Welcome to
Dale Ogden’s Blog on
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I want
Individual Freedom
Personal Responsibility
Minimum Government
Minimum Taxes

Dale Ogden for Governor
of California 2010
www.dalefogden.org

“Small Government is Beautiful”

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“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents...” --James Madison

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

“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, “Manufactures” [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

“The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning, but without understanding.” — Judge Louis D. Brandeis

“Obama, Reid and Pelosi might snicker, but they obviously don’t understand the difference between [Las] Vegas and Washington D.C. You know what it is? In [Las] Vegas the drunks gamble with their own money.” —Wayne Allyn Root [Libertarian Candidate for Vice President 2008; likely Presidential candidate 2012]

“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

“The battle, sir, is not to the strong alone; it is to the vigilant, the active, the brave... [I]t is now too late to retire from the contest. There is no retreat but in submission and slavery! Our chains are forged! Their clanking may be heard on the plains of Boston! The war is inevitable -- and let it come! I repeat it, sir, let it come!” --Patrick Henry

3/31/2010: United States of Argentina

[It may be hyperbole, but it is food for thought]

Argentine President Juan Peron frittered away his nation’s prosperity by introducing redistributionist economic and regulatory policies, nationalizing utilities and pumping up the national debt — all leading to three decades of instability and stagnation. (AP Photo, 1951)

When White House Chief of Staff Rahm Emanuel last year advised “never waste a good crisis,” he likely was thinking ahead to President Obama’s economic stimulus program and health care plan. After swelling the federal deficit by passing the stimulus at a cost of nearly $1 trillion, Democrats in Congress signed off on Obamacare, with a price tag, according to Rep. Paul Ryan, R-Wis., of $2.3 trillion in its first decade alone. With federal spending exploding at such a rate, it’s no wonder that Moody’s Investor Service recently warned that it would downgrade the U.S. government’s credit rating if it concludes “the government was unable and/or unwilling to quickly reverse the deterioration it has incurred.”

What the United States government will do in the future may be in question, but we need not look far to find past examples of countries unwilling to get their finances in order. Consider Argentina. In 1914, it was one of the wealthiest countries in the world, and its living standard exceeded that of Western Europe until the late 1950s. Then President Juan Peron squandered his nation’s prosperity by introducing a host of redistributionist economic and regulatory policies, nationalizing utilities and foreign investments, and pumping up the national debt. What followed was three decades of political instability, growing dependency, and economic stagnation.

There was a brief period of privatization and booming foreign investment in what the American Enterprise Institute’s Mark Falcoff called Argentina’s “go go” 1990s. But that was negated by the return of political leaders espousing Peronist principles who created a downward economic spiral by breaking contracts with foreign utility companies that had invested heavily in Argentina. Today, the country has lost its international credit standing and an estimated 10 percent of the population has moved abroad to escape the stifling taxes, regulation and inefficiency. To make matters worse, President Cristina Kirchner recently attracted attention for firing the president of the country’s central bank. His sin was refusing to go along with her inflationary spending policies (Argentina’s inflation is 17 percent) and challenging her demand that he hand over $6.6 billion in bank reserves.

Besides sending federal spending skyrocketing, Obama has, like so many of the politicians who ruined Argentina, dramatically increased government regulation of business, nationalized major sectors of the economy, and imposed a lengthy list of tax increases. America today is no more exempt from economic reality than Argentina was in years past. Make no mistake, these actions will eventually drain the life from this nation’s economic vitality, just as they did in Argentina.

3/30/2010: Americans Remain Concerned About Costs of Healthcare Bill

3/29/2010: American Capitalism Gone With A Whimper

3/20/2010: Civil Liberties in Obama’s America by Anthony Gregory

The following is based on a talk delivered at the Free State Project’s Liberty Forum in Nashua, New Hampshire, Saturday, March 20, 2010.

In the United States, civil liberties are seen as the province of the left. The ACLU, the Bar Association, the Democratic Party, people who err in favor of procedural protections for criminals and even terrorists—this is what tends to come to mind to conservatives who condemn civil liberties as a leftist interest, and to liberals who celebrate it as a great anchor of their political philosophy.

But what happens when the left-liberals are in charge of the executive branch, its police, its justice department, prosecutors and military courts? Predictably, conservatives fear the government will be soft on foreign and domestic villains. Liberals hold out hope that due process will be restored...

After week one [as president], however, Obama reverted to Bush detention policy in virtually every way. One of the first major disgraces concerned detainees at Bagram, the prison camp in Afghanistan, where Bush began shipping more detainees after Guantanamo was no longer his lawless playground, and where Obama has increased funding and the prison population. Four men sued for habeas relief. Justice John Bates, a federal judge appointed by Bush found that habeas should apply, in limited capacity, to Bagram, given that the Supreme Court ruled that it extended to Guantanamo. Obama’s administration appealed this ruling, using Bushian reasoning down the line...

Everything is just ramped up under Obama. Instead of state secrets to protect information on the warrantless wiretapping, they claim sovereign immunity. Instead of a poor excuse for law at Gitmo, they celebrate no law at all at Bagram. Everything is sold in the name of the rule of law and American decency, but the policies are the same or worse. Now they want the power to indefinitely detain U.S. citizens on U.S. soil and Obama claims the right to assassinate U.S. citizens he deems enemies of the empire as long as they are on foreign soil. We live under a leviathan where there is no geographic escape. If you managed to escape the Soviet Union, its jurisdiction was mostly behind you. If you leave America, you could still have to pay taxes and if they deem you an enemy combatant you can be liquidated by drone attack in the name of national security.

Of course, detention policy is only one of many concerns for civil libertarians, although it really does get to the crux of the totalitarianism that sits behind the mask of American security policy. We now have a TSA that is getting only worse, with full-body scans being implemented so as to stop the Christmas bomber, which probably wouldn’t have been stopped this way. Immediately after the failed bombing, blankets were taken away from commercial passengers—as though not allowing passengers to have blankets makes any sense in light of a man trying to set himself on fire. And of course, all the terrorist attacks being thwarted are being thwarted by private actors, passengers and crew...

The left must be converted to libertarianism, and some of them can, just as some of the right can, but it is as clear to me as ever that the desire to separate some freedoms from others makes it impossible to reliably defend any. The Republicans were supposed to deliver a government at least slightly smaller than Al Gore would have given. Instead they started two murderous wars, destroyed the economy more than Clinton would have in 30 years, and desecrated most of the remaining virtues of the Constitution. Obama was supposed to deliver us from these excesses and has instead stepped on the gas. The whole time, the people on Team A or B cheer on their champions and lose sight of principle, if they had any to begin with. To say Clinton killed a bunch of peaceful if strange people in Waco was simply seen as being on the Republican side, so virtually the entire left defended that massacre...

When a left-liberal friend expresses disappointment with Obama’s war on the Bill of Rights, just note that it was inevitable. This is a party that is hostile to private property, the anchor of all individual liberties and rights, and enamored of the managerial central state, the greatest modern enemy of all liberties. Leftists will have to make a choice—bail on their civil libertarianism, as most did under FDR, defending Japanese Internment and national command economics, or bailing on their dream of creating social paradise, or even fostering society, through the violent means of central planning. We must be there to explain how it all goes together, and although I am pessimistic we will break most of Obama’s groupies out of the hypnotic delusions of his professorial and literate American Idol authoritarianism, we will convince some, even many, one by one, to abandon the rot of soft socialism that has plagued the American left since World War I, and instead embrace the only ethic that can morally transcend Bush’s and Obama’s dungeons, wiretaps and crackdowns on dissent: The ethic of anti-state libertarianism grounded in private property. And as they come in, one by one, let us welcome them with open arms as we do our slow and uphill work to bring the police state down.

[Read the entire article]

3/27/2010: The ObamaCare Writedowns
The corporate damage rolls in, and Democrats are shocked!

It’s been a banner week for Democrats: ObamaCare passed Congress in its final form on Thursday night, and the returns are already rolling in. Yesterday AT&T announced that it will be forced to make a $1 billion writedown due solely to the health bill, in what has become a wave of such corporate losses.

This wholesale destruction of wealth and capital came with more than ample warning. Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or “political.”

Perhaps that explains why the Administration is now so touchy. Commerce Secretary Gary Locke took to the White House blog to write that while ObamaCare is great for business, “In the last few days, though, we have seen a couple of companies imply that reform will raise costs for them.” In a Thursday interview on CNBC, Mr. Locke said “for them to come out, I think is premature and irresponsible.”

Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment “appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs.”

In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don’t like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.

On top of AT&T’s $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

As Joe Biden might put it, this is a big, er, deal for shareholders and the economy. The consulting firm Towers Watson estimates that the total hit this year will reach nearly $14 billion, unless corporations cut retiree drug benefits when their labor contracts let them.

Meanwhile, John DiStaso of the New Hampshire Union Leader reported this week that ObamaCare could cost the Granite State’s major ski resorts as much as $1 million in fines, because they hire large numbers of seasonal workers without offering health benefits. “The choices are pretty clear, either increase prices or cut costs, which could mean hiring fewer workers next winter,” he wrote.

The Democratic political calculation with ObamaCare is the proverbial boiling frog: Gradually introduce a health-care entitlement by hiding the true costs, hook the middle class on new subsidies until they become unrepealable, but try to delay the adverse consequences and major new tax hikes so voters don’t make the connection between their policy and the economic wreckage. But their bill was such a shoddy, jerry-rigged piece of work that the damage is coming sooner than even some critics expected.

3/26/2010: Vallejo’s Painful Lessons in Municipal Bankruptcy by Steven Greenhut
Two years after going broke, the California city still isn’t free of its crushing pension obligations.

In 2008, Vallejo, Calif., was nearly broke. Faced with falling tax revenues, rising pension costs, and unmovable public-employee unions, the city was unable to pay its bills and declared bankruptcy. Now, as it prepares to emerge from Chapter 9, officials in Los Angeles, San Diego and other cities across the state are looking to see if Vallejo has blazed a trail for them to get out from under their own crushing pension costs. What they’re finding is that even bankruptcy may not be enough to break the grip unions have on the public purse.

Vallejo is a Bay Area community of 121,000 that two years ago became the state’s largest city to declare bankruptcy. Like other municipalities, its public-sector unions had driven its budget deep into the red. A report issued by the Cato Institute last September noted that 74% of the city’s general budget was eaten up by police and firefighter salaries and overtime along with pension obligations. The average city in the state spends 60% of its budget on those things.

The study also found that lavish pay and benefit packages were a root cause of the city’s problems. In Vallejo compensation packages for police captains top $300,000 a year and average $171,000 a year for firefighters. Regular public employees in the city can retire at age 55 with 81% of their final year’s pay guaranteed. Police and fire officials can retire at age 50 with a pension that pays them 90% of their final year’s salary every year for life and the lives of their spouses.

Over the past five years, Vallejo has slashed spending where it could, mostly by cutting personnel and services. As a recent San Francisco Chronicle editorial pointed out, the city cut its police force to about 100 officers from nearly 160 and warned residents to use the 911 system judiciously, even while it experienced crime rates higher than other comparable cities in California. The city has also cut funding for a senior center, youth groups, and arts organizations and has done little to restore an increasingly decrepit downtown, develop waterfront properties, or attract new businesses.

To permanently bring its spending in line with its tax base, however, at some point Vallejo will have to do something about its pensions. U.S. bankruptcy judge Michael McManus, as the National law Journal reported last March, “held the city of Vallejo, Calif., has the authority to void its existing union contracts in its effort to reorganize.”

But when it came to voiding those contracts on pensions—a major driver of public expenses—the city blinked. The “workout plan” the city approved in December calls for cuts in services, staff and even some benefits, such as health benefits for retirees. However, it does not touch public-employee pensions. Indeed, it increases the pension contributions the city pays.

This week, the city did approve a new firefighter contract that trims pension benefits for new hires and requires existing firefighters to pay more into their pensions. But that contract doesn’t touch existing pensions. Nor does it affect police officers or other city workers. It also leaves the city with a $1.2 million shortfall. “The majority [of council members] did not have the political will to touch the pink elephant in the room—public safety influence, benefits and pay,” Vice Mayor Stephanie Gomes told me.

A home along the waterfront is shown up for lease by the City of Vallejo in Vallejo, Calif.

Vallejo’s unwillingness to go after existing pensions and wage other fights necessary to put the city on stable financial footing sets a bad example. Other cities will now find it harder to use the threat of bankruptcy (or bankruptcy itself) to get unions to agree to rein in pension costs.

That’s unfortunate. For years, Vallejo and cities throughout the state have fattened pension benefits for public employees, worrying more about the next election cycle than about the ability of their municipalities to make good on lush promises. Now that the bills are coming due, officials are scrambling to find ways to upend gold-plated pension benefits or at least create cheaper benefits for new employees.

For example, after granting two pension increases in the past decade Orange County’s Board of Supervisors is now suing in state court to overturn the portion of those increases that granted a retroactive payment to retirees. The county claims that payout was an unconstitutional gift of taxpayer funds to union employees. But it lost in Los Angeles Superior Court last year and will likely lose again on appeal, notwithstanding the fact that the case seems to be based on sound legal reasoning.

That leaves bankruptcy as probably the most effective tool in the drawer for lowering pension obligations. But if officials are unwilling to demand pension concessions in bankruptcy, there will be few choices left to balance their budgets other than support from the state that itself is facing steep budget deficits, or local tax hikes that could undermine local economies and thereby drive down tax revenues over the long term. That’s a sobering thought in what is an already struggling economy, and an argument for government officials to be much more stingy in granting pension increases in the first place.

