Obama the Great Divider

Just in time for Christmas, Hugh Hewitt has a piece on Obama the Great Divider.  Obama has successfully eliminated Speaker Boehner as a negotiating partner for his second term, he writes.

Having managed to lose 4 million votes between 2008 and 2012, the most partisan and relentlessly negative president of modern times doubled down on all of his least generous instincts and went "full Lee Atwater," embracing completely the advice that if your opponent is on the ground with a broken arm, step on it.



Atwater, of course, intended his counsel for the period before elections, but the permanent campaign requires permanent pummeling.

President Obama is the guy that sent the bust of Winston Churchill back to the British Embassy.  Perhaps the most famous apothegm attributed to Churchill is this:

In War: Resolution; In Defeat: Defiance; In Victory: Magnanimity; In Peace: Good Will.

Now why would the pugnacious Churchill propose such a dictum?  Because he was a good guy?  Because he had a weakness for a good turn of phrase?



I suggest that he proposed it because it is good practical advice for anyone in high politics.  When you are fighting you need courage and perseverance.  When you are victorious in war you want to co-opt the losers and discourage them from forming a new head of rebellion.



President Obama seems to think that he doesn't need the goodwill of the loyal opposition, and maybe he is right--for now.  And he has the advantage of a cultural elite that is completely in the tank for him.



But what happens down the road when things turn bad for him and his party?  When the politicians he has humiliated get their chance to stab him in the back?



The central idea in the politics of the left seems to be the act of protest.  It supposes that the left is a powerless group of the marginalized desperately reaching for a moment of publicity in which to announce their grievances to an uncaring world.  In other words, it is 1825 and the workers are working twelve hours a day underground in ill-ventilated mines.



In fact, of course, the left, in its liberal instantiation, is the ruling class of today, not a ragged band of the powerless.  It would, if it were sensible, try to co-opt its adversaries in order to reduce the effectiveness of the opposition.



My guess is that liberals are still reeling from the experience of the Reagan administration.  Here was something inconceivable: an amiable dunce that won the Cold War and ended the stagflation of the 1970s.  If it was real, it would mean that the administrative welfare state of the liberals was a mistake and a chimera, and the whole project was based on a delusion.  So liberals have closed their minds to the idea that Reagan was right, and have returned to their government expansion project like a dog to its vomit.



So now we have President Obama, determined to complete the liberal agenda against all odds and against all opposition.



Here is the problem for liberals in this policy.  It means that conservatives don't have a dog in the fight.  It means that there is nothing in the entire sweep of government policy that reflects conservative ideas and sentiments.  Given our druthers, conservatives would not continue Social Security: we would replace it with a genuine private-sector based savings program with maybe some sweeteners for the low-paid.  We would not continue Medicare and Medicaid, but move to a consumer-based rather than third-party-based healthcare insurance scheme.  We would not continue the government monopoly education system, and we would reform the welfare system at a minimum to reduce the high marginal tax rates on the poor.



Why then would conservatives consent to pay taxes for all these liberal programs?



When you are utterly shut out of the government spending racket and you don't have any dog in the fight then you start to rail at the injustice of it all.  You start to look for alternatives.  You start to gather a head of rebellion.



Churchill's dicta are the practical politician's way of preventing rage from breaking out in the opposition.  President Obama's way is the ideologue's clumsy way of riling up the opposition.



Most likely the near term result will be that the president will leave office in 2017 with the Democratic Party in ruins.



And don't forget the Instapundit Rule: "Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be."

Plan B Failure a Disaster? Or What?

The MSM consensus on the failure of Speaker Boehner's "Plan B" last night seems to be that Boehner was humiliated and the Republicans are in disarray.



So now the president and the Democrats can go to the country and crow that Republicans want to increase taxes on the middle class.



Who knows?



The basic correlation of forces is still what it was after the election in November.  The American people have chosen not to go for reform of the welfare state.  Not yet.



The logical result of that is to increase taxes, but not not too much, and keep all the rent-seeking spending going for now.



I was watching a Peter Robinson UncommonKnowledge interview of John O'Sullivan and Jonah Goldberg last night.  Someone said that you only get to curb the spending and the rent-seeking after a military defeat or a civil war.



It's obvious really.  The spending and rent-seeking in the modern administrative welfare state represents the real power balance in the western world.  If you want to change it you have to have the power to move the current power-holders and their supporters off dead center.  Realistically, you can only do that when the current power-holders are off their balance.



Maybe a financial meltdown would have the same effect as a war.



