Obama: A Tactical, Strategic, Grand Strategic Mess

My Big Idea is that the Democrats could have learned from the Reagan era. They could have said to themselves: hey, we screwed up. We screwed up society with our 1965 War on Poverty, which our own metrics showed didn't work. We screwed up the economy with the stagflation policies of the 1970s when our program of balancing inflation and unemployment clearly did not work. Here's Reagan, the amiable dunce, and he's kick-started the economy into a stunning boom while winning the cold war. Maybe we could learn something here.

But they didn't. Our Democratic friends have spent the last generation manufacturing policy pretzels to prove to themselves that their big-government, big-regulation political vision really was right after all.

The result of this huge mistake is President Obama, and he is failing at all levels.

Tactically, as John Podhoretz writes, he is failing at the stupid "birther" level. The Obamis evidently thought they were being clever letting the conspiracy nuts have their head on this, but when Donald Trump made it work for him they were forced to put the birth certificate out anyway. I suppose the embarrassment they were trying to avoid is that Ann Dunham Obama was 18 when Barack was born.

Strategically, as Karl Rove writes, Obama is making a mistake with a strategy that lurches left now on the assumption that it can go centrist next year.

Instead, it risks permanently alienating independents, soft Republicans, and a few Democrats who dislike his appeal to the hard left. Savaging the GOP's deficit-reduction plan as "radical" and "nothing serious" may fire up Daily Kos bloggers and gratify Nancy Pelosi. But it's likely to turn off swing voters.

Grand strategically, as Walter Russell Mead writes, he is getting everything else wrong, from foreign policy to stimulus policy. Mead criticizes the president for a half-way approach, splitting the difference and angering both his supporters and his opponents. But I think the problem is bigger than that.

On foreign policy, the President of the United States must rule over the Pax Americana, treating kindly those that want to trade peacefully and sensibly with our commercial commonwealth and treating roughly the thug dictators and pirates that do not. On economic policy the president needs to dial back the pedal-to-the-metal credit and spending and regulation philosophy that has got the United States close to a debt-default situation. The purpose of a stimulus is not to stimulate; it is to tide people over the trough of the recession. But President Obama's stimulus was a slush find for Democratic supporters, and thus a waste. The crying need on health policy is to get off the "first dollar" approach that encourages overuse of health care on minor problems and replace it with a high-deductible policy that encourages Americans to pay for routine health care with their own money and only use health insurance for big-ticket items. President Obama's ObamaCare went in exactly the opposite direction, pushing the United States towards a breakdown in health care funding. Democrats think that such a crisis would allow them to take health care over completely, but they may be surprised by the American people.

The fact is that the liberal model of the centralized administrative welfare state is broken, and President Obama just happens to be president at the moment that this becomes glaringly obvious to the American people. It also just happens that the president is a perfect poster boy for just what is wrong with the Democratic Party: its affirmative action racism, its removal from the American heartland in liberal enclaves like Chicago's Hyde Park, its insular culture in selective colleges and center-left media and think tanks.

Well, now it looks like we are heading for the Perfect Storm, and the American people, especially the Democrats' core constituencies of minorities and single women, are going to suffer.

None of it had to happen if the liberals and the Democrats had taken the trouble to learn the lessons of the 1980s from that amiable dunce, Ronald Reagan.

CBS! The Science is Decided On Price Controls!

One thing you can say about the mainstream media. They are quick to whale on anyone that dares to deny the truth of global warming. The science is decided, they like to tell us, and they are delighted to echo the activists that insist that anyone that disagrees is a "denier."

OK, but what about price controls? Here we have CBS reporterette Nancy Cordes interviewing Rep. Paul Ryan (R-WI).

Q: But is there no way to save it [Medicare] without moving to a system of premium support?

RYAN: Yes there is, and it’s what the president’s proposing which is to ration Medicare. We do not want — we do not believe in the idea of having a board of unelected people putting price controls and rationing on Medicare.

Q: But don’t you ration it anyway?

Honey. The science is in on this. Rationing with price controls doesn't work. Never has worked. Never will work. When you propose with such a question that government rationing is a realistic option you are helping the deniers, the people that think you can ignore the science developed in the last two centuries about the operation of the economy.

