Politcal Power and Money Power

One of the themes of the Democratic Party since its founding by 1812 war hero Andrew Jackson is a trust in political power over economic power. It means nothing to a Democrat to ride roughshod over property rights in the service of some greater end than mere money-making.

The trouble is that there is a big difference between political power and economic power.

Political power is all about power. Economic power is a reward for service. Unless a business learns to serve the consumer it cannot wield economic power. Its economic power lasts so long as it serves the consumer.

It is when business gets enmeshed in politics that its troubles begin. Because politics is not about serving the consumer, day in and day out. Politics is about power.

The auto companies are a sad witness to the destructiveness of political power, for the auto companies are host to a political entity, the United Auto Workers union. And the union has systemically looted the auto companies for over half a century ever since World War II. And they have done it with the encouragement of Democratic politicians.

Today the auto companies are bankrupt. So what does the Democratic Party do, led by President Obama? It straight-arms the secured creditors and gives a large minority interest in the company to the United Auto Workers union.

Rich Galen pointedly asks how this is different from the expropriation of oil service companies by President Chavez of Venezuela.

The "state firm says lower oil prices mean the contractors are being paid too much" so Chavez went for efficiency and simply seized the services companies and now the state-owned oil company owes them … nothing.

Well. It is certainly politically efficient to dodge paying the piper. But as the Fram oil filter guy says: You can pay me now or you can pay me later.

The problem with political control of the economy is that politicians and their aides know nothing about running successful companies.

That is why Fannie and Freddie were such a disaster; they were run by men and women from the Clinton administration that knew nothing about mortgage banking. But they did know a lot about lobbying Congress.

That is why the oil industry in Venezuela is a disaster. It is run by Chavez appointees, men who may be brilliant at political activism. But they are lousy at getting the heavy oil of Venezuela out of the ground and off to market.

The tragedy of expropriation politics is that the very people who cheer at the expropriation of the hated capitalists are the people that suffer first when the capitalists lose confidence and the economy tanks.

And that is what will happen to the US as the Obama administration continues its random walk through the economy making decisions based on short-term political expediency instead of long-term consumer needs.

Conservatives and Young People

What hope do conservatives have, given that young people voted overwhelmingly for Barack Obama? After all, the youth is the future, and if they reject conservative ideas for liberal ideas, well...

That is what Hugh Hewitt is worrying about, and he asked Mark Roberts from Christian Biola University to write about it. Writes Roberts:

Losing the youth vote year after year is a sign of approaching party senility.

Then Roberts goes on to propose development of "middle-brow" institutions that can speak to young people.

We either need to be part of or fund the equivalent of middlebrow institutions such NPR and public television to discuss the entire culture from a conservative point of view. A political movement in a republic cannot be healthy if it loses the class of people who are not professional intellectuals, but who care deeply about the life of the mind. Such folk will produce much of the popular entertainments consumed by the rest of us.

Yes, but who's that "we?" And don't we need the young people themselves to develop the middle-brow institutions?

Actually, the miracle is that any conservative ideas get a hearing and any conservative politician gets elected. Given that the left controls the schools and the media your average young person would be a force of nature to get through twelve years of schooling without internalizing the lefty world-view.

In the current situation, conservatives are stuck with a raiding strategy. We can only swoop down and conquer when the liberal agenda has failed. That's how Ronald Reagan got elected. In 1980 it was pretty obvious that something was wrong. When Ronald Reagan came up with a solution that seemed to work, he got the votes of young people.

Here in the United States we've had a cultural drumbeat for the last ten years against conservatives as mean-spirited and narrow-minded. Bush Derangement Syndrome amplified anti-conservative rhetoric up to a level that could damage people's hearing.

And of course, young people are receptive to anti-authority rhetoric. Always have been.

But don't forget that right now the Dems are in control, in the White House and in the Congress. So if you are a real anti-authority figure, you'll be anti-Obama and anti-Pelosi, right? I dare say that we'll see a lot of conservative entertainment media seeping up through the cracks, now that video is so cheap to produce, and now that the official hypocrisy is all liberal.

The other big problem for conservatives is the schools. As long as the schools are government schools they will be trying to turn out graduates that love big government. The solution here is to educate children away from the schools.

