A Jobless Recovery

The news that unemployment dropped to 9.0 percent last month is actually terrible news--for America and for the Obama administration. It means that the economy, now in a mild recovery for the last two years, still hasn't started to generate new jobs.

Back in the early days of the recovery in 2002 and 2003 after the tech bubble recession, Democrats like Nancy Pelosi would howl about the "jobless recovery." Now it's the Republicans' turn to howl, and Rush Limbaugh, for one, isn't slow to do so. You can see the situation from these two charts. The first one shows the US labor force for the last ten years.

It shows that the labor force is flat, continuing the flatness of the past three years. The second chart is total US employment for the last then years.

This shows the staggering bloodletting in the Great Recession. It shows we are still down nine million jobs from the peak of the economic cycle in 2006-07. It shows that the Democratic whining about a jobless recovery 8 years ago was ridiculous. In 2003 the labor force was climbing strongly, as people came into the labor force, and employment was climbing moderately. Contrast that with the current recovery, in which the labor force is flat, and the employment gain is also flat, and down nine million from four years ago.

Of course, conservatives have a simple explanation of the jobless recovery. President Obama and the Democrats thought, back in 2009, that all they had to do was pass a stimulus bill and jobs would magically appear. That's what Keynesian economics told them and that's what their tame economists told them.

Unfortunately, Keynesian economics is baloney. The government needs to keep its hands off the economy. It needs to promote a healthy credit market, which it has not done for the last century. And it needs to promote a healthy business climate, which it has not done from the start of the Obama administration.

If there is a good thing about all this, it may be that the overall losses to Democratic power in 2010 and 2012 will be so severe and so shocking that Democrats will abandon their inflationism, their interference in the credit markets, and their faith in Keynesian economics and come, grudgingly, to accept Reaganomics. But don't hold your breath.

Liberals Administering Prosperity

President Obama talked a Reaganesque line in his State of the Union speech about business and innovation. Here's his paean to business.

Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS. Just think of all the good jobs -- from manufacturing to retail -- that have come from these breakthroughs.

Notice the "but". But government needs to step in to fund basic research, to plant the seeds of the internet.

Here's where our liberal friends smuggle their statism in the back door.

The internet, Mr. President, was invented through DARPA research because the Pentagon thought that the government needed a communications network that could survive interruption in nuclear war. In other words, the government invented the internet for reasons of defense. The government paid for semiconductor research because it needed lightweight electronics for ballistic missile guidance. In other words, the government was looking after its own needs, and its core responsibility of defense.

But this is an imperfect world. Politicians and experts aren't satisfied by the mundane tasks of defense. They want to save the world. That's how we get from defense research to climate-change research. But saving the world is not a government task. Saving the world is a religious task. It's the job of people with a moral mission, not a defense mission. Moral missions, of course, are much more fun. You can divide the world into the good guys and the bad guys, and you can lead a moral crusade against the bad guys. But never mind about that. Government doesn't just want to lead people on moral crusades; it wants to feed every child and put two cars in every garage.

The big problem, in other words, is mission creep. And when government gets into mission creep in the economic sector it starts building technological and economic white elephants. Mission creep leads to waste and corruption and to crony capitalism. Government doesn't make people more prosperous. It just gives money to its supporters, and stiffs the rest.

This really isn't hard. Government should stick to its basic functions and people in political life should stick to the dull and dutiful job of defending society from enemies that want to kill us or defraud us. The fun job of saving the world should be left to moral leaders. And the hands-on job of innovation and making new products should be left to businessmen, scientists, engineers, marketers, designers, salespeople, and investors.

When government tries to get into the business of innovation and basic research not related to its core functions, it makes a mess. That's because government is force, politics is power. Business is different. Business is about imagining and then creating products and services. Business is about listening to consumers and responding to their every whim. Leave business to business, and concentrate on applying force on them when they do something criminal. Otherwise, leave them alone, and above all, don't tempt them into crony capitalism.

Free Speech. Yes, But How?

Radio host Dennis Prager reminds us just how unfree we are when it comes to free speech. In America, you don't say anything that might offend left-wing ears, because it can get you into trouble.

In the past generation, the left has controlled so much speech and behavior that these controls are now assumed to be a normal part of life.

