Monday, July 6, 2015

Next Up: Greek Limbo

All of us peasants just want the Greeks to be kicked out of the Euro so we can get on with our lives. But James Delingpole doesn't think so. Because, as was true of the Soviet Union, you are not allowed to leave the Euro or the EU.

That's because "we" are the Ruling Class of educated experts and "we" will decide when it's time to go.

The annoying thing about Syriza and the Greek Prime Minister Alexis Tsipras is that they know exactly how to play against the educated ruling class. They would, since they are part of it. Educated lefty experts.

Incidentally, why aren't people calling them "fascists?" They are blaming foreigners and Jews. They have a "stab in the back" myth. And they seem to think that they can do anything they like to the economy. Let's see. A socialist is a lefty pushing class warfare. A fascist is a lefty pushing race warfare. A progressive is a lefty pushing identity politics warfare.

Let's look at all this through my microscopical lens. In which any government is an armed minority occupying some territory and using the usufruct (the right to enjoy the use and advantages of another's property short of the destruction or waste of its substance) of the people that live there to reward its supporters.

Oh, maybe "usufruct" is too tame a word, since what governments typically do is use the peoples' property and destroy it as well.

The way this racket works in the modern age is that politicians bidding for power offer potential supporters benefits and pensions. They they win. Then they enact pensions for their supporters. Then they run out of other peoples' money. Then the fun begins.

The fun in the Greek case is that the Greek governments have been playing the game perfectly for 20 years. They entered the EU on a lie, but a lie that perfectly aligned with the needs of the politicians, to offer their voters more benefits. Then in 2009 the whole thing went belly up. But not completely, because Greece was able to take advantage of the EU ruling class's need to keep Greece in the EU. They could continue their unsustainable pensions by borrowing more money from the EU ruling class.

How unsustainable? Rich Galen has the numbers:
According to Eurostat, the EU statistical arm, Greece leads the EU in percentage of GDP that goes to pay pensions: 17.5 percent. Although we think that every dollar we earn is going toward someone's pension in the U.S. that number is about 6.8 percent of GDP.
The thing to remember is that the Greek leaders are not in the same boat as the Greek voters. They don't care if the pensions can't be paid. They'll find some other gig somewhere. And meanwhile they are having the time of their lives winning elections, running plebiscites, tweaking the noses of the rich uncles in Frankfurt, Berlin, and Brussels. Emile Zola already had that figured out over a century ago in Germinal. Community organizer, name of Etienne, comes into town, organizes the striking miners, leads them to sabotage the mines, then skips town as the miners face starvation.

And the same goes for the politicians and bureaucrats running the EU (and the US). They don't care about you and me. It's not their money. Their pals will give them a gig, somewhere, somehow. And if they don't it was all great while it lasted. Power is the great aphrodisiac, said Henry Kissinger.

And the band plays on.

Friday, July 3, 2015

Wake Me When It's Over

We've seen this all before. It was back in the 1960s that the Democrats got a big presidential win and passed a bunch of big-government programs. And the left figured that they were going to take over. There were the hippies and the New Left and Cloward-Piven. The hippies were going to make love, not war. The New Left, inspired by Frankfurt School acolyte and One Dimensional Man Herbert Marcuse were going to transform politics, and Profs Cloward and Piven were going to overthrow the establishment with street action.

Well, they got their Medicare and Medicaid forever, and hippiedom too. And they successfully moved the center of gravity of left-wing politics from class to identity. But Cloward and Piven failed to crash the system.

And most of all the average American just wanted to live a middle-class life in peace. This was symbolized by Ben Wattenberg's 47-year-old housewife from Dayton, Ohio in his book The Real Majority. The theme was taken up by Richard Nixon and his Vice-President Agnew who talked about the "silent majority" that hadn't been yelling its head off during the Sixties.

And so we got a conservative revolution and Ronald Reagan and a 20 year economic boom.

Evidently liberals have interpreted the Obama victory of 2008 as a call for a new Sixties and a new lurch to the left, even though the result has been the most Republican Congress in almost a century.

Of course, after the Supreme Court decisions on Obamacare and gay marriage it looks like the liberals were right. But I have a feeling that they are going to be radically, embarrassingly wrong.

The thing is that we don't know, we can't know, because liberals have forbidden anyone to disagree with them.

But the question is: can we roll back the Obamacare entitlement? Everyone knows that once you give people an entitlement they will resist reform until the place goes Greece. But we must remember that Obamacare was not like Medicare and Social Security which gave the broad middle class something they had never had before. The average American already has health insurance and the average American is pretty upset that Obamacare has messed with their health insurance. Also, I suspect that the folks getting the Obamacare subsidies are pretty upset and confused right now.

