There Is No Cunning Plan

Some Republicans seem to be frightened that President Obama is enticing them into a trap with his FY 2014 federal budget, what with his proposed chain-weighted CPI for Social Security inflation adjustments.  They think he is baiting a trap with this teenie-weenie entitlement reform to force them into agreeing to tax increases.



Then there are the House Democrats that seem convinced that the president's chain-weighting proposal is going to lead them into a frightful trap in the 2014 elections.  They fear that the House Republicans have a plan to beat them like a drum on Social Security.



I doubt it.  I don't think the president is that smart on the budget.  I think he is just doing what he has to do.  He has to show something on entitlements, like his Social Security plan.  He also has a bunch of less visible cuts on Medicare.  And what else is he going to do but propose massive tax increases?  After all, the alternative is to take a meat-ax to the entitlements and the crony capitalism and all the programs that dish out lovely grants to liberals.   That would be like running up the white flag.



And House Democrats doubtless think that the sun rises and sets on entitlements.  So they naturally fear that someone, somewhere has a cunning plan to deep six them and their noble constituents that have staked their lives on government benefits.



I lean on the old Hollywood saying about what makes a hit movie.  Nobody knows nothing.  In national politics it's a bit different.  Everyone knows what needs to be done, but nobody dares to move.  Democrats can't ask their supporters to eat entitlement cuts.  Republicans won't ask their supporters to bail out the unsustainable entitlements with tax increases.



The net result is that the officers are standing on the deck in the storm watching the ship of state crash its way onto the rocks.  Nobody dares to order the grumbling crew to do anything, because the officers are afraid of mutiny.



The ruling class is right to be afraid of mutiny.  Nobody said anything about financial mayhem and shipwreck when they promised Social Security and Medicare as a basic human right.  Anyway, all the money that people paid into FICA is locked away in those Trust Funds, right?



Nobody knows how all this will turn out.  No doubt that cunning politicians will find ways of winning and losing elections as we stumble on into the future.  And the cunning politicians on one side will outfox the cunning politicians on the other side.



One thing is for certain.  The folks that put their trust in government are going to find that their trust was misplaced.  It's the old story: women and minorities hardest hit.

Marx: Five Big Mistakes

We all like to rag Karl Marx on the failure of his "immiseration" thesis, that the workers would get poorer as the capitalists got richer.

Well, not all of us.  Tens of thousands of "progressives" still firmly believe in the immiseration doctrine.  That's what makes the fight against inequality meaningful.

But that wasn't the only big mistake that Marx made.  Let's enumerate them, one by one, starting with the gold standard, the immiseration thesis.

1. Immiseration of the workers. Marx argued that the progress of machine industry run by the capitalists would slowly drive the small operators out of business, leading to poverty in the lower bourgeoisie and the working class.  Of course, there's a big truth in that.  It happens all the time.  Some giant of capitalism that bestrode the marketplace slowly loses its mojo.  Think A&P pushed out by Safeway.  Think Detroit pushed out by the Germans and the Japanese.  But every time, jobs in new industries spring out of the ground as the old jobs wither away.  As long as we leave them the space to grow.
2. Alienation. Marx argued that capitalism and the division of labor alienated workers from their true nature.  He had in mind the degradation of the manufactory where workers performed mind-numbing repetitive tasks that didn't require the skills of the old hand trades.  And there was a sense in which the working class was forced into the factories after being dispossessed of their rights by the enclosure movement that changed the tradition of collective ownership of the land to individual freehold.  But it is clear that many people actually choose to work for a big corporation.  They like the idea of the implied life-time employment, the benefits, and the meritocratic bureaucratic structure.  Is it alienation when people choose to work in the giant modern office factory over the hurly-burly of the small startup?
3. Labor theory of value. Marx took the problematic theories of value promoted by the classical economists, the divided notion of use value and exchange value, and mixed them up into the nonsense of his labor theory of value.  Yes, it's true that everything we know and do comes out of the brain or the labor of somebody, somewhere.  But today we understand that everything from the past is simply a sunk cost, not a value.  All the work of the past is done, the work that helped feed millions and also the work that went into useless pyramids and bankrupted great empires.  When you have done your labor and finished your product, the labor, the effort, the genius, that is all in the past.  The question is: what will the next customer pay for that product?  And all the effort and the labor that meant so much to you means nothing to him.  The labor theory of value stinks.
4. Socialism and bureaucracy.  Marx correctly sneered at Hegel's paen to the bureaucracy as a mediation between government and people.  That is rubbish, because the absolute monarchs generated their bureaucracies precisely as an instrument for taxing and controlling the people.  But Marx predicted that bureaucracy would wither away after the socialist revolution.  OK, Marx had an excuse back in the wild and crazy 19th century.  But we now know that the more socialism in a government, the more bureaucracy, and the more taxing and the more control.  Bureaucracy, as Marx insisted, is the administrative organ through which the sectional interest of the ruling class is imposed upon the people.  He was right on that one.
5. Disappearance of the division of labor.  Marx maintained that the alienating division of labor would disappear under socialism.  No longer confined by the limited, dehumanizing task, the laborer would be able to develop the full range of his talents and capacities, making a product in the morning, gardening in the afternoon, and going to the theater in the evening.  This is rubbish.  People like to specialize; to become an expert in something.  And there is no division of labor more rigid and dehumanizing that the administratively organized workplace of the socialist state.