There's the telling point: "a normal part of life." And frankly, if you are a corporate exec, or an employee in a medium-to-large corporation, it would be disloyal to your employer to breach the left-wing speech codes. You might be willing to get yourself in trouble, but that is not the end of the story. For sure, your local HR department will be all over you like a cheap suit if you say the wrong thing. But your frankness can get your employer in trouble. And the fact is that most of us, the 80 percent of Americans who are not liberal, don't feel that our employer has it coming. We know how hard it is to create a profitable company, and we know how hard it is to keep a company profitable. So we really don't want to do anything that could harm our employer and get him in trouble with the PC police.

But the fact is that you can't say "Merry Christmas"; you can't talk about "innate differences between men and women"; you can't talk about black violence; you can't criticize homosexuality. It gets down to the bizarre. Apparently they are now Photoshopping out cigars from Churchill photos and cigarettes from FDR photos and Beatles photos.

What's to be done? Writes Prager:

If you love liberty, you must target the left and put its totalitarian tendencies in your cross hairs. We must shoot down political correctness and wage a crusade for truth and liberty.

That means that nice people have to get a little nasty. When you are around your liberal friends you have to short out the censor, and talk as if men and women are different, Christianity is a good thing, homosexuality is problematic, blacks have bought themselves a problem by living on the liberal plantation. And so on.

If you don't have the courage to violate the liberal speech codes you can try irony and code words. Just a couple of days ago, I exchanged greetings with an older couple, and we commented on the snow storms up north. "Global warming," I said. "Climate chaos" came the replay.

My own strategy is to turn the left's words against them, using their slogans to mean something different. And I always make it a point to talk about "girl stuff" and "boy stuff" when the opportunity arises.

But it still comes down to courage. We have to refuse to play the left's game. We have to "speak truth to power."

The Indictment

For the last century and a half everyone has been whaling on the middle class--the bourgeoisie, the factory owners, the booboisie--and tremendous fun it has been. As with most calumnies there was a grain of truth in the indictment of the middle class and everything it stood for. The bourgeoisie, dignified and free, had in the industrial revolution transformed society from an agricultural age to an industrial age. Millions of lives had been transformed; completely new ideas and practices had sprung out of the ground; untold wealth had been created. But there was a terrible cost. Millions of people found themselves toiling and working in satanic mills in squalid slums on the edge of want and starvation; if that was the bottom line of the industrial age, it needed radical surgery.

That was the judgment of a new class that emerged out of the revolutions of 1848, the educated middle class radicalized by the turmoil and the suffering of the high industrial revolution in Europe. These people were young, they were educated, and they were idealistic. They saw that the toiling masses that wove the textiles, mined the coal, forged the steel, and drove the railroad locomotives worked and lived on the edge of poverty in conditions little short of hellish. What was the point of the new age of rights and liberties, of inventions and manufactures, if they could not lead to concrete improvement in the lives of the masses? They decided that political revolution, or at least radical reform, was needed to create a better society.

A century before, educated young men like John Wesley and George Whitefield had chosen a different path. They had led farm laborers and mechanics into a social movement of aspiration and responsibility. They believed that the lower orders had the ability and the virtue in them to rise and to prosper even without political transformation. But the 1848 generation of educated youth believed that it was the system that prevented the workers from rising. To the youthful Karl Marx, the old agricultural order, in which the feudal lords had exploited the serfs, had given way to more of the same, a new system of oppression in which the bourgeoisie exploited the industrial proletariat. In response to this perceived injustice, the 1848ers constructed a political vision that would raise them, the educated class, to political hegemony as permanent guardians of the proletariat. Practical activists, they adapted the political structure of the absolute monarchs of the 17th century for their own use. These monarchs had needed expensive standing armies to maintain their power, and that required a revolution in the organization of the state. It needed discipline, loyalty, a rational organization, and money. The monarchs found they had to cut through or circumvent the web of institutions separating them from their subjects and tax them direcly. To do that they needed a state bureaucracy staffed by professional administrators. Just like its parallel military organization, the state bureaucracy came to control the individual citizen as the military bureaucracy controlled the individual soldier.

Sounds familiar? Yet that is exactly what the generation of 1848 decided, as they worked to build a system that could deliver rights, benefits and programs to the helpless workers. They needed a system of administrative centralism to control society and extract the resources they needed to right the injustices of an unjust age.

Of course, the 1848ers were wrong. The workers were not condemned to everlasting poverty. They began to prosper steadily in the second half of the 19th century, perhaps assisted by legislation. Maybe we never needed the 1848ers and the educated political class.

