Questions and Observations

Free Markets, Free People

Another reason we’re in the mess we’re in: the rise of the professional politician

Another reason we’re in the mess we’re in is because of the rise of professional politics and politicians.  According to a recent study 46%  of the present Congress is comprised of lawyers.  That’s 68 times  the density of lawyers throughout the population. But law school for many has been or has become the jumping off point for life as a professional politician.

And so, as with our current president, we get a class of people who have never “done anything or run anything.”  The results predictable, just look around. For the most part, those who are our supposedly “leaders” haven’t a clue on how to proceed or how to “fix” what is wrong with this country.  They have little experience in doing much of anything else but getting elected. Execution, governing, management – all seem foreign to most of our political class.  So they rely on “experts”, mostly in academia or among their political connections, to advise them on how to proceed.

Ed Driscoll provides us with a great example of one politician who, after he left political life, realized how little he knew about extraordinarily important information, and how little experience he actually had where it counted. Former presidential candidate and longtime politician, George McGovern, decided to go into business after leaving politics. It was only then, after his business failed, he realized how little he knew about something as critical as what it takes in the business atmosphere he helped build to run a business.

George McGovern laments that after his experience in the bed-and-breakfast business he realizes that laws and regulations pertaining to small business are actually hurting the lower-wage workers whom he had tried to help during his entire political career. With his Stratford Inn in bankruptcy, McGovern now says:

In retrospect, I wish I had known more about the hazards and difficulties of such a business…. I wish that during the years I was in public office I had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better Senator and a more understanding presidential contender… To create job opportunities, we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities.

He is just one of many of this of this professional political class who have helped put us in this mess.

We should demand, as voters and citizens, that our politicians have real world experience before we allow them the privilege of representing us. We should end this era of politicians whose only real world experience concerning the effects of policy come from dormitory debates and untried academic theories.  And we should reject, out of hand, anyone who has “never done anything or run anything”, unless we find ourselves comfortable with the shape this country is in.

~McQ

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Economic Statistics for 5 Feb 13

The following US economic statistics were announced today:

The Institute for Supply Management’s non-manufacturing index fell 0.9 points to 55.2. There were signs of strength in the report, however, with the employment index rising 2.2 points to 57.5, the highest monthly jump in 7 years.

In weekly retail sales, ICSC-Goldman Store Sales rose 2.4% for the week, and up 2.6% on a year-over-year basis, but the 4-week average is still below trend. Redbook reports a very soft 1.5% year-over-year sales increase. Both reports indicate January retail sales are weak.

~
Dale Franks
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Why are we in the mess we’re in? [update]

You don’t have to be a rocket scientist, brain surgeon, or even particularly smart to figure out that this trend means entitlements, as structured, will fail:

Last week, the Commerce Department announced that the gross domestic product shrank by 0.1 percent in the fourth quarter of 2012. And the Census Bureau reported that the U.S. birthrate in 2011 was 63.2 per 1,000 women ages 15 to 44, the lowest ever recorded.

Slow economic growth and low population growth threaten to undermine entitlement programs like Social Security and Medicare. Despite contrary rhetoric, they are programs in which working-age people pay for pensions and medical care for the elderly.

When Medicare was established in 1965 and when Social Security was vastly expanded in 1972, America was accustomed to the high birthrates of the post-World War II baby boom. It was widely assumed that the baby boom generation would soon produce a baby boom of its own.

Oops. The birthrate fell from the peak of 122.7 in 1957 to 68.8 in 1973 and hovered around that level until 2007. The baby boom, it turns out, was an exception to a general rule that people tend to have fewer babies as their societies become more affluent and urbanized.

So, when will our so-called “leaders” finally  figure this out? My guess, in fact it really isn’t a guess, is they know but haven’t intestinal fortitude, politically speaking, to do what is necessary.  That is cut them, privatize them or any of a host of other options they won’t even consider.

What they will consider, of course, is raising taxes and borrowing.

The fact of the matter is that both Social Security and Medicare are based in flawed models. The original models saw the base of the those paying into the system remaining constant, despite the “general rule that people tend to have fewer babies as their societies become more affluent and urbanized.”

