Archive for May, 2009
Speak Softly and Carry a Big Teleprompter by Mark Steyn on National Review Online
Mark Steyn’s May 30th NRO article suggests we are on the brink of a “man-caused disaster.” Problem is, no one in Washington cares!
If you’re American, it’s natural to assume that the North Korean problem is about North Korea, just like the Iraq War is about Iraq. But they’re not. If you’re starving to death in Pyongyang, North Korea is about North Korea. For everyone else, North Korea and Iraq, and Afghanistan and Iran, are about America: American will, American purpose, American credibility. The rest of the world doesn’t observe Memorial Day. But it understands the crude symbolism of a rogue nuclear test staged on the day to honor American war dead and greeted with only half-hearted pro forma diplomatese from Washington. Pyongyang’s actions were “a matter of . . . ” Drumroll, please! “ . . . grave concern,” declared the president. Furthermore, if North Korea carries on like this, it will — wait for it — “not find international acceptance.” As the comedian Andy Borowitz put it, “President Obama said that the United States was prepared to respond to the threat with ‘the strongest possible adjectives . . . ’ Later in the day, Defense Secretary Robert Gates called the North Korean nuclear test ‘supercilious and jejune.’ ”
The president’s general line on the geopolitical big picture is: I don’t need this in my life right now. He’s a domestic transformationalist, working overtime — via the banks, the automobile industry, health care, etc. — to advance statism’s death grip on American dynamism. His principal interest in the rest of the world is that he doesn’t want anyone nuking America before he’s finished turning it into a socialist basket-case. This isn’t simply a matter of priorities. A United States government currently borrowing 50 cents for every dollar it spends cannot afford its global role, and thus the Obama cuts to missile defense and other programs have a kind of logic: You can’t be Scandinavia writ large with a U.S.-sized military.
Out there in the chancelleries and presidential palaces, they’re beginning to get the message. The regime in Pyongyang is not merely trying to “provoke” America but demonstrating to potential clients that you can do so with impunity. A black-market economy reliant on exports of heroin, sex slaves, and knock-off Viagra is attempting to supersize its business model and turn itself into a nuclear Wal-Mart. Among the distinguished guests present for North Korea’s October 2006 test were representatives of the Iranian government. President Bush was much mocked for yoking the two nations together in his now all but forgotten “axis of evil” speech, but the Swiss newspaper Neue Zuercher Zeitung reported a few weeks ago that the North Korean–built (and Israeli-bombed) plutonium production facility in Syria was paid for by Tehran. How many other Iranian clients are getting nuclear subsidies? It would be interesting to learn who was on the observation deck for the Memorial Day Hiroshima reenactment, but North Korea is one of the most closed societies on the face of the earth, certainly when compared with the more closely scrutinized corners of the Middle East. In other words, it’s the perfect partner for any state that wants to pursue certain projects under the Western radar screen.
It is remarkable in just five years how the world has adjusted to the inevitability of a nuclear North Korea and a nuclear Iran. Nudge it on another half-decade: Whose nuclear ambitions will be unstoppable by 2015? Syria’s? Sudan’s? Selected fiefdoms in Somalia?
Barack Obama came to power pledging to talk to America’s enemies anywhere anytime. Alas for America’s speak-softly-and-carry-a-big-teleprompter diplomacy, there are no takers for his photo-ops. In the ever more pitiful straw-clutching of the State Department, America is said to be banking on a post-Kim era. He’s apparently had a bad stroke, and might be dead within a decade or three. So what? It’s a safe bet that whoever emerges from a power struggle between the family, the party, and the military is committed to nuclearization as the principal rationale of the state. Likewise in Iran’s imminent election, both “extremists” and “moderates” are pro-nuke. You want an Iranian moderate? Here’s Hashemi Rafsanjani, the moderate guy who lost to that crazy Ahmadinejad last time round: He called Israel “the most hideous occurrence in history” which the Muslim world “will vomit out from its midst” with “a single atomic bomb.” Nuking the Zionist Entity is as bipartisan as motherhood and apple pie.