As for the social issues like gay marriage: In my view the decisive demographic in all social issues is women: middle-aged women, just like Ben Wattenberg discovered in the 1960s. That's because things like abortion and marriage are central to women's lives. In the end it doesn't matter what the ruling class -- or men -- wants on social issues. What matters is what women want.

It turned out, after Roe v. Wade, that women do not want unrestricted abortion as the high-class feminists wanted. That's because for the average woman, child-bearing is central to her life. Not so much for elite women. There's a similar aspect to gay marriage. Lots of elite people are gay or know someone who is gay. Down in the trenches, not so much. And marriage is central to the life of a middle-class woman.

As you know, I look at the world through the filter of my three peoples model: people of the creative self, people of the responsible self, and people of the subordinate self. Because of the influence of the people of the creative self we all get the impression that everyone agrees with their current enthusiasm. In all the fuss and feathers of elite-class enthusiasm it takes a long time for the influence of the people of the responsible self to be heard.

I was out to dinner last night with Lady Marjorie and her mother and her niece at Ray's Boathouse in Seattle: the last night before the Fourth of July holiday weekend. We were at a table for five, but nearby were several middle-aged middle-class couples out on date night sitting together in booths that looked out on a sun-drenched Puget Sound. It was touching to see the satisfaction of the wives to be out to dinner with their husbands. They looked, from moment to moment, at their husbands with gentle married love. From time to time they would gently put an arm around their husbands.

What do people like that think about things in Obama's America? That's what I want to know.

Thursday, July 2, 2015

The Unanticipated Consequences of High Deductible Obamacare

The big takeaway on Obamacare is the mindless ruling-class faith in bureaucracy and regulations. Set up an administrative system, the Obamateers seems to think, and equitable benefits will result.

Of course that is pure fantasy. What really happens when a government sets up an entitlement system is that people learn how to game it. Like welfare. Like Medicare. And the costs spiral out of sight.

You dangle a bunch of free stuff in front of the voters and then hide the costs in Medigaps and do-nut holes. But it still costs an arm and a leg.

That's why I was really surprised by the Bronze-Silver-Gold metallic system for Obamacare. To get the only affordable plans you need to go for the Bronze plan. But the Bronze plan typically has eye-wateringly high deductibles. To get rid of the deductibles you have to go for the Gold. But the Gold plan has eye-wateringly high premiums.

In the high-deductible plans that big corporations have implemented to control costs they typically sweeten the pot with Health Savings Accounts so you can pay for your deductibles. In Obamacare they sweeten the pot with subsidies on your premiums. And reports indicate that Obamacare subsidy customers are getting blown away both by the premiums and the deductibles, so that they don't pay their premiums and don't go to the doctor.

The high-net-worth Jonathan Grubers of the world that designed Obamacare should have taken a look at the mini-med plans that corporations offer to their low-wage workers. These plans typically offer co-pays for routine medical expenses. They don't offer real insurance coverage against big bills.

Hey, Prof. Gruber. The low-wage workers don't need traditional heath insurance policies because they don't have a high net worth to protect from unexpected health care costs. And that probably goes for all the people that qualify for Obamacare subsidies.

People without high net worth can get health care and then declare bankruptcy when the going gets tough.

I don't know how smart the Republicans are. But they might think about exploiting this minor little flaw in Obamacare. Or not.

But the Wall Street Journal has come out with an article about the impact of the high-deductible Obamacare plans. David Goldhill and Paul Howard write:
As millions of Americans move onto high-deductible plans, they will change their behavior—and the incentives of the market. Under these plans, in a typical year consumers will pay most, if not all, of their health-care expenses out of pocket. Since they will be spending their own money, they will compare prices for checkups and procedures. Providers will have to earn their business on the basis of quality, price and service, the way companies do in the other four-fifths of the U.S. economy. Competition has the potential to transform America’s sclerotic, overpriced health-care system into something much more transparent and affordable.
You wonder: did the Obamateers really understand that? They don't seem to like it. That's the point of the current "underinsured" campaign that is starting to hit the media. Many Democratic voters are perplexed at having to pay for any health care out-of-pocket.

But for Goldhill and Howard this unanticipated consequence of Obamacare is an unexpected opportunity. We market fundamentalists understand that the only way that we can get the health care system to respond to consumer needs is to irradiate it with the cleansing rays of market prices. Imagine if the Obamateers accidentally wrote a bill and after we found out what was in it we discovered that it would beat the special health care interests into line and force them to deliver what the customer needs and wants at a price the customer is willing to pay.