The numbers don’t lie. Fewer and fewer workers are available to pay into these systems and continue to pay out at the rate at which they’re paying out now. This is no mystery. This is plain old everyday economics.  It’s as plain as the nose on your face. Yet our so-called “leaders” seem unwilling and unable to face the facts.  The facts are not going to change. We’re not going to suddenly have a baby boom again.

These are the sorts of problems elected leaders are supposed to face head-on. That’s why they’re elected, supposedly. Yet we continue to let our elected officials get away with malfeasance. So while it is easy to point at them and say they’ve failed, in fact we’ve failed. We have failed to gin up the courage to do what is necessary to fix these problems. To force our “leaders” to do the right thing. We continue to claim in poll after poll that entitlements must be fixed. Yet we continue to put in office, time after time, the same people who haven’t yet mustered the courage to do that (nor fund themselves held accountable for not doing it).

Whose fault is that?

UPDATE: Here’s a perfect and timely example of part of the point:

John Kasich, the fiercely conservative governor of Ohio, announced Monday that he’s going to expand Medicaid dramatically using federal money — a 180-degree turn from what conservative groups swore their allies in governors’ mansions would do when the Supreme Court gave them an out last year.

This makes John Kasich a big, fat liar.

Republicans should be the ones circulating recall petitions. He should be drummed out of office, out of politics and never again hold any office higher than dog catcher. But they won’t, because despite this, he’s “one of ours”.

~McQ

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No podcast this week

Apparently Bruce and Michael prefer to watch the Superbowl, our nation’s annual celebration of Communism, than do a podcast that may help spread the word about individual liberty.

Meanwhile, in baseball, the only truly American game, pitchers and catchers report to Spring Training in 8 days.

~
Dale Franks
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The left’s false moral equivalency concerning guns

Leave it to former White House Chief of Staff and current Mayor of Chicago Rham Emanuel to provide us with the example. George Will tells the sorry story:

Politics becomes amusing when liberalism becomes theatrical with high-minded gestures. Chicago’s government, which is not normally known for elevated thinking, is feeling so morally upright and financially flush that it proposes to rise above the banal business of maximizing the value of its employees’ and retirees’ pension fund assets. Although seven funds have cumulative unfunded liabilities of $25 billion, Chicago will sacrifice the growth of those assets to the striking of a political pose so pure it is untainted by practicality.

Emulating New York and California, two deep-blue states with mammoth unfunded pension liabilities, Chicago Mayor Rahm Emanuel (D) has hectored a $5 billion pension fund into divesting its holdings in companies that manufacture firearms. Now he is urging two large banks to deny financing to such companies “that profit from gun violence.” TD Bank provides a $60 million credit line to Smith & Wesson, and Bank of America provides a $25 million line to Sturm, Ruger & Co.

Chicago’s current and retired public employees might wish the city had invested more in both companies. Barack Obama, for whom Emanuel was chief of staff, has become a potent gun salesman because of suspicions that he wants to make gun ownership more difficult. Since he was inaugurated four years ago, there have been 65 million requests for background checks of gun purchasers. Four years ago, the price of Smith & Wesson stock was $2.45. Last week it was $8.76, up 258 percent. Four years ago, the price of Sturm Ruger stock was $6.46. Last week it was $51.09, up 691 percent. The Wall Street Journal reports that even before “a $1.2 billion balloon payment for pensions comes due” in 2015, “Chicago’s pension funds, which are projected to run dry by the end of the decade, are scraping the bottoms of their barrels.”

So we have the Mayor of Chicago using, well, Chicago style “politics”, to make a “moral statement” that likely few of his citizens agree with and hurting an already failing retirement system by demanding stocks that are doing well be dropped. We call that “moral preening” and, of course, it’s no skin off his back – he’s not the one losing the money – retirees are.  Screw serving the public welfare – his job.  He’s all about hurting the public welfare to make a private moral statement.

As for the false moral equivalency? Here you go:

Nevertheless, liberals are feeling good about themselves — the usual point of liberalism — because New York state’s public pension fund and California’s fund for teachers have, the New York Times says, “frozen or divested” gun holdings, and Calpers, the fund for other California public employees, may join this gesture jamboree this month. All this is being compared to the use of divestment to pressure South Africa to dismantle apartheid in the 1980s.

