Miscellany: 12/31/10

Quote of the Day

It is a wise father that knows his own child.
William Shakespeare

Alan Combes and More Political Spin on Polls and the Health Care Law

I was watching an interview segment on daytime Fox News Channel today when Alan Combes, one of the cable channel's liberals and Sean Hannity's former co-host, came on and once again claimed that persistently negative ratings are only because progressives/liberals wanted a stronger bill, e.g., preferably a single-payer, government-run system or, at minimum, the much-vaunted "public option".  In fact, Alan Combes is putting lipstick on a pig; about 40% of the country is conservative, and they overwhelmingly reject it. The 30% which are moderates and independents want some form of reform; there is a plurality, but not a majority of support for the current law.

The polls are a mixed bag with no clear consensus, but before proceeding, I think that the polls are poorly stated and misleading. The salient fact is that the American people are happy with their current private-sector health care solutions. I think there are concerns over costs, but I don't believe the people believe that government is effective at managing or controlling costs--and certainly don't buy the disingenuous claims that the government can reduce costs while expanding coverage and improving quality. (I have already pointed out  that a major cost factor is the fact that the population is aging, which is beyond public policy unless we have a new baby boom or pursue a more aggressive immigration policy for younger people. Another short-term factor is many people in good health during tough economic times drop coverage, which means fewer people are available to subsidize the costs of more costly insured patients.)

What kind of reform do I think there was consensus for? Catastrophic health reform. I don't think people are worried about covering a deductible or smaller health care bills: they are more concerned about what happens if they can't handle the big health bills--say, major operations or serious illnesses like cancer. They are concerned what happens if they get dropped  and can't find similarly priced coverage. But I believe this could have been done through alternative proposals, e.g., government as an insurer of last resort, more fully funding high risk pools.

What does seem to be clear from the sea of polls out there?

• most people realize there's no such thing as a free lunch. More government involvement means higher taxes, and it will have an adverse affect on the economy.
• they don't want anything to risk how they are currently insured (e.g., a large company junking its health care benefit, leaving workers to fend on their own)
• an unambiguous majority opposes the individual mandate.
• there are problems with the status quo. Many states have no or underfunded high risk pools. The small business owner does not have the economy of scale (or the ability to pool with other businesses) to attract the best rates or self-insure like large companies.

It's hard to argue that the health care bill was the biggest issue out there for the election, because many of the costs and benefits are still a few years off. Also, the public knows that as long as Obama is President, there's only so much the House Republicans can do other than starve the bureaucratic beast.

But Combes has to cease and desist spouting this nonsense that voters think the federal government which brought us the economic tsunami, a $13.8T national debt, Katrina, the BP oil spill, Iraq and Afghanistan has the ability to reinvent (or the credibility to deliver) one-sixth of the American economy.

If you ask me whether I like chocolate cake and ice cream, I'll say 'yes'; but if you point out I'm overweight and don't need the extra calories, I would agree I should take a pass. Even if I like certain benefits in a 2000-page bill, it doesn't mean I think the legislation is a good idea. And for Alan Combes to believe that the people support a bill nobody even understands (and we have seen already nasty consequences such as waivers for McDonald's  and other companies for certain insurance benefits,  not to mention accounting changes in retirement liabilities), really takes arrogance.

Quick Note: Lisa Murkowski (R-AK) Certified Yesterday for Senate Reelection

The first write-in election for a US Senate election since 1954 capped off a remarkable mid-term election after Joe Miller unexpectedly sniped her party renomination attempt.

Story of the Year: Health Care Reform Passage

The health care legislation was remarkable in a number of respects: its unlikely passage after Scott Brown's (R-MA) remarkable come-from-behind victory to succeed the late Ted Kennedy as a filibuster-sustaining Senate vote #41,  its approval without a single Republican vote, the soap opera of exception requests and other revelations, and a flood of state lawsuits challenging the individual mandate and unilateral Medicare/Medicaid coverage extensions (the cost of which is split with states, already reeling from the effects of tax revenue drops).

Winner of the Year: The Independent Voter

There is no doubt that the Republican voter base was highly motivated, and the Tea Party Express sniped several prominent GOP Senate incumbents or heavily favored candidates: Bob Bennett, Charlie Crist, Lisa Murkowski, and Mike Castle in particular. The 63-seat conversion by the Republicans was made possible by  independents and moderates, angry over massive, unsustainable federal deficits, a lack of checks and balances when the Congress and White House is headed by progressives (representative of only 20% of voters), and no effective handling of the core issue in the 2008 election: the economic free-fall. They wanted change, but on a centrist, not progressive agenda. Obama and the Congressional Democrats pulled a classic bait and switch, posturing as centrists and preaching a nonpartisan politics, but then cramming hundreds of bills down the nation's throat. They also lost credibility after the stimulus plan was sold on unrealistic expectations regarding unemployment. The fact that the victory was not accompanied with a more positive view of Republicans serves as a warning to the Republicans what the voters gave them could just as easily be taken away again and that voters don't vote in people just to see them kick the ball to the next Congress. Tea Party members suggest if the Republicans don't meet their expectations, they'll be out next election; actually, they are quite wrong: if the majority of voters feel that the GOP doesn't use their majority to tackle the economy and major issues like entitlement reform and the debt, it won't matter whom the Tea Party snipes in 2012.

The independent/moderate voters also showed that they weren't prepared to accept candidates whom weren't well-vetted and appeared to be too extreme or eccentric, e.g., Sharron Angle, Kent Buck, Joe Miller, and Christine O'Donnell.

Loser of the Year: Future American Taxpayers

The fact of the matter is the national debt stood at $10.62T when Bush left office and as of yesterday it was $13.87T. Despite all the rhetoric about TARP costs and the banks, the CBO earlier this month reduced its estimate of net costs to the taxpayer to $66B. Obama's austerity initiatives have been essentially trivial--token $17B and $100M initiative and a mostly symbolic freezing of pay for political appointees. After criticizing the Republicans for being hypocritical in failing to balance the budget or for not paying for up to $100B per year for the Middle East operations in Iraq and Afghanistan, the Democrats not only met the Republicans' lack of fiscal discipline but exceeded them by a multiple.

Whereas I supported the tax cut extension compromise (mostly because I was concerned about increasing taxes on job creators in the middle of a tough economy), I was not happy about the huge spending increases conceded to Obama in return.

In a rapidly growing global economy, other countries will have investment alternatives, and it's vitally important that we adopt globally competitive tax structures and get our debt in check--otherwise, we are going to find us facing European-style austerity measures. It will likely require a combination of tax increases (I've recommended a national sales tax, dedicated strictly to debt reduction) and spending cuts across ALL federal spending--domestic or defense spending, entitlements, etc. Earmarks are a start but account for less than 1% of the budget. Speaker-elect Boehner is talking about rolling back budgets to 2008 spending numbers; I would like to see more serious cuts.

But I suspect that Obama, in a transparent bid for reelection, will keep trying to play the class warfare card and will play good cop to the GOP's bad cop. The true loser in that game? The American people.

Sound Bite of the Year




Political Humor

A few originals:

• Outgoing Governor Bill Richardson (D-NM) decided not to pardon (long-deceased) Billy the Kid. In an unrelated story, President Obama has decided not to pardon John Wilkes Booth.
• President Obama said, "When I get back [from vacation], I really want to figure out a way where I can spend more time outside of Washington listening and learning and engaging with the American people." The New York Post just came out with a Presidential summary, which might help: He made 491 statements, went on 172 flights,  took 6 vacations over 30 days, gave 107 interviews, met with 61 foreign leaders, played 29 rounds of golf and at least 20 basketball games. On the other hand, Obama did meet with the House Republicans at their retreat one day, interrupted Republicans only a handful of times during their one-day summit on health care, met with his own cabinet 6 times, went to 7 backyard chats, and attended 17 town hall meetings.
  

Musical Interlude: Holiday Tunes

Bobby Darin, "Christmas Auld Lang Syne"

Miscellany: 12/30/10

Quote of the Day

We rarely think people have good sense unless they agree with us.
Francois de La Rochefoucauld

A Message From Childhood Friends

Today's birthday is shared with fellow southpaw Sandy Koufax (one of the greatest pitchers ever), the musical genius behind one of my favorite music groups ELO (Jeff Lynne), a great comedienne (Tracey Ullman), a once great golfer (Tiger Woods), the NBC Today Show co-hosts, a well-known radio/cable TV conservative commentator (Sean Hannity), and some obscure former professor and conservative blogger.