Mr. Greenhut is the author of “Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives And Bankrupting The Nation” (The Forum Press, 2009) and the director of the Pacific Research Institute’s Journalism Center in Sacramento. This article was adapted from the forthcoming issue of City Journal.

3/26/2010: Wishful Thinking on Health Care by Sheldon Richman
No one knows exactly what was passed.

This is an elaboration of my remarks at the seventh annual Jolicoeur Seminar, an event put on this week by FEE and the economics department at Western New England College, Springfield, Mass.

How an issue is framed is crucial to how it is decided. Advocates of the package of health insurance regulations, taxes, and mandates known as ObamaCare managed to frame the issue as “reform versus the status quo.” But to call the Obama-Pelosi-Reid plan (OPR) “reform” is to beg the question by assuming precisely what needs to be proved: namely, that the legislative package would actually reform — that is, improve — the medical system. Therefore the debate should have been not whether reform is desirable – real reform (improvement) is always desirable — but whether OPR is really reform.

A better framing of the issue would have been: real reform versus the status quo on steroids, for in the end OPR is little more than what Holman Jenkins of the Wall Street Journal calls a “doubling down on the system’s existing perversities.” For example, under OPR everyone will be forced to become a customer of the health insurance industry that the ruling political class just spent a year demonizing, and that industry will reap billions in taxpayer subsidies. Moreover, demand for medical services will be further insulated from true costs. That is already the source of so much of what’s wrong today.

Let’s look at the newly signed law from four perspectives: moral, fiscal, economic, and political.

Morality

For a century the foundation of medicine in the United States has steadily shifted from cooperation and competition to compulsion and management through government power. In 1910 the Flexner Report, financed by the Carnegie Foundation, set in motion the process by which medical education and practice would be regulated by a physician cartel deriving its coercive power from government primarily at the state level. While the need for such management was publicly justified as a way to protect patients, what doctors told one another when no one else could hear was that their incomes not their patients were endangered by too many medical schools graduating too many doctors. Over the next 20 years, many independent medical colleges were closed. Was it mere chance that women’s and African-American medical colleges were the first to go and that, as a result, the smaller, more lucrative medical profession was firmly white and male?

Since that time, coercive administration – primarily in the form of state licensing – more and more took the place of patient-driven contract, competition, and cooperation. When fraternal organizations tried to bring affordable medical care to their middle- and low-income members through “lodge practice,” the protectionist medical cartel struck back and eventually destroyed this promising alternative to self-serving institutional medicine. During World War II the crucial, if inadvertent, step was taken toward top-down control of the payment mechanism. The tax code became the means of inducing individuals to rely on employers and insurance for medical services. Money individually and privately spent on medical care would be subject to the tax collector, while money that one’s employer used for the same purpose would not. The result, intended or not, was to accustom people to rely on big intimidating bureaucracies for the payment of medical bills. Health care appeared to be free or well below its true cost — as long as the relevant bureaucracy approved of what was bought. The entitlement/supplicant frame of mind was established, which served the cause of centralization and further control by the government-medical complex. OPR is another step, though probably not the last, in that process.

Meanwhile each state became a protectionist-regulatory insurance guild that limited entry and competition in return for compliance with mandates and price guidelines that let regulators masquerade as the people’s advocates, while saddling policy holders with expensive, unneeded coverage. Many people were priced out the market, giving politicians a cause: the uninsured.

Government then assumed direct control over a good portion of medical spending through Medicare and Medicaid, bringing us to the point where third-party payments account for more than 85 percent of all medical spending in the United States. As someone has said, the patient is only needed to sign the papers that prompt one bureaucracy to cut a check for another.

Viewed historically, then, OPR is merely an extension of the current force-based bureaucratic system. Its novel contribution is to mandate that people buy medical insurance, the first instance in which the national government will compel us to buy something from a private company. This is said to be consistent with regulation of interstate commerce, but no intelligent person honestly believes that. For one thing, interstate commerce in health insurance is forbidden by the national government.

Adding insult to injury, OPR falsely promises that we can have government-subsidized consumption of medical services, lower prices, and freedom of choice at the same time. In fact, those three things cannot coexist. Subsidies will boost consumption, which will raise prices. If government is serious about lowering prices, it will have to curtail consumption, that is, limit freedom of choice, explicitly through rationing or implicitly through price controls and standards of practice.

Fiscal Considerations

On the other hand, if the ruling elite gives up the objective of lowering prices, fiscal chaos will ensue. The medical “entitlement” called Medicare already faces a $37 trillion unfunded liability. It is a big component of the government’s budget deficit and growing debt. Imagine what will happen when the new entitlement explodes. The assertions that OPR will cut costs and lower the deficit are ludicrous, and no one really believes that. It is just a game played in Washington under rules that Congress carefully sets for its fig leaf Congressional Budget Office.

As a result, government borrowing will increase, if lenders aren’t scared off; interest rates will rise, squelching economic activity; more new taxes will be thought up, discouraging investment; and the money supply will expand, shrinking our purchasing power.

Economic Considerations

OPR will directly subvert what is left of the insurance market and indirectly subvert what is left of the medical market. Insurance is about pooling risk in the face of an uncertain future. But OPR requires that insurance companies cover people without taking risk or even certainty (preexisting conditions) into consideration. There are no grounds for calling this insurance. Rather, it is welfare mixed with prepayment for future services. (Not that the insurers are complaining; it’s a price they’ll gladly pay for the captive customers that the mandate will deliver.)

While OPR’s advocates extolled the virtues of competition for the last year, they were being either dishonest or ignorant. Competition does not mean a few licensed companies providing identical government-defined products to government-coerced “customers’ according to government-defined pricing rules. It means open-entry trial and error by sellers attempting to satisfy buyers who are free to say no thanks. OPR gives us anything but that.

Politicians and bureaucrats cannot possibly know what they would need to know to manage the insurance and medical industries. Yet they convinced themselves and enough others to get OPR passed.

Political Considerations

Finally, OPR puts another nail in the coffin of government transparency. Regardless of how much or little government (if any) people want, they should at least be able to see and understand what it is up to and how much it costs them personally. In every way OPR flouts this principle. The law’s 2,700 pages of impenetrable “English” was read in its entirety by few if anyone. But that only begins to describe the offense. The law leaves much to be defined in the future by government departments, boards, and commissions. Hundreds of rules and regulations have yet to be written – and who do you think will be right there offering counsel as the new insurance rules are formulated? The same insurance companies whom last week were said to be the devil incarnate. (And Organized Medicine and Big Pharma too.) That’s how the Washington game is played. And we’re the losers.

Moreover, huge costs that could have more honestly been placed on-budget for all to see will instead be hidden in various ways. People will have no idea what this “reformed” system really costs them.

The upshot is this: Today no one knows what the members of Congress passed and Obama signed, including them. Self-government? Representation? Democracy? What a laugh.

At best, this was a triumph of wishful thinking over sound thought.

3/25/2010: Obamacare: “The Bigger the Lie” by Howard Rich

Lost amid the partisan sniping and procedural jousting over the passage of “Obamacare” is a fundamental, unavoidable hypocrisy - one that’s worth unmasking as Washington politicians continue to ignore the will of the American people and plunge our nation deeper into full-blown socialism.

President Barack Obama and his Congressional allies are spending money that they know we don’t have on a program that they know isn’t going to work – all in an effort to expand government’s control over the private sector and its reach into the private lives of American citizens.

Sound a bit conspiratorial?

It’s not – at least not when you turn down the partisan rhetoric (on both sides of the debate) and start examining what this monstrosity actually does.

“Obamacare is really about who commands the country’s medical resources,” an editorial in The Wall Street Journal noted the day before the legislation was passed. “It vastly accelerates the march toward a totally state-driven system, in contrast to reforms that would fix today’s distorted status quo by putting consumers in control.”

With government already purchasing nearly half of all health care services in America (a system that’s rampant with fraud and anti-competitive price-fixing), just who did you think was responsible for the “distorted status quo” that Obamacare ostensibly seeks to correct?

Here’s a hint – it’s not those “evil” insurance companies, which will be receiving nearly a half-trillion dollars in Obamacare subsidies.

Consistent with the core fallacy of other recent socialist misadventures (like former President George Bush’s TARP bailout or Obama’s so-called “stimulus”), Washington politicians are once again attempting to solve problems that have been exacerbated by excessive government interventionism with additional government interventionism. “Dumping buckets of water on the head of a drowning victim,” if you will.

Even though America can’t even begin to afford its current entitlement obligations, Washington’s answer is to create yet another new entitlement program – something that Republicans who voted in favor of Bush’s prescription drug benefit know all about. And even as Medicare and Medicaid have failed spectacularly (and expensively) to provide cost-effective health care, Obama and his allies are using this failure as an excuse to dramatically escalate their “government knows best” approach to include individual mandates and huge fines for families and small businesses who fail to comply.

It’s a power grab, pure and simple. And a money grab, which is why Obamacare spends $10 billion to hire 17,000 new tax collectors at the IRS to rake in billions of dollars from America’s newly-created class of “illegally uninsured” citizens.

That hardly sounds like a plan built around “expanding coverage,” does it?

Obviously Obamacare isn’t going to reduce the deficit either. In fact when the actual cost of just one of the variables ignored by the Congressional Budget Office (CBO) is calculated into the legislation, its price tag soars by nearly $208 billion (putting it $59 billion in the red).

Even “Obamacare’s” worst-case deficit projections are likely to prove overly-optimistic. In 1965, for example, government accountants predicted that the hospital insurance portion of Medicaid would cost $9 billion by 1990. It wound up costing $63 billion. Even after adjusting for inflation, that’s still twice as expensive as the government originally estimated.

Earlier this month The New York Times – ostensibly seeking to build momentum for universal coverage – published a story highlighting the un-sustainability of Medicaid. The story revealed that last year, while state governments were relying on bailout money to fund skyrocketing growth rates, the program added 3.3 million new members – raising its total enrollment to 47 million. It is going broke, clearly, although that didn’t stop Obama and his Congressional allies from raiding $202 billion from its coffers (as well as $53 billion from Social Security) to make their plan appear deficit neutral.

And that may be the ultimate irony of Obamacare – that it is funding tomorrow’s big government obligations with the failed promises of yesterday.

3/25/2010: Hope and Change ... the Constitution by Larry Elder

We live in a fundamentally different country from that which existed only days ago. The government now requires that every American purchase health insurance. The Constitution has been attacked, interpreted in a way beyond its original intent. Therefore, we must change it.

Ignoring the will of the majority of the American people, the discouraging experiences of countries with socialized medicine, and the already staggering amount of entitlement debt, President Barack Obama and the congressional Democrats “reformed” health care. Once a nation under a Constitution that restricted government intrusion, we now want government to provide for our “needs” by calling them “rights.”

We now ask government to prop up failing businesses, make student loans, guarantee mortgages, build and maintain public housing, financially support state education from preschool though graduate school, fund private research, provide disaster relief and aid, pay “volunteers” and on and on.

Many in our nation happily submit to this bargain. They consider the Big Three entitlements -- Social Security, Medicare and Medicaid -- “rights,” their absence unimaginable in a modern “caring” society. It is out of the question to expect people, families and communities to plan for retirement. It is beyond reason to expect medical care, like any other commodity, to follow the laws of supply and demand -- for prices and choices to allocate resources and for competition to drive down prices and improve quality. It is simply too much to expect the compassion, morality and spirituality of humankind to aid those unable to care for themselves.

We ignore history’s numerous examples of how good intentions produce bad results. Almost 50 years ago, another “transformative” president used government to launch a War on Poverty. But for many welfare recipients and their families, poverty became “structural.” People became dependent on government. After the government finally placed some restrictions on welfare, dependency declined. Much to the surprise of those who denounced welfare reform as cruel, people changed their behavior.

We ignore the experience of price controls. Government can dictate prices, but cannot dictate costs. Price controls result in rationing, drive producers out of business and cause lower quality and less innovation. America, because its citizens enjoyed greater economic freedom, built a superior health care system -- which ObamaCare now threatens to dismantle.

Communism collapsed under the romantic but bankrupt notion of “from each according to his abilities, to each according to his needs.” Taking from the productive and giving to the unproductive does damage to the incentive of both parties. European countries -- “social justice” democracies -- produce comparatively few private-sector jobs. Europe suffers from high taxes, choking union agreements that make it virtually impossible to fire unproductive or unneeded workers, and government policies that mandate paid vacations and other job-killing benefits.

Into this statist abyss we willingly jump.

Former Democratic presidential candidate George McGovern left the Senate after 18 years and bought a small business. It went under. He wrote: “(I) wish I had known more firsthand about the concerns and problems of American businesspeople while I was a U.S. senator and later a presidential nominee. ... Legislators and government regulators must more carefully consider the economic and management burdens we have been imposing on U.S. businesses. ... Many businesses ... simply can’t pass such costs on to their customers and remain competitive or profitable.”

President Obama, like many members of Congress, has little experience in or understanding of the private free-market economy. Obama never started a business, ran one or struggled to meet a payroll. He shows little respect for the hard, long hours people put in to build successful businesses that compete to provide goods and services to customers and that hire people. He believes that unequal outcomes are unjust and that government exists to right this wrong by “spreading the wealth.”

If this means telling doctors how to practice, so what? If this means that people will be less likely to improve themselves through education and training in order to get “good” jobs with benefits, so what? If this means we make employers less likely to hire for fear of fines should they fail to offer health insurance, so what? And if the “wealthy” invest less and create fewer jobs because of higher taxes and expensive regulations, so what?