At any rate, if the economy isn't doing too well by the end of the Obama administration then you can expect the American people to be in a nasty mood.



And nobody will remember the details of Boehner's Plan B.

Robert Bork and Liberal Paranoia

The other day I mentioned to a liberal enthusiast for public transportation that, in my view, personal transportation is guaranteed in the Constitution.  Of course, I admitted, it's probably not right there in the text.  But I'm sure that I could find it in a "penumbra."



It was penumbras in the Constitution that empowered the US Supreme Court to find a right to privacy and thus a right to abortion, back in the day of Roe v. Wade.  The idea of penumbras comes from the dominant liberal approach to the Constitution, developed by the Progressives at the turn of the 20th century, that modern conditions required a "living constitution" that could adapt to the new world.



Conservatives have come to regard the "living constitution" doctrine in less flattering terms.  Conservatives regard it as giving liberals a free hand to interpret the Constitution any way they want.  So it stands to reason that some conservative would come up with an opposing doctrine, that the constitution means what the writers originally meant, and that if you want to change the Constitution you need to do it the hard way, by formal Constitutional Amendment.



The recently deceased Robert Bork was a principal architect of this "originalism."



Bork was a law professor at Yale for a couple of decades and then President Reagan appointed him, in 1981, to the US Court of Appeals.  In 1987, right after the Democrats had retaken the US Senate, Reagan nominated him to the US Supreme Court.  Democrats, led by Judiciary Committee Chairman Joe Biden and liberal lion Ted Kennedy, saw their chance and they took it.  They successfully calumniated this mainstream conservative judge as a conservative extremist and defeated his nomination.  Thus the tactic of personal calumny became neologized as the verb: to Bork.



This week The New Republic has run a piece regretting the tactics of 1987 but condoning the result: keeping a very conservative judge off the Supreme Court.

It’s a good thing that the man who Bork became after his defeat wasn't confirmed to the Supreme Court: If he, instead of Anthony Kennedy, had been the swing vote between 1987 and 2012, America would indeed have been a more illiberal place.

Right on liberals.  Still, there is room for regret.

But it’s bad for the country that Bork was Borked in the way he was. American courts, judges, and constitutional law have been paying the price for the past twenty-five years, and the future looks even more bleak.

You will not be surprised to learn that the commenters at TNR were not so circumspect.  They parroted the sentiments taught to them over 30 years ago by Sen. Edward Kennedy and others, that Bork was a dangerous extremist that should never have been nominated to the Supreme Court.



But here's a more telling commentary on Robert Bork and conservative jurisprudence, from John O'Sullivan:

At one point in the 1960s, Bob Bork and the other conservative law professor in Yale Law School approached its director to argue for the appointment of a third conservative to the faculty. They were told that although their candidate had excellent credentials, the selection committee had decided with agonized regret not to appoint him. They were afraid that the 60-strong faculty might be “swamped” with conservatives.

So who, really, are the pathologically paranoid ones in America?



If liberal professors are going to get their knickers in a twist over the prospect of 3 conservative professors in a faculty of 60, you can begin to see the problems that America is going to have, when it is time to show its liberal ruling class the door some day between now and eternity.

Think Like a Democratic Voter

If you are a Republican or and independent voter, the current fiscal cliff negotiation seems like a exercise in futility.  We solid citizens understand that a deal must be done on entitlements--principally Medicare--and that "something must be done" about runaway spending.



So we say, like the Wall Street Journal edit page, that the "budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later."



Some conservatives think that this amounts to a monstrous betrayal by Speaker Boehner (R-OH), but I think that we are asking too much of the Speaker and his Republican colleagues.  They are trying to move the Democrats, and the Democrats know something that we ordinary middle-class folks don't know.  To understand where the Democrats are coming from you have to think like an ordinary Democratic voter.



The average Democratic voter reckons "we are owed."  I got into trouble with an African-American acquaintance over this.  Never heard anyone say that, he said.  Yeah, so those chaps muttering about reparations are just talking about nothing.



But really, that's what the average Democrat keeps getting told.  You are owed.  That's what egalitarianism and redistribution means, if it means anything.



You can tell, from the outrage of the public employees of Wisconsin last year and the outrage of the unions in Michigan this year that the average rank and file Democrat never thinks about where the money comes from.  They are just owed.  Rush Limbaugh had a running joke for months after the 2009 stimulus, riffing off an interview of African Americans lining up for some free stuff.  Where does the money come from, a reporter asked?  Obama's stash, came the answer.



Which confirms my argument that government is nothing more than a looting expedition.  That's what a stash is: a place to hide the proceeds of piracy and plunder.



