A year late Mr President

Talk about a day late and a dollar short. Only now, two years after the political class knew that the recession was a big one, is the president coming up with business tax cuts. At least that is what is being predicted for the president's speech on Wednesday.

Apparently the president will propose $100 billion in business tax cuts including an R&D tax credit and $35 billion in small business tax cuts.

Frankly, Mr. President, the fact that you are coming up with this crowd-pleasing package now, within 60 days of an election, an election in which your party is expected to get clobbered, is a very good reason to vote against you.

You are telling us that only when you have been hit over the head with a 2 by 4 are you willing to propose a sensible, practical economic policy.

Look, I understand that politics is power. I understand that politicians don't give a damn about the economy except to the extent that it can deliver revenues to the government.

But the American people have a right to expect that, when they elect a president, he would be sensitive to the needs of the economy. We don't expect the president to be way out ahead of public opinion, but we do expect him to be right there in the center of conventional wisdom.

We believe it is outrageous when the president is just about the last person in America to realize that the way you stimulate the economy is with changes to the marginal costs that businesses must pay, i.e., taxes and government mandates.

And conventional wisdom has held for a while now that straight Keynesianism is not an appropriate response to a downturn in the economy. Why? Because Keynesian economics does not really comprehend that all business decisions are taken at the margin. It just sprays out money to political favored constituencies and hopes that everything will return to normal when the government runs out of spray money.

There's an old story, Mr. President, about killing the goose that lays the golden eggs. When we talk about the economy that means thinking about how government decisions affect businesses. If you raise income tax rates on high-income business owners, then the chances are that the business owners will have less money to expand their businesses. If you have high tax rates on corporate income then chances are that corporations will get over-leveraged and find themselves badly burned by an economic downturn.

Only now, Mr. President, after your economic policies have failed to restart the economy, only now with electoral disaster staring you in the face, are you proposing economic policies that are semi-oriented towards helping economic recovery.

I'd say, Mr. President, that when an administration bungles economic policy has badly as yours has done, that there is only one thing for the voters to do: throw the bums out.

But then, that's why I voted for you back in 2008. I figured that nothing would cure the voters of Democratic government faster than Democratic government.

As usual, I was wrong. I had no clue, no clue how fast the American voters would reject the people and the policies of the Democratic ruling class.

Now, about those entitlements, Mr. President.

Our Friendship vs. Their Resentment

After the success of the Glenn Beck Restoring Honor rally, some of our liberal friends are determined not to be outdone. Labor and religious leaders and the NAACP are organizing a rally on the National Mall for October 2.

"The AFL-CIO is determined that the Tea Party and its corporate backers are not going to get the final word,” said AFL-CIO executive vice president Arlene Holt Baker. "We will expect tens of thousands of union families to come." "We are fueled by hope and not hate," Holt Baker said.

I have a suggestion for the labor and religious leaders and the NAACP. Don't.

If you chaps mount a rally it will show up a profound difference between the goal and the vision of the Beck folks and the goals and vision of you lefty chaps.

The difference that will come out for all to see is the difference between friendship, not to mention faith, hope and charity, and the resentment that powers the left.

The mainstream of western thought owes much to the commonplace assertion of Aristotle, that we are social animals. The notion of human sociability suggests the idea that we should resolve our differences in a spirit of friendly negotiation rather than by force.

That was the point of the Restoring Honor rally. It was a friendly gathering. In fact the folks that attended spent a lot of the time friending each other on Facebook. A young black woman at the rally told the media not to call her an African American, but an American. "These are my family," she asserted, echoing the words of an older black man who testified to the media back in the spring.

The speakers at the Beck rally also emphasized the Christian values of faith, hope, and charity, not to mention the notion of the providential God that is shared by both Christians and Jews.

They did not mention specific goodies they wanted in recompense for past injustice.

Living under a providential God, or blessed to live in the culture of American exceptionalism, we Americans discover a responsibility to deserve the providential love of God. So the rally speakers emphasized that the future begins with us, with our dedication to responsibility, friendship, kindness.

But the left believes in a culture of resentment, a resentment nurtured in the minds of helpless victims cheated of their rightful place in the world by oppressors and exploiters.

There is, of course, plenty of injustice in the world, and resentment is a natural sentiment that all of us experience. We resent the friend that got into Harvard when we didn't, the co-worker that gets a promotion that we didn't, the guy that got the girl that we didn't. Resentment shows up in the seven deadly sins as envy, only resentment is envy on steroids.

You want to watch that envy, because, according to Roger Scruton in A Political Philosophy resentment is the emotion that leads to totalitarianism.