Now what? As many as 39 state legislatures have taken or will take action to block the mandate. Thirteen state attorneys general immediately filed suit, arguing, among other things, that ObamaCare’s insurance mandate violates the Constitution’s commerce clause. Expect more states to sue. Unfortunately, the Supreme Court broadly interprets the commerce clause -- wildly beyond the intent of the Founders -- to allow just about anything.

So, the Constitution must be changed. It must be amended to make what was once clear absolutely, positively, unavoidably clear. Two-thirds of the states can call for a constitutional convention, where an amendment can be proposed to prohibit the forced purchase of health insurance. Three-fourths of the states could then ratify it.

Implausible? So was ObamaCare.

3/25/2010: Thoughts to ponder

Our country has stumbled into socialism during the past half century; by now — 1958 — we have adopted nearly all the things socialists stand for. Those of us who are aware of socialism’s built-in destructiveness have watched this process with apprehension and are forever predicting, or warning against, the impending catastrophe which we think we see hanging over our society. Under socialism, some men are put at the disposal of other men, deliberately, legally, and on principle. Socialism, in other words, is premised in an immoral extension of political power. — Leonard E. Read, Essays on Liberty, Volume VI [1959]

Though freedom and wealth are both good things which most of us desire and though we often need both to obtain what we wish, they still remain different. Whether or not I am my own master and can follow my own choice and whether the possibilities from which I must choose are many or few are two entirely different questions. The courtier living in the lap of luxury but at the beck and call of his prince may be much less free than a poor peasant or artisan, less able to live his own life and to choose his own opportunities for usefulness. — Friedrich A. Hayek, The Constitution of Liberty [1960]

3/24/2010: The Obamaklatura by James Taranto
The president aims to make America more equal--and some Americans more equal than others.

David Leonhardt of the New York Times--last seen (we are not exaggerating) touting National Socialism as a model for economic policy--is on more conventional ground today in praising ObamaCare as “the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago”:

Over most of that period, government policy and market forces have been moving in the same direction, both increasing inequality. The pretax incomes of the wealthy have soared since the late 1970s, while their tax rates have fallen more than rates for the middle class and poor. . .

A big chunk of the money to pay for the bill comes from lifting payroll taxes on households making more than $250,000. On average, the annual tax bill for households making more than $1 million a year will rise by $46,000 in 2013, according to the Tax Policy Center, a Washington research group. Another major piece of financing would cut Medicare subsidies for private insurers, ultimately affecting their executives and shareholders.

The benefits, meanwhile, flow mostly to households making less than four times the poverty level--$88,200 for a family of four people.

Remember when Sen. Obama told “Joe the Plumber” he wanted to “spread the wealth around”? This might have been the most revealing moment in the campaign--and the mainstream media responded by investigating and vilifying the man who had the temerity to confront the candidate with a question.

Leonhardt’s piece ends with an anecdote involving an Obama aide:

Before he became Mr. Obama’s top economic adviser, Lawrence Summers told me a story about helping his daughter study for her Advanced Placement exam in American history. While doing so, Mr. Summers realized that the federal government had not passed major social legislation in decades. There was the frenzy of the New Deal, followed by the G.I. Bill, the Interstate Highway System, civil rights and Medicare--and then nothing worth its own section in the history books.

Now there is.

One might mischievously suggest that it’s terribly unfair for one girl to get free tutoring from a super smart economist who used to be president of an elite university and assert that Larry Summers is a hypocrite unless he takes steps toward the socialization of his own brain.

That, of course, is a reductio ad absurdum--fun but fallacious. The inequality that benefits children of smart parents is a product of nature (and of nurture, but nurture is also a product of nature). Leveling it by coercive means is beyond the ability of any but perhaps the most brutal totalitarian state.

But another story, broken yesterday by the Chicago Tribune, illustrates why “equality” isn’t all it’s cracked up to be. Unlike medicine, elementary and secondary education in the U.S. is already almost completely under political control. Defenders of this arrangement justify it in the name of equality. They do not claim the current system achieves that ideal, but they do insist that efforts to reduce political control via vouchers and other forms of privatization would make inequality worse.

But the Tribune story shows that political control introduces its own kind of inequality, to benefit the political class:

While many Chicago parents took formal routes to land their children in the best schools, the well-connected also sought help through a shadowy appeals system created in recent years under former schools chief Arne Duncan.

Whispers have long swirled that some children get spots in the city’s premier schools based on whom their parents know. But a list maintained over several years in Duncan’s office and obtained by the Tribune lends further evidence to those charges. Duncan is now secretary of education under President Barack Obama.

The log is a compilation of politicians and influential business people who interceded on behalf of children during Duncan’s tenure. It includes 25 aldermen, Mayor Richard Daley’s office, House Speaker Michael Madigan, his daughter Illinois Attorney General Lisa Madigan, former White House social secretary Desiree Rogers and former U.S. Sen. Carol Moseley Braun.

Non-connected parents, such as those who sought spots for their special-needs child or who were new to the city, also appear on the log. But the politically connected make up about three-quarters of those making requests in the documents obtained by the Tribune.

This is “the aristocracy of pull,” in Ayn Rand’s memorable phrase. Its existence is probably inevitable inasmuch as government’s is, but its extent can only increase with the power and reach of government.

If you and Larry Summers both get sick and need a treatment that the Medicare Advisory Commission (dysphemistically known as the Death Panel) deems too expensive, what are the odds that you’ll find a way to get it anyway and he won’t? How about the other way around? In the Soviet Union, those privileged by political connections were called the nomenklatura. Here, we can call it the Obamaklatura.

3/23/2010: It’s a Civil War: What We Do Now by Dennis Prager

A terrible thing happened to America on Sunday, March 21, 2010.

The country took its biggest step ever down a road diametrically opposed to its original intent of keeping the state small so that the individual can be free and great.

Therefore, in this unprecedented crisis of values, this is what needs to be done:

1. Know and teach America’s core values.

We got to this point solely because over the past few generations, Americans have forgotten the values that have made America distinctive and great. Even the “Greatest Generation” failed to communicate them.

In a nutshell, they are what I call the American Trinity: “In God we trust,” “Liberty” and “E Pluribus Unum.” The left has successfully made war on all three -- substituting secularism for God and religion in as much of American life as possible; substituting equality (of result) for liberty; and multiculturalism is the opposite of “E Pluribus Unum.”

People who do not understand American ideals -- especially small government -- now dominate our schools, our entertainment media and our news media.

(My own contribution here is a video titled, “The American Trinity” at prageru.com. Please view it and forward it.)

2. Recognize that we are fighting the left, not liberals.

Conservatives and centrists are no longer fighting liberals. We are fighting the left.

Liberalism believed in American exceptionalism; the left not only does not believe in it, the left opposes it. President Obama, when asked if he believes in American exceptionalism, replied, “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism, and the Greeks believe in Greek exceptionalism.”

Liberalism believed in creating wealth; the left is interested in redistributing it.

Liberalism believed in a strong defense. The left believes in cutting defense and a strong United Nations.

3. Democrats should be referred to as Social Democrats. This is not meant to be cute, let alone as a slur. But calling Democrats Social Democrats is an effective way of reminding Americans that there is no longer any difference between what is now known as the Democratic Party and the Social Democratic parties of Europe. When the Democratic Party returns to its roots as a liberal, not a left-wing, party, we will happily resume calling the party by its original name. However, since no Democrat can cite a significant difference between the Democratic Party and the SD parties, there is no good reason not to use the more accurate nomenclature.

4. Work tirelessly to repeal the bill.

We must single-mindedly work to repeal the government health plan. We all know that it is difficult to repeal entitlements because they are like drugs and it is very difficult to wean people off drugs. But it is not impossible. We need to warn our fellow Americans that entitlements will do to America what drugs eventually do to addicts.

All Republicans must run for office on the “repeal” issue. Even when they lose, the difference between right and left, between Republicans and Social Democrats will have been made clear; and clarity is our best friend.

5. Our motto: “The bigger the government, the smaller the citizen.”

I used this phrase in addressing the Republican members of Congress. It has become widely used, including by Rep. David Dreier, R-Calif., on the House floor during the Congressional debate on Sunday. It encapsulates this epic battle of American values versus leftist values. Every movement needs a motto. I nominate this.

6. Do not let other matters distract.

Neither Republicans nor conservatives are united on every issue facing America. Immigration is one example. But we are united on the big government vs. free individual issue, which, more than anything else, has defined America. If we allow any other domestic issue to divide us, we will lose.

And here’s why: If Americans forget what America stands for, it won’t help us if there is not one illegal immigrant here. And if we do remember what it means to be American, we can handle anything.

7. Acknowledge that we are in a non-violent civil war.

I write the words “civil war” with an ache in my heart. But we are in one.

Thank God this civil war is non-violent. But the fact is that the left and the rest of the country share almost no values. The American value system and the leftist value system are irreconcilable. If the left wins, America’s values lose. If American values prevail, the left loses.

After Sunday’s vote, for the first time in American history, one could no longer confidently believe that the American system will prevail. And if we don’t fight for it, we don’t deserve it.

3/23/2010: The Five Keys to Killing Obamacare by John Hawkins

“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” -- Winston Churchill

Without question, people who zealously guard their freedoms, love their country, and want a better future for their children lost a big battle on Sunday. Yes, Republicans in the House fought skillfully and won the battle with the public, but the legislative chicanery, bribery, and utter disdain for the will of the people won the day for the Left.

Democrats in extremely red districts proved ready and willing to sacrifice their jobs in November to pass the bill. The Stupak block, which held firm for weeks, joined hands with the pro-abortion crowd to federally fund abortions for the first time in our history. The Democrats in Congress didn’t care about the rules, they didn’t care about the consent of the governed, and they didn’t care about what is good for the country. This is a socialist power grab, pure and simple, and a little bit of what has made this a great country died writhing on the floor of the House last night.

The Democrats are calling this a historic moment. So it is. Of course, the same could be said of the crash of the Hindenburg, the sinking of the Titanic, and the start of the Civil War. This is an unconstitutional bill that will increase taxes, increase premiums, hurt Medicare, explode the deficit, federally fund abortions, lead to rationing, reduce quality of care, and dramatically increase the government’s control over your life.

Moreover, unlike Social Security and Medicare, which were both popular bills that were passed with large bipartisan majorities, this bill is unpopular, passed without Republican support, and most of the “benefits” don’t come into effect until 2014. That gives us an opportunity to do something that rarely happens in American politics: We have a legitimate chance to repeal an entitlement program.

Some people in the heat of the moment are talking about repealing Obamacare like it’s a given that’s bound to happen. It’s not. It’s going to be hard work, the results will be uncertain, and it will take years of political combat against utterly amoral opponents who have no qualms about lying, handing out bribes, or shredding the Constitution to get their way.

Here’s a basic outline of what it will take to get it done:

1) Fight the Democrats on Reconciliation. Republicans are saying that they’re going to do anything and everything in their power to block the further damage Democrats want to do to our country via reconciliation. That’s the right attitude to have. However, at the end of the day, if Joe Biden is willing to disgrace his office to prevent the Republicans from offering legitimate amendments, eventually the Democrats will get something through. But, the more Republicans can block, the more discontent there will be on the Democratic side with the bill and less noxious provisions there will be to repeal.

2) Challenge the bill in court. It’s clearly unconstitutional to force people to buy insurance. If the government can force you to buy insurance as a condition of citizenship, why couldn’t the Congress just as easily write a bill forcing you to buy a car from GM? Numerous states will end up challenging the bill in court on that point. Given that we have four Supreme Court justices who believe in following the law, four who generally vote liberal regardless of the Constitution, and Anthony Kennedy who votes based on what side of the bed he gets up on this morning, it’s impossible to say whether these legal challenges will work, but they’re worth trying. If they succeed, suddenly, the whole health care bill, as written, will become unfeasible. That would give us the opportunity to roll it back.

3) Win the public relations war. So far, we’ve won the public relations battle over this bill, but that doesn’t mean we’re guaranteed to win it forever. It’s entirely possible that Obama and health care reform will get a temporary bump from passing health care reform. That’s not the least bit unusual after a big bill like this passes. Happily, that bump will be destined to fade, but expect Democrats to play the PR for all it’s worth. There will also be a limited number of benefits that will kick in immediately. Expect the Democrats and their allies in the mainstream media to tout them endlessly while shamelessly lying and deflecting blame about the negatives. If we’re going to repeal this bill, the truth has to win out over the lies because if the public is tricked into supporting this bill, it’s simply not going to be repealed.

4) The Republican Party has to win big in the next two elections. Here’s the sad reality: Republicans need to win 10 seats to take back the Senate, 40 seats to take back the House, and we need to defeat Barack Obama in 2012. Some people are taking it for granted that all those things will happen. Some people even think we’ll take the House in a walk in November. Maybe that’ll be the case. But, the Democrats have a big cash advantage, the American people have short memories, and eventually, the economy almost has to improve. So, there are no guarantees. If we do take back the House in 2010, it will be because legions of Americans who care about their country were inspired by a despicable bill to put up yard signs, contribute money, make phone calls, and do the rest of the grunt work it takes to get people elected. Are you going to be one of those people?

5) Repeal, replace, and refuse to fund. To completely repeal this bill, we’re probably going to need to control the House, have 60 votes in the Senate, and hold the presidency. Obviously, that’s a heavy lift -- particularly getting to 60 in the Senate. However, in the interim, if we can control Congress, we can start tearing this bill apart, piece-by-piece. We can try to get unpopular parts of the bill, like the tax hikes and the individual mandate, repealed. Congress also controls the purse strings; so we can shut down large parts of the plan by simply refusing to fund it. Moreover, we can suggest popular conservative ideas to replace unpopular parts of the bill and force the Democrats to either continue to go against the will of the people or vote them in. Then, if and when we get the votes and the presidency, we can try to repeal the whole thing. Don’t let anyone tell you that this will be easy. But, don’t let them tell you it’s impossible either.