Guns are as evil as “apartheid” and thus should be dealt with the same way. Because everyone knows that owning a gun is precisely the same as being an oppressive racist using the power of government to enforce your racism.  Or moralism.

Never mind the fact that:

Guns are legal products in America, legally sold under federal, state and local regulations. Most of the guns sold to Americans are made by Americans. Americans have a right — a constitutional right — to own guns, and 47 percent of U.S. households exercise that portion of the Bill of Rights by possessing at least one firearm.

The left, as it usually does, is going to demonize an industry just as they have the fossile fuel industry. Amusingly, that too is one of the left’s “apartheid divestment” moves.

Moral grandstanding, however, offers steady work, and the Chronicle of Higher Education reports a new front in “the battle against climate change”: “Student groups at almost 200 colleges and universities are calling on boards of trustees to divest their colleges’ holdings in large fossil-fuel companies.” Of course, not one share of those companies’ stock will go unsold because academia is so righteous. Others will profit handsomely from such holdings and from being complicit in supplying what the world needs. Fossil fuels, the basis of modern life, supply 82 percent of U.S. energy, and it is projected that they will supply 78 percent of the global increase in energy demand between 2009 and 2035, by which time the number of cars and trucks on the planet will have doubled to 1.7 billion.

Of course, that’s not a problem for fossile fuel companies because their stocks aren’t going to go without a buyer.  Institutional investors who actually are interested in helping build wealth in a portfolio will snap them up.  What will suffer? University endowment funds, that’s what. Most people would call that sort of moral preening a “self-inflicted wound”. It won’t change a thing, it’s moral relativisim at its worst and someone else will be happy to take the dividend income those boobs are foregoing.

Next up?

Institutions of higher education will, presumably, warn donors that their endowments will be wielded in support of the political agenda du jour, which might include divesting from any company having anything to do with corn, source of the sweetener in many of the sodas that make some people fat and New York’s mayor cranky. Or anything to do with red meat, sugar, salt, trans fats, chickens not lovingly raised . . . .

Bet on it.

~McQ

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Speaking plainly about force

One of the most useful things I’ve learned about communication is the importance of stating things plainly and concretely.*  But thinking about that lesson frequently makes politics maddening.

Euphemisms are the health of politics.  If a government really wants to get away with murder, even secrecy can be less useful than making that particular murder sound unremarkable, justifiable, sensible, or even dutiful.

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Economic Statistics for 1 Feb 13

The following US economic statistics were announced today:

It was another lackluster jobs report. Non-farm payrolls increased by 157,000 net new jobs in January. Average weekly hours were unchanged at 34.4, while average hourly earnings rose $0.04 to $23.78. The unemployment rate rose a tick to 7.9%. The labor force participation rate remained unchanged at 63.6%. The number of persons reporting themselves to be unemployed rose by 126,000 to 12,332. Those not in the labor force rose 169,000 to 89.008 million. The U-6 unemployment rate, the broadest gauge of unemployment the BLS produces, remained steady at 14.4%. Calculating the unemployment rate at the historical average of labor force participation, gives a real unemployment rate of 11.5%, up 0.1% from December.

The Reuters/University of Michigan’s consumer sentiment index for January rose 2.5 points to 73.8.

The final PMI Manufacturing Index for January rose 1.8 points to 55.8.

The ISM manufacturing index continued to move into positive territory, up 2.4 points to 53.1 in January.

Construction spending jumped 0.9% in December, and is up 7.8% on a year-over-year basis.

Car manufacturers are reporting monthly sales for January today. Ford, GM, and Chrysler all saw double-digit sales increases. GM: 15.9%, Ford: 22%, Chrysler: 16%. Other sales results today saw Volkswagen with a 7% increase, and Toyota with 27%. Overall, automakers are on track to sell 15 million to 15.5 million vehicles this year.

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Dale Franks
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And this person votes …

Really, no words from me needed:

Chicago safer than anywhere?  C-section babies?  And that old inconvenient Constitution and stuff.  Yes indeed, let’s all go for this more “modern” way of living, okay?

You’d almost think it was a parody but it isn’t.  Just a “proud Democrat”.

So much for an informed (and semi-intelligent) electorate (and yeah, some Republicans don’t get off much easier – just ask a few running for office about rape).

~McQ

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