Lay Off the Dogs and Chimps

Today the American Spectator's Ben Stein very properly takes out after the folks piling on the accused rapist Dominique Strauss-Kahn, head of the International Monetary Fund. Writes Ben:

In this country, we have the presumption of innocence for the accused. Yet there's my old pal from the Ron Ziegler/ Richard Nixon days, Diane Sawyer, anchor of the ABC Nightly News, assuming that Mr. Strauss-Kahn is guilty.

Quite right, Ben. But here's what troubles me. We've heard a lot of people talking about "crazed chimpanzees" in connection with DSK, put like we heard a lot about "sex poodles" when former Vice-President Al Gore was accused of getting aggressive in a San Francisco hotel one night. Isn't it about time we stopped pretending that animal sexual behavior is somehow more violent than human sex?

I'm a little disappointed that Ben Stein, a noted dog-lover, and owner of "Puppy-wuppy," didn't raise this issue.

Is it really the case that chimpanzee sex is comparable with human rape? Or that the behavior of Al Gore towards a hotel masseuse made him into a "sex poodle?"

Now it is true that chimpanzee sex is highly hierarchical. The alpha chimp male gets most of the sex, from accounts that I've read, to the extent that about 25 percent of the chimplets born into a troop of chimps get to be fathered by him. It is the low-status males that have to grab a piece of the action while nobody is looking. But hey, the alpha chimp doesn't get his access to females by brutalizing them. He gets it by brutalizing the other male chimps.

And what is it about poodles and sex? Are we talking about toy poodles barking up someone's leg? We cannot, surely, be talking about standard poodles. Standard poodles are French hunting dogs, adapted for swimming in cold French water in winter. They are friendly chaps and full of life and vigor, canine athletes, and have nothing in common with ageing male politicians getting aggressive with the hotel help.

It's time to lay off the dogs and the chimps, and create a new entry in the American Psychological Association's upcoming DSM-5. How about Luxury Hotel Aggression Syndrome?

Obama's Upside Down Economy

Hugh Hewitt's political guru chappie Clark Judge has three political-economic "data points" to think about this morning. Here they are:

First, there's a report on Obama's stimulus, reported by Powerline blog. The Obama stimulus created/saved a net 450,000 government jobs. The Obama stimulus destroyed/forstalled about 1,000,000 private sector jobs. So the net stimulus effect was to destroy about 500,000 private sector jobs. Nice going Mr. President.

Second, in the Wall Street Journal, Edward P. Lazear reports that in a healthy economy the US generates about 5.5 million jobs a year. Right now it is generating about 4,000,000 jobs a year as it has for the last two years. Nice going Mr. President.

Thirdly, the revision of unemployment and inflation data may be seriously under-counting both unemployment and inflation, according to the chaps at Economic Policy Journal. This is not necessarily President Obama's fault, but probably politicians ensuring that the high inflation numbers of the 1970s never happen again.

The point is that the ruling class is clearly failing, and failing badly. Conservatives say that the solution is simple. Don't let the politicians run the economy. Politicians deal in winning elections, and that has nothing to do with growing the economy. What we need is a greater separation of powers to keep the politicians from smashing civil society to pieces in their quest for political power. And we voters can help. Whenever some politician comes down the road promising to "fight" for us, we need to say No Thanks, chum. Because the politician is going to be "fighting" with our money.

Really, it's not that hard.

Obama's "D" in Demagoguery

Maybe the president knows something that I don't know. Maybe Latinos just love talk about moats and alligators at the border. But I don't think so.

I don't think the president does demagoguery very well. Charles Krauthammer writes in "Demagoguery 101" that the president, in his El Paso immigration speech, was trying to gin up votes rather than advance a national conversation on immigration, and I agree. But I don't think that the president was conducting a class in how to do demagoguery. I think his demagoguery is usually lame, and notably so in this case.

To be good, it seems to me, a demagogue must strike rage into the hearts of his supporters and fear into the hearts of his opponents. Think of the eight years of liberal demagoguery against President Bush.

With President Obama, on the other hand, his opponents treat his attempts at demagoguery as a joke. Moats? Alligators? Whack me with a wet noodle. And what about the president's supporters? What about the Latinos that are anxiously awaiting amnesty and the opportunity to come out of the shadows? What might they think about the president's rhetoric?