More to the point, the feeble bleatings from the State Department that there may be internal change down the road emphasize the central feature of the present scene: the absence of meaningful American power. While America laughed at North Korea, Iran used it as a stalking horse, a useful guide as to the parameters of belligerence and quiescence a nuclearizing rogue state could operate within. In what Caroline Glick of the Jerusalem Post calls “the post-American world,” other nations will follow that model. We are building a world in which the wealthiest nations on the planet, from Norway to New Zealand, are all but defenseless, while bankrupt dysfunctional squats go nuclear. Even with inevitable and generous submissions to nuclear blackmail, how long do you think that arrangement will last? In the formulation of Janet Napolitano, we are on the brink of “man-caused disaster.”
via Speak Softly and Carry a Big Teleprompter by Mark Steyn on National Review Online.
No Scenario Looks Good
Posted by Tom in Centrally Managed Economy on May 30, 2009
These prognostications from John Mauldin’s weekly letter:
More and more we read about the growing concern over $1-trillion-dollar deficits. Stanford professor John Taylor (creator of the famous Taylor Rule) jumped into the debate with a rather alarming op-ed in the Financial Times this week, echoing much of what I wrote last week, but with some real insights into what trillion-dollar deficits mean. Quoting:
“I believe the risk posed by this debt is systemic and could do more damage to the economy than the recent financial crisis. To understand the size of the risk, take a look at the numbers that Standard and Poor’s considers. The deficit in 2019 is expected by the CBO [congressional Budget Office] to be $1,200bn (€859bn, £754bn). Income tax revenues are expected to be about $2,000bn that year, so a permanent 60 per cent across-the-board tax increase would be required to balance the budget. Clearly this will not and should not happen. So how else can debt service payments be brought down as a share of GDP?
“Inflation will do it. But how much? To bring the debt-to-GDP ratio down to the same level as at the end of 2008 would take a doubling of prices. That 100 per cent increase would make nominal GDP twice as high and thus cut the debt-to-GDP ratio in half, back to 41 from 82 per cent. A 100 per cent increase in the price level means about 10 per cent inflation for 10 years. But it would not be that smooth — probably more like the great inflation of the late 1960s and 1970s with boom followed by bust and recession every three or four years, and a successively higher inflation rate after each recession.”
You can read the rest at (http://www.ft.com/cms/s/0/71520770-4a2c-11de-8e7e-00144feabdc0.html?nclick_check=1)
While Obama gives lip service to cutting the deficit in half, his actual budget increases it over the next 10 years. As I have been writing for some time, this is a very dangerous path. And it is one that the bond market seems to be concerned about, as interest rates are rising, even on mortgages that the Federal Reserve is buying in massive quantities in its effort to hold down rates and stimulate the housing market.
“The good news,” Taylor concludes, “is that it is not too late. There is time to wake up, to make a mid-course correction, to get back on track. Many blame the rating agencies for not telling us about systemic risks in the private sector that lead to this crisis. Let us not ignore them when they try to tell us about the risks in the government sector that will lead to the next one.”
Taylor is right that the massive tax increases necessary to fund these deficits and programs should not happen. But it is not clear to me that they won’t. A Democratic Congress is talking of adopting John McCain’s plan to tax health-care benefits. While this would be a tax on the middle class (on everyone) that Obama said he would not do, he is clearly willing to sign a bill that has such a tax.
The administration is starting to float trial balloons about a new VAT, or value-added tax. Many of my non-US readers will be familiar with VAT taxes, especially in Europe. A combination of a VAT and taxing health-care benefits would raise enough to get us to a deficit of “only” a few hundred billion. Take away the Iraq war and you get even closer. You can make an economic case that a VAT tax would be preferable to an income tax.
However, the administration is not talking about a substitute but an additional tax. There is momentum in the heavily Democrat-controlled Congress for large new health-care programs. While there is resistance to large deficits on the part of a few moderate Democrats, there is a chance they could be brought on board with a tax or a series of new taxes that would offer the potential to pay for the new programs. (Even though everyone knows that the cost overruns on new health-care benefits will be much larger than estimated.)
