Category Archives: Economics

Business, Economics, Political Commentary

Newtering Obama’s Election Strategy

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Did Gingrich’s and Perry’s failure to hurt Romney with their class-warfare rhetoric bode ill for Obama in the fall?

President Obama should be very worried by the backlash against these attacks, real or perceived, on free-market capitalism. The White House’s divisive class-warfare strategy of running against free enterprise, against the “1 percent,” was given a test run by Mr. Gingrich and Mr. Perry, and it failed miserably. Not only was Mr. Romney given the opportunity to preview that line of attack and prepare accordingly but, more importantly, the voters soundly rejected it.

Democrats will claim that these Republican primary results do not necessarily reflect the sentiments of general election voters, but not so fast. New Hampshire has an open primary, and 45 percent of its primary voters were “undeclared” as to political party. Independent voters are unquestionably rejecting the ahttp://www.weeklystandard.com/blogs/morning-jay-what-make-obamas-approval-bounce_617121.htmlssault on free enterprise. What’s more, Mr. Romney received a higher percentage of voters, despite the large GOP field, than either Mr. Obama or Hillary Rodham Clinton did in 2008.

I don’t think it will slow them down. It’s all they have, really. They’ll go ahead, and rationalize that Newt and Rick just didn’t do it right. They knew the words, but Obama sings the music.

[Afternoon update]

How to explain Obama’s approval bounce?

As we can see, Ronald Reagan blew Jimmy Carter out of the water in 1980 (then Walter Mondale in 1984) because he won substantial support among Democrats. However, the party more or less consolidated its base vote starting with Michael Dukakis in 1988, and this is pretty much all Obama has managed to do in the last two months. His relentless, partisan campaign of this winter has only moved him into Dukakis territory.

Good luck with that.

Business, Economics, Media Criticism, Political Commentary

What The “Republican Establishment” Really Means

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It’s about the spending, stupid:

The current trajectory of American government spending is one in which spending by government in general, and by the federal government in particular, just keeps on growing as a share of the economy, further and further crowding out the space occupied by free private citizens and businesses in the private sector. Worse, much of this happens automatically, without the consent of the governed in any but the most perfunctory way: discretionary spending is designed to grow because budgets are set by using the prior year’s spending as a baseline, and entitlement and public employee benefit spending – which consume a far larger share of spending – grows by itself in the absence of any affirmative legislation to stop it. The federal government has not passed a budget in nearly 1,000 days (President Obama’s State of the Union speech will mark the 1000th), yet spending has continued to grow, and will continue to grow as far as the eye can see – a dramatic change in our country taking place on auto-pilot – unless dramatic action is taken in response to stop it. Jack’s magic beans have nothing on public spending.

And the growth of spending bleeds over into every other issue. Federal spending comes with strings attached, and those strings reduce the independence of the states and burrow the arms of the federal octopus ever further into the area of social policy. Institutions like churches, schools, and hospitals become hooked on federal money, and have to dance the federal tune. Spending gets earmarked and targeted to favored people, businesses and groups, making society less equal and government less ethical. Spending distorts energy markets, housing markets, and markets for higher education, creating bubbles and inefficiency. And that’s before we even get to the metastatic growth of federal regulation. And eventually, runaway domestic spending saps our ability to adequately fund our national defense.

There is general philosophical agreement among both Republicans and conservatives about all of this. Where the fault line lies is in exactly how far we are willing to go to do something about it.

If we don’t do something, America as we knew it is over.

Business, Economics, Political Commentary, Social Commentary

The Italian Sinking Ship

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…was a metaphor for Europe.

[Update mid morning]

Some thoughts on the EU from Theodore Dalrymple:

Belgium’s inability to form a central government would not matter so much if the country did not need to reduce its public spending. Though Belgium is the largest per-capita exporter of goods and services in the world and has healthy private savings, it also has a large and growing public debt—nearly 100 percent of GDP—and an annual budget deficit of more than 5 percent. With growth negligible and government bond yields rising in a currency (the euro) that the Belgians cannot inflate, retrenchment is essential, but the Walloons and the Flemish cannot agree on how to do it. The Walloons want higher taxes to maintain the current arrangements; the Flemish want lower taxes and reduced spending to promote long-term growth. The result is a stalemate. Wallonia and Flanders are like a married couple who no longer can live together but find divorce impossible because of difficulties over the settlement.