My Favorite Ballplayer of All Time Is Diagnosed With Cancer

Harmon Killebrew, during his playing days

One of the greatest home run hitters of all time, 74-year-old Harmon Killebrew, a "bonus baby" of the old Washington Senators before they moved to the Twin Cities, has been diagnosed with esophageal cancer. He was my idol growing up; it's quite unusual for a natural lefty like myself to bat right (actually, I'm  the only person I know whom can throw equally well with either arm, which came in handy in sandlot games where nobody else had a left-hander's glove; I have also batted left but not in a game). I intentionally emulated Killebrew's batting stance (not that I achieved his results...). When the major leagues let the fans vote on the players, I got ballots for my dad and my brother; I didn't care about the other positions, so long as they voted for Harmon Killebrew to play first base. (As I recall, not only did he win, but he hit a homer to validate my faith in him.)

Harmon Killebrew is a true ambassador of the sport, a gentleman and legitimate role model. He is being treated at the Mayo Clinic and expects a full recovery. My thoughts and prayers are with him.

NYC Public Unions: Let It Snow, Let It Snow, Let It Snow...

Julian Assange, instead of playing diplomacy-killing i-Spy, should try doing something constructive with his time, like bringing up a WikiSnitch website exposing the corruption of top-heavy, unproductive, self-serving labor union monopolists.

GOP City Councilman Dan Halloran reported that 3 plow workers and 2 supervisors, anonymous due to threats of union reprisals, said that there was a work slowdown, in some cases drivers being told not to plow a number of bypassed roads without explicit orders, in other cases skimming only part of the snow layer, thus requiring an inefficient, follow-up plow. There are other ad hoc news reports, e.g., of sitting plows with workers in them asleep in late morning/early afternoon. Why? The Sanitation Department workers were allegedly angry over supervisory demotions/pay cuts and layoffs, as Bloomberg sought to balance the books given lower recession-bound tax revenues, and attempted to embarrass the mayor in a passive-aggressive response while taking full advantage of the blizzard to attenuate the pay cuts. The union, of course, predictably denies any such conspiracy, but the fact is that New York City averages roughly 30 inches of snow per year and multiple areas to the north collect multiples of that. Not only that, but big snowfalls are not unknown. There was a blizzard just as I finished officer training in Newport several years ago; I remember walking through thigh-deep snow to eat at the mess hall, with strong winds off the nearby waters so cold my eyeballs ached, and the Navy generously offered to take the airport delays (a day or two) off our annual leaves.

I do understand that there are some challenges with fast-falling, accumulating snowfalls and this was not a typical snowstorm. But just like any civil emergency (including hurricanes, tornadoes or earthquakes), there should be an operational plan, with clearly defined priorities and logistics. It doesn't help if a plan exists (like the 2004 plan for the evacuation of New Orleans, before the Katrina disaster), if leaders fail to manage and control.

There are a couple of things I feel Mayor Bloomberg should consider as a lessons learned. First, he needs to adopt more of a fixed-cost versus time-and-materials approach to the annual maintenance of snow.  It's also important to collect baseline performance data. Unions have to absorb the risks of inefficient performance. It would be to their benefit to come in below the targeted figure, because otherwise, once they exhaust the budget, they still have to clear the streets--without any additional compensation; the unions would have little incentive to let slackers exhaust funding prematurely. (And no, we don't want a "plower fix" like the Medicare "doc fix" because the city and the unions won't address productivity issues.) Second, and more ideally, he should consider privatizing sanitation responsibilities. At minimum, he should consider situations where he can augment city services, already operating at full capacity, unable to respond effectively.

Apples and Oranges: The Pentagon Papers and WikiLeaks

I should note that Daniel Ellsberg, the source of the famous Pentagon Papers, fully supports Julian Assange, but, as Floyd Abrams, who represented the New York Times, points out in his excellent Wall Street Journal column "Why WikiLeaks Is Unlike the Pentagon Papers", Ellsberg did not release 4 volumes of documents which discussed diplomatic efforts on behalf of the United States by other countries in very frank terms. The release of those documents would have accomplished no purpose other than straining relationships with our allies. Abrams notes that national leaders deliberately misled the American people about the history of America's involvement in Vietnam (which Ellsberg did leak).

Embarrassing or outing individuals has more more of an effect on sowing distrust between diplomatic parties than impeaching the knowingly false statements of policymakers. The last thing we need to do is to make diplomacy even more difficult than it already is. As Abrams points out, this has more to do with the secrecy of the materials, not the nature of the materials.

The other point I don't think other commentators have focused on (in my brief review of other posts) is that fact that the parties within WikiLeaks could use information to engage in political blackmail. Julian Assange is really a law unto himself. Just like an author owns the intellectual property of his writings, the US owns its diplomatic documents, and theft of those documents has a material impact on US operations and costs. Where do you draw the line then? Could any leak be considered legitimate? My response is somewhat nuanced: I think if there is material evidence that policymakers are misleading the American people (which is different  than keeping certain process-related information discreet), it is legitimate to leak the information, but only the amount relevant to the specifics of policymaker misrepresentation.

Political Humor

A few originals:

• Mayor Michael Bloomberg, the day after Snowpocalypse, suggested that frustrated New Yorkers should just chill out and take in a Broadway show. Rumor has it Marie Antoinette herself will even serve cake...
• Former President George W. Bush, President Obama, and Mayor Bloomberg appeared on the game show "To Tell the Truth". The goal was to identify which leader handled emergencies in an effective, preventive, proactive manner. George W. Bush was asked to discuss Katrina, Obama talked about the BP oil spill, and Bloomberg spoke of the Snowpocalypse. The panelists correctly concluded that all 3 leaders were engaging in political spin and thus nobody told the truth...

Musical Interlude: Holiday Tunes

Crystals, "Parade of the Wooden Soldiers"

Miscellany: 12/29/10

Quote of the Day

What would you attempt to do if you knew you would not fail?
Robert Schuller

Sarah Palin and Newt Gingrich: The 2012 Numbers Don't Look Good

Obama's approval numbers have plateaued in the mid-40's since roughly mid-May, according to Gallup. The jury is still out in terms of what this means for reelectability. Others have pointed out that Reagan and Clinton rebounded from poor mid-term ratings to easily win reelection. One would think it's unlikely for the economy to remain in the doldrums during Obama's entire term, and it would seem that any improvement whatsoever would be to Obama's benefit: almost certainly the approval numbers would surge past 50%.

I'm not sure the conventional take, the parallel between Obama and the other two Presidents, is likely. There are a number of reasons why. First of all, people do not necessarily win based on favorability ratings: Governor Ehrlich (R-MD) in 2006 had 55% approval ratings, but Martin O'Malley rose to victory in a Democratic wave election. Second, just like Clinton stridently attacked G.H.W. Bush's "no new taxes" broken pledge, the Republicans will hone in on Obama's problematic issues with his broken class warfare pledge, Gitmo, the Afghanistan surge, etc. Another example is Obama's reversal, initially opposing individual mandates for the health care bill. Third, I think if Obama can't at least get unemployment numbers back to where he started (and I hope I'm wrong, but I don't see it happening), it's a tough sell. Fourth, we could have a critical incident, something like the Iran hostage crisis that plagued Carter. This could happen in a variety of ways: for example, a municipal bond bubble bust, a double-dip recession, another energy crisis of sky-high oil prices, a dollar crash, a successful terrorist incident in the US, etc.

On the other hand, Obama benefits from a highly fragmented GOP Presidential field. Scott Conroy, in an RCP post today, points that Sarah Palin, who has had more publicity than all other potential candidates put together with a cable reality show, frequent Fox News Channel contributions, and widely-sought endorsements during the recent mid-term elections, has some troubling numbers. In the latest CNN poll, slightly less than half would be at least likely to vote for her as nominee, considerably less than the two-thirds just after the election--and nearly 30% would vote for somebody else. (You take take this to the bank, and I would say even if I supported Palin: if Palin is nominated, a third party/candidate will appear. Has anyone else learned a lesson from Joe Miller's loss in the Alaska Senate race? You can almost write the script: after the fact, Sarah Palin will attack the party establishment, like Christine O'Donnell, for not having backed her...)

Newt Gingrich, as the former Speaker of the House, is unquestionably qualified and hands down, except maybe for Paul Ryan, the best "new conservative" idea man around, and probably the best Republican I would like to see debate Obama. Getting rid of the Clinton deficits gives him unquestioned credibility on a key issue. The problems I see with his candidacy: I think the voters want to see a competent executive, someone who can work with the opposition, and somebody untainted with Washington insiders. Pawlenty, Romney, and Huckabee have all been able to work with opposition party legislative leadership. Second, in the CNN poll, he's picking up a 40% or so "unlike/no" vote (second only to Palin's).  I suspect if Gingrich runs, he doesn't really expect to win, but I think what he'll really after is influence, i.e., getting his ideas into the party platform or talking points.

