President Bush Sets Up Republican Retreat

The key question, after the Republican defeat last November, is how President Bush plans the necessary Republican retreat.  You almost always have to retreat after a defeat in battle, and the quality of that retreat is what sets up the opportunity for a new offensive.

Said the president, as reported by Joseph Curl:

For all of us in this room, there is no higher responsibility than to protect the people of this country from danger. ... To win the war on terror, we must take the fight to the enemy. Both parties and both branches should work in close consultation...

If American forces step back before Baghdad is secure, the Iraqi government would be overrun by extremists on all sides.

But is this the situation?  Robert Haddick suggests what that the United States is really doing in the upcoming “surge” is not securing Baghdad but siding with Shiite leader Abdul Aziz al-Hakim against Prime Minister al-Maliki and Moqtada al-Sadr.  And also trying to avoid a complete wipe-out of the Sunnis.  Yet the Sunnis are finished:

The Sunni insurgency is near its end. Far too late, the Sunnis now realize that only the Americans can protect them from the Shi’ite ethnic cleansing campaign... But even the Americans can’t help the Sunni Arabs now.

Haddick thinks that we are trying to help the Sunnis as a favor to the Saudis.  But what will be the result of stirring the pot?

Domestically, we can read that the president is setting up some issues on which he can deal with the Democrats—immigration reform and alternative energy, for instance.

But he is also throwing down markers.  His proposal to allow workers that lack company benefits to pay for health insurance with pre-tax dollars is one.  His call for school vouchers is another.  It is significant that Democrats immediately said: no deal.

No doubt.  But you win elections with issues, taking down immovable objects with irresistible forces.  With his markers on health care and education, Bush is setting up the Republican army for the future.

On top of that is the minefield that Bush has laid down on taxes.  With the Alternative Minimum Tax and the expiration of many tax rate cuts passed in the early 2000s, Democrats are going to find themselves in a very nasty place some time in 2009 and 2010.

All in all, not a bad plan for a measured retreat.  Now let us start planning for the next offensive.

Milton Friedman, E-mailer

Back in July 2006 the Wall Street Journal was emailing with Milton Friedman about China and exchange rates and economic policy.  Was he worried, for instance, about the low US savings rate?  No, he wasn’t. 

The right saving rate is whatever satisfies the tastes and preferences of the public in a free and unbiased capital market. Market can adjust to any rate. This is a very complicated question. Present estimates probably understate actual savings because of treatment of capital gains. In any event, the present situation does not raise any problems for the economy.

Did he think China should float the Yuan?  Yes, it should. 

If they do insist on pegging the yuan, they will sooner or later run into a situation in which they are either accumulating an excessive amount of U.S. dollars or they are in debt for an excessive amount of U.S. dollars and they will have a foreign exchange crisis.

And that, as they say, is not good.

Among other recommendations, Friedman recommended that a computer program run the US monetary policy and that the outlook for India was better than China.

China has maintained political and human collectivism while gradually freeing the economic market. This has so far been very successful but is heading for a clash, since economic freedom and political collectivism are not compatible. India maintained political democracy while running a collectivist economy. It is now unwinding the latter, which will strengthen freedom of all kinds, so in that respect it is in a better position than China.

Milton Friedman: Nobel laureate and great American.  Rest in peace.

Behind the NYT Happy Single Women Story

Good show for the New York Times. Their story on single women reported by Sam Roberts—that 51 percent of women are not living with husbands—required them to do a bit of massaging.  They lumped single teenaged girls and women whose husbands are on assigment into the “single” column, reports  NR But all the men of suitable age and educational level insist on sex on the first date, and she’s not interested. I hear from young people who would love to get married and stay married because they don’t want to put their own children through the misery of divorce that they endured.

 Morse says she hears from women “whose husbands abandoned them and their children, for no particular reason.”  And then there are the women.

Some divorced women leave their husbands with huge credit-card debts and three screaming children. I hear from these men all the time. And we’re supposed to just celebrate women’s freedom?

Let’s get real shall we?

Marriage is the most basic form of social cooperation. It is the institution in which children are born and reared.

If the New York Times, its radical experts, and its liberal readers want to replace marriage with something else then it’s about time they told us what that something is.  And I’d say that the burden of proof is on the liberals to prove that their alternative is better.

Some people have suggested that the reason that liberals are so down on marriage is that they all work for the government.  Failed marriages equals more government, so failed marriages means more jobs for liberals.

But I do not believe that liberals think that way.  I think that the liberal distaste for marriage is visceral, instinctive.  And, of course, it is a matter of liberals getting with the Zeitgeist.

UPDATE: In the New York Times Sunday review of the single women story by Kate Zernike they had this to say.

The last 30 years have seen a huge shift in educated women’s attitudes about divorce. Mr. Martin, who has written about women and divorce, said that three decades ago, about 30 percent of women who had graduated from college said it should be harder to get a divorce. Now, about 65 percent say so, he said.

But for less educated women and for men, the numbers have not changed; only 40 percent — a minority — say it should be harder to get a divorce.

That ties into Kay S. Hymowitz’s findings in Marriage and Caste in America, interviewed here by Kathryn Jean Lopez.

But with that big a change in public opinion, someone is going to find themselves in a buzz-saw pretty soon.

What Should We Do About Education?

After a century of government education we still have large swathes of the population that just don’t get education.  Writes Niall Ferguson

In Britain today, fully 40 per cent of adults who left school at the earliest opportunity are now unemployed.

Then he goes on to talk about an “an uneducated and unemployable underclass” that is our biggest problem.