It happens that the central offices of the E.U. are located in Brussels. Yet the political difficulties of Belgium do not give the European unionists pause for thought—or, if they do pause, they reach a peculiar conclusion: that what has not worked in two centuries in a small area with only two populations will work in a few years in a much larger area with a multitude of populations. It does not occur to the unionists that different countries really are different: not a little bit, but radically, in culture, language, history, traditions, and economies. The term “European” is not meaningless, but whatever content the term may have, it is not sufficient for the formation of a viable polity.

The debt crisis has revealed differences in national character of precisely the kind that make any closer union both difficult and dangerous. Indeed, the very attempt to force a union is at the root of the crisis, for if Greece and Ireland, to take two countries at the geographical extremes of the continent, had not been able to borrow in euros under the false supposition that eurozone membership effectively guaranteed their sovereign debts, it is unlikely that they would have wound up in their current straits. After all, lenders might have taken more care if their debts were being paid in drachmas or Irish pounds, which the Greeks and Irish could have inflated to their hearts’ content.

…The alternative to sharing the debts seems to be the breakup of the euro. This might turn recession into prolonged slump, with the countries expelled from the eurozone forced into a default catastrophic for the banking system. I get dizzy just thinking about the bank account in which I hold euros: in the event of a breakup, will it be denominated in drachmas or deutschmarks, and who will decide? Like everyone else, I would prefer deutschmarks, a preference that will drive up the price of the currency to the point that German exports, no matter how high their quality, will be too expensive to buy.

No wonder German chancellor Angela Merkel appears indecisive: like every politician, she wants a painless solution to a problem.

Unfortunately for her, there is none.

Economics, Education, Media Criticism, Philosophy, Political Commentary, Social Commentary

Ameritopia

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A review:

That Levin wrote this book now demonstrates not his passion for the United States, but his awareness that he is a statesman defending natural law at a pivotal moment in human history: the United States in decline represents a far different thing than the failure of Europe’s utopianism. The key lies in recognizing John Locke’s accomplishment for what it objectively is, which Levin does with Part Two of Ameritopia. John Locke’s Second Treatise is properly understood as the “black monolith” moment for human history.

Utopian thinking has never represented brilliance or historical greatness; if it did, there wouldn’t be utopians in every age and nation and we wouldn’t be littered with the evidence of their perfect failure rate. Utopianism instead represents the simplest of philosophical thinking: trying to make survival easier not with innovation but with brute force. Indeed, a defining characteristic of utopian thought is neglect of the math and economics of the idea — details for the philosopher class to hammer out later while the leader poses for portraits.

But Locke is different — there is only one Locke. His recognition of natural law did not occur soon after man had the time to think, but 9700 years later; much trial and error of society came before his discovery. Which is: man feels violated if he is to lose his life to another, or if he has his liberty or property taken, and no system of laws can prevent that emotion or halt actions taken because of it. Therefore laws cannot be arbitrarily chosen by men, but must exist only to defend the rights of the individual. Under this we necessarily thrive, otherwise we are doomed.

Utopians have always otherwise been in the position of trying to replace a tyrannical system. But now, post-Locke and de Montesquieu and the Founders, the utopians are in a position of destroying that pivotal discovery, which presently exists nowhere else on Earth or in time but in the U.S. Constitution. Levin, with Ameritopia, shows that he recognizes this urgency: he is criticized for his “anger” on the air — how do you keep your voice down once you understand what is presently being threatened?

If you’re going to purchase the book, I hope you’ll do it here.

Business, Economics, Political Commentary

High-Speed Rail

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…and the broken state of California and its political class:

The blue social model can’t produce great results anymore. If you want to think big, you can no longer think blue. This is Governor Brown’s problem in a nutshell. The political coalition that backs him cannot produce coherent and workable plans anymore. The greens, the unions, the planning bureaucrats, the mayors and so forth each bring so many requirements to the table that the only designs that make them all happy are so cumbersome and expensive that they cannot be built. The political imagination of the blue coalition can no longer visualize the future: it can only project its nostalgia ahead.

Jerry Brown is stuck in the sixties. What a tragedy that the Republicans can’t put up decent statewide candidates in California. And I very much fear that Mitt Romney will be Meg Whitman on a national scale.