I see [resentment] as an emotion that arises in all societies, being a natural offshoot of the competition for advantage. Totalitarian ideologies are adopted because they rationalize resentment, and also unite the resentful around a common cause. Totalitarian systems arise when the resentful, having seized power, proceed to abolish the institutions that have conferred power on others, institutions like law, property and religion which create hierarchies, authorities and privileges, and which enable individuals to assert sovereignty over their own lives.

Once the resentful acquire power they reduce everything to pure power, and "dispense with mediating institutions"; individual rights are replaced by central control. We have seen how this works. Central control everywhere seems to mean bureaucracy.

Converted into a "centralized power structure" society becomes transformed into an army. An army is, after all, a centralized power structure for projecting power on neighboring territories.

But in the totalitarian power structure the power is directed inside the territory, at groups targeted for punishment. These targeted groups become the replacement for the ancient scapegoat in which tribal societies purged themselves of the wrath of the gods.

The Jacobins targeted the aristocrats and then "emigrés." The Soviets targeted the bourgeoisie and then "kulaks." The Nazis targeted the Jews. Sen. Joseph McCarthy (R-WI) targeted Communists.

Our liberal friends, unfortunately, have too often toyed with this inflammatory material. They used to target the malefactors of great wealth. Then it was the big corporations. Then it was the racist South. It used to be the religious right, but now it is the Tea Party activists, who are stigmatized and marginalized as racists, bigots, sexists, and homophobes.

It is, of course, laughable to turn the Tea Party into the liberal scapegoat-du-jour. These chaps haven't done anything yet except go to rallies and pitch out a couple of Republican senators.

But there is a bigger issue in the resentment/scapegoat dynamic. In its original form, the scapegoat was the king. It had to be. It must be the king who must be sacrificed to propitiate the gods. That should be obvious. The king is the representative of the tribe or nation. If something has gone wrong, then he should take the blame. To sacrifice a lesser person is an insult to the gods, and would provoke the gods to greater wrath.

The scapegoat concept is understood in the corporate and military shibboleth that, when things go well you say that your team were the ones that made it possible. When things go wrong, then you, the leader, take the blame.

President Bush understood this. He understood that he had to be the national scapegoat for the unpopular war against terror. He bowed his head and took it like a man--like a mensch, you might say.

But liberals don't understand this. That is why they are going ahead with their October 2 rally, which will doubtless be a display of liberal resentment. Of course, Jim Wallis, liberal evangelical, insists that it will all be sweetness and light. "[W]e must move this country forward beyond divisiveness and hate, to rebuild and reclaim our destiny," he says.

But then why does organizer Holt Baker talk about the "Tea Party and its corporate backers?" Corporate backers? He means, one assumes, the libertarian billionaire Koch brothers and the Scaife family that fund groups like Americans for Prosperity and FreedomWorks.

My advice to liberals is to put money into keeping as many of your senators and representatives in the game as possible. make sure that your troops are properly led and execute on a good strategic retreat.

But don't try to pretend that you can turn out a grass-roots movement this fall that can rival the Tea Party.

Because if you showcase your political philosophy of resentment up against the Beck philosophy of Restoring Honor you guys are going to look like the sore losers.

The Jobless Recovery

So here we are at Labor Day and there's been an uptick in employment. Which is good.

Yes, I know that the unemployment rate ticked upwards from 9.5 to 9.6 percent, but that's normal in the early part of a recovery as people who have given up looking for work return to the labor force. You have to be "looking" to be counted in the labor force.

Actual employment went up.

According to the Labor Department Household Survey civilian employment went up from 138.96 million 139.25 million. That's a tad under 300,000.

But these charts tell you the real problem. Here's the civilian labor force since 2006.

And here's the civilian employment.

I reckon that's what you call a jobless recovery. Of course Democrats were all over President Bush back in the mid 2000s when unemployment was 6 percent. So I suppose turnabout is fair play.

But the charts do show what a dog's breakfast President Obama has made over economic policy. We don't need ObamaCare. We don't need stimulus programs to save the jobs of teachers. We don't need higher energy prices. We need lower taxes on business so that business owners can have the confidence to grow and hire more workers. We need to get that number of the employed from just under 140 million and crank it up to 145 million. Pronto.

Any ideas, Mr. President?

Next Year's Agenda

Some people are getting impatient. They are asking why the Republican Party doesn't have a party position for the mid-terms. Other people are looking forward already to a Republican Congress. They are asking how the Republicans should avoid the mistakes of 1995.

I think the critical thing is to tell the truth and shame the devil. That's Shakespeare, by the way.

