Quote of the Day
I hear and I forget.
I see and I remember.
I do and I understand.
Confucius
Monthly Blog Readership
There was a modest readership boost to a 3-month high (but still only about a third of the readers I had a year ago and roughly a half of what I had at the start of the year). I have noticed a few anecdotal issues with Google searches on the blog and suspicious stretches of no reader access to the blog.
For example, as I write, I haven't shown a pageview my blog since the 6 AM hour--some 18 hours ago. A progressive complaining about my Fed writeup or perhaps a fair use complaint of the heavily filtered and marked-up excerpt of Higgs' column I linked to? The latter would be frivolous in nature; much of what I excerpted and highlighted were points I have stated myself dozens of times in original commentaries. The basic point of the Higgs' excerpt was businesses not investing using commonly available government statistics, and it is not that surprising because progressives keep complaining about banks not lending, businesses not investing mountains of cash. Higgs is not discussing the Fed at all in this excerpt. What was my point? The nature and extent of Fed intervention in the economy is mostly pushing on a string with very bad unintended consequences. Think of an economic recovery like a fragile fire, and Democrats are dumping 2000-page bills on top of it, snuffing the recovery out. I'm arguing that the time you discuss new programs or regulatory regimes is AFTER you get back to a robust economy.
But the Democrats are the ultimate political opportunists; they had their best setup in years to ram their partisan agenda against a nearly powerless, vastly outnumbered minority on its heels following two blowout elections. They are totally clueless, of course. Let me give a minor example. A way that companies take on new employees is through contract for hires, typically with no benefits other than employer payroll tax contributions (if that). The last thing they want to hear about is NEW benefit costs or mandates (e.g, ObamaCare): they find it risky enough to bring on new workers with EXISTING benefits. What's my point? It's obvious from preceding context: what the Fed should be doing is jawboning misguided, counterproductive federal policies, unsustainable spending, and trillions in unfunded liabilities to seniors and others; those problems feed their own bubbles, the last things the Fed Reserve needs to worry about.
Getting back to the blog, it does seem that the readership has stabilized. Writing a blog is like writing songs; you can write something that you think is very well-crafted, and it barely registers a blip, and then one day, like September 12, you write a rant (in this case, about the Obama jobs bill--there were other things in that post, but I'm assuming it's the rant) and it spreads like wildfire--like 5 times the usual readership. It's never really clear what makes for a popular post. For example, I've written over the past few days what I consider some of the best, most clearly written posts around on social insurance and the Fed's dual mandates (I read literally dozens of other posts--I know what's out there on the topics), and I only got average number of pageviews.
Similarly, in the music field, you sometimes read about a song track that somehow got added on a CD at the last minute, e.g., Bob Carlisle's sentimental song about a father watching his baby daughter grow up, "Butterfly Kisses", that turns out to become the artist's signature song, a rare #1 crossover hit by a Christian artist over a decade ago. The song was so popular when it came out, I remember a music store tethered copies of the CD so they wouldn't be stolen.
Once again, only a modest number of international pageviews, with German and Russian readers tying for the monthly lead. My top 3 overall country leaders (since statistics became available spring a year ago), Denmark, South Korea, and Great Britain, have not shown a significant number of pageviews for the last few months combined.
Elizabeth Warren:
Same Old Same Old Social Democrat Populism
[This speech is in the public domain and has been reprinted all over the web. My only reason for printing Ms. Warren's speech here is if, in the future, the above embedded Youtube video is withdrawn.]
Transcript: "I hear all this, you know, “Well, this is class warfare, this is whatever.”—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."
Senator Scott Brown (R-MA) is a grown-up and should easily make short work of this predictable demagogue rehearsing the same old same old progressive talking points. Let me address the first part of partisan rhetoric not reprinted above. Ms. Warren mocks the GOP fiscal conservatives, using the alleged tax giveaways of (less than) $1T in higher bracket tax hikes, the cost of Medicare drug coverage late in President Bush's first term, and the wars in Iraq and Afghanistan.
How do we dispose these feeble-minded objections? Let me count the ways... More seriously, first of all, if Ms. Warren was more knowledgeable about federal revenues, she would realize that the sharp decreases in marginal top bracket tax rates after the Wilson Presidency, in the Kennedy/Johnson Administrations, in the Reagan Administration, and in the Bush Presidency (after the 2003 tax cut), did NOT show a collapse of federal revenues. In fact, the highest tax collections in American history were achieved during the Bush Presidency--NOT the Clinton Presidency. It's a fact; look it up. What's the difference? FEDERAL SPENDING. Now was it, as Warren suggests, a giveaway to the rich? No. By cutting taxes, Bush INCREASED the tax base. And not at the expense of the middle class, because the relative shift in tax burden was progressive in effect. And tax increases also did not improve federal revenues. That's because raising taxes decreases the tax base (at least once you reach a sustainable income level). But more to the point, even if you got an extra $70B a year from higher tax rates, Ms. Warren conveniently forgets that some three-quarters of the tax cut went to the middle class. Now if Ms. Warren was truly sincere about the lost revenue of tax increases, how could she simply ignore the far more significant tax cut "lost revenue" going to the middle class? Her whole line of reasoning is arbitrary and lacks any serious credibility.
