already on the books, btw) to prohibit “extremists” from joining the military. Now the Southern Poverty Law Center is asking Congress to investigate the military based on a couple of postings it found on a suspect website.  The premise, of course, is because we now have a black Democratic president, there is more of a threat from such extremists who might be in the military.
  • Government’s attempt to regulate every aspect of your life takes another step in that direction, but in an unexpected area – licensing yoga teachers. Of course, government knows so much about yoga to begin with. In fact, all this will do is add cost and paperwork to something which is at the moment, self-regulated by the market.  What it will do for yoga is present an government imposed bar to entry.  And, of course, create another revenue stream where none previously existed.
  • Electric cars? The panacea? Not according to the Government Accounting Office which claims, at best, they’d reduce CO2 emissions by 4 – 5% but would see that negated by increased travel because users would drive more believing their use isn’t a threat to the environment. And then there’s the lithium problem.
  • David Brooks sat through an entire dinner with a Republican Senator’s hand on his inner thigh? Really? Why? And what does that say about David Brooks?
  • Corporations which have taken taxpayer money are on notice not to book meetings at fancy resorts. But government (which exists on nothing but taxpayer money)? No problem.
  • Mark Steyn wonders if the era of “soft despotism” has begun here? It’s a good description of what is going on I think.  For the record, Obama isn’t the initiator of it, he’s just an accelerant. The only problem with “soft despotism” is it usually turns to the garden-variety hard despotism after a while.
  • Timing is everything, isn’t it? In the midst of the recession, the federal minimum wage is scheduled to increase by 70 cents an hour to $7.25 on July 24th. That’ll certainly help the recovery and create jobs, won’t it?

I’ll add more as I find them – check back throughout the day.

~McQ


Brooks On Capitalism

David Brooks had started down the road to Damascus when he was called back into the fold by Dear Leader. His Op-Ed in today’s NYT is the result.

Most of Brooks’ offering is a rather transparent attempt to shame congressional Republicans into supporting Pres. Obama’s agenda:

The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.

The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is “no.” They’ve apparently decided that it’s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.

There are myriad problems with Brooks’ line of reasoning, including many in just to two foregoing paragraphs (e.g. How much input did Republicans have into the recent legislation? By “adopted a posture” is he referring to “not having control of either the House or the Senate”?), but I wanted to focus in on a couple of points in particular.

After some platitudinous admonitions, Brooks launches into his prescription for Republicans to save capitalism:

Third, Republicans could offer the public a realistic appraisal of the health of capitalism. Global capitalism is an innovative force, they could argue, but we have been reminded of its shortcomings. When exogenous forces like the rise of China and a flood of easy money hit the global marketplace, they can throw the entire system of out of whack, leading to a cascade of imbalances: higher debt, a grossly enlarged financial sector and unsustainable bubbles.

I really don’t know what point Brooks thought he was making, but he failed miserably on any score. First of all, “exogenous forces” cannot be “weaknesses” and/or “shortcomings” with capitalism since, by definition, they come from outside that system. At best, examining such forces can be used to understand better ways of protecting capitalism from them. In the context of the entire Op-Ed piece, however, it appears that Brooks is pitching the tired line that capitalism must be reigned in so that people don’t get hurt. That’s like diagnosing the problem with house, finding termites, and then thinking of ways to protect the termites from the house.

Furthermore, Brooks cites a “flood of easy money” (which, of course, is caused by government) as an example of an exogenous force, and then lists the following “shortcomings” of capitalism: “higher debt, a grossly enlarged financial sector and unsustainable bubbles.” What do any of those things have to do with capitalism? If anything, these are once again a failure of government skewing incentives.

In fact, when the government does its darnedest to make the cost of borrowing money historically low, people would be really stupid not to take advantage of that. We all know that rates fluctuate, and that the cost of money will be more expensive when they go back up. Logically therefore, it only makes sense to borrow when the Fed turns the money spigot on and then to find some sort of an asset to grow that money in. That, of course, is what leads to bubbles as everyone has barrels of money but not as many clear ideas of what makes a good investment. Instead of taking the time to really investigate what opportunities are available, and which ones fit a particular person’s portfolio, the herd mentality takes over and we all tend to keep up with the Jones and Smiths whether that means buying tulip bulbs or a run-down house we intend to flip.

