Free Markets, Free People

Monthly Archives: October 2010


Following the House of Bourbon

I really do try not to be pessimistic about the future, but this is the kind of thing that keeps me up at night:

[W]ithout serious course correction, America is doomed. It starts with the money. For dominant powers, it always does – from the Roman Empire to the British Empire. “Declinism” is in the air these days, but for us full-time apocalyptics we’re already well past that stage. In the space of one generation, a nation of savers became the world’s largest debtors, and a nation of makers and doers became a cheap service economy. Everything that can be outsourced has been – manufacturing to by no means friendly nations overseas; and much of what’s left in agriculture and construction to the armies of the “undocumented”. At the lower end, Americans are educated at a higher cost per capita than any nation except Luxembourg in order to do minimal-skill checkout-line jobs about to be rendered obsolete by technology. At the upper end, America’s elite goes to school till early middle age in order to be credentialed for pseudo-employment as $350 grand-a-year diversity consultants (Michelle Obama) or in one of the many other phony-baloney makework schemes deriving from government micro-regulation of virtually every aspect of endeavor.

So we’re not facing “decline”. We’re already in it. What comes next is the “fall” – sudden, devastating, off the cliff. That’s why this election is consequential – because the Obama-Pelosi-Reid spending spree made what was vague and distant explicit and immediate. A lot of the debate about America’s date with destiny has an airy-fairy beyond-the-blue-horizon mid-century quality, all to do with long-term trends and other remote indicators. In reality, we’ll be lucky to make it through the short-term in sufficient shape to get finished off by the long-term. According to CBO projections, by 2055 interest payments on the debt will exceed federal revenues. But I don’t think we’ll need to worry about a “Government of the United States” at that stage. By 1788, Louis XVI’s government in France was spending a mere 60 per cent of revenues on debt service, and we all know how that worked out for the House of Bourbon the following year.

Oh, but wait, it gets worse, because we’re not just talking about the effect on the US. Our current path affects the whole world.

In 2009, the US spent about $665 billion on its military, the Chinese about $99 billion. If Beijing continues to buy American debt at the rate it has in recent times, then within a few years US interest payments on that debt will be covering the entire cost of the Chinese military. This summer, the Pentagon issued an alarming report to Congress on Beijing’s massive military build-up, including new missiles, upgraded bombers, and an aircraft-carrier R&D program intended to challenge US dominance in the Pacific. What the report didn’t mention is who’s paying for it.

Answer: Mr and Mrs America.

By 2015, the People’s Liberation Army, which is the largest employer on the planet, bigger even than the US Department of Community-Organizer Grant Applications, will be entirely funded by US taxpayers. When the Commies take Taiwan, suburban families in Connecticut and small businesses in Idaho will have paid for it.

When these kinds of crises hit, they often happen suddenly, without warning, often as the result of an event that is minor, in and of itself, but becomes the straw that breaks the camel’s back. When Gavrilo Princip popped a couple of slugs into Franz Ferdinand and his wife, Sophie, it seemed trivial. It was the kind of story that appeared on Page C-4 of Le Monde or the Times of London, and yet, weeks later, sparked a war that literally unmoored Western Civilization from everything that had gone before.

Let’s also be clear that this won’t be a European experience. The post-war European decline , if not painless, was at least very powerfully cushioned by the financial and political support of the United States. We won’t have that cushion.

In a two-party system, you have to work with what’s available. In America, one party is openly committed to driving the nation off the cliff, and the other party is full of guys content to go along for the ride as long as we shift down to third gear. That’s no longer enough of a choice.

Hard choices–very hard choices–are at hand. We will make those choices willingly, and try to maintain some control over our destiny, or reality will simply make those choices for us.


Paul “one-note” Krugman still pushing for more stimulus

Krugman’s latest approach to demanding more deficit spending – er, excuse me, “stimulus” spending – centers on the impending election.  The Democrats wouldn’t be about to see an electoral tsunami if they’d just listened to him and spent more.  The economy would be recovering and we’d only be talking about nominal losses in the mid-term as is historically the case with just about every President.

Says Krugman:

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.

And he further states:

If you look back now at the economic forecast originally used to justify the Obama economic plan, what’s striking is that forecast’s optimism about the economy’s ability to heal itself. Even without their plan, Obama economists predicted, the unemployment rate would peak at 9 percent, then fall rapidly. Fiscal stimulus was needed only to mitigate the worst — as an “insurance package against catastrophic failure,” as Lawrence Summers, later the administration’s top economist, reportedly said in a memo to the president-elect.