Imagine that.

Wednesday, July 1, 2015

Ban Polygamy Now!

The slippery slope argument against gay marriage was that, next, we'll see the social justice warriors insisting upon "polyamory," or polygamy. And of course, no sooner had Justice Kennedy imposed gay marriage on America than the push for polygamy began.

(By the way, I voted for gay marriage in Washington State Referendum 74 which passed 53.7% to 46.3% in 2012, but I still think it's stupid.)

In The American Spectator today Scott McKay proposes, among other things, that Republican candidates should "Push a constitutional amendment to ban polygamy, and demand the Democrat nominee join you in making it happen."

I couldn't agree more. You only have to watch Raise the Red Lantern to realized what a bad idea polygamy is. If nothing else each wife is fighting with the other wives to get hubby into her bedroom so that she can get pregnant and raise her status. It doesn't seem like #LoveWins there.

Oh well. As Doc Martin says, I don't see why everyone has to be happy.

The real problem with polygamy is that it cuts low-status males out of the marriage market. As my daughter Beatriz Williams writes in her Tiny Little Thing, the attitude of women towards husbands is "why not the best?" Perfectly natural and physical. But when high-status men grab all the girls for themselves, guess who gets left standing when the music stops in the game of musical chairs?

Polygamy is profoundly inegalitarian. Monogamy, on the other hand, is profoundly egalitarian. Monogamy gives the lower-status man a chance at love and marriage and children. Polygamy, not so much.

But wait! Don't liberals looove the poor and the marginalized? How could they advocate policy that bears down so cruelly on the poor?

In that case liberals would hate the welfare state. As Charles Murray writes in Coming Apart: The State of White America 1960-2010 the administrative welfare state of the liberals has turned low-income America into a no mans land of dysfunction where the men don't work and the women don't marry.

Why don't liberals do something about the horrors of the welfare state? Because liberals care about themselves: their power and their class interests. When it comes to the poor, liberals only care about their votes. Family destruction in the inner city is no skin off liberal noses. Those voters keep voting for their benefits, so they must be happy with their liberal political leaders.

But why are liberals so bent on sexual libertinism?

Liberals are the people of the creative self. One of the easiest ways to get creative is on the sexual front. It doesn't take any effort, doesn't take any years of training. You just follow your bliss. And there's always parents to bail you out of trouble.

Also liberals are culturally and politically opposed to the people of the responsible self and their bourgeois notions about cultural matters.

Of course today liberals will swear on a stack of constitutions that they would never vote for polygamy, just as Candidate Obama in 2008 found that his faith prevented him from proposing gay marriage.

OK, writes Scott McKay. Let's call the liberals' bluff on polygamy. Let's ask them to vote for an anti-polygamy Constitutional Amendment and see what happens.

Tuesday, June 30, 2015

No, Dennis Prager; the Left Does Not Run on "Feelings"

One of radio host Dennis Prager's recurrent memes is that the left runs on feelings. It's not grounded in the Judeo-Christian intellectual tradition, but encourages free-floating "feelings." Here is Prager in the aftermath of the Supreme Court on gay marriage and the end of Judeo-Christian America.
Americans, from the Founders on, understood that without God, there is no moral truth, only moral opinion -- and assumed that those truths were to be gleaned from the Bible more than anywhere else.
But now the Judeo-Christianity in America's public square has been tossed in the garbage can.
And what has replaced Judaism, Christianity, Judeo-Christian values and the Bible?

The answer is: feelings. More and more Americans rely on feelings to make moral decisions. The heart has taken the place of the Bible.

Years ago, I recorded an interview with a Swedish graduate student. I began by asking her whether she believed in God. Of course not. Did she believe in religion? Of course not.

"Where, then, do you get your notion of right and wrong?" I asked.

"From my heart," she responded. 
I love Dennis Prager, but I think that he misunderstands the issue here. That Swedish graduate student's "heart" was not getting its notions from free-floating "moral opinions."  It was getting a new moral law from a new "god" and a new "bible." To quote Oscar Hammerstein II: "you've got to be carefully taught." The feelings we all experience as natural and right are in fact the end product of careful ideological education.

The new god is the god of creativity and identity. The new bible is the intellectual output of 150 years of leftist thought, from the Enlightenment and Romanticism and Fourier and Saint-Simon and Marx and Engels to the Frankfurt School to feminism to environmentalism to the Empire trilogy of Michael Hardt and Antonio Negri.