Too late: now we are stuck with them and their system unless we rise up and change it. Because their system of of administrative centralism is unjust.

The modern central administrative state is just as unjust as the state bureaucracies of the absolute monarchs, and for the same reason. A society in which the major activities of life have been brought under the direct administration of a political ruling class is necessarily unjust, for it collapses political society into an administrative organ that is nothing more than the instrument of its ruler.

Thus we can say that the administrative welfare state that the post-1848 educated class, now out liberal friends, have imposed upon the American people is an abomination. It is deluded, for it attempts to solve a problem that never existed. It is unjust, for it puts a thumb on the scales of justice to advantage politically favored groups over others. It is cruel, for it substitutes government compulsion for voluntary cooperation and responsibility. It is wasteful, for it rejects the efficiencies of the market for the rigidities of government. It is corrupt, for it favors its well-connected supporters and politically powerful interests over the unconnected and the unorganized.

The administrative welfare state, the regime of administrative centralism invented by the absolute monarchs and perfected by the post-1848 educated class, is the rule of injustice. Once it was royal injustice; now it is liberal injustice.

It is an abomination, and it shall not stand.

Oh, The Shame of It!

The whole point of British costume drama series is that they are, well, a little higher toned than the US variety. The implication is that the viewers, also, are a cut above.

Imagine my dismay at Masterpiece Theatre's Downton Abbey, which finished its first season with a cheap cliffhanger straight of of Dallas.

Oh the shame of it!

Of course there is nothing wrong with Maggie Smith playing an impossible dowager countess, though she played the role before in Gosford Park. There is nothing wrong with three problem upper-class daughters. There is nothing wrong with a a rather over-solid butler. There is nothing wrong with a rich American heiress putting new blood in a threadbare British aristocratic family. There is nothing wrong with an Earl of Grantham utterly abandoned to his noblesse oblige and sending the cook to London for eye surgery.

There is nothing wrong with beginning the series with the Sinking of the Titanic--so many friends lost, darling--and ending with the outbreak of the Great War.

But when you end the series with (plot spoiler!) the ridiculous smashup of the budding romance between the heroine, Lady Mary Crawley, and the hero, middle-class solicitor Matthew Crawley, over the ridiculous issue of whether or not she would have married him if her mother hadn't lost her baby over the criminal neglect over her ladies' maid, O'Brien, who deliberately slicked up the bathroom floor with soap causing her ladyship to slip when all Lady Mary needed to do was admit to Matthew her rather tawdry roll on the death bed of a Turkish diplomat. Well!

And then to end it with the outrageous teaser that Series Two is now in preparation! Even now!

The shame of it, I say. The shame of it.

There is one other thing that needs a disapproving mention. Not that I have anything against British costume dramas!

It is the influence of the tobacco Nazis.

Think now. Here we are in the global world of the 2010s and the food Nazis and the smoking Nazis are everywhere making life miserable. Now let us return to the Edwardian atmosphere of Downton (yes:there's a foreshadowing of decline). None of the upstairs people smoke. But some of the downstairs people do, and guess what, they are the villains, the lying, stealing Thomas and the conniving bitter O'Brien. They seem forever off behind the barn, veiled in billows of cigarette smoke, hatching their evil complots.

I say back to Ben Disraeli and the heavenly Sybil singing in the ruins of an abbey. You know that all those abbeys were stolen by evil Whig followers of Henry VIII, don't you! And I'm sure that there was a Robert Crawley back then helping himself to a dissolved monastery or two in South Yorkshire and getting himself a barony into the bargain. That was before the Crawleys got the noblesse oblige bug.

The Day the Liberal Narrative Dies

For half a century our liberal friends have lived off the story that FDR saved the USA with his New Deal and his jobs programs like the WPA and the CCC. Occasionally conservatives have pushed out an analysis or a screed that picks holes in it. Most recently, Amity Shlaes in The Forgotten Man has walked all over it. But the narrative is still alive and kicking.

Now the Democrats are trying to tell us that the meltdown of 2008 was all the fault of greedy bankers. Reports Maya Jackson Randall in the Wall Street Journal:

A blue-ribbon panel investigating the 2008 financial crisis blamed failures in financial regulation, flaws in corporate governance and excessive borrowing as key elements leading to the meltdown, Financial Crisis Inquiry Commission Chairman Phil Angelides said Thursday.