Here we are spending about five percent of GDP on primary and secondary education every year.  Yet millions of children grow up without acquiring basic literacy and numeracy.  What is going on?

But let us step back a bit.  Notice anything about those unemployed and unemployable adults?  They aren’t starving to death.  Let’s put it another way.  Although you and I wouldn’t be caught dead without our 20 years of education and our college degrees, the fact is that education is not a matter of life and death.  People who studiously avoid education are doing fine.

In fact our society actually gives money to people without education and without skills.  On the other hand, it takes money from people with an education.

As economist Ludwig von Mises said half a century ago.  People who are unemployed today are people who can afford not to be working today.

Maybe we need to change the whole structure of incentive in our society.  Here are a few mean-spirited ideas.

• We abolish the public school system but the government (or government contractors) runs free literacy/numeracy clinics for all ages 6 through 60.  Graduates get a certificate of literacy and numeracy.
• Kids under 14 cannot work unless they have a certificate of literacy and numeracy.
• Teenagers who want to quit school and work must pay a 20 percent literacy tax unless they carry a certificate of literacy and numeracy.
• Single parents that show up for government benefits must enroll in a literacy program and demonstrate basic literacy skills before they can get government housing or rent subsidies.  Children are farmed out to foster homes until certificate of literacy and numeracy is obtained by the parent.
• People that apply for unemployment benefits must show a certificate of literacy and numeracy before they get full benefits unless they are enrolled in a literacy/numeracy clinic.
• People can’t get a driver’s license unless they hold a certificate of literacy and numeracy.

And so on.  Nothing special going on here.  It is just that if we believe that literacy and numeracy are essential in the modern age then let us demonstrate how serious we are.

And the way to show our seriousness is to get serious about illiteracy.

Liberals should like this program.  They are all in favor of compulsion.

Collapsing Venezuela. Who Cares?

Now that the price of oil is going down we shall start to see the consequence in the thug dictator nations, natural resource states like Venezuela.   Richard W. Rahn reminds us the dimensions of the corruption in that unhappy country and of the collapse to come. 

It has been widely reported that Mr. Chavez has been increasingly taking control of the oil, telecommunications and energy sectors, as well as the media. What has not been reported is the full extent of the corruption in Venezuela and how this ultimately will destroy the economy.

The financial scandal taking place is far bigger than Enron, and may ultimately even exceed the U.N. "oil-for-food" scandal, the biggest financial disgrace of all time.

Who cares, you might ask?  After all, the Chavez regime isn’t the first to nationalize the economy and go straight down the tubes.  And it won’t be the last.  After all it was in 1758 that Benjamin Franklin wrote in “Poor Richard’s Almanac”  that:

Experience keeps a dear School, but Fools will learn in no other, and scarce in that.

Maybe a century ago it was possible to dispute that capitalism was the only way to organize economic cooperation.  Maybe fifty years ago it was still just possible as left-wing enthusiasts confidently expected that the Soviet Union would “bury” us.

But not any longer.  We can predict, with as much certainty as is possible in economic affairs, that the consequence of the nationalization and politicization of the Venezuelan economy is that the Venezuelan people are entering a period of economic misery.  And everyone knows how to avoid it.

"Have Your Baghdad Civil War Without Us"

What is the difference between a serious commentator and an unserious one?

Answer:  Occasionally, the serious commentator can be detected in an original thought.  That is why Charles Krauthammer is a serious commentator.

He asks: What’s the point of the “surge?”  The problem is that is does nothing to make the Maliki government get serious about the Shiite militias.  Right now it is protecting the militias and the Iranians.

So let’s do something that really does threaten the Maliki regime.

We say to Maliki: you let us down and we dismantle the Green Zone, leave Baghdad, and let you fend for yourself; we keep the airport and certain strategic bases in the area; we redeploy most of our forces to Kurdistan; we maintain a significant presence in Anbar province where we are having success in our one-front war against al Qaeda and the Baathists. Then we watch. You can have your Baghdad civil war without us. We will be around to pick up the pieces as best we can.

A redeployment like that would reduce US casualties, maybe to zero, but would still maintain US military presence.

Back to the bottom line.  It is embarrassing to Bush and the US that we haven’t built a democracy in Iraq.  But it is only an embarrassment.

The bottom line is that US strategy requires that Iran doesn’t get to be the hegemon of the Middle East.  In that effort Iraq is just a useful pawn. 

Meanwhile, the Iran economy is in the toilet.

A Small Step towards Education Reform

The New York City Department of Education is taking a small step towards reform.  As reported by Ryan Sager, in the future the standard process will: 

Require principals from now on to actually recommend teachers for tenure.

 Up to now, 99 percent of probationary teachers got tenure after three years.  Now the system will take a tiny step to change this.

1. Principals must sign a form positively recommending teachers for tenure
2. Principals will be educated “as to their existing right to refuse to grant tenure.”
3. Start using hard data, like student test scores, in tenure evaluations.

Well maybe.  It could make a little difference.  But don’t expect the principals to change that much.  After all, it’s no money out of their pockets.

The reason that people go to work for the government is that they want the tenure.  They want, after the first probationary months and years, to have absolute job security.

After they get job security then they decide that they should have the money too.

Maybe they should have that right.  Some people are very risk-averse, and they have a right to be.  But not with our kids. And not for hourly wage rates that are equivalent to that earned by technical professionals with no tenure.

Generally, in the real world you must pay for security, especially job security.  It is like insurance.  You pay a premium for the right to allocate risk to the insurance company.

There is a word for a world in which people that have complete job security earn as much or more than people exposed to the full risk of the modern global economy.  Unjust.