The American people tend to give the president the benefit of the doubt. That is why it is usually not a good idea for the opposition to attack the president. That's why the Republicans got into trouble when they decided to impeach President Clinton. That's why it took until 2006 for the Democrats to lay a glove on President Bush. That's why it took until the last week of the 1980 presidential campaign for challenger Ronald Reagan to move ahead of President Carter in the polls.

It seems to me that President Obama is heading for trouble with his lame demagoguery and his lame economic policy and his lame budgets and his lame NRLB beating up Boeing for moving production to a non-union state. To say nothing of the lame ObamaCare that the Democrats pushed with lame corrupt bargains to wavering senators.

What we have here is an aging dynasty that is demonstrating an embarrassing need for lame macho gestures to prove its manhood.

Instead, President Obama and the Democrats are proving the opposite. Their agenda is narrowly partisan and doesn't resonate with the majority of the American people. The president can be beaten in 2012.

No Crony Capitalism without Government

It's all very well to remind us, as William K. Black does, that the real crooks got away with murder in the late great mortgage bubble and meltdown. Of course they did. Otherwise it wouldn't be crony capitalism.

The Office of Thrift Supervision, the successor to the S&L regulator where I worked, made no criminal referrals in the latest crisis. The Office of the Comptroller of the Currency and the Federal Reserve made less than a handful. Mortgage and investment banks also made very few referrals -- and never against their senior officers.

Putting it as concisely as possible, Black tells us:

The defining characteristic of crony capitalism is the ability of favored elites to loot with impunity and the failure of regulators to do their jobs.

But let us look at the cases he gives us.

First there is the "Texas Rent-a-bank scandal" in the 1970s. According to Joseph M. Grant in The great Texas banking crash, crooks looted $10 billion from "fifty thrifts and banks in the South and Southwest."

Notice something? "Thrifts" were special government-subsidized banks.

Then we have the S&L meltdown in the 1980s. Savings and Loans: government subsidized banks were caught short in the 1980s as they were forced to borrow at high short-term interest rates while their loan portfolios were all long-term 30 year mortgages at low rates.

Then, of course, we have the housing bubble in the 1990s and 2000s, at the center of which were the government-subsidized mortgage giants that were encouraging mortgage originators to sell them mortgages for low-income borrowers.

Of course the government went easy on these crooks. The crooks were just implementing government policy, only a little too enthusiastically. After all, if you are setting up a boom with easy money it doesn't take a genius to figure out that sooner or later it is all going to end in tears. So you need people running the show who aren't too worried about consequences. Otherwise your affordable mortgage boom will never get off the ground.

Look. I'm all in favor of prosecuting bad actors and crony capitalists. But to act shocked, shocked, that fraudulent mortgage origination and/or securitization is going on when you have set the system up in the first place to flood the credit markets with bad paper is nothing but play-acting.

Our liberal friends like to think of themselves as the educated ones, the tolerant ones, the supporters of science. But when it comes to the unraveling of their ideas, from the housing subsidy game to the job-training game to the whole welfare state benefits game, our liberals can go into a denial that make climate skeptics look like rank amateurs.

The simple fact is that when the government starts swinging money around it attracts bad actors like honey attracts bees. Whenever the government gets into something it is always trying to game the system. If it's Social Security then the government is giving pensions to people that haven't saved much money. If it is Medicare then the government is giving health care away to people that haven't put aside money to pay for medical costs in their declining years. If government is running welfare it means that government is giving money to people that don't work much. If government is giving money to education it means that a lot of people are going to school that don't value education that much.

Of course the bad actors come out of the woodwork and game the government's system and commit fraud. Of course the worst of the bad actors probably have good connections with politicians. Of course they do. When you are a bad actor you need some friends in high places to slap down the occasional bureaucrat that doesn't know which side his bread is buttered.

We won't crack the code on crony capitalism until we stop government creating subsidies and economic favorites.

But that means we have to break the religion many people have that you can do good with government programs and subsidies. We, the people of the United States, are a long way from losing faith in government spending, especially when it is spending on "me."