CBS would never think of boosting the deniers when it came to climate science, a scientific endeavor that we now know is something less than a science. So why does CBS not apply the same test to economics deniers?

Well, we know why. CBS allows respectability to the economics deniers because it helps Democrats. Most everything that Democrats propose flies in the face of everything we know in the human sciences. But their faith, in the face of the science and the facts, is that government is the answer: government force, government rationing, government subsidies, government price controls.

So it's a religious thing. CBS and the Democrats worship at the same church and so, for CBS, the economics deniers are good guys.

The Welfare State's Security Illusion

In Wisconsin, Henry Olsen writes, white working class voters are returning to the Democrats. They see the GOP attack on government union collective bargaining rights as a threat to their economic security. Are they right?

Or are they just selfish, welfare state addicts selfishly sucking benefits from their fellow citizens? That's what Dennis Prager argues. The welfare state teaches people to become selfish, he writes.

Capitalism teaches people to work harder; the welfare state teaches people to want harder. Which is better?

I marvel that we have ever had a society in which people refrained from grabbing the maximum that their political power allowed. In the simple predatory warfare of the agricultural age the idea was to loot the rest of the world to bring home booty. In the welfare state the idea is that every entitlement is a "right." The politics of entitlement is a politics of indignation at the very idea of "give-backs," rights that can be taken away.

The magic of capitalism, of course, is that you can only amass a pile of rights--expressed as money income or property--if you give the world something really useful. Thus the monkey is on your back to discover something that the world wants, and is willing to pay for. The entitlement philosophy is the opposite: you deserve benefits and rights just because you are a member--of the nation, the union, the identity group.

Obviously, the truth lies in the middle. The whole point of humans as social animals is that we get protection from the big, bad world because the social group protects us. But the social group cannot work unless its members willingly work to benefit their social group.

The miracle of capitalism is that it is a system that rewards people for actions that benefit society; it exploits their natural selfishness in ways that are typically socially useful. The welfare state, on the other hand, encourages people in selfish and free-rider behavior; it rewards people that form powerful political coalitions and that establish a moral case for support by the rest of the community.

We know, of course, that the welfare state is coming to an existential crisis. The mechanics of the welfare state encourages politicians to promise rights and benefits to voters that can never be delivered. But how can you tell that the promises are empty? The economy is big and wealthy, and surely the rich can afford to pay a little more.

The only time you really get to know if the politicians have promised too much is when you get to a sovereign debt crisis--like Greece, Ireland, and Portugal.

Democrats mourn that today's Republicans seem to be intent on wrecking the national finances by voting for tax cuts in the face of big deficits. They are right of course. We know that the only way the welfare state will ever stop growing is if we cut the supply of revenue and bring on the fiscal crisis that will cut the supply of money to the welfare state beast.

That is the only way to break the illusion that the welfare state offers security.

Sarah Palin's Perfect Pitch

If liberals are piling on some political figure there must be something good about him. If conservative Poo-Bahs pile on too, then there really must be truly exceptional there.

So let's review the book on Sarah Palin.

Way back when, in 2009, Palin put up a note on her Facebook page about "death panels" in President Obama's ObamaCare package. Now it's the law and the president is optimistically talking about his "independent commission of doctors, nurses, medical experts and consumers" that will be cutting Medicare reimbursement rates.

Sarah Palin has always been solid on the need to develop conventional energy resources and hold back from wasteful subsidies on "green energy." She has sneered at President Obama's "very fast trains" and now the Chinese are slowing theirs.

Sarah Palin went to Wisconsin and told the teachers that their pensions were sacred and Gov. Walker was working to save them.

And now as experts are starting to agree that the Federal Reserve's "quantitative easing" or inflation hasn't boosted the economy as much as it has boosted food and energy prices, we are reminded that Sarah Palin spoke out against QE2 months ago.The Wall Street Journal reported on Palin's speech.

“We don’t want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings,” the Journal quoted Mrs. Palin as saying. “We want a stable dollar combined with real economic reform. It's the only way we can get our economy back on the right track.”

Yet we have political experts like Karl Rove saying that Sarah Palin cannot be president.