The more I think about it the more obvious it is that the purpose of the education system is to raise nice dutiful little liberals who will take their place either as elite transgressive creative artists or as bureaucratic placemen and women in the administrative state.

But conservatives want to raise children who are courageous and adventurous. Obviously you can't raise such children if they are stuck in school for twelve years sitting on their butts watching environmental agitprop like Al Gore's Inconvenient Truth.

It is pretty obvious. Adventurous adults need to be raised to adventure while they are still children. They need to be self-directed. They need to have a healthy attitude towards risk. They need to be trained in the four aspects of competence: knowledge, skill, experience, judgment.

There's no need for conservatives to worry about becoming irrelevant. What we need to do is have the courage of our convictions and live our lives as a demonstration of our convictions.

Here's a prediction. If conservatives have the courage of gtheir convictions and make their lives into a witness to their convictions there will be a consequence. Young people will notice.

Barack von Schlieffen

There are reports this week about the secret plan for health-care reform. Bill writers are apparently not leaking as they beaver away to produce a plan that will utterly transform health care in America as we know it.

And that is saying nothing about the grand plan to transform energy production and use with the Obama administration's cap-and-trade plan.

For those of us with a little historical memory there is something eerily familiar about all this. But what is it?

The "It" is, of course, the Schlieffen Plan. It was the audacious plan of the Great German General Staff to take out France in six weeks with a stunning right hook through Belgium so that they could turn their armies eastward and deal with the Russians.

In the event, in 1914, they muffed it.

The question that General von Schlieffen did not ask is: What do you do with a defeated France and a defeated Russia after you are done whipping them? The Germans had already beaten France in 1870 and then stood around embarrassed for nearly a year while the French refused to capitulate.

In fact the Schlieffen Plan was an admission of failure, that Germany had weakened itself by becoming the strongest nation in Europe. If the Germans had merely taught France a short, sharp lesson in 1870 they could have gone home and returned to being merely the most advanced nation in the world, with the best philosophers, the best composers, the best scientists, and the best engineers, and the best universities.

Our liberal friends have a word for this deemphasis of "hard" military and political power. They call it "soft power." So then why are they not following their own advice and going slowly on their plans for health care reform and energy reform?

Because they must sense that time is running out on their project. They feel that strange and awful forces are gathering to plot their downfall. And they are right. Here are a few markers:

• The vast administrative apparatus they have built up in health care, in education, and in welfare is starting to crack. Designed over a century ago, it just doesn't do the job in the 21st century. Major reform is needed, but liberals can't allow reform because they might lose power.
  
• The liberal hegemony over the business and financial sector is a failure. Remember, all this regulation of business and government central banking was put together because you couldn't trust businessmen like Rockefeller and bankers like Morgan with the power to make or break the nation. But the recent credit crack-up demonstrates that the political hacks in charge of the financial system are clueless and the banking welfare queens that government financial welfare has created are as mindless and irresponsible as the underclass clients of the social workers.
  
• Liberal hegemony over the culture is a failure. Liberals are unmasked. In their personal lives they just want to fritter themselves away on projects of "creativity" while abandoning the real work of creating families and children. There is a simple word for a culture like this: Dead end.
  

So it makes complete sense that the Obama administration is executing the political equivalent of the famous Schlieffen Plan with its audacious left hook through health care and energy. The Obamunists sense that their liberal hour is coming to a close. It's now or never for them.

But liberals should remember what happened to Germany after its desperate effort to break out of its encirclement. It led to the utter defeat and humiliation of Germany, because the whole world ganged up to defeat the Bloody Hun.

Tea Parties: Astroturf or Sown by the Wind?

Our Democratic friends were very quick to brush off the Tea Party movement as "astroturf," which is liberal-speak for a movement that pretends to be grass-roots but is instead manipulated by string pullers from on high.

Liberal Harvard professor Theda Skocpol has written about this in Diminshed Democracy. She finds that the US used to have lots of membership associations that were represented by an elite cadre in Washington. Today’s activist groups, especially on the liberal side, are typically cadre with few members.