As much as it grieves me to say it, a tax on health-care benefits or a VAT tax large enough to hold the proposed deficits to something under 3% of GDP would be preferable to running decade-long trillion-dollar deficits, which would destroy the US economy and the dollar and do severe damage to the world economy. (For the record, I am assuming the Bush tax cuts are history.)
But while a large tax increase would keep the economy from crisis and collapse, it is not without very serious consequences. It will put a serious crimp in economic growth. It will lock in European growth rates and European-like unemployment rates. And we will be using those tax increases to fund new spending and will still not have solved the future problems with Social Security and Medicare, which are going to require massive increases in spending in another 5-7 years. Which of course means that either a cut in benefits or another round of growth-crippling tax hikes is down the pike.
A third path would be to simply go ahead and raise taxes on the rich, say no to increased spending on programs until we can afford them, hold the line on any new spending, and see if we can reintroduce the gradual budget control that was the result of the stand-off (and to some extent cooperation) between Gingrich and Clinton.
I put about a 5% probability on the third scenario happening. Better than the chances of a snowball in hell, but not much. The first disaster scenario is about a 35% probability, which is quite scary. If we do choose such a path, then short the dollar, buy gold, and invest abroad. It will be a very tricky and difficult environment.
I assign a 60% probability to the middle path. Maybe it’s my basically optimistic nature and I am simply being naive, but I am hopeful that cooler heads will prevail and we will not run continual massive deficits larger than the growth of GDP. While that means rather large tax increases, since the current leadership wants to create massive new health-care entitlements and will do so, I would rather have to simply overcome higher taxes in my business rather than deal with a collapse of the dollar, high unemployment, high interest rates, and an extremely sluggish economy.
Each scenario will create a different investment environment. Ironically, the middle scenario could be good for the dollar over the long term. But it will be hell on corporate profits from US sources. Given the above, it seems like a 95% chance that we should start looking at investing a significant percentage outside of the US and Europe. Think Canada, Australia, Asia (not Japan), Brazil, South Africa, etc.
Normally, politics does not have all that much of an impact on the stock market. As an example, both Democrats and Republicans can take credit for the ’90s, but it was really the dynamic of the free market that worked in spite of government. Same for the Bush years. While the tax cuts did help, it was the free market and increasing leverage that were the dominating factors.
This time it will be different. The choices we make as to how to fund, or not fund, the increases in spending that are our clear and sad destiny, will have a major impact on not just the US but the world economy. As US consumers have been a major part of the growth of the developing world, and especially Asia (China), a slowing of consumption in the US will mean a very slow recovery for the rest of the world. It will happen, but the choices made by politicians this year will have many unintended consequences. Just as deciding we would take a major part of the corn crop and turn it into expensive ethanol raised the price of tortillas in Mexico, raising taxes in the US will mean lower global consumer spending and trade. It is a very tangled web we weave.
REMEMBER–Americans Helped So Many, No Apology Required
As a prelude to Memorial Day our new president traveled to Europe and the Middle East to curry favor, admit our arrogance, and apologize. He let his audience know that his administration would rely on negotiation and disarmament.
For almost a century, America has been defending the so-called “free world” from the various forms of socialism which have warred against it and which it now, in one form or another, embraces. American blood has been spent and American sacrifice has been made on behalf of people we didn’t even know. All for what we believed was right and just.
Below find some remembrances of the precious costs. These are all American cemeteries in France, Belgium, Luxembourg, Netherlands, Italy, and England. France hosts the greatest number of our sons by far. Those who are astute will see that Normandy is missing. I’ve walked that ground where 9387 of our sons, brothers, fathers and husbands are buried, and as others I cried. The graves shown represent more than 100,000 of our loved ones’ final efforts.
President Obama, the Commander In Chief, may confess American arrogance and apologize. I disagree.
Tom Motherway, tom@renohayek.com
‘Empathy’ in Action by Thomas Sowell on National Review Online
It is one of the signs of our times that so many in the media are focusing on the life story of Judge Sonia Sotomayor, President Obama’s nominee for the Supreme Court of the United States.