Last but not least, what John Boehner said on the House floor before the vote Sunday night should ring in the ears of every American,

Shame on each and every one of you who substitutes your will and your desires above those of your fellow countrymen. Around this chamber, looking upon us are the lawgivers from Moses to Gaius, to Blackstone, to Thomas Jefferson. By our action today, we disgrace their values. We break the ties of history. We break our trust with America.

Whatever it takes, we will not let it stand.

3/20/2010: National Review Online: Welcome to Deemocracy
If you’re sick of talking about health care, you’d better move to Tahiti now.
by Mark Steyn

On Thursday, the California Occupational Safety and Health Standards Board voted to set up a committee to examine whether condoms should be required on all pornographic film shoots within the Golden State.

California has run out of money, but it hasn’t yet run out of things to regulate.

For a government regulatory hearing, the testimony was livelier than usual. The porn star Madelyne Hernandez recalled an especially grueling scene in which she had been obliged to have sex with 75 men. The bureaucrats nodded thoughtfully, no doubt contemplating another languorous 18-month committee assignment looking into capping the number of group-sex participants at 60 per scene. In the future, if a porn actress finds 75 men waiting for her on the set, they’ll be bureaucrats from Sacramento’s Condom Enforcement Squad.

The committee will also make recommendations on whether the “adult” movie industry should be subject to the same regulatory regime and hygiene procedures as hospitals and doctors’ surgeries. You mean with everyone in surgical masks? Kinky. If you’ve ever been in the filthy, C. difficile– and MRSA-infected wards of Britain’s National Health Service, it may make more sense after the passage of Obamacare to require hospitals to bring themselves up to the same hygiene standards as the average Bangkok porn shoot.

One can make arguments for permitting porn and for banning porn, but there isn’t a lot to be said for the bureaucratization of porn. Hard to believe there will be dull, bespoke California bureaucrats looking forward to early retirement on gold-plated pensions who’ll be getting home, sinking into the La-Z-Boy and complaining to the missus about a tough day at the office working on the permits for Debbie Does the Fresno OSHA Office.

Meanwhile, Obamacare will result in the creation of at least 16,500 new jobs. Doctors? Nurses? Ha! Dream on, suckers. That’s 16,500 new IRS agents, who’ll be needed to check whether you — yes, you, Mr. and Mrs. Hopendope of 27 Hopeychangey Gardens — are in compliance with the 15 tax increases and dozens of new federal mandates the Deemocrats are about to “deem” into existence. This will be the biggest expansion of the IRS since World War II — and that’s change you can believe in. This is what health care “reform” boils down to: fewer doctors, longer wait times, but more bureaucrats. And, when you walk into the Health Care Enforcement Division of the IRS, the staffing levels will make Madelyne Hernandez’s group-sex scene look like an Equity-minimum one-man play off-off-off Broadway.

Barack Obama, a man who not so long ago had time to jet across the world to make dreary Olympics-losing speeches about how his kind of town Chicago is, has now postponed his presidential visits to Indonesia and Australia in order to make sure “health care” passes this week — or, at any rate, is “deemed” to have passed, which is apparently the way a quarter-millennium-old constitutional republic does things.

The president, his press secretary informs us, regrets having to postpone his trip for three months, but “passage of the health-insurance reform is of paramount importance.” Whereas Australia isn’t.

The visit had already been pared back to the bare minimum — a quick refueling stop in Canberra, with a speech to Parliament and a grip’n’greet with the governor-general and the prime minister. Maybe the administration could simply “deem” the visit to have occurred, photoshop a souvenir snapshot, and stick it in the mail to their eminences. In much the same way, the Deemocrats are deeming their health bill to control costs rather than actually controlling them. Medicare doesn’t reimburse doctors the cost of treating the patient; it reimburses what the bureaucracy “deems” it to have cost. In a deemocracy, this works. In real life, it’s more problematic.

Investor’s Business Daily argues that the “health” debate is really a proxy fight on the size and role of government. According to their poll, 64 percent of people think the federal government has “too much power.” Correct. But a big chunk of that 64 percent voted less than 18 months ago for a man and a party explicitly committed to more government with more power, and they’re now living with the consequences. Obama is government, and government is Obama. That’s all he knows and all he’s ever known. You elected to the highest office in the land a man who’s never run a business or created wealth or made a payroll, and for his entire adult life has hung out with guys who’ve demonized (deemonized?) such grubby activities. Many of which associates he appointed to high office: Obama’s cabinet has less experience in private business than any in the last century. What it knows is government, and government’s default mode is to grow, and grow.

California is bankrupt: The dependent class and the government class that issues the checks to the dependent class have squeezed out the poor boobs in the middle who have to pay for it all. Everybody knows this. But a state that already has a Bureau of Home Furnishings cannot restrain itself from setting up a Bureau of Motion Picture Condom Regulation — or, anyway, an impact study to study whether the Bureau of Impact Studies should study the impact of a Bureau of Motion Picture Condom Regulation.

Look around you, and take it all in. From now on, it gets worse. If you have kids, they’ll live in smaller homes, drive smaller cars, live smaller lives. If you don’t have kids, you better hope your neighbors do, because someone needs to spawn a working population large enough to pay for the unsustainable entitlements the Obama party has suckered you into thinking you’re entitled to. The unfunded liabilities of current entitlements are $100 trillion. Try typing that onto your pocket calculator. You can’t. There isn’t enough room for all the zeroes, and, even if they made a pocket calculator large enough, and a pocket large enough, you’d be walking with a limp. To these existing entitlements, Obama and his enforcers in Congress propose to add the grandest of all: health care, on a scale no advanced democracy has ever attempted.

Whatever is “deemed” to have passed in the next few days doesn’t end the debate but begins it. If you’re sick of talking about health care, move to Tahiti, because in the U.S. we’re going to be talking about it until the end of time, or at least until the Iranians nuke Cleveland.

It isn’t difficult. We need less government, with smaller budgets, fewer agencies, and vastly reduced numbers of public-sector union employees on less lavish remuneration. I’m confident the California Bureau of Condom Regulators can be retrained as porn-movie bit-players and once again make a useful contribution to society. But, if you’re not in favor of shrinking government, you’re voting for national decline, remorseless and ever accelerating.

Obama and Pelosi are strong-arming swing-state congressmen into taking one for the deem. It’s appropriate that it should take banana-republic maneuvers to ram this through, because it’s about government so powerful it can make up the rules as it goes along. Maybe regulators should roll a giant condom over the Capitol before it fatally infects the rest of us.

— Mark Steyn, a National Review columnist, is author of America Alone.

3/19/2010: Obama keeps sinking…another new record LOW

3/18/2010: Obama to America: Bend Over and Cough by Larry Elder

Americans resoundingly reject ObamaCare. What, then, accounts for the Democrats’ determination?

Democrats believe health care is a right. Start with that premise and everything else makes complete sense. Rights -- whether the right to vote or to freely assemble or to avoid self-incrimination -- exist independent of popular feeling, poll numbers or even, in the case of health care, the Constitution.

Democrats don’t care how much ObamaCare costs. When President Barack Obama addressed Republicans, Rep. Paul Ryan, R-Wis., carefully outlined the costs of this “reform.” He explained why costs figure to go up, not down. To someone truly interested in a cost-benefit analysis, these points warrant a rebuttal. But as MSNBC host Ed Schultz said, when it comes to health care reform and money, “I don’t care how much it costs.” An owner of an NFL team fired his coach despite the team’s winning record. He explained, “I gave him an unlimited expense account -- and he exceeded it.” To Democrats, “economic justice” knows no price tag.

Democrats consider election losses a small price to pay for health care “reform.” Predictions range from moderate fall election losses to a bloodbath resulting in a Republican takeover of the House and possibly even the Senate. To this Democrats say, “So what?” Once health care reform becomes law, that’s that. Only a Republican charge with a filibuster-proof Republican supermajority in the Senate could undo it. Besides, President Bill Clinton got re-elected when the Republicans took over the House. And although he gives Republicans no credit, Clinton thereafter governed closer to the center, turned House Speaker Newt Gingrich into a convenient whipping boy, cruised to re-election and left office with a budget surplus. Obama, Democrats figure, could do a lot worse.

Democrats blame Americans’ confusion about ObamaCare’s virtues on Republican “lies.” Democrats claim that ObamaCare would decrease costs while retaining the same or better health care quality. Republicans say the opposite. Massachusetts’ RomneyCare, which is similar to ObamaCare, has failed to reduce costs. The three big entitlement programs -- Social Security, Medicare and Medicaid -- are all in deep financial trouble. At inception, the programs’ cost estimates were wildly underestimated. None of this provides cautionary lessons. Republicans lie.

Democrats believe that they truly care about people and that Republicans don’t. Obama tells of an uninsured self-employed Ohio woman receiving cancer treatment at the Cleveland Clinic. The woman, he says, faces the prospect of losing her home because of the hospital bills. Never mind the Cleveland Clinic offers millions of dollars of non-reimbursed care annually. Never mind that the world-renowned medical facility said it has no intention of going after her home. And never mind that the woman, according to the hospital, is likely eligible for several charitable programs.

Democrats say, “If you like things as they are, don’t worry.” Eighty-five percent of Americans have health insurance, and 89 percent of them are satisfied with it. This poses a problem for “reform.” MSNBC’s Chris Matthews once wrote that because HillaryCare failed to calm the satisfied, it collapsed. “People,” said Matthews, “saw their hard-won benefits and options being siphoned off to fund the health needs of all comers. Instead of securing the health care of the ‘working family,’ Hillary Clinton was offering ‘universal coverage’ for those who didn’t work, financed by those who did. It was an offer people were eager and quick to refuse.”

Democrats say, “If you like your plan and your doctor, you can keep them.” But won’t some employers drop their employee plans, pay the fines and slough the costs onto the taxpayers? And won’t some doctors, as polls suggest, restrict their practices or quit altogether? No, because, well, they just won’t.

Democrats bask in an Obama-loving liberal traditional media. The media cheerlead for health care “reform” and desperately want to give the President a “victory” -- while accepting preposterous claims at face value. ObamaCare promises to extend health insurance to 30 million people; promises financial assistance to those unable to afford insurance; requires all employers to offer health insurance or pay fines; requires every American to obtain insurance or pay a fine; and promises to attack “unwarranted” insurance premium increases while requiring insurers to enroll those with pre-existing illness without dropping anyone’s coverage. And it would lawfully achieve all of this without increasing the deficit!

Democrats believe that if people are too dumb right now to see the benefits of ObamaCare, someday they will. If not, opponents will be powerless to do anything. Some people refuse to see what’s best. That’s why God created Democrats.

Democrats ultimately want a Canadian-style single-payer system. ObamaCare will result in cost overruns, caregivers driven out of business, declining quality, rationing, reduced innovation and bureaucrats determining who gets what, how and when. What then?

When the complaints grow loud enough, Democrats will be ready -- with a plan to “reform” the “reform.”

3/17/2010: The Warmers Strike Back by Walter E. Williams

Stephen Dinan’s Washington Times article “Climate Scientist to Fight Back at Skeptics,” (March 5, 2010) tells of a forthcoming campaign that one global warmer said needs to be “an outlandishly aggressively partisan approach” to gut the credibility of skeptics. “Climate scientists at the National Academy of Sciences say they are tired of ‘being treated like political pawns’ and need to fight back…” Part of their strategy is to form a nonprofit organization and use donations to run newspaper ads to criticize critics. Stanford professor and environmentalist Paul Ehrlich, in one of the e-mails obtained by the Washington Times said, “Most of our colleagues don’t seem to grasp that we’re not in a gentlepersons’ debate, we’re in a street fight against well-funded, merciless enemies who play by entirely different rules.”

Professor Thomas Sowell’s most recent book, “Intellectuals and Society,” has a quote from Eric Hoffer, “One of the surprising privileges of intellectuals is that they are free to be scandalously asinine without harming their reputation.” Environmentalist Professor Paul Ehrlich, who’s giving advice to the warmers, is an excellent example of Hoffer’s observation. Ehrlich in his widely read 1968 book, “The Population Bomb,” predicted, “The battle to feed humanity is over. In the 1970s, the world will undergo famines. Hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now. Population control is the only answer.” Ehrlich also predicted the earth’s then-3.5 billion population would starve back to 2 billion people by 2025. In 1969, Dr. Ehrlich warned Britain’s Institute of Biology, “If I were a gambler, I would take even money that England will not exist in the year 2000.” Despite these asinine predictions, Ehrlich has won no less than 16 awards, including the 1980 Crafoord Prize, the Royal Swedish Academy of Sciences’ highest award.

Stanford University professor and environmentalist activist Stephen H. Schneider is another scientist involved in the warmer retaliation. In a 1989 Discover Magazine interview, Professor Schneider said, “We have to offer up scary scenarios, make simplified dramatic statements, and make little mention of any doubts we may have. Each of us has to decide what the right balance is between being effective and being honest.”

Former Colorado Sen. Tim Wirth, now president of the United Nations Foundation, in 1990 said, “We’ve got to ride the global warming issue. Even if the theory of global warming is wrong, we’ll be doing the right thing, in terms of economic policy and environmental policy.”

Environmental activist predictions have been dead wrong. In National Wildlife (July 1975), Nigel Calder warned, “... the threat of a new ice age must now stand alongside nuclear war as a likely source of wholesale death and misery for mankind.” In the same issue, C.C. Wallen of the World Meteorological Organization warned, “The cooling since 1940 has been large enough and consistent enough that it will not soon be reversed.”

