The Corruption and the Temptation

Up until the presidency of Franklin Delano Roosevelt the Democratic Party was split between the “honest graft” wing and the squeaky clean liberal or progressive wing. (Let’s leave the Southern Democratic Party out of this.)

Liberals were embarrassed by the corrupt city machines, and the ward heelers were contemptuous of the egg-head liberals who were full of ideas but couldn’t get anyone to the polls.

Of course, both of these tendencies are bad, very bad. The routine corruption of city machines was a continuation by other means of the rule of the “eternal gang of ruthless men,” the politics of piracy and plunder.

But the liberal approach to politics, if anything, is even worse. Liberals are determined to do good, and that’s a good thing. But they want to do good on someone else’s dime. They want to force other people to fund their programs of social welfare. It’s a matter of compassion, they tell us.

Earth to liberals. Compassion is where you give your money to poor people. Compulsion is where you give other peoples’ tax money to poor people.

There was once a famous person who had the liberal temptation.

Again, the devil taketh him up into an exceeding high mountain, and sheweth him all the kingdoms of the world, and the glory of them; And saith unto him, All these things will I give thee, if thou wilt fall down and worship me.

The great political achievement of President Roosevelt was to submit to temptation, to turn the Democratic Party from a coalition of city patronage machines and ideological liberals into a single national political patronage machine, led and run by liberals, focused on using political power to do good.

But he also started the descent into corruption. And anyone can see that in full operation as the Obama administration takes office. It’s not about Hope and Change. It’s just about getting back the levers of political power back from the Republican yahoos.

The great world historical achievement of liberals is this. They took a federal government that was spending about three percent of GDP and cranked it up to 20 percent.

What do liberals spend all that money on? Well, that’s what usgovernmentspending.com is for. Let’s take a look.

United States Federal
State and Local Government Spending

Fiscal Year 2009

Amounts in $ billion



Pensions: $891.1

Health Care: $958.2

Education: $873.7

Defense: $806.1

Welfare: $467.7

Protection: $325.0

Transportation: $247.8

General Government: $193.3

Other Spending: $403.6

Interest: $361.7

Balance: $24.3

Total Spending: $5,552.4

Government, especially national government, is there to defend first of all against enemies foreign and domestic. You don’t see a lot of that going on in the top spending categories. Why is that?

The reason is pretty simple. Liberals are running, in the Democratic Party, a political operation. It is not particularly interested in defense. It is interested in its left-wing government programs and its raw political patronage.

The tragedy is that the people most benefitting from all these trillions are well-born educated liberals. The people most hurt are the program beneficiaries, anesthetized by the liberal mess of pottage, who aren’t getting to learn the skills and the trust culture of the city. They aren’t moving up into the self-reliant middle class. And that is a shame. It is more than a shame. It is a crime.

Some day the American people are going to ask conservatives to reform this corrupt regime of patronage and ideological cant.

Until then, conservatives must develop and sharpen their indictment of this cruel, corrupt, and unjust regime.

Music Really Is the Food of Love

Count Orsino in Twelfth Night was one of the most pompous lovers ever. What did the plucky Viola see in him?

But he knew the importance of music:

If music be the food of love, play on;

Give me excess of it, that, surfeiting,

The appetite may sicken, and so die.

There you have the two themes of sex. Music and death.

Being holiday season and all, the London Economist has a long and learned disquisition on the question of music. Is it related to sex or survival, they wonder?

No contest. It’s sex. The research proves it.

One reason for believing this is that musical productivity... seems to match the course of an individual’s reproductive life. In particular, Dr Miller studied jazz musicians. He found that their output rises rapidly after puberty, reaches its peak during young-adulthood, and then declines with age and the demands of parenthood.

Interesting isn’t it, how music has degenerated in the last half century from the romantic ballad into the drumbeat pulse of sex.

Music tracks the sexually active years. But cooking does not.

But uniquely human activities associated with survival—cooking, say—do not show this pattern. People continue to cook at about the same rate from the moment that they have mastered the art until the moment they die or are too decrepit to continue.

The question is: are singers the sexiest people alive, more so even than ath-e-letes? You’d think so. Think Frank Sinatra, Elvis Presley, The Beatles, Jimi Hendrix. And that goes for the more sedate world of opera, with Maria Callas, Luciano Pavarotti (sexy despite his size), and Plácido Domingo.

The other thing that makes you sexy is dancing ability. That’s why they call Tango “vertical sex.”

The Kennedys Ain't What They Used To Be

Nobody could say that the Kennedy political machine didn’t practice nepotism. Old Joe Kennedy would probably have made Gov. Blagojevich (D-IL) look like a piker if we’d known about his shenanigans. (Why do you think we use that Irish word to communicate the notion of dodgy political footwork?)