I try to understand the modern era by dividing its people into three tribes. There are the people of the creative self who experience themselves as evolved and educated beyond the norm, and ordained by reason and inspiration to be first an avant-garde and then the cultural and political ruling class. There are the people of the responsible self that believe in freedom and responsibility, and experience themselves as part of a community of free people worldwide that live by serving each other. Then there are the people of the subordinate self that live by attaching themselves to a powerful lord and think of themselves as a tribe united by kin or race or gender or other tribal identity against the world.

The left has constructed a secular religion based on the notion that the people of the responsible self are not free and responsible persons but exploiters and oppressors who are grinding the people of the subordinate self into the ground with their oppressive politics and their exploitative economics; they aren't very nice to creative people either because they want to cut funding to the arts. The people of the creative self are called by everything that's creative and compassionate to protect the people of the subordinate self from this reign of oppression and to create a better world for all through fundamental transformation of politics and culture.

It's a pity, of course, that the left's Marxian and Fabian economics was exploded over a century ago as false and chimerical. It's a shame that its anti-bourgeois culture that is really neo-feudal in character results in cultural chaos for the poor and slows the assimilation of immigrants to the city into the international capitalist economy where they eventually take their place as people of the responsible self. It's ominous that its cultural norms discourage people from having children. It's an outrage that the leftist god and leftist bible have visited death and misery on the world ever since they went on-line in the mid 19th century.

The fact that failures and famines and terrors have not discredited the left proves that the left's belief system is not founded on un-directed "feelings" but is in fact the "true religion" to its priests and its adherents. We may say that the core of its church community is the educated young Swedish woman who thinks that she acts from her "heart" when in fact she is a nice young lady that just graduated from progressive finishing school and passed all the classes in progressive moral law.

The task before conservatives is to change the culture so that well-bred young Swedish graduate students will be obtaining their notions of right and wrong from hearts undamaged by the follies and crimes of the left.

Monday, June 29, 2015

It's the Pensions, Stupid.

On July 5, writes John Fund, "the Greek people will be asked to make a choice: either 'surrender' and give in to cuts in pensions and higher taxes or refuse and perhaps be forced to exit the euro and go back to a depreciated drachma as their national currency."

The Greek people are of one mind on all this. About 80 percent of them want to stay in the Euro; and about 80 percent of them are opposed to "austerity" spending cuts and tax increases.

So the Greeks aren't much different from Americans. We Americans all demand our entitlements and benefits but we don't want to pay for them.

Here's Cliff Taylor in the Irish Times talking about the difference between the Irish "austerity" and the Greek "austerity." Both countries did a pretty good job of "in terms of cutting borrowing" but to reduce debt you need high growth.
The problem is that Greece never got momentum moving firmly in the right direction; it never got around the corner. As the crisis took hold, its debt level shot up, reaching more than 170 per cent of GDP. Reducing such a high debt level requires high growth (along with a bit of inflation) and a big surplus on the government’s annual budget, excluding debt costs.
This ought to be obvious. You can't have a flourishing, prosperous nation state unless you have economic growth.

Ireland, on the other hand, started the crisis with very low national debt, so it was able to get "around the corner" and resume growth in 2012.

Of course, you can't really have high growth if you are burdening your economy with e.g. Obamacare.

So let us try and understand the problem of the modern administrative welfare state.

The problem is really very simple. The whole idea is to tax the country up to the limit that is politically possible, and distribute the revenue in entitlements and subsidies. Usually, however, the government borrows a little to sweeten the pot a little. Since this works pretty well in normal times everybody is happy.

But the truth is that when you get into debt you are making a bet against the future that cannot go wrong. You must have the income to make your payments; otherwise you get into a world of hurt.

This is obvious in personal finances. People that mortgage themselves up to the hilt get wiped out if they lose a job.

The same thing applies to administrative welfare states. When there's a recession or a crash they must continue to pay their normal entitlements to pensioners plus their free health care and free education, but must also increase their welfare expenditures substantially to take care of all the people thrown out of work. All this on reduced revenues because of the recession. This wouldn't matter if, say, the government was collected and spending about 10% of GDP. But at 40% of GDP you can't really afford a recession, because you already are paying entitlements to tons of people to do nothing. Now you need to bail out the banks and also pay the unemployed.

The solution is pretty simple: privatize all pensions, privatize health care and education. No more "defined benefit" pensions. Then the state can weather a crash and a depression by borrowing. No problem.

But of course no modern state is going to do that because every state that ever was has maintained itself by paying pensions to its supporters.

