Equality the Last Refuge of a Scoundrel?

Over in the liberal Amen corner, they are all singing the same hymn: "Equality."  And James Pethoukakis does us a favor by listing the five parts to the song: The People's Budget, the Brandeis Inequality Tax, Doubling of top income tax rates, Osawatomie Bam, and the Occupy movement.



For conservatives, the question is: why now?  Liberals have kept their longing for equality down to a low rumble for many years.  Why are they swelling into a thunderous chorus right now?



My guess is that President Obama is the chap that has pulled out the stops on the liberal organ.  And so the other players have upped their volume too.



As I've written before, it's a bit scary when the liberals start marching their class warfare army around.  Because it is so divisive.  And you have to assume that the reason they don't normally do it is because it is electoral poison.  Maybe it will be this time, or maybe not.  Maybe it will die a quiet death in the spring when the president's handlers decide that it's not working.



Here's another thing I wonder.  I wonder if President Obama's strategy of running against Congress is really such a good idea.  They say it worked for President Truman in 1948.  But the Do-Nothing Congress of that era had actually done rather a lot, including the Taft-Hartley Act to roll back the powers of organized labor.  In those days, when 30 percent of the work-force was unionized, there were plenty of people who might be annoyed with Congress.



In my view, the American people expects the president to bash heads together and get things done.  I'm not sure that bashing heads together and not getting things done can be expected to get the American people excited about a president's reelection.



And there is this:  If Bush were  president the air would be full of the horror of unemployment and people choosing between heating and eating.  But with Obama in the White House the air is surprisingly calm.  That's just the way the mainstream media operates.  But coming up is the presidential campaign, a time when the non-political moderates actually get to hear the Republican side of the argument for a change.  That can't be good for the president.



So maybe the reason the liberals are all worked up about inequality is that, with Keynesian economics a failure, they don't have any other brilliant ideas.

NYT Still in Denial on Fannie Freddie

One of the things you need to believe if you are a card-carrying liberal is that it was greedy bankers that caused the Crash of 2008, not government housing policy.  At The New York Times they have written nary a discouraging word on the subject.  They don't want their readers to find out that it was the Community Reinvestment Act that bullied bankers into making sub-prime loans and Fannie and Freddie that securitized them.

Lately, things have been a bit precarious, because Gretchen Morgenson, an NYT reporter, wrote Reckless Endangerment with Joshua Rosner.  It dared to point the finger at folks like former Fannie CEO James A. Johnson, former campaign manager to Fritz Mondale.

But good old faithful Joe Nocera is still plugging the Who Me? line.

Fannie and Freddie got into subprime mortgages, with great trepidation, only in 2005 and 2006, and only because they were losing so much market share to Wall Street... The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.

Peter J. Wallison, who wrote a dissent to the Financial Crisis Inquiry Commission, contests Nocera, arguing that Freddie mis-reported the number of its sub-prime loans for years.

Anyway, if Fannie and Freddie were late to the party, how come that they are in receivership, expecting to cost the taxpayer something like $200 billion in losses, when "Wall Street" is back up and running.  It suggests that the Fannie Freddie balance sheet was a lot worse that the average megabank.  And why would that be?

And if you want an insider look at Fannie and Freddie, this extraordinary call to the Rush Limbaugh radio program from "Laurie" might give you a clue.

xYou know, in the late '90s and early 2000s when real estate prices were sharply on the rise, you know, anywhere between '99 and '03 depending upon what part of the country you lived in, housing prices were on the rise dramatically, and there was a lot of pressure at Fannie and Freddie to get mortgages out the door.

We had a representative from FHA, HUD, Fannie and Freddie, all of which visited this mortgage broker's office. And when Fannie began this idea of packaging these things as securities and grouping them together, you'll find that the number of mortgage brokers for residential mortgages in the country skyrocketed because they were suddenly getting what we call wholesale lines of credits from banks. So mortgage company A or B goes to the bank and he gets a $15 million line of credit called a wholesale line. He fills that line up with mortgages and then they're guaranteed, they're bought off. Fannie and Freddie buy them up immediately, repackage them, or leave them whole and send them out to places like Lehman Brothers.x

Pressure at Fannie and Freddie?  To get mortgages out the door?

The problem with our liberal friends insisting that there is nothing to see here is that it blinds them to what is really going on in the world.  When you refuse to credit news that you don't like, there is a penalty.  One day you wake up and find that you have been totally blindsided.