Now if we're talking about a predictable script, look at whoever wins the GOP nod to nominate former Florida governor Jeb Bush (assuming he stays out of the main event) or his charismatic protégé Senator-elect Marco Rubio as Veep. I think the GOP wants to send a message to the Latino community, just like George W. Bush signaled that he wanted to name Miguel Estrada to the Supreme Court by nominating him first to the Court of Appeals. (Jeb Bush is not a Latino, but he has a Latina wife.) Also, Florida, with two newly-awarded Congressional districts (and electoral votes), has become a critical swing state.

The Kissinger Kerfuffle: The Danger of Speculating Hypotheticals...

"Let's face it: The emigration of Jews from the Soviet Union is not an objective of American foreign policy. And if they put Jews into gas chambers in the Soviet Union, it is not an American concern. It may be a humanitarian concern." National Security Advisor Henry Kissinger, Nixon White House Tape, 3/1/73

To read this, one should realize that Kissinger, a Jewish German-born immigrant, lost a granduncle, three aunts and other relatives to the unspeakable horrors of the Holocaust. In my opinion, Kissinger puts together a convincing explanation of the context in a recent Washington Post column. Kissinger explains that the Nixon Administration had begun low-key diplomatic discussions in allowing Soviet Jews to emigrate from the USSR under the 'realist' diplomatic policy. Around the time of the tape, Jackson and Vanik (Senate and House Democrats) were drafting an amendment to a trade deal which explicitly wanted most-favored-nation status (desired by the USSR) tied to human rights, including the unobstructed emigration of Soviet Jews. (At the time, there was a controversial "barrier-to-exit" tax assessed to relevant emigrants.)

Kissinger's main point is that we have to look at negotiated diplomatic agreements in terms of the "big picture"; it's not that you are indifferent to moral injustices against relevant minorities, but it's more productive to discuss these concerns quietly. For one thing, we have no control over how other nations treat their citizens, and there's a question of a loss of face: for example, what right does the US have a right to single us out explicitly for injustices, given how they have historically mistreated Native Americans or African Americans?

Kissinger said, in the above quote, seems to be saying that we are willing to throw Soviet Jews under the bus because the only thing we care about is large-scale diplomatic agreements and treaty confirmations, but what he's really saying is that meddling with a carefully negotiated treaty can be counterproductive, with the other nation responding in a passive-aggressive manner. He exaggerated the nature of a violation of human rights to emphasize the point at hand.

Indeed, I agree with Dr. Kissinger, not in how he said it, but in what he was trying to convey. We can't tie up diplomatic negotiations by adding incidental conditions to an agreement's complexity, thus enabling its failure. Human rights violations are unconscionable and reflect on those authorities whom enable or sustain the practice. The United States is NOT the world's policeman. What we can do is to point out quietly that adherence to human rights contributes to trust between countries which is to the benefit of both countries.

Political Humor

A few originals:

• I'm not saying Sarah Palin is running for President, but the posters around New York City are promising a snow machine in every garage...
• Everybody is making their resolutions for the new year. President Obama promises to "spend more time outside of Washington talking to listening and learning and engaging with the American people". The House Republicans are putting their own resolutions in writing: (1) cut spending, cut spending, cut spending; (2) repeal and replace ObamaCare; (3) simplify taxes and regulations; (4) reform entitlement programs; (5) privatize the GSE's; (6) audit the Fed...

Musical Interlude: Holiday Tunes

The Ronettes, "Sleigh Bells". I remember this song from my high school choir Christmas concert...

Miscellany: 12/28/10

Quote of the Day

One person with a belief is equal to a force of ninety-nine with only interests.
John Stuart Mill

Joe "Sore Loser" Miller (R-Denial) Gets Shut Out in Alaska Supreme Court;
Federal Judge Beistline Lifts Certification Stay, Dismisses Miller Lawsuit

I regret I didn't keep my readers updated on Joe Miller's quixotic attempt to disenfranchise nearly 10,000 Alaskan voters by positioning the election to the US Senate as a spelling bee and a test on penmanship. Last Wednesday the Alaska Supreme Court rightly voted on all counts to sustain the lower court ruling saying the election board acted appropriately in allowing phonetically similar spellings of Murkowski's surname to count and ruling that Joe Miller hadn't properly substantiated his fraud allegations.

Miller yesterday indicated that he would not seek to bar lifting of the injunction; the federal judge today lifted the injunction, meaning the election board will certify Lisa Murkowski's election over the next couple of days (so the reelected senator is able to be sworn in next week with the rest of the 112th Congress).  The question is whether Miller has permanently damaged his potential candidacy for Begich's seat in 4 years. (Of course, there is some speculation Sarah Palin might be looking at that seat for herself...)

Sallie James/CATO, "Persistent Trade Myths": Thumbs UP!                               

Ms. James, in the embedded podcast, points out nicely many of the themes I've been pointing out: for instance, trade has become the whipping boy for job losses, but in fact fewer manufacturing jobs have more to do with a more productive workers and increased automation. (One must as well bitterly complain about that nefarious agricultural technology having cost the jobs of millions of farmers! ) She also discusses Paul Rubin's excellent Wall Street Journal article, "The Protectionist Instinct": win-win trades. I recently mentioned notorious US protection of its ethanol industry, at the expense of suppliers like Brazil, a country with a rapidly growing middle class, coveted target consumers of American goods and services. There's also the heavily protected sugar industry; it doesn't keep the cost of baked goods, candies, etc., globally cost competitive.

She references Daniel Griswold's CATO webpage. Here are a few pertinent Griswold column facts:

• "It's not about access to "cheap labor," either: More than three-quarters of outward US manufacturing investment goes to other rich, developed economies like Canada and the European Union...From 2005 to 2009, foreign manufacturers invested an average of $87 billion a year in US factories...while US manufacturing companies were investing an average of $45 billion a year abroad." [Remember Barack Obama's phony job-killing policy wanting to punish US companies for building their overseas operations? An incentive to invest in a country with the second highest business tax rates in the developed world? What do companies do to cut costs (and taxes are a cost)? Yup, cut jobs...]
  
• [Daniel, why do we want companies to invest in their overseas operations?] "In 2008, US companies sold more than $6 trillion worth of goods and services through overseas affiliates — three times what US companies exported from America....Almost 90 percent of what they produce abroad is sold abroad.."
• [Daniel, how does Obama's ill-advised trade/tax policy affect the bottom 95% of American workers?] "The $26 billion the U.S. government collects each year from tariffs amounts to the most regressive tax it imposes. Remaining U.S. trade barriers drive up the cost of living for low- and middle-income American families, who spend a larger share of their income on goods subject to the highest tariffs, such as food and low-end clothing. Repealing those tariffs would be a tax cut for the poor."
  
• [Daniel, what do you think about Obama's crony capitalism?] "Protectionism is just another form of subsidy for politically connected producers. The same government that bailed out General Motors and Chrysler protects other special interests with tariffs and production subsidies [and also carries] water for the United Steelworkers union, textile magnates, and the sugar industry by supporting anti-competitive trade barriers."
  

 



Amazon Is Transforming the Marketplace

Yesterday's discussions on energy and the public schools initially started as an introduction to this segment. I wanted to talk about the conditions that make economic growth possible. It's really impossible to overstate the damage that an inexperienced, incompetent President and the 111th Congress have done to this country. Fundamentally we have built an economy that is based on liberty, hard work, persistence and innovation.

Let me start with small companies. (Among others, Moya Mason has accumulated a nice summary page of facts and figures about new companies and attrition.) It might be interesting to note some important facts relating to why a number of smaller companies fail. Poor business planning, inadequate capital, (lower) education level and/or poor managerial/accounting knowledge and skills, and insufficient owner commitment/motivation (e.g., a desire to work for oneself, being responsible for other employees, etc.) make a difference. Not all businesses fail because of bankruptcy; for example, some small business owners (e.g., single-person) clear a modest income, but a company has offered a job for more money and/or fewer hours. Maybe the business didn't achieve its goals (e.g., profit, market share, or growth) or required an excessive number of hours affecting one's quality of life.