In fact, when you look back at the spending forecast that accompanied the Obama plan, you’ll find something very strange (as we’ve pointed out before).  You’ll find that it spent more than Mr. Krugman said was necessary at the time:

All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.

It should be huge, huge I tell you!  $600 billion at least.  We ended up with  $900+ instead new figures show.  It was 50% bigger than Krugman called for but, now, it was “totally inadequate”.

If you, like me, have essentially turned off the one-note bleat from this guy it is because other than calling for more spending he never, ever reviews his work or analyzes the results of someone actually following his advice.  It was huge, it was more than he asked for, and it FAILED.

Has that sunk in yet, Mr. Krugman – your suggestion was less than what was spent and the result was an increase in unemployment and a decrease in economic activity.  That, to most, means the idea of a “huge” amount of deficit spending did not have the effect you and the administration claimed it would.  It. Failed.

Unlike Mr. Krugman, most of us have come to terms with the Einstein definition of insanity and resist doing the same thing over and over again expecting different results.

Obviously that’s not the case with Mr. Paul “one-note” Krugman.  Tuning him out is a perfectly acceptable reaction to his ceaseless call for more deficit spending.

~McQ


Are Dems closing the enthusiasm gap?

There has been a lot of assertion flying around the net about how Democrats are “closing the enthusiasm” gap.  The question, of course, is whether or not that’s actually true.  Certainly any number or races are tightening as should be expected with 8 days to go before an election.  And both sides are ginning up their Get Out The Vote drives – critical to a win.  You also have the President and VP hitting the road for  any number of at-risk candidates thereby punching up the visibility of those candidates and stirring up the base (although the level of enthusiasm among some base groups lags 2008’s).

But are the Democrats really closing the enthusiasm gap?

POLITICO seems to think the latest information from early voting says “no”.

POLITICO surveyed early voting through Saturday in 20 states, and in 14 of the 15 that have voter registration by party, the GOP’s early turnout percentage is running ahead of the party’s share of statewide voter registration — whether measured against 2006 or 2008, when President Barack Obama’s campaign led to a surge in Democratic voter registration. As a result, Republicans say they’re turning the tables on the Democratic dominance of early voting that paved the way for Obama’s victory in 2008 — and that independents’ lean toward the GOP this year will do the rest.

Two important points there.  A) GOP turnout is running ahead of the party’s share of state wide voter registration.  That’s a very important indicator of where the enthusiasm lies.  When that sort of an advantage gained, history shows the results are usually favorable for the party that does so.  B) Independents are more pro-GOP than pro-Democrat this time around.  Each of the parties command about 30 to 35% brand loyalty in any election.  It may go higher in some as the early voting indicates it is for the GOP this time.  However, everyone understands that the party faithful alone can’t swing an election.  It takes persuading independents to sign on and vote for the party to close the deal.   Independents have shown consistently in polls that they’re favoring the GOP this time around.

Nate Silver of FiveThirtyEight has taken a look at the early voting as well, and comes to pretty much the same conclusion as does POLITICO:

So, the various estimates of early voting data each show an edge for Republicans: their voters have been slightly more inclined that Democrats in most states thus far. Under the most favorable set of assumptions for them, their advantage is around 9 points; by the least favorable set of assumptions, it is more like a 4-point edge.

These figures ought to seem familiar to regular readers of this blog. How come? Because they are very close to the enthusiasm gap as inferred by the consensus of pollsters — who, on average, show Republican candidates performing about 6 points better among likely voters than among registered voters — although their advantage varies from state to state and from polling firm to polling firm.

Take a look at Silver’s full analysis – probably one of the most exhaustive you’ll find.  It holds up pretty well and it underlines the fact that the reports of a Democratic comeback – a closing of the “enthusiasm gap” – is founded more in “hope” than reality.  He concludes:

Overall, however, the early voting data does not provide compelling reason to reject the consensus among pollsters, which is that the enthusiasm gap is most likely to manifest itself in a mid-to-high single digit turnout advantage for Republicans. When coupled with the edge that Republican candidates have among independent voters in most races, this suggests that they are liable to have a pretty good year [emphasis mine].