But it’s pretty clear that the Tea Party movement is not a fake movement pretending to be grass roots, like, e.g., ACORN. Here’s an article in the Wausau Daily Herald by Meg Ellefson, organizer of a Tea Party in Wausau, Wisconsin. She makes it all perfectly clear.

I organized the Wausau Tea Party in about two weeks, with donated goods and services from individuals and small business owners... I’m just a regular mom who lives in Rib Mountain, who is fed up with our government and motivated to plan a tea party. I am not involved in Wisconsin politics, nor have I ever been affiliated with any candidate’s campaign in Wisconsin.

Ellefson was pretty clear about her concerns:

Wisconsin tax payers are fed up with government’s out-of-control spending and excessive taxation without representation.

This spring our Democratic friends are clearly engaged upon a massive dash to implement their agenda before anyone can wake up and oppose it. Hugh Hewitt today writes about the secret talks to develop the Democratic health reform plan.

I have the feeling that the Democrats are making a strategic mistake. The rush to push things through and make them a fait accompli before opposition can develop is telling. It tells us that they know that their ideas are really not popular.

Maybe their strategy is right. Maybe they can cram their agenda down our throats, and keep it there. But maybe they will provoke instead a movement of rejection that will change the face of politics in America.

"Obama is Overwhelmed"

If you read Solzhenitzyn’s August 1917 you will recall his description of the Russian commander on the front with Germany. He was in a daze, confused and demoralized by the blizzard of incoming information.

That’s why it takes a couple of years in any war to sort out the good generals from the bad ones. It’s a question of temperament. Men who were sitting comfortably in a cradle-to-grave bureaucracy are suddenly called upon to make life-and-death decisions every hour. Most of them can’t make the transition. They get overwhelmed by the confusion and the uncertainty, the “fog” of war.

Right now, I’m right in the middle of reading General Grant’s Personal Memoirs and we are just coming up on the capture of Vicksburg. It’s interesting to read a man who had the temperament to be a general. The critical thing that Grant can do is form a mental picture of the correlation of forces. He can tell what’s a threat and what is not. And he’s good at confusing the enemy. For instance, he sends General Sherman off on a feint up the Yazoo River to the north of Vicksburg before rafting his troops downstream to the south of Vicksburg. He notes that he later found out that the feint caused all kinds of heartburn to the Confederate defenders of Vicksburg.

So when we read that "Obama is overwhelmed," we knuckledraggers who read a bit of military history say: Oh ho. I’ve heard that one before.

The fact is that after the election Obama and his team had a choice. They could continue on Plan A, the plan to ratchet up government spending in health care, in education, and global warming response. Or they could say: Whoa, Neddy. They could say: Whatever we may have wanted to do if we had our druthers, we don’t. It’s Plan B time. And the Obama administration won’t add up to a bucket of warm spit if we don’t fix the credit system. Now.

But they didn’t. They were inexperienced and lacked a strategic vision of what is important and what is just noise.

Actually, that’s true not just of Obama and his team but of most Democrats and liberals.

The important stuff for government to do is the guy stuff, securing the nation against enemies foreign and domestic. All the other stuff that government does is fluff. Mostly, especially in health care, in education, in welfare, and in pensions, it is doing stuff that people ought to be doing for themselves.

But liberals and Democrats get this upside down. They believe that the Nanny State stuff is the important stuff: the mothering on health care, education, and affordable housing. Then they regard defense as imperialism, and policing as domestic oppression.

Sooner or later, when you get things completely upside down, reality catches up with you.

No wonder President Obama is overwhelmed. He’s got his world-view wrong and, in consequence, he’s got his priorities wrong too. The trouble is that the world won’t wait for him to figure it all out.

So the American people will have to pay for his education. And there’s no guarantee that, at the end of his crash course in reality, he will “get it.”

Dems' Luck Running Out?

How lucky are the Democrats? They came into power in 1933 after a Republican president had been screwing up the economy for 3.5 years. They came into power in 1961 after President Eisenhower had paid down the WWII debt, so they could open the spigots for a decade of fun and frolic.

They came into power in 1976 just after the end of a nasty recession. They came into power in 1993 just after a mild recession.

But this time the Dems are coming into power at the beginning of a nasty recession.