If you pick any item out of what I just discussed, you can find a rationale for a conservative economic policy: if the business, for instance, finds its limited working capital and hours eaten up by government taxes/fees/mandates, time-consuming paperwork, and fees for expensive lawyers and accountants, etc. Playing winners and losers doesn't help. For instance, since many of my clients are larger organizations, I do well when my clients do well. I have no incentive to build my own practice if, say, my clients put off projects because of budget problems. There are other insights as well: for instance, if I was to make more by collecting unemployment than by subcontracts, what's the point of marketing myself for a new opportunity?

Of course, it's not just Obama whom has increased the federal payroll; many of the jobs created during Bush Administration were also federal (e.g., DHS/TSA). But we have a number of professions (e.g., legal or medicine) where growth is unsustainable. There are only so many costs you can put on business; it distracts business from their core functions and saps resources.

The reason I went off on energy is because it affects businesses in multiple ways. For example, $5/gallon gasoline or diesel may adversely affect store traffic, shipping costs, or your ability to hire the right people or to bid on a project.

What should we be doing? Avoiding things like the FCC's recent power grab to regulate the Internet; promoting free trade legislation which opens more international markets for companies like Amazon.com.

Let me start the remaining discussion by noting that I do not hold Amazon stock, but I have been an Amazon customer for years.  (An ex-college professor who likes books? Go figure...) Amazon has broadened its product mix over the past few years.

The day(s) after Christmas are among the top shopping days of the years--and, of course, it's the time you return those gifts that aren't in your size or are duplicates you don't need.

Amazon has patented an intriguing new rules-based technology which, in theory, could drastically reduce the time, cost and effort of gift returns. It would require all parties to be in some Amazon-connected network. I do not know how they intend to implement the concept, but they've had a wish list concept. If someone buying you new clothes got the size wrong, you can have the size automatically adjusted (if available). Or if a friend already purchased that new country CD for you, your second friend's transaction will fail, and he or she will get an interactive or email notification. Perhaps a food gift is incompatible with your known allergies, and you can instead be given an Amazon gift certificate for the value of the gift.

One principle I've repeated on several occasions is that we should design systems to eliminate human error or unnecessary activity. Anytime we can proactively eliminate the hassle from a shopping experience, the better.

Diagram from Patent 7,831,439, Granted to Amazon.com

Political Humor

A few originals:

• Congressman Danny Davis and former US Senator Carol Moseley Braun, Chicago mayoral candidates of color, have warned "First Black President" Bill Clinton not to intercede in the upcoming election on behalf of his former senior policy adviser, Rahm "Dead White Fish" Emanuel. Bill Clinton may even find himself stripped of his honorary black American status...
• New York City residents and visitors are angry over the city's sluggish response to the recent snowstorm. The biggest snow job? No, not the unplowed side streets: Mayor Bloomberg's press conference today.

Musical Interlude: Holiday Tunes

Aretha Franklin, "Winter Wonderland"

Miscellany: 12/27/10

Quote of the Day

Not a day passes over this earth but men and women of note do great deeds, speak great words and suffer noble sorrows.
Charles Reed

Counterproductive Progressive Energy Policies: We Need To Change Course NOW


It may seem unusual that an MIS academic and IT professional is writing a political blog but not (yet) a technology blog. But in fact I have done a lot of interdisciplinary research, and I'm always fascinated with innovative approaches to problem-solving. Take, for instance, the question of personal transportation. There are roughly a quarter million registered vehicles, of which maybe 55% are passenger cars. How do you fuel these? With oil prices, anticipating a robust global recovery, already heading close to $100/barrel and gasoline prices up nearly 16% over the past year (beyond wage growth), I'm sure Ben Bernanke should be very nervous... The last thing we need is an energy bubble, but keep in mind this is one artifact of a cheap dollar and the lack of oil independence, something the current Administration has fought off tooth and nail using the BP oil spill as a rationalization for progressive environmental policies...

We can talk about ethanol, but ethanol not only is less energy-efficient than gasoline, but it's incompatible with existing pipeline structures, requires considerable fertilization (and relevant pollutant runoffs in our waterways), and competes with food (e.g., escalating corn prices). We can talk about all-electric cars but there's a question of range and infrastructure (charging stations or battery replacement, available outlets (e.g., open parking areas))--and right now most power generation is carbon-based.

One interesting development is advancements in natural gas exploration and development,  which  have vastly increased domestic supply, to the point natural gas is selling for a fraction of the price just a few years ago. There had been a focus on converting buses and trucks to run on a compressed form of natural gases--until prices exploded. There may be a pick-up in converting coal-based power plants to natural gas ones; however, utilities realize that the supply/demand could change by the time a plant design translates into an operational unit.

There are other issues--including the compatibility of energy sources with existing engines (that's why, as most people probably know, the mix of ethanol with gas is usually capped at 15% or less of total volume). Ideally your fuel mix would be compatible with a quarter million registered vehicles on the road. There has been a lot of interest in algae-based fuels; algae don't compete with the food supply and under certain circumstances yield fuels consistent with gasoline-powered engines. Algae can continuously produce fuel in (say) 10-day cycles. The issue is not proof of concept but scalability (current yields are not enough to put a dent in total fuel demand).  A full discussion of this topic is beyond the scope of this post, but there are some good summaries elsewhere.

The reason I've gone through this discussion is to show the complexity of the business and economics of energy. There are a number of things, but the policies of Obama and the other progressive Democrats are completely counterproductive. First, you can't and shouldn't try to pick winners and losers; protectionist policies (e.g., slapping tariffs on ethanol imports, farm subsidies, etc.) are counterproductive. For example, if Brazil is able to supply ethanol below our costs, we don't help the living standards of fellow Americans by paying an artificially high price for fuel. In the global market, Brazil would still have a compelling cost advantage. Second, there's the matter of unrealistic expectations. Even if the Chevy Volt sells well, there are production capacity issues, and in a tough economy, there are only so many $40K vehicles you can sell with 9.7% unemployment--and a low single-digit percentage of vehicles on the road. People should understand that the market follows the consumer--and if 98% of cars are not electric-powered, capitalists are reluctant to make huge investments in what appears to be a niche market.

So the bottom line is--whatever the progress in fuel development, producing a quarter of our own fuel and less daily--and leaving oil underground in American territory--with an out-of-control trade deficit is not a plan: it's a road to perpetual economic decline. Look at our overall economy--what do you think of the implications if people can't afford to commute because of out of control fuel costs? (If you thought the housing market was bad now, imagine if people in the suburbs find nobody willing to buy their house at any price--because potential homeowners have the same problem in commuting...) I understand environmental concerns, but the only way we're going to be able to afford the investment in environmental technology is with a robust tax base. And you are not going to get there with anti-growth economic policies (e.g., tax increases, high regulation, etc.)

A Rant on Public Education and Parents

There are other issues as well. We need a deep bench of scientists and engineers to lead the way to new business technology (e.g., many of the issues that need to be resolved to mass-produce algae biofuels). One way is through aggressive recruitment--and fast-track citizenship--of foreign-born science and engineering students and PhD's for our world-leading universities; but immigration discussions over the past 4 years have almost exclusively and counterproductively focused on low-skill, unauthorized Latino residents.

Another way is by shifting the culture towards what we see elsewhere versus the United States. I have found that most American IT recruiters do not really appreciate the fact I have 3 advanced degrees; ironically, I find many foreign-born recruiters are more intrigued by my educational accomplishments than my nearly 18 years of professional DBA experience. Now why is this the case? I hate to make broad generalizations, but within 3 years many of my students were earning more than I did as a professor--the road to a PhD included living for 2 or 3 years on a few hundred dollars a month which barely covered my basic school and living expenses. The typical tenure track is about 7 years;  you teach four or so courses/classes, hold office hours, prepare lesson plans and assignments (Shakespeare doesn't change year to year, but technology does), perform university service (e.g., committee assignments), advise students--and also work on original research. This is no exaggeration--I was averaging over 70 hours a week as a professor, and that didn't include in my case looking for new/temporary academic positions my last 2 years. Maybe if I had achieved retirement tenure, the work load would have been less. (Some professors in my area also had lucrative consulting gigs, but I was not so fortunate.)

This was not intended to be a personal rant but to explain that for almost a decade, I worked long hours for below-average compensation--and had my academic career snuffed out in the early 90's by a nasty recession. And it took a while for me to get my professional career restarted.

Today there's a lot of prestige to becoming doctors or lawyers, and this is not to demean these professions, but how many times do you hear the same about becoming a medical researcher or a scientist? Or even take careers as professional engineers, actuaries, or accountants: not only are curricula challenging, but in many cases there are long exam paths to certification and/or continuing professional development requirements.

Here's the point I'm getting to: there is a huge push, outside the US, for students to compete for, say, the few coveted seats in a university which is the ticket to a comfortable middle-class lifestyle. If you don't make the cutoff, it may mean a lifelong struggle to make ends meet.

