Welcome to
Dale F. Ogden’s Blog on
www.dalefogden.net

I want
Maximum Freedom
Minimum  Government
Minimum Taxes

Go directly to Og’s Blog
(Skip the Cartoons & Quotes)

“First, Do No Harm!” should be the first rule for all government regulators. Are there any of the so-called “experts” in the Obama Administration who have thought about that? Do any of them really have any idea what they’re doing? Almost anything that any government touches becomes less efficient, less responsive to the public, and more likely to be looted; why would the bail out of Wall Street (or AIG or the “Big Three”) be any different? Why would a disease caused by low interest rates and easy credit be cured by even lower interest rates and more easy credit?

Any alleged “right” of one man, which necessitates the violation of the rights of another, is not and cannot be a right. — Ayn Rand

Virtue means doing the right thing, in relation to the right person, at the right time, to the right extent, in the right manner, and for the right purpose. Thus, to give money away is quite a simple task, but for the act to be virtuous, the donor must give to the right person, for the right purpose, in the right amount, in the right manner, and at the right time. – Aristotle

Real freedom means the least government — government conspicuous by its absence — with sufficient power only to protect life, liberty, and property from frauds, thieves, and murderers. Real freedom means the full right of ownership and to make decisions for one’s self and one’s family. — John C. Sparks, Behind the Facade [1964]

If, from the more wretched parts of the old world, we look at those which are in an advanced stage of improvement, we still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping the spoil of the multitude. Invention is continually exercised, to furnish new pretenses for revenues and taxation. It watches prosperity as its prey and permits none to escape without tribute. --Thomas Paine, Rights of Man, 1791

I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious. --Thomas Jefferson

Credit expansion is the governments’ foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous. — Ludwig von Mises, Human Action [1949]

“Be wary of strong drink. It can make you shoot at tax collectors...and miss.” — Robert Heinlein [my favorite Science Fiction Author]

“Repeal that [welfare] law, and you will soon see a change in their manners. St. Monday and St. Tuesday, will soon cease to be holidays. Six days shalt thou labor, though one of the old commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves, than could be done by dividing all your estates among them.” --Benjamin Franklin, letter to Collinson, 1753

“On every unauthoritative exercise of power by the legislature must the people rise in rebellion or their silence be construed into a surrender of that power to them? If so, how many rebellions should we have had already?” --Thomas Jefferson

“Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.” --Thomas Jefferson, Notes on Virginia, Query 19, 1781

“The whole aim of practical politics is to keep the populace alarmed, and hence clamorous to be led to safety, by menacing it with an endless series of hobgoblins, all of them imaginary.” – H.L. Mencken

Carly Fiorina (left) will unseat Barbara Boxer (right) in 2010

Barbara Boxer is the Village Idiot of the Senate and all she offers is an unwillingness to compromise the “right” of women to kill their unborn children (that’s what her TV ads said in her last election). Personally, I think it’s wonderful that liberals kill their unborn children; that way we have fewer liberals, most of whom are parasites, anyway. Now, I have just one more question: “Who’s had the most work done?”

Let me get this straight.
Obama’s health care plan will be
written by a committee whose Chairman doesn’t understand it,
whose Members haven’t read much of it,
passed by a Congress that hasn’t read it,
signed by a president who smokes cigarettes
[and who has read little, if any, of it],
funded by a treasury chief who did not pay his taxes,
overseen by a surgeon general who is obese, and
financed by a country that is nearly broke.
What possibly could go wrong?

Town Hall Meeting with
U.S. Congressman Brian Baird

A Physicist Explains Time Travel for Dummies

8/31/2009: The Daily Reckoning presents: Over the last century, excessive money creation has become so much a part of US monetary policy that it’s difficult to remember when our money was actually worth anything. This week, the Mogambo gives us a little history lesson...and some of his facts are pretty darn interesting. Read on...

Driving a Fiat Currency into a Tree by The Mogambo Guru
Tampa Bay, Florida

Floy Lilley at the Mises Institute, in her essay at LewRockwell.com, notes that the gold-standard dollar “provided us with nothing less than relative peace and prosperity over a span of 136 years” until that fateful year, 1913.

So how does she quantify “relative peace and security”? Well, one good way is to look at the value of the dollar, which would be strong if the country was a good investment, which it was, and in fact, “It had not only retained one hundred percent of its value, it had gained eleven percent. That’s right. The dollar we started with in 1776 bought us eleven percent more after almost seven generations.”

Then, on the “quiet 23rd of December in 1913”, J.P. Morgan and buddies got Congressional quislings to pass legislation authorizing the creation of the Federal Reserve, and to which I add that the jerk Woodrow Wilson then signed it, thus going down in history as the disastrous guy who set in motion the destruction of the dollar by the Federal Reserve creating excess money and credit.

She doesn’t make a point of it, but back then, the dollar was still gold, and thanks to the loathsome Federal Reserve creating the money to finance the bubbles of The Roaring Twenties that resulted in the Great Depression, the despicable Supreme Court infamously ruled in 1933 (and upheld by every traitorous Supreme Court case since then) that, contrary to what the Constitution said, the dollar did not have to be made of silver or gold, and that a paper “fiat” currency could be created, without limit, for any reason, even at a mere whim, anytime, day or night, 24/7, including holidays, not realizing that they were the idiots that REALLY destroyed the dollar! Gaahhh!

With this kind of disastrous stupidity, I dryly and humorlessly ask that you don’t talk to me about any “wisdom” emanating from the Supreme Court.

I was hoping that Ms. Lilley would spontaneously pick up on the theme of “heap scorn on the Federal Reserve for creating too much money and credit out of thin air and the despicable Supreme Court for letting them.”

“...achieving a ‘sound money’ is the easiest thing in the world! Just stop creating more of it! That’s all you need!”

I was going to suggest that she could, you know, maybe even put in an endorsement for the Mogambo Mindless Mob (MMM) brand of products, like the popular Mogambo Pitchfork (very effective when brandished threateningly) and the classic Mogambo Flaming Torches that will be so hard to get when the proletariat bozos start forming mindless mobs bent on revenge after so much hurting from the horrifying inflation in consumer prices, the pervasive, lingering economic depression, ruination, bankruptcy and the embarrassment of realizing that it was caused by the people we elected to Congress, who picked the people to run the Federal Reserve, which is the biggest failure one can imagine and should be immediately abolished, how Ben Bernanke, its chairman, should be turned over to me for some sessions at my new Mogambo Re- Education Center, where our muscular, trained technicians will slap the hell out of his stupid face, and the stupid faces of Congresspersons (except Ron Pau l), and the stupid faces of anyone who still believes in getting, or giving, a free lunch to, or from, anyone, especially the government, which is so corrupt that it once gave smallpox-infected blankets to the American Indians, which is only marginally worse than destroying the currency of the country and makes you reflexively scream in horror every time you see the money supply go up.

Well, it does me, anyway.

Instead, she goes on that the result was that since then, “the purchasing power of a dollar has plummeted over 95%”, which means that “We now pay twenty times more than J.P. Morgan did for any item.” Yikes!

Suddenly, my ears pricked up as she said, “Few have written on the mechanics of getting back to sound money”, which I immediately noticed makes me a genius, meaning that people should worship my gigantic brain, my wife and kids should stop calling me “idiot” and saying how much they hate me and maybe I should get a Nobel Prize.

The reason I am suddenly so enamored of my intellect is that achieving a “sound money” is the easiest thing in the world! Just stop creating more of it! That’s all you need! It’s simple! It is my Profound Mogambo Genius (PMG) that has solved the puzzle!

Okay, I am embarrassed that I got carried away there, and I admit that I am not very smart, and that is why I stole the whole idea from the fact that this is all the gold standard did; it prevented increases in the money supply, and the only thing that Congress had to worry about was doing smart things so that gold came into the country (increasing our money supply) and not doing something so stupid that it went someplace else better (decreasing our money supply).

But those days are all over now, and the only people who are buying gold, along with silver and oil, are the people who know what happens to an unsound, fiat currency (like the dollar) in the hands of a government composed of a bunch of socialist, commie-think yahoos (like the US Congress) that willingly deficit-spends insane amounts of money thanks to a central bank (like the Federal Reserve) creating it and a population sitting around saying, “Duh! Okay with us!” Hahaha!

We’re freaking doomed!

Until next time,
The Mogambo Guru for The Daily Reckoning

Editor’s Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter – an avocational exercise to heap disrespect on those who desperately deserve it.

May 1978: Inflation in One Page By Henry Hazlitt [More than 30 years later, it seems that Government has not learned anything. Ben Bernanke knows better, and so does Alan Greenspan, but both have whored themselves to Leviathan. Power corrupts...]

Cause and Cure of Inflation

1. Inflation is an increase in the quantity of money and credit. Its chief consequence is soaring prices. Therefore inflation—if we misuse the term to mean the rising prices themselves—is caused solely by printing more money. For this the government’s monetary policies are entirely responsible.

2. The most frequent reason for printing more money is the existence of an unbalanced budget. Unbalanced budgets are caused by extravagant expenditures which the government is unwilling or unable to pay for by raising corresponding tax revenues. The excessive expenditures are mainly the result of government efforts to redistribute wealth and income—in short, to force the productive to support the unproductive. This erodes the working incentives of both the productive and the unproductive.

3. The causes of inflation are not, as so often said, “multiple and complex,” but simply the result of printing too much money. There is no such thing as “cost-push” inflation. If, without an increase in the stock of money, wage or other costs are forced up, and producers try to pass these costs along by raising their selling prices, most of them will merely sell fewer goods. The result will be reduced output and loss of jobs. Higher costs can only be passed along in higher selling prices when consumers have more money to pay the higher prices.

4. Price controls cannot stop or slow down inflation. They always do harm. Price controls simply squeeze or wipe out profit margins, disrupt production, and lead to bottlenecks and shortages. All government price and wage control, or even “monitoring,” is merely an attempt by the politicians to shift the blame for inflation on to producers and sellers instead of their own monetary policies.

5. Prolonged inflation never “stimulates” the economy. On the contrary, it unbalances, disrupts, and misdirects production and employment. Unemployment is mainly caused by excessive wage rates in some industries, brought about either by extortionate union demands, by minimum wage laws (which keep teenagers and the unskilled out of jobs), or by prolonged and over-generous unemployment insurance.

6. To avoid irreparable damage, the budget must be balanced at the earliest possible moment, and not in some sweet by-and-by. Balance must be brought about by slashing reckless spending, and not by increasing a tax burden that is already undermining incentives and production.

8/31/2009: Sorting Fact From Fiction on Health Care
By Jerome Groopman and Pamela Hartzband

In recent town-hall meetings, President Barack Obama has called for a national debate on health-care reform based on facts. It is fact that more than 40 million Americans lack coverage and spiraling costs are a burden on individuals, families and our economy. There is broad consensus that these problems must be addressed. But the public is skeptical that their current clinical care is substandard and that no government bureaucrat will come between them and their doctor. Americans have good reason for their doubts—key assertions about gaps in care are flawed and reform proposals to oversee care could sharply shift decisions away from patients and their physicians.

Consider these myths and mantras of the current debate:

• Americans only receive 55% of recommended care. This would be a frightening statistic, if it were true. It is not. Yet it was presented as fact to the Senate Health and Finance Committees, which are writing reform bills, in March 2009 by the Agency for Healthcare Research and Quality (the federal body that sets priorities to improve the nation’s health care).

The statistic comes from a flawed study published in 2003 by the Rand Corporation. That study was suppose to be based on telephone interviews with 13,000 Americans in 12 metropolitan areas followed up by a review of each person’s medical records and then matched against 439 indicators of quality health practices. But two-thirds of the people contacted declined to participate, making the study biased, by Rand’s own admission. To make matters worse, Rand had incomplete medical records on many of those who participated and could not accurately document the care that these patients received.

For example, Rand found that only 15% of the patients had received a flu vaccine based on available medical records. But when asked directly, 85% of the patients said that they had been vaccinated. Most importantly, there were no data that indicated whether following the best practices defined by Rand’s experts made any difference in the health of the patients.

In March 2007, a team of Harvard researchers published a study in the New England Journal of Medicine that looked at nearly 10,000 patients at community health centers and assessed whether implementing similar quality measures would improve the health of patients with three costly disorders: diabetes, asthma and hypertension. It found that there was no improvement in any of these three maladies.

Dr. Rodney Hayward, a respected health-services professor at the University of Michigan, wrote about this negative result, “It sounds terrible when we hear that 50 percent of recommended care is not received, but much of the care recommended by subspecialty groups is of a modest or unproven value, and mandating adherence to these recommendations is not necessarily in the best interest of patients or society.”

• The World Health Organization ranks the U.S. 37th In the world in quality. This is another frightening statistic. It is also not accurate. Yet the head of the National Committee for Quality Assurance, a powerful organization influencing both the government and private insurers in defining quality of care, has stated this as fact.

The World Health Organization ranks the U.S. No. 1 among all countries in “responsiveness.” Responsiveness has two components: respect for persons (including dignity, confidentiality and autonomy of individuals and families to make decisions about their own care), and client orientation (including prompt attention, access to social support networks during care, quality of basic amenities and choice of provider). This is what Americans rightly understand as quality care and worry will be lost in the upheaval of reform. Our country’s composite score fell to 37 primarily because we lack universal coverage and care is a financial burden for many citizens.

• We need to implement “best practices.” Mr. Obama and his advisers believe in implementing “best practices” that physicians and hospitals should follow. A federal commission would identify these practices.

On June 24, 2009, the president appeared on “Good Morning America” with Diane Sawyer. When Ms. Sawyer asked whether “best practices” would be implemented by “encouragement” or “by law,” the president did not answer directly. He said that he was confident doctors “want to engage in best practices” and “patients are going to insist on it.” The president also said there should be financial incentives to “allow doctors to do the right thing.”

There are domains of medicine where a patient has no control and depends on the physician and the hospital to provide best practices. Strict protocols have been developed to prevent infections during procedures and to reduce the risk of surgical mishaps. There are also emergency situations like a patient arriving in the midst of a heart attack where standardized advanced treatments save many lives.

But once we leave safety measures and emergency therapies where patients have scant say, what is “the right thing”? Data from clinical studies provide averages from populations and may not apply to individual patients. Clinical studies routinely exclude patients with more than one medical condition and often the elderly or people on multiple medications. Conclusions about what works and what doesn’t work change much too quickly for policy makers to dictate clinical practice.

An analysis from the Ottawa Health Research Institute published in the Annals of Internal Medicine in 2007 reveals how long it takes for conclusions derived from clinical studies about drugs, devices and procedures to become outdated. Within one year, 15 of 100 recommendations based on the “best evidence” had to be significantly reversed; within two years, 23 were reversed, and at 5 1/2 years, half were contradicted. Americans have witnessed these reversals firsthand as firm “expert” recommendations about the benefits of estrogen replacement therapy for postmenopausal women, low fat diets for obesity, and tight control of blood sugar were overturned.

Even when experts examine the same data, they can come to different conclusions. For example, millions of Americans have elevated cholesterol levels and no heart disease. Guidelines developed in the U.S. about whom to treat with cholesterol-lowering drugs are much more aggressive than guidelines in the European Union or the United Kingdom, even though experts here and abroad are extrapolating from the same scientific studies. An illuminating publication from researchers in Munich, Germany, published in March 2003 in the Journal of General Internal Medicine showed that of 100 consecutive patients seen in their clinic with high cholesterol, 52% would be treated with a statin drug in the U.S. based on our guidelines while only 26% would be prescribed statins in Germany and 35% in the U.K. So, different experts define “best practice” differently. Many prominent American cardiologists and specialists in preventive medicine believe the U.S. guidelines lead to overtreatment and the Europeans are more sensible. After hearing of this controversy, some patients will still want to take the drug and some will not.

This is how doctors and patients make shared decisions—by considering expert guidelines, weighing why other experts may disagree with the guidelines, and then customizing the therapy to the individual. With respect to “best practices,” prudent doctors think, not just follow, and informed patients consider and then choose, not just comply.

• No government bureaucrat will come between you and your doctor. The president has repeatedly stated this in town-hall meetings. But his proposal to provide financial incentives to “allow doctors to do the right thing” could undermine this promise. If doctors and hospitals are rewarded for complying with government mandated treatment measures or penalized if they do not comply, clearly federal bureaucrats are directing health decisions.

Further, at the AMA convention in June 2009, the president proposed linking protection for physicians from malpractice lawsuits if they strictly adhered to government-sponsored treatment guidelines. We need tort reform, but this is misconceived and again clearly inserts the bureaucrat directly into clinical decision making. If doctors are legally protected when they follow government mandates, the converse is that doctors risk lawsuits if they deviate from federal guidelines—even if they believe the government mandate is not in the patient’s best interest. With this kind of legislation, physicians might well pressure the patient to comply with treatments even if the therapy clashes with the individual’s values and preferences.

The devil is in the regulations. Federal legislation is written with general principles and imperatives. The current House bill H.R. 3200 in title IV, part D has very broad language about identifying and implementing best practices in the delivery of health care. It rightly sets initial priorities around measures to protect patient safety. But the bill does not set limits on what “best practices” federal officials can implement. If it becomes law, bureaucrats could well write regulations mandating treatment measures that violate patient autonomy.

Private insurers are already doing this, and both physicians and patients are chafing at their arbitrary intervention. As Congress works to extend coverage and contain costs, any legislation must clearly codify the promise to preserve for Americans the principle of control over their health-care decisions.

—Dr. Groopman, a staff writer for the New Yorker, and Dr. Hartzband are on the staff of Beth Israel Deaconess Medical Center in Boston and on the faculty of Harvard Medical School.

Printed in The Wall Street Journal, page A13

8/31/2009: Technology Can Fight Global Warming By Bjørn Lomborg

[Assuming “Global Warming” is happening, which I seriously doubt (I’ve seen no compelling evidence either way), Lomborg’s is a more rational approach. Those who promote “Cap & Trade” and other command and control approaches are really just looking for another source of tax revenue and more control over our lives. Moreover, Al Gore is nothing more than a (now very rich) con artist.]

We have precious little to show for nearly 20 years of efforts to prevent global warming. Promises in Rio de Janeiro in 1992 to cut carbon emissions went unfulfilled. Stronger pledges in Kyoto five years later failed to keep emissions in check. The only possible lesson is that agreements to reduce carbon emissions are costly, politically arduous and ultimately ineffective.

But this is a lesson many are hell-bent on ignoring, as politicians plan to gather again—this time in Copenhagen, Denmark, in December—to negotiate a new carbon-emissions treaty. Even if they manage to bridge their differences and sign a deal, there is a strong likelihood that tomorrow’s politicians will fail to deliver.

Global warming does not just require action; it requires effective action. Otherwise we are just squandering time.

To inform the debate, the Copenhagen Consensus Center has commissioned research looking at the costs and benefits of all the policy options. For example, internationally renowned climate economist Richard Tol of Ireland’s Economic and Social Research Institute finds that a low carbon tax of $2 a metric ton is the only carbon reduction policy that would make economic sense. But his research demonstrates the futility of trying to use carbon cuts to keep temperature increases under two degrees Celsius, which many argue would avoid the worst of climate change’s impacts.

Some economic models find that target impossible to reach without drastic action, like cutting the world population by a third. Other models show that achieving the target by a high CO2 tax would reduce world GDP a staggering 12.9% in 2100—the equivalent of $40 trillion a year.

Some may claim that global warming will be so terrible that a 12.9% reduction in GDP is a small price to pay. But consider that the majority of economic models show that unconstrained global warming would cost rich nations around 2% of GDP and poor countries around 5% by 2100.