For the Fall election it is critical for Republicans to promise what they really intend to do come January. It's not hard to come up with a doable agenda: continue the Bush tax rates and lower corporate income tax rates; repeal ObamaCare and start over on a non-bureaucratic approach to health care; cut wasteful spending.

The American people are not yet ready to cut entitlements. They need to see the entitlements system broken before they will agree to that. But there's plenty of other stuff to work on. There is the utter waste of government money in education, for starters. Then there is green energy, that is crony capitalism from start to finish. Then there is the fabulous ethanol program. There are tons of things that can be cut at the margin as governors like Mitch Daniels and Chris Christie have shown.

After the elections, whatever the result, President Obama will have to start working with Republicans. No more "I won," or telling people to shut up while he fixes things that Bush broke. Republicans should start working with the president, or at least urgently saying to the media that they need to get together with the president and solve the nation's problems.

The people have spoken, Republicans should say. But the president is still the president, and we are all Americans. We should work together. What the people have told us is that they don't like bailouts, they don't like stimulus, they don't like ObamaCare, and they don't like earmarks. So let's get together, Mr. President, let's clean up the nation's capital as you promised in 2008 and get about the people's business.

Personally, I feel that President Obama is no Bill Clinton, and that he just doesn't have the talent or the temperament or the experience to do a good job negotiating on the issue-by-issue process of day-to-day government. I think he's a guy that likes to say: call me in when it's time to call the big shots.

But the Republicans must treat the president as the president. If he won't deal straight--and I don't think he will--then they need to go to the media and the talk-show hosts and tell them about it.

But Republicans must start out in September with a clear and honest agenda, and then continue in January saying: let's get together Mr. President and let's work together for the American people.

2010 Isn't 1994, etc.

People in the political world like to sneer at generals for "fighting the last war." So what is all the talk of 1994, and the worrying about a Republican Congress overreaching in 2011 in a reprise of 1995?

As Ronald Reagan said: to say that Congress spends money like a drunken sailor is an insult to drunken sailors. And the re-fighting the wars of 1994 and 1995 is an insult to generals.

The only thing we know is that 2010 won't be a replay of 1994 and that 2011 won't be a replay of 1995. However, like any general that has studied recent wars, it certainly doesn't hurt for us to recall the lessons of 1994 and 1995.

First of all, 1995 may have been a tactical defeat for Republicans in that President Clinton "won" the government shutdown. But in the medium term Republicans actually did reduce the rate of increase in spending. The problem for Republicans was not 1995, it was 1998. That was the year when the budget went into surplus and President Clinton started saying telling Americans that, yes he could cut taxes and return money to the taxpayers but then maybe the taxpayers would waste it. That was voters started to think that we could relax the purse strings a little.

That sentiment gave us the 2000s and a Republican Congress that gorged itself on earmarks.

Anyway, all the talk about debt and deficits and bailouts rather misses the point. The whole key to the federal spending problem is, #1 Medicare, #2 Medicaid, and #3 Social Security. That's where the money is.

The Medicare problem is simple. Affluent middle-class seniors (like me) will have to pay full freight on health care. It is simply unjust for people with money (i.e., older people with savings) to tax the hides out of 30 somethings much less wealthy than they are. The fact is that most middle-class seniors can afford to pay for our own health care. And we should.

Of course, that might mean that a lot of seniors won't be able to afford to become snowbirds and winter down south.

When we affluent seniors start to pay full-freight on our health care we will start to find ways to economize on health care. We will revolutionize health care and all of a sudden health care costs will stop their exponential rise into the stratosphere.

Once the Medicare problem is solved, then Medicaid will follow. Don't know how, but it will. The American people will demand it.

Social Security? You can fix Social Security with a financial coup de main. For instance, you can capitalize current benefits by awarding Social Security beneficiaries special Treasury bonds that pay off Social Security benefits and then privatize the whole thing. Again, it's a matter of justice. People in their fifites and sixties should save, big time, for their retirement. And guess what: our savings will go to create the jobs for the 30 somethings. As is should be.

When will middle-class seniors be ready to pay full freight on health care? When Medicare is completely broken. And that won't be in 2011.

So Republicans won't be doing a grand reform on entitlements in 2011. But Republicans can start the ball rolling by offering, e.g., a New Medicare that offers a fixed subsidy that you can apply to your own health insurance plan.

One thing is for sure. We are living in interesting times.

Stimulus and Confidence

The big question in economic crises is Confidence. When the stock market is going south and banks are going broke and everyone is worrying about a "double dip" they are looking for the magic bullet that will turn the whole thing around and restore Confidence.