For a long time in the US, fairly low-skilled work, e.g., work on an auto assembly line, meant a healthy wage, a nice retirement--without a college degree.  Or maybe with a 4-year college degree, you joined an IBM or some other corporation which all but guaranteed a job for life, without an incentive to get an MBA or advanced degree unless you rose to management.

In short, I really think that we are heading in the same direction as other economies. I am aware, of course, there has always been stiff competition to get into the name schools (e.g., the Ivy League). But--and this is why I'm always ranting against teacher unions--doing the minimum to get your job ticket punched is no longer a viable strategy. We need a paradigm shift in the minds of parents; they need to be as obsessed with their kids getting ahead--where students attend extra classes on their own, maybe even study on Saturdays or through summers at their own initiative, not simply for bad grades. I'm not saying kids shouldn't have fun or do away with family vacations, but the amount of time kids play video games, watch TV, hop from one after-school activity to the next, etc., I think, is staggering.

I was a special case; my folks didn't have to push me. I was mostly bored with middle school until I encountered a rigorous sixth-grade English teacher. I liked teachers whom expected more from me, and I wasn't satisfied with just meeting their expectations. In high school, my biology teacher took me aside after class one day and told me I didn't have to attend class anymore--he was giving me my A. He explained it was unfair for me to sit in a class where I was at a different level than the rest of my class and he had to focus on the other students.

I think this is far more serious than Barack Obama or Education Secretary Arne Duncan's lip service to public charter schools. We need to get away from political correctness in the classroom, self-esteem, and other related progressive nonsense and get back to the core basics of reading, writing, math and science. (Even many of my better students couldn't write a well-structured, readable essay if their life depended on it.)  To be honest, the libertarian in me objects to the concept of public schools and colleges altogether for exactly the reasons we are seeing in New Jersey and elsewhere. I just have zero faith in the ability of teacher unions to make the kinds of concessions necessary.  If I had a child today, I would probably send him or her to a private school, even if I had to take a third job to pay for it.

Political Humor

A few originals:

• There are reports that Secretary of State Hillary Clinton is considering stepping down to spend more time with her family, Bill and newlywed daughter Chelsea. I'm not saying that I don't believe her, but it would help if her family still lived at home.
• Outgoing Congresswoman Carol Shea-Porter (D-NH) blames the moneyed interests of the Chinese for the Dems' losses in the mid-term elections. (After all, the Chinese bought a number of T-bills to cover Democratic super-spending.) You know what that must mean: yup, Oliver Stone is probably looking for a conspiracy between George W. Bush and the Chinese.

Musical Interlude: Holiday Tunes

Mannheim Steamroller, "Christmas Lullaby"

Miscellany: 12/26/10

Quote of the Day

You have to know how to accept rejection and reject acceptance.
Ray Bradbury

Death Panels II: Section 1233 The Sequel:
Obama Administration By Fiat: Thumbs DOWN!

Remember how former Representative Alan Grayson (D-FL), my 2009 Jackass of the Year winner, suggested that the GOP health care plan for sick people was to die quickly? I can predict that Sarah Palin will have something to say about the Obama Administration's attempt to test the boundaries of the separation of powers with a new Medicare rule which will cover "voluntary advance care planning" as part of an annual office visit. The Democrats couldn't get it through the front door (i.e., legislation) so the administration is doing an end run to accomplish this end by administrative fiat, which I consider to be unconstitutional.

"Advance care planning" is a euphemism for end-of-life counseling. The presumptuous progressive government has decided that the real problem is that there is a crying need (not identified by the private sector, of course) for the little people to be educated on their rights not to receive life-sustaining care. You see, liberals know that because they have special telepathic powers with critical-care patients unavailable to the rest of us mere mortals; critical-care patients communicate only if the government had stepped forward to "educate" them on their rights to not have their lives spared, they would have made the 'right' decision  (because they need Big Sis in their lives to help them with all of life's big decisions).

The government is trying to put lipstick on a pig here: it's claiming it's only thinking of giving people information they may not have or realize, that they have the right to forgo expensive technologies that (of course) will not improve their quality of life and do little more than postpone the inevitable. No doubt there will also be the subtle nudging that surely they don't want to leave their loved ones with huge bills--and wouldn't they like an end to that pain they're experiencing? Whatever people will say under normal circumstances, of course, is likely to be different when they are fighting to stay alive. Do it for the Gipper--do it for your family, do it for your country. As for Mr. Grayson--this really is a health care policy that implicitly says "die quickly"; and there's not a GOP or conservative fingerprint on it.

Make no mistake: Medicare, with escalating expenditures as the large baby boomer generation transitions to retirement, would directly benefit from a reduction in demand for expensive technology and more labor-intensive medical care. Linking this policy to physician compensation is, in my judgment, a breach of ethics and a conflict of interest. I feel strongly that the medical profession should be in the business of preserving life--not counseling its ending. A patient has the right and responsibility to discuss end-of-life issues with his clergyman, lawyer, psychologist or other party, independent of insurance (private or federal).

Reminder: Man of the Year 2010

I posted my selection in an earlier post today. I also provide some contextual comments about my prior 2 selections.

Sunday Talk Soup

I leave it to the reader to watch the video podcast of NBC's Meet the Press today or read its transcript. But Bernie Goldberg's still prescient observation of the media's "slobbering love affair" with Barack Obama was in full force. Bob Woodward, who I normally respective, discussed Obama as doing a "great job" as a manager, he "so smart", "so celebral", his repeal of "don't ask, don't tell" as the civil rights issue of the decade. I did think Tom Brokaw's observation on the tax deal was quite correct--on this matter, for once, Obama did take the issue from the front instead of the back. But let's have a little reality check here.

• "Don't Ask, Don't Tell" did NOT prohibit gays from service in the service--in fact, gays discreetly served in the military before DADT, because I met a couple of lesbians while I worked in Orlando. The repeal deals more with an incidental right of expression, not directly related to military duties, but don't compare it with the social injustices experienced by people of color. I think any effects on recruitment will be modest at best. Whether gays already serving now feel better about themselves is more of a quality of life or perhaps a morale issue. I still don't think discussion of one's intimate life has a place in the professional duties of a soldier.
• So help me if I hear one more time about the productivity of the 'lame duck' session with the tax cut extension, repeal of DADT, and the START treaty: let me remind the reader of a few salient facts: all of these issues could and should have been addressed BEFORE the election. The ONLY reason they weren't, I'm convinced, was for political reasons, i.e., they wanted to shield Democrats in red/purple districts/states from tough votes before the election. Second, in the lame duck session, the Democrats still had 58 senators and a huge majority in the House. All the Democrats had to do was peel off 2 Republican senators--and at least 4 GOP senators were retiring--to get closure on any key vote, and 9 votes for the new START Treaty (the old one got over 90 votes). The only way the Republicans could stop anything was to vote as a bloc. If a bill was not partisan, a filibuster would be difficult to sustain. Third, DADT had been reversed in the courts and on appeal; I prefer policy making in the legislature than the courts, but to a large extent, the court wins made repeal of DADT all but inevitable.
• I think Obama is reasonably intelligent, but I'm not particularly impressed with his genius. I've explained in past posts I think Obama is obsessed with how other perceive him and has a hard time trying to connect to his audience (the latter point was raised in the program). I also believe that he underestimates the intelligence of his audience (i.e., "those clinging to their guns and religion", "voting against their self-interest", etc.) Dozens of polls constantly registering disapproval of the health care reform bill--it must be he's not getting his point across. Obama is so self-assured he's right, it never occurs to him that the majority of the people simply disagree with him. I have a healthy ego myself, but the main difference with Obama is that I respect the limits of my knowledge and I recognize the legitimacy of an opposing point of view. Obama, on the other hand, has this cocky attitude that "you can't seriously be thinking that", all but calling his political opponents stupid.
• On the leadership point: let me remind people that Obama could have and should have led the way on all the major legislative issues; I am convinced that the reason he hasn't is because he doesn't want to risk his legislation being shot down, so he cheers from the sideline. Why did he suddenly compromise on the tax cuts? Well, first of all, the Senate GOP filibustered, as promised, the House's passage of a class-warfare tax extension. In the meanwhile, taxes for everyone was due to go up on January 1, and so if he wanted the extension, he had to cut a deal. He was politically vested in middle-class tax cut extensions. So he had to move and couldn't afford to wait until the new Congress.