You might think that this was some kind of popularity contest, instead of a weighty decision about someone whose impact on the fundamental law of the nation will extend for decades after Barack Obama has come and gone.
Much is being made of the fact that Sonia Sotomayor had to struggle to rise in the world. But stop and think.
If you were going to have open-heart surgery, would you want to be operated on by a surgeon who was chosen because he had to struggle to get where he is, or by the best surgeon you could find — even if he was born with a silver spoon in his mouth and had every advantage that money and social position could offer?
If it were you who was going to be lying on that operating table with his heart cut open, you wouldn’t give a tinker’s damn about somebody’s struggle or somebody else’s privileges.
The Supreme Court of the United States is in effect operating on the heart of our nation — the Constitution and the statutes and government policies that all of us must live under.
Barack Obama’s repeated claim that a Supreme Court justice should have “empathy” with various groups has raised red flags that we ignore at our peril — and at the peril of our children and grandchildren.
“Empathy” for particular groups can be reconciled with “equal justice under law” — the motto over the entrance to the Supreme Court — only with smooth words. But not in reality. President Obama used those smooth words in introducing Judge Sotomayor, but words do not change realities.
Nothing demonstrates the fatal dangers from judicial “empathy” more than Judge Sotomayor’s decision in a 2008 case involving firemen who took an exam for promotion. After the racial mix of those who passed that test turned out to be predominantly white, with only a few blacks and Hispanics, the results were thrown out.
When this action by the local civil-service authorities was taken to court and eventually reached the Second Circuit Court of Appeals, Judge Sotomayor did not give the case even the courtesy of a spelling out of the issues. She backed those who threw out the test results. Apparently she didn’t have “empathy” with those predominantly white males who had been cheated out of promotions they had earned.
Fellow Second Circuit Court judge Jose Cabranes commented on the short shrift given to the serious issues in this case. It so happens that he too is Hispanic, but apparently he does not decide legal issues on the basis of “empathy” or lack thereof.
This was not an isolated matter for Judge Sotomayor. Speaking at the University of California at Berkeley in 2001, she said that the ethnicity and sex of a judge “may and will make a difference in our judging.”
Moreover, this was not something she lamented. On the contrary, she added, “I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.”
No doubt the political spinmasters will try to spin this to mean something innocent. But the cold fact is that this is a poisonous doctrine for any judge, much less a justice of the Supreme Court.
That kind of empathy would for all practical purposes repeal the 14th Amendment to the Constitution of the United States, which guarantees “equal protection of the laws” to all Americans.
What would the political spinmasters say if some white man said that a white male would more often reach a better conclusion than a Hispanic female?
For those who believe in the rule of law, Barack Obama used the words “rule of law” in introducing his nominee. For those who take his words as gospel, even when his own actions are directly the opposite of his words, that may be enough to let him put this dangerous woman on the Supreme Court.
Even if her confirmation cannot be stopped, it is important for senators to warn of the dangers, which will only get worse if such nominations sail through the Senate smoothly.
via ‘Empathy’ in Action by Thomas Sowell on National Review Online.
Yucca Mountain–A New Economic Look
Posted by Tom in Energy Facts & Policies on May 26, 2009
John Dunn presented an intriguing proposal for Yucca Mountain at the Hayek Dinner May 19th, a refreshing new way to think about our nuclear waste storage. The background presentation included a review of the legislation, studies and administrative actions. The Nuclear Waste Policy Act of 1982 set up the process for siting, construction and operation of one or more national repositories of our spent nuclear fuel and high-level radioactive waste. In 1987 after a DOE study of nine sites the act was amended to limit further study to Yucca Mountain, which was selected by Congress in 2002 and included a 70,000 MTHM storage limit. In June 2008, the DOE applied to the Nuclear Regulatory Commission for a license to build the Yucca Mountain repository. In December of 2008 the DOE report to Congress and the President that the Yucca Mountain storage limit could be expanded to at least 210,000 MTHM obviating the need to seek additional storage sites. Currently approximately 60,000 MTHM of spent fuel is stored throughout the country at 121 nuclear facilities in 39 states.