In the liberal world-view, you restore Confidence with a stimulus program that keeps money in consumers' pockets and gives them Confidence in the economy's future.

In the conservative world-view, you restore Confidence with tax cuts that give businessmen Confidence that the future will allow them to make profitable investments and keep a good chunk of what they make.

James Glassman has a useful analysis of the current crisis of Confidence in "The Failure of the Liberal Economic Experiment?" in Commentary.

He argues that the stimulus hasn't worked because people are looking past the stimulus to the higher taxes and spending and heavier regulation that the Obama administration has so diligently been working on for the last 18 months.

If government spending is short-term or one-time-only, which is what the stimulus was supposed to be, then individuals might be expected to take a more benign view. But the 2009 stimulus did not take place in a vacuum. It was soon accompanied by other economic policies and proposals of the Obama administration and the Democratic Congress: health-care reform extending public coverage to 30 million new people, cap-and-trade energy proposals featuring vastly higher taxes, and the imminent expiration of the Bush tax cuts at the end of 2010.

American business leaders and consumers are not fools. They can see what is coming. They see that the Confidence-building stimulus was a bridge to nowhere.

Americans judged that the party in power intends the radical expansion of the size of government in perpetuity. That expansion will have to be paid for. There is no reason to expect very much good from the future if you are the sort of person who generates income and creates jobs. Your “permanent income” is going to decline, and your gut response will be to husband your resources.

Democrats have had this coming to them for a long time. They were lucky in the 1937-38 downturn resulting from increased taxes and higher union wages rates that World War II came along before they got pitched out on their ears. They were lucky in 1965-68 when their inflationary economic policies were drowned out by the Vietnam War. They were lucky in 1994 when Republicans gained control of Congress and reduced spending. They were lucky that the crazed credit subsidies at Fannie and Freddie crashed on Bush's watch.

But it is starting to look as if the American people are going to blame the Democrats for the current lack of progress on the economy. It is starting to look as if their luck is running out.

My guess is that the only thing President Obama needs to do to save his presidency is to extend the Bush tax cuts and lower corporate income tax in stages to 20 percent. Because that will restore Confidence in the future.

My guess is that he won't do it.

Glenn Beck's Girl Conservatism

Suppose you are a liberal, and here you are on Monday morning after the Beck Restoring Honor rally. What are you to think? What does it all mean?

You go read Ross Douthat in The New York Times and he isn't really that helpful. OK, he says, he underestimated Glenn Beck. But it's not really such a big deal:

Beck’s packed, three-hour jamboree was floated entirely on patriotism and piety, with no “get thee to a voting booth” message. It blessed a particular way of life without burdening that blessing with the compromises of a campaign, or the disillusioning work of governance.

For a weekend, at least, Beck proved that he can conjure the thrill of a culture war without the costs of combat, and the solidarity of identity politics without any actual politics. If his influence outlasts the current election cycle, this will be the secret of his success.

OK. Here's a quickie analysis for liberals, so you chaps can figure it out.

Glenn Beck is selling girl conservatism.

Rush Limbaugh is selling boy conservatism.

That's it. That's all you need to know. Now go back to NPR. The rest of you, Stay tuned.

I once read a critic of Rush Limbaugh who lightly sneered at his "jaunty optimism." That's it, I thought! That's exactly the secret of Rush Limbaugh: his day in, day out, irrepressible jaunty optimism. It's a profoundly male thing, of course. When men are under stress, whether they are an army platoon in a tough spot or working in a business that is teetering on the edge of failure, the response is to maintain a front of jaunty optimism, to say to your brothers that things are looking up, we'll get through to the end of this, and then we'll lift our arms with a brewski.

Glenn Beck is different. He is all emotion, all twelve step recovery, all history lessons, all revival. This morning, I caught a couple of minutes of the Glenn Beck Radio Program, and it featured women calling in about Good Samaritan episodes that they experienced at the Restoring Honor Rally. Guess what: that's girl stuff.

So we have Rush Limbaugh servicing the boy side of conservatism, about "being the best you can be," about laughing in the face of adversity. We have Glenn Beck servicing the girl side of conservatism, dishing up morally uplifting stories, rolling his eyes and rolling out the blackboard for a lesson on conservatism. Women love that stuff.

So if I were a liberal, trotting off to my non-profit sinecure this morning with a vague feeling of unease, I'd realize that things were really a lot worse than I thought. Because conservatives now have a one-two punch communicating daily to the 40 percent of Americans that call themselves conservatives. Men and women.

P.S. How about that black woman at the rally that said: "I am not an African. I'm an American!... These people are my family."