George Woodwell’s, founder of the Woods Hole Research Center, comments suggest that the warmers are gearing up for a big propaganda push. In one of his e-mails, Woodwell said that researchers have been ceding too much ground. He criticized Pennsylvania State University for their academic investigation of Professor Michael Mann, who wrote many of the e-mails leaked from the Britain’s now disgraced Climate Research Unit. Stephen Dinan’s Washington Times article reports, “In his e-mail, Mr. Woodwell acknowledged that he is advocating taking ‘an outlandishly aggressively partisan approach’ but said scientists have had their ‘classical reasonableness’ turned against them,” adding, “‘We are dealing with an opposition that is not going to yield to facts or appeals from people who hold themselves in high regard and think their assertions and data are obvious truths.’”

Fortunately, for the American people, Sen. James M. Inhofe, R- Okla., is considering asking the Justice Department to investigate whether climate scientists who receive taxpayer-funded grants have falsified data. He has identified 17 taxpayer-supported scientists who have been major players in the global warming conspiracy.

3/17/2010: The Wisdom Of Thomas Jefferson

1. When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe .

2. The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

3. It is incumbent on every generation to pay its own debts as it goes, a principle which if acted on would save one-half the wars of the world.

4. I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.

5. My reading of history convinces me that most bad government results from too much government.

6. No free man shall ever be debarred the use of arms.

7. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

8. The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

9. To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.

10. I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake up homeless on the continent their fathers conquered.

3/19/2010: Fred on Everything: Taking the Tenth, The Last Hope

Washington is out of control. It does as it likes, without restraint. It spends American money and American lives to fight remote wars for which it cannot provide a plausible reason. It determines what our children will be taught, who we can hire and fire, to whom we can sell our houses, whether we can defend ourselves, even what names we can call each other. The feds read our email and track the web sites we visit, make us hop around barefoot in airports at the command of surly unaccountable rentacops. They search us at random in train stations without even a pretense of probable cause. We have no influence over them, no way of resisting.

Except, perhaps, to ignore them.

Washington has learned to insulate itself from interference by the population. Huge impenetrable bureaucracies beyond public control make regulations that amount to laws, spending God knows how much money to do God knows what for the benefit of the interest groups that run the government. These bureaucrats cannot be fired and usually cannot be named. Congress, like the bureaucracies, serves not the United States but the big lobbies. The looters of Wall Street wreck the lives of millions, and get millions in bonuses for doing it instead of the end of a rope.

Further, the federal government simply doesn’t work. It is clogged up, constipated, gridlocked, using antiquated technology to do badly things it ought to do and things it oughtn’t. In large part this is because federal hiring rests on the desires of racist and feminist lobbies instead of suitability for the work to be done. Whole departments—HUD, Education—do much harm and little good. IRS is ruthless, incompetent, and unaccountable, the tax laws burdensome and crafted for the benefit of special interests and of Washington. I can change my address with my bank online in five minutes and know that it has been done; IRS requires a paper form and six to eight weeks to effect the change, and you don’t know whether it has been done. The goons of TSA leer at our daughters with their porno=scanners. The VA can easily take six months to provide a veteran’s records, when it could be done online in five seconds. The Pentagon spends a trillion a year, precious little of which has anything to do with defending America, but can’t defeat a small group of badly outnumbered men armed with rifles and RPGs; the intelligence agencies were unable to warn them of the prospect.

The government doesn’t work. It is broken. It can’t be fixed. It can’t be fixed because only those within it could, and their interest lies in not fixing it.

The only remedy short of armed rebellion is civil disobedience at the level of the states. Clear constitutional justification for refusal to obey Washington lies in the Tenth Amendment:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

A great many states now begin to do a great many things counter to Washington’s wishes. I think it wise to keep resistance within the framework of the Constitution, but the entire question comes down to a blunt truth: No law extends beyond the lawmaker’s power to enforce it. Congress can pass a law against gravitation, but can’t prevent things from falling when released from a height. The federal government made alcohol illegal but, in the face of massive public disregard, couldn’t make it stick.

What happens if, as may happen, California legalizes marijuana—not just for contrived medical purposes, but legalizes it, period? I search in vain for the Marijuana Clause in the Constitution. The feds do not have the manpower to enforce federal laws within California without the help of the police of California. What happens if a state passes a law saying that its citizens cannot be forced to buy health insurance? What can Washington do? It can persecute individuals, but a state, or thirty states, are another thing. The FBI can arrest any one person, but it cannot arrest Wyoming.

Much depends on how sick people really are of the ever-growing thicket of laws, regulation, imposed political correctness, surveillance, and having to live according to the dictates of remote elites with whom they have nothing in common.

At bottom, Washington’s power is economic. The feds rely for control on taxing money from the states and giving some of it back in exchange for obedience. They cannot arrest Wyoming, but they can deny it federal highway funds. This technique provides de facto control over everything from kindergarten to MIT.

Now, if Idaho passes a law (I’m making this up) saying that no restrictions on the ownership of guns will be enforced within the state, Washington might choose discretion over valor and ignore it. Legalizing marijuana, however, or refusing to accept compulsory medical care, would be a direct if not necessarily intentional challenge to the power of the central government. The feds could not afford to let either of these things slide. The danger of the precedent to the grip of the governing classes would be too great. A deadly serious confrontation would ensue.

What could, or would, the federal government do in response to defiance? Send the Marines to occupy Sacramento? Or the FBI to arrest Arnold and the legislature of California?

Or cut off California’s financial water? No bailout for the state’s tottering economy, no more fat subsidies to the universities, and so on?

The question is how ugly might things get. Washington may be able to make the states back down. It may not. The peril for the feds is that it might occur to the states that, while they get their money from Washington, Washington gets its money from the states. The central government depends absolutely on the states, whereas the states would get along swimmingly without the current central government.

How tired are Americans of a dysfunctional, oppressive Washington, unconcerned for its citizens, unaccountable and tending fast toward the totalitarian, that sprawls across the continent like an armed leech of malign intent? That is the question. The first time a populous states says “No,” if such a state ever does, we will get the answer. The United States has been free, prosperous, and reasonably well governed for a long time. It no longer is. Things go downward, within and without.

Nothing lasts, change comes, and things break. We shall see. Give it five years.

From Reason Magazine: Five Lies About the American Economy

The Obama team’s favorite slices of fiscal baloney
by Tim Cavanaugh from the April 2010 issue

1. Bold government action staved off a Depression, saving or creating 1.5 million jobs.

2. No one wants banks making the kinds of risky loans that got us into this situation in the first place.

3. The economic crisis is a ‘subprime crisis.’

4. Ben Bernanke is a heroic leader.

5. The worst is behind us.

[Read more]

From Reason Magazine: Obama and the L-Word

The president’s habit of telling untruths
by Matt Welch from the April 2010 issue

3/12/2010: from the Daily Reckoning

...There are more clowns in economics than in the circus. They invented an economic model that has been very popular for more than 50 years - particularly in the US and Britain. It began with a bogus insight; John Maynard Keynes thought consumer spending was the key to prosperity; he saw savings as a threat. He had it backwards. Consumer spending is made possible by savings, investment and hard work - not the other way around. Then, William Phillips thought he saw a cause and effect relationship between inflation and employment; increase prices and you increase employment too, he said.

Jacques Rueff had already explained that the Phillips Curve was just a flimflam. Inflation surreptitiously reduced wages. It was lower wages that made it easier to hire people, not enlightened central bank management. But the scam proved attractive. The economy has been biased towards inflation ever since.

Economists enjoyed the illusion of competence; they could hold their heads up at cocktail parties and pretend to know what they were talking about. Now they were movers and shakers, not just observers. The new theories seemed to give everyone what they most wanted. Politicians could spend even more money that didn’t belong to them. Consumers could enjoy a standard of living they couldn’t afford. And the financial industry could earn huge fees by selling debt to people who couldn’t pay it back.

Never before had so many people been so happily engaged in acts of reckless larceny and legerdemain. But as the system aged, its promises increased. Beginning in the ‘30s, the government took it upon itself to guarantee the essentials in life - retirement, employment, and to some extent, health care. These were expanded over the years to include minimum salary levels, unemployment compensation, disability payments, free drugs, food stamps and so forth. Households no longer needed to save.

As time wore on, more and more people lived at someone else’s expense. Lobbying and lawyering became lucrative professions. Bucket shops and banks neared respectability. Every imperfection was a call for legislation. Every traffic accident was an opportunity for wealth redistribution. And every trend was fully leveraged.

If there was anyone still solvent in America or Britain in the 21st century, it was not the fault of the banks. They invented subprime loans and securitizations to profit from segments of the market that had theretofore been spared. By 2005 even jobless people could get themselves into debt. Then, the bankers found ways to hide debt...and ways to allow the public sector to borrow more heavily. Goldman Sachs did for Greece essentially what it had done for the subprime borrowers in the private sector - it helped them to go broke.

As long as people thought they were getting something for nothing, this economic model enjoyed wide support. But now that they are getting nothing for something, the masses are unhappy. Half the US states are insolvent. Nearly all of them are preparing to increase taxes. In Europe too, taxes are going up. Services are going down. And taxpayers are being asked to pay for the banks’ losses...and pay interest on money spent years ago. Until now, they were borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they didn’t worry about yesterday. So, the patsies are in revolt.

Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.

The rioters can go home, in other words. The system will collapse on its own.

Bill Bonner for The Daily Reckoning

3/10/2010: Organized Labor and Citizens United by Steven J. Law
Unions were the big winners in the ‘corporate’ free speech case.

When President Obama delivered his tongue-lashing to the Supreme Court in his State of the Union address—accusing the justices of opening “the floodgates for special interests”—he didn’t mention the No. 1 beneficiary of the Court’s Citizens United decision. Nor did Sen. Chuck Schumer (D., N.Y.) when he excoriated the campaign finance case as a victory for “corporate America.”

The unmentioned winners massively outspend any corporation on politics. By their own admission, they dropped roughly half a billion dollars in the 2008 elections, overwhelming any group representing business.

Despite enjoying access to the highest reaches of the federal government, many of this group’s leaders avoid detection of their lobbying simply by removing their names from official lobbying databases. One of the group’s most powerful executives referred to its legislative shopping list as “payback” in return for lavishing financial support on politicians. And if that weren’t enough, the group even represents thousands of foreigners.

So what is this political powerhouse that Washington politicians dare not mention by name? Organized labor.

The central ruling of Citizens United v. FEC allows corporations to engage in independent advocacy during elections. This applies equally to labor unions. And unlike corporations, unions are far better positioned to take advantage of the ruling because they have virtually no other restraints on their capacity to engage in political action.

Public companies have to deal with earnings targets, investment analysts, ratings agencies and dividend-hungry shareholders. That’s why most corporations spend little or nothing on politics and can be expected to do the same going forward.

Labor unions, on the other hand, can spend whatever they want on elections with no accountability at all. The AFL-CIO regularly imposes special fees on union members to fund their political programs. Last year the country’s largest union, the SEIU, passed a resolution setting quotas for its local affiliates to cough up “voluntary” contributions to its political action committee, and requiring that shortages be made up from general treasury funds. This fund-raising scheme has been challenged in a complaint to the Departments of Labor and Justice as a violation of federal election law.

Unions also aren’t held to any financial performance standards. SEIU chief Andy Stern admitted last year that he had taken out tens of millions of dollars in loans to pay for campaign ads, saying: “We maxed out the credit card and now we’re paying it off.” What corporation could get away with that?

Given the unions’ capacity for dominating political spending, should Congress curtail organized labor’s free speech rights? Absolutely not. The First Amendment applies equally to unions as it does to business.

At the same time, however, Congress should take steps to protect the free speech rights of union members who don’t support their leaders’ political agenda, and to ensure the integrity of union political activism. As lawmakers evaluate appropriate responses to the Citizens United decision, these proposals should be on the table:

• Require secret ballot elections, supervised by the National Labor Relations Board, to approve political spending.

• Strengthen “pay-to-play” reforms to prohibit government employee unions from spending money to elect politicians who will oversee their labor contracts.

• Allow union members to deduct from their dues all union lobbying and political expenditures, as calculated by an independent auditor.

• Get the government out of the business of automatically deducting union dues from paychecks and require an affirmative check-off for union political spending.

• Prohibit unions that are under the influence of organized crime—as determined by the Department of Labor’s inspector general—from ingratiating themselves with politicians by spending money on elections.

There is a great deal of hyperventilating on Capitol Hill these days about the power of corporations. There is conspicuous silence about organized labor. Coincidentally, unions give nine out of 10 election dollars to the party that currently runs Washington. If Congress attempts to inhibit corporate political speech while treating unions with kid gloves, that’s not reform. It’s just another special-interest payback.

Mr. Law is chief legal officer and general counsel of the U.S. Chamber of Commerce.

3/11/2010: Republican Collectivism by Larry Elder

The most disturbing part of the ObamaCare debate is not about where Republicans and Democrats disagree, but where they agree.

Take this issue of those with pre-existing illnesses. Many Republicans actually support government action to prevent insurance companies from refusing to insure them. Ignoring the benefits of cost-lowering free market competition and the role of charity, many Republicans believe it acceptable to force an insurance company -- in business to insure against unknown risks -- to “insure” someone currently experiencing a known risk.

Sen. Tom Coburn, R-Okla., supports legislation to “eliminate pre-existing conditions” as a reason for a carrier to deny coverage. Sen. John Barrasso, R-Wyo., says government needs “to take care of things like pre-existing conditions so that that doesn’t stop (people) from getting insurance.” Sen. Chuck Grassley, R-Iowa, supports prohibiting “insurers from denying coverage to people with pre-existing medical conditions or charging higher premiums to people who are sick.”