Funding for the project has been generated by a federal tax on the consumers of nuclear generated electricity of one mil per KWH. The tax revenue goes into the Nuclear Waste Fund which at December 31, 2008 had a balance of $29.6 B. The DOE receives money for the fund through Congressional appropriations. Large taxpaying states included IL, PA, SC and CA. $9B has already been spent on Yucca Mountain.
The Obama administration has cut the Yucca Mountain budget by $100M to an all time low of $197M. There is no current alternative to Yucca, which is by law the national repository. Obama did appoint a former Reid aide as chairman of the NRC; while working for Reid Gregory Jaczko worked to kill Yucca.
So we have now spent $9B of taxpayer money and statutorily designated Yucca as the national repository. Yet we have environmentally motivated scare tactics to convince Nevadans that Yucca should be killed, this despite the money and jobs that would be brought to the state. John suggests that if the people of Nevada benefited directly and economically they would applaud the decision to commission Yucca. Since Yucca was first designated as the repository Nevada politicians have refused to have meaningful discussions with the federal agencies, thus removing any viable opportunity to explore and then publish a truly unbiased look at the tremendous economic opportunity for Nevadans.
So John proposes an annual rebate to NV ratepayers. First, the citizens would be informed of the status of all the engineering studies and conclusions concerning the safety of the Yucca site. Next, the public will be honestly informed of the economic benefits, research and industry coming to the state because of the Yucca location. Finally, since Nevada will be entitled to negotiate access fees from the federal government through its nuclear tax and its Nuclear Waste Fund, the bulk of those fees will go to Nevada ratepayers in the form of annual payments. There is ample precedent for this with the Alaska drilling and pipeline. John proposes 80% of the payments to ratepayers and 20% to the state coffers. There would be specific rules to preserve the economic effect of these annual payments to the ratepayers intact and to avoid adverse effects of inflation. With good voter information on safety and economic incentive to ratepayers Yucca Mountain would be the nation’s nuclear repository and the federal money heretofore spent would not go to waste.
In summary, John Dunn gave an excellent presentation of a new way to look at and gain from the Yucca Mountain political football. It was widely endorsed by those in attendance with an agreed follow up discussions with state politicians and opinion makers.
What Are We Stimulating? by Mark Steyn on National Review Online
Posted by Tom in Stimulus/Bailout on May 23, 2009
Mark Steyn gives forth with a little holiday humor in his NRO May 23rd column: While on a recent Vermont jaunt he mistakenly picked up a local paper in which a rare quarter page ad caught his eye. This help wanted ad was from SEVCA, South-Eastern Vermont Community Action, an anti-poverty agency, community organizers, just like our president. Seems that SEVCA is advertising in all the local papers seeking applicants for positions funded by the American Recovery & Reinvestment Act (ARRA), you know the “stimulus,’ our president’s promise to “create or keep” 2.5 million jobs. By golly, he’s actually CREATING eight new positions according to the ad. These included “ARRA Project Coordinator,” “Grantwriter,” and “Marketing Specialists,” all of which had to do with getting more money from the federal trough. Mark’s piece proceeds:
I don’t want to give the impression that every job funded by the stimulus is a job coordinating the public awareness of programs for grant applications to coordinate the funding of public awareness coordination programs funded by the stimulus. SEVCA is also advertising for a “Job Readiness Program Coordinator.” This is a job coordinating the program that gets people ready to get a job. For example, it occurred to me, after reading the ad, that I might like to be a “Job Readiness Program Coordinator.” But am I ready for it? Increasing numbers of us are hopelessly unready for jobs. Ever since last November, many Americans have been ready for free health care, free daycare, free college, free mortgages — and, once you get a taste for that, it’s hardly surprising you’re not ready for gainful employment. I only hope there are enough qualified “Job Readiness Program Coordinators” out there, and that they don’t have to initiate a Job Readiness Program Coordinator Readiness Program. As the old novelty song once wondered, “Who Takes Care of the Caretaker’s Daughter While the Caretaker’s Busy Taking Care?” Who coordinates programs for the Job Readiness Program Coordinator while the Job Readiness Program Coordinator’s busy readying for his job? If you hum it, I’ll put in for the stimulus funding.