That seems to me to be a reasonable conclusion despite a rising tide of media stories implying that Democrats are coming back.  There’s little reason to believe independents will begin to reverse their trend away from Democrats at this late date.  There has been absolutely nothing happen that would trigger such a reverse. 

Keep all this in mind as you read more stories that I’d put in the “whistling past the graveyard” category about Democrats keeping the House, etc.  While I don’t believe the dire predictions of 70 or 80 seats there switching sides, I do believe more than enough will turn over to give the GOP a majority.

~McQ


Observations: The Qando Podcast for 24 Oct 10

In this podcast, Bruce, Michael, and Dale discuss the NAACP’s finding of racism in the Tea Party, and the Tea party in general.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.


Dems–boot blue dogs, fold big tent

Ari Berman of "The Nation” does an op-ed for the New York Times in which he pushes for the removal (or at least the non-support) of the blue dog Democrats such as Heath Schuler of NC. 

Now that doesn’t come as much of a surprise to me – just as the Tea Party wants the less than conservative members of the Republican party replaced with more reliably fiscal conservative members.

That said, however, I loved the “reasoning” quoted for this desire:

Margaret Johnson, a former party chairwoman in Polk County, N.C., helped elect Representative Shuler but now believes the party would be better off without him. “I’d rather have a real Republican than a fake Democrat,” she said. “A real Republican motivates us to work. A fake Democrat de-motivates us.”

Well there you go – remember the left has been lambasting the right for who knows how long for not offering a “big tent” but essentially being a narrow based “all white male” party.  Howard Dean and Rahm Emanuel concocted the 50 state strategy which recruited blue dogs like Schuler because they were “electable” in those districts and that strategy gave Democrats a “super majority”.  But what real good did it do? 

The argument is “wouldn’t you rather have someone that would vote with you 70% of the time rather than someone who will vote for your programs 0% of the time?  The answer is “no”.  Not if you actually want to get those things done which require critical votes and the 30% of the time they don’t vote with you is when those votes occur.  Tea Partiers figured this out a while ago.  And again, they’ve been lambasted for being so non-inclusive.  Karl Rove, an inveterate seat counter, focuses solely on the number of “Republicans” in each chamber.  Tea Partiers and conservatives focus on the ideology of those running and only support those who are, in Ms. Johnson’s words, “real Republicans” as the TP and conservatives define them.

It appears Democrats, lately of the “big tent”, are now looking toward a smaller tent.  That would include the architect of the 50 state strategy, Howard Dean:

Ms. Johnson is right: Democrats would be in better shape, and would accomplish more, with a smaller and more ideologically cohesive caucus. It’s a sentiment that even Mr. Dean now echoes. “Having a big, open-tent Democratic Party is great, but not at the cost of getting nothing done,” he said.

Yeah … exactly what a number of us have been saying for years.  Look, people throw the word “ideology” around like it is some sort of bad word.  It’s not.  It is your political philosophy, your principles, your belief in what politics should reflect.

Does anyone believe those that founded this country weren’t ideologically driven?   That they didn’t have a definite set of principles  that were foundation of what they created?

“Big tent” is a wonderfully nebulous and useless concept that implies that inclusiveness is more important than principles.  It’s nonsense as both sides are discovering.  You’re either for something, in terms of principles, or you’re not.  “Including” others who don’t necessarily share your principles is simply an exercise in, well, seat counting, which as both the GOP and Democrats have finally discovered, is a waste of time.

~McQ


Democrats having trouble with “adverse political climate”

As a writer I can’t help noticing subtleties in the articles and books I read. A good writer packs a lot of meaning into a short space, and sometimes creates impressions in the reader that are subconscious.

Here’s an example from this weekend:

Obama made his fourth trip to Nevada Friday for a week-before-the-election rally and fundraiser to help Reid squeak out a victory despite low popularity in his home state and an adverse political climate. [Emphasis mine]

I’ve seen the same phrase several times over the last few months, always referring to the travails of embattled Democrats.

Notice the implied message. Those poor Democrats are not being beaten by motivated, possibly better qualified opponents. Nor are they contending with the results of their own disastrous, unpopular policies. Instead, they are dealing with “an adverse political climate”, as if the entire situation were just some random storm that blew up out of nowhere.

