Ohio Speech: One Last Hurrah

Everyone seems to be disappointed in the president's June 14 speech in Cleveland, Ohio, from the press corps to Dana Milbank to Charles Krauthammer.  But I think it was interesting.  It reminded me, obliquely, of the great speech, the full-throated recitation of the liberal world-view, that Ted Kennedy gave at the 1980 Democratic Convention.



Not that the president's speech held a candle to Ted's old speech.



The president on Thursday ran through the liberal world-view, 2012 version, for the assembled liberal faithful.  He did not so much set out his plan for the future as paint a picture of how we got here.



The most important thing to communicate was the New York Times version of the last ten years.  Tax cuts and deregulation brought on the Crash of 2008.

Without strong enough regulations, families were enticed, and sometimes tricked, into buying homes they couldn’t afford. Banks and investors were allowed to package and sell risky mortgages. Huge, reckless bets were made with other people’s money on the line. And too many from Wall Street to Washington simply looked the other way.

Yeah.  Notice how "Washington" stands in for Fannie and Freddie and the Community Reinvestment Act and the young Barack Obama working with ACORN to bully banks into lowering their lending standards.



Then there was the liberal line on the auto bailout.

And when my opponent and others were arguing that we should let Detroit go bankrupt, we made a bet on American workers and the ingenuity of American companies -- and today our auto industry is back on top of the world. (Applause.)

Yeah.  And forget about how the auto bailout was really a crony capitalist bankruptcy in which the law was trampled on and senior creditors (read widows and orphans) got shafted and union auto workers sailed through almost untouched.  Which means that the Detroit problem has just been punted down the road.



Then comes the pivot to the wonders of Big Government. It doesn't do any good to pay workers lower wages or let corporations pollute, said the president.

I see an America with the best-educated, best-trained workers in the world; an America with a commitment to research and development that is second to none, especially when it comes to new sources of energy and high-tech manufacturing. I see a country that offers businesses the fastest, most reliable transportation and communication systems of anywhere on Earth. (Applause.)

Yeah.  Trouble is that we have gone from 1 percent GDP on government education to 6 percent in the last century and you can't really say that we have got six times the payback, Mr. President.  And as for reliable transportation, by which I presume you mean very fast trains, what is the problem with very fast airplanes?  But the bigger point is, Mr. President, is there a hope in hell that government will ever do more than make a complete dog's breakfast of everything it touches, from education to health care to pensions to welfare?



Then the president gets to the really dodgy part of the speech.  Medicare, Medicaid and spending cuts.

My own deficit plan would strengthen Medicare and Medicaid for the long haul by slowing the growth of health care costs -- not shifting them to seniors and vulnerable families. (Applause.) And my plan would reduce our yearly domestic spending to its lowest level as a share of the economy in nearly 60 years.

Yeah.  And I've got a bridge to sell. Are we talking about the death panels here, Mr. President?  And what exactly does "yearly domestic spending" mean?  I suppose it means so-called "discretionary" spending, including everything except Social Security, Medicare and Medicaid.



The president's speech is an odd creature, and I suspect reflects the hand of the president himself more than his handlers.  I suspect that the president thinks of himself as quite the Hyde Park political philosopher.



I also suspect that,  once the Romney campaign has finished with it, the Ohio speech will turn out to be another big Obama blunder.  Because I think that the president really doesn't know how his liberal bromides sound when they go in the ears of an ordinary moderate voter.

The Welfare State End-game

How will it all end?  Will we reform the welfare state and prune it back to a pragmatic level of entitlement?  Or will we go over the cliff?  The trouble is that a nation can go over the cliff and still not reform its welfare state.



Look at Argentina.  It went over the cliff in 2002, with a huge devaluation of over 50 percent.  Then it got the populist Nestor Kirchner.  But the politics of the last ten years has been relentlessly left wing, with intrusive regulation and now expropriations of corporations.  Greece is heading the same way.



We are learning is that welfare states cannot trim their entitlements, particularly their employee salaries and their pensions.  "Austerity" sends people into the streets.  In the US the conservative Tea Party is all for reducing government, but not Social Security and Medicare.



Sorry Tea Party.  Government spending pretty well is Social Security and Medicare--apart from education and welfare.



In today's Wall Street Journal Daniel Henninger talks with a young Italian woman.  Her best friend has a degree in electrical engineering, but "he is working for nothing in a hotel."  Other young Italians have already left for Brazil--or China, or Australia.  Henninger pleads with European voters to vote for salvation.