Either way, for nations and for individuals, don't ever forget that when you contract a debt you are making a bet that you'll repay before the downside hits. Because the downside for a debtor means that you get wiped out.

The thing to watch in the Greek crisis is how the bank depositors get screwed. In Argentina in 2002 they wiped out the depositors, and in Cyprus they gave them a haircut. The buzz-word is "bail-in."

Friday, June 26, 2015

The "Frozen" Girls "Inside Out" the Boat

At the end of The Boys in the Boat, Daniel James Brown's book about the University of Washington varsity crew that went to the 1936 Berlin Olympics, oarsman Joe Rantz marries Joyce, his faithful high-school sweetheart, and lives happily ever after.

The Boys in the Boat is narrative non-fiction that mixes male athletic competition with the hard-scrabble story of Joe Rantz and the horrible fact of rising Nazi fascism. One of the contrasts Brown draws is between the comfortable upper-middle class undergraduates "in pressed slacks and freshly shined oxfords and cardigan sweaters" and the kids from the artisan class who just managed to scrape together the tuition and were working night jobs to stay in school. Further in the book we get to contrast the converted government seaplane hangar in which the Washington Husky crew kept their rowing shells with the lavish crew facilities of the WASP colleges back east.

But I found myself reading the book as an allegory of our own time.

After all, if Joe Rantz was chucked out by his father's second wife when Joe was ten, we have our own abandoned athletes like The Blind Side's Michael Oher. And if you are a conservative you can't help notice the parallels between 1930s Nazi fascism and today's Liberal Fascism.

Oh sure, we aren't putting anyone in concentration camps, but we are firing prominent people for having the wrong opinions on gay marriage. We don't have Leni Riefenstahl and her Triumph of the Will, but we did have a big presidential acceptance speech a while back staged in a stadium complete with heroic camera angles and Grecian formula columns in back of the candidate. We don't have the virulently anti-semitic Der Stürmer, but we do have the virulent mob of social justice warriors ready to turn out a Twitter mob to name and shame anyone who dares to voice an heretical thought that departs from liberal orthodoxy.

For me, the Command Central of liberal cultural orthodoxy is the children's CGI cartoon feature. I am talking about Disney mega-hit Frozen and the current Pixar-Disney hit Inside Out that's now playing in a theater near you.

Both Frozen and Inside Out are what used to be called "fractured fairy tales." They need to be broken because the originals don't serve the liberal zeitgeist and don't send the message that liberals want to indoctrinate in our children. Frozen is a rewrite of Hans Christian Anderson's The Snow Queen. Only now the heroine is not trying to find the ordinary lost boy next door, corrupted by a shard from the Snow Queen's mirror, but trying to rescue her sister, and both are princesses. In the Frozen ending the two sisterly princesses are best friends forever instead of the boy and girl next door living happily ever after through the strength of Gerda's Christian love.

In Inside Out we have a little girl tossed out of her happy Minnesota childhood, complete with championship hockey team, into the tech startup world of San Francisco; and her world collapses. Her troubles are symbolized by a pop-psych (but actually mechanical) representation of her emotions where Joy, Sadness, Anger, Fear, and Disgust rule her consciousness from Headquarters. The trouble starts when this white-bread upper-middle-class girl gets up in the diverse class in her new San Francisco school complete with right-on black teacher and discovers her sadness over the life she left behind.

(Diverse class? In the city of San Francisco? Where I imagine every parent is a white helicopter parent or an Asian tiger mom?)

In both movies we get hammered over the head with boys in girls' clothing. The movie makers are converting fairy tales into boys' adventure stories with the good parts played by girls. We are meant to think that every girl will grow up to become Carly Fiorina. (Only, of course, none of them will grow up to be a Republican. Eeeuw!)

But women just aren't like that. Daniel James Brown allows us a glimpse in The Boys in the Boat. Joe Rantz's sweetheart Joyce finds herself enraged that Joe's father could ever have allowed his second wife to toss Joe out of the family home.

After the Berlin Olympics it took two years for Joe Rantz to graduate from UW in 1939 with a degree in Chemical Engineering. He then went to work at Union Oil Company and later at Boeing, living with Joyce in the family home north of Seattle for decades where they raised five children.
In all those years, Joyce never forgot what Joe had gone through in his early years, and she never wavered from a vow she had made to herself early in their relationship: come what may, she would make sure he never went through anything like it again, would never be abandoned, would always have a warm and loving home.
That reads like the women I know, even, no, especially, the liberal women. Their entire lives revolve around moral analysis -- some might even say moral judgment. 

The one thing these women are not is faux heroines in faux liberal fairy tales.