But this should not surprise anyone who observes the allegedly “fiscally conservative,” “pro-free market,” “limited government” party in action. From the acceptance of the New Deal to government bailouts of private industry, Republicans -- sooner or later -- go along.

Here are just a few recent examples. Republican President George W. Bush, for a time, worked with a Republican House and Senate. Bush promised and delivered a prescription benefits bill for seniors. It expanded Medicare, the popular under-funded entitlement program passed -- with Republican support, by the way -- in 1965. We like seniors. Seniors vote. So if they struggle with their drugs bills, why, by all means make someone else help pay them.

On the 10th anniversary of the Americans with Disabilities Act, signed into law by his father, Bush bragged about the law’s importance and effectiveness. That such an assault on private employers engenders praise says much about the GOP’s acceptance of federal government’s command and control.

Like Hamlet, Bush agonized over whether to support federal funds for embryonic stem cell research. He never said, “Why are we asking government to spend taxpayer money on research that is -- or should be -- done by the private sector or nonprofits?”

No Child Left Behind ties federal dollars to local schools’ performance. Where is the outrage about taxpayers in one state paying for education in another? What gives educrats in Washington, D.C., the skills, wisdom and competence to run schools in all 50 states? More importantly, what clause in the Constitution permits this? Presidential candidate Ronald Reagan campaigned to shut down the Department of Education. Reagan failed. Today any candidate making such promises gets a one-way ticket to Shutter Island.

The entire ObamaCare debate starts off in the wrong place -- with Republicans agreeing that “reform” is necessary, health care “costs too much” and that government must “make health care more affordable.” But it is because of government -- laws, regulations and policies -- that users pay more for services and drugs than they otherwise would.

Licensing requirements restrict potential caregivers. A non-doctor field medic in Iraq or Afghanistan could not come home, hang up a shingle, and render basic care without facing prosecution. Despite our aging population, trade associations, along with laws and regulations, restrict the number of doctors. Insurance companies enjoy protected markets because laws restrict carriers from competing across state lines. The Food and Drug Administration increases the cost of drugs while delaying or keeping possibly beneficial drugs off the market.

Republicans ran for the exits when Bush attempted a partial privatization of Social Security. And they should encourage a full-throated deregulation/privatization of the health care industry. After airline deregulation, fares declined. After telephone deregulation, telecommunications companies started providing a numbing array of services -- along with better quality, lower prices and constant innovation.

Because government pays for nearly half of medical costs, we have a nation of government-provided-health-care dependents. Understandably, they want what they currently have or expect to have in the near future. But Medicare, Medicaid and Social Security are steadily gnawing away at the country’s foundation. The bill is coming due.

In 1900, government at all levels -- federal, state and local -- took about 7 percent of America’s income. Today it’s almost 40 percent. And that doesn’t include an estimated 10 percent cost in federal unfunded mandates imposed on states and private business. President Barack Obama and Democrats want to add more than 30 million people -- those without health insurance -- to the takers, with little or no concern about the effect on the givers.

Are Republicans sounding the alarm about government’s present intrusion in health care and its counterproductive effect on quality, affordability and accessibility? Government, they should argue and persuade, grows at the expense of the productive. This eventually weakens the country by sapping the incentive of risk takers. This makes it harder -- not easier -- to help those we claim to care about.

A collectivist, whether an active or passive one, is still a collectivist. Having an “R” after the name provides no defense.

3/11/2010: Letters to the Editor: What I Saw While Debating Obama by John Cox

Holman Jenkins nails it again with “The President vs. Health-Care Reform” (Business World, March 3). This president is not interested in health-care reform; he is interested in government-provided benefits.

I have firsthand knowledge of his intent. In August 2003 I debated him for an hour-and-a-half on this very topic (we were both in the Illinois Senate primaries—he on the Democrat side, I on the Republican). His entire position was that government exists to provide what people cannot provide for themselves. His response to any suggestion of a free market was that such an approach is Darwinism, survival of the fittest, and his approach is that we should all take care of each other through government largess. The fact that this largess must be administered by large government bureaucracies, run by so many government-employee union members committed to Democratic politicians, is a very happy byproduct.

As Mr. Jenkins aptly and ably points out, several factors that skew incentives are to blame for the high cost and unavailability of health insurance and health-care services. Tax policy, state insurance mandates, tort roulette and government purchasing all conspire to constrain supply and distort costs so that the current system is flawed. The administration’s response is to put these skewed incentives into overdrive, when what is needed is a rational plan to eliminate them. I share the sadness that such an opportunity as this president had to really make a difference is being sacrificed on the altar of political expediency.

[“The solution to the so-called health-care crisis is to rid ourselves of the cause of the problems — to dismantle governmental involvement in health care, especially Medicare and Medicaid. Only a complete separation of the state and the health-care market can permanently solve the problem. Instead of asking for free medicine from the state, we should be asking to free medicine from the state.” William Dale, “Free Medicine“]

3/10/2010: In Praise of Educational Pluralism by Danny Shahar

I often hear it said that if the government did not determine what our children are taught, we would have no way to assure they learned the right things. The idea here is that every child deserves a proper education and that, although government education has its share of problems, at least we can keep an eye on who is being allowed to teach and what they are teaching. The free market, on the other hand, would supposedly allow us no such control; schools could simply teach whatever they wanted, and our children might grow up thinking that up is down, black is white, and right is wrong.

While this argument comes from the best of intentions, it is completely misguided for two basic reasons. The first, which has been widely discussed elsewhere, is that it gives an unreasonably pessimistic view of how a free-market education system would look. In a free market, competition would force producers to cater to their customers or risk losing business to other firms. This should lead us to expect that when customers are free to choose, producers will end up creating better products, not worse.

And in fact we can see this happening in the real world. For example, the success of graduates from particular universities reflects on the quality of the education there, so universities are constantly trying to better themselves and their current students in order to compete for the best students in the future. The same seems to be true of private and preparatory schools at the high-school level and below. Although the government funds a number of these schools, universities and private schools are generally permitted to make their own decisions about what they will teach and who will be doing the teaching. And yet we do not see these institutions systematically teaching their students poorly or indoctrinating them with false ideologies. On the contrary, it seems fair to say that these more laissez-faire systems generally perform far better than our centralized public school system.

But there is another reason to question the idea that governments must be involved to ensure that our children receive a proper education. That reason is that there is no such thing as a proper education. Different people have different conceptions about what kinds of lives they want to lead, what kind of knowledge is important, and how they want their children to be raised. These differences do not represent right and wrong. Rather, a free society will always be characterized by reasonable pluralism in values and worldviews. But if this is the case, then it seems the idea that we should all get together under one roof and democratically decide how to educate our children is a bad one.

Instead, it’s sensible to welcome a number of different approaches to education, with the crucial decisions about how children are to be educated ultimately left to their parents. As philosopher David Schmidtz writes in Elements of Justice: “In effect, there are two ways to agree: We agree on what is correct, or on who has jurisdiction—who gets to decide. Freedom of religion took the latter form; we learned to be liberals in matters of religion, reaching consensus not on what to believe but on who gets to decide. So too with freedom of speech. Isn’t it odd that our greatest successes in learning to live together stem not from agreeing on what is correct but from agreeing to let people decide for themselves?”

For far too long we have ignored the possibility that in a society which embraces freedom of belief, religion, and expression, it is best to respect people’s freedom to decide for themselves how they want their children educated. I understand that some may feel shocked by the suggestion that they do not know what is best for everyone else’s children. But for the rest of us, it is clear that the only fair and equitable solution to the differences in our values and worldviews is to reject the flawed model of centralized government education and to put the power to choose back in the hands of parents.

3/9/2010: About That Pay Cut For Federal Workers by Brian S. Wesbury and Robert Stein
We stand behind the idea.

Last week we wrote that one way the federal government could show it was serious about the budget deficit would be an across-the-board pay cut of 10% for all civilian federal workers. Although the savings would be only about $15 billion per year (roughly 1% of the budget deficit), the “cut” would send a clear signal to our creditors that policymakers were concerned about the deficit and were willing to take on sacred cows.

It seems like we touched a nerve. No article we’ve ever written has generated as much response.

In the larger picture, this is a bad sign. If government has become so big that articles about changes to government generate more interest than articles about stock prices, then government has become too big and too entangled in the lives of the American people. Government has become the intermediary in so much of our life that it has crowded out ways of relating to each other through civil society itself.

That said, while many of the comments we received were supportive, the majority were downright hostile. Some were too silly to warrant a reply. Maybe it was just a coincidence, but those comments seemed to come from federal employees during work hours.

Other criticisms, including some from government workers, were more serious and fell into a couple of groups. One argument against the pay cut was that many young federal workers are already underpaid.

Truth be told, we’re sympathetic. Young workers may do the same jobs as older workers, yet they receive much lower pay--think TSA passenger screening. But, since federal pay is based on seniority, they can move up that scale rapidly, and once ensconced in the federal system become very difficult to dislodge. While the federal system attempts to use merit-based pay, the seniority system can undermine the productivity improvements that come from merit.

In addition, federal pensions are generous when compared to the private sector, as is worker pay and other benefits. A story published in USA Today three days after our last column showed that federal workers were paid more than their private-sector counterparts in more than 80% of occupations. And that does not include benefits, which are on average four times higher in the public sector vs. the private sector. Maybe that’s why the statistics show that federal workers only quit their jobs at about 25% the rate of private-sector workers. This is an amazing difference. If that’s not the definition of highly paid, we’re not sure what is.

Another argument used by government employees was that the earnings of federal workers get spent in the local community, which multiplies the benefits of their pay across the economy. So a pay cut would hurt the economy.

This multiplier argument is fallacious and worries us because it seems that government employees do not understand basic economics. Every dollar the federal government pays its workers has to come from someone else (through taxes or borrowing), who would have spent it anyhow. Why is a federal paycheck any more likely to be multiplied than a private paycheck?

Even if you buy into the idea that a boost in federal spending can temporarily have a multiplier effect, raising pay for government workers--who would provide the same services anyhow--is wasteful. The same money could be spent on hiring new workers to perform additional tasks, like providing greater port security, for example.

Also, the “multiplier” argument implicitly accepts that federal workers are not really paid for the value of the services they render, but instead receive a premium for some larger social good. In essence, they are saying federal pay is a form of “workfare,” a hybrid of a paying job mixed with a welfare payment. That’s a reason to cut pay right there.

We are ready for more criticism... and support... from our readers, but we think we’ve made our point.

Brian S. Wesbury is chief economist and Robert Stein senior economist at First Trust Advisors in Wheaton, Ill.They write a weekly column for Forbes. Brian S. Wesbury is the author of It’s Not As Bad As You Think: Why Capitalism Trumps Fear and the Economy Will Thrive.

3/8/2010: from the Patriot Post: “No man in his senses can hesitate in choosing to be free, rather than a slave.” —Alexander Hamilton

Liberty: “While American politicians and intellectuals have not reached the depths of tyrants such as Lenin, Stalin, Mao and Hitler, they share a common vision. Tyrants denounce free markets and voluntary exchange. They are the chief supporters of reduced private property rights, reduced rights to profits, and they are anti-competition and pro-monopoly. They are pro-control and coercion, by the state. These Americans who run Washington, and their intellectual supporters, believe they have superior wisdom and greater intelligence than the masses. They believe they have been ordained to forcibly impose that wisdom on the rest of us. Like any other tyrant, they have what they consider good reasons for restricting the freedom of others. A tyrant’s primary agenda calls for the elimination or attenuation of the market. Why? Markets imply voluntary exchange and tyrants do not trust that people behaving voluntarily will do what the tyrant thinks they should do. Therefore, they seek to replace the market with economic planning and regulation, which is little more than the forcible superseding of other people’s plans by the powerful elite. We Americans have forgotten founder Thomas Paine’s warning that ‘Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.’” —George Mason University economics professor Walter E. Williams

Insight: “Obviously there is no need of fighting to overcome this single tyrant, for he is automatically defeated if the country refuses consent to its own enslavement: it is not necessary to deprive him of anything, but simply to give him nothing; there is no need that the country make an effort to do anything for itself provided it does nothing against itself. It is therefore the inhabitants themselves who permit, or, rather, bring about, their own subjection, since by ceasing to submit they would put an end to their servitude. A people enslaves itself, cuts its own throat, when, having a choice between being vassals and being free men, it deserts its liberties and takes on the yoke, gives consent to its own misery, or, rather, apparently welcomes it.” —French judge, writer, political philosopher Etienne de la Boetie (1530-1563)

The Left: “The abuse of federal political power to intervene in areas such as Americans’ private health care could exist only in a nation that no longer holds its leaders accountable to its constitution and that has governmental leadership that regards itself as above its people and its constitution. Sadly, I was listening to an interview the other day in which President Barack Obama described the U.S. Constitution as ‘an imperfect document ... a document that reflects some deep flaws ... (and) an enormous blind spot.’ He also said, ‘The Framers had that same blind spot.’ In so doing, the president established a rationale and justification for disregarding the Constitution. Even worse, he placed himself above the Constitution and those ‘blind Framers,’ who just couldn’t see the big picture as he does today. After all, he’s the constitutional scholar, and the Framers were just, well, the creators of the document!” —columnist Chuck Norris

The Last Word: “Once the state swells to a certain size, the people available to fill the ever expanding number of government jobs will be statists — sometimes hard-core Marxist statists, sometimes social-engineering multiculti statists, sometimes fluffily ‘compassionate’ statists, but always statists. The short history of the postwar welfare state is that you don’t need a president-for-life if you’ve got a bureaucracy-for-life: The people can elect ‘conservatives,’ as the Germans have done and the British are about to do, and the left is mostly relaxed about it because, in all but exceptional cases (Thatcher), they fulfill the same function in the system as the first-year boys at wintry English boarding schools who for tuppence-ha’penny or some such would agree to go and warm the seat in the unheated lavatories until the prefects strolled in and took their rightful place. Republicans are good at keeping the seat warm. A big-time GOP consultant was on TV crowing that Republicans wanted the Dems to pass ObamaCare because it’s so unpopular it will guarantee a GOP sweep in November. Okay, then what? You’ll roll it back — like you’ve rolled back all those other unsustainable entitlements premised on cobwebbed actuarial tables from 80 years ago? Like you’ve undone the Department of Education and of Energy and all the other nickel ‘n’ dime novelties of even a universally reviled one-term loser like Jimmy Carter? Andrew McCarthy concluded a shrewd analysis of the political realities thus: ‘Health care is a loser for the Left only if the Right has the steel to undo it. The Left is banking on an absence of steel. Why is that a bad bet?’ Indeed.” —columnist Mark Steyn

3/7/2010: Case For a Scythe? by George Will

WASHINGTON -- It is said, more frequently than precisely, that the reasons the Supreme Court gives for doing whatever it does are as important as what it does. Actually, the court’s reasons are what it does. Hence, the interest in the case the Supreme Court considered last week.