Even those figures are an overstatement. A group of climate economists at the University of Venice led by Carlo Carraro looked closely at how people will adapt to climate change. Their research for the Copenhagen Consensus Center showed that farmers in areas with less water for agriculture could use more drip irrigation, for example, while those with more water will grow more crops.

Taking a variety of natural, so-called market adaptations into account, the Carraro research shows we will acclimatize to the negative impacts of global warming and exploit the positive changes, actually creating 0.1% increase in GDP in 2100 among the member countries of the Organization for Economic Cooperation and Development. In poor countries, market adaptation will reduce climate change-related losses to 2.9% of GDP. This remains a significant, negative effect. The real challenge of global warming lies in tackling its impact on the Third World. Yet adaptation has other benefits. If we prepare societies for more ferocious hurricanes in the future, we also help them to cope better with today’s extreme weather.

This does not mean, however, that we should ignore rising greenhouse-gas emissions. Research for the Copenhagen Consensus Center by Claudia Kemfert of German Institute for Economic Research in Berlin shows that in terms of reducing climate damage, reducing methane emissions is cheaper than reducing C02 emissions, and—because methane is a much shorter-lived gas—its mitigation could do a lot to prevent some of the worst of short-term warming. Other research papers highlight the advantages of planting more trees and protecting the forests we have to absorb C02 and cut greenhouse gases.

Other more speculative approaches deserve consideration. In groundbreaking research, J. Eric Bickel, an economist and engineer at the University of Texas, and Lee Lane, a researcher at the American Enterprise Institute, study the costs and benefits of climate engineering. One proposal would have boats spray seawater droplets into clouds above the sea to make them reflect more sunlight back into space—augmenting the natural process where evaporating ocean sea salt helps to provide tiny particles for clouds to form around.

Remarkably, Mr. Bickel finds that about $9 billion spent developing this so-called marine cloud whitening technology might be able to cancel out this century’s global warming. The benefits—from preventing the temperature increase—would add up to about $20 trillion.

Climate engineering raises ethical concerns. But if we care most about avoiding warmer temperatures, we cannot avoid considering a simple, cost-effective approach that shows so much promise.

Nothing short of a technological revolution is required to end our reliance on fossil fuel—and we are not even close to getting this revolution started. Economists Chris Green and Isabel Galiana from McGill University point out that non-fossil sources like nuclear, wind, solar and geothermal energy will—based on today’s availability—get us less than halfway toward a path of stable carbon emissions by 2050, and only a tiny fraction of the way towards stabilization by 2100.

A high carbon tax will simply hurt growth if alternative technology is not ready, making us all worse off. Mr. Green proposes that policy makers abandon carbon-reduction negotiations and make agreements to seriously invest in research and development. Mr. Green’s research suggests that investing about $100 billion annually in non-carbon-based-energy research could result in essentially stopping global warming within a century or so.

A technology-led effort would have a much greater chance of actually tackling climate change. It would also have a much greater chance of political success, since countries that fear signing on to costly emission targets are more likely to embrace the cheaper, smarter path of innovation.

Cutting emissions of greenhouse gases is not the only answer to global warming. This week, a group of Nobel Laureate economists will gather at Georgetown University to consider all of the new research and identify the solutions that are most effective. Hopefully, their results will influence debate and help shift decision makers away from a narrow focus on one, deeply flawed response to global warming.

Our generation will not be judged on the brilliance of our rhetoric about global warming, or on the depth of our concern. We will be judged on whether or not we stop the suffering that global warming will cause. Politicians need to stop promising the moon, and start looking at the most effective ways to help planet Earth.

—Mr. Lomborg teaches at the Copenhagen Business School and is director of the Copenhagen Consensus Center. He is the author of “Cool It: The Skeptical Environmentalist’s Guide to Global Warming.

“Printed in The Wall Street Journal Europe, page 14

8/31/2009: Health-Care Secrets

U.S. President Barack Obama has promised a “new era of transparency” in Washington, so perhaps he should talk to the Senate about getting with his program. On July 15, six weeks ago, the Senate Health, Education, Labor and Pensions Committee passed an amended $1 trillion health-care bill, with acting Chairman Chris Dodd calling it a “historic achievement.” Too bad the committee won’t reveal this history even to other Senators, much less to the public.

Three weeks ago Republicans on the committee wrote Mr. Dodd “to reiterate our request for a full copy of the bill as amended, in the four-week mark-up.” Mr. Dodd has refused to comply. The Senate bill that is available on the committee Web site is 790 pages long. While that is some 300 pages shorter than the House health bill, that’s in part because it doesn’t include nearly 200 amendments that passed when the committee redrafted the bill. Amended sections of the bill might as well be written in invisible ink.

The whole process was so haphazard that at one point during the committee mark-up Barbara Mikulski, the Democrat from Maryland, declared: “Giving me language on little pieces of paper on which I’m going to commit the sacred fortunes and honor of the United States for decades, this is not the way to go. We can’t do this on the backs of envelopes.”

We called Mr. Dodd’s committee office last week to ask why the bill isn’t posted, and a spokesman explained that it is still being “worked on.” Will it be ready by October? “Don’t count on it,” the staffer said.

Meanwhile, President Obama has been saying that critics are “misrepresenting” his proposals. But who’s to know what’s reality and what’s a myth when the public and Members of Congress aren’t able to read a bill that would restructure one-seventh of the U.S. economy. We don’t have any idea what the bill will cost or how many people it will provide insurance for, because the Congressional Budget Office can’t score it. No wonder the American public is increasingly skeptical of this entire exercise.

Printed in The Wall Street Journal Europe, page 13

8/30/2009: One Long Shot to Watch by George Will

SAN DIEGO -- The most ominous domestic event of the 1970s was the collapse of self-government in New York City, which before being put into receivership by the state was liberalism’s laboratory. Since then, California has been the slate on which liberalism boldly writes its recipe for decline -- high taxes, heavy regulation, subservience to public employees unions and environmentalism that is simultaneously apocalyptic and chiliastic.

Because California’s calamitous present -- creative accounting as a rickety bridge to the next budget crisis, coming soon -- might prefigure the nation’s future, next year’s gubernatorial election is portentous. An especially intriguing candidate in a colorful field is Tom Campbell. Colorful he is not. “Talk softly and carry a small calculator” could be his motto. What glitter, however, are his resume and agenda.

He has a Harvard law degree and a doctorate in economics from the University of Chicago, where his faculty adviser was Milton Friedman. He clerked for Supreme Court Justice Byron White. Working in the Reagan administration in 1983, in the wake of a severe recession, he assumed Reagan would lose in 1984 (“proof of my political acumen,” he says; Reagan carried 49 states) and accepted a professorship at Stanford’s law school. He represented Silicon Valley in Congress for five terms. He unsuccessfully sought the Republican nomination for Senate in 1992. He won the nomination in 2000 but lost the election. His third statewide run might work because, after Arnold Schwarzenegger’s childlike faith in personality as the conqueror of problems, blandness may be charismatic.

There is no constitutional mechanism to do for California what the state of New York did for New York City in 1975 -- transfer to an improvised authority responsibility for problems the political process cannot solve. But having been California’s financial director in 2004-05, Campbell believes politics can restore something like the “Gann limit,” a constitutional provision that, from 1979 to 1989 (California’s malleable Constitution only intermittently constitutes), limited annual spending by a formula based on inflation and population growth.

He favors resetting the budget cycle so that the state would accumulate one year’s revenues to be spent the following year, when precise knowledge would replace wishful thinking about available revenues. He would aggressively use the line-item veto by which governors can reduce as well as eliminate particular spending items. He thinks Berkeley and UCLA are providing an education comparable to Stanford’s and should be priced accordingly, with higher tuition and compensating scholarships for the needy.

He favors a constitutional convention to reform the initiative process by forcing proponents of particular propositions to stipulate the taxes they would raise or programs they would cut to pay for their measures. But only if a convention can be limited to specific changes stipulated in advance. He knows that the 1787 Constitutional Convention, which was called to merely revise the Articles of Confederation, scrapped them up and started fresh.

Campbell’s two rivals for the Republican nomination -- former eBay CEO Meg Whitman and another tech entrepreneur, Steve Poizner, currently California’s insurance commissioner -- are rich. Campbell is a professor. Whoever wins the nomination, he says, will quickly become flush with funds. Yes, but you cannot steal first base in politics either. How can he be nominated?

Like this, he says: Gray Davis, a professional politician of modest means, won the Democratic nomination in 1998 when two rich opponents nullified each other with media bombardments. Republicans are a shriveling tribe: Their registration is at a record low 31.1 percent, and they do not have a majority of registered voters in any of California’s 53 congressional districts. Democrats have a registration majority in 20 districts, and a statewide registration advantage of more than 2 million and growing. But the fastest-growing cohort of voters are independents who can vote in either party’s primary. Campbell believes he is energizing them inexpensively by buying lists of likely voters (who have voted in four of the last five elections), inviting 150,000 to call in to an enormous conference call, and discussing issues for 90 minutes with the 20,000 who do.

If nominated, Campbell will face either the once-exotic but still canny Jerry Brown, who will be 72 and perhaps familiar to a fault, or Gavin Newsom, 41, San Francisco’s dashing and evidently delusional mayor whose campaign suggests that the bankrupt state’s biggest problem is its denial of same-sex marriage. If Campbell is nominated, he can win, but if Californians were sufficiently rational to nominate him, their state would not be shambolic.

8/28/2009: The Diet COLA Myth
Seniors benefit from zero [negative] inflation.

AARP and other self-styled senior lobbies are raising a ruckus over the news that in 2010, for the first time in 35 years, Social Security recipients won’t be getting a cost of living increase in their monthly checks. Members of Congress are calling for an investigation into the way COLAs are calculated. But the only real scandal here is the opposite of what Congress, the press and AARP are moaning about. The recent fall in prices has served up a windfall for seniors and a real $600 average increase in their Social Security payments this year.

There will be no COLA increase this year because consumer prices have been level or even falling. In the past nine months, the consumer price index—the official measure of the cost of living—has fallen by 2.3%, meaning the real purchasing power of a Social Security check has risen. How is this bad for seniors? In the 1970s we were told that inflation robs seniors more than most because they live on fixed incomes. Now we’re told grandma suffers from no inflation.

Most seniors will have to pay about $2 a month more next year because of an increase in Medicare drug coverage premiums that are withheld from Social Security checks. But this is dwarfed by the Social Security windfall over the past 12 months that resulted from a 5.8% COLA increase awarded for 2009. This was an overpayment for sure. Prices rose by nearly 6% through August of 2008, but then inflation fell in last year’s fourth quarter as energy prices crashed.

Prices have been roughly flat since that time according to the government’s calculations. By January of this year, says Andrew Biggs, the deputy commissioner of Social Security under President George W. Bush, “Social Security benefits were about 4.3% higher this year than needed to maintain constant purchasing power.” He figures that because the average Social Security check is $1,160 a month, the typical senior received a $516 bonus above inflation this year.

Thanks to a “hold harmless” law that prohibits Medicare premiums for Part B from rising in any year that there is no Social Security COLA, the vast majority of seniors will be exempt from higher premiums next year. This premium freeze means that most seniors will get an additional subsidy from general taxpayers, because Medicare’s premiums are supposed to cover 25% of the program’s expenses. To keep premiums at 25% of expenses would have required another $96 a year payment per Medicare recipient. Add all of this up and seniors have received roughly a $612 per person benefit increase—and yet AARP wants more.

Like most Americans in this recession, seniors are struggling to maintain their standard of living. Their retirement savings have been hit especially hard by the stock market plunge, and they’ve lost income on their savings accounts and Treasury bills from the plunge in interest rates. There are plenty of people in Washington to blame, but the people who calculate COLAs aren’t among them.

8/28/2009: from Best of the Web:
‘Have You Heard Any New Jokes About Chappaquiddick?’

The quote that is the title for this item is, jaw-droppingly, attributed to the late Sen. Edward Kennedy. Ed Klein, a former editor at Newsweek and the New York Times and author of “Ted Kennedy: The Dream That Never Died” and other Kennedy books, was reminiscing on “The Diane Rehm Show,” on Washington’s WAMU-FM, when he said the following (transcript by Ed Morrissey):

I don’t know if you know this or not, but one of his favorite topics of humor was indeed Chappaquiddick itself. And he would ask people, “have you heard any new jokes about Chappaquiddick?” That is just the most amazing thing. It’s not that he didn’t feel remorse about the death of Mary Jo Kopechne, but that he still always saw the other side of everything and the ridiculous side of things, too.

Observes blogger Jules Crittenden: “I gather it was a self-deprecating maneuver on Kennedy’s part, exercised with the famous Kennedy charm, though it sounds like one of those ‘I guess you had to have been there’ things.”

Meanwhile, Melissa Lafsky, “ex-lawyer, blogger, writer,” has a much-discussed Puffington Host post titled “The Footnote Speaks: What Would Mary Jo Kopechne Have Thought of Ted’s Career?” The headline is misleading; Mary Jo Kopechne could not be reached for comment. But Lafsky offers the following speculation:

We don’t know how much Kennedy was affected by her death, or what she’d have thought about arguably being a catalyst for the most successful Senate career in history. What we don’t know, as always, could fill a Metrodome.

Still, ignorance doesn’t preclude a right to wonder. So it doesn’t automatically make someone (aka, me) a Limbaugh-loving, aerial-wolf-hunting NRA troll for asking what Mary Jo Kopechne would have had to say about Ted’s death, and what she’d have thought of the life and career that are being (rightfully) heralded.

Who knows--maybe she’d feel it was worth it.

One does get the sense that a certain type of liberal regards women as expendable.

8/27/2009: The main issue in present-day political struggles is whether society should be organized on the basis of private ownership of the means of production (capitalism, the market system) or on the basis of public control of the means of production (socialism, communism, planned economy). Capitalism means free enterprise, sovereignty of the consumers in economic matters, and sovereignty of the voters in political matters. Socialism means full government control of every sphere of the individual’s life and the unrestricted supremacy of the government in its capacity as central board of production management. There is no compromise possible between these two systems. Contrary to popular fallacy there is no middle way, no third system possible as a pattern of a permanent social order. The citizens must choose between capitalism and socialism or, as many Americans say, between the American and the Russian way of life. — Ludwig von Mises, Bureaucracy [1944]

8/26/2009: Congress’s Death Cult (from Best of the Web)

Back in March, the Democratic National Committee was indignant: “Today Rush Limbaugh yet again crossed the line saying: by the time the debate on President Obama’s health care plan is over, ‘it’ll be called the Ted Kennedy Memorial Health Care bill.’ It is outrageous to demonize a patriotic Senator who has spent his life fighting so that every person has the opportunity to live the American dream.”

“Tell Republican Party Chairman Michael Steele to denounce Rush Limbaugh once and for all,” the DNC urged its followers. It’s not clear what it means to “denounce” someone “once and for all,” but whatever.

We’re guessing Limbaugh’s prediction (which you can hear courtesy of MediaMutters) was intended in a jocular vein, but it is now coming true, as Politico reports:

Ailing Senator Robert Byrd, one of only two to have served longer than Kennedy, suggests in an emotional statement renaming the pending health care legislation for the late Massachusetts Senator:

“In his honor and as a tribute to his commitment to his ideals, let us stop the shouting and name calling and have a civilized debate on health care reform which I hope, when legislation has been signed into law, will bear his name for his commitment to insuring the health of every American.”

Agence France-Presse reports that the leader of the lower chamber is echoing the sentiment:

House Speaker Nancy Pelosi vowed Wednesday to push through embattled health reform legislation this year following the death of Senator Ted Kennedy, who called the effort “the cause of my life”.

“Ted Kennedy’s dream of quality health care for all Americans will be made real this year because of his leadership and his inspiration,” Pelosi said in a statement.

Byrd and Pelosi propose to brush aside the public revolt against ObamaCare, seize control over one-sixth of the economy, and give government life-or-death powers over all Americans--all so that they can pay tribute to their dead colleague. Haven’t they heard of a nonbinding resolution?

Ted Kennedy was not a cult leader. He was a lawmaker, democratically elected to represent his constituents. It’s hard to imagine anything more outrageously self-indulgent than for his erstwhile colleagues to pay tribute to him by imposing on everyone an expensive, unpopular and potentially deadly scheme of social control. Could Washington be more out of touch?

8/26/2009: Last of the Kennedy Mob...er, Dynasty
(not sure about who wrote it originally, but I mostly liked it)

As soon as his cancer was detected, I noticed an immediate attempt at the “canonization” of old Teddy Kennedy by the mainstream media. They are saying what a “great American” he is. I say, let’s get a couple things clear and not twist the facts to change the real history.

1. He was caught cheating at Harvard when he attended it. He was expelled twice, once for cheating on a test, and once for paying a classmate to cheat for him.

2. While expelled, Kennedy enlisted in the Army, but mistakenly signed up for four years instead of two. Oops! The man can’t count to four! His father, Joseph P. Kennedy, former U.S. Ambassador to England (a step up from bootlegging liquor into the US from Canada during prohibition [imho: this was one of the more honorable things old man Kennedy did]), pulled the necessary strings to have his enlistment shortened to two years, and to ensure that he served in Europe, not Korea , where a war was raging. No preferential treatment for him! (like he charged that President Bush received).

3. Kennedy was assigned to Paris, never advanced beyond the rank of Private, and returned to Harvard upon being discharged. Imagine a person of his “education” NEVER advancing past the rank of Private!

4. While attending law school at the University of Virginia, he was cited for reckless driving four times, including once when he was clocked driving 90 miles per hour in a residential neighborhood with his headlights off after dark.. Yet his Virginia driver’s license was never revoked.

5. In 1964, he was seriously injured in a plane crash and hospitalized for several months. Test results done by the hospital at the time he was admitted had shown he was legally intoxicated. The results of those tests remained a “state secret” until in the 1980’s when the report was unsealed. Didn’t hear about that from the unbiased media, did we?

6. On July 19, 1969, Kennedy attended a party on Chappaquiddick Island in Massachusetts . At about 11:00 PM, he borrowed his chauffeur’s keys to his Oldsmobile limousine and offered to give a ride home to Mary Jo Kopechne, a campaign worker. Leaving the island via an unlit bridge with no guard rail, Kennedy steered the car off the bridge, flipped, and into Poucha Pond.

7. He swam to shore and walked back to the party passing several houses and a fire station. Two friends then returned with him to the scene of the accident. According to their later testimony, they told him what he already knew - that he was required by law to immediately report the accident to the authorities. Instead Kennedy made his way to his hotel, called his lawyer, and went to sleep. Kennedy called the police the next morning and by then the wreck had already been discovered. Before dying Kopechne had scratched at the upholstered floor above her head in the upside-down car.

The Kennedy family began “calling in favors”, ensuring that any inquiry would be contained. Her corpse was whisked out-of-state to her family before an autopsy could be conducted.

Further details are uncertain, but after the accident Kennedy says he repeatedly dove under the water trying to rescue Kopechne and he didn’t call police because he was in a state of shock. It is widely assumed Kennedy was drunk, and he held off calling police in hopes that his family could fix the problem overnight. Since the accident Kennedy’s “political enemies” have referred to him as the distinguished Senator from Chappaquiddick. He pleaded guilty to leaving the scene of an accident, and was given a SUSPENDED SENTENCE OF TWO MONTHS.

Kopechne’s family received a small payout from the Kennedy’s insurance policy and never sued. There was later an effort to have her body exhumed and autopsied, but her family successfully fought against this in court, and Kennedy’s family paid their attorney’s bills.... a “token of friendship”?