Now let's talk briefly here about the Medicare drug benefit. Many conservatives, including myself, knowing that Medicare was even in worse financial state than social security, did not want to add a Medicare benefit that wasn't funded. As I recall, the talking point at the time was that funding of prescriptions would pay for themselves by controlling for far more serious health problems we were going to have to cover under Medicare anyway. But Ms. Warren is also arguing entirely disingenuously here. Is any Democrat seriously going to argue that Democrats were willing to let seniors pay for high cost of prescription drugs on a limited income? So that money was already going to be spent anyway, and no Democrat at all wanted to have seniors (or the middle class) pay for the drugs. There's only one bill they wanted to write. (Can you say the top income-earners?) Did Speaker Pelosi ever once seriously decide to repeal the Medicare drug benefit? ARE YOU KIDDING? That would have been the most fiscally conservative thing to do. No, in fact, Pelosi took great pride in passing the "doughnut hole" subsidies, which INCREASED, NOT DECREASED Medicare costs
No, the Dems have largely focused on two points: they wanted to institute price controls on prescription drugs (or a thinly-veiled substitute measure: pharmaceuticals often have to negotiate prices under state-run health programs like in Canada to maintain market share globally) and filling in the benefit coverage "doughnut hole" (where the insured paid the deductible amount in drug coverage) Once you cover your fixed costs--your overhead, etc., the main cost issue is of meeting or hopefully beating variable (the time and materials for medication production). In essence, by the government importing American drugs from Canada, the pharmaceuticals would lose some of their ability to cover fixed costs because domestic sales would be cannibalized. The correct policy response would not to engage in crony capitalism or de facto ineffective price controls but to promote rigorous competition in drugs by shortening time of approval for competitive drugs.
Now let's talk about Iraq and Afghanistan. Ms. Warren would have you believe that there would have been NO costs for the Iraq and Afghanistan wars/nation rebuilding of about $100B/year. This, once again, is entirely disingenuous (among other things, Obama certainly hasn't achieved any cost savings, and keep in mind that the Senate Democrats could have filibustered relevant funding from the get-go; Democrats like Hillary Clinton have complained that "feeble-minded" George W. Bush somehow misled them on war authorization, but that's just a politically convenient excuse. Let's put this discussion into perspective: the first Gulf War had a lot to do with Iraq's conquest of Kuwait and Saddam Hussein's anger over Saudi's not forgiving part or all of loans funding its prior war with Iran. The Saudi king asked for American military assistance because Iraq's military was within easy strike distance of Saudi oil fields, something posing an economic threat against the US and other Western democracies. American forces were stationed in military bases near the eastern Gulf border, but Islamic radicals considered a foreign "crusader" presence on Saudi soil (even far away from the crown jewels of Islam, Mecca and Medina) unacceptable and staged attacks against Americans after the first Gulf War (e.g., the Khobar Towers, the USS Cole, etc.) Osama bin Laden and Al Qaeda declared war against the US and the Western democracies by the mid-1990's. Ms. Warren, unless totally in a state of denial, knows that the Taliban sheltered OBL through the aftermath to the 9/11 attacks. In fact, most Afghanistan costs and casualties occurred after Obama became President; the Democratic talking point to that point was that Bush had been diverted from the "good war".
Now let's consider Iraq. Right or wrong, the decision to invade Iraq in 2003 was based on flawed intelligence--the same intelligence that Congressional Democrats had, in fact, also been briefed on, and let us not forget that the US had already decided during the Clinton Presidency on a goal of regime change in Iraq. There had been a bipartisan rejection of Hussein. Ms. Warren may argue that the inspections should have been given more time to work, but keep in mind that Hussein only agreed to UN inspections with over 100,000 American troops in the area. There were high costs associated with that presence.
You can argue all you want about us fighting the wrong war, but when we know the damage that a couple of dozen terrorists did with limited funding on 9/11, there was a concern about Hussein, whom had already attempted to assassinate George HW Bush on a visit to the region during the Clinton Presidency, exacting revenge against the US because of the first Gulf War; we knew that Iraq had nuclear know-how (remember the Israeli attack during the Reagan presidency?) and stocks of chemical agents when Hussein threw out inspectors in the late 1990's. There were also something like 17 UN resolutions that Hussein spurned. So there was some concern about what Hussein would do given oil revenues. Whereas I have my own issues with Bush's decision, I do understand the context.
But let's go beyond that. Ms. Warren wants to pretend that up to $100B/year or more would have been saved by simply not invading Iraq. That simply is demonstrably false. The US and Britain were patrolling no-fly zones and had to maintain a large, very expensive operation in the area to contain Hussein. At least one estimate in the lead up to the liberation of Iraq estimated containment costs (of Hussein, with no invasion) as between $300 to $700B. (The estimates of the invasion cost had lower to higher limits.) If we simply picked the midpoint of the two ranges, the costs were within $100B (not per year but aggregate costs).