Oh, and let’s not forget the new job of “VITA Program Coordinator.” VITA? That’s “Volunteer Income Tax Assistance.” It’s an IRS program designed “to help low and moderate-income taxpayers complete their tax returns at no cost.” The words “no cost,” by the way, are used in the new Webster’s–defined sense of “massive public expenditure.” Whoops, I mean massive public “investment.” You might think, were you a space alien recently landed from Planet Zongo, that, if tax returns are so complicated that “low and moderate-income taxpayers” have difficulty filling them in, the obvious solution would be to make the tax code less complex. But that’s just the unfamiliar atmosphere on Planet Earth making you lighthearted and prone to cockamamie out-of-this-world fancies. Put in for a Job Readiness Program, and you’ll soon get with the program.
Of course, it’s not just “low and moderate-income taxpayers” who have difficulty completing their tax returns. So do high-income taxpayers like Treasury secretary Timothy Geithner. Tragically, they’re ineligible for the “Volunteer Income Tax Assistance” program. Indeed, the Treasury secretary seemed under the misapprehension that it was a “Volunteer Income Tax” program, which would be a much better idea. But, being ineligible for VITA, Secretary Geithner was forced to splash out $49.95 for TurboTax and, simply by accidentally checking the “No” box instead of “Yes” at selected moments, was able to save himself thousands of dollars in confiscatory taxation! Oops, my mistake, I meant that, tragically, by being unable to complete his tax return due to a lack of Volunteer Income Tax Assistance, Timothy Geithner was the only one of 300 million Americans to pass the Treasury Secretary Job Readiness Program.
via What Are We Stimulating? by Mark Steyn on National Review Online.
I too have had a taste of the “stimulus.” On returning home from a recent vacation I found 27 voice mail messages on my office phone, a full 19 of these were offers to help me refinance my mortgage, but only if I met the necessary deadbeat credit criteria. Wonderful world!
The sad part is that real tax money-either current or borrowed-is used to fund this crap. What we don’t pay, our children and grandchildren will. And, at the end of the day, Obama will rightly claim that he has indeed “created of kept” 2.5 million jobs. And the American public is too dumb to see Obama’s “sleeves off your vest” turn of phrase: with the size of our employment base there will always be 2.5 million jobs kept! Bravo.
Tom Motherway, tom@renohayek.com
The Laffer Curve in Action | Cato @ Liberty
Posted by Tom in Centrally Managed Economy on May 22, 2009
Jerry sent this today, it’s emblematic of what’s to come in CA and the USA. Atlas Shrugged all over again. The endgame is ugly to envision: Obama, Pelosi, Reid and minions, together with the public employee unions, teacher unions and UAW taxing one another to fund a downward spiraling society. Europe is the model. Socialism is the goal. And, since we can’t afford both guns and butter, the guns must go. We are unprotected; the only unquestionably legitimate raison d’tre for government is abrogated. Don’t believe me, look at Obama’s budget priorities!
Tom Golisano, one of the richest men in New York, has decided to escape the state’s greedy politicians by moving to Florida. This is another example of why higher tax rates are so destructive. When people are tired of being fleeced, they can move their labor and/or capital. They can choose to be less productive. And they can hire lobbyists, lawyers, and accountants to find creative loopholes.
Writing for the New York Post, Mr. Golisano is very happy that his money no longer will be funding tax-and-spend politicians in Albany:
Politicians like to talk about incentives — for businesses to relocate, for example, or to get folks to buy local. After reviewing the new budget, I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers. To be eligible, you need do only one thing: move out of New York state. Last week I spent 90 minutes doing a couple of simple things — registering to vote, changing my driver’s license, filling out a domicile certificate and signing a homestead certificate — in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.