8. Kennedy has held his Senate seat for more than forty years, but considering his longevity, his accomplishments seem scant. He authored or argued for legislation that ensured a variety of civil rights, increased the minimum wage in 1981, made access to health care easier for the indigent, funded Meals on Wheels for fixed-income seniors, and is widely held as the “standard-bearer for liberalism”. In his very first Senate roll he was the floor manager for the bill that turned U.S. immigration policy upside down and opened the floodgate for immigrants from third world countries.

9. Since that time, he has been the prime instigator and author of every expansion of an increase in immigration up to and including the latest attempt to grant amnesty to illegal aliens. Not to mention the pious grilling he gave the last two Supreme Court nominees, as if he was the standard bearer for the nation in matters of “what is right” What a pompous ass!

10. He is known around Washington as a public drunk, loud, boisterous, and very disrespectful to ladies. JERK is a better description than “great American”. “A blonde in every pond” is his motto.

Let’s not allow the spin doctors to make this jerk a hero -- how quickly the American public forgets what his real legacy is.

Send this on, as a lot of younger people don’t have a clue about all of this, and us older ones tend to forget things that happened so many years ago.

8/26/2009: What Will They Learn? by Walter E. Williams

When parents plunk down $20, $30, $40 and maybe $50 thousand this fall for a year’s worth of college room, board and tuition, it might be relevant to ask: What will their children learn in return? The American Council of Trustees and Alumni (ACTA) ask that question in their recently released publication, “What Will They Learn: A Report on the General Education Requirements at 100 of the Nation’s Leading Colleges and Universities.”

ACTA conducted research to see whether 100 major institutions require seven key subjects: English composition, literature, foreign language, U.S. government or history, economics, mathematics and science. What ACTA found was found was alarming, reporting that “Even as our students need broad-based skills and knowledge to succeed in the global marketplace, our colleges and universities are failing to deliver. Topics like U.S. government or history, literature, mathematics, and economics have become mere options on far too many campuses. Not surprisingly, students are graduating with great gaps in their knowledge -- and employers are noticing.”

The National Center for Education Statistics reports that only 31 percent of college graduates can read and understand a complex book. Employers complain that graduates of colleges lack the writing and analytical skills necessary to succeed in the workplace. A 2006 survey conducted by The Conference Board, Corporate Voices for Working Families, the Partnership for 21st Century Skills, and the Society for Human Resource Management found that only 24 percent of employers thought graduates of four-year colleges were “excellently prepared” for entry-level positions. College seniors perennially fail tests of their civic and historical knowledge.

The American Council of Trustees and Alumni graded the 100 surveyed colleges and universities on their general education requirements. Forty-two institutions received a “D” or an “F” for requiring two or fewer subjects. Twenty-five of them received an “F” for requiring one or no subjects. No institution required all seven. Five institutions received an “A” for requiring six general education subjects. They were Brooklyn College of the City University of New York, Texas A&M, University of Arkansas (Fayetteville), United States Military Academy (West Point) and University of Texas at Austin. Twenty institutions received a “C” for requiring three subjects and 33 received a “B” for requiring four or five subjects. ACTA maintains a website keeping the tally at Whatwilltheylearn.com.

ACTA says that “paying a lot doesn’t get you a lot.” Generally, the higher the tuition, the less likely there are rigorous general education requirements. Average tuition and fees at the 11 schools that require no subjects is $37,700; however, average tuition at the five schools that require six subjects is $5,400. Average tuition fees at the top national universities and liberal arts colleges are $35,000 (average grade is “F”).

Dishonest and manipulative college administrators might try to rebut the report saying, “We have general education requirements.” At one major state university, students may choose from over 100 different classes to meet a history requirement. At other colleges, students may satisfy general education requirements with courses such as “Introduction to Popular TV and Movies” and “Science of Stuff.” Still other colleges allow the study of “Bob Dylan” to meet a literature requirement and “Floral Art” to meet a natural science requirement.

ACTA’s report concludes by saying that a coherent core reflects, in the words of federal judge Jose Cabranes, “a series of choices -- the choice of the lasting over the ephemeral; the meritorious over the meretricious; the thought-provoking over the merely self-affirming.” A general education curriculum, when done well, is one that helps students “ensure that their studies -- and their lives -- are well-directed.”

ACTA says that a recent study reports that 89 percent of institutions surveyed said they were in the process of modifying or assessing their programs. What these and other institutions need is for boards of trustees, parents and alumni to provide the necessary incentive to administrators and there’s little more effective in opening the closed minds of administrators than the sounds of pocketbooks snapping shut.

8/26/2009: Senator Edward Kennedy, 77, Dies [finally]

U.S. Senator Edward Kennedy, a major figure in the Democratic Party who took the helm of one of America’s most fabled political families after two older brothers were assassinated, died late on Tuesday, CNN said. He was 77.

[When reached for comment, Mary Jo Kopechne said only, “40 years too late”]

[A number of people have been calling for his resignation; he finally did the right thing...perhaps for the first time in his life. Before the emergence of Obama on the national scene (maybe this is why Kennedy endorsed him) no individual so epitomized the stupidity and evil of socialism, uh, modern liberalism than Ted “the drunk given a liver transplant at the expense of someone else’s life” Kennedy. May his passing prove fatal to all of Obama’s socialist ambitions.]

“...any man’s death diminishes me, because I am involved in Mankind...” -- John Donne [nah...not Ted Kennedy who, like most of his family, was a life-long parasite on the buttocks of humanity. May he rot in Hell; he deserves no less.]

8/26/2009: Sen. Edward Kennedy Dies After Battle With Cancer
[Is it possible to have brain cancer without a brain?]

Sen. Edward Kennedy, a liberal icon and frequent Republican target who was one of the longest-serving and most accomplished [sic] lawmakers of the modern era, died at age 77.

In nearly five decades in the Senate, Mr. Kennedy fathered legislation that affected millions, tackling, among other things, education in the 1960s, poverty in the 1970s, disability in the 1980s and education in the 1990s. His longevity helped him build what many consider the most substantial record of achievement of anyone in his famous family, and made him a hero to many Democrats. A frequent nemesis of conservatives, he nonetheless forged friendships and legislative partnerships with many Republicans over the years.

[Read More]

[My rewrite] In nearly five decades in the Senate, Mr. Kennedy fathered legislation that affected millions, tackling, among other things, education in the 1960s [thanks, Ted, everyone now gets a quality education], poverty in the 1970s [we no longer have poor people in this country], disability in the 1980s [at least he made some lawyers rich but almost no one wants to risk hiring a disabled person...and small businesses are sued by disabled “customers” who had never before patronized the business and, after settling the lawsuit, never come back] and education [again] in the 1990s [we had to try again because it didn’t work in the 1960s]. He cost taxpayers who, unfortunately, are a diminishing portion of the population, trillions of dollars and made everything worse than before he “fixed” it. A fool and a crook, I guess those are his “accomplishments.” Had he not died, the passage of socialized health care for all of us (except government employees and the political elites) would have been more likely. His death was welcomed by freedom-loving people throughout the world.

Goodbye Asshole!

Now, back to something important...how ‘bout them Cubs?

8/25/2009: Born Again Romer Pushes Stimulus Plan Sham by Michael Fumento

There was never doubt that whenever the economy began turning around the Obama administration, and especially the $787 billion stimulus package, would get the credit. “Absolutely” the stimulus package was working, Christina D. Romer, Chair of President Obama’s Council of Economic Advisers, insisted in an August 6 address to the Economic Club of Washington D.C.

[That’s why they had to rush the stimulus package through Congress; if they waited, the economy would already have recovered and there would be no justification, no matter how lame, for paying off ACORD, unions, public employees and every brain-dead liberal scheme Congress could imagine.]

Yet she accompanied that talk with contradictory evidence – which is about par considering that since joined the administration Ms. Romer has herself become a contradiction.

Along with her speech, Ms. Romer presented a table with calculations of the percentage of 2009 GDP “discretionary fiscal stimulus” spending in various countries. It showed the U.K. spent 1.5 percent of its GDP on stimulus, the same as Germany and more than twice that of France at 0.6 percent. Yet even as the German and French economies grew by 0.3 percent in the second quarter according to new Eurostate data, the British economy plummeted 0.8 percent. Sweden spent 1.4 percent of its GDP on stimulus, yet had no growth.

And the U.S.? It outspent everybody, Romer boasted. Her table shows we spent 2.0 percent of GDP. In her talk she said “roughly 5 percent of GDP,” which represents the entire $787 billion as a portion of the projected GDP for this year, though it will actually be paid out over several years.

Choose whichever figure tickles your fancy; it remains that for all Pres. Obama’s personal back-slapping and media crowing of “disproved” stimulus skeptics, the U.S. economy shrank one-percent in the second quarter. It was remarkable only its improvement from the previous quarter.

Of course, a mere measurement of overall stimulus spending allocations versus growth in one quarter is grossly simplistic. But certainly it’s no more so than declaring “We’re spending stimulus funds, the economy improved last quarter, ergo stimulus funds caused the improvement.”

But what could be reviving economies if not stimulus spending?

“When the economy goes down there are [intrinsic] restorative forces that drive it back up,” observes UCLA economics professor Lee E. Ohanian, in contrast with the view that without substantial government programs you’ll go down and stay down for a long, long time.”

Yes, just as certain vulgar bumper stickers remind us that “excrement” happens, so do recessions followed by recoveries.

In fact, there were 12 recessions or depression just from 1850 to 1900, according to the National Bureau of Economic Research, and plenty before that. All before government could even pretend to do much about them. Not incidentally, despite mythology, U.S. recovery during the Great Depression began in the second quarter of 1933, while Congress was still voting on the earliest New Deal legislation. Sadly, a similar myth helped propel Hitler to power months after Germany’s recovery began.

As for actually ending the depression, “currency devaluations and monetary expansion became the leading sources of recovery throughout the world,” wrote a highly-regarded economic historian in 2003. “Fiscal policy, in contrast, contributed almost nothing to the [U.S.] recovery before 1942,” she asserted in a 1992 paper. Yes, that was Christina D. Romer – back when she was just a humble Berkeley economics professor.

Yet the Obama version Romer insists fiscal stimulus is “a well-tested antibiotic, not some newfangled gene therapy.” She herself recognizes this seeming double standard. “Some have concluded” from her 1992 paper she told the Brookings Institution in a March 9 speech, that “I do not believe fiscal policy can work today or could have worked in the 1930s. Nothing could be farther from the truth.”

“Some” may have reached that conclusion because her 1992 paper contains no hint that fiscal policy of any size or length has any benefit. Her 2003 paper contains such a hint, but only in the case of Japan and only “combined with substantial monetary expansion and an undervalued yen . . .” It also helped that Japan suffered a 8.5 percent decline in industrial production, compared to 46.8 percent in America and worse elsewhere.

The only problem with the U.S. government’s Great Depression stimulus, she said at Brookings, is that it was too small and too short. Yet there she was, August 6, insisting a small short stimulus had “absolutely” helped turn the economy around.

Tellingly, she felt obligated to exaggerate it, claiming “As of the end of June, more than $100 billion had been spent,” giving the Recovery.gov website as her source. That website, however, actually says only $60 billion had been “paid out” by then, much less actually spent by recipients. Regardless, both figures pale in comparison to the $2 trillion the Fed had already pumped into the economy by April 2 when the first stimulus dollars were going out.

“Politics is the art of the possible,” German Chancellor Otto von Bismarck said. Under the Obama administration, apparently it’s become the art of the impossible.

8/24/2009: Doubling the National Debt By: Michael Barone
Senior Political Analyst

The Obama administration late last week, in classic late Friday afternoon attention-dodging mode, released its midsession budget review. The good news: the federal deficit for this year will be only $1,600,000,000,000 rather than $1,800,000,000,000. The bad news, which will be released officially Tuesday: the projected federal deficit for the next ten years is projected to increase to $9,000,000,000,000 from $7,000,000,000,000.

That’s an extra $547,000 per day every day for the next 10 years.

As Harvard economist Greg Mankiw points out, this means that the national debt is on it way to more than doubling over the next ten years.

As I wrote in my August 12 Examiner column, “the tea party and health care protesters, in their often unsophisticated way, are raising an issue that seems to have become central to our politics: Should we vastly increase the size and scope of the federal government?” It’s far from obvious that our current economic predicament requires an increase in federal indebtedness comparable to that which was necessary to prosecuting World War II.

8/25/2009: The Great Escape by Thomas Sowell

Many of the issues of our times are hard to understand without understanding the vision of the world that they are part of. Whether the particular issue is education, economics or medical care, the preferred explanation tends to be an external explanation— that is, something outside the control of the individuals directly involved.

Education is usually discussed in terms of the money spent on it, the teaching methods used, class sizes or the way the whole system is organized. Students are discussed largely as passive recipients of good or bad education.

But education is not something that can be given to anybody. It is something that students either acquire or fail to acquire. Personal responsibility may be ignored or downplayed in this “non-judgmental” age, but it remains a major factor nevertheless.

After many students go through a dozen years in the public schools, at a total cost [well in excess of] of $100,000 or more per student— and emerge semi-literate and with little understanding of the society in which they live, much less the larger world and its history— most discussions of what is wrong leave out the fact that many such students may have chosen to use school as a place to fool around, act up, organize gangs or even peddle drugs.

The great escape of our times is escape from personal responsibility for the consequences of one’s own behavior. Differences in infant mortality rates provoke pious editorials on a need for more prenatal care to be provided by the government for those unable to afford it. In other words, the explanation is automatically assumed to be external to the mothers involved and the solution is assumed to be something that “we” can do for “them.”

While it is true that black mothers get less prenatal care than white mothers and have higher infant mortality rates, it is also true that women of Mexican ancestry also get less prenatal care than white women and yet have lower infant mortality rates than white women. But, once people with the prevailing social vision see the first set of facts, they seldom look for any other facts that might go against the explanation that fits their vision of the world.

No small part of the current confusion between “health care” and medical care comes from failing to recognize that Americans can have the best medical care in the world without having the best health or longevity because so many people choose to live in ways that shorten their lives.

There can be grave practical consequences of a dogmatic insistence on external explanations that allow individuals to escape personal responsibility.

Americans can end up ruining the best medical care in the world in the vain hope that a government takeover will give us better health.

Economic issues are approached in the same way. People with low incomes are seen as a problem for other people to solve. Studies which follow the same individuals over time show that the vast majority of working people who are in the bottom 20 percent of income earners at a given time end up rising out of that bracket.

Many are simply beginners who get beginners’ wages but whose pay rises as they acquire more skills and experience. Yet there is a small minority of workers who do not rise and a large number of people who seldom work and who— surprise!— have low incomes as a result.

Seldom is there any thought that people who choose to waste years of their own time (and the taxpayers’ money) in school need to change their own behavior— or to visibly suffer the consequences, so that their fate can be a warning to others coming after them, not to make that same mistake.

It is not just the “non-judgmental” ideology of the intelligentsia but also the self-interest of politicians that leads to so much downplaying of personal responsibility in favor of external explanations and external programs to “solve” the “problem.”

On these and other issues, government programs are far less likely to solve the country’s problems than to solve the politicians’ problem of getting the votes of those whose think the answer to every problem is for the government to “do something.”

To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is www.tsowell.com.

Copyright 2009 Creators.Com

8/24/2009: Obama’s Summer of Discontent by Fouad Ajami
The politics of charisma is so Third World. Americans were never going to buy into it for long.

So we are to have a French health-care system without a French tradition of political protest. It is odd that American liberalism, in a veritable state of insurrection during the Bush presidency, now seeks political quiescence. These “townhallers” who have come forth to challenge ObamaCare have been labeled “evil-mongers” (Harry Reid), “un-American” (Nancy Pelosi), agitators and rowdies and worse.

A political class, and a media elite, that glamorized the protest against the Iraq war, that branded the Bush presidency as a reign of usurpation, now wishes to be done with the tumult of political debate. President Barack Obama himself, the community organizer par excellence, is full of lament that the “loudest voices” are running away with the national debate. Liberalism in righteous opposition, liberalism in power: The rules have changed.

It was true to script, and to necessity, that Mr. Obama would try to push through his sweeping program—the change in the health-care system, a huge budget deficit, the stimulus package, the takeover of the automotive industry—in record time. He and his handlers must have feared that the spell would soon be broken, that the coalition that carried Mr. Obama to power was destined to come apart, that a country anxious and frightened in the fall of 2008 could recover its poise and self-confidence. Historically, this republic, unlike the Old World and the command economies of the Third World, had trusted the society rather than the state. In a perilous moment, that balance had shifted, and Mr. Obama was the beneficiary of that shift.

[Read More]

8/24/2009: Saving the Obama Presidency
Obama needs to move to the right.

On this day in 1994, Bill Clinton’s presidency was saved.

It didn’t look that way at the time. After threatening to keep Congress in session until a health-care bill was passed, then Senate Majority Leader George Mitchell gave up and let members return home for their recess. The legislative push for universal health care never recovered, and scarcely 11 weeks later Republicans led by Newt Gingrich woke up to find that they had just won control of both houses of Congress.

Mr. Clinton’s presidency, however, did recover. And though the Republican revolution in Congress would ultimately run aground, in retrospect we can see two important legacies: It helped usher in a new era of prosperity for the American people, and in the process helped Mr. Clinton save his presidency.

Today the lesson that President Barack Obama and the Democratic leadership in Congress take from that 1994 defeat is that they need to avoid Mr. Clinton’s “mistakes.” Avoiding mistakes, however, is not a winning strategy. A far more productive strategy would be to embrace Mr. Clinton’s success, which was freeing himself from his party’s left and returning to the centrist themes he had campaigned on.

No doubt that would be a bitter pill for Mr. Obama, given how he has made health care his signature issue. Still, a wiser West Wing ought to have seen this train wreck coming. For months polls have shown a huge gap between the popularity of the president and the unpopularity of his policies. Sooner or later, one of these had to give.

Mr. Obama’s bet was that his personal popularity would be enough to push his agenda through. Perhaps that would have been possible before the $787 billion economic stimulus package, the $410 billion omnibus bill that funds the government, the House-approved cap-and-trade bill, and so forth. But these big-ticket spending bills have helped define what the president means by “hope” and “change,” and it is through this prism that the American public now views his health-care proposals.

Public skepticism increased when the Congressional Budget Office issued findings contradicting Mr. Obama’s claims that his health-care reform would lower costs. And the more Americans have learned about the specifics, the more they dislike the plans. The president understands that he loses when he talks about substantive issues, which is why he’s been fudging on the public option. He may not understand that he is closing the gap between his unpopular policies and his personal popularity in the worst way a president can: by reducing his own credibility.

[Read More]

8/24/2009: In Search of Real Villains by Thomas G. Donlan

House Speaker Pelosi does not seem to grasp the nature of insurance, which relies on pooled risk -- not forced coverage.

Just before congress went home to face voters, House Speaker Nancy Pelosi arranged the music for the Democrats’ serenade for better and cheaper and more comprehensive health care. She sang in a minor key, with a heavy kettledrum accompaniment, taking aim at health insurance companies and their profits.

“I do not like using words like villains, but people call me a villain all the time, so I figure it is probably OK to use it back,” the speaker said as she warmed up in an interview with Al Hunt on Bloomberg TV.

Why does Pelosi see the insurance industry as a nest of villains? “They have been the ones with exorbitant profits and immoral decision-making in terms of coming between patients and their doctors,” she squawked.

Exorbitant profits? U.S. insurance industry profits are easy to look up. The managed health care companies in the S&P 500 are Aetna, Cigna, Coventry Health Care, Humana, UnitedHealth Group and WellPoint. In the four quarters ended March 31, their operating profit margin was 4.3%. For the whole S&P 500, the corresponding profit margin was 7.3%. Economist Ed Yardeni, who keeps track of such things and is a great hand with corporate data, says that since 1996, the insurance companies have averaged 2.9 percentage points below the profits of all 500 companies.