Political Humor

A couple of originals:

• The TSA is now checking out insulated thermos jugs and coffee mugs. I have another suggestion: if a passenger asks the flight attendant for a match to light his crème brûlée flambée, just say 'no'. 
• The Treasury Department has approved humanitarian aid exceptions to trade sanctions on Iran, Sudan or North Korea, including weight loss supplements, salt substitutes, microwave popcorn, and beer. Apparently these countries also have agreements to carry NFL football games...

Musical Interlude: Holiday Tunes

Ray Coniff and the Ray Coniff Singers, "12 Days of Christmas"

And the 2010 Man of the Year Is....

Erskine Bowles and Alan Simpson

Our Winners: 

Erskine Bowles, Former Clinton Chief of Staff 

Alan Simpson, Former Senator (R-WY)

My third co-recipients (following John McCain in 2008 and Rick Santelli in 2009) get no stipend or trophy, just a few bytes in cyberspace and sincere acknowledgment and appreciation.

I usually try to tap into a bigger picture in my selections, which I think have been fairly unique. Take, for instance, the more obvious choice, Barack Obama in 2008. First, there had been a buzz building about his potential candidacy since his keynote address at the 2004 Democratic National Convention. I do think the way he was able to outmaneuver Hillary Clinton, the heavy favorite, by capturing most caucus votes (not awarded on a proportional basis) and holding his own in primary states, with proportional assignments, his ability to distinguish himself from the other senators because (as a state, not US senator) he had opposed the liberation of Iraq (a huge issue with the party base), and his innovative use of high technology and appeal to a coalition of new/younger voters was remarkable. But let's temper the enthusiasm: the only two successful Democratic Presidential nominees since 1964 had been centrist Southern governors (Carter and Clinton). None of the major Democratic candidates had any credible administrative experience, Obama's chief competitor was only barely into her second term as a US senator, and for all practical purposes, all the major candidates had the same progressive voting record. There was no true diversity of views in the field: you had candidates trying to assert which candidate was more ideologically pure on the same issues. (I think the centrist voters gravitated towards Hillary, ignoring her liberal voting record, because they considered her a proxy for her husband and his record in office.) Barack Obama beat, in my opinion, a very weak field for the nomination.

The election was not that remarkable; it was a change election year when the outgoing incumbent President had one of the lowest approval ratings on record; Obama had a campaign war chest multiple times larger than the cash-strapped McCain campaign; Obama had a limited track record and the advantage of youth; and the economic tsunami and ensuing economic uncertainty favored the safety-net Democrats. McCain found himself on shakier ground as the public shifted its attention from the improving picture in Iraq to the economy, where McCain admitted just a few years earlier he needed "to be educated". McCain made two devastating mistakes that led many independents and moderates to question his judgment: the selection of Sarah Palin as his running mate and the temporary suspension of his campaign over TARP legislation.

I'm not going to repeat my many criticisms of Sarah Palin here; some of my pre-selection posts discussed her as a potential candidate, but I had dismissed it because of the ongoing Troopergate investigation due to be released near the election. I thought it would have been unwise for McCain to risk an adverse finding. I'm personally convinced McCain loved the fact that he swerved the press and opposition with a choice nobody expected. But many people, including myself (although I deliberately low-keyed my criticisms of McCain during the campaign), thought he had undermined his experience argument against Obama with the selection of a first-term governor, not even halfway through her first term.

McCain abysmally handled the TARP situation from a tactical and strategic campaign standpoint. The Obama campaign had been trying to define a McCain Presidency as a Bush third term. The American public was largely against the bailout. Obama was backed into a corner: the Democratic-controlled Congress had to act. McCain could have used the situation to tap into public discontent and to distance himself from Bush. By unilaterally suspending his campaign without getting his ducks in a row, i.e., postponement of the first Presidential debate and an Obama agreement to do the same, McCain came across as rash or desperate, and Obama came across as more calm, cool, and collected, in effect turning the table on the basic advantages of an older candidate.

So then, why did I choose McCain as my man of the year? The interested reader can read the post, but let me point out McCain's 2007 campaign collapse and his subsequent cash-strapped campaign comeback from single-digit support status is one of the most remarkable stories in American political history. What made it even more stunning is the fact he had to fight off the attacks from media conservatives, whom loathed his initial Bush tax cut votes, his support for campaign reform, and (of course) immigration. But I also think that his election night concession speech is one of the most remarkable, elegant, honorable ones I've ever heard. If and when Obama is defeated for reelection, I will always believe that the beginning of the end was Obama's "elections-have-consequences" attitude, spurning McCain's open invitation for bipartisan cooperation, to use huge Congressional majorities to ram a minority progressive agenda down the nation's throat. When Obama chose to bypass McCain, one of the truly bipartisan leaders during his multiple terms in office, he all but killed bipartisan cooperation: Obama only seems to compromise when he doesn't have the numbers and he needs votes for his own key political self-interests (e.g., the middle-class tax cut extensions); the fact that he did not have a bipartisan mandate on health care, financial reform, or the stimulus didn't stop him at all, only conceding photo op opportunities, which really really aimed at manipulating the American people into believing single appearances of discussions on health care (where, in fact, he constantly interrupted Republican legislators, disagreeing with them) or to a House Republican retreat constituted his idea of post-partisan politics.

My choice last year, Rick Santelli, reflected the country's backlash against a spendthrift Congress and President, whom used their new clout not to focus on pro-economic growth policies, but to act on pent-up demands for progressive legislative priorities (including climate change and health care, which, if anything, increased economic uncertainty), all but ignoring the recession after a massive stimulus bill and associated morally hazardous or counterproductive legislation, e.g., mortgage assistance, auto company and state/local bailouts, cash for clunkers (what better way to help struggling lower/middle-class people looking for affordable vehicles than to withdraw the supply from the market, essentially driving up used auto prices?), etc. Instead of letting various markets find their bottom, all Barack Obama did was postpone the day of reckoning (e.g., the auto company bankruptcies); the Dems initially fought the auto bankruptcies tooth and nail, arguing nobody would ever buy a car from a company which had filed for bankruptcy; and then all of a sudden they decided spread-the-assets-around bankruptcies (that screwed over higher-standing bondholders in favor of Dem special-interest union interests) were in the country's best interests. It just wasn't that the progressives were enacting mostly ineffectual, counterproductive laws, but they were willing to spend whatever they could, running up the next generation's credit card while at the same time unfunded liabilities (social security and Medicare) were due to escalate as the baby boomer generation started to retire in 2007. Businesses and local or state governments have to cut back (after all, they have to balance their budgets), but Pelosi and company were in a state of denial: why, every dollar the federal government spends, after all, is a "stimulus". Hire someone to dig a hole and fill it up again? No problem--the worker's pay gooses the economy, no matter how intrinsically unproductive his task.

I have to admit this year's selection of Bowles and Simpson was not based on initial high expectations. As an academic and former business school professor, I'm skeptical of anything significant coming from task forces and commissions, and any business professional probably has probably rued the amount of time spent in meetings (like "that's one hour of my life I won't get back"). Second, like the GOP Congressional leadership, I was naturally suspicious of a commission to reduce the deficit; there are fundamentally two ways to close a budget gap: increase revenues or decrease spending--and the latter almost never happens, at least in Washington DC. With strident liberals like Jan Schakowsky and Dick Durbin (never mind strong conservatives like Paul Ryan), it seemed unlikely anything meaningful could come out of a commission that among other things had to wrestle with a 75% vote necessary to compel bringing it up to a vote in Congress.

Along the way, Alan Simpson, who always had a way with words, angered the liberal elite, making reference to 310 million tits on the federal government's social security cash cow. But the co-chair's plan, which I discussed at length in my Nov. 14 post, was a serious attempt at bipartisan compromise: instead of the typical class-warfare rhetoric from progressives like outgoing Speaker Pelosi, it seriously looked at the fact that the social security program never got the kind of revenues necessary to accommodate longer payment cycles (i.e., the actuarial "inconvenient truth" reflecting longer lifespans) with retaining the same retirement age. Progressives are in an unbelievable state of denial: do they honestly believe confiscating the transfer payments of 2% of retirees is going to resolve an increasingly insolvent entitlement program? Never mind the fact that higher income people are unlikely to break even on their/their employers' contributions... Some have even suggested that the 15-plus% of higher-earning worker payroll taxes should be considered an an "insurance policy", never mind the fact that the current social security system  is already a redistributionist system. But the Bowles-Simpson compromise takes on gimmicky annual adjustments (which typically have outpaced increases in the cost of living) and deferred eligibility.