One thing’s certain: That money won’t continue to fund Albany’s bloated bureaucracy, corrupt politicians and regular special-interest handouts. How did the state get to this point? By spending, spending and spending some more. New York’s budget was $72.7 billion in 1999. Ten years later it ballooned to $131.8 billion. Each year, on average, the budget has risen at an astounding 6 percent compounded annual rate — more than double inflation (2.8 percent).
…This problem didn’t begin with the current recession. New York faced a $6 billion shortfall before the economic downturn. However, in the face of economic turmoil, Gov. Paterson, Assembly Speaker Sheldon Silver and Senate Majority Leader Malcolm Smith looked to the unions and special interests, who answered with one voice: raise taxes. That was irresponsible — and may just prove to be counterproductive, since the top 1 percent of earners account for about 50 percent of state revenue and are the ones who can and will leave.
Among other hikes in taxes and fees, they raised the marginal tax rate on the most successful (and most mobile) New Yorkers to 8.97 percent, the second-highest rate in the nation. Bottom line? By domiciling in Florida, which has no personal-income tax, I will save $13,800 every day. That’s a pretty strong incentive. Like I said, I love New York. But I’m not going to pay any more for the waste, corruption and inefficiency that is New York state government.
Tom Motherway, tom@renohayek.com
Not My Fault…I’m Not Responsible, Just Irresponsible
Remember the old Western saw, “paleface speak with forked tongue?” That’s what I think of when Obama speaks…. on just about anything. He says one thing and does another. Today’s NRO editorial pretty well sets out his performance on security issues. It’s worth the read.
President Obama wants you to know that nothing is ever his fault.
He gave a speech on national-security matters Thursday the gist of which was: George W. Bush left me a mess, and I’m doing the best I can to clean it up. A more forthright theme would have been: Radical Islam has thrust the United States into a defensive war, and it’s now my duty to protect the nation — despite legal complications created by left-wing lawyers, many of whom are now working in my administration.
President Obama described Bush’s counterterrorism program as an “ad hoc legal approach for fighting terrorism that was neither effective nor sustainable — a framework that failed to trust in our institutions, and that failed to use our values as a compass.” But here Obama must contend with himself as much as with Bush: His own Justice Department has argued, as the Bush Justice Department argued, that the nation is at war, that the laws of war therefore apply, and consequently that enemy combatants may be captured and detained without trial until the conclusion of hostilities.
In point of fact, the Bush administration’s counterterrorism campaign was anything but ad hoc. It was extraordinarily effective, and it is entirely sustainable — which President Obama has shown by sustaining its major elements. Detention of enemy combatants has been a staple of every war the United States has fought, which is why the Supreme Court reaffirmed the practice in the 2004 Hamdi case, even though the combatant at issue was an American citizen. The practice of trying combatants before military commissions traces back to General Washington’s precedent in the Revolutionary War; and though today’s tribunals were originally authorized by the commander-in-chief, as they traditionally have been, their use was reauthorized by Congress in 2006, without material change, in response to a lawless Supreme Court decision that twisted both statutes and the Geneva Conventions beyond recognition.
Bush’s counterterrorism work can be regarded as ineffective only from the standpoint of the ACLU, whose metric is the quantum of due process accorded to terrorists who recognize no law or treaty. From a sensible point of view, the measure of success is the incidence of terrorist attacks — and we have not had one in eight years. By adopting a war-fighting paradigm the paradigm on which President Obama must rely, lest his assassinations in Pakistan be deemed a violation of international law, President Bush expanded geometrically our intelligence on the enemy, decimated and dislocated the top tiers of al-Qaeda’s hierarchy, and killed and captured thousands of jihadists. At the same time, enforcing laws enacted in 1996 to enable the government to disrupt terrorist cells before their plots could come to fruition, the Bush Justice Department assembled an impressive string of convictions for terrorist conspiracy and financing.
via The Buck Stops Elsewhere by The Editors on National Review Online.