Still, Pelosi said, “The American people have been at their mercy. They have not made America healthier. They have made health care more costly. And it is important for us to have this legislation that puts the leverage back in the hands of the patients.”

Power to the Feds

The speaker ignored several important realities of U.S. health care and health insurance. Most Americans have good health coverage and are afraid to lose it. Most Americans pay only a small part of the cost of their health care directly. Most Americans receive health insurance from corporate employers or the government, who dictate the terms that insurance companies only administer.

The leverage Pelosi was talking about would be leverage in the hands of the federal government. There’s no power here for the people. “Under this legislation, an insurance company would not be able to withhold insurance from you if you had a pre-existing medical condition,” Pelosi promised. “If you lose your job, if you change your job, if you start a business, if you want to be self-employed, you would still have it. It caps what you pay into the system. It does not cap the benefit that you receive. This is very important for people with disabilities, people with a cancer diagnosis. The vulnerability, economically, is reduced because of our legislation.”

Pelosi’s no villain -- she really believes this nonsense, because she doesn’t understand what insurance is.

Insurance is a financial device protecting people from unlikely, unpredictable, adverse events, by pooling their funds to compensate those few who have losses. Fire insurance, for example, protects homeowners from extreme but unlikely losses.

Covering people with pre-existing conditions is not insurance; it’s a social program. Imagine a homeowners’ policy that covered air-conditioning and heating bills as well as fire and other sorts of unexpected damage. Payoffs would be continuous and certain. Premiums would rise accordingly, just as they have with health insurance that offers too much coverage.

The only way to insure a “risk” that is actually a certainty is to make other people pay for it. As we do. Healthy people already are taxed to pay for the care of sick people. More than half of Americans receive tax-supported health care.

Working Americans and employers each pay 1.45% of gross pay to support the Medicare program, which covers people over 65 and people who are disabled.

The total direct tax bill for Medicare is 2.9% of payroll, but that only raises about one-quarter of the program’s full cost. Beneficiaries pay nominal deductibles and co-payments, which may seem large to them but are small compared with actual costs. The bulk of the Medicare bill is paid from other government tax revenue and from Treasury borrowing. (No wonder it’s popular with beneficiaries.) Medicaid expenses for the poor are shared between state and the federal government using taxes and borrowing. Veterans and military families also receive government-supported health care.

Insurance companies should charge for homeowners’ insurance according to their estimate of actual risk; competition would keep rates in check. In all states, however, government comes between insurers and insureds to dictate fairness. Californians who live where forest fires come every few years pay a lot less than they should. The state makes everyone else pay a little more than they should and calls that fairness. Floridians pay a lot less than the actuarial value of their risk of hurricane damage. They tax themselves to subsidize themselves, and they call that fairness.

Obstruction of Justice

If insurance companies come between patients and their doctors, Pelosi should not resent it unless patients are also paying for their own treatment. It’s true that insurance companies sometimes refuse to pay for treatments that patients want and doctors think are necessary. Usually the insurers do so because they did not insure that risk, because they did not receive a premium to pay for it. This is a shame, but not shameful.

Only a government “insurance” plan, such as Medicare and Medicaid, can cover risks without charging premiums for them. They have the government’s invisible bank account behind them -- topped off by taxes and borrowing.

Even such government plans can’t do everything. Medicare and Medicaid have long lists of services they don’t cover, and they use their economic power to fix prices below market levels on a take-it-or-leave-it basis. Most doctors and hospitals take what the government pays; a few brave ones exercise their diminishing freedom to use the exit.

If a majority of Americans wished to pay for universal health insurance, they would have attended noisy town meetings this month and demanded that their legislators provide it -- and that they levy an appropriate tax. Congress and the administration would rejoice, and give it to them, good and hard. But politicians who try to slip national health past the people without admitting the true costs will not succeed.

Editorial Page Editor THOMAS G. DONLAN receives e-mail at tg.donlan@barrons.com.

8/21/2009: Mexico decriminalizes small-scale drug possession
by Mark Stevenson, Associated Press Write

[Mexico’s government recognizes the hazards of criminalization of recreational drugs while the United States’ government is too stupid and too greedy (and too controlling) to make the same kinds of changes in the law.]

MEXICO CITY (AP) - Mexico decriminalized small amounts of marijuana, cocaine and heroin on Friday—a move that prosecutors say makes sense even in the midst of the government’s grueling battle against drug traffickers.

Prosecutors said the new law sets clear limits that keep Mexico’s corruption-prone police from extorting casual users and offers addicts free treatment to keep growing domestic drug use in check.

“This is not legalization, this is regulating the issue and giving citizens greater legal certainty,” said Bernardo Espino del Castillo of the attorney general’s office.

The new law sets out maximum “personal use” amounts for drugs, also including LSD and methamphetamine. People detained with those quantities no longer face criminal prosecution.

Espino del Castillo says, in practice, small users almost never did face charges anyway. Under the previous law, the possession of any amount of drugs was punishable by stiff jail sentences, but there was leeway for addicts caught with smaller amounts.

“We couldn’t charge somebody who was in possession of a dose of a drug, there was no way ... because the person would claim they were an addict,” he said.

Despite the provisions, police sometimes hauled in suspects and demanded bribes, threatening long jail sentences if people did not pay.

“The bad thing was that it was left up to the discretion of the detective, and it could open the door to corruption or extortion,” Espino del Castillo said.

... The maximum amount of marijuana for “personal use” under the new law is 5 grams—the equivalent of about four joints...[Read more]

8/20/2009: In Government We Trust? by Daniel Henninger

To explain why the Obama health-care proposal pitched the nation’s politicians into town-hall hell, we would like to call to the stand an expert on how things in life can sometimes go wrong—Mr. Billy Joel.

Using a song years ago to sort through the complexities of a relationship in trouble, the Piano Man repeated the same simple one-word truth: “It’s a matter of trust.”

Instead of whining about conspiracies, the average congressman getting yelled at this summer by his own constituents might ask: How come these people don’t trust me?

The Democratic leadership and the progressive left think the town halls emerged from the electric fog of conservative talk shows, but the Obama proposal since early June never had an organized opposition. It has been sinking beneath its own weight. It is the weight of doubtful government.

Recall that soon into the Obama presidency it was written, if not put to music, that this new moment marked the reversal of the Reagan legacy.

One such springtime account began: “Ronald Reagan used to joke that the nine most terrifying words in the English language were ‘I’m from the government and I’m here to help.’ Barack Obama is making those words welcome.”

No he’s not. The public reaction to the health-care proposal, evident both in public-opinion polls and town halls, tells us that the misgivings Ronald Reagan identified 25 years ago remain a potent factor in American politics. There’s a reason why the United States motto on the back of its currency reads “In God We Trust,” not the other G-word.

The left likes to say that conservatives hate government. The truth, and it holds for many people beyond conservatism, is closer to what Alfred Hitchcock said when he was accused of hating the police. “I’m not against the police,” Hitchcock said, “I’m just afraid of them.”

Congress’s approval rating sits at 30%. This is a remarkable vote of no confidence in the representative branch of a national government.

In California and New York, the two most economically important and famous of the 50 states, the legislatures have been revealed as incompetent to manage the public’s money. The budget crises in California and New York aren’t just a normal turn in the fiscal cycle. Those governments have finally hit the wall.

Oblivious to manifest failure, the liberal-progressive idea keeps itself afloat on intellectual water wings—insisting that most people still believe that if government commits itself to accomplishing a public good, it will more or less succeed despite the difficulties and inefficiencies of these great projects. Needed good gets done.

That civics-book faith in the good intentions of government has been on the bubble with a broad swath of the American people who don’t know left from right but only public performance. The Obama health-care proposal arrived at a particularly bad moment to be asking voters to “trust us.”

By the time Barack Obama entered the White House, the exploding of the housing bubble had covered the landscape with the bodies of bankers, brokers and politicians who’d promised people a yellow-brick road lined with houses sold with fairy-tale down payments. Then the gods delivered a final lesson in misplaced trust: the Madoff Ponzi scheme.

I believe Madoff’s massive and destructive breach of trust had an effect on the public mind that carried beyond the tragedy of its immediate victims. After Madoff, John Q. Public set the bar really high for anyone seeking a big commitment of trust with money. But that’s exactly what the ambitious Obama health plan did.

President Obama in his public pleas for the plan appears to be truly upset that his benign view of it isn’t obvious to all. In his op-ed Sunday for the New York Times he said, “We’ll cut hundreds of billions in waste and inefficiency in federal health programs like Medicare and Medicaid.” Hundreds of billions? Just like that? This is nothing but an assertion by one man. It’s close to Peter Pan telling the children that thinking lovely thoughts will make them fly.

Most people are aware that the big three entitlements we’ve got are underfunded. Medicaid is wrecking state budgets, Medicare goes broke in eight years, followed by the flatlining of Social Security.

King Canute ordered the tides to recede to prove to his courtiers that his powers were limited. President Obama appears to believe he can reverse the tides of entitlement. What evidence has government given to allow anyone to believe this?

The White House is suggesting that Mr. Obama in the fall will state the “moral imperative” beneath a federal expansion of health insurance. As one Democratic strategist told this newspaper: “You’ve got to call on the better angels out there.”

These people seem to think that if a popular president can just find the right way to describe this entitlement, the American people will take his word for it. Maybe there was a time when a strong presidential personality could sell big things. Those days are gone. The government frittered them away.

President Obama has been saying lately, “This isn’t about me.” That’s right. That’s his problem.

Write to henninger@wsj.com

8/18/2009: from the Wall Street Journal Online, Best of the Web: Some proponents of ObamaCare may be underestimating its cost to the taxpayer. For example, Ellen Ratner, a left-wing commentator, writes on FoxNews.com:

According to The Center for Responsive Politics’ Web site OpenSecrets.org the total amount of lobbying money spent in 2008 and 2009 by groups representing pharmaceutical/health products was a whopping $370,440,214. The insurance companies are responsible for $144,738,590. To put this in perspective, the amount spent lobbying would pay for nearly four years of the estimated full cost of the Obama health care plan. The lobbying groups have managed to spend that in less than two years!

That comes to a total of $515,178,804. Divide that by 4, and the “estimated full cost” of ObamaCare is just $128,794,701 a year. Does anyone really believe Obama can provide insurance to however many people--what is it today, 47 million?--for $2.74 a year apiece?

8/18/2009: Whose Medical Decisions? by Thomas Sowell

There was a time when rushing a thousand-page bill through Congress so fast that no one has time to read it would have provoked public outrage. But now, this has been attempted twice in the first 6 months of a new administration.

The fact that they got away with it before, with the “stimulus” bill, may have led them to believe that they could get away with it again.

But the first bill simply spent hundreds of billions of dollars. The current “health care” bill threatens to take life-and-death decisions out of the hands of individuals and their doctors, transferring those decisions to Washington bureaucrats.

Culture of Corruption by Michelle Malkin FREE

People are taking that personally-- as they should. Your life and death, and that of your loved ones, is as personal as it gets.

The mainstream media are again circling the wagons to protect Barack Obama, but this time it may not work. One of those front-page editorials disguised as a news article in the New York Times begins: “The stubborn yet false rumor that President Obama’s health care proposals would create government-sponsored ‘death panels’ to decide which patients were worthy of living seemed to arise from nowhere in recent weeks.”

[...Read more...]

8/18/2009: Now Yale Embarrasses the Idea of the Western University
by Dennis Prager

When I was a graduate student at Columbia University in the early 1970s, I came to the then-tentative conclusion that I would probably never encounter a morally weaker, more cowardly group of people than college administrators.

While there are exceptions to this rule and there are other institutions that regularly exhibit as much moral cowardice as universities do, nearly 40 years later my conclusion is no longer tentative.

What prompted this conclusion in the 1970s was seeing a handful of radical students take over classrooms at Columbia and shut down the university while professors and deans, individuals whose lives were supposedly dedicated to the open mind and to learning, did nothing. It is almost impossible for me, nearly four decades later, to fully convey how deeply this affected me.

I came to see the modern university as fraudulent. In theory it stood for learning and opening the mind. In practice it stood for appeasement of bullies.

Unfortunately, nothing has happened since then to make me rethink the low view of universities that I developed in my 20s. And the most recent example -- this time at Yale University -- only adds to the bleak moral record of the modern university.

As reported -- to its credit -- in the New York Times last week, Yale University Press has banned the publication of any picture of Muhammad from a book it is about to publish on the Muhammad cartoons controversy, “The Cartoons That Shook the World.”

[...Read more...]

8/17/2009: NY shopkeeper who defended store recounts shooting
By VERENA DOBNIK (AP) – 3 days ago

NEW YORK — The sidewalk outside the Harlem store still was smeared with blood Friday, and the glass on the door still was blown out.

Above the entrance, someone had scribbled the words, “Abandon hope all ye who enter here.”

Less than 24 hours after a deadly showdown at the shop worthy of a Clint Eastwood script, Charles “Gus” Augusto Jr. entered his store — oblivious of the inscription taken from Dante’s “Inferno.”

The 72-year-old wholesaler of commercial restaurant equipment had been up all night, questioned by police about how he’d drawn a shotgun and killed two of four armed robbery suspects who entered his Kaplan Brothers Blue Flame store Thursday afternoon.

Two of the young men died on the street. Two remained hospitalized in stable condition with gunshot wounds.

When they walked in at about 3 p.m. and confronted Augusto with guns, “I didn’t want to shoot them,” he said, sitting bleary-eyed in his dusty, windowless warehouse, with a fly swatter hanging above his head.

He said the bandits drew their handguns, yelling, “Where’s the money? Where’s the money?”

They pistol-whipped a worker and waved a weapon at a cashier’s face, he said.

“There is no money,” Augusto said he told them. “Go home.”

Stashed away nearby was the 12-gauge shotgun he bought decades ago and said he had never used since a test-fire. He reached for it when he sensed one of the men was about to shoot, and pulled the trigger once.

“I hoped after the first shot they would go away,” he said.

When they didn’t, continuing to menace his employees, he fired again, and again.

Police said one of the men collapsed and died outside the door, just feet from a Baptist church.

“He died in the hands of God,” said a neighborhood resident, Vincent Gayle, pointing to the blood-spattered pavement by the church. “But what goes around comes around.”

Another fatally wounded suspect managed to cross the street, leaving a trail of blood before he collapsed. He was later pronounced dead at the hospital, police said.

More blood led police to the other two suspects, who were arrested and taken to the hospital. Charges against them were pending.

Police said Augusto didn’t have a required permit for the weapon used in the headline-grabbing shooting the Daily News called a “Pump-Action Ending.”

But he was a victim, police said, and no charges had been filed on Friday.

“I’d rather not have done it,” Augusto said, “and I’m sad for those mothers who have no sons.”

On Friday, pedestrians were still sidestepping pools of blood along Augusto’s block on West 125th Street, a short walk from Bill Clinton’s Harlem office.

Reactions to the shooting were mixed.

Frida Rodriguez called it “a sad day” for the neighborhood.

Augusto “was defending his work, his business, so you could perceive that as being heroic,” she said. “But on the other hand, these kids died.”

The shopkeeper was coy when asked whether, with his shotgun confiscated, he had a backup.

“I’m not going to tell you that,” he said.

Associated Press Writer Tom Hays contributed to this report.

Copyright © 2009 The Associated Press. All rights reserved.

8/17/2009: Two Papers in One: from the WSJ’s Best of the Web

“There’s a problem: conservative politicians, clinging to an out-of-date ideology--and, perhaps, betting (wrongly) that their constituents are relatively well-positioned to ride out the storm--are standing in the way of action. No, I’m not talking about Bob Corker, the Senator from Nissan--I mean Tennessee--and his fellow Republicans... I am, instead, talking about Angela Merkel, the German chancellor, and her economic officials, who have become the biggest obstacles to a much-needed European rescue plan.”--former Enron adviser Paul Krugman, New York Times, Dec. 15, 2008

“Why is Europe falling short? Poor leadership is part of the story. European banking officials, who completely missed the depth of the crisis, still seem weirdly complacent. And to hear anything in America comparable to the know-nothing diatribes of Germany’s finance minister you have to listen to, well, Republicans.”--Krugman, New York Times, March 16, 2009

“The European economy bounced back with unexpected strength in the second quarter, buoying hopes that a worldwide recession was drawing to a close. The sharp improvement from the first quarter underscored just how far Europe and indeed the global economy had come since a harrowing free fall in late 2008. Underlying the strong reading were solid performances in France and Germany, each of whose economies grew slightly in the second quarter, according to government data released Thursday.”--news story, New York Times, Aug. 14, 2009

[and they did it without pork-laden “stimulus” plans from brain-dead, lying, thieving liberals; Paul Krugman (a former advisor to Enron) is an idiot; he may have lots of degrees and a Nobel prize in economics (at least he once believed in free trade), but he is still wrong most of the time.]

8/17/2009: Health care slaves? “Public goods” versus private exchange
by Laura Hollis

Conservative public policy is often attacked because it fails to “fix” human nature. But liberal public policy usually fails because it ignores human nature. A conversation I had at a business law conference I attended two weeks ago drove this point home to me anew.

Having served on a well-attended panel entitled “Conservatism in Academe,” early on in the conference, I was fair game for anyone wanting to challenge conservative principles and policies. Later in the week, a colleague chatting with me over cocktails tried to defend single-payer health care. “I believe in having a civil society,” she explained pleasantly, “and in a civil society, I think health care should be a ‘public good.’”

Saying that health care is a “public good” sounds wonderful – the kind of statement with which no intelligent and compassionate person could disagree. But, as with so many blanket statements made by liberals, it does not hold up under scrutiny, and in fact the infrastructure necessary to deliver on such an apparently compassionate policy inevitably results in disappointment, failure, and – if the latter is not acknowledged – oppression by the very government it was hoped would be the solution to all human ills. Why is this so? Three basic reasons, all inarguable:

1. No one “owns” another human being’s work.

A “public good” ought to be something that everyone needs access to, but no one should own, like air or water. Although human beings might unlawfully pollute or otherwise make these public goods unavailable or unusable for their fellow creatures, humans did not create nor do they own these things, which preexisted us.

Unlike air or water, “health care” does not exist in the absence of another human being’s endeavors. If someone decides to be a nurse, a pediatrician, an oncologist, or a neurosurgeon, he will spend (or borrow) the money, and devote months and years of study to acquire the necessary expertise. Someone else could get an engineering degree and invent a new stent, an MRI technology, a CT scan machine, or ultrasound. Still another could pursue her education in chemistry, and develop a compound that eventually becomes drug therapy for cancer, autism, diabetes, hypertension, or chronic obstructive pulmonary disease. Groups of people get together, raise the necessary funds, and build offices, clinics, and hospitals. Multiply this activity by hundreds of thousands of people over decades, and you have a health care “system.” (Although even the term “system” is a misnomer here, since there is no single unifying power behind the development or delivery of the care). But none of these goods or services would exist without human beings’ creating, building, or deciding to deliver them.

To say that “health care” is a “public good” is to say that everyone has an equal right to these people’s time, their efforts, their energy; the services they choose to deliver, or the things they have devoted their lives’ work to developing. The unfairness of this assessment and the impossibility of its implementation is surely obvious: none of us “owns” anyone else’s time or creativity, and none of us have the right to demand free access to it. To claim otherwise is a form of indentured servitude. A free society depends upon free exchange: we request goods or services that another provides, and we must offer something that person views as having equal value. Which brings us to the second point.