Welfare Queens Aren't the Issue, Dems

In the liberal mind, Republicans are always trying to come up with "wedge" issues that divide the American people and disturb the even tenor of good, beneficial programs that create a safety net.

First it was affirmation action, then welfare queens.  Now the Republicans think they have a new issue, according to Mark Schmitt: unemployment insurance.

But now they seem to have found it, in the most unlikely of programs: Unemployment Insurance. The legislation to extend the payroll tax cuts that passed the Republican-controlled House on Wednesday brings the full arsenal of welfare reform gimmicks to the UI program: Time limits; drug tests; requirements to seek work or enter an education program.

Well, I'd have to agree that drug tests and seeking work are gimmicks.  But that's because liberals like Mark Schmitt will descend like a murder of crows on anyone that proposes a bigger reform and asks bigger questions.

Don't agree?  Well, Schmitt himself pours scorn on Newt Gingrich for a "proposal to have schoolchildren work as janitors."  Sorry, I don't bite.  Why don't we have schoolchildren getting out to work instead of being confined for their entire childhood in those wonderful government child-custodial facilities without possibility of parole?

And why don't we take a bigger look at unemployment insurance?  Why don't we privatize the whole thing: old-age pensions, unemployment insurance, workers' comp, and disability?  All of these government programs, that want us to believe that government is giving us wonderful benefits, are merely running wage income through the government and then out again as benefits.  Why don't we encourage workers to build their own savings, and supplement it with a bit of insurance when they are young?

I will tell you why, and it has nothing to do with the safety net.  It is merely that people in politics want to buy votes.  In the case of unemployment the government taxes employers and then turns around and pretends that the government is giving money to the helpless unemployed.  Suppose we just gave that money directly to the workers in personal unemployment accounts, and let them borrow from the government during a recession when jobs are hard to find?

The good thing is that the temptation to freeload, however large or small, would be diminished when people are spending their own money on unemployment.  And if an unemployed 40-year-old went out and found a job sooner, because he didn't want to touch his nest-egg, well, it's a free country.

That's the difference between conservatives and liberals.  Liberals want a benefit society; conservatives want an ownership society.

A Wedge for Me? Or Thee?

Quick question.  What is a "wedge issue?"  The answer, according to Jonah Goldberg, is any issue the Democrats don't want to talk about.

In his book What’s the Matter with Kansas? Thomas Frank insisted that Republicans only know how to win on divisive wedge issues that distract voters from their “real” interests. This amounted to McMarxism — a dumbed-down, mass-market version of the old socialist notion of “false consciousness.” Liberals like Frank assume voters are too dumb to know what they should care about.

Like the Keystone XL pipeline.  Right now, the White House is in high dudgeon that the eevil Republicans have put the Keystone XL pipeline and its 20,000 jobs on the payroll tax holiday bill.



And I agree.  It is monstrous for the Republicans to be raising the false consciousness of the white working class with the mirage of jobs, jobs, jobs, when anyone who knows anything knows that the only way to save the planet is to put the kybosh on fossil-fuel development and shovel money at Democratic crony capitalists and their solar panels and wind farms.



But there's a bigger problem for Democrats than the bitter clingers of the white working class.  It is the disappointed hordes of young voters that voted for hope and change in 2008.  Voters under 30 voted 66 percent for Obama back then, but they seem to be experiencing buyer's remorse.  I wonder why.



According to Carl Cannon, only 32 percent of under-30s approve of the president's handling of the economy.  All is not lost, of course.  The president still leads a generic Republican among 18-29 year olds by six points.  But you can see that the 66 percent is out of the window, and also the enthusiasm.



This is good news.  For Republicans there is nothing better than for a whole generation of youngsters to put their faith in a charismatic leader and have their hopes cruelly dashed.  Now those young folks will be receptive to our message.  This is not rocket science, folks.  When government controls everything then young people must join the end of the queue.  Because young people don't have much political power.  It is much better for young people to rely on their energy and youth than upon Uncle Sugar.



But here is more.  It looks like President Obama's class warfare campaign is coming up a loser.  The Gallup Poll announces that "Fewer Americans See U.S. Divided Into "Haves," "Have Nots"".  Gallup asked people whether they thought the nation was divided into Haves and Have Nots.  Back in 2008 Americans split 49% to 49% on this.  But now the Is Divided camp has declined to 41%.  And here is the kicker.  When asked to say whether they felt they were part of the Haves or the Have Nots, 58% said they were Haves, and 35 percent said they were Have Nots.  And Americans' self identification has not changed much over the last ten years.