What is striking about the Marxian vision -- and for that matter the modern liberal vision -- is its oblivious turning away from the fundamental truth of life: the cycle of conception, gestation, birth, growth, maturity, decline and death, and the renewal of life in a new generation with all the genes remixed.  The old must die so that the young can inherit the earth.

The cosmic joke on the modern ruling class is that the very thing that it sets its shoulders against, capitalism, is the very thing that approximates in its operation the metaphor of life.  Ideas, businesses, industries are all the time, all around us, getting created, expanding, contracting and dying, just like life itself.  And what do we do?  We rebel against it.  We want to live forever, we want to preserve our traditional standard of life from all external shocks.  And we want the rest of the world to pay for it.

Thanks Chuck.  But I sometimes wonder if we will ever get this world out of the ditch you got us into.

What Grand Bargain?

Some people are talking about a grand bargain on the federal budget.  Joe Klein, for instance.



You can look at the president's FY14 budget at usfederalbudget.us.



Well, sorta.  Joe says that Congress is fed up with the broken budget process and may do a deal this year.  He sees a moderate compromise of entitlement cuts and increased revenue.  And President Obama may possibly join in.  He's apparently "stopped trying to bang his head up against John Boehner and the Tea Party crowd."



Really?  The chap who's planning to flip the House of Representatives in 2014 with Organizing for America?



If the president were planning on a grand bargain, he would have started months, maybe years ago.  To get Democrats to sign on to entitlement reform and Republicans to sign onto tax increases would have required the patience and the political skills of -- well, a Reagan.  And President Obama is not that kind of politician.  He made his chops as a community organizer, riling up the welfare-state beneficiaries to demand their "rights."  And that's what he likes doing.



The death of Margaret Thatcher this week shows what I mean.  Thatcher came into office with a program, and she diligently and doggedly stuck to her guns for nearly 12 years.  This meant a huge effort in developing the intellectual horizon of what she wanted to do and then implement it in the hard daily grind of political and administrative details.



In President Obama we do see an intellectual horizon.  It's the liberal horizon of a bigger and bigger administrative state.  To the extent that we see the evidence of a hard daily grind it is clearly devoted to implementing that liberal vision.



Why would President Obama compromise anything away now?



Liberals will only be ready to compromise when they see political power slipping away, and today, they are very far from that.  In fact, liberals think the have an "emerging Democratic majority" of minorities, women, educated and the young, that will make them the default party of government for the next generation.



The job of Republicans right now is to be the Party of No.  Entitlement cuts?  Maybe, but not if it means anti-growth tax increases.  That's because the bottom line for Republicans, as the party of the People of the Responsible Self, is that Republican voters should have an economy in which they can make an honest living.



Democrats live and die on the free stuff they have won for their clients.  Republicans live and die on the ability of their voters to work and thrive.  Don't look for a grand bargain until one of the two parties fears annihilation at the polls.



Maybe in 2015 after the Democrats get annihilated by the unpopularity of ObamaCare?

Live by the State, Die by the State

There are two narratives out there about Margaret Thatcher.  The conservative line is that Maggie saved Britain.  The liberal line is that she divided the country and cratered manufacturing, wiping out the working class.



For a conservative view of the wipeout, let's turn to Brit-born John Derbyshire.

Mrs. Thatcher’s defeat of the frankly communist National Union of Mineworkers was a triumph for economic sense, but left mining towns and villages without work. Most of them remain in that condition today. As the grandchild of two coal miners from just such places, I know what has been lost.

The great virtue of John Derbyshire is that he tells it like it is, without shading his views in deference to the Zeitgeist.  That's what got him fired at National Review: saying something non-PC about race.