The bottom line, however, is that these sorts of scenarios start with government intervention into the market place. In addition to turning on the money spigot, the federal government was also encouraging lenders to make high-risk loans, and for the Freddie Mac and Fannie Mae to buy them up, securitize them and sell them into the derivatives market. Again, that’s all fine and dandy (until it it all goes to hell), but it has nothing to do with “weaknesses” and “shortcomings” of capitalism, and everything to do with government sticking its big fat honker where it doesn’t belong.

More Brooks:

If the free market party doesn’t offer the public an honest appraisal of capitalism’s weaknesses, the public will never trust it to address them.

The “free market party”? Who does he think he’s kidding here? The Republicans haven’t acted like a free market party since … well … it’s been so long I can’t remember.

Moreover, I simply can’t fathom how Brooks thinks a “free market party” would ever be able to reconcile itself to joining hands with Obama on his completely anti-capitalist agenda.

Power will inevitably slide over to those who believe this crisis is a repudiation of global capitalism as a whole.

Earth to Brooks: that’s already happened. Look who the president is for crying out loud, or take the time to read your own newspaper. Each and every day we hear about how the excesses of capitalism caused this crisis, and how the “libertarian” policies of Bush (HA!) have landed us in this awful spot. Capitalism didn’t get a trial, Mr. Brooks, it was rounded up, convicted and summarily shot as soon as the latest grand experiment in government do-goodism failed (again).


The Dishonesty Inherent In The Administration’s Economic Claims

David Brooks, 3 days after a semi-courageous, “what-the-heck-is-going-on” column, received calls from the senior staff at the White House and quietly got back in line:

In the first place, they do not see themselves as a group of liberal crusaders. They see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. They’re not engaged in an ideological project to overturn the Reagan Revolution, a fight that was over long ago. They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.

The budget, they continue, isn’t some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform. That’s what the budget does. It’s not the Russian Revolution.

How moderately wonderful, right? They’ve now dazzled Brooks again. They’re not “liberal crusaders”, they’re moderate pragmatists who want to lend stability to the economy.

Brooks then goes through a litany of things “Republicans should like”. He finishes up by claiming he still thinks they’re trying to do too much too fast, and that may lead to problems “down the road”, but all in all, he’s impressed by their sincerity, commitment to what is best for America and the fact that all of this is not going to cost anywhere near what all the critics claim.

On their face, the arguments are nonsense. This is the biggest planned expansion of government in a century. Estimates are the federal government will be hiring between 100,000 and 250,000 new employees to oversee its new programs and spend the trillions of dollars being borrowed through debt instruments right now.

Unlike the rather facile and easy to impress Brooks, Charles Krauthammer takes a look at the spin and deconstructs it rather handily.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan’s Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

As Krauthammer points out, none of the costly things that Obama pledged to focus on have anything to do with the down economy. They all do, however, include the  the probability of causing even more damage if enacted.

And since they’ve been in office, Obama or his surrogates (mostly in the guise of Timothy “tax cheat” Geithner”) have talked down the stock market, the auto industry, the oil and gas industry, the health care industry, energy, banks, financial and the defense industry. They still don’t seem to realize what impact their words have on markets, or if they do, then one has to assume they’re doing this on purpose. I tend toward the side of ignorance, but at some point, after it has been pointed out to them over and over again, you have to abandon that belief and head toward the other conclusion. Their words, quite literally, are wrecking the economy.

Markets can’t stand instability and insecurity. When leaders talk about what’s wrong with this industry or that industry and what they intend on doing to punish or change how that industry does business, investors get very nervous. As you might imagine, they’re extremely nervous right now, as reflected by the Dow. They know that there is a government assault coming, in some form or fashion, on the industries I’ve mentioned. So they’re going to get out of the position they now hold in them and they’re going to refrain from investing in them until they’re clear what that assault will entail. And I don’t use the word “assault” lightly.