Think of the average Democrat voter.  She or he lives off the government teat.  She has a government job, most likely, and is plugged into various liberal government scams from health care to housing.  Now the point to remember, which we ordinary middle-class folks don't get, is that a voter like that has all her eggs in one basket.  Suppose she is a teacher, a nurse's aide, a social worker.  What in the world will she do when the government has to cut spending by a trillion a year?  It is unthinkable.



Then there are the Social Security and Medicare recipients like me.  Better not touch our benefits: we earned them: We are owed!



So which Democratic politician is going to be the one that addresses the Democratic faithful in some high-school gym and says: sorry about all that, but there is no more money?



Now the irreducible truth about the first four years of the Obama administration is that the federal government was spending about $1 trillion more each year than it was collecting in taxes.  Thinking in terms of my looting metaphor, Obama was distributing $1 trillion more in benefits to his supporters from his "stash" that he was collecting in his predations upon the private economy.



And that's how he got reelected.  There could be more money available in his stash if only the rich would give a little more.



And don't forget, we are talking about people that have put all their eggs in the government basket.  If you are a private sector person you have probably moved around a bit from job to job: you understand your skills and your marketability.  But a woman with a government job would probably have to take a massive pay cut if she had to get a job in the private sector.  If you have retired you have Social Security plus your 401k plus your savings.  But the government worker has only her government pension.



If you are a Final Glide American you have carefully organized your life to land on the government aircraft carrier secure in the knowledge that you are owed.  It is unthinkable that your benefits could ever be cut.  After all, you are living on a fixed income.  You have nowhere else to turn.



When the money runs out and the government can no longer spend more than it collects in taxes, then there will be an almighty fight over the remaining spoils.  It might be a good idea for the prudent if they can afford to walk away from their government benefits.  If only to avoid stray bullets.



Meanwhile, I'm not sure that it matters what deal Speaker Boehner cooks up.  It will all end in tears, anyway, because the Democrats cannot afford to tell the truth to their supporters.

The Beautiful Dream of American Exceptionalism

President Obama taught us all a lesson a while back.  When asked about American exceptionalism in 2009 he replied:

"I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism."

Yeah.  In other words, it's a nationalistic fantasy.

But, of course, the president is wrong: the United States is an exceptional nation.  It was founded upon an idea, the rising idea of its age, of republican self-government, on the Axial Age concept of the "responsible self."  From that idea came the whole exceptional package: limited government under law, separation of powers, the "Dutch finance" of Alexander Hamilton, the whole idea of civil society, of a middle ground of free association between the government and the individual.

But there is one brute fact about exceptions.  They are exceptions to the rule.  If the United States was born as an exceptional nation, then it stands to reason--and experience--that the United States will eventually become ordinary: "regression to the mean" is the official term.

Our liberal friends, of course, think that American exceptionalism is a bad thing: nationalism, anti-intellectualism, the gun culture, Babbitry, boosterism, the money culture.  They want to get back to being a normal nation, like the Europeans and their social democracy.

The libertarian "instapundit" Glenn Reynolds likes to quote the science-fiction author Robert Heinlein at this point:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as "bad luck."

The point is, of course, that "extremely small minorities" are people like Albert Einstein or Steve Jobs; they appear for a moment, like a blinding flash of light, and then they are gone.  Sometimes they are revered; often times, as in the case of a Rockefeller or a Morgan, they are reviled.  Then the world reverts to the mean.

I like to say that the United States is founded upon the exceptional idea of "Dutch finance" in which the government bases its finance on promoting the health of the rest of the financial and credit system.  The normal way of government finance is "French finance" where the government games the financial system to ward off the consequence of its overspending.  Dutch finance builds a strong nation; French finance leads to sovereign default, hyper-inflation, riots and revolution.

Under President Obama the US is heading as fast as politically possible down the path of French finance. That is the meaning of unsustainable entitlements; that is the meaning of cheesy "fiscal cliffs;" that is the meaning of trillion dollar deficits.

And it will be the "little people" who will end up "eating the paint off the walls."

All exceptions come to an end.  But it is a bitter thing to be living through the end of one so glorious and luminous as the American Exception.

Fifty Years of "The Calculus of Consent"

The bible on political is The Calculus of Consent by James M. Buchanan and Gordon Tullock, first published back in 1962.

Wow!  That means that we are celebrating its golden anniversary.  I wonder why I wasn't aware of this until today.  It's not as if people haven't been celebrating.