Bowles and Simpson also did the politically courageous step of tax reform (simpler, fewer, lower income tax bands rooting out special-interest exceptions and even an American sacred cow of politics, the mortgage interest deduction), advocated deep cuts in both domestic and military programs, and set tough targets on the deficit and debt relative to GDP.

The majority of the committee accepted the compromise 11-7, not enough to make the 75% criterion necessary to bring the proposal to a vote. (Most of the adverse votes came from the House, including a couple of conservative Republicans worried that revising the tax-free exemption of health care may result in companies dumping their health care coverage under ObamaCare.)

What is amazing is that notoriously fickle senators, with one exception, accepted the general framework. This becomes particularly important in the upcoming mixed government with the GOP heading the House, and the Dems controlling the Senate and White House. Despite the deal on tax cut extensions, there is every indication that the Obama hyper-political mindset has not changed. He has insisted "triangulation"--Clinton's policy of trying to meld the partisan extremes during the last 6 years of the Clinton Administration--will not be his approach going forward. I suspect, like the Clinton-Gingrich budget confrontation, that the White House will attempt to maneuver the House into a politically unpopular position, figuring to draft off the Congress' low approval ratings.

Obama is in a state of denial; just like he couldn't understand people clinging to their guns and religion, just like he couldn't get his point across on health care, Obama is underestimating the unpopularity of his class-warfare politics. I think John Boehner is shrewd and will not overplay his hand. Everybody realizes that a $13.8T national debt is unsustainable. Like it or not, the Bowles-Simpson framework has provided a starting point with legitimate bipartisan credibility:

ERSKINE BOWLES: Yes. Well, Paul Ryan, who is head of the Budget Committee in the House, has already said 85 percent of what we recommend will be in his budget. And, as you know, the head of the Senate Budget Committee and the ranking member voted for it today. I think we have made enormous progress. I think the era of these deficit denials is over.

Miscellany: 12/25/10 Merry Christmas!

Quote of the Day

If there were no God, there would be no Atheists.
G. K. Chesterton

Holy, Blessed, Hopeful Christmas to All!

Giovanni Battista Salvi da Sassoferrato

One of the things that strikes me about this painting by a seventeenth-century Italian "Baroque Era" painter is that my middle sister has a photo of me holding my oldest niece as a baby almost exactly like this painting (well, I was wearing a flannel shirt and jeans...)

I am not an art critic, but as a matter of personal taste, I like simpler, more realistic images, not a lot of veneration of the baby, halos, etc. (Speaking of art in general, I am bored by what I regard as pretentious, obscure or provocative pieces. It's like how I view political writings or commentaries: I appreciate clearly organized, direct communication (regardless of the orientation, i.e., progressive or conservative). It's not that I can't follow rambling, self-indulgent, heavily-nuanced discussions (as a professional, graduate fellow and professor, I've literally debugged hundreds, if not thousands of computer programs written by other people), but I disdain the implicit elitism of people as if trying to impress other people by how smart they are. Writing well is very difficult work and somewhat of an art; intrinsically complex things cannot be made simple, but there are ways of writing about them, to structure them and hide unnecessary detail.)

The Legend of Santa Claus

One of the things that is predictable every Christmas season is that atheists will go on their predictable talking points, presumptuously comparing childhood legends like Santa Claus, the Tooth Fairy, and the Easter Bunny with Biblical stories (in particular, the story of Christ's birth). I never really was a true believer in childhood myths, but it was like a game to me. My folks played along with the myths; to me, it was more about exercising one's imagination as a child. I never really thought much about the fact that Disney's cartoon animals could walk and talk like people; I certainly didn't confuse them with real animals, and if I ever heard another kid trying to impress the rest of us by pointing out that animals don't really talk, I would probably have told him to get a life.

I've probably told my own story of finding out, the hard way, Santa wasn't real. My middle brother was in first grade (I'm about 3 years older), and he asked me whether I thought Santa was real.  I hadn't really thought about it; it was more like, I'll go with the flow--why should I care who really gave the presents as long as the gift tag bore my name? But, being the oldest, it was important to live up to my little brother's dare that I didn't really know about Santa; it was important to maintain the status of the all-knowing big brother. So I thought about the phony dime-store white beards and confidently noted, "Well, I think I saw some black stubble under that white beard." I was bluffing, of course. My brother looked at me in utter shock--he picked up on the hint, knowing there was only one person in the house with black stubble. My brother ran out, yelling out loud (for the benefit of all our other siblings, of course): "Mommy! Mommy! Ronald just said that Daddy is Santa Claus." My Dad was furious, and as I got my obligatory corporal punishment, he let me know in no uncertain terms that I "didn't have to spoil it for the others." I didn't really, but I don't think Perry Mason could have gotten me off...

Getting back to the concept of Santa Claus or Father Christmas, I'm not going to go the other predictable theme about how Christmas has gotten too commercialized, how the birth of Christ has gotten lost in what's become more of a secular holiday, where people feel compelled to give something to other people and certain gifts, like dried-out fruitcake, get repeatedly regifted. All  that is true, of course, but for me, the concern was more about the morally hazardous concept of giving someone a reward for doing the right thing. As a Catholic boy who went to confession, I never argued with my confessor that I should get rewarded for my just deeds. I knew a lot of fellow students got more stuff at Christmas, but I never really envied them.

There are numerous websites which chronicle the evolution of the Santa Claus concept. Perhaps at the risk of oversimplification, the image of St. Nicholas (until the beginning of the nineteenth century) was of a tall, thin, serious man. Washington Irving (the writer of "Rip Van Winkle" and other famous American literary works) wrote a satirical work "A History of New York" under the pseudonym Diedrich Knickerbocker. One of the things a writer does in satire is to caricature a person; the image of St. Nicholas was transformed into something the exact opposite: short, fat, and jolly. Irving then built on this imaginative take on St. Nick in a series of follow-up short works : he entered houses by the chimney. Now it didn't make a lot of sense to have a short, fat man constantly climbing up and down houses, so Irving imagined a sleigh which could travel directly from roof to roof. (The evolution of  the name 'Saint Nicholas' to 'Santa Claus' is intuitively obvious.)

For me, Christmas has evolved into occasional visits home with the folks and finding the 'right' gift (not necessarily the most expensive). This will vary by individual experience, but for me I'll often focus on some incidental comment in past communications, knowledge of hobbies and interests, etc. For example, one of my sisters and I were talking about how our maternal grandfather used to give us nickels to pick out penny candy at a variety store across the street from his grocery store. The proprietors of the variety store I'm sure didn't make much money off penny candy but loved our deliberations over what candy to choose from a large variety. My sister recalled that and wistfully remembered choosing chocolate non-pareils. So chances are, the next time I see her, I'll bring some Ghirardelli dark chocolate non-pareils... It's more than just getting her a present; it's a way of acknowledging her importance to me and in valuing what she has to say. Archetypal incidents of the first Christmas, e.g., the journey of Joseph and Mary to the ancestral birthplace, and the gifts of the Magi, are seminal in my conceptualization of the Christmas experience.

The Government Performance Act: A Promising First Step: Thumbs UP!

How many times have blog readers read me write about streamlining government? Much of my scholarly research has dealt with measurement issues (reliability and validity), behavioral outcomes, milestones, deliverables, etc. But what you often find is that evaluated parties try to game the system; this attitude was clearly displayed during the past decade's debate in education funding, tied to outcomes: teachers argued that what would come of using objective measures of student performance is that fellow educators would "teach to the test".  Paul Light in his Washington Post column gives a salient example in distinguishing between activities and outcomes: ICE went through every gimmick possible to hit a misleading record target of about 390,000 people over the border. (Without knowing the specifics, this might happen if you manipulate certain review periods to push out people earlier than normal. But borrowing from Peter to pay Paul is not a sustainable process; it's also comparing apples to oranges, because prior records were not achieved the same way.)

Paul Light traces the original GRPA (Government Performance and Rewards Act) which set the standard over the past 2 decades; it was intended to do much the same as the current legislation but it didn't provide usable outcome-based criteria/metrics or accessible/action-oriented management summaries. Light summarizes three principal benefits of the current legislation sponsored by Warner (D-VA) and others and passed earlier this week at the end of the lame duck session: (1) it requires explicit justification of metrics used; (2) it demands year-over-year comparative outcome statistics; and (3) it improves managerial assessment by improving report usability, with high-level takeaway summaries that can serve to facilitate managerial decision making.

Granted, President Obama is bored by these managerial processes (and perhaps some of my readers' eyes may glaze over), but suffice it to say that this is an invaluable first step in trying to compare and contrast relevant government operations for eliminating redundancy, improving consistency, and propagating better, more efficient business methods, processes, and outcomes. Clearly, I don't think it's enough (if it was enough, Chicken Little bureaucrats would have been coming out of the woodwork, screaming the sky is falling). It's something that House Republicans can build upon next term.