But at least Jack Kennedy actually ran and won races for the House, the Senate, and the Presidency. And at least Ted Kennedy ran for the Senate in 1962.

But now we have the latest Kennedy scion, Caroline Kennedy Schossberg, campaigning for an appointment to the US Senate.

How about the idea that this political novice should actually run for a political office before she works the system to get into the Senate by the back door?

Otherwise, who can complain about Sarah Palin, a woman without political connections, who has actually won three different political offices in open elections? Indeed, she won the governorship by running against the Republican political machine in Alaska.

Well, never mind. Democrats are Democrats, and Republicans are different, honey.

As the Brits used to say. Not really out of the top drawer, old chap.

Pushing on a String

At this stage of the business cycle pundits usually talk about the Fed pushing on a string. They mean that the Fed can’t actually make people start to borrow. All the Fed can do is print money and hope that economic activity starts to revive.

The usual response is that, of course, economic activity will revive; it always does. But until it does, who knows how long it will be before greed takes over from fear.

The worry is that the Fed is reaching the zone of “quantitative easing.” That was what the Bank of Japan used to do during the lost decade of the Japanese economy, after its big real estate boom left many of its banks insolvent and unwilling to lend.

Well, we solved that problem, didn’t we? We bailed out the banks by recapitalizing them. But do we know that the banks are out of the wood? After all, the banks depend on the quality of their assets, and that depends, in many cases, on the value of commercial and residential mortgages, and they depend on housing prices.

The Fed is working on that, according to the Wall Street Journal, and its action is already leading to a reduction in mortgage rates which will help to advance a revival in real-estate prices. But what’s really needed is not an increase in liquidity, but an increase in confidence.

Meanwhile, according to Larry Kudlow, the Obama team is planning a massive purchase of mortgage paper.

Team Obama is also drawing up plans for a massive purchase of mortgages in order to get long-term borrowing rates down to 4.5 percent — a full percentage-point drop.

But is that the prescription for recovery? What nobody seems to be suggesting is a tax rate cut, worries Kudlow.

But I still believe the best economic stimulus would be a move to cut tax rates across-the-board for individuals and businesses. No matter how much money the Fed prints, or how many roads or mortgages Uncle Sam buys, none of it creates new incentives for private enterprise, risk-taking, and investment.

Yes. It took Bush two years to get Congress to agree to tax rate cuts. And it looks like the same could happen with the firm of Obama, Reid, and Pelosi.

Were Talent-spotters Right on Obama?

Federal Appeal Court Judge and über-liberal Abner Mikva was an early patron of President-elect Obama, according to Tom Hundley. He “was among the first to spot the potential of the skinny young law school graduate with the odd name.”

"I use a Yiddish expression, yiddishe neshuma, to describe him," explains Mikva. "It means a Jewish soul. It’s an expression my mother used. It means a sensitive, sympathetic personality, someone who understands where you are coming from."

That’s cool, because there’s a national problem right in the cross-hairs of the national radar that needs just that sort of sensitive, sympathetic personality. It’s the Big Three auto mess. Michael Barone rather neatly describes how the mess came to be.

It all started with Taylorism, after the book on “the one best way” by Frederick Winslow Taylor. Taylor’s brilliant idea was to measure worker productivity with time and motion studies and implement the one best way as a mandatory procedure for all workers.

Only one problem, of course. It treats workers like machines rather than people. So it provoked its nemesis, the Wagner Act of 1935, that legislated an adversarial relationship between business and labor. It worked great, for a while, as auto workers and steel workers won themselves fabulous wages and benefits.

Everyone thought that the new unionism was a wonderful idea, in particular liberal writers like John Kenneth Galbraith who made a fortune peddling conventional wisdom to a generation of liberals by telling them that he and they were intelligent iconoclasts that soared above mere “conventional wisdom.”

Well, it wasn’t such a great idea. It wiped out the steel companies a generation ago, and now it’s brought the auto companies to the edge of ruin, and brought the current generation of autoworkers to the edge of humiliation.

If President-elect is the genius that his patrons believe then he will use his yiddishe neshuma to lead the autoworkers and their union and their jobs back from the precipice.

But my guess is that he won’t. My guess is that he’ll choke on the chance to get the auto companies to reorganize and write Finis on the era of Wagner Act unionism.

The sensible thing for liberals to do would be to start a strategic retreat on their welfare state and its privileges, to preserve as long as possible the unsustainable privileges and subsidies they have awarded themselves and their servitors. But I don’t think they will.

My guess is that in the next few years the liberals are going to get themeselves suckered into the political equivalent of the Battle of Kursk. That battle, you will recall, was the last big offensive of the German Army on the eastern front in World War II. It seemed like a good idea to the German generals in early 1943 but by the time that Germans actually started the offensive the Russians were ready for them. So the greatest tank battle ever fought ended in failure. The Russians began a counter-offensive that didn’t stop until it reached Berlin two years later.