Well, is Palin running or not? People seem to be interpreting her reticence about announcing as a sign that she won't run (even though such blushing is usually considered a sure sign of a presidential candidacy).

In my judgement, Palin can delay an announcement of formal candidacy later than the other candidates. She is such a star that as soon as she announces she will move to the top of the heap. So why waste energy by turning on the klieg lights before the curtain goes up?

The 2012 election is going to be fought on the straight issues of government spending, debt, inflation, and the failure of President Obama to guide the economy out of the 2008-09 slump.

On that Gov. Palin is rock solid and consistent as a common-sense constitutional conservative. So why do the pundits think she's a flake?

Liberalism: Crony Capitalism and Skewed Scholarship

What do you call the research-on-demand work of the climate science community? They are the chaps who have obediently produced the end-of-the-world global warming scenarios for their political paymasters, proving that global temperature is increasing at an unprecedented rate in the past century: the fabled hockey stick, and that CO2 is the main driver of climate change.

That's not to say that the Michael Manns and the Phil Joneses and the Keith Briffas don't believe in their science. Of course they do. That's what makes Climategate so sad.

In one word, as Marx would say, for noble, honest, independent scholarship, we have naked, brutal, direct, "skewed scholarship."

That is the nature of the academy in the liberal patrimonial state. Educators and scholars and moralists and researchers get to realize what side their bread is buttered on. When education or scholarship or morality or research is funded by the government, the educator's, scholar's, moralist's or researcher's bread is buttered on the side that delivers research that makes the case for more government power.

In this sense we may say that Skewed Scholarship is closely related to another feature of the modern state, the state run as a patrimonial estate by the educated elite: in a word, Crony Capitalism.

Crony Capitalism is the market economy dominated by the patrimonial state. CEOs and capitalists learn that the way to make easy profits is by getting aligned with major government objectives. It used to be public electric power in the 1930s. In the 1950s and 1960s it was aerospace. In the 1970s it was energy conservation and environment. Now it is clean energy and very fast trains. (Did you know that the Chinese are slowing down their very fast empty trains so they can lower the ticket prices?)

Crony capitalists cozy up to political actors and get favorable terms written into legislation. They figure out how absurd pipe-dreams like goals for renewable energy, wind and solar, can be turned into subsidies and guarantees and sweetheart deals for their companies.

So we may say that when you have a overweening patrimonial state that has money and power and a desire to dominate the economic and moral-cultural sectors, you get, as a law of nature, Crony Capitalism and Skewed Scholarship. Jonah Goldberg has called this political system Liberal Fascism. By whatever name we are talking about the tendency of the modern political system to tip more and more in the direction of political primacy, where the political system gets more and more power over the rest of society (to deal with its bigger and bigger failures) and makes bigger and bigger toadies of the crony capitalists and the skewed scholars.

The joke is, of course, that eventually, when the politicians run out of other peoples' money they blame the crony capitalists and the skewed scholars. Speculators, they cry! Speculators are driving up the cost of gasoline! The skewed scholars, of course, suffer a less dramatic fate. They just end up testifying before an unfriendly Congress that is suddenly shocked, shocked, by the mistakes in their research. And then their grants dry up.

He who lives by the sword, dies by the sword. Should that include crony capitalists and skewed scholars? Well, yes. They are living from the crumbs that fall from the table of government, the patrimonial state of the educated liberal elite. And government is force; politics is power.

The Wages of Big Government

It's the old story. A populist leader bewitches the peasants with talk of justice for the poor and an end to inequality. He promises well-deserved raises to ill-paid government workers, and spreads out subsidies to help folks with their heating and cooking fuel.

Then comes reality.

Reality is hitting Evo Morales and Bolivia right now, as the populist president tries to roll back fuel subsidies and faces demands from government employees.

Last December, his country erupted in massive street protests when Morales abolished fuel subsidies and thereby caused an abrupt spike in gasoline and diesel prices. Chastened by the violent backlash, he quickly reversed his decision and restored the subsidies. A few weeks ago, fresh anti-government protests began. Spearheaded by the most powerful Bolivian trade union (the Central Obrera Boliviana), the demonstrations were aimed at winning a 15 percent salary increase for teachers, miners, policemen, and other public-sector workers.