It probably will result in a routine ruling that extends a 2008 decision and renders dubious many state and local gun control laws. What could -- but, judging from the justices’ remarks during oral argument, probably will not -- make the ruling momentous would be the court deciding that the two ordinances at issue violate the 14th Amendment’s “privileges or immunities” clause. Liberals and conservatives submitted briefs arguing, correctly, that this clause was intended to be a scythe for slicing through thickets of state and local laws abridging fundamental liberties.

The Second Amendment says: “A well-regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.” Until 2008, the court had never clarified whether the prefatory clause makes this right conditional: Does the amendment protect an individual’s right to own firearms, or does it protected that right only in connection with a state’s right to organize a militia?

In 2008, the court struck down a District of Columbia law that effectively banned possession of handguns even in an owner’s home -- it banned all guns not kept at businesses, or disassembled or disabled by trigger locks. The court held, 5-4, that the Second Amendment protects individuals’ rights.

But the court answered only the question then posed, which concerned the federal enclave of D.C. Left unanswered was whether the amendment protects that right against severe restrictions by state and local laws.

The oral argument concerned ordinances in Chicago and suburban Oak Park that are indistinguishable from the D.C. law. The court probably will overturn those ordinances by holding that another part of the 14th Amendment -- the guarantee that no state shall deny liberty “without due process of law” -- “incorporates” the Second Amendment. The justices evinced scant interest Tuesday in resurrecting the “privileges or immunities” clause by revisiting an incoherent decision rendered in 1873.

To the drafters of the 14th Amendment, the phrase “privileges or immunities” was synonymous with “basic civil rights.” But in 1873, the court held that only some of the rights enumerated in the Bill of Rights restrict states by being “incorporated” into the 14th Amendment’s “due process” clause.

Since 1897, the court has held, with no discernible principle, that some rights enumerated in the Bill of Rights are sufficiently fundamental to be “incorporated” but others are not. This doctrine bears the oxymoronic name “substantive due process.” Substance is what process questions are not about.

If the court now “incorporates” the Second Amendment right via the “due process” guarantee, that will be progress because it will enlarge the sphere of protected liberty. And even Justice Antonin Scalia, who recognizes that “substantive due process” is intellectual applesauce, thinks it is too late to repudiate 137 years of the stuff. Still, three points argue for using the “privileges or immunities” scythe against the two gun ordinances.

First, protecting the individual’s right to keep and bear arms for self-defense was frequently mentioned by those who drafted and ratified the 14th Amendment, the purpose of which was to protect former slaves and their advocates from being disarmed by state and local governments determined to assault their security and limit their autonomy.

Second, the central tenet of American political philosophy is that government is instituted not to bestow rights but to protect pre-existing rights, aka natural rights -- those essential to the flourishing of our natures. In its 2008 decision, the court affirmed that the Second Amendment did not grant a right to keep and bear arms, it “codified a pre-existing right.”

Third, “privileges or immunities” are all those rights that, at the time the 14th Amendment was ratified, were understood to be central to Americans’ enjoyment of the blessings of liberty.

Liberals might hope and conservatives might fear that a revivified “privileges or immunities” clause wielded by liberal justices would breed many new “positive rights” -- to welfare, health care, etc. But conservatives know that “substantive due process” already has such a pernicious potential. And they believe that if -- a huge caveat -- it remained tethered to the intent of its 19th-century authors, the “privileges or immunities” clause would be useful protection against the statism of the states.

3/7/2010: Why the Left Despises Personal Responsibility by Kevin McCullough

If you wish to see an enjoyable evening with friends become quite animated, then overly hostile, and end in exacting bitterness, ask those in attendance to choose between the following.

As an individual citizen, is it more American to believe that you have a personal responsibility to be personally accountable for your actions, and those of your family? Or is it more American to believe that you should wait for the giant collective to take care of you?

This did not use to be a controversial concept. Until liberals decided that power is more highly coveted than freedom. Once they did, they started systematically enslaving people to the collective. Take the President for example.

President Barack Obama’s tendency to drink too much, and his inability to stop smoking was revealed publicly this week. His refusal to stop smoking, and his need, according to the White House physician’s official diagnosis, to moderate his alcohol consumption are huge red flags, health-wise. In fact aggressive or “non-moderate” alcohol intake, and cigarette smoking specifically (pipes and cigars are not nearly as dangerous) contribute to many poor health factors that do not show up immediately. Yet everything from heart disease to various cancers can be accelerated due to these behaviors.

But in President Obama’s world, personal responsibility barely means anything. He seldom exhibits it, and the nation that voted for him reviles it.

“Oh too far, Kevin,” you may be saying.

But it’s not.

On my nationwide morning show on March 2, 2010, I asked this very question, and the responses floored me. Geographically speaking, it made no difference. From the east, west, north, and south, protestations and attempted justifications declared repeatedly that the collective has more responsibility for the individual’s happiness than the individual.

And friends if this IS the belief of the nation, we’ve lost America.

The reason our founders were so attentive to individual rights, and focused so hard to embed them into the bedrock of our legal outlines was because they understood that to be at the mercy of the collective, was in fact to be at the mercy of a powerful few.

President Obama may not wish to curb his habits as it relates to his health. But generally speaking, such risky behavior should put him outside the boundaries of expecting to have other people pay for his cancer surgery, his diseased liver, or the eventual recovery from a stroke or heart attack should the unthinkable occur.

He, however, (who ironically will be guaranteed all of that and more through the tax-payer employment benefit we bestow on him for his service to us in office) will argue again and again that it should be the requirement of the neighbor who eats fresh vegetables to pay for the costly therapy of the guy who lunches daily on Big Macs.

Thus this is the irony wrapped in the enigma.

Liberals claim the collective owes the individual, while elected liberals who hold office make such arguments to attain greater power as the masses become enslaved to entitlement, falsely thinking they’re getting what is owed them.

In reality, God states that man (genus not sex) shall provide for and protect his family. In reality, God has instructed that lazy men should not receive the fruits of other men’s labor. In reality, God makes it clear that if a man does not work, he should not eat. (Meaning that intentional slothfulness is not to be rewarded if society is to function properly.)

The irony of all this is also not lost on me.

Individuals who wake up in the morning, rub their eyes, and know in their hearts that they will only rise or fall by the results of their own efforts, also categorically tend to also be the people who are the most generous with those who do fall on hard times. Giving billions each year to ease the pain of hunger and suffering in other lands, while at the same time taking dinner to a next door neighbor who just lost his job.

Those who sit waiting for the collective to care for them do so at the expense of the survival of free society.

But if you’re President Obama, or any one of his millions of supporters, what do you have to lose in another few drinks before bed, or sneaking a smoke before the girls get home from school?

Hey, if something bad does happen... He doesn’t have to pay for it!

3/5/2010: from Best of the Web By James Taranto

Former Enron adviser Paul Krugman takes note in his New York Times column of what he calls “the incredible gap that has opened up between the parties”:

Today, Democrats and Republicans live in different universes, both intellectually and morally.

“What Democrats believe,” he says “is what textbook economics says”:

But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

Krugman scoffs: “To me, that’s a bizarre point of view--but then, I don’t live in Mr. Kyl’s universe.”

What does textbook economics have to say about this question? Here is a passage from a textbook called “Macroeconomics”:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

So it turns out that what Krugman calls Sen. Kyl’s “bizarre point of view” is, in fact, textbook economics. The authors of that textbook are Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman.

It seems Krugman himself lives in two different universes--the universe of the academic economist and the universe of the bitter partisan columnist. Or maybe this is like that episode of “Star Trek” in which crewmen from the Enterprise switched places with their counterparts from a universe in which everyone was the same, only evil.

Like Spock, the evil Krugman is the one with the beard.

3/2/2010: from Best of the Web: Is ‘Climate Science.’ Science?

Phil Jones, head of the scandal-plagued Climate Research Center at the University of East Anglia, testified yesterday before a committee of Britain’s Parliament, the Times of London reports:

Professor Jones denied that he had tried to prevent alternative views being published by influencing the process of peer review under which scientific papers are scrutinised.

He said: “I don’t think there is anything in those e-mails that supports any view that I have been trying to pervert the peer review process . . .” He added that it “hasn’t been standard practice” in climate science for all data to be disclosed.

In one of the emails, as the Washington Post reported in November, Jones wrote: ““I can’t see either of these papers being in the next IPCC report. Kevin and I will keep them out somehow--even if we have to redefine what the peer-review literature is!” Sounds perverted to us.

As for Jones’s claim that disclosing data “hasn’t been standard practice,” the Times reports on an authoritative rebuttal:

The Institute of Physics said that e-mails sent by Professor Phil Jones, head of the Climatic Research Unit at the University of East Anglia, had broken “honourable scientific traditions” about disclosing raw data and methods and allowing them to be checked by critics. . . .

In a written submission to the committee, the institute said that, assuming the e-mails were genuine, “worrying implications arise for the integrity of scientific research in this field and for the credibility of the scientific method as practised in this context.”

The e-mails contained “prima facie evidence of determined and co-ordinated refusals to comply with honourable scientific traditions and freedom of information law,” it added.

At this point, there’s a real question as to whether “climate science” even deserves to be called science.

Great Moments in Higher Education

“San Francisco high school students, just months out of middle school, can start earning San Francisco State college credit this fall through a ninth-grade ethnic studies course,” reports the San Francisco Chronicle. Apparently this is not a joke:

The program is designed for students who might not otherwise be considering college as an option, said Jacob Perea, dean of the School of Education, who runs the Step to College program at San Francisco State.

“We’re not really looking for the 4.4 (grade point average) students,” he said. “We’re looking for the 2.1 or 2.2 students.”

Students cannot fail the class. They either receive a “pass” grade or are withdrawn from the course if it appears they cannot pass, Perea said.

“All we do is give them an opportunity,” he said. “I do believe that (the ethnic studies) course is a course set up so the kids will come out of there with the kind of information that a freshman here taking an ethnic studies course will have.”

The content of the courses offered in the Step to College program are reviewed by CSU faculty to ensure that they’re equal to any offered at the university.

What does it tell you about the California State University system that its classes are equal to those offered high school freshmen?

On a more serious note, however, this may suggest a way out of California’s budget mess: Why not abolish high schools, fire all their unionized teachers, and send kids straight from middle school to CSU?

3/2/2010: Meddling Where We Oughtn’t...Yet Again
by Fred Reed [Fred on Everything]

Mexico, if left alone, would be a reasonably successful and stable country of the upper Third World. It isn’t Haiti, isn’t Bangladesh, isn’t a dying patient with multiple tubes in every orifice. If not strong-armed into chaos, it would be all right.

But the United States won’t leave it alone. Washington is pushing it to wage Washington’s “war on drugs.” As usual, Washington has no idea what it is doing. Nor does it care. Should untoward consequences follow, it will be surprised, this being the characteristic condition of American foreign policy.

Untoward consequences are quite available. The narcotraficantes that Mexico is supposed to fight for Washington are a formidable armed force. They have unlimited money, which they use to buy heavy weapons. They have unlimited money, which they use to corrupt the government of a comparatively poor country. Mexico does not have the wherewithal to fight them. The army here is small and poorly armed. This is reasonable since Mexico has neither territorial ambitions nor enemies. Except, certainly in effect, the United States.

The government is outgunned by the narcos. Further, the traffickers have the advantage of being dispersed and invisible. The situation is, or quickly could be, exactly that faced by the US in Vietnam, Iraq, and Afghanistan: narcos can appear from nowhere, blow up police stations, assassinate judges, or kill a dozen teenagers at a party. Then they disappear.

Thus they can destabilize the nation and hold the population hostage. This doesn’t bother Americans, who barely know where Mexico is. It bothers Mexicans, who know their people are dying in an exported American war.

Bear in mind that anti-Americanism thrives here and throughout Latin America. Much of it is justified; some of it isn’t. The US population, the most comprehensively ignorant of the advanced world, knows nothing of the reasons or of the countries. But the hostility is real. Shrugging it off could prove a mistake.