I continue to think that we ain't seen nothing yet when it comes to the election of 2012.  It is going to be a watershed election.

End of the Age of Exploitation

I'm reading a history of India right now.  It's a Marxist history so it views everything through a lens of colonialism and exploitation.  The Brits, you see, cleverly disturbed the traditional land-ownership and tax payment in India.  They replaced "corrupt" officials with their own chaps who racked up the rent and the taxes on the poor suffering Indian peasants.  Of course the peasants rebelled, time after time.  On this view, in India's Struggle for Independence by Bipan Chandra, the Rebellion or "mutiny" of 1857 "was the culmination of a century long tradition of fierce popular resistance to British domination."

The interesting thing is that, up until about 1850, the Brits summarily dealt with rebellions.  They put them down, "with prejudice," as the phrase goes, and then went on their merry way, making more money out of India.  They were quite happy to exploit the Indians to the limit.  Their indigo planters were representative.  These chaps farmed out the cultivation of indigo plants to the natives, and then paid them next to nothing.  Not surprisingly, in 1859, there occurred an "indigo revolt."

But this time the Brit overlords took a look at the situation and decided that the revolters had a point.  Then in the 1880s the Indian intelligentsia formed the Indian National Congress and developed the idea of India as a nation and began to organize Indians of all faiths and castes in an all-India movement against the British.  Then, you might say, it was all a matter of time.

The important thing to realize is the novelty of all this.  Go back to 1800 and you have Arthur Wellesley happily marching troops all over central India in a war against the Maratha Confederacy.  There was no scandal about that.  But by 1857 the Indian Mutiny was a scandal, and the question of exploitation was an issue, and the British were ashamed.

Let's say that, between 1750 and 1850, the world changed.  Let's say that it reflected the rise of middle-class intellectuals and the bourgeoisie and the "public square".  These chaps had a different world-view than the landed warrior class that ruled up to the moment of the French Revolution.  There was a religious side to the change that was manifest in the anti-slavery movement.  And there was a secular side of it, that erupted in the French Revolution and the baby-boomers of the 1840s.

After 1850, therefore, exploitation--of slaves, of workers, of colonial peoples, of "others" became a scandal.  The century from 1850 to 1950 was the Age of Exploitation.  Everyone railed against exploitation, and the most notorious railers, Lenin, Stalin, Hitler, Mao, created the most exploitative societies in human history.

And now, I would argue, the Age of Exploitation is about to disappear onto the ash-heap of history.  Why?  Because exploitation isn't just a scandal these days.  It doesn't even make sense.  It only made sense in the old agricultural age, when agricultural workers could be conveniently exploited and starved on the quiet out in the countryside.  Today, we are all networked and each person is a resource that makes the most money for the ruling class if they are groomed into becoming a valuable "intangible asset" for the global economy.

But here we have Osawatomie Bam Obama still sounding the old cry: "inequality" and "exploitation."  It's the last hurrah of the class warrior.  It's the last hurrah because greedy employers today realize that they can make more money with skilled employees that can deliver more product than unskilled employees that you squeeze for the last ounce of blood.

Here's the dirty secret of the class warrior.  Obama and the class warriors have to bang the drum for exploitation.  I only realized why a few months ago.  If you want a revolution, or you want to increase government power with taxes and spending and regulation, you have to argue for exploitation.  Without exploitation there is no argument for increased government power.  Without exploitation we all sit around and say, wow, what could we do better?  How could we use our capital better?  How could we improve the training of our employees. How could we improve our market position?

But the Obamas of the world are not interested in a society where there are mild or moderate problems. Because that doesn't call for force.  They want big-time exploitation that calls for men on white horses, charismatic leadership, fake Greek columns, and vast government power.  Otherwise what's the point?

Newtonian Politics

Like most everyone, I'm a bit skittish about Newt Gingrich.  Why?  Because, you know, he's a bit flaky.  Shoots from the hip.  And all the other things we "know" about Newt Gingrich, which is to say, stories that his enemies have launched into the public square through their willing accomplices in the mainstream media.



On the one hand, I don't think that Newt is a dreaded "progressive," in the mold of TR, Wilson, and FDR, as Glenn Beck seems to think.  On the other hand, I don't think that Newt is a dyed-in-the-wool conservative.