A Classic Reading From Ben Stein

I am a Jew, and every single one of my ancestors was Jewish. And it does not bother me even a little bit when people call those beautiful lit up, bejeweled trees Christmas trees. I don't feel threatened. I don't feel discriminated against. That's what they are: Christmas trees. It doesn't bother me a bit when people say, "Merry Christmas" to me. I don't think they are slighting me or getting ready to put me in a ghetto. In fact, I kind of like it. It shows that we are all brothers and sisters celebrating this happy time of year. It doesn't bother me at all that there is a manger scene on display at a key intersection near my beach house in Malibu. If people want a creche, it's just as fine with me as is the Menorah a few hundred yards away.

I don't like getting pushed around for being a Jew and I don't think Christians like getting pushed around for being Christians. I think people who believe in God are sick and tired of getting pushed around, period. I have no idea where the concept came from that America is an explicitly atheist country. I can't find it in the Constitution and I don't like it being shoved down my throat.

Musical Interlude: Holiday Tunes

Neil Diamond, "You Make It Feel Like Christmas". Any faithful reader knows I'm a HUGE Neil Diamond fan. I have done several musical interlude segments of Neil Diamond songs. But when Neil Diamond, a Jewish boy from Brooklyn, tackled the Christmas music genre over 20 years ago, even I had some doubts he could pull it off. But then I heard the first single released (or received airplay), "Morning Has Broken", and I had to buy the album. (Cat Stevens' version had been my favorite, but Neil redefined the song in his own style with the backing choir... Many pop artists have a signature original Christmas hit, and this track is Neil Diamond's...)

Miscellany: 12/24/10

Quote of the Day

What a father says to his children is not heard by the world; but it will be heard by posterity.
Jean Paul Richter

The TSA and PilotLeaks: Some Comments

I realize some readers may think I'm beating a dead horse by mocking the TSA over the full body scan/pat-down procedure. Whereas the issue of privacy is salient, there are a number of issues, including the intrinsic unmanageable nature of a huge bureaucracy. No one seems to understand how a tip on a potential terrorist at a US embassy managed to fall through the cracks of the system, not even making the no-fly list. Apparently there was a typo. Many people would have stopped at that and simply cursed at the administrative assistant or other person whom made the error. But that's not good enough; I've written posts explaining that systems should be designed with human error in mind. Let's just say, if the suspect was aware of the delicate nature of the id system, he could have slightly altered his name and/or any aliases.

I've worked with enough bureaucracies (private- or public-sector). I've mentioned in a prior post that at a federal installation  I had hundreds of megabytes of functionally unusable Oracle log files going back over 4 years, but it proved impossible to find someone authorized to allow me to purge these files (to make the space available for other data). I also tried to get a database replication server moved to another location to control risk; the government had simply demanded functionality of setups from prior contractors, even though the placement of servers defeated the purpose for replicated servers. These are hardly items taken of context. To give another example, Oracle had released a newer version of the application server I had been tasked to install as part of an upgrade and would have minimal impact on the application upgrade. But I was denied permission to install it on a sandbox server without explicit permission of the Navy project manager (then on an extended vacation).  (My rationale was obvious: it would eliminate the need for a second upgrade later.)

The more subtle point I'm trying to get across is that most people tend to look at surface details, not the big picture that GHW Bush famously called the "vision thing". So when the issue was brought up about the full body scan technology and the implicit full nude images, and whether that was an acceptable price to pay for safety on the airlines, two-thirds or more of Americans expressed support for the policy. This was, at best, a dubious and misleading result. First, most Americans don't realize that the reliability of this method to detect chemicals (i.e., the underwear bomber) is questionable, it is relatively easy to deploy image obfuscation technology, say, to mask private areas. Moreover, the risks of the vast majority of Americans are near-zero, and random searches would have a deterrent effect and free up resources to do behaviorally-based screens.

You don't have to be a rocket scientist to figure out some of the "big picture" issues, from a customer perspective: in a world where most people would be charged with a crime for touching someone's private areas or taking intimate pictures or videos without consent, it was sheer administrative arrogance not to anticipate resistance. Arguments that air travel is a privilege and not a right are frivolous: for example, as a consultant, I have, on occasion, had to make flight arrangements across the country with as little as 4 hours notice.

Most importantly, these screenings lead to a false sense of security. For example, it isn't even necessary to do something explicitly to put flight safety into question. Negligence during maintenance periods can also be a factor.

But the ABC News report (cited above) points out, one airline pilot, irritated about the fact that pilots are subject to the same rules (let's face it: a pilot doesn't have to result to bombs to down an aircraft--all he has to do is a lousy job flying the plane), points out an inconvenient truth: many airport employees do not go through a similar security but have swipe card access to vulnerable areas. The airline pilot decided to rant by publishing a few relevant Youtube videos (since pulled). I do not know the content of those videos, but it doesn't a lot of imagination to realize that swipe cards could be stolen or otherwise obtained by unauthorized personnel and items could be brought into sensitive areas without going through the same screening process.

The government did what was predictable: "shoot the messenger"; the pilot in this case had been previously deputized, and now the bureaucracy no longer trusted him because of his going outside of authorized processes and sent lots of officers to collect his weapon. (Folks, your tax dollars at work...) Here's the point: swipe card access is NOT a new issue. Now isn't it amazing that some female terrorists in the former Soviet Union can hide bombs in their undergarments and virtually overnight, all American women are suddenly screened as if they were potential suicide bombers; the underwear bomber tries to ignite a chemical weapon, and all of a sudden people are being patted down near or on their private areas; a zealot tries to ignite a shoe bomb, and right away, all American travelers have to have their shoes checked. But some airport employees are "more equal" than others and don't undergo the same screening; why is it, nearly 9.5 years after 9/11, we haven't tightened security procedures around airport employees? Is it going to take a tragedy by a rogue employee or a terrorist getting possession of a swipe card before the TSA addresses this mother of all security issues?

EPA Bent on Trying to Enforce Climate Change Policies by Administrative Fiat: Thumbs DOWN!

I don't intend to keep knocking Charles Krauthammer on his optimistic judgment concerning post-midterm Obama snatching victory from the jaws of defeat. But over the past week, the Obama Administration has announced unilateral policy changes which, in fact, did not clear a heavily Democratic Congress: there was the so-called net neutrality policy, where the FCC decided, by a partisan vote, 3-2, to initiate regulation on the Internet, and now there's this long-rumored threat of the EPA to start regulating greenhouse gas emissions, which certainly has been even more contentious in the wake of Climategate (a scandal that revealed manipulation of the academic review process to promote advocacy of related public policy and to suppress criticisms of  the research).

This is an administration which is proactively and aggressively stretching the limits of Executive Power at the expense of the Legislative Branch. (We haven't forgotten the health care reform law, which in my judgment clearly violates both the Ninth Amendment (individual mandate) and Tenth Amendments (state regulation of insurance) to the US Constitution.) What a lousy "Christmas present" to the American people... I am intrigued by news reports suggesting the new GOP-controlled House will open the session with a reading of the US Constitution.

Political Humor

Apparently, it took a team of people four days to put up the Obamas' Christmas tree. It kept leaning too far to the right. - Jay Leno

[First, Jay, Obama had to find a company willing to put the purchase on the government's tab. Second, Obama had to rename it a "holiday tree" to get it past the progressive censors. Finally, the real reason the tree kept leaning? It was all those ornaments. One word: EARMARKS.]

A town in Germany is having financial problems, so they passed a tax on hookers. Talk about balancing the budget on the backs of the people... - Jay Leno

[Well, you know, in a tough economy, instead of hiring a professional, folks will just do it themselves and save some money.]

Musical Interlude: Holiday Tunes

Trans-Siberian Orchestra, "Christmas Canon Rock". I have a large Christmas album/CD collection, but this song and Faith Hill's "Where Are You, Christmas" (which I embedded in a post almost 13 months ago) were the first Christmas tunes I downloaded commercially and are in heavy rotation on my Christmas music iTunes playlist. [For the official video, click here (right-click/open in new...). Embedding is disabled.] The observant reader will notice there are a couple of versions of "Christmas Canon" from TSO; this one, as the name implies, has more of a rock arrangement, prominently featuring a woman's lead vocal.

 [For the utterly charming official video of Trans-Siberian Orchestra's "Christmas Eve / Sarajevo" (Carol of the Bells/God Rest Ye Merry Gentlemen), click here.]