The Wages of Centralism

Back in the mid 19th century a cabal of Bostonians decided to centralize the education of children in the Bay State into a state board of education. This plan would lower the crime rate by 90 percent, promised Horace Mann, the "father of the common school." Over the decades schooling for American children changed from the education favored by parents to the education favored by the upper middle class. It evolved from a combination of babysitting and basic literacy and numeracy that prepared most children for an entry into apprenticeship and work in the early teens to the present system of government child custody, in which parents are legally required to surrender their children for a twelve year term without possibility of parole. Not surprisingly, the system fails to educate children well, and particularly fails to educate the children of barely literate parents.

Given how well centralism worked in education the educated elite decided that the same principle should apply to a variety of other social activities from the economy to health care. In the 1940s liberal economist John Kenneth Galbraith developed the idea of "countervailing power" in which the Big Units of business, labor unions, and government would negotiate outcomes in the national economy by the weight of power. It seemed to work well for a few years, but in fact ended up pledging the wealth of the nation for unaffordable benefits. Thus the Big Unit corporations pledged future profits that turned out to be insufficient to pay for worker pensions. Big Unit unions looted profitable corporations and reduced the steel industry and then the automobile industry to contemptible shells. Big Unit government created entitlements to pensions and health care that have resulted in an unfunded liability of $100 trillion.

The problem is that Big Unit politics hollows out the mediating institutions that provide the real strength and resilience of society. Big Unit administrative centralism reduces everything to a conceit of elite competence, an assumption that you can design an effective, adaptable education system for all children. It reduces business corporations to crony capitalists, cringing for political favors. It reduces the luxuriant web of self-help social welfare organizations to a bare government safety net. It tempts people to wither their family and social connections and obligations and rely in the first place upon government benefits.

We can see the wages of centralism by looking at the society wide numbers. People who rely primarily upon government benefits present significant social pathologies. Marriage in the upper middle class is about as prevalent as ever; marriage in the lower 20 percent is off from 83 percent to 48 percent. Back in the 1950s 96 percent of men were in the labor force, and only four percent were not in the labor force either working or looking for work. Now 20 percent of men are out of the labor force, and for men without a high-school education 35 percent are absent from the labor force.

The century from 1848 to 1948 was called by F.A. Hayek the century of socialism. The years before 1848 were years of preparation for socialism; the years after have been years of exhaustion. But the problem is that socialism is not and never was "social," or, in the words of John Dewey, the Great Community in which to conduct a discourse among citizens about their communal life. Socialism has always been an elite ruling the many through administrative centralism, and administrative bureaucracy is, by design, a system for controlling people, not for discourse among people.

The great irony of our age is that precisely the system that the educated elite has been fighting against for 150 years is the system that is, in the true sense of the word, "socialist." It is the combination of a free, property-owning economy where the "discourse" is conducted through economic actors communicating in their buying and selling, producing, advertising, borrowing, lending, and investing. It is achieved through political actors discussing the limits of force, and through cultural and moral actors discussing the meaning, the "why" of it all.

But that is what the educated elite cannot bear, for a truly "social" society would deny the educated elite its "leading role." It would be reduced to merely one voice among many.

The breakthrough moment for modern humans will be the moment when they smash the power of the educated elite and demand to live in a world purged of the totalizing strangulation of political hegemony. Humans are social animals, not servile animals, and it's about time we refused the humiliating wages of centralism.

America's Big Social Problem

Back in the 1950s, writes David Brooks, something like 96 percent of adult men were in the labor force. Only about one man in twenty was not working or looking for work. Today, around one fifth, 20 percent of men, are out of the labor force. It's worse at the bottom, of course.

According to data from the Bureau of Labor Statistics, 35 percent of those without a high school diploma are out of the labor force, compared with less than 10 percent of those with a college degree.

So what does David Brooks propose to deal with this social problem? He worries about all the money we spend on Medicare when we should be spending it on the structurally unemployed.

It will probably require a broad menu of policies attacking the problem all at once: expanding community colleges and online learning; changing the corporate tax code and labor market rules to stimulate investment; adopting German-style labor market practices like apprenticeship programs, wage subsidies and programs that extend benefits to the unemployed for six months as they start small businesses.