2. If people think it is “free,” they will demand more of it than can be provided.

Characterizing health care as a “public good” is another way of saying that demand for it is potentially unlimited. This exposes the single largest flaw in the single-payer plans. Single-payer advocates like Barack Obama, Nancy Pelosi and Barney Frank ignore human nature, and then hide behind their intentions when human nature rears its head: “We don’t have any intention of ‘rationing’ health care,” they claim. OK, let’s assume they don’t. But it won’t be their “intentions” that cause it to be rationed; it will be the fact that everyone will want more of it than they can have, because they have been told that it is their “right,” and that it is “free.”

A simple analogy should demonstrate this. Food is even more essential to human existence than health care, and yet we don’t argue that we have a “right” to “free” food. If your local supermarket was ordered to announce “Free food today!” would people casually stroll over and pick up a few items they needed? More likely, there would be a run on the store that would empty the shelves within minutes. Imagine that happening at every store, every day. How long could that system last?

The only thing tempering insatiable human demand is the fact that the person providing the wanted item expects something of value in exchange – usually money. As much as liberals love to denounce the profit motive, it is precisely the insistence upon an exchange of value that keeps what would otherwise be limitless human demand in check.

Government purports to be “above” mere money-grubbing profit motives, and people assume this is an improvement. But it is actually the problem. Government “income” from tax dollars is not unlimited, despite perception to the contrary. Yet history is replete with instances of entities charging the government more than they would if they were billing a private entity. (Medicare fraud, anyone? Or perhaps you remember $500 toilet seats?) In point of fact, the costs of the goods and services after the government decides to provide them will be pretty much what they were before the government took over. Only now, the customers/recipients/patients think that they no longer have to pay for them. Without the checks and balances inherent in the “my-wants-versus-your-profit-motive” dynamic, demand will skyrocket, supplies will shrink, and shortages will occur. Why must supplies shrink? Because the government cannot command doctors to work more than 24 hours in a day. It cannot command that complex surgeries take less time. It cannot command the chemical reactions in pharmaceutical manufacturing to occur faster. All it can do is ration what there is.

3. There is no such thing as completely “equal” care, anyway

If demand for health care is limitless, governments’ pursuit of absurd and impossible results, seemingly, is not. And that pursuit has been the cause of untold misery. It is a very small step from saying that “health care is a ‘public good’” to saying that “equal quality health care is a ‘public good.’” After all, if I have a “right” to neurosurgery, then do I not also have a right to neurosurgery that is as good as that which someone in Los Angeles, Cleveland or Boston would get?

This, too, is untenable. Human beings may be “created equal” in the eyes of God, but they are certainly not created equal in terms of talent, skill, acuity, tenacity, or ability. The government cannot say, “Surgeon X must be of equal quality and skill as Surgeon Y.” Plenty - like the former Soviet Union, Cambodia, China and Cuba (note the pattern there) - have tried and failed. More recently, countries like Sweden have actually forbidden the private purchase of health care that is not paid for by the government, arguing that for some to get “better” care simply because they can afford to pay for it, is “unequal.”

The primary problem with the delivery of health care in this country is not the model of private exchange, it is a cost structure that is making it increasingly difficult for the average American to pay for the care they receive. The correct model of reform is one that addresses unnecessary costs, not one that takes our most talented, productive and needed citizens, and makes them – and us – slaves to an unworkable and ultimately doomed government health care system.

8/16/2009: We Don’t Spend Enough on Health Care
It’s crazy to adopt a bean-counting mentality amid revolutionary, albeit expensive, advances in medicine. by Craig S. Karpel

[There’s a lot in this essay with which to agree, but the real issue is that we don’t know how much we would spend in the aggregate without government interference. We might spend a lot more in total but get even more services and better outcomes for it. As we as a society become wealthier and spend a smaller percentage of our income on food, clothing and shelter, we can afford to spend more on “luxuries” and much of health care is a luxury both by historical standards and world standards.]

Americans are being urged to worry about the nation spending 17% of its gross domestic product each year on health care—a higher percentage than any other country. Addressing the American Medical Association in June, Barack Obama said, “Make no mistake: The cost of our health care is a threat to our economy.” But the president is mistaken. Japan spends 8% of its GDP on health care—the same as Zimbabwe. South Korea and Haiti both spend 6%. Monaco spends 5%, which is what Afghanistan spends. Do all of these countries have economies that are less “threatened” than that of the U.S.?

No. So there must be other factors that affect the health of a nation’s economy.

Mr. Obama has said that “the cost of health care has weighed down our economy.” No one thinks the 20% of our GDP that’s attributable to manufacturing is weighing down the economy, because it’s intuitively clear that one person’s expenditure on widgets is another person’s income. But the same is true of the health-care industry. The $2.4 trillion Americans spend each year for health care doesn’t go up in smoke. It’s paid to other Americans.

The basic material needs of human beings are food, clothing and shelter. The desire for food and clothing drove hunter-gatherer economies and, subsequently, agricultural economies, for millennia. The Industrial Revolution was driven by the desire for clothing. Thus Richard Arkwright’s water frame, James Hargreaves’s spinning jenny, Samuel Crompton’s spinning mule, Eli Whitney’s cotton gin and Elias Howe’s sewing machine.

Though it hasn’t been widely realized, the desire for shelter was a major driver of the U.S. economy during the second half of the 20th century and the first several years of the 21st. About one-third of the new jobs created during the latter period were directly or indirectly related to housing, as the stupendous ripple effect of the bursting housing bubble should make painfully obvious.

Once these material needs are substantially met, desire for health care—without which there can be no enjoyment of food, clothing or shelter—becomes a significant, perhaps a principal, driver of the economy.

A little-noticed feature of the current recession is the role of the health-care industry as a resilient driver of the general economy. Health-care now accounts for 10.4% of nonfarm employment. Health-care employment grew by 19,600 jobs in July 2009, on a par with the average monthly gain for the first half of 2009, which was down from an average monthly increase of 30,000 in 2008. Remarkably, these gains occurred in a period during which total employment shrank by 6.7 million.

The U.S. health-care economy should be viewed not as a burden but as an engine of growth. Medical and orthopedic equipment exports increased by 65.1% from 2004 through 2008. Pharmaceutical exports were up 74.6%. The unprecedented advances expected to come out of American stem cell, nanotechnology and human genome research—which other countries’ constricted health sectors cannot support—will send these already impressive figures skyward.

A study by Deloitte LLP has found that more than 400,000 non-U.S. residents obtained medical care in the U.S. in 2008, and it forecasts an annual increase of 3%. Some 3.5% of inpatient procedures at U.S. hospitals were performed on international patients, many of them escaping from Canada’s supposedly superior health system.

“Inbound medical tourism,” Deloitte stated, “is primarily driven by the search for high-quality care without extensive waiting periods. Foreign patients are willing to pay more for care within the United States if these two factors play a large role.” The deficiencies of the foreign health-care systems the Obama administration wishes to emulate can be counted on to generate ever-increasing revenues for U.S. providers and employment for Americans.

In a 2007 study, Stanford University economists Robert E. Hall (who will take office next year as president of the American Economic Association) and Charles I. Jones reported that modeling they’ve conducted has found that mid-21st century U.S. health-care expenditures would optimally amount to 30% of GDP or more. They wrote:

“We examine the allocation of resources that maximizes social welfare in our model. We abstract from the complicated institutions that shape spending in the United States and ask a more basic question: from a social welfare standpoint, how much should the nation spend on health care, and what is the time path of optimal health spending? . . .

“Viewed from every angle, our results support the proposition that both historical and future increases in the health spending share are desirable... [W]e believe it likely that maximizing social welfare in the United States will require the development of institutions that are consistent with spending 30 percent or more of GDP on health by the middle of the century.”

The administration’s health-care plan is biased toward bean-counting rather than designed to maximize American physical and mental well-being. We need to ask ourselves whether there is truly anything more valuable to us than our loved ones and our own health and longevity.

In the signature radio sketch of Jack Benny, whose performing persona was laughably frugal, actor Eddie Marr snarled at him, “Don’t make a move—this is a stickup. Now, come on: Your money or your life.” Benny didn’t respond. The “robber” said, “Look, bud—I said your money or your life!” Whereupon Benny shot back, “I’m thinking it over!”

Confronted for the first time in history with a constant stream of medical innovations that are marvelously effective but tend to be very expensive, our legislative representatives—in particular, the Blue Dog Democrats—would do well to stop “thinking it over” and to commit themselves to action that will preserve the ability of Americans to choose life over money.

Mr. Karpel is the author of “The Retirement Myth” (HarperCollins, 1995).

8/17/2009: Health Debate Misses a Key Point

The health debate isn’t just about health or the role of government in the economy (“Health Debate Isn’t About Health,” Capital Journal, Aug. 11). It is about the Constitution, liberty and the future of the republic. As a high-school government teacher for 11 years, I have read the Constitution thoroughly and completely hundreds of times. The Constitution is about limiting government—keeping it as small and unobtrusive as possible. It is about the government protecting property, not taking away from one group to give to another.

As our government gets further away from those basic principles, we move toward the tyranny that the Founding Fathers hoped to avoid. The health bill may be well-intentioned, but it gives government sweeping powers to make health-care decisions concerning everything from preventing life (abortion) to ending it (end-of-life counseling). It may not intend to put the government between the physician and the patient but it gives the government unprecedented power to do just that.

There is no authority in the Constitution for government to take over our health care, just as there was no authority in the Constitution to take over General Motors or take taxpayer money to bail out failing banks. The government decided to throw the Constitution under the bus during the last year of the Bush administration, and the current administration has driven the bus back and forth over the document. The people of this country have a right to be angry and fearful for both our liberty and the future of our republic.

David Williams
Fairfax, Va.

8/17/2009: It’s Time to Legalize Drugs
By Peter Moskos and Stanford “Neill” Franklin

Undercover Baltimore police officer Dante Arthur was doing what he does well, arresting drug dealers, when he approached a group in January. What he didn’t know was that one of suspects knew from a previous arrest that Arthur was police. Arthur was shot twice in the face. In the gunfight that ensued, Arthur’s partner returned fire and shot one of the suspects, three of whom were later arrested.

In many ways, Dante Arthur was lucky. He lived. Nationwide, a police officer dies on duty nearly every other day. Too often a flag-draped casket is followed by miles of flashing red and blue lights. Even more officers are shot and wounded, too many fighting the war on drugs. The prohibition on drugs leads to unregulated, and often violent, public drug dealing. Perhaps counter-intuitively, better police training and bigger guns are not the answer.

When it makes sense to deal drugs in public, a neighborhood becomes home to drug violence. For a low-level drug dealer, working the street means more money and fewer economic risks. If police come, and they will, some young kid will be left holding the bag while the dealer walks around the block. But if the dealer sells inside, one raid, by either police or robbers, can put him out of business for good. Only those virtually immune from arrests (much less imprisonment) -- college students, the wealthy and those who never buy or sell from strangers -- can deal indoors.

Six years ago one of us wrote a column on this page, “Victims of the War on Drugs.” It discussed violence, poor community relations, overly aggressive policing and riots. It failed to mention one important harm: the drug war’s clear and present danger toward men and women in blue.

Drug users generally aren’t violent. Most simply want to be left alone to enjoy their high. It’s the corner slinger who terrifies neighbors and invites rivals to attack. Public drug dealing creates an environment where disputes about money or respect are settled with guns.

In high-crime areas, police spend much of their time answering drug-related calls for service, clearing dealers off corners, responding to shootings and homicides, and making lots of drug-related arrests.

One of us (Franklin) was the commanding officer at the police academy when Arthur (as well as Moskos) graduated. We all learned similar lessons. Police officers are taught about the evils of the drug trade and given the knowledge and tools to inflict as much damage as possible upon the people who constitute the drug community. Policymakers tell us to fight this unwinnable war.

Only after years of witnessing the ineffectiveness of drug policies -- and the disproportionate impact the drug war has on young black men -- have we and other police officers begun to question the system.

Cities and states license beer and tobacco sellers to control where, when and to whom [those] drugs are sold. Ending Prohibition saved lives because it took gangsters out of the game. Regulated alcohol doesn’t work perfectly, but it works well enough. Prescription drugs are regulated, and while there is a huge problem with abuse, at least a system of distribution involving doctors and pharmacists works without violence and high-volume incarceration. Regulating drugs would work similarly: not a cure-all, but a vast improvement on the status quo.

Legalization would not create a drug free-for-all. In fact, regulation reins in the mess we already have. If prohibition decreased drug use and drug arrests acted as a deterrent, America would not lead the world in illegal drug use and incarceration for drug crimes.

Drug manufacturing and distribution is too dangerous to remain in the hands of unregulated criminals. Drug distribution needs to be the combined responsibility of doctors, the government, and a legal and regulated free market. This simple step would quickly eliminate the greatest threat of violence: street-corner drug dealing.

We simply urge the federal government to retreat. Let cities and states (and, while we’re at it, other countries) decide their own drug policies. Many would continue prohibition, but some would try something new. California and its medical marijuana dispensaries provide a good working example, warts and all, that legalized drug distribution does not cause the sky to fall.

Having fought the war on drugs, we know that ending the drug war is the right thing to do -- for all of us, especially taxpayers. While the financial benefits of drug legalization are not our main concern, they are substantial. In a July referendum, Oakland, Calif., voted to tax drug sales by a 4-to-1 margin. Harvard economist Jeffrey Miron estimates that ending the drug war would save $44 billion annually, with taxes bringing in an additional $33 billion.

Without the drug war, America’s most decimated neighborhoods would have a chance to recover. Working people could sit on stoops, misguided youths wouldn’t look up to criminals as role models, our overflowing prisons could hold real criminals, and -- most important to us -- more police officers wouldn’t have to die.

Peter Moskos is a professor at John Jay College of Criminal Justice and the author of “Cop in the Hood.” Neill Franklin is a 32-year law enforcement veteran. Both served as Baltimore City police officers and are members of Law Enforcement Against Prohibition.

8/15/2009: Public service pensions over $100,000 per year skyrocket
By Troy Anderson, Staff Writer

At a time when government agencies are cutting back on law enforcement, health care for children and services for the poor, the number of public servants collecting $100,000-plus pensions - including one raking in nearly $500,000 a year - has exploded in recent years, in some cases tripling or even increasing sevenfold.

In Los Angeles County, the number of retired county employees receiving pensions of $100,000 or more has nearly tripled from 1,198 in 2004 to 3,096 today, the Daily News, a sister paper of the Press-Telegram, has learned through a series of Public Records Act requests.

Throughout California, the number of retired state workers collecting $100,000-plus pensions has mushroomed more than six fold from 816 in 2004 to 5,115 now.

And the number of school administrators and teachers collecting six-figure pensions has rocketed more than sevenfold from 427 in 2004 to 3,088 now.

Los Angeles, excluding the Department of Water and Power, currently has 600 retirees collecting more than $100,000 a year.

“This is just outrageous to me,” said Marcia Fritz, vice president of the California Foundation for Fiscal Responsibility, an organization that advocates statewide pension reform. “I would not have expected the number of ($100,000 pension club members) to have increased that much in the last five years.”

Nearly $500,000 a year

The dubious honor of collecting the state’s highest pension belongs to former Vernon City Administrator Bruce Malkenhorst, who receives $499,675 per year - even though he is currently facing two counts of misappropriating public funds for allegedly taking $60,000 in city money for personal use.

Malkenhorst’s attorney did not return calls for comment.

The second-largest pension goes to an undisclosed Los Angeles County government retiree who is paid $366,384.

As grand juries throughout the state are investigating pension systems, former Assemblyman Keith Richman, president of CFFR, said these huge pensions are the result of a “corrupt pension system.”

California, Richman said, is the only state in the nation that allows employees to use their highest year of salary - including unused vacation, vehicle allowances, bonuses and other compensation - in calculating their pensions.

“The bottom line is we have very extravagant pension benefits that taxpayers can’t afford,” Richman said. “Pension-spiking has played a large role in this. We have public employees throughout the state who are retiring at age 50 and collecting more than 100 percent of their salaries, getting annual cost-of-living raises and lifetime health benefits.”

But union leaders bristle at the suggestion that most public workers receive extravagant retirement benefits.

Barbara Maynard, a consultant for the Coalition of LA City Unions and the Coalition of County Unions, said only a small percentage of retired public servants receive “these exorbitant pensions.”

“It’s really upper management who are receiving these benefits,” Maynard said. “The rank-and-file workers are really struggling to get by on very meager pensions averaging $40,000 a year.”

Call for rollback

The revelations about the eye-popping pensions - a by-product of what officials describe as a “Cadillac” pension system elected officials have created at the prodding of public employee unions - come as Gov. Arnold Schwarzenegger, Los Angeles City Councilman Bernard Parks and others are calling on elected officials to roll back generous pension and retiree health care plans.

Schwarzenegger has estimated the unfunded retirement promises - the money the state has promised to pay over the lifetime of its employees and retirees without designating where the funds will come from - could be as much as $300 billion if investments don’t meet projections.

When the state’s first pension fund - the California State Teachers’ Retirement System - was created in 1913, teachers who worked 30 years were paid a $500 annual pension, the equivalent of about $10,500 annually now. Over the years, other public pension systems were created and most were designed to pay public servants about half their salary in retirement.

In 1999 - at the height of the economic boom - labor unions aggressively lobbied state lawmakers to pass SB 400 - the “pension-boosting bill” - retroactively boosting pensions for state employees and allowing them to retire at younger ages with higher pensions.

Then in 2003, the California Supreme Court issued a ruling on a 1997 lawsuit allowing public employees to use bonuses, clothing and auto allowances, unused vacation and other income in calculating their pensions.

Since then, government agencies throughout the state have adopted similar plans and public employees - whose pensions are usually based on the highest year’s pay - have used a variety of methods to “spike” their pensions shortly before retirement.

Now, even as the number of government workers collecting $100,000-plus pensions has skyrocketed in recent years, the pension systems charged with dispersing their checks have lost tens of billions of dollars in the stock and real estate markets.

As a result, the amount of taxpayer subsidies for these pension plans will have to be increased by billions of dollars in the years ahead, requiring more tax increases and cuts in public services.

The nation’s largest public pension fund, the California Public Employees’ Retirement System, has recently lost a third of its value, dropping from a high of $253 billion in December 2007 to $181 billion as of June 30.

Even before the historic stock market downturn, the annual taxpayer contribution to the fund jumped from $4.2 billion in 2003-04 to $7.2 billion last fiscal year.

CalPERS spokesman Ed Fong said the system is planning to meet with representatives from public employee unions and its 26,000 member government agencies to discuss ways to reduce costs to ensure retirees are paid the amounts owed them.

Despite failed efforts in recent years to reform the public pension and benefit systems, David Crane, special adviser to the governor for jobs and economic growth, said a growing number of Democrats and Republicans in Sacramento agree steps have to be taken.

While existing pensions can’t be renegotiated, Crane said the governor plans this week to propose several reforms, including less generous pension plans for newly hired workers and increased retirement ages.

“I think the Legislature increasingly understands the nature of this problem,” Crane said. “They have been issuing general obligation bonds regularly without voter consent to pay these benefits. But now the programs they care very deeply about are being shut down because we have to pay off these past pension promises.”

In the same way as CalPERS recently lost a huge portion of its funds, the teachers system, CalSTRS, has dropped by a third from a high of $172 billion in 2007 to $119 billion as of June 30.

Even as taxpayer contributions to the plan have grown from $1.9 billion in 2004 to $2.3 billion in 2008, CalSTRS now says closing the shortfall will require legislative action to further increase contributions made by school districts.

Similarly, the county’s taxpayer contribution to the Los Angeles County Employees Retirement Association fund is expected to increase from $805 million this year to $1.1 billion by 2011-12 as the fund has dropped in value since mid-2007.