But I have been reading the book, so you don't have to.  No sex, no plot twists, you see.  Nothing to keep the reader's attention, except a devotion to learning.

In Calculus Buchanan and Tullock analyze the behavior of electors and politicians using the normal economic assumption that people seek to maximize utility, and with occasional resort to game theory.

Since I've just finished the chapter on special-benefit legislation using general taxation and the chapter on general-benefit legislation using targeted taxation, I thought you'd be interested to know what Buchanan and Tullock have to say.

In the case of special-benefit legislation, (e.g., getting the whole county to pay for a few peoples' road improvements) the average individual voter is going to get screwed unless he is able to bargain for compensation from the majority.  Since this is usually called "corruption" except when legislators do it informally in the process known as "logrolling" you can see that special benefit legislation is a bad deal for the average person.

In the case of general-benefit legislation, let us just quote from the book:

If the dominant majority is able to impose the full costs of general-benefit projects on the minority, it follows that all projects yielding any benefits at all to the majority coalition members, and costing no more than the maximum taxable capacity of the minority, will be adopted without question... [F]or all such projects a member of the majority coalition may secure some net benefit without cost to himself.(p.166-7)

As in "the rich pay a little more" Mr. President.

So Buchanan and Tullock judge that: "There is nothing in the operation of majority rule to insure that public investment is more 'productive' than alternative employments of resources".

An interesting claim in Buchanan's and Tullock's analysis is that "side payments" (or logrolling or graft or bribes) tend to reduce the amount of over-investment.  In other words, when the majority has to pay off the minority in order to get its project passed, then the value of the project to the majority is reduced, and the less "productive" investments won't get passed.  This seems to go against common sense.  You would think that, if side payments were forbidden, that it would be harder to pass special interest legislation.

But you can see why limited government is a good idea.  If there is no identifiable benefit from public "investment" then maybe we should all get together and limit the ability of organized minorities and dominant majorities from imposing costs on their fellow citizens.

Try telling that to President Obama.

Who Are the 1%?

When the president calls for the rich to pay a little more, what does he mean?  Who does he mean?  That is what Mike Bauer, from David Horowitz's shop, wants to know.  He sent me the following questions:

1. What number and percentage of Americans earn over $250K?
   
   


2. What number and percentage of Americans have a net worth over $250K?
   
   


3. What number and percentage of Americans earn over $1M?
   
   


4. What number and percentage of Americans have a net worth over $1M?

The simple answer is: it does not compute.  Because as soon as you start asking about "number and percentage of Americans" you get into questions of persons, households, adults, residents, income-taxpayers, "undocumented workers," and all the rest.  Despite the best efforts of governments to make their peoples "legible" it is still hard to know what is going on.



But Question 1 is fairly easy.  The IRS has lots of tax stats here with lots of Excel spreadsheets.  Here's one: 10in01pl.xls.  It says that 2.7 million 1040 tax returns out of 143 million reported $250,000 adjusted gross income or more.  So that works out at 1.9 percent.  Unfortunately, the spreadsheet doesn't go above $250,000.  So to answer Question 3 we'll have to find another one.  Here is 08in05tr.xls, which has the income that qualifies you for the ought point one percent.  Its last year is 2008, but it took $837,708 to get in the club.  Back in 2007 at the height of the evil unsustainable Bush boom--engineered by greedy bankers with which community activists and Fannie and Freddie had nothing to do-- you needed $1,039,732 to get in the 0.1% club.



Now wealth for Questions 2 and 4..  The data isn't so easily available on this.  But the Census Bureau has Table 721 on Family Net Worth, and the median family net worth in 2007 was $120,000.  Then there is Table 717 on top wealth holders.  It shows 2.7 million with wealth over $1.5 million.  Now the Census Bureau has 115 million households for 2007-2011.  So you can say that 57 million households had more that $120,000 net worth, and 2.3 percent have net worth more than $1.5 million.



So let's get back to the four questions:

1. What number and percentage of Americans earn over $250K?
   
   Answer: 2.7 million and 1.9 percent.
   
   


2. What number and percentage of Americans have a net worth over $250K?
   
   Answer:  About 25 million households and 25 percent.
   
   


3. What number and percentage of Americans earn over $1M?
   
   Answer: 142,000 and 0.1 percent.


4. What number and percentage of Americans have a net worth over $1M?
   
   Answer: Over 3 million households and 3 percent.

Of course, Americans in general have suffered more in the Great Recession than these numbers suggest. Minorities and women hardest hit. And it will get worse, much worse, as the Fed's money printing starts a huge bear market in bonds and a huge inflation in consumer prices.