This enables reporters to talk about the problems of Democratic candidates without having to face up to the reality of Democratic administration of the last four years for Congress and two years for the White House. They don’t have to come right out and say that Obama, Pelosi, Reid, et. al. have been a disaster for the political left. And they certainly don’t have to make any serious examination of their own internal assumptions that leftism is the ideal political philosophy.

The reporters can even sound somewhat sympathetic to the candidates’ plight. You can almost hear their internal dialog. “Gosh, we don’t know where the storm came from, but those Democrats sure are getting drenched! Isn’t it awful that our statesmen like Reid have to contend with such random things?”

Perhaps I just don’t remember, but I don’t think I saw that phrase when Republicans were getting hammered in 2006 and 2008. Everything was Bush’s fault and the fault of those Republicans caught in assorted ethical scandals. This year, the much worse offenses of Charlie Rangel are quickly shuffled to the “old news” pile and never, ever trotted back out when discussing Democrats’ lagging campaigns.

As I tiresomely repeat, to defeat the political left, it’s important to constantly be on watch for their post-modern attempts to redefine the terms used in politics to make themselves look better. I hope every time you see “adverse political climate” from this point, you’ll translate it more appropriately as “deep, deep hole the Democrats dug for themselves, which the reporter is too chickensh!t to acknowledge.”


More real ObamaCare costs emerge

I don’t want this one to slip by, because it is significant. It is yet another study that shows the numbers attributed to the cost of ObamaCare were so much nonsense. The interesting thing is it comes from an organization friendly to ObamaCare (via HotAir):

Families USA commissioned The Lewin Group to use its economic models to estimate how many individuals would benefit from the new premium tax credits in 2014 and the value of the dollars going to help pay for insurance (see the Methodology on page 12 for more details). We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion.

Where’s the disconnect? Well the Congressional/CBO estimate for this particular cost was almost 600% lower than the Lewin Group study. Ed Morrissey lays it out:

In his presentation to Congress, CBO director Douglas Elmendorf predicted a cost of only $20 billion on health-exchange subsidies and associated costs.  The Lewin Group, which conducted the study for Families USA, shows that four times as many people will become eligible for subsidies in 2014 than the CBO predicted in March and that the cost will be 550% higher as a result (page 4 of the linked study).

How did the CBO arrive at those numbers with which to calculate the cost of ObamaCare?  Well when Morgen at Verum Serum pointed out the discrepancy to Families USA, they had a peculiar answer:

Morgen also contacted Families USA to get an explanation of the difference, and was told that he made an “apples to oranges” comparison.  Why?  This survey, they explained, showed how many people would be eligible, while the CBO predicted how many people would actually take advantage of their eligibility for tax credits.  This is an odd distinction to make, since the entire idea of the subsidies is to encourage uninsured Americans to buy health insurance through both mandates and generous subsidies.

Morrissey asks:

How likely will it be that people will pass on the notion of getting big tax credits to subsidize must-issue health insurance?  And if the success rate in applying mandates, higher taxes, and more government authority to the 270 million Americans who are already insured is only 20-25% in getting the other 30 million insured, how is that at all successful?

The deficit projection given by Democrats was apparently based on 75% failure rates to get people into the system; their advocates are busy touting the massive amounts of subsidies in the program that will tip ObamaCare into a deficit exploder in Year 2.

75% failure rates?  In other words, 75% of those eligible for a generous subsidy through tax credits won’t take advantage of them? 

Really?  I guess this is one of those “benefits” Bill Clinton was talking about that hasn’t quite made an impression yet – exploding costs well above the nonsense the Democrats used to “justify” the abysmal ObamaCare bill.

Talk about being sold a pig in a poke.

~McQ


Campaign finance reform: be careful what you wish for Democrats

You’ve heard all the whining by Democrats about “outside spending” on election campaigns and the lecture of the members of the Supreme Court by President Obama during the last State of the Union address because they overturned the unconstitutional campaign finance law?  Their concerns, as they stated them, were about “outside spending” on campaigns.  That’s a Dem code phrase for “corporate spending”.  But as this election cycle is demonstrating, most of the “outside spending” for the mid-terms isn’t coming from corporations per se – it’s coming from public employee unions.