But while county officials are confident they can afford the increased costs, Parks, the Los Angeles councilman, said the city’s pension funds are “seriously in bad shape” and a rapidly growing proportion of the budget is going to pay for pensions and retiree health care costs.

In response, city officials are drafting a change in the city charter that would allow for the creation of a new, less generous pension plan for newly hired city workers.

Assistant City Administrative Officer Tom Coultas said the City Council could approve the new plan for civilian employees, but any changes for police officers and firefighters would require voter approval.

8/11/2009: Sen. Debbie Stabenow, Energy Leader

Detroit, Mich. - Michigan just experienced its coldest July on record; global temperatures haven’t risen in more than a decade; Great Lakes water levels have resumed their 30-year cyclical rise (contrary to a decade of media scare stories that they were drying up due to global warming), and polls show that climate change doesn’t even make a list of Michigan voters’ top-ten concerns.

Yet in an interview with the Detroit News Monday, Senator Debbie Stabenow (D., Mich.) - recently appointed to the Senate Energy Committee - made clear that fighting the climate crisis is her top priority.

“Climate change is very real,” she confessed as she embraced cap and trade’s massive tax increase on Michigan industry - at the same time claiming, against all the evidence, that it would not lead to an increase in manufacturing costs or energy prices. “Global warming creates volatility. I feel it when I’m flying. The storms are more volatile. We are paying the price in more hurricanes and tornadoes.”

And there are sea monsters in Lake Michigan. I can feel them when I’m boating.

[Aren’t you glad important decisions are being made by people with such a deep understanding of science?]

Read Parts 2 and 3 of Payne’s Stabenow interview coverage at his blog here.

8/17/2009: Editorial Commentary The Capital of Self-Interest
by Mark Hirschey

Politicians are self interested, not altruistic

In The Wealth Of Nations, Adam Smith put forth the revolutionary concept that the individual pursuit of self-interest promotes the good of society. By pursuing their own interests, individuals support the good of society more effectively than when they intend to promote social welfare.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages,” Smith said.

Today, politicians rail against what they describe as the misplaced self-interest of investment bankers, CEOs and other corporate executives. There are plenty to hold responsible for the current economic malaise. Blame greedy Wall Street executives who created dangerous financial derivatives. Blame greedy bankers who took advantage of easy credit to grant mortgages that borrowers could not afford. Blame the greedy borrowers themselves.

This list missed one important group: greedy politicians.

If Adam Smith was correct in surmising that we are all motivated by self-interest, then “we” also includes politicians. If corporate executives can be fairly described as motivated by money, power and prestige, the same description applies to “public servants.” When Willie Sutton was asked by the Federal Bureau of Investigation why he robbed banks, he famously replied, “That’s where the money is.” Today, anyone seeking money, power and prestige heads to Washington, D.C. That’s where the money is.

Tax What You Don’t Like

For example, legislators routinely increase the tax on cigarettes to reduce smoking, but argue that increasing minimum wages will not decrease employment among low-wage workers. They ignore how increasing the minimum wage makes it more difficult for employers to justify the training costs necessary to make teenagers into useful workers.

Eliminating low-wage job opportunities prevents lots of kids from gaining valuable job skills. Lawmakers do not reduce poverty by getting teenagers and other part-time workers fired or never hired in the first place. Kids need better basic education and training, but they also need low-wage job opportunities for the experience that will allow them to earn higher wages. Enlightened economic policy would focus on ways to help workers earn maximum wages, not minimum wages.

Why is unenlightened minimum-wage policy popular and invariably supported in Congress and state legislatures and municipal councils? It isn’t credible to argue that presumably well-intentioned politicians are simply ill-informed and naïve about the link between rising minimum wages and higher teenage unemployment. They don’t need to read government-provided unemployment statistics to see the problem. Many are old enough to remember low-wage assistance from carry-out kids at the grocery store, gas-pump jockeys, and waiters and waitresses in popularly priced restaurants. So many of those jobs are gone; do they ever wonder why?

The legislative jihad against minimum wage jobs continues because it is in the self interest of politicians to kill such jobs. That’s how you increase the need for public assistance and government-sponsored training programs for jobs that don’t exist. Politicians prefer handouts to wages because recipients of handouts are beholden to political providers. Public dependency grows when the market system is forced to shrink.

Car Swap

Next we have the Customer Assistance to Recycle and Save (CARS) program, charmingly referred to as the Cash for Clunkers program. Available at registered new-car dealers this summer, the now-$3 billion program provides U.S. government vouchers valued at $3,500 to $4,500 when consumers destroy an eligible vehicle and purchase a new one.

Consumers who want to take the family on a summer vacation, or buy food or back-to school clothing, have to pay their own way, but those who want to buy a new car might be in luck. If they meet political guidelines before the money runs out again, some of their costs will be picked up by taxpayers.

Sponsors want consumers and taxpayers to believe that government aid will reduce new-car costs by a commensurate amount, but whom are they kidding? Industry-provided rebates and sales incentives are shrinking and prices are firming. This gift to consumers is actually a gift to dealers and manufacturers and the United Auto Workers’ union. The best thing that can be said about it is that it’s a small gift -- most of the clunkers being traded in this summer were going to be replaced soon anyway. They were clunkers, after all.

Healthy Redistribution

Looking ahead to the fall, we have a whole host of politicians to thank for the pending reform of our nation’s health-care system. Never mind the lack of evidence that government is able to prudently control health-care costs (have you seen the federal budget deficit lately?), or effectively direct future improvements in health-care technology.

Don’t even imagine what the government manual looks like that describes brain surgery; it’s hard enough to picture how government bureaucrats will decide who does and doesn’t qualify for knee replacement, alcoholism treatment or breast implants.

As for the cost, in the four decades we have had the Medicare and Medicaid programs, health-care spending in the United States has more than tripled, from 5% to 16% of gross domestic product.

In the past half century, federal outlays accounted for an average of 22.2% of GDP. The fiscal 2010 Obama budget boosts that to 27.2%. When health care is more fully nationalized, federal outlays as a share of GDP will rise to 43.2% -- double what they were in 2007.

Politicians would have us believe that this enormous grab for money, power and prestige has nothing to do with political self interest. Taxpayers should remember the advice of Adam Smith and Willie Sutton. After all, politicians are people, too.

MARK HIRSCHEY is Anderson W. Chandler Professor of Business at the University of Kansas

8/13/2009: Tax Withholding Is Bad for Democracy
So is the payroll tax. End them both and voters will have a healthier understanding of the government burden. by Charles Murray

America is supposed to be a democracy in which we’re all in it together. Part of that ethos, which has been so essential to the country in times of crisis, is a common understanding that we all pay a share of the costs. Taxes are an essential ingredient in the civic glue that binds us together.

Our democracy is corrupted when some voters think that they won’t have to pay for the benefits their representatives offer them. It is corrupted when some voters see themselves as victims of exploitation by their fellow citizens.

By both standards, American democracy is in trouble. We have the worst of both worlds. The rhetoric of the president tells the public that the rich are not paying their fair share, undermining the common understanding from the bottom up. Meanwhile, the IRS recently released new numbers on who pays how much taxes, and those numbers tell the people at the top that they’re being exploited...

...This deforms the behavior of everyone—the voters who think they aren’t paying for Congress’s latest bright idea, the politicians who know that promising new programs will always be a winning political strategy with the majority of taxpayers who don’t think they have to pay for them, and the wealthy who know that the only way to get politicians to refrain from that strategy is to buy them off...

[Read the entire article]

8/13/2009: Historical Quotes

“What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value.” --Thomas Paine, The American Crisis, No. 1, 1776 [sounds like a good argument against free health care and all other forms of welfare]

“Honor, justice, and humanity, forbid us tamely to surrender that freedom which we received from our gallant ancestors, and which our innocent posterity have a right to receive from us. We cannot endure the infamy and guilt of resigning succeeding generations to that wretchedness which inevitably awaits them if we basely entail hereditary bondage on them.” --Thomas Jefferson [and this is an excellent argument against government deficits and government intrusion into our lives]

8/12/2009: Review & Outlook August 12, 2009, 4:25 P.M. ET
The Truth About Health Insurance

Only nine states have the costly rules that Obama wants to impose nationwide.

The White House is priming the defibrillator paddles to revive ObamaCare, and its new strategy is to talk about “health-insurance reform,” rather than “health-care reform.” The point is to make its proposals seem less radical than they are, while portraying private insurers as villains for supposedly denying coverage to the sick.

Sounds like a good time to explain a few facts about the modern insurance market. Start with the reality that nine out of 10 people under 65 are covered by their employers, most of which cover all employees and charge everyone the same rate. President Obama’s horror stories are about the individual insurance market, where some 15 million people buy coverage outside of the workplace.

Mr. Obama does have a point about insurance security. If you develop an expensive condition such as cancer or heart disease, and then get fired or divorced or your employer goes out of business—then individual insurance is going to be very expensive if it’s available. But what the President and Democrats won’t tell you is that these problems are the result mainly of government intervention.

Because the tax code subsidizes private insurance only when it is sponsored by an employer, the individual market is relatively small and its turnover rate is very high. Most policyholders are enrolled for fewer than 24 months as they move between jobs, making it difficult for insurers to maintain large risk pools to spread costs.

Mr. Obama wants to wave away this reality with new regulations that prohibit “discrimination against the sick”—specifically, by forcing insurers to cover anyone at any time and at nearly uniform rates. But if insurers are forced to sell coverage to everyone at any time, many people will buy insurance only when they need medical care. This raises the cost of insurance for everyone else, in particular those who are responsible enough to buy insurance before they need it; they end up paying even higher premiums. And the more expensive the insurance, the less likely people will buy it before they need it.

That’s one reason that only five states—Maine, Massachusetts, New Jersey, New York and Vermont—have Mr. Obama’s proposal for “guaranteed issue” on the books today. New Hampshire and Kentucky repealed such laws after finding that they soon had an even smaller individual insurance market as companies fled the state.

Another proposed reform known as “community rating” imposes uniform premiums regardless of health condition. This also blows up the individual insurance market, by making it far more expensive for young, healthy or low-risk consumers to join pools—if they join at all. And if the healthy don’t join risk pools, then premiums go up for everyone and insurers have little choice but to reduce their risk by refusing to cover those who have a high chance of getting sick, such as people with a history of cancer. This is why 35 states today impose no limits whatsoever on how much insurers can vary premiums and six states allow wide variation among consumers.

New York, New Jersey and Massachusetts have both community rating and guaranteed issue. And, no surprise, they have the three most expensive individual insurance markets among all 50 states, with premiums roughly two to three times higher than the rest of the country. In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799, respectively. ObamaCare would impose New York-type rates nationwide.

There are better ways to go. Tax credits to individuals to buy insurance would make it more affordable and thus strengthen the individual market. Other tax rule changes could also make it easier for people to join and form their own risk pools beyond their employers, such as through business federations, labor unions or, say, the Kiwanis Club. They would no longer be hostage to one job for insurance.

University of Chicago economist John Cochrane also argues that in a more rational individual insurance market, people could insure not merely against medical expenses but also against changes in health status. This kind of insurance would cover the risk of premiums rising as you get older and your health condition changes.

In turn, that would free insurers to compete for the business of all patients, including those with pre-existing conditions, because then they could charge enough to cover the costs—instead of passing them to others. As for those with rare conditions (“orphan diseases”) that require a lifetime of special care and are thus uninsurable, this is where government subsidies could be both appropriate and affordable.

ObamaCare would impose on all 50 states rules that have already proven to be failures in numerous states. Because these mandates would raise the cost of insurance, ObamaCare would then turn around and subsidize individuals to buy the insurance that the politicians made more expensive. Only in government could such irrationality be sold as “reform.”

Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

8/12/2009: Obama’s healthcare horror
Heads should roll -- beginning with Nancy Pelosi’s! by Camille Paglia

...I must confess my dismay bordering on horror at the amateurism of the White House apparatus for domestic policy. When will heads start to roll? I was glad to see the White House counsel booted, as well as Michelle Obama’s chief of staff, and hope it’s a harbinger of things to come... Obama seems to be surrounded by juvenile tinhorns, bumbling mediocrities and crass bully boys.

Case in point: the administration’s grotesque mishandling of healthcare reform...

But who would have thought that the sober, deliberative Barack Obama would have nothing to propose but vague and slippery promises -- or that he would so easily cede the leadership clout of the executive branch to a chaotic, rapacious, solipsistic Congress? House Speaker Nancy Pelosi... has clearly gone off the deep end with her bizarre rants about legitimate town-hall protests by American citizens. She is doing grievous damage to the party and should immediately step down.

There is plenty of blame to go around. Obama’s aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land...

...Both major parties have become a rats’ nest of hypocrisy and incompetence...

...And what do Democrats stand for, if they are so ready to defame concerned citizens as the “mob” -- a word betraying a Marie Antoinette delusion of superiority to ordinary mortals. I thought my party was populist, attentive to the needs and wishes of those outside the power structure. And as a product of the 1960s, I thought the Democratic party was passionately committed to freedom of thought and speech.

But somehow liberals have drifted into a strange servility toward big government, which they revere as a godlike foster father-mother who can dispense all bounty and magically heal all ills. The ethical collapse of the left was nowhere more evident than in the near total silence of liberal media and Web sites at the Obama administration’s outrageous solicitation to private citizens to report unacceptable “casual conversations” to the White House. If Republicans had done this, there would have been an angry explosion by Democrats from coast to coast. I was stunned at the failure of liberals to see the blatant totalitarianism in this incident, which the president should have immediately denounced. His failure to do so implicates him in it.

As a libertarian and refugee from the authoritarian Roman Catholic church of my youth, I simply do not understand the drift of my party toward a soulless collectivism. This is in fact what Sarah Palin hit on in her shocking image of a “death panel” under Obamacare that would make irrevocable decisions about the disabled and elderly. When I first saw that phrase, headlined on the Drudge Report, I burst out laughing. It seemed so over the top! But on reflection, I realized that Palin’s shrewdly timed metaphor spoke directly to the electorate’s unease with the prospect of shadowy, unelected government figures controlling our lives. A death panel not only has the power of life and death but is itself a symptom of a Kafkaesque brave new world where authority has become remote, arbitrary and spectral. And as in the Spanish Inquisition, dissidence is heresy, persecuted and punished.

Surely, the basic rule in comprehensive legislation should be: First, do no harm. [where have we heard that before?] The present proposals are full of noble aims, but the biggest danger always comes from unforeseen and unintended consequences. Example: the American incursion into Iraq, which destabilized the region by neutralizing Iran’s rival and thus enormously enhancing Iran’s power and nuclear ambitions.

...Quite frankly, the president gives little sense of direct knowledge of medical protocols; it’s as if his views are a tissue of hearsay and scattershot worst-case scenarios...

[Read All]

8/11/2009: Obama’s Seven Deadly Political Sins by John Hawkins

In the early days of Barack Obama’s presidency, his approval rating soared to dizzying heights as many Americans thought we had entered a new era of hope, change, unity, bipartisanship and uplifting speeches. Then, Obama moved on to actual governance and suddenly, for the first time in his political career, he had to primarily rely on his unproven leadership skills instead of his soaring oratory. That hasn’t worked out so well for him because he has engaged in seven deadly political sins:

Partisanship: After 16 years of ugly political battles during the Clinton and Bush presidencies, Americans were ready for a President who’d actually be able to get Republicans and Democrats to work together. Like McCain, who, love him or hate him, is a true bipartisan reformer, Obama constantly talked about unity during the campaign. However, once Obama was elected, the idea of cooperating with the other side went right out the window. Republicans were locked out of having any significant input on legislation as Obama decided to rely completely on his own party to get his agenda passed.

Typical of that attitude is this statement from Obama:

But I don’t want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess. I don’t mind cleaning up after them, but don’t do a lot of talking.” -- Barack Obama

There’s nothing new about ham-fisted partisanship in American politics, but if you practice it after running a campaign where you repeat the word “unity” so often that you sound like a parrot with a one word vocabulary, don’t expect people to be happy with you.

Racialism: Many Americans believed Barack Obama’s election would lead the country into a post-racial world. After all, Obama’s rhetoric during the campaign was very different from previous “black leaders” like Al Sharpton and Jesse Jackson. Besides, if a black man could become President, how racist could the country really be?

However, that wonderful dream has turned into a nightmare since Obama was elected. His supporters are frivolously crying “racism” about everything from Obama Joker posters to Obamacare. Obama’s Attorney General, Eric Holder, referred to America as “a nation of cowards“ on matters of race. Even the man himself waded into controversy by suggesting race might be involved in the arrest of Henry Louis Gates despite admitting that he didn’t know “all the facts.” The last thing most Americans thought they were doing when they voted for Obama was increasing how often the word “racist” was going to be errantly tossed around.

Lying: Bill Clinton was a shameless liar, but he was smooth about it. There’s a reason so many people refer to the man as “Slick Willie.” Obama, on the other hand, is so confident that the media will stick by him that he will blatantly contradict his earlier statements and just expect the press to simply cover for him. While that’s exactly what happens most of the time, all it seems to be doing over the long run is destroying the credibility of Obama and the mainstream press at the same time. That’s because eventually, when Obama’s lies come to light, they’re so flagrant that they’re almost impossible to ignore or explain away.

Radicalism: In America, distrust of government is as American as apple pie and as sensible as locking your door at night. So, when the government runs up unsustainable deficits, takes over GM and Chrysler, and attempts to swallow our entire health care system, people naturally get frightened and angry. That has a lot to do with the outrage that we’re seeing at these Townhall meetings and it’s definitely hurting Obama’s popularity.

Liberalism: Most Americans thought Obama had much more in common ideologically with Bill Clinton than Jimmy Carter. However, instead of a President steering the ship of state a bit to the left-of-center, Americans got a President who seems determined to take the country as far to the Left as he can, as fast as he can, preferably without any debate about the subject. Contrary to liberal opinion, this is a center-right country. Most Americans don’t share the ideological views of Ted Kennedy and they don’t want to see the United States turned into Venezuela or the Soviet Union, circa 1975. That bodes ill for a man who has already proven to be the most liberal President we’ve ever had in the White House.

Greed: In all fairness to Barack Obama, given that the Left has what may be once in a lifetime margins in the House and Senate, it makes a certain kind of sense to try to ram as much of their agenda through as possible while the Right doesn’t have the numbers to try and stop them.

However, when you try to sledgehammer through an enormous number of radical, extremely liberal bills in a center right country that dislikes radicalism and rapid change, you’re going to pay a steep price in popularity. It’s like the old saying goes, “Pigs get fed, hogs get slaughtered.” Barack Obama is being a hog about his agenda and he’s started to get slaughtered at the polls as a result.

Arrogance: Whether it’s Obama smugly saying “I won“ to a Republican who had concerns about handing out a “tax credit for people who don’t pay income taxes” or his administration’s willingness to openly admit that they were exploiting the economic crisis to get Obama’s agenda through -- “Never let a serious crisis go to waste“ -- Obama’s presidency has been marked by a stunning pomposity. As Kathryn Jean Lopez noted, “For Barack Obama, democracy appears to be a distraction. He really does seem to view himself as a Caesar.” The American people want a President who views himself as their servant, not a king who wants to lecture the peasants about what he views as “teachable moments.”

8/10/2009: I just read the May 2009 issue of Liberty Magazine: The many faces of herding – The current recession is only one among many examples of herding — following the crowd, jumping on bandwagons, getting swept up in mass psychology.

Each of us gets only a tiny fraction of our knowledge from direct personal experience. Most of it necessarily comes from other people, with their enthusiasms and fears. Many people join in a speculative boom, as for tulip bulbs in 17th-century Holland, or dotcom stocks in the recent history of the United States, not because they themselves grasp underlying fundamentals but because they assume that the supposed professionals know what they are doing.