But he got me to thinking.  What did those miners think they were doing, joining a political strike against the government?  Didn't they understand that they were essentially engaged in civil war?  Didn't they get that, but for the left-wing press, they would have been tagged as rebels?  What did they think happens to defeated rebels in this sub-lunar world?



It's a bit rich to complain about your miseries after you've been defeated in a civil-war-by-other-means.



And the same goes for all those who worked for the failing nationalized industries in the 1970s.  What did those folks think would happen in the end, long after government had "saved" their jobs?   What did they think happened to the competitive qualities of their employer after he's been rescued by the government?  Did they think they could go on forever producing substandard products and services for their fellow Brits?



One of the great cruelties of our age is that lack of truth-telling from our educated elite.  And one of the failures on the truth front is the failure to tell people that when they get the government to bail them out they are forcing the rest of society to cut checks to them for doing, well, not very much.  A small business cannot survive at all not doing very much.  A big corporation cannot last very long without satisfying its customers. True, a government can go for quite a while by taxing and borrowing and spending.  But in the end it all collapses in inflation and default.



Our educated elite won't tell ordinary people just how much they risk by sucking on the government teat.  Because in the end a Pharaoh will arise that knew not Joseph, and will decide that it is too much trouble to continue the customary subsidies.  Anyway, he has other supporters he needs to look after.



What about the truth, from Deirdre McCloskey, that it is capitalism, not government, that brought us in 200 years from $3 per day to $120 per day?



There is no substitute for a robust independence and competence, in individuals, in families, in businesses, in nations.  When you work for years and years for some big corporation or government bureaucracy you get further and further from reality, where reality is the market wage you could earn if you got laid off tomorrow.



If you want to know why the ranks of people on Social Security Disability are expanding so rapidly, that's where you start.  With people who have been taking a paycheck for years at some long-established employer, but not really producing, not really keeping their skills up, not really making themselves useful and employable.



On the other hand there is capitalism and the market.  There is no doubt that capitalism is a stern taskmaster.  It operates by profit and loss.  If you can offer a product or a service to the market at a profit, you get to live another day.  If you can't, they you'd better think of something else.  But what alternative do you propose?  Do you propose to impose yourself on your fellow citizen and force them to support you, because this is such a cruel hard world?



Margaret Thatcher had an interesting take on earning a living, as she experienced it, growing up as the daughter of a shopkeeper.

For them [the critics] capitalism was alien and harsh: for me it was familiar and creative. I was able to see that it was satisfying customers that allowed my father to increase the number of people he employed. I knew that it was international trade that brought coffee, sugar, and spice to those who frequented our shop. And, more than that, I experienced that business, as can be seen in any marketplace anywhere, was lively, human, social, and sociable: in fact, though serious, it was fun.

Come on, fellahs.  The basic social contract is that we work to serve others, so that we may earn our own living from that service.  The alternative is the life of the robber, to hold up others and take their money.  But life is not so hard after all.  If you surrender to the rules of capitalism you can break through the seriousness of it all, and transform the struggle into fun.



And isn't that what the whole of human life is about?  It is a brave and resolute gesture against the awful truth, that we are just pond-scum living on the margin of a great rock in space, and that every one of us will soon return, dust to dust, ashes to ashes.



But meanwhile, let us live life as a glorious gift, and live and work and love, giving the grim reaper and our fears no more than a grudging respect.

Protecting Liberal Totems with Government Force

After gay marriage, you might be asking, then what?

How about the criminalization of people that don't want to do business with gays?  That's what Mark Steyn discussed in a recent column.

In Canada, where they have had gay marriage for a decade, you can get into trouble over gay marriage.  In other words, the race police, the folk that right now can get you into trouble for saying the wrong thing about minorities, will be expanding their remit to speech about gays.

The Diversity Celebrators have their exquisitely sensitive antennae attuned for anything less than enthusiastic approval. Very quickly, traditional religious teaching on homosexuality will be penned up within church sanctuaries, and “faith-based” ancillary institutions will be crowbarred into submission.

In Canada, right now, Catholic schools are required to have gay-straight alliances on campus.  And in the US you can get the local Human Rights Commission sicced on you if you don't want to photograph a gay wedding or if you write an article about race in Philadelphia.

What's happened to tolerance, you ask?  You thought liberals lived and died on their tolerance.

Let us leave on one side the hypocrites who talk a good line about tolerance just as a misdirection play.  Let us imagine instead a real thoughtful liberal.  Why would such a person want to criminalize people that disagree with her values?

I stumbled across the answer in a book by Anthony Giddens, Capitalism and modern social theory: an analysis of the writings of Marx, Durkheim and Max Weber.  Giddens?  He was Tony Blair's pet political philosopher for New Labour's "Third Way" back in the 1990s.