That's the story of the six Democrats on the panel, and they are sticking to it. It's the story that liberals and the New York Times have been selling. The Republicans split in their dissent. Peter Wallison, for the conservative American Enterprise Institute:

Instead of pursuing a thorough study, the commission's majority used its extensive statutory investigative authority to seek only the facts that supported its initial assumptions—that the crisis was caused by 'deregulation' or lax regulation, greed and recklessness on Wall Street, predatory lending in the mortgage market, unregulated derivatives and a financial system addicted to excessive risk-taking[.]

Wallison fingered the two GSE mortgage twins, Fannie and Freddie as the main cause of the crisis.

Three Republicans, led by former House Ways and Means Committee Chairman Bill Thomas came up with ten reasons for the crisis:

The three commissioners narrowed the causes of the crisis down to 10, faulting, among other things: credit and housing bubbles; nontraditional mortgages; failures in credit-rating and securitization; financial firms' massive housing risk; firms holding too little capital; the ease at which losses spread through the system; bad bets on housing; and market shock and panic.

In my view, Thomas and his co-dissenters go too light on Fannie and Freddie. And, for that matter on the Fed that stoked the fires in the early 2000s.

But the bigger problem is the problem for Democrats. Their failure to realize that the mess in 2008 was not going to be solved with a quick Depression-style stimulus means that high unemployment will continue for years. Despite their valiant effort to blame greedy bankers and deregulation, the American people will blame the chaps in charge for the last four years. At the end of it, the Democratic economic narrative that has stood strong and tall for half a century is going to collapse.

It's about time, because the liberal governing strategy of administrative centralism is bringing the US to the brink of national bankruptcy. The liberal administrative state is cruel, corrupt, unjust, wasteful, and deluded. The sooner we send them back to their universities and their think tanks the better for the prosperity of all Americans.

The Social Challenge

When conservatives want to do something about the cost of entitlements, social democrats say, as President Obama said at his 2011 State of the Union speech, "let’s make sure that we’re not doing it on the backs of our most vulnerable citizens."

When conservatives react against a universal government program of health delivery, they say that "no one should go without health care." Or if it's a program to deliver health care to children, "no child should be without health care." On education, the cry is No Child Left Behind. Even President George W. Bush got behind that slogan.

When people make deliver these challenges, they mean that there ought to be a program. There ought to be a nation government program of health insurance paid for with tax dollars and administered by the federal government. Or child health care. Or education. As if that is the only way to deliver social goods.

The conservative challenge is to change the argument. Nobody doubts the need for social goods. The question is whether the administrative centralism is the right, or indeed the just way to do it.

A century ago, many advanced social thinkers were confident that these social goods could and should be provided by administrative centralism, tax-funded government programs negotiated in the political sector through comprehensive legislation and administered by a department of the central government.

A century later, this vision seems hopelessly naive. In the first place, the negotiation of social goods in the political sector is extremely divisive, and descends into a brawl over dividing the spoils of political victory. In the second place, governments have demonstrated that, on average, they deliver these services very badly. In the United States, the government pension programs have all grossly overpromised pensions to current and future beneficiaries. The government health care programs have distorted the health care delivery system and greatly increased costs because of the "third party" payment problem. The education system has been captured by the producers, and one political party has been completely neutered by the power of the teacher unions. The government welfare system has succeeded in wrecking the low-income family.

So if President Obama warns against harming the most vulnerable citizens, he would have a point--if he were directing his concern against the cruelty and the injustice of the present administrative welfare state. It has notoriously spawned social pathologies, divided the nation, and wasted valuable resources. Governments in the United States spend about one trillion dollars a year on government pensions, one trillion dollars a year on government health care, one trillion dollars a year on government education, half a trillion dollars a year on government welfare, and it does it badly.

Conservatives have an alternative to this cruel, corrupt, unjust, wasteful, and deluded system. The conservative argument is that the universal delivery of social goods through government like old age pensions, health care, education, and welfare is a bad idea and there are other, better ways to realize the promise of universal health care and universal education. The answer is to take these social goods out of the grip of the state and hand them back to society.

There is such a thing as society, it's just not the same thing as the state. Society, on the view of political philosopher Michael Novak can be thought of as three separate and coequal sectors. There is the political sector, which specializes in activities that need force; it says, you must. There is the economic sector, which specializes in activities that need cooperation and exchange; it says, we can. There is the moral/cultural sector, which specializes in moral questions; it says, I should.

Conservatives ask: why do our liberal friends insist, against all the evidence, that social goods can only be delivered according to the principle of force?