Of the top five “outside sources” of spending, three are pubic employee unions.  The top spender is The American Federation of State, County and Municipal Employees at 87.5 million dollars.  The next two are the Chamber of Commerce and American Crossroads (Karl Rove).  Numbers four and five are the SEIU and NEA.  Of those five the two supporting Republicans has spent 140 million.  The public sector unions, committed to Democrats, have spent 171.5 million.

Asked about this here’s the White House response:

When asked about AFSCME’s ramped up campaign efforts following the court’s decision, the White House focused on largely anonymous campaign spending by what it termed "special interests."

"The president has been crystal clear that third-party groups which spend tens of millions of dollars from anonymous sources are a threat to our democracy—regardless of which candidates they support," said White House spokesman Josh Earnest. He said these groups are disproportionately backing Republican candidates.

Yeah, not so much Josh.  And you have to wonder why “anonymous” sources are somehow more of a “threat to our democracy” than known sources like the AFSCME, SEIU and NEA?  And since when haven’t they been as much “special interests” for Democrats as they claim Big Business is for the GOP?

By the way, you’ll love this:

Previously, most labor-sponsored campaign ads had to be funded by volunteer donations. Now, however, AFSCME can pay for ads using annual dues from members, which amount to about $390 per person. AFSCME said it will tap membership dues to pay for $17 million of ads backing Democrats this election.

Nice.  Any guess as to whether union dues will rise next year since much of them are now being spent on political lobbying/campaigning/advertising?  And how does it feel to have your tax dollars indirectly supporting political advertising with which you don’t agree (and for those in the unions who don’t agree, their dues are directly supporting such efforts).

Back to the point of the title though – given these numbers, one wonders how much continued caterwauling we’ll hear from Obama and the Democrats with 2012 looming?

Yeah, not much.

~McQ


Are you willing to pay much more for green energy?

It is a legitimate question, wouldn’t you say, especially if government plans on forcing its use through mandates.

Here’s a list that gives the cost of a megawatt of power (2008 dollars) in 2016 according to the government’s Energy Information Agency:

•Conventional coal power: $78.10
• Onshore wind power: $149.30
• Offshore wind power: $191.10
• Thermal solar power: $256.60
• Photo-voltaic solar power: $396.10

That’s what it will cost you, depending on the method of generation, for the mandated “integration” of renewable energy if Senate Democrats have their way:

A nationwide renewables mandate, or RES, is a longstanding pillar of Democratic energy plans that requires utilities to source certain amounts of their electricity from renewable sources. The bill currently under consideration in the Senate would require utilities to derive 15 percent of their electricity from sources like wind, solar and geothermal by 2021.

Here’s the problem.  At the moment, “renewables” comprise about 6% of the electricity generated in the US.  Not included by the Democrats is nuclear generation.   Oh, and btw, of that 6% renewables, half, or 3%, comes from hydro-electric.  There are no plans to increase that by Dems either.

So here we have the beginnings of a wooden headed plan to mandate the use of heavily subsidized “renewable” energy which would, without a doubt jack up the price of energy that is absolutely critical to the fundamental functioning of America.  David Kreutzer:

“Electric power is one of the most critical inputs to a modern economy. Thus, it is no surprise that forcing the cost of electricity to rise dampens economic activity. The cost increase for electricity can be viewed as a particularly damaging energy tax, because a renewable mandate, unlike the case of a normal tax, provides no revenue to at least partially offset the higher cost. By way of comparison, the highway use tax on gasoline raises the price of gasoline, but it also generates revenues for building and maintaining roads and bridges. On the other hand, a renewable energy standard raises costs in the form of less efficient production, which provides no economic benefit.”

As Con Carroll points out:

If electricity created by wind and other renewables was cost competitive, consumers would use more of it without a federal law to force consumption. But renewable energy is not cost competitive, hence the need for government coercion to force the American people to buy it.

And it will be both a job and economy killer as Kreutzer explains.  If this is “going forward”, then I’m all for bringing back the old America.  This is simply stupidity on a stick and another example of the Democrats being agenda driven instead of reality driven (so much for the “reality based” community, no?).  It’s a “damn the torpedoes, full speed ahead” ideologically driven recipe for economic disaster.  

But if Democrats have their way, you’ll be paying the bill in a few years that could be much, much higher than it is now for no appreciable difference or reason other than that’s how they want it to be.  You’ll be paying it, that is, if you have a job.

Another reason to change the balance of power in the Senate and limit the danger Democrats pose.

~McQ