Giddens extracts an important notion from Emile Durkheim's study of Australian totemic religion.  It is the human need to foster a notion of the "sacred" and separate the sacred from the profane.

We humans need to hold close our ideal of what could be, what should be, and keep it separate from the everyday and the banal.  Thus the idea of the sacred temple, the sacred texts, and the sacred rituals in which we get together to renew our faith in a better world, and find strength to go on.  It must be kept separate and special.

The fact is that while science is a wonderful thing, chunking away and churning out knowledge, we cannot wait for it to decide everything, for our lives are here and now.  We must make a decision about how to live our lives right now, because it is bootless to say: well, we certainly should change, but all the ducks aren't in a row yet, so we better wait until the science is complete.

(That is why the global warming scientists have been fudging the science about climate.  They cannot wait, either.)

In our modern era, liberals experience themselves are carriers of a special "rational morality" relating to equality and liberation.  They feel that they possess a special moral authority to expound and implement their social beliefs.

Now the maintenance of moral authority demands that moral ideas are "as if surrounded by a mysterious barrier which keeps violators at arm's length, just as the religious domain is protected from the reach of the profane."(p114)

You can't have deeply-held beliefs without being outraged when someone treats them as routine and banal.

But if you "expunge all traces of religion from morality" then you get to the point where "all moral rules are rejected, because such rules can only survive this they are accorded respect and are regarded, within the conditions of their application, as being inviolable."  So liberals must defend their ideas as sacred, and that means, necessarily, punishing the violators of their sacred shrines.

If liberal ideas mean anything to liberals, they are good ideas leading to the good society.  Thus liberal race programs unwind the centuries of racial injustice; liberal gay programs unwind the centuries of gay-bashing.  And people that sneer at those ideas and those programs are racists, bigots and homophobes profaning the sacred spaces.

Now one of the central ideas of American exceptionalism is that there should be no establishment of religion.  Government should not get in the middle of arguments about the sacred, and it shouldn't become the enforcer for any particular sect or movement.  First Amendment and all that.

Of course, the First Amendment only works in the breach, because there is always a dominant religion that gets to use government as its cat's paw.  Thus Catholics had a rough time in the mid 19th century as the common school system was set up to favor Protestant bible-reading in school.  At the turn of the 20th century the Jews didn't like the frank bias towards Christianity in the US public square.

But now liberals are in the saddle, and they are using government to promote their sacred ideals and to protect them from sacrilege.  But why not, since liberal ideas are only based on "rational ethics" rather than superstitious ideas from the Dark Ages.

The thing is that with the decline of god-based religion, at least among the educated elite, a substitute has arisen, the modern phenomenon of "secular religion:" Communism, socialism, environmentalism, feminism, racial identity, gay rights, etc.  All these movements are secular churches with articles of faith and with sacred rites where members celebrate togetherness and the power of getting together.  And our modern society is drenched in these secular religious movements.

The problem is that, while denying that their faith amounts to a religion, the educated elite has more or less built an establishment of their secular religion, institutionalizing it in thousands of government programs, so that anyone that dissents from educated-class orthodoxy is branded not just as a bigot and a heretic but also as a criminal or even a rebel.

The whole notion of the First Amendment arose out of the bitter experience of the Reformation and the British Civil War where disagreements about religion--about the sacred--led to bloody war and bloody repression.  Let's get government out of the day-to-day arguments about the sacred, our founding fathers said.  Let's decide questions about faith and morality in a fair fight, without one side having the benefit of the government's guns.

But liberals are blissfully ignorant of all this, because they do not experience their liberal faith as a religion.  They believe--they know--that they have evolved beyond the iron cage of "organized religion."

In this, as in many things, liberals are woefully mistaken.  Get a clue, liberals.  Of course, your environmental and your "justice" organizations are churches.

And liberals have even developed their own form of ritual, the "peaceful protest."  Look at these photos of a peaceful protest in San Francisco against the Keystone XL pipeline and tell me that the demonstrators are not engaged in a religious ceremony.

It's easy to imagine that the big challenge of the immediate future is getting through the inevitable meltdown of the government finances.

But that will just be the start of our troubles.  I suspect that right up there will be the fight to extend the provisions against an establishment of religion to the modern secular religions that were not anticipated by the framers of the Constitution.

And it won't be pretty.

Margaret Thatcher, RIP

Of the Great Three of the 1980s, Margaret Thatcher, perhaps, had the most distinguished ancestry.  Her father was a grocer.