Health care, defense, oil and gas, pharma, auto, energy, housing, banking, finance etc. are all under a form of assault by the new administration. Health care will change and expand dramatically under government auspices, oil and gas will lose tax breaks, cap-and-trade will bury the auto industry and shoot energy prices through the roof – affecting transportion and manufacturing. Cram-downs affect the housing, banking and financial sectors. Who wants to invest in any of that when a judge can reward irresponsible home owners with a write down of their principle? Meanwhile responsible home seekers will see the interest rate go up by about 2 points to cover the losses. That’ll spur homebuying, won’t it?

Like Dale pointed out about the Red Kangaroo, you can see this coming from a mile off. And “useful idiots” like David Brooks climb back on the bandwagon and resume cheering the parade to economic ruin.

~McQ


David Brooks Finally Figures It Out

Well sort of.  He tells us in his latest piece that he considers himself a “moderate-conservatitve” (what in the world is that?) and he finds the Obama budget (and agenda) waaay to “progressively liberal” for his taste.

Like David Broder, he seems to be surprised by that.

But the Obama budget is more than just the sum of its parts. There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor — caught up in the self-flattering belief that history has called upon it to solve all problems at once.

So programs are piled on top of each other and we wind up with a gargantuan $3.6 trillion budget. We end up with deficits that, when considered realistically, are $1 trillion a year and stretch as far as the eye can see. We end up with an agenda that is unexceptional in its parts but that, when taken as a whole, represents a social-engineering experiment that is entirely new.

The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide. The president issued a read-my-lips pledge that no new burdens will fall on 95 percent of the American people. All the costs will be borne by the rich and all benefits redistributed downward.

The lesson the left learned from the Clinton era is to move boldly and unapologetically toward what they want while they have the power and popularity to do so instead of screwing around with moderation, incrementalism and governing from the center. And the Republicans only reinforced the lesson when they tip-toed around while they had power, seemingly more worried about being liked than getting things done that agreed with their principles. Well, as Brooks and the “moderates” who were fooled into thinking Obama would be another Clinton have found out, there’s nothing “centrist” to this bunch now in power.

To their horror, they find they’re getting exactly what they were told they would get and, for some reason, they’re surprised and don’t like it. But without them, this little progressive song and dance never had a chance of hitting the main stage.

Now, per Brooks, its up to the moderates to save the country.

Oh goodie.

Pardon me if I don’t hold my breath. The squishy middle save us from anything? Based on what?  What principles do they rally too?  As easily as they were gulled in the last election, they have little credibility when it comes to such activities. And to whom or what would they appeal? Other moderats who were as clueless as they were? Then what?

But losing the middle would be a bit of a blow to the Obama administration’s plans. Obama is presently trading off of his popularity and there seem to be more questions about his true intentions than satisfactory answers. A loss of popularity might stiffen the spines of some blue dog Dems and slow this rocket sled to hell down a bit. Of course, it seems there’s a RINO in the weeds for every blue dog that says no, so I’m not sure what real impact that would have.  But hey, even the RINOs may get the message (again, not holding my breath).

I know it’s not much to hope for, but it is interesting to see the scales finally begin to fall from moderate eyes.  It demonstrates the brilliance of the candidate being the projection screen and with a few key words like “hope” and “change”, conning the middle into pretending that the fantasies they’ve conjured up and projected on him would become reality.  Now we pay the piper for that little screw up, don’t we?

~McQ


Old America v. New America – Justice vs. Fairness

David Brooks does his usual NYT spin job:

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible

That’s the rumor. The reality, as we’ll see, doesn’t conform with the rumor. The why is in a single word: ‘justice’. What Brooks talks about here are the supposed foundations of our civilization and way of life. Individual responsibility and justice. Individuals are responsible for their condition (through their choices) and expected to live with them. Their condition isn’t anyone else’s fault or problem barring force or fraud. A just society understands that and, as is necessary, holds them responsible for their choices. Lessons are only learned when one has to live with the consequences of one’s choices. But what a just society doesn’t do is penalize those which have made the right or proper choices in their lives. It doesn’t require such people to prop up or rescue those who have made poor choices. Such a society would see that as “unjust” and work against the concept of individual choice and individual responsibility.