If Mexicans had to choose between the drug lords, who are often seen as counter-culture heroes, and the US, seen as an enemy too dangerous to be openly called an enemy, many would go with their compatriots in the drug trade. A repertoire of narco-corridos, songs glorifying the narcos, exists. Los Tigres del Norte in Sinaloa have specialized in these.

Although Mexico doesn’t have America’s festering antagonisms--blacks hate whites hate browns hate men hate women hate Jews— there are groups, particularly in Chiapas, who are potential insurgents. If they should ally themselves with the narcos and go to the mountains, or set up cells in the cities, the result would be a long, bloody civil war: Afghanistan on the US border. This is not Freddian fantasy. Thoughtful Mexicans worry about it.

The Mexican army cannot handle an uprising of any magnitude. The Pentagon would then intervene to “help” Mexico. Que dios nos ayude.

The Pentagon is working toward intervention, whether it knows that it is or not. There is something called the Merida Initiative, in which the US supplies money and advice to transform Mexican society to combat the narcos. The colonels in the Five-Sided Squirrel Cage really believe they can reform the Mexican judiciary and infuse the police with virtuous fervor for American ideals. I spoke to a field-grade American officer about this. He had taken a six-month intensive course in Spanish at the Defense Language Institute and spoke less Spanish than my daughter did after two weeks here. The money would be used to reform the Mexican government, he said, which would then make short work of the narcos. He explained this with the earnest mission-orientedness that officers display when they are about to do something senseless.

I didn’t say, “Give me a freaking break,” because I knew it would accomplish nothing. You don’t “reform” countries you don’t understand by solemn brainless enthusiasm. The money would vanish like water in dry sand. Mexico does not want to be remade in the image of the United States, for remarkably good reasons. The more the US meddles, the less legitimate the government that permits it will be. Not a good idea.

Why does the military regularly misestimate the nature of the Third World? Because soldiers live, and think, in a rigid, conformist, orderly world in which good (us) and evil (them) are starkly distinct, in which one gives orders and things happen, in which all are on the team and working toward a common goal. Officers are insular, self-righteous, ruthless (after all, they are fighting Evil) and clueless. The workings of the Third World are the polar opposite of orderliness of the military. The colonels are instantly lost in the complex relationships, informal arrangements, family loyalties and invisible politics of Latin America. And they do not understand that when they intervene, they are not the good guys.

This is why we hear again and again from some buzz-cut horse’s ass with stars on his shoulders about how we are trying so hard to “help the Afghan people.”

One might ask: Why are drugs Mexico’s problem? Americans, huge numbers of them, want drugs. If they didn’t want drugs, the narcos couldn’t sell the stuff. But the American government doesn’t want its citizens to have drugs. Fine. Let the government attack its own citizens. Leave others out of it.

Washington isn’t going to rid the US of drugs any more than it rid the country of alcohol. Popular demand is far too great. The US crawls with crank labs, open-air crack markets, meth cookers, fields of marijuhweenie too large not to have been noticed by state authorities. California talks of legalizing grass in defiance of the Feds. All God’s chillun loves drugs—good ol’ boys, Ivy League students, their professors, high-school kids, middle-class suburbanies, congressman, musicians, and several Republicans. Mexico is going to change this? They must be smoking something good in DC.

A friend recently told me of being in a boat off Florida with several honeys in bikinis aboard. A Coast Guard cutter pulled alongside because the guys wanted to look at the babes. My buddy, being sociable, hollered, “What are you guys doing?”

“We’re looking for drugs.”

“Oh. We’ll follow you.”

Whereupon the Coast Guardies broke out laughing. Even the cops don’t really care.

Mexico can’t fix things, if indeed they are broken. Leave the place alone.

3/3/2010: Who Poses the Greater Threat? by Walter E. Williams

Bill Gates is the world’s richest person, but what kind of power does he have over you? Can he force your kid to go to a school you do not want him to attend? Can he deny you the right to braid hair in your home for a living? It turns out that a local politician, who might deny us the right to earn a living and dictates which school our kid attends, has far greater power over our lives than any rich person. Rich people can gain power over us, but to do so, they must get permission from our elected representatives at the federal, state or local levels. For example, I might wish to purchase sugar from a Caribbean producer, but America’s sugar lobby pays congressmen hundreds of thousands of dollars in campaign contributions to impose sugar import tariffs and quotas, forcing me and every other American to purchase their more expensive sugar.

Politicians love pitting us against the rich. All by themselves, the rich have absolutely no power over us. To rip us off, they need the might of Congress to rig the economic game. It’s a slick political sleight-of-hand where politicians and their allies amongst the intellectuals, talking heads and the news media get us caught up in the politics of envy as part of their agenda for greater control over our lives.

The sugar lobby is just one example among thousands. Just ask yourself: Who were the major recipients of the billions of taxpayer bailout dollars, the so-called Troubled Asset Relief Program (TARP)? The top recipients of TARP handouts included companies such as Citibank, AIG, Goldman Sachs and General Motors. Their top management are paid tens of millions dollars to run companies that were on the verge of bankruptcy, were it not for billions of dollars in taxpayer money. Politicians preach the politics of envy whilst reaching into the ordinary man’s pockets, through the IRS, and handing it over to their favorite rich people and others who make large contributions to their election efforts.

The bottom line is that it is politicians first and their supporters amongst intellectuals who pose the greatest threat to liberty. Dr. Thomas Sowell amply demonstrates this in his brand-new book, “Intellectuals and Society,” in which he points out that: “Scarcely a mass-murdering dictator of the twentieth century was without his intellectual supporters, not simply in his own country, but also in foreign democracies ... Lenin, Stalin, Mao and Hitler all had their admirers, defenders and apologists among the intelligentsia in Western democratic nations, despite the fact that these dictators each ended up killing people of their own country on a scale unprecedented even by despotic regimes that preceded them.”

While American politicians and intellectuals have not reached the depths of tyrants such as Lenin, Stalin, Mao and Hitler, they share a common vision. Tyrants denounce free markets and voluntary exchange. They are the chief supporters of reduced private property rights, reduced rights to profits, and they are anti-competition and pro-monopoly. They are pro-control and coercion, by the state. These Americans who run Washington, and their intellectual supporters, believe they have superior wisdom and greater intelligence than the masses. They believe they have been ordained to forcibly impose that wisdom on the rest of us. Like any other tyrant, they have what they consider good reasons for restricting the freedom of others. A tyrant’s primary agenda calls for the elimination or attenuation of the market. Why? Markets imply voluntary exchange and tyrants do [not] trust that people behaving voluntarily will do what the tyrant thinks they should do. Therefore, they seek to replace the market with economic planning and regulation, which is little more than the forcible superseding of other people’s plans by the powerful elite.

We Americans have forgotten founder Thomas Paine’s warning that “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”

3/1/2010: from the Daily Reckoning

The zombies are taking over! Stocks went up 4 points on the Dow on Friday... Gold went up $10. Noise. Distraction. Headlines. Opinions.

The important trend is the big one – the shift of resources from the private sector to the public sector. During the bubble years, the private sector made a big, big mistake – taking on far too much debt.

Now, it is correcting its mistake...reluctantly, painfully, and with plenty of foot-dragging and interference from the government. Instead of letting the dead die in peace...the feds are pumping financial adrenaline into their veins...turning them into zombies.

It’s expensive work...so government is now making the same mistake the private sector made a few years ago. It’s pretending that debt-fueled spending is the same as growth. Ain’t no such thing.

The feds’ “growth” is even more pernicious and counterfeit than the bubble era growth in the private sector. At least people actually wanted houses...they just couldn’t afford to pay for them.

The feds, on the other hand, produce things that people wouldn’t buy even if they had the money – zombie products. Who would buy a billion- dollar software program to spy on other people? Who would pay other people to do nothing? Who would take on the debts of a failing financial institution?

Consider this, from Bloomberg: “Fannie Mae will seek $15.3 billion in US aid, bringing the total owed under a government lifeline to $76.2 billion, after its 10th consecutive quarterly loss.

“The mortgage-finance company posted a fourth-quarter net loss of $16.3 billion, or $2.87 a share, Washington-based Fannie Mae said in a filing yesterday with the Securities and Exchange Commission.

“Fannie Mae, which owns or guarantees about 28 percent of the $11.8 trillion US home-loan market, has been hobbled by a three-year housing slump that wiped 28 percent from home values nationwide and led to record foreclosures. The company, which posted $120.5 billion in losses over the previous nine quarters, and rival Freddie Mac were seized by regulators in September 2008.”

Did you read that carefully? Fannie Mae guarantees almost a third of the $12 trillion home mortgage market – or about $4 trillion. And guess who guarantees Fannie Mae? You do!

Fannie made bad loans. It ought to be put down, like a horse with a broken leg. But Fannie’s bondholders don’t take a loss. The losses have been moved to the public sector and Fannie itself has been turned into a zombie company.

Assets, liabilities, spending – it’s all shuffling over to the government...and sucking the life out of the private sector. In the area of durable goods, only about 4.4% of them, on average, were purchased by the pentagon over the last 17 years. But since the beginning of the financial crisis, durable spending by private industry decreased...while pentagon spending went up. The most recent figures show that 8% of durable orders are now bought by the military.

Recovery? Don’t bet on it. This government spending only makes it look like a recovery. The numbers may show an increase in durable goods sold, but tanks and armored personnel carriers don’t lead to genuine growth. They lead to Soviet-style zombie growth...by the government, of the government, and for the government. The rest of the economy shrinks…

Everyone says the euro is falling apart...that Europe itself can’t survive as a political unit.

Europe seems to lack the things that make for a strong political system. It has no common language, for example (there are more than 200 different languages in Europe). And it has no common culture either...or even a common religion...or a common race.

The Greeks are rioting in the streets. They’re upset because their government is trying to cut back on “services.” Actually, it’s not the services that anyone would miss. It’s the money. The rioters are mostly people who live, in one way or another, at the expense of others...thanks to the government. They work for the government...or get handouts from it.

The poor Greek government is stuck. As in almost all other democracies [just like California], politicians bought votes by giving out jobs and money. This leads to a bidding war...in which political parties vie for favor with the voters by offering more and more “services.” One gives away bread. The other prefers circuses. Whether it is food stamps or foreign wars...the price is high. And eventually, the bids go beyond the capacity of the economy to pay them.

Greece is at that point. So are half the US states. They’re out of money. It’s “doomsday” in Illinois, says one headline. It’s a “state of emergency,” in New Jersey.

Lenders don’t want to give them any more money. Wisely, they worry they won’t get paid back. So, lenders demand higher interest rates to cover their increased risks...which puts the Greek budget even further in the red.

The Greeks think the Germans should come to their aid. Why? Because, in a way, it was the Germans who got them into this mess. Nobody would have lent so much money to the Greeks had it not been for the strong teuton-backed euro...and the implicit promise that if the Greeks got into trouble...which everyone knew they would...the rest of Europe would come to their aid.

Well, what do you know? The Greeks are in trouble. And the Germans don’t want to come to their aid. The Germans saved. They ran their own economy better. They are one of the few countries in Europe that is living, almost, within the terms of the treaty they all signed, in which they agreed to keep deficits below 3% of GDP. The German deficit is just a little more than 3%. The Greeks don’t even come close – with a deficit of 12.7%.

In America, the situation is a little different. The economy and the population are more homogenous. And much more of the money is in the hands of the central government. The Germans don’t see why their savings should be used to bail out the Greeks. They’ve got their economy. The Greeks have theirs. In the US, while there are regional differences, there is basically one economy...with one government that messes it up for everyone.

Is the US better off? Does central planning on a larger scale make the US dollar or the US economy stronger?

In fact, the looseness of the European experiment is a strength, not a weakness. What damages a paper currency is not an act of omission; it’s an act of commission. Neglecting to provide more cash and credit is not what kills paper money; on the contrary, it’s the willingness to provide unlimited amounts of it. So far, the Americans are. The Europeans – or at least the Germans – are not.

So, we’ll bet on the euro over the long term...both the euro and the dollar are “elastic” currencies. They both get stretched out of shape. But there are more people pulling at the dollar than the euro.

In the short run, anything could happen. There are probably more reasons for the dollar to go up than for it to go down. But in the long run, our money is on the euro.

3/1/2010: “Americans cherish their independence. One interesting aspect of the spontaneous tea party movement is the constant invocation of the Founders and the prominence of the ‘Don’t Tread on Me’ flag... Americans tend to see themselves as independent doers, not dependent victims. They don’t like to be told, especially by those with fancy academic pedigrees, that they are helpless and in need of government aid. That’s why the politically popular American big government programs – Social Security, Medicare, veterans’ benefits, student loans – all make a connection between effort and reward. You get a benefit because you’ve worked for it. [that “connection between effort and reward is rather tenuous for Social Security and Medicare] In contrast, Americans have loathed and rejected big government programs with no nexus between effort and reward. Welfare was begun in the 1930s to help widows with children, whose plight, as Russell Baker’s memoir ‘Growing Up’ showed, was often dismal. But when welfare became a mass program to subsidize mothers who didn’t work and to excuse fathers from responsibility for their actions, it became wildly unpopular. Bill Clinton recognized this when he signed welfare reform in 1996... Barack Obama, who has chosen to live his adult life in university precincts, sees... Americans generally as victims who need his help, people who would be better off dependent on government than on their own. Most American voters don’t want to see themselves that way and resent this condescension.” —Michael Barone

Read Blogs from Prior Months

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Jan 2009 Feb 2009 Mar 2009

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Other Old Stuff from dalefogden.net

Other Information about Dale F. Ogden

Dale F. Ogden for Governor
of California 2010
www.dalefogden.org

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Dale F. Ogden, Libertarian, for
California Insurance Commissioner, 2006

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