I see. So government is the solution to this problem.

There's another way to look at this. It is to say that government is the problem. Thomas Sowell worries about one little problem, students that "can graduate from some of the most prestigious institutions in the country without ever learning anything about science, mathematics, economics, or anything else that would make them either productive contributors to the economy or informed voters who can see through political rhetoric." He is talking about the problem of over-educated people in the developing countries, graduates of government universities, that can't get jobs.

The problem is much bigger than a question of funding--or even the problem of the glut of university graduates stupid enough to spend money on a degree in underwater postmodern basket-weaving.

The problem is that government can't be trusted with education. That's because in the hands of government, education becomes captured by the teachers and special interests. For decades, high schools have turned out graduates that need remedial course in colleges. What has happened? The problem has gotten worse. Of course it has. Because angry parents and students can't fire their schools and go down the street. The education industry is too powerful.

But even the problem of government schools doesn't really address the problem. The problem was illuminated years ago by George Gilder in Visible Man. It was about a disabled ex-Marine who knocked up an underage teenaged girl. He married her and got a job at a lumber yard, and supported her and their baby. But when she reached 16 and could go on welfare and get an apartment, well, then their relationship broke apart, and pretty soon the ex-Marine broke apart too.

It's an old story, and it points out a timeless truth. The big social problem is not the suffering working class or traditionally marginalized communities or any other liberal fantasy. The problem is how to socialize the boys, and turn them towards productive work and away from their natural instinct for mayhem and rapine.

And about that, our modern educated elite has nothing to say.

All of which means that things are going to have to get much worse before we can have a hope of making them better.

We will know when there is hope. It will be when the quota conservative at The New York Times feels able to propose to his liberal readership solutions to social problems that go beyond rearranging the government programs on the deck of the Titanic.

That Magic $250,000 a Year

Various conservatives have remarked upon the significance of the Obamian $250,000 a year dividing line. Above that are the rich that must "pay a little more" in taxes and below it are--well, the liberals.

Otherwise why wouldn't Democrats be demonizing everyone over $150,000 a year, or $100,000 a year, or anyone over the median of about $50,000 a year?

Reihan Salam takes a look at this.

In an essay titled “Desperately Seeking Revenue,” Rosanne Altshuler, Katherine Lim, and Roberton Williams of the Tax Policy Center found that achieving a budget deficit of 3 percent of GDP by 2020 through tax increases on over-$250,000s would require doubling their rates, kicking the top rate to 76.8 percent.

A far less damaging strategy would be to reduce "tax expenditures", or loopholes, in the federal income tax, but that would affect liberals, especially in the $100,000 to $250,000 range, and they are the core base of Obama vote.

When our liberal friends go on about how the rich have benefited from the Reagan and Bush eras they neatly elide their own situation. For over the last 50 years there has been a huge increase in employment of experts in government, from colleges to regulatory agencies, that has hugely benefited liberals. Of course, liberals don't earn multimillion dollar salaries in these jobs but they do earn good money, often propelling a liberal couple into the six-figure income bracket.

Charles Murray is saying the same thing in his upcoming book about how well the upper-middle class has done on a variety of statistical indices in relation to the rest of America, most notably, in marriage.

The culture war is, of course, a class war between the upper-middle class, the educated elite, and the rest of the middle class. Up to now this war has been a stalemate because the liberal elite has bought the support of the underclass and other financially stressed Americans with the money of the rich (who pay 40 percent of federal income tax on 22 percent of the income).

My guess is that the major political achievement of the Obama administration is going be chopping off another limb of the Democratic coalition. With every decade it becomes more and more obvious that the administrative welfare state that tosses crumbs to the poor and the middle class is in fact government of the educated elite, by the educated elite, and for the educated elite. Everything else government does is just window dressing and tactical compromise.

In the New York Times today Paul Krugman chastises the elite for blaming the ordinary American for the mess we are in. He politely shows how the Bush elite brought all the messes down on our heads. Of course he would, he's writing for liberal NYT readers. But when you get past Krugman's partisan pot-shots, it is the educated elite of liberals that has brought the current spending crisis to a head, and it is liberals--those lucky few in the $100,000 to $250,000 a year range--that will soon feel the wrath of the people.