The collapse of a mania for profit on houses triggered the current recession. Arguably, that mania can be traced to irresponsible government promotion of housing credit in many ways and over many decades, and more recently to credit from excessively easy Federal Reserve policy. The bursting of the bubble impinged on a financial system already rendered fragile by two types of contagion.

The first, which we might call “structural,” involves multiple tiers of securities and derivatives based on other securities based ultimately on mortgage and other debt, as well as the financial leverage so sought. But a second, closely related type is largely psychological: actual or rumored losses of some firms devalue others, which are holding their debt, throwing some into bankruptcy, intensifying a general panic, and driving investors into supposedly safe assets (such as U.S. government securities).

Even today the U.S. economy remains “fundamentally strong” in the sense that productive capacity survives, along with willing workers and creative entrepreneurs. Millions of consumers would eagerly spend money if only they could be confident of jobs, while thousands of companies would hire or retain workers if only they could count on selling their products. Desires to trade work and products for one another remain strong, but discoordination keeps these desires from meshing.

The financial structure is a large part of the difficulty, certainly, but so is an atmosphere of apprehension and fear, emphasized by a bearish stock market. Gloom pervades the media; for, in contrast with routine prosperity, bad news is, well, news. The president keeps threatening “catastrophe” unless he gets his way on legislation. (As H.L. Mencken used to explain, politicians thrive on promising salvation to a terrorized public.) Businesses and consumers alike hesitate to spend money, prudently from their individual points of view, yet intensifying each others’ distress. Measures to “stimulate” spending seem plausible in the short run; yet paradoxically, a record of profligacy and debt by both the public and the government forms the long-run background of our woes.

Bringing pop psychology into diagnosing economic trouble may seem lowbrow and imprecise. It lacks the cachet of high-powered abstract theory and mathematical models. What does one do, though, if psychology really belongs in the story?

Furthermore, “behavioral economics” is now gaining adherents and academic respectability. That new field recognizes how decision makers depart from the hyper-rationality postulated by standard theory, and depart in ways that may be explained by natural selection operating on the human race many millennia ago.

As I suggested at the start, herding and bandwagon effects are not confined to strictly economic affairs. Politicians and ignorant celebrities and even energy companies echo politically correct alarm over global warming to the point where the rest of us can hardly know what to believe as solid science. Many scientists accept grant money that they would hardly receive if they expressed doubt over the very phenomenon to be investigated. Auburn University recently announced that an entomologist who specializes in butterflies has received a grant to study the impact of global warming on butterflies. Being politically correct, the university has an Office of Sustainability to reinforce pressures on people to change their behavior. Dormitories are pushed to compete on cutting consumption of water and electricity and who knows what else. Also following fashion, the university has an Office of Diversity and Multicultural Affairs.

The War on Drugs as waged so far is lost. I do, however, applaud warning teenagers, honestly and emphatically, about the dangers of drugs. Still, I am squeamish about an approach being taken here in Auburn. Retailers are urged (pressured?) to issue discount cards to teenagers who take a pledge to abstain from drugs and submit to random testing. Doesn’t that carry intrusiveness and presumptuousness too far?

But one thing is certain: anyone who tries to explain contemporary events, and neglects the importance of herding and bandwagon effects, theorizes at his own peril. – Leland Yeager

8/8/2009: We do not face a choice between methods of rationing medical services. We face a choice between rationing according to a bureaucratic plan and being freed to engage in mutually beneficial exchanges. — Sheldon Richman, “The Market Doesn’t Ration Health Care“ [August 7, 2009]

Healthcare reformers say they have two objectives: to enable the uninsured and under-insured to consume more medical services than they consume now, and to keep the prices of those services from rising, as they have been, faster than the prices of other goods and services. Unfortunately, Economics 101 tells us that to accomplish those two things directly — increased consumption by one group and lower prices — the government would have to take a third step: rationing. The reformers are disingenuous about this last step, and for good reason. People don’t like rationing, especially of medical care.

[Read more]

8/7/2009: Violence breaks out in America’s town halls over Obama’s health care reforms by David Gardner

...President Obama said on Wednesday that there will be an overhaul of the health care system before the end of the year whether or not he has bipartisan support...

[More proof that our president is an arrogant asshole]

8/7/2009:Spitzer’s Incredible Shrinking Case
Hank Greenberg’s alleged misdeeds at AIG get smaller and smaller.

[As I said years ago, Eliot Spitzer is (or at least was) a menace to society. It is ironic that he was ruined by committing a “crime” that should not be a crime, but that he was adamant about enforcing. I wonder if he has changed his mind about victimless crimes...and those high-paid call girls definitely were not victims of their customers. On the other hand, they (and Eliot) were victims of an obtrusive overbearing government of hypocrites.]

Eliot Spitzer began the destruction of AIG for this? Yesterday’s $15 million settlement between the Securities and Exchange Commission and former AIG CEO Hank Greenberg offers a healthy perspective on Mr. Spitzer’s second most embarrassing case. In April of 2005, the former New York Attorney General filed fraud charges in the TV court of George Stephanopoulos on ABC’s “This Week,” but he never filed them in criminal court.

More than four years later, the federal government has decided that it cannot even make a civil case for fraud against Mr. Greenberg, never mind a criminal one. The SEC has essentially settled with Mr. Greenberg on the charge that he was the CEO at the time that “material misstatements” in earnings occurred.

Yet even if one accepts the SEC’s view of events, it may be a stretch to call them material, as they add up to less than 1% of AIG’s net income during the period at issue. The accounting items in the SEC charges, which Mr. Greenberg neither admits nor denies, represent less than 10% of the restatement AIG filed to justify the Greenberg firing demanded by Mr. Spitzer. The impact on retained earnings was roughly $250 million, when AIG’s total retained earnings at the time were approaching $70 billion.

AIG shareholders appear to have been hurt far more by the company’s 2005 Spitzer-driven earnings restatement than by Mr. Greenberg’s alleged failures as the “control person” in charge when AIG booked improper items. And we haven’t even gotten to the loss of AIG’s AAA credit-rating that followed his Spitzer-dictated ouster, the new management’s decision to go all-in on the U.S. housing market, or the failed regulation of AIG conducted by the Spitzer-appointed New York Insurance Superintendent Eric Dinallo.

Take only the $19 billion in losses that AIG suffered in its securities-lending business, the result of decisions made after Mr. Greenberg’s firing and overseen by Mr. Dinallo and other state regulators. More than 10 times the size of even the padded settlement Mr. Spitzer demanded from AIG, these losses make the charges against Mr. Greenberg seem almost quaint. Consider the subsequent $173 billion in taxpayer assistance to AIG and the demolition of a great American company, and it is nothing short of tragic.

8/6/2009: Autocracy and the Decline of the Arabs by FOUAD AJAMI

‘It made me feel so jealous,” said Abdulmonem Ibrahim, a young Egyptian political activist, of the recent upheaval in Iran. “We are amazed at the organization and speed with which the Iranian movement has been functioning. In Egypt you can count the number of activists on your hand.” This degree of “Iran envy” is a telling statement on the stagnation of Arab politics. It is not pretty, Iran’s upheaval, but grant the Iranians their due: They have gone out into the streets to contest the writ of the theocrats.

In contrast, little has stirred in Arab politics of late. The Arabs, by their own testimony, have become spectators to their history. A struggle rages between the Iranian theocracy and the Pax Americana for primacy in the Persian Gulf and the Levant. The Arabs have the demography—360 million people by latest count—and the wealth to balance Iran’s power. But they have taken a pass in the hope that America—or Israel, for that matter—would shatter the Iranian bid for hegemony.

We are now in the midst of one of those periodic autopsies of the Arab condition. The trigger is the publication last month of the Arab Human Development Report 2009, the fifth of a series of reports by the by the United Nations Development Program (UNDP) on the state of the contemporary Arab world.

The first of these reports, published in 2002, was treated with deference. A group of Arab truth-tellers, it was believed, had broken with the evasions and the apologetics to tell of the sordid condition of Arab society—the autocratic political culture, the economic stagnation, the cultural decay. So all Arabs combined had a smaller manufacturing capacity than Finland with its five million people, and a vast Arabic-speaking world translated into Arabic a fifth of the foreign books that Greece with its 11 million people translates. With all the oil in the region, tens of millions of Arabs were living below the poverty line.

Little has altered in the years separating the first of these reports from the most recent. A huge oil windfall came into the region, and it was better handled, it has to be conceded, than earlier oil windfalls. But on balance the grief of the Arabs has deepened, and the autocracies are yet to be brought to account. They remain unloved, but they remain in the saddle.

In a clever turn of phrase, The Economist recently wrote of an Arab Rip Abu Winkle awakening from a slumber into which he had fallen in the early 1980s to marvel at how little has changed. He would find Hosni Mubarak still at the helm in Cairo, the policeman Zine el-Abidine Ben Ali in Tunisia, and Moammar Gadhafi in Libya. He would miss Hafez Assad in Damascus, but he would be reassured that his son Bashar had inherited his father’s dominion. He would of course find the same dynasties in Jordan and in the Arab states of the Peninsula and the Gulf.

Wily rulers, the men at the helm may have failed their peoples. They may have denied them decent educational systems. They may not have figured out a way into the modern world economy. But they have mastered the art of political survival. “He who eats the sultan’s bread, fights with the sultan’s sword,” goes an Arabic maxim. The economic dominance of the rulers, the absence of the countervailing power of property and the private sector, has increased the awesome power of the governments and their security establishments.

It is no mystery, this sorrowful decline of the Arabs. They have invested their hopes in states, and the states have failed. According to the UNDP’s report, government revenues as percentage of GDP are 13% in Third World Countries, but they are 25% in the Middle East and North Africa. The oil states are a world apart in that regard: the comparable figures are 68% in Libya, 45% in Saudi Arabia, and 40% in Algeria, Kuwait and Qatar. Oil is no panacea for these lands. The unemployment rates for the Arab world as a whole are the highest in the world, and no prophecy could foresee these societies providing the 51 million jobs the UNDP report says are needed by 2020 to “absorb young entrants to the labor force who would otherwise face an empty future.”

The simple truth is that the Arab world has terrible rulers and worse oppositionists. There are autocrats on one side and theocrats on the other. A timid and fragile middle class is caught in the middle between regimes it abhors and Islamists it fears.

Indeed, the technocrats and intellectuals associated with these development reports are themselves no angels. On the whole, they are unreconstructed Arab nationalists. The patrons of these reports are the likes of the Algerian diplomat Lakhdar Brahimi and the Palestinian leader Hanan Ashrawi, intellectuals and public figures whose stock-in-trade is presumed Western (read American) guilt for the ills that afflict the Arabs. Anti-Americanism suffuses this report, as it did the earlier ones.

There is cruelty and plunder aplenty in the Arab world, but these writers are particularly exercised about Iraq. “This intervention polarized the country,” they say of Iraq. This is a myth of the Arabs who are yet to grant the Iraqis the right to their own history: There had been a secular culture under the Baath, they insist, but the American war begot the sectarianism. To go by this report, Iraq is a place of mayhem and plunder, a land where militias rule uncontested.

For decades, it was the standard argument of the Arabs that America had cast its power in the region on the side of the autocrats. In Iraq in 2003, and then in Lebanon, an American president bet on the freedom of the Arabs. George W. Bush’s freedom agenda broke with a long history and insisted that the Arabs did not have tyranny in their DNA. A despotism in Baghdad was toppled, a Syrian regime that had all but erased its border with Lebanon was pushed out of its smaller neighbor, bringing an end to three decades of brutal occupation. The “Cedar Revolution” that erupted in the streets of Beirut was but a child of Bush’s diplomacy of freedom.

Arabs know this history even as they say otherwise, even as they tell the pollsters the obligatory things about America the pollsters expect them to say. True, Mr. Bush’s wager on elections in the Palestinian territories rebounded to the benefit of Hamas. But the ballot is not infallible, and the verdict of that election was a statement on the malignancies of Palestinian politics. It was no fault of American diplomacy that the Palestinians, who needed to break with a history of maximalist demands, gave in yet again to radical temptations.

Now the Arabs are face to face with their own history. Instead of George W. Bush there is Barack Hussein Obama, an American leader pledged to a foreign policy of “realism.” The Arabs express fondness for the new American president. In his fashion (and in the fashion of their world and their leaders, it has to be said) President Obama gave the Arabs a speech in Cairo two months ago. It was a moment of theater and therapy. The speech delivered, the foreign visitor was gone. He had put another marker on the globe, another place to which he had taken his astounding belief in his biography and his conviction that another foreign population had been wooed by his oratory and weaned away from anti-Americanism.

The crowd could tell itself that the new standard-bearer of the Pax Americana was a man who understood its concerns, but the embattled modernists and the critics of autocracy knew better. There is no mistaking the animating drive of the new American policy in that Greater Middle East: realism and benign neglect, the safety of the status quo rather than the risks of liberty. (If in doubt, the Arabs could check with their Iranian neighbors. The Persians would tell them of the new mood in Washington.)

One day an Arab chronicle could yet be written, and like all Arab chronicles, it would tell of woes and missed opportunities. It would acknowledge that brief interlude when American power gave Arab autocracies a scare, and when a despotism in Baghdad and a brutal “brotherly” occupation in Beirut were laid to waste. The chroniclers would have to be an honest lot. They would speak the language of daily life, and the truths that Arabs have seen and endured in recent years. On that day, the “human development reports” would be discarded, their writers seen for the purveyors of double-speak and half-truths they were.

—Mr. Ajami, a professor at the School of Advanced International Studies at Johns Hopkins University and an adjunct fellow at Stanford University’s Hoover Institution, is the author, among other books, of “The Arab Predicament: Arab Political Thought and Practice since 1967 (Cambridge University Press, 1981).Printed in The Wall Street Journal, page A13

8/5/2009: Who May Harm Whom? by Walter E. Williams

“No one has a right to harm another.” Just a little thought, along with a few examples, would demonstrate that blanket statement as pure nonsense. Suppose there is a beautiful lady that both Jim and Bob are pursuing. If Jim wins her hand, Bob is harmed. By the same token, if Bob wins her hand, Jim is harmed. Whose harm is more important and should the beautiful lady be permitted to harm either Bob or Jim are nonsense questions.

During the 1970s, when Hewlett-Packard and Texas Instruments came out with scientific calculators, great harm was suffered by slide rule manufacturers such as Keuffel & Esser, and Pickett. Slide rulers have since gone the way of the dodo but the question is: Should Hewlett-Packard and Texas Instruments have been permitted to inflict such grievous harm on slide rule manufacturers? In 1927, General Electric successfully began marketing the refrigerator. The ice industry, a major industry and the livelihoods of thousands of workers, was destroyed virtually overnight. Should such harm have been permitted and what should Congress have done to save jobs in the slide rule and ice industries?

The first thing we should acknowledge is that we live in a world of harms. Harm is reciprocal. For example, if the government stopped Hewlett-Packard and Texas Instruments from harming Keuffel & Esser and Pickett, or stopped General Electric from harming ice producers, by denying them the right to manufacture calculators and refrigerators, they would have been harmed, plus the billions of consumers who benefited from calculators and refrigerators. There is no scientific or intelligent way to determine which person’s harm is more important than the other. That means things are more complicated than saying that one person has no rights to harm another. We must ask which harms are to be permitted in a free society and are not to be permitted. For example, it’s generally deemed acceptable for me to harm you by momentarily disturbing your peace and quiet by driving a motorcycle past your house. It’s deemed unacceptable for me to harm you by tossing a brick through your window.

In a free society, many conflicting harms are settled through the institution of private property rights. Private property rights have to do with rights belonging to the person deemed owner of property to keep, acquire, use and dispose of property as he deems fit so long as he does not violate similar rights of another. Let’s say that you are offended, possibly harmed, by bars that play vulgar rap music and permit smoking. If you could use government to outlaw rap music and smoking in bars, you would be benefited and people who enjoyed rap music and smoking would be harmed. Again, there is no scientific or intelligent way to determine whose harm is more important. In a free society, the question of who has the right to harm whom, by permitting rap music and smoking, is answered by the property rights question: Who owns the bar? In a socialistic society, such conflicting harms are resolved through government intimidation and coercion.

What about the right to harm oneself, such as the potential harm that can come from not wearing a seatbelt. That, too, is a property rights question. If you own yourself, you have the right to take chances with your own life. Some might argue that if you’re not wearing a seatbelt and wind up a vegetable, society has to take care of you; therefore, the fascist threat “click it or ticket.” Becoming a burden on society is not a problem of liberty and private property. It’s a problem of socialism where one person is forced to take care of someone else. That being the case, the government, in the name of reducing health care costs, assumes part ownership of you and as such assumes a right to control many aspects of your life. That Americans have joyfully given up self-ownership is both tragic and sad.

8/4/2009: Care Versus Control by Thomas Sowell

As someone who was once rushed to a hospital in the middle of the night, because of taking a medication that millions of people take every day without the slightest problem, I have a special horror of life and death medical decisions being made by bureaucrats in Washington, about patients they have never laid eyes on.

On another occasion, I was told by a doctor that I would have died if I had not gotten to him in time, after an allergic reaction to eating one of the most healthful foods around. On still another occasion, I was treated with a medication that causes many people big problems and was urged to come back to the hospital immediately if I had a really bad reaction. But I had no reaction at all, went home, felt fine and slept soundly through the night.

My point is that everybody is different. Millions of children eat peanut butter sandwiches every day but some children can die from eating peanut butter. Some vaccines and medications that save many lives can also kill some people.

Are decisions made by doctors who have treated the same patient for years to be over-ruled by bureaucrats sitting in front of computer screens in Washington, following guidelines drawn up with the idea of “bringing down the cost of medical care”?

The idea is even more absurd than the idea that you can add millions of people to a government medical care plan without increasing the costs. It is also more dangerous.

What is both dangerous and mindless is rushing a massive new medical care scheme through Congress so fast that members of Congress do not even have time to read it before voting on it. Legislation that is far less sweeping in its effects can get months of hearings before Congressional committees, followed by debates in the Senate and the House of Representatives, with all sorts of people voicing their views in the media and in letters to Congress, while ads from people on both sides of the issue appear in newspapers and on television.

If this new medical scheme is so wonderful, why can’t it stand the light of day or a little time to think about it?

The obvious answer is that the administration doesn’t want us to know what it is all about or else we would not go along with it. Far better to say that we can’t wait, that things are just too urgent. This tactic worked with whizzing the “stimulus” package through Congress, even though the stimulus package itself has not worked.

Any serious discussion of government-run medical care would have to look at other countries where there is government-run medical care. As someone who has done some research on this for my book “Applied Economics,” I can tell you that the actual consequences of government-controlled medical care is not a pretty picture, however inspiring the rhetoric that accompanies it.

Thirty thousand Canadians are passing up free medical care at home to go to some other country where they have to pay for it. People don’t do that without a reason.

But Canadians are better off than people in some other countries with government-controlled medical care, because they have the United States right next door, in case their medical problems get too serious to rely on their own system.

But where are Americans to turn if we become like Canada? Where are we to go when we need better medical treatment than Washington bureaucrats will let us have? Mexico? The Caribbean?

Many people do not understand that it is not just a question of whether government bureaucrats will agree to pay for particular medical treatments. The same government-control mindset that decides what should and should not be paid for can also decide that the medical technology or pharmaceutical drugs that they control should not be for sale to those who are willing to pay their own money.

Right now, medications or treatments that have not been approved by the Food and Drug Administration are medications or treatments that you are not allowed to buy with your own money, no matter how desperate your medical condition, and no matter how many years these medications or treatments may have been used without dire effects in other countries.

The crucial word is not “care” but “control.”