Would a European electorate, if given an honest chance to choose self-salvation rather than the bleed-to-death choices they've been given the past two years, vote to save themselves?

 I doubt it.  I expect European voters to vote for their entitlements.  That is what the French just did.  They voted for "growth" in government rather than austerity.  Voters vote their pocketbooks, right up until the day that the government closes the banks and devalues the currency.



What you can get voters to do is vote against some minority that is looting the public fisc.  So in Wisconsin last week the voters voted for the guy, Scott Walker, that was taking it to greedy government employees.  Voters will vote also against greedy bankers and greedy CEOs.  What they will not do is vote to trim their own benefits.



Why should they?  Most beneficiaries are older people like me, getting government pensions and health care.  They are cultural Keynesians, for Keynes (the childless homosexual) said that "in the long run we are all dead."



Today's European seniors are different from Keynes, of course.  They are childless heterosexuals.  And  they will all be dead in the short run.  So who cares?

The Flip-side of Orientalism

The sharpest arrow in the anti-colonialist quiver, or maybe the biggest bazooka, is "orientalism," the idea developed by Edward W. Said in Orientalism that the west justified its colonial empires on the inherent inferiority of the Orient. Wikipedia:

He argued that a long tradition of romanticized images of Asia and the Middle East in Western culture had served as an implicit justification for European and American colonial and imperial ambitions.

In other words, the western colonialists developed all kinds of notions about the "Oriental mind." All these things, writes Said, the notion of Oriental barbarity, how the climate and geography dictated the characters of the Orient, in telling the truth, using logic, even walking on sidewalks.

I'd heard of Said, of course, but only encountered him this week as a read his introduction to a Penguin edition of Rudyard Kipling's Kim.  It is the ideal vehicle for Said's theory, since Kipling had completely internalized the notions of Oriental infantilism necessary to justify the British Raj in India in his story about a poor white kid, Kim O'Hara, growing up in Lahore, in the Punjab.

Of course, Edward Said brings some ahistorical notions of his own into his critique of Kipling.  He introduced the notion of an "independent" India before the British Raj.  You mean the Mughal invaders from the West?  The Delhi Sultans?  Even back to the Aryans, who seem to have come through Afghanistan to conquer India?  The fact is that before, say, 1700, there was no notion of anything except predatory warfare and might makes right.

And then he mentions "adventurers and pioneers like Warren Hastings and Robert Clive, men whose innovations and unrestricted rule required legislation in England to subdue the unrestricted authority of the Raj."  Really?  I'd say that the innovation around Clive and Hastings was the innovation that there could or should be any limit on the behavior of a victorious and plundering pro-consul.  That was why the Impeachment of Warren Hastings managed by Edmund Burke was so noteworthy.  In the old days, whoever cared what happened to minor nobility like the Begums of Oude?  But Burke made oppressive and predatory government into a scandal, not just in the British heartland but in its Empire.

And then it struck me.  Isn't the whole liberal political philosophy a kind of domestic version of Said's Orientalism?  Let me render a paragraph of Said's from Orientalism with "Orient" translated as appropriate.

My contention is that Orientalism[liberalism] is fundamentally a political doctrine willed over the Orient[US] because the Orient[ordinary bitter-clinger American] was weaker than the West[liberal elite], which elided the Orient’s[ordinary American's] difference with its weakness....As a cultural apparatus Orientalism[liberalism] is all aggression, activity, judgment, will-to-truth, and knowledge

What do you think?  Is not liberalism in fact a form of domestic colonialism, that justifies liberal power because the ordinary uneducated American is not up to the challenge of government?  And anyway, his bigotry and greed marginalizes workers, minorities, women, and gays, and therefore liberals are ethically required to intervene and rule the bitter-clinger barbarians.

The Malinvestments of the Previous Boom

The Austrian theory of the business cycle goes something like this: A recession is the period of adjustment for liquidating the malinvestments of the previous boom.



In other words, when you get an unexpected increase in the economy, people pile on, and make investment and consumer decisions that assume the good times will roll on forever.



It wouldn't matter if they just plowed their extra income into foolish projects.  Then, when things go south they would just adjust to the reduced income.  But typically, they borrow money to fund their projects.  Borrowing money is a way of anticipating your future income.  But what happens if your future income is not as large as you assumed?  The answer is simple: it is retrenchment, losses, poverty, and bankruptcy.  And because you fail to make payments on your debt you imperil your financial counterparties, your bank and your bondholders.