So, putting it all together, the Democrats were keeping the 75% of the Bush tax cuts that went to the middle class (just ignoring the pro-growth benefits of higher-income discretionary spending, saving, and investments of the $70B/year, because, of course, the government makes better use of that money by investing in Solyndra, shrimp on treadmills, etc.), they were arguing we weren't spending enough on the Medicare drug benefit, and they were knowingly ignoring the costs of containing Iraq. And even more to the point, what has been Obama/Democrats' response to these issues during the 111th Congress with massive majorities? Did they pass the class warfare tax hikes? No. Did they make Medicare more solvent? No. In fact, they tried to double-count savings to unrealistic reimbursement cuts (despite repeated doc fixes or rollbacks to past automated provider cuts) in order to cost-justify ObamaCare. And Obama has added an Afghanistan surge and Libya military assistance, with very little aggregate savings in Iraq/Afghanistan costs.
So, it's very clear, by any objective standard, that Ms. Warren's analysis is, at best, superficial and deliberately misleading. If Senator Brown, with his pragmatic center-right voting record, cannot defeat a polarizing ideologue, I don't hold much hope for the future of Massachusetts.
Now let's go onto Ms. Warren's discussion of the "social contract" and the quote at the start of this commentary. There are several different conceptualizations of the social contract, but the American political system was developed on Locke's Second Treatise of Government. Locke holds that all men have unalienable rights of life, liberty, and property. (Jefferson says "pursuit of happiness" instead of property in the Declaration of Independence, but the Lockean influence is seen in other contexts, i.e., the Fifth Amendment.) Men could use every means in self-defense of their rights but in theory consent to government to serve as their trusted surrogate in defense of their rights and agree to abide by the due process resolution of conflicted rights. Ms. Warren is referencing that when she implicitly refers to the cost of police in protecting business property.
But, of course, Ms. Warren is being entirely arbitrary in her discussion of the social contract. For example, I don't agree with a potentially infinite number of positive rights under the contract (e.g., public funding of education). Maybe I pay it forward to contributing to my church operating its own private school or I choose to home-school my children. I would also argue that the government should provide a supportive context for individual virtue, not foster an undue dependence on the resources and efforts of others.
I don't give the government a blank check up to the full extent of my unalienable rights; due process requires more than arbitrary majority rule. A system, like the federal government, where one of every two wage earners does not pay a cent towards its operations, intrinsically does not provide equal protection.
What's morally contemptible about Ms. Warren's point of view is that class-based policies are by their very nature discriminatory and unjust; we conservatives or libertarians don't disagree with cost-sharing of a minimal core government guaranteeing public health and safety, arbitration of disputed rights, infrastructure and resources supporting access to and establishment of a fair market. Those costs, however, must be limited in nature and be shared as broadly and fairly as possible; all citizens must be vested in the efficient, effective use of government resources.
If we recognize the right to work, we must ensure a supportive context for employers. When government implements policies which unduly restricts economic liberty by shifting costs burdens or risk to business, it impedes economic growth and development of supportive jobs. Entrepreneurs and businesses do not have a moral obligation to expand operations or to hire the unemployed
Political Humor
"President Obama was heckled by a protester who called him “the Antichrist.” The protestor was detained, but released without being charged, and then later he was offered his own show on Fox News." - Jay Leno
[I guess President Obama didn't recognize Glenn Beck since his Fox News show went off the air a few months back.]
"N.A.S.A. says they may never know where the satellite that crashed this week landed. They’re planning to wait until it shows up on eBay." - Jay Leno
[Pakistan said that it will eventually turn over the satellite--after the Chinese have had a chance to examine and photograph it.]
"Gov. Chris Christie keeps saying he’s not running for president. On the other hand, he would consider running for Santa." - David Lettermna
[Someone whom gives presents to people whom don't earn any income or half of the workers whom don't pay a penny towards them? Yes, President Obama IS running for Santa; Obama has always liked the fact that Santa wears a red suit... Yes, of course Gov. Christie is not going to run for President. Maybe walk at a decent pace...]
"A group of unpaid interns are suing a film company for not teaching them anything. The film company said they did teach them something: Show business is about screwing people over." - Conan O'Brien
[Just wait until college graduates hear about this...]
"The Obama campaign is offering a chance to win dinner with the president for $3. This would explain his new campaign slogan: 'Hey, I’m cheaper than Arby’s.'" - Conan O'Brien
[Obama's supporters are in a state of shock: they thought the only ones whom pay for lunch are taxpayers.I'll handle the tip: vote for change in 2012.]
"Kids need to go to coffee shops as often as possible. They need to see what happens if they major in philosophy." - Craig Ferguson
[Or else someone could send them the URL for an obscure conservative political blog whose author doesn't earn a penny for writing it.]
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Big Love"