A just society is where everyone is afforded the same opportunities and held to the same standards of behavior and the law. Success, however, is left up to individual effort and ability. In a just society you are free to do, within reason, whatever you desire to do, but you’re expected to live with the consequences.

With that preface, let’s look at Brooks’ next couple of paragraphs:

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.

While Brooks properly chastises the banks, automakers and state governments, he leaves out one of the most irresponsible of entities which played as large a role as any other contributor to this current financial debacle – the federal government. If ever there was an enabler for all of this, it is Washington DC. Much of what happened can be laid directly at the feet of the Fed. The financial  implosion didn’t start on Wall Street but with the insolvency of the quasi-governmental entities  Freddie Mac and Fannie Mae. Yet they’ve not been in the spotlight of Congressional hearings or had the millions paid their top execs complained about and capped. Where’s the justice in that?

So to get back on topic after that brief aside to assail writers like Brooks for excusing the Federal government from their condemnations (and you’ll see why he did so in a moment), the reason that Brooks seems so angry in this part of his op-ed is he is giving lip service to some foundational American ideals and pretending to be outraged that they’re being violated just before he pulls the rug out from under them.  It is obvious to Brooks and anyone with the IQ of a melon that those who are running the show in DC have absolutely no desire for a “just” society based on individual responsibility anymore but he wants to break it to you gently. That’s the old America. The new America is one based in “fairness” and collective responsibility.  At this point, Brooks wants you believing he’s an “old America” kind of guy.

So he relates the fact that many in America are still mired in their old fashioned belief in justice and are, consequently, a little ticked about this payoff to the irresponsible among us.   People are complaining about it. And after a reasonably good, but disingenuous start, it is here where Brooks pulls the mask off completely:

These injustices are stoking anger across the country, lustily expressed by Rick Santelli on CNBC Thursday morning. “The government is promoting bad behavior!” Santelli cried as Chicago traders cheered him on. “The president … should put up a Web site … to have people vote … to see if they want to subsidize losers’ mortgages!”

Well, in some cases we probably do. That’s because government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.

Irresponsibility is not really penalized in New America. New America is driven by the belief that it is our collective responsiblity to those in need, regardless of how they got there or what it entails, to satisfy that need. So when the life vest of your money (via taxes and debt you will be taxed to repay) is offered to someone drowning as a result of their own irresponsible choices, you are expected to accept that as your duty and not complain about it.

You see, per Brooks, government isn’t in the justice business, it’s in the “economic stabilization” business.

Really? Since when?

And since when did the economic stabilization business involve rewarding incompetence and irresponsibility while punishing their opposites? Isn’t such a policy of rewarding incompetence and irresponsibility a huge moral hazard, not to mention self-defeating? Why would someone change their behavior if there is no real punishment for their present behavior? Isn’t government picking “winners” and “losers” even while Brooks claims government isn’t in the “Last Judgment” business?

In fact it is and has been in the “Last Judgment” business for a while. And in the case here, the judgment made by government is that it is only fair to pick up those who’ve fallen short at the expense of those who haven’t. It has made the judgment that their need is far greater than the need of those who have played by the rules and done their part – after all those who have done the right thing are relatively better off than those who haven’t aren’t they? If, as Obama claimed at the Greek Temple, “we are our brother’s keepers” (well except in a real, Obama-family sense), then the “last judgment” was made then and is now merely being implemented.

We are, apparently, no longer a nation which seeks justice and equal opportunity. That’s Old America. New America seeks fairness as its highest goal. And in the New America, that means an equality of outcome where new “rights” are invented which entitle us to our desires, even at the expense of others.

Brooks goes on to apologize and attempts to minimize the horrific damage being done to America as we used to know it. He serves his purpose and spins the utter destruction of Old America and the emergence of New America as something which just had to be done by our new leader and his benevolent band of brothers, all of whom have your best interest at heart.

It’s enough to make you sick.

~McQ