We hear now from former House members that didn't like Gingrich as speaker and thought he was erratic, and then you read Tony Blankley, who used to work for him, write this:

Curious. I remember most of them enthusiastically following his leadership year after year as the Republican whip from 1989-1994. It was the most successful congressional opposition movement since Benjamin Disraeli formed the modern Conservative Party in Britain in the mid-19th century. And after the GOP took back the House for the first time in 40 years (and the Senate, too, by the way), Gingrich's four years as speaker proved to be the most productive, legislative congressional years since at least 1965 to 1967, and they were led by Lyndon B. Johnson from the White House. Working against -- and with -- Democratic President Bill Clinton, we passed into law most of the Contract with America, welfare reform, telecommunications reform (which ushered in the modern cell phone and Internet age), we had the first balanced budget since before the Vietnam War, we cut taxes and lowered unemployment to under 5 percent.

And the other thing about Newt is that when they said: Go, in 1998, he went.



So which is it?  The big thing about Newt is that Democrats can't stand him and like to make fun of him.  But then they made fun of Ronald Reagan and George W. Bush: they sneer at all conservative Republicans.  They have a special reason to be angry at Newt.  It was he that forced Speaker Wright (D-TX) to stand down and it was he that led the 1994 campaign that switched the House to R. for the first time since 1954.



I met Newt at a fundraiser back in 1994 when I was working on the congressional campaign for Rick White.  What did I think?  I think it was outrageous that the left were demonstrating outside the fundraiser.  They called Newt a bomb-thrower back then, meaning that he said nasty things about the opposition.  You mean like every Democrat that ever lived?



Here's what I think.  If the American people are determined to get rid of Barack Obama it won't matter whether Newt is a flake or has "baggage" or has taken money from Freddie Mac.



And you know what?  They would be right.

Newt and Romney and Layoffs

Presidential candidate Newt Gingrich has ruffled feathers with the following challenge to Mitt Romney:

If Gov. Romney would like to give back all of the money he’s earned from bankrupting companies and laying off employees over his years at Bain, then I would be glad to listen to him.”

I get the point.  We conservatives believe in the market economy and one of the vital functions of the market economy is performed by companies like Bain Capital: reorganizing bankrupt companies, laying off employees, and recapitalizing them for further growth, if possible.



So what is Newt playing at, doing the Democrats work for them?  It is, after all, President Obama who told us, in his role as Osawatomie Bam:

Because there were people who thought massive inequality and exploitation of people was just the price you pay for progress.

But that is the point.  Right now I expect that the president and his handlers are rubbing their hands about Mitt Romney and Bain Capital.  Democrats have been whaling on Romney for years now about all the companies he bankrupted, and all the jobs he sent overseas.  It's time that Mitt Romney came up with a retort.



And that retort better be more than a lame defense.  It has to go on the attack.  It has to say that companies get into trouble.  When they do there are no good options.  You have to suck it in and do the best you can with what you have.  Back in the railroad era, it was J.P. Morgan who wound up with the nasty job of reorganizing bankrupt railroads.  It was a dirty job, but someone has to do it.



We know what President Obama believes in.  He believes in taxpayers' money for his union cronies and his crony capitalist contributors. As for coal companies, he's quite happy for them to go out of business and all the jobs with them.  As for oil pipelines, from small to XL, who needs 'em?



We all understand that humans are risk averse.  We hate to admit it when we are wrong, and we hate to be the bearer of bad news, and we put off unpleasant decisions when the companies we lead are going south.  That usually means that the reorganization falls to an expert in reorganization, like Mitt Romney and Bain Capital. We often resent people that are tough enough to do the tough work.



So where is Mitt Romney's home run on the Bain Capital issue?



And of course there is the bigger issue about "inequality" and "exploitation."  Of course inequality and exploitation are problems.   The question is, can government make them better?  The record, I would say, is clear.  Government hasn't a clue what to do about inequality and exploitation except take money from people it doesn't like and give it to people it does like.



Take the auto bailouts.  That was taking money from ordinary Americans and giving it to the best-paid workers in America.  Talk about inequality!  And when the government took money from the taxpayers and gave it to solar-panel loser Solyndra it was exploiting all the companies that sell products to market without subsidies.  Talk about exploitation!



The whole point about capitalism is that its needs a proper legal basis, one that rewards faithful service and clearly defines the rights of debtors and creditors and punishes fraud.  But when you start talking about inequality and exploitation you are getting into pretty deep water.  You are saying that the system that took us from $3 per day to $100 per day needs to be bashed around by force.  For government is force and politics is talking about force.



How in the world are you going to improve a system of peaceful cooperation with force?