Car Commissar Speaks…USSA Listens
Posted by Tom in Centrally Managed Economy on May 20, 2009
We’ve all seen “centrally managed economies,” the USSR and Cuba being prime examples. If memory serves, those are costly, they are inefficient, and they don’t work, at least according to those who have suffered under them. Undaunted for another try, our leftist leader Obama with his fearless apparatchiks in tow has set the future course of the American driver. He has mandated mileage standards and pollution standards for new vehicles in one fell swoop. He controls two of the major producers, GM and Chrysler, who will emerge after taxpayer largess as debt free competitors against the rest of the industry. As the WSJ editorial “Car Crazy” says, “Even the French must think were nuts.”
All that’s left to arrive at the Presidents new destination for the American way of driving are huge, unanswered questions about technology, financing and the marketability of cars that will be small and expensive.
Start with technology. The Presidents proposed standards would raise fuel economy goals higher and faster than even the National Highway Transportation Safety Administration believes is practical. Last year, NHTSA issued a proposed rule making that would have raised fuel economy to 32.2 mpg by 2015 for cars and light trucks combined. Its 376-page report notes that “the resources used to meet overly stringent CAFE standards . . . would better be allocated to other uses such as technology research and development, or improvements in vehicle safety.”
The new U.S. fleet will almost certainly be made up of hybrids and electric cars. This comports with the explicit intention of the President and his environmental partners to back out fossil fuels. One may ask: Once Detroit is forced to build these cars, will free Americans want to buy them, at any price?
Unless we outlaw the bigger cars that recent sales figures have shown Americans prefer any time gas prices fall below $4 per gallon, Detroit will need help marketing these small vehicles. As GMs Bob Lutz put it not long ago, “Very few people will want to change what has been their nationality given right to drive big and bigger if the price of gas is $1.50 or $2 or even $2.50. Those prices will put the CAFE-mandated manufacturers at war with their customers.”
All solutions to this problem flow from Washington. One would be to give substantial tax subsidies to buyers. Another would be to impose a federal gas tax to jack up the price of gasoline to $4 per gallon and keep it there. This is the solution that keeps Europeans driving small cars with tiny engines. High gasoline prices have become a political third rail in U.S. politics, and the Obama Administration insists it isnt interested in subsidies or taxes.
That puts the burden back on the beleaguered auto makers. The Detroit Three already sell small cars at a loss to meet the current 27.5 mpg fleet average. The car companies may hope that if the whole industry is forced to move up the fuel-economy ladder, consumers will have no choice other than to buy these cars. But experience suggests companies that have specialized in making smaller cars, such as the Japanese-owned auto makers, are more likely to be able to sell them at a profit.
Mr. Obama said a lot yesterday about the promised benefits of all this for the environment but not much about return on investment for the auto sellers. These public goals notwithstanding, it still looks as if Ford, Chrysler and GM will be making cars they cant sell, or cant sell profitably. That might not be a problem if youre now Gettelfinger Motors. But still-independent Ford has private shareholders and creditors to answer. While GM and Chrysler attempt to meet the new standards with taxpayer money, Ford will have to do so on its own.
The real carrot the Administration offered the industry yesterday was a detour from the nightmare of state-mandated standards. California has been seeking a waiver from the Administration to impose its own higher mileage standards, and a number of other states have followed suit. The Obama national proposal indeed offers the industry what he called “consistency.”
So yes, it is possible to see why this disparate group came together yesterday. The UAW may soon be the governments partner in ownership of GM and Chrysler, and it has a strong incentive not to bite the hand feeding it a huge equity stake in the car makers. Ford and the other foreign-owned auto makers, which will have to raise private capital to make changes that U.S. taxpayers will fund at Chrysler and GM, no doubt want to maintain their political viability by not standing athwart this regulatory steamroller.
We wish these folks luck “working together” with the Obama auto-design team. One thing seems certain by 2016: Taxpayers will be paying Detroit to make the cars Americans dont want, and then they will pay again either through trust us a gas tax or with a purchase subsidy. Even the French must think were nuts.
via Car Crazy – WSJ.com.