Not so long ago he was a populist union leader, the darling of progressives everywhere.

Morales took office with bold promises of reducing widespread poverty and deep inequality. Instead, his policies have spooked foreign investors, spurred capital flight, slowly destroyed the vitally important Bolivian energy sector, and increased social polarization.

I suppose that if you are a populist politician--sorry, any politician--you tell people what they want to hear.

But come on fellas, we know that subsidies and price controls don't work. And we know that feeding the beast of unionized government workers just feeds their appetite for more.

What is interesting in the Bolivian case is that Evo Morales seems to lack the charisma and the thuggishness of his mentor Cesar Chavez. Maybe it's just that Bolivia doesn't have as much wealth to loot as Venezuela, so the money ran out faster that it is running out up north.

But I am looking at the bigger issue: the problem of unwinding any government program. The fact is that any government program is in the business of giving away free stuff. It doesn't matter whether it is Social Security subsidizing pensions for the low-paid, or government schools giving away education for "free." Pretty soon people get to expect those free services; they organize their lives around them. And they get really angry if the government runs out of money. They don't care that the money has to come from taxes on business—the businesses that give them jobs—they don't care that, e.g., their pensions and their unemployment come from swingeing taxes on ordinary working stiffs. They just want their money and they are prepared to break the peace in order to force the government to keep paying up.

That's the lesson of Madison, Wisconsin, not just third-world Bolivia. You give stuff away for free, then you will find that people will fight to keep that free stuff when you run out of money.

That's what we are going to see here in the United States in the next few years, after the Republicans get back the White House and the Congress, and it ain't gonna be pretty.

In fact, it's time for Republican gray beards to be thinking, right now, about the strategy to deal with the government workers and lefty activists that are going to be doing the Madison thing in the years ahead.

I suppose that the best thing to do is start with a 60-40 presidential election blowout, something that makes President Obama's seven percent "we won" look like a dead heat.

Don't Touch My Medicare

Conservatives are shocked that overwhelming percentages of Americans are opposed to changing Medicare to a defined contribution system, i.e., over 80 percent. Of course, if they knew what ObamaCare had in store for them, the Independent Payment Advisory Board they would probably oppose that by 60 percent. According to The Wall Street Journal the board seems to have power to do one thing.

Mr. Obama, by contrast, is relying on the so far unidentified technocratic reforms of 15 so far unidentified geniuses who are supposed to give up medical practice or academic research for the privilege of a government salary. Since the board is not allowed by law to restrict treatments, ask seniors to pay more, or raise taxes or the retirement age, it can mean only one thing: arbitrarily paying less for the services seniors receive, via fiat pricing.

So, the Obama policy for Medicare is price controls. Maybe that is the only way to get to a reform of Medicare. We know what will happen with price controls. Shortages. President Obama's policy will end up wrecking Medicare.

But maybe that's the point. If 80 percent of people are opposed to reforming Medicare by turning it into a regular health insurance plan, and they will surely be opposed to the secret "death panel" plan to screw down payments to providers, and if President Obama is refusing to agree to any spending cuts in the mammoth welfare state, as his April 13 speech indicates, then reform will have to wait until the system crashes.

I keep saying this, but I must say that I can hardly believe it.

There is another thing that I can hardly believe, but which is suggested by the out-of-town tryout in Madison, Wisconsin. When the crunch comes, Democrats will be putting their people into the street.

What is the best scenario for America? I'm coming to the view that we need President Obama to win reelection in 2012. Probably we'll get a Republican Senate as well. Then, of course, 2013 and 2014 are going to be hell. Either the president will implement spending cuts or we will have inflation and a debt default. In either case there will be a massive rejection of the Democrats in 2014, setting up a Republican president and Congress in 2016.

The problem is that many people are going to suffer. Forget seniors and health care (let's face it, we geezers are going to die anyway sooner or later) what about the ordinary Americans whose lives will have been wrecked by the economy maelstrom?

I had my hair cut yesterday by a young woman that's worried about her husband, a construction superintendent. He's worried about being laid off, and they are worried about losing their home in a Seattle suburb. What about them, as the two sides in the political civil war play their political games?