Maybe their luck is running out. Because today government leaders need to make some difficult decisions to revive the economy. It’s not First and Ten. It’s Third and Long.

The political parties are, realistically, one-trick ponies. The Republicans always want to cut spending and taxes, and are looking over their shoulder wondering how much in the way of spending cuts the American people will tolerate.

The Democrats always believe in more spending. Whether it’s 1933 or 1993, it’s time for a stimulus.

But maybe not now. You see, the governments in the US have been cranking up spending on “nice-to-have” pretty well uninterrupted since the Reagan Cuts of 1981. There really isn’t anyone around that was there when cutting was the order of the day. And Democrats have never had to do the serious work of political triage: which lovely spending programs do I cut and which do I save?

It seems to me that the markets are telling us that the Spend Yesterday, Spend Now, Spend Tomorrow philosophy of the Democrats as manifested in the bloated budget of President Obama is wrong. The time has come for retrenchment, and the sooner the better.

Democrats don’t want to hear that. The present Obama generation has never had to hear it. For Democrats, the answer to every problem is to increase spending.

I suspect that things are going to have to get a lot worse before our Democratic friends will realize that they must change course and abandon their present policy of increased spending and bailouts.

Because sooner or later, we are going to have to get the business owners of America more money so they can earn enough profit to expand their businesses and start hiring.

Sooner or later, our Democratic friends are going to have to learn that tossing money away on political pet projects from new government buildings to more health care to more education to alternative-energy subsidies just doesn’t cut it.

The fact is that government is a cost. RIght now, the government is an enormous cost. The time has come to reduce that enormous burden on the backs of the American people. Then the economy can catch its breath and get moving again.

I just hope that the American people don’t have to suffer too much while our Democratic friends learn this vital lesson.

Let's Get Serious Mr. President

Now that the president’s budget has been out for about a week, it is time to reach a judgment upon it. What can we say now about the course that President Obama has set for the federal government and, by extension, all the governments of the United States?

I think it is becoming clear. The Obama administration’s budget is an error of strategic proportions.

The Democrats ran in 2008 on a platform that proposed to give government a bigger slice of the Bush prosperity. We had the money for extra health care programs. We had the money for pre-K schooling. We needed to spend big money to revolutionize the energy economy to meet the challenge of global warming. Nobody was thinking about a big financial crisis.

(President Bush probably was. Else why would he nominate Ben Bernanke, an expert on the Great Depression, as Chairman of the Federal Reserve Board, and Hank Paulson, Mr. Big from Wall Street, as Treasury Secretary?)

Anyone with half a brain understands that the status quo of 2007-08 has been smashed to smithereens. We are not going to be thinking about nice-to-have social programs in the next few years. We are not going to be whacking away on the oil companies and the coal companies as we bring in beautiful solar farms and wind farms.

No. Anyone with half a brain understands that we are going to be putting the economy back together in the aftermath of the biggest financial hurricane in living memory.

But the president’s budget doesn’t really adjust its spending plans to this reality. His budget shows that it was developed by campaign staffers back in the middle of 2008 before the crash in September when Lehman Brothers went under.

Right now what is needed is to go through all government budgets with a meat axe. What is needed is to release resources being wasted on low-value government programs and to redirect them to more valuable uses in the private economy.

But the Obama administration with its willing accomplices in Congress have just enacted a vast increase in government spending on stupid stuff that doesn’t deliver value to the bottom line.

Right now what is needed is to give substantial marginal tax-rate relief to America’s business leaders—and I mean to the people earning between $250,000 and $1,000,000 per year, the people who run America’s small-to-medium-sized businesses—so that they can improve their cash flow enough to start hiring again.

But the Obama administration is planning big tax increases on America’s business leaders.

How do you spell R-E-A-L-L-Y D-U-M-B?

There is still time for the Obama administration to get it right. But time is running out.

But then there’s this:

• Today I read an article saying that Treasury SecretaryTim Geithner looks like a student pilot trying to fly an F-18.
• And they say that none of the under-secretaries at Treasury have even been nominated yet.

Yes, Mr. President. What exactly is the status of your grand plan to fix the banks and end the financial crisis?