8/4/2009: Sgt. Crowley: You’re No Joe the Plumber by Robert Ringer

Obama’s “Beer Summit” was yet another stupid distraction from the reality that his czars, thug-o-crats, and progressive supporters in Congress are moving quickly to shove us into the socialist cage and slam the door shut before another election can take place. Thankfully, most people didn’t buy into this sideshow, seeing it as just another asinine, arrogant attempt to bolster his good-guy image.

Francis Reilly, president of Reilly Communications Inc., described Obama’s cheap theatrics this way: “Roosevelt had his Malta, Obama has his Malt.” If BHO didn’t have bad intentions, you’d be tempted to dismissively chuckle at his childish antics.

Having said that, and even though BHO’s poll numbers are sinking, it’s scary to contemplate the number of bamboozled Americans who still don’t get it. Rush Limbaugh had the courage to say it straight out in a recent interview with Greta: “This is a bad guy.” Now that’s what I call candid.

Every time the man looks into a camera, snickers, and waves aside those who resist going along with his Marxist agenda as obstructionists or extremists, it makes me realize what an amateur liar Bill Clinton was. Obama is the real deal - Fidel, Mao, and Lenin rolled into one. Or, even worse, how about Pelosi, Reid, and Frank rolled into one?

But I digress. Back to the world-shaking Beer Summit. I’m in the minority on this, but I feel compelled to say what no one else seems to be willing to say: Police Sgt. James Crowley was a major disappointment, for two reasons.

First, he didn’t have the courage, self-discipline, or dignity to say no to Obama’s invitation. Let’s be honest here. Apparently the thrill of being thrust into the limelight - visiting the White House as a guest of the president of the United States - was simply too much for him to resist.

Now you might be thinking, “Given similar circumstances, I’ll bet Robert Ringer would have sold out too.” If so, you’re wrong. I can’t prove it, but I’m positive I would not have lowered myself to buttress the president’s image by being part of yet another cheap BHO campaign stunt.

And, quite frankly, I’d be willing to bet that most of you folks reading this article would not have sold out either. After all, you’re Voice of Sanity subscribers!

Fifteen minutes of fame is okay, I guess. I understand the desire to get attention, but I understand the need to stick to one’s principles even more. There are some things that are far more important than a brief moment of feeling important.

Like, for example, a little something called liberty. BHO is a well-documented lifetime hater of capitalism and individual sovereignty who is in the process of keeping his campaign promise to “remake America.” Why in the world would you want to help him continue to mesmerize those remaining supporters whose eyes are still glazed over from Inauguration Day euphoria?

Sgt. Crowley could have been a hero to millions of fed up Americans - especially those who now realize they were had in the last election - if he’d simply responded, “Thanks, but no thanks.” Wow! Can you imagine what a message that would have sent to the country? Crowley would have been immortalized had he said something like:

While I mean no disrespect, I have decided to decline the president’s invitation to have a beer at the White House and talk things over with someone who violated the law and caused me to have to arrest him. I have a job to do, and I have neither the time to go to Washington, nor an interest in going, for what is obviously a PR stunt.

Enough taxpayer money has already been wasted, and I don’t want to be a party to wasting even more on flying me and others to Washington to talk things over. The only thing that matters here is that I carried out my duty as a police officer in a professional manner, so there is nothing to discuss.

Contrary to what the media and the White House seem to believe, this is not a national news story. And now, if you’ll excuse me, I have to get back to work.

Those comments would have ensconced Sgt. Crowley in the Teabagger Hall of Fame alongside Joe the Plumber!

The second reason Sgt. Crowley was a disappointment is that, at his post-summit press conference (yawn), he came across as an amateur politician reading comments that sounded suspiciously like they were prepared by someone else. I won’t try to guess who that someone else might be.

What came out of his mouth was a make-nice conglomeration of words cut in the BHO mold - tiptoeing gingerly, careful not to say anything emotive or politically incorrect. For me, it was a real turnoff. I would rather have listened to Louis Farrakhan or Reverend Wright. At least they’re entertaining - and straightforward about their views.

And then, of course, came the questions from the media puppies. While I respect police officers who don’t use their badges to bully citizens, how many more times do we have to watch one of these star-struck lawmen hold a press conference and say to the salivating press, “Yes, in the back there ... your question?”

I have this uncomfortable feeling that every police chief in the U.S. is waiting patiently for a “nationwide” story to hit his district so he can get behind the mic [sic] and show his reality-TV stuff.

Enough! It’s time for all of us to get back to work. Fighting progressive fascists is a full-time job for those of us who cherish liberty. Let’s hope the prez with the chip on his shoulder and the fake smile keeps wasting his time on ever more campaign schmaltz so the rest of us will have time to spread the truth about universal health care, cap and trade, and the Marxist agenda that he is close to having securely in place.

Oh ... and by the way ... if you happen to have the president’s ear, you might mention to him that Iran, North Korea, Venezuela, and Russia - not to mention several million terrorists around the world - are still causing, and plotting, mischief for the U.S. Perhaps we need a Mischief Czar? If so, I would like to take this opportunity to nominate Joe the Plumber.

8/4/2009: Teeing Up the Middle Class
Joe the Plumber’s tax vindication is nigh.

Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.

Asked about raising taxes on the middle class on Sunday on CBS’s “Face the Nation,” White House economist Larry Summers wouldn’t repeat Mr. Obama’s pre-election promise. “It is never a good idea to absolutely rule things out no matter what,” Mr. Summers said—except, apparently, when his boss is running for office. Meanwhile, on ABC’s “This Week,” Treasury Secretary Timothy Geithner also slid around Mr. Obama’s vow and said, “We have to bring these deficits down very dramatically. And that’s going to require some very hard choices.”

These aren’t even non-denial denials. The Obama advisers are laying the groundwork for taxing the middle class while claiming the deficit made them do it.

The liberal establishment is even further along in finally admitting that Mr. Obama wasn’t, er, telling the truth. A piece in the New York Times over the weekend declared in a headline that “the Rich Can’t Pay for Everything, Analysts Say.” And it quoted Leonard Burman, a veteran of the Clinton Treasury who now runs the Brookings Tax Policy Center, as saying that “This idea that everything new that government provides ought to be paid for by the top 5%, that’s a basically unstable way of governing.” They’re right, but where were they during the campaign?

In an editorial on February 26, “The 2% Illusion,” we wrote that the feds could take 100% of the taxable income of everyone in America earning more than $500,000 and still have raised only $1.3 trillion even in the boom year of 2006. The rich are fewer and less rich now, while the Obama budget is nearly $4 trillion.

Democrats already plan to repeal the Bush tax cuts, but that won’t raise enough money. So they’re proposing an income tax surcharge on “the wealthy,” but that won’t raise enough either. Democrats have no choice but to soak the middle class because only they have enough money to finance the liberal dream of yoking the middle class to cradle-to-grave government entitlements.

Democrats have already taxed the middle class by raising cigarette taxes to pay for the children’s health-care expansion. They’re also teeing up average earners with their cap-and-tax energy bill. Mr. Obama had hoped that cap-and-tax would raise some $646 billion over a decade, but Democrats in the House had to give most of that away in bribes to business to pass their bill. To finance ObamaCare, they’re also proposing another 10-percentage-point increase in the payroll tax on firms and individuals that don’t purchase health insurance. But this won’t raise enough money either.

So waiting in the wings is the biggest middle-class tax increase of them all: a European-style value added tax, or VAT. This tax would apply to every level of production or service, and it is beloved by politicians in Europe because it raises so much money so easily without voters noticing. Ezekiel Emanuel, a White House aide and brother of Chief of Staff Rahm Emanuel, has advocated a 10% VAT to finance national health care. Look for a VAT to be one of the prominent options when Mr. Obama’s tax reform commission issues its report later this year.

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

8/4/2009: Utopia Versus Freedom by Thomas Sowell

“Eternal vigilance is the price of freedom.” We have heard that many times. What is also the price of freedom is the toleration of imperfections. If everything that is wrong with the world becomes a reason to turn more power over to some political savior, then freedom is going to erode away, while we are mindlessly repeating the catchwords of the hour, whether “change,” “universal health care” or “social justice.”

If we can be so easily stampeded by rhetoric that neither the public nor the Congress can be bothered to read, much less analyze, bills making massive changes in medical care, then do not be surprised when life and death decisions about you or your family are taken out of your hands— and out of the hands of your doctor— and transferred to bureaucrats in Washington.

Let’s go back to square one. The universe was not made to our specifications. Nor were human beings. So there is nothing surprising in the fact that we are dissatisfied with many things at many times. The big question is whether we are prepared to follow any politician who claims to be able to “solve” our “problem.”

If we are, then there will be a never ending series of “solutions,” each causing new problems calling for still more “solutions.” That way lies a never-ending quest, costing ever increasing amounts of the taxpayers’ money and— more important— ever greater losses of your freedom to live your own life as you see fit, rather than as presumptuous elites dictate.

Ultimately, our choice is to give up Utopian quests or give up our freedom. This has been recognized for centuries by some, but many others have not yet faced that reality, even today. If you think government should “do something” about anything that ticks you off, or anything you want and don’t have, then you have made your choice between Utopia and freedom.

Back in the 18th century, Edmund Burke said, “It is no inconsiderable part of wisdom, to know much of an evil ought to be tolerated” and “I must bear with infirmities until they fester into crimes.”

But today’s crusading zealots are not about to tolerate evils or infirmities.

If insurance companies are not behaving the way some people think they should, then their answer is to set up a government bureaucracy to either control insurance companies or replace them.

If doctors, hospitals or pharmaceutical companies charge more than some people feel like paying, then the answer is price control. The actual track record of politicians, government bureaucracies, or price control is of no interest to those who think this way.

Politicians are already one of the main reasons why medical insurance is so expensive. Insurance is designed to cover risks but politicians are in the business of distributing largesse. Nothing is easier for politicians than to mandate things that insurance companies must cover, without the slightest regard for how such additional coverage will raise the cost of insurance.

If insurance covered only those things that most people are most concerned about— the high cost of a major medical expense— the price would be much lower than it is today, with politicians piling on mandate after mandate.

Since insurance covers risks, there is no reason for it to cover annual checkups, because it is known in advance that annual checkups occur once a year. Automobile insurance does not cover oil changes, much less the purchase of gasoline, since these are regular recurrences, not risks.

But politicians in the business of distributing largesse— especially with somebody else’s money— cannot resist the temptation to pass laws adding things to insurance coverage. Many of those who are pushing for more government involvement in medical care are already talking about extending insurance coverage to “mental health”— which is to say, giving shrinks and hypochondriacs a blank check drawn on the federal treasury.

There are still some voices of sanity today, echoing what Edmund Burke said long ago. “The study of human institutions is always a search for the most tolerable imperfections,” according to Prof. Richard Epstein of the University of Chicago. If you cannot tolerate imperfections, be prepared to kiss your freedom goodbye.

To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His Web site is http://www.tsowell.com.

COPYRIGHT 2009 CREATORS.COM.

8/3/2009: Pay Your Teachers Well
Their children’s hell will slowly go by.

The conflicting interests of teachers unions and students is an underreported education story, so we thought we’d highlight two recent stories in Baltimore and New York City that illustrate the problem.

The Ujima Village Academy is one of the best public schools in Baltimore and all of Maryland. Students at the charter middle school are primarily low-income minorities; 98% are black and 84% qualify for free or reduced-price school meals. Yet Ujima Village students regularly outperform the top-flight suburban schools on state tests. In 2006, 2007 and 2008, Ujima Village students earned the highest eighth-grade math scores in Maryland. Started in 2002, the school has met or exceeded state academic standards every year—a rarity in a city that boasts one of the lowest-performing school districts in the country.

Ujima Village is part of the KIPP network of charter schools, which now extends to 19 states and Washington, D.C. KIPP excels at raising academic achievement among disadvantaged children who often arrive two or three grade-levels behind in reading and math. KIPP educators cite longer school days and a longer school year as crucial to their success. At KIPP schools, kids start as early as 7:30 a.m., stay as late as 5 p.m., and attend school every other Saturday and three weeks in the summer.

However, Maryland’s charter law requires teachers to be part of the union. And the Baltimore Teachers Union is demanding that the charter school pay its teachers 33% more than other city teachers, an amount that the school says it can’t afford. Ujima Village teachers are already paid 18% above the union salary scale, reflecting the extra hours they work. To meet the union demands, the school recently told the Baltimore Sun that it has staggered staff starting times, shortened the school day, canceled Saturday classes and laid off staffers who worked with struggling students. For teachers unions, this outcome is a victory; how it affects the quality of public education in Baltimore is beside the point.

Meanwhile, in New York City, some public schools have raised money from parents to hire teaching assistants. Last year, the United Federation of Teachers filed a grievance about the hiring, and city education officials recently ordered an end to the practice. “It’s hurting our union members,” said a UFT spokesman, even though it’s helping kids and saving taxpayers money. The aides typically earned from $12 to $15 an hour. Their unionized equivalents cost as much as $23 an hour, plus benefits.

“School administrators said that hiring union members not only would cost more, but would also probably bring in people with less experience,” reported the New York Times. Many of the teaching assistants hired directly by schools had graduate degrees in education and state teaching licenses, while the typical unionized aide lacks a four-year degree.

The actions of the teachers unions in both Baltimore and New York make sense from their perspective. Unions exist to advance the interests of their members. The problem is that unions present themselves as student advocates while pushing education policies that work for their members even if they leave kids worse off. Until school choice puts more money and power in the hands of parents, public education will continue to put teachers ahead of students.

Printed in The Wall Street Journal, page A10

8/3/2009: The Spending Party Must End by Thomas G. Donlan
The folly of creating artificial demand.

FOR NEARLY TWO DECADES, AMERICANS HAVE had their cake and eaten it with gusto, in the form of grand houses and fancy toys. They paid the bakers with paper profits from a stock-market boom and a real-estate boom, both now busted.

Who believes that Americans should have another helping? Those who say that the stimulus of government deficit-spending has already begun to work; those who say it’s about to start working; those who say it hasn’t worked, so we need a third round of stimulus spending.

Straddling the three categories, President Barack Obama said last week: “We may be seeing the beginning of the end of the recession.” He added: “We have stopped the free fall. The market is up and the financial system is no longer on the verge of collapse. We’re losing jobs at half the rate we were when I took office six months ago.”

Jumping the gun by a few months at least, a news magazine flatly declared on its cover, “The recession is over.”

Unemployment may be a problem a while longer, and there are many more underwater houses on which banks must foreclose. Happy Days Aren’t Quite Here Again, and the time is not far off when most Americans will expect a third helping of dessert.

The Noisy Majority

A famous Carl Rose New Yorker cartoon from 1928 comes to mind. The well-dressed mother says “It’s broccoli, dear,” and the curly-haired little girl replies, “I say it’s spinach, and I say the hell with it.” She probably wanted cake.

The party in power believes that Americans can eat their cake and have it, too, just as the other party did when it was in power. (The cake party is always in power.) The U.S. government enacted a $152 billion stimulus-spending measure in 2008 and a $787 billion dose in 2009. For 2010, it could be $1.4 trillion or $3.2 trillion or $7.5 trillion, depending on whether the growth is additive, multiplicative or exponential.

Spinach -- accepting the failure of many borrowers and lenders and waiting for the recession to restore balance to the economy -- is not an option.

The cake party also is running most of the other economies that matter in the world. Almost every government is borrowing heavily to spend on their politicians’ pet projects -- the same projects that they could not stretch their budgets to include when times were good and tax revenues were ample. It should make us wonder just how useful those “shovel-ready” projects really are.

Of course, they were hardly shovel-ready. Less than 20% of the $787 billion has been spent. The Department of Transportation, for example, is supposed to manage $48 billion in stimulus spending. Projects amounting to about $22 billion have been approved, and $967 million has been spent.

The Price of Greatness

To the cake party and its tub-thumpers, the need for public spending is always justified; it just can’t be pushed through except in times of economic crisis.

Whether times are good or bad, nostalgic American historians cruise the countryside admiring the parks and campgrounds created by “the CCC boys,” who had been plucked from lives of despair to work for the common good in the Civilian Conservation Corps. They praise the travel books and plays procured by the Federal Writers’ Project. They delight in the cheap power produced by federal dam projects, the cheap pensions produced by Social Security and the cheap loans for postwar houses produced by Fannie Mae and its ilk.

It’s often overlooked that most of the great works of the so-called Greatest Generation would never have been built in the absence of the greatest depression and the greatest war in history. Sensible people would not consider a new crisis to be a new opportunity. We built because we had destroyed. We shouldn’t be happy about the current destruction, no matter what we build on the rubble.

The opportunity for government spending has expanded again to meet desires that always existed in the platforms of the cake party. The plan to create “green jobs” and destroy dirty ones predates the current financial crisis. The movement to rebuild public infrastructure rather than sell it off pre-dates the last three economic downturns. Energy subsidies for energy production got started at least 80 years ago. The cake-eaters have been arguing only about who gets the next serving.

Cake-party economists find their best opportunities in a crisis. They drag out the Keynesian doctrines that they ignored when times were booming, and say that now things are very different. They never acted to suppress excessive demand when it ignited a stock-market skyrocket or launched a hot-air balloon in housing. But now they are certain that demand is insufficient, because they can see unemployment. They say government can and must add to demand in order to bring back full employment.

President Obama explained it this way a few months ago:

“It is expected that we are going to lose about a trillion dollars’ worth of demand this year, a trillion dollars of demand next year because of the contraction in the economy. So the reason that this has to be big is to try to fill some of that lost demand.” The question he dodged is, where did that demand go? The answer is that it was satisfied on credit over the last 16 years. Now the bills must be paid.

A Time Out for Saving

Unfortunately, public-sector demand is not something kept on a shelf for emergencies, like bottled water. The resources that pay the public sector’s bills for creating artificial demand must be taxed or borrowed or created out of thin air with inflation. Government spends at the expense of taxpayers, at the expense of alternative investments in the private sector, or at the expense of all savers, lenders and investors.

Stimulus spending is like juggling. A juggler can keep many flaming torches in the air, but he can’t repeal the law of gravity. When the juggler tires, relaxes or makes a mistake, the torches fall down. Stimulated economies are like frogs in a high school biology lab. They kick as long as the wires are attached, but they are just as dead after the experiment is over.

America had its cake, it had its student biologists zapping dead frogs, it had its jugglers tossing torches. All that remains are taxes, borrowing and inflation.

Editorial Page Editor THOMAS G. DONLAN receives e-mail at tg.donlan@barrons.com

8/1/2009: The point is that there is no health care model, whether privately or publicly financed, that can offer unlimited access to medical services while containing costs. Ultimately, such a model arrives at a crossroads where it has to either limit access in an arbitrary way, or face uncontrolled cost increases.

— Shikha Dalmia, “The Myth of Free Market Health Care in America”

Read Blogs from Prior Months

January 2009 February 2009 March 2009

April 2009 May 2009 June 2009

July 2009

January 2008 February 2008 March 2008

April 2008 May 2008 June 2008

July 2008 August 2008 September 2008

October 2008 November 2008 December 2008

January 2008, December 2007 & November 2007

Other Old Stuff from dalefogden.net

Other Information about Dale F. Ogden

Dale F. Ogden & Associates
Actuaries & Management Consultants
www.usactuary.com

Dale F. Ogden, Libertarian, for
California Insurance Commissioner, 2006
www.dalefogden.org

Dale F. Ogden, Libertarian, for
California State Senate, 2004

Dale F. Ogden, Libertarian, for
California Insurance Commissioner, 2002

Dale F. Ogden, Libertarian, for
California State Assembly, 2000

Dale F. Ogden, Libertarian, for
California Insurance Commissioner, 1998