After all, Barack Obama didn’t run for president to sort out the labor union problem. He ran to lower the oceans and cure the sick. Much more fun.

Brit Laborites Propose Welfare Reform

They said it wouldn’t work. They said that millions of children would starve.

That’s what the experts and the advocates said when President Clinton signed the US welfare reform bill 12 years ago.

They were wrong. All that has happened in the United States is that the welfare rolls have gone down and poverty rates have decreased.

Now the British Labour Party, champion of welfare and social programs, has announcd a welfare reform plan for Britain. It comes not before time, as Brits have been regaled recently by several welfare horror stories, including the killing of Baby P by Mum’s current boyfriend. Then there was the disappearance of Shannon Matthews. She was one of seven children out of single-parent Karen Matthews by several fathers. Little Shannon disappeared because her welfare mum (it’s Mum, not Mom, in Britland) figured to get £50,000 in reward money. So she staged her daughter’s disappearance.

Anyway, Labour minister James Purnell last week announced a welfare reform bill in Britain. Even the Labour Party has a limit when it comes to turning a blind eye to the catastrophe of the underclass.

This may be Labour’s reform plan but it is the Conservative Party in Britain that is setting the pace on social reform, writes Tim Montgomerie. He quotes Conservative Party leader David Cameron in a recent speech about children trapped in the culture of social breakdown.

Raised without manners, morals or a decent education, they’re caught up in the same destructive chain as their parents. It’s a chain that links unemployment, family breakdown, debt, drugs and crime. Breaking that chain means recognising the scale of the problem and taking serious, long-term action.

Lots of people have sneered at David Cameron. That’s because he presents himself as a new kind of Tory. But if you look at the substance that the Conservative Party is developing, including radical ideas on education and welfare, you see a party that is setting itself up as the party of real hope and real change.

In many respects, David Cameron’s Conservative party is timid but on social reform it is groundbreaking. The Tories understand that the only way of reducing the size of the state is to cut the demand for government services by strengthening civil society. They understand, finally, that the Left has lost the war on poverty. And they are rediscovering that conservatism is at its best when politicians support and never supplant the Burkean little platoons of family, voluntary organization, and local school

Sounds like US and UK conservatives are all on the same page.

Of course, the Conservatives are in opposition. All they can do is talk. But whatever they are saying, the Labour Party seems to be listening and anxious to co-opt their ideas.

Double Whammy Morning

Faced with the failure of the auto bailout in the United States Senate and the collapse of a $50 billion Ponzi scheme markets plumm... well, they seem to have shrugged. At noon, 12/12/2008, the Dow was down 95.02 points and the Nasdaq was up 5 points.

So that just shows you. It’s not the end of the world. Yet.

Most likely, as long as the financial system holds up—and LIBOR rates are down sharply in the last two days—we can deal with the auto meltdown just fine. That’s what the bankruptcy system is for. You declare Chapter 11, you wipe out the stockholders. You make the bondholders the new owners of the company. You wipe out the labor contracts. And you keep going with special bankruptcy loans.

But why then did we have to bail out the banks? The answer is simple. We can’t let the banks fail because they’d bring down the whole credit system with them. We did a nationwide experiment on that in the 1930s. Banks failed left and right, and depositors lost their life savings. It brought the United States to a standstill and a ten-year Great Depression.

Don’t think you’d like a repeat of that? Then bail out the banks.

That’s not to say that there aren’t lessons to be learned. Lesson One is: Don’t get leveraged up like that. Don’t get leveraged up on home mortgages, or credit default swaps, or government sponsored enterprises like Fannie Mae and Freddie Mac. But that’s a subject for beneficial legislation, if Congress is up for the job.

The interesting part, for me, with the bailout failure in the Senate is that Majority Leader Sen. Harry Reid (D-NV) now proposes to go home for the holidays. Oh really? Can’t be all that urgent, can it.

The murmur you hear is that the Dems did the whole bailout thing as payoff for the United Auto Workers support in the election. And the bailout package failed because eevil Republican senators wouldn’t sign onto a bailout bill unless the UAW bit the bullet on wages and accepted “parity” in 2009.

So the Dems took a dance on the floor with the partner what brung them. But, it looks like the agreement was one dance only. Now the partner could be on their own.

Unless President Bush rushes into the breach.

But Mr. President. It looks like the market has already discounted an auto industry failure. And it looks like it thinks that it’s not the end of the world. So why worry?

Yes. There are all those “high net-worth individuals” who got taken to the cleaners by an accused Ponzi scheme. Oh well.