The Federal Reserve reports that Americans lost 40 percent of their family wealth between 2007 and 2010.  That is telling.  It says that the decisions that Americans made in the 2000s about the future were wrong.  The investments they made in houses, especially, turned out to be malinvestments, because they ended up not having the income to service their mortgages.  So it turns out that we are a lot worse off than we thought in the heady days of the real-estate bubble. (But there is hope.  The Wall Street Journal reports that foreigners are snapping up high-end apartments in Manhattan and Miami.)



So now we turn to the question of "stimulus" and Keynesian economics.  The Keynesians recommend that the government borrows and spends in order to jump-start the economy.  There is a point to that.  If you have foolishly let your car battery run down, then getting a jump-start will get your engine going again, and hopefully recharge your battery.  But if there is no fuel in the tank, then it doesn't matter how long you crank the starter, you ain't gonna get the car to start.  Eventually you will exhaust the battery on the other side of the jump-start cables.



That's the problem that southern Europe is facing.  It just can't go on paying all those government entitlements when the economy lacks the fuel to crank out the GDP and tax revenue that the government needs.



And that's the problem in the US as well.  President Obama wants to borrow money and forward it to state and local governments so they don't have to lay off government workers.  The problem is that today's government workers are very highly paid.  Writes Josh Barro for Bloomberg: "San Jose spends $142,000 per FTE on wages and benefits, up 85 percent from 10 years ago."



So the question is: Do you think that helping the city of San Jose continue to pay its full-time employees an average $142k per year is going to help the US economy?

Honoring an Eagle Scout

We old 'uns are always worrying about the young generation.  But the truth is that the vast majority of young people are nothing to worry about.  It's we, the old ones, with our power, our corruption, and our hypocrisy, that are responsible for ruining the future.



On Sunday I was privileged to attend an Eagle Court of Honor at Troop 171 in Seattle, where four young Americans, including a former neighbor, Kyle Piddington, were awarded the rank of Eagle Scout.  It's easy to forget that behind all the hoodies and the baggy pants of today life is going on as usual and regular middle-class kids are going on scout camp-outs and getting socialized from boys into men.



The Eagle Scout ceremony is shocking in its unashamed conservatism, with flags, bush shirts, badges, God, country, character and moral straightness.  And it is also shocking in its familism.  Each honoree is eulogized (from the Greek: "good words") by an adult, and is enrolled in the rank of Eagle Scout with mother and father behind him.  Mother puts the Eagle Scout ribbon on, and the Eagle Scout pins mother, father, and a mentor.  Each Eagle Scout gets a US flag that has flown over the US Capitol.  Cue George M. Cohan and "It's a Grand Old Flag."



Those of us that have read Judith Rich Harris's Nurture Assumption, which argues that the most important influence on children is first of all their genes, and then their peers, and only then their parents, often wonder how to socialize young people: to counter the Lord of the Flies barbarity of their peers with something healthier than our appalling schools.



Scouting stands as an obvious and unassuming answer.  It puts boys under the guidance of adults, immerses them in a rough-and-ready moral order complete with ritual and responses, and combines teaching with play.  The boys start out as beginners, and end up as leaders.  We are talking about real leaders, of course, with real responsibility for their charges, poles apart from the "community organizer" style of leadership that is often celebrated by our political culture.



But the biggest takeaway for me was the realization that Scouting puts boys of all ages in a single group, and counteracts the instinct of children to socialize only with their age cohort.  Thus a 12-year-old can go out camping with 18-year-old gods, by right of membership.  And the 18-year-old has a responsibility of care for the young ones.



In my own boyhood I recall with particular relish "fagging" for a school prefect.  It usually meant toasting bread and brewing coffee in the afternoons for the Olympian gods.  And it also allowed the young to take certain liberties with the senior boys: a cheeky remark was not amiss.  When you consider that my particular god grew up to become Sir Howard Stringer, head of CBS News and then Sony Corporation, you can understand the privilege I enjoyed in the humble role of servant.



It's a delight to get a chance to talk to young people once they can converse like adults.  Kyle, the Eagle Scout that I came to honor,  responds like a politician to the usual questions from adults, with confident and intelligent sound bites.  Last year he set up a Facebook page for kids at his high school to help each other with homework.  And his father reports that he spent many hours teaching kids through their homework problems.  Why not?  Studies show that you remember 90 percent of what you teach.  Kyle is going to Cal Poly in the Fall and intends to major in Computer Science.



The trouble with our modern society, with its Big Media, Big Politics, and Big Business, is that it marginalizes all the important things, like family and civil society.  It's good to be reminded that under the radar, outside the camera frame, kids like Kyle Piddington are doing fine.

Who's The Extremist?

You don't often get a liberal and a conservative having a civil discussion about politics, but Hugh Hewitt had E.J. Dionne Jr. on his show to discuss E.J.'s  new book, Our Divided Political Heart: The Battle For The American Idea In An Age of Discontent.



Dionne argues that conservatives have gone extremist in the last ten years, abandoning the "compassionate conservatism" of the early 2000s for a radical individualism.  I've taken strong exception to E.J.'s argument here.



Of course Hewitt and Dionne disagreed about conservatism and liberalism, but their disagreement is illuminating.  Dionne says that the Tea Party is partly a throwback to the John Birch Society, that there is a "Bircher kind of strain within the Tea Party."  Hewitt hates that: "They're just different."



But Dionne is right.  Any conservative populist movement is bound to have similarities with the John Birch Society, and liberals are bound to try to link any new conservative trend with the conspiracy theorists of yesteryear.  Just look at the Wikipedia entry on the Birchers.  The problem with the John Birch Society was that they started looking for Reds under the beds, and that allowed liberals to turn them into a laughingstock of conspiracy nuts.



On the other hand when Hewitt raises the question of reading the left-wing crazies out of the liberal movement, Dionne won't do it.

[S]omeone on your side, and it might be you, has to do to your left wing, the Occupy people, the SEIU and the rest of the radicals what Buckley did to the Birchers. You must throw them out, or your party will die[.]

 That's when Dionne says that he doesn't think that the left has changed, and therefore there is no call to curb the crazies.



Actually, I think that Dionne is right, but for the wrong reasons.  It is true that conservatives have changed their political stance in the last ten years.  We have not really changed our beliefs; we just don't believe that we can get to where we want to go by compromising with liberals.  To Dionne the death of "compassionate conservatism" means that today's conservatives are all radical individualists.

I think they [the Tea Party] emphasize our individualistic side, which is very much part of us, the individual liberty side, to the exclusion of that side of us which both believes profoundly in community, and sees it as essential to preserving liberty.

This, of course is the fundamental divide between conservatives and liberals.  Liberals believe that community means government.  Conservatives believe that community ends where government begins, because government is force and the whole point of humans as social animals is the attempt to reduce force in intersubjective relations.  More government equals less community: that's what conservatives believe.



As David Cameron said in 2005, "There is such a thing as society.  It's just not the same thing as the state."  Talk to your liberal friend about that.  You'll find they just don't get it.

Americans Still Love Big Government

Don't get too excited about Wisconsin, people.  The problem Wisconsin exposed is a split in the Democratic Party, writes Michael Gerson.

The voters of the Badger State do not object to the idea of an activist, generous state government. The problem for Democrats in Wisconsin and elsewhere is that state and local budget debates unite conservatives while dividing voters who believe in active government.

One the one side are the public-sector unions that just want More; on the other side are the progressives that want the things that government delivers: "parks, libraries, public safety, education, support for the homeless and such."



This, it seems to me, rather misses the point.  The Democrats are united on Big Government.  They want unions and workers' "rights" and they also want big government and its public services. They are united because they all experience themselves as consumers of government--as government workers and as consumers of government services.



The trouble is the average American moderate and independent.  These honest folks are all in favor of big government; they just don't want to pay for it.  So when it looks like government workers are the big rich guys, getting free pensions and health care, it is easy to stir up resentment against them.  Conservatives have been railing for ten years about the princely wages and benefits that government workers get, anywhere from 25 to 50 percent more than equivalent workers in the private sector.  It was only a matter of time before some politicians found a way of capitalizing on this injustice.



When the good times were rolling the moderates and independents were quite happy to vote for new programs.  But now that budget cuts are threatened they think that the government workers should take up the slack by ponying up more for their benefits.



The question is how to get to a more worthy politics, one in which people aren't mere freeloaders eager to cash in on "free stuff" one day and railing enviously against the current winners in the Free Stuff Sweepstakes the next.



America is supposed to be better than that.