Ronald Reagan's father was the town drunk, and Karol Wojtyła's father was a sergeant in the Austro-Hungarian army. But Thatcher's father was a respectable grocer in Grantham, northern England, a Methodist and sometime alderman.



So Margaret Thatcher, grocer's daughter, united left and right: the Tory upper crust and the lefties both hated her.



Margaret Roberts graduated from a British grammar school, meaning a government school that emphasized academics, and went to Cambridge to get a degree in Chemistry.



When she decided to go into politics, it took her ten years to find a Conservative seat.  In those days, the local party ran the candidate "selection" and the old-school Tories didn't really like the bright young woman graduate.  But she eventually got to become the MP for Finchley, then a middle-class suburb of north London.  Twenty years later she was Prime Minister.



Looking back, it is remarkable to realize how well the left recovered from the debacle of the 1970s, the decade of stagflation, and how resolutely they determined not to learn the lessons of the Eighties.



The lesson was that it's all very well to want to fight inequality, but big government won't do the job for you.  That's because the only thing that government can do is take money from one person and give it to another.  It cannot build wealth; it cannot educate children; it cannot lead the poor out of poverty.  All it can do is tempt the voters with free stuff at election time and then govern by handing the lolly out to its supporters.



Oh, there are exceptions.  You can have a great reform and staff it with enthusiasts for a while. But eventually the enthusiasts leave for another gig and you are left with the time servers and the pension addicts.  Just as we have today in education and in local government.



The trouble with socialists, Margaret Thatcher said, is that "they always run out of other people's money."  The reason is that government doesn't produce anything; it doesn't produce or serve in response to market demand.  It merely takes money from people and goes through the motions of producing and serving.  You would too if you got your check whether you produced or served up anything of value.



The great achievement of the 1980s and Ronald Reagan and Margaret Thatcher is that they showed the world that hard money and market economics will usher in strong economic growth.



But the left could never accept that, because if you accept the Reagan-Thatcher achievement then the whole point of the Liberal Ascendancy, the rule of the educated class, is demolished.  Why, maybe parents could get together to educate their children, as home-schoolers do today.  Maybe people could save their own money for retirement.  Maybe charity and neighborliness could relieve the poor.



So the left has turned its face against the great reforms of the 1980s.  In Britain and in the US the parties of the left have swamped the country with new immigrants off the farm, and new immigrants have reliably voted for free stuff ever since the Irish tumbled onto the shores of North America from the coffin ships of the 1840s.



Now we are heading for a rendez-vous with reality, as the pathetic Obama economy stumbles along in a four-year misery of a jobless recovery.  Millions of Americans have given up and got themselves on disability.



But socialism, or identity liberalism, or progressivism, or whatever you want to call it, always runs out of other people's money.  That's because humans are social animals, not government slaves.  We thrive according to Adam Smith's invisible hand: we get what we want by doing things for other people, things that they are prepared to pay money for.  The whole point of big government is that the invisible hand won't do the job.  What you need to make a better world is force.



Of course, there is a sense in which capitalism confirms the jeremiad of Horkheimer and Adorno: "What men want to learn from nature is how to dominate it and other men."  But these pessimists miss the point about the nature of a social animal.  The point about social animals is that they don't merely dominate, and don't merely reduce their lives to a mechanical exchange of force.  They cooperate.  They pay attention to the needs of others, and act upon it.



Capitalism is the human adaption to the fact of cooperation beyond the face-to-face cooperation of the hunter-gatherer camp or the agricultural village.  It is cooperation based upon a radical expansion of the horizon of trust from blood kin to all the people in the world that demonstrate trustworthiness.



Of course capitalism doesn't end exploitation, and people suffer under capitalism as under any social system.  And capitalism is ruthless on people that don't want to make stuff for other people.  And its focus on specialization does tend to make people smaller.



But capitalism is like democracy.  It is the worst way of organizing the economy except for all the alternatives.



That's what Margaret Thatcher stood for and that is why we will always remember her.

Throttlebottom Obama Economy

Here we go with another sluggish employment report.  Yes, the unemployment is down to 7.6 percent, but the nasty is in the Household Survey employment numbers: Labor force down 496,000.  Employment down 206,000.



Not good.  You don't want to get the unemployment rate down by shrinking the labor force more than the shrinkage in the number of jobs.  Not nohow.



And how now about that Keynesian policy mix of deficits and cheap money?  Liberals should have learned from Ronald Reagan, who did the opposite, with tight money and domestic spending cuts, and started a 20 year boom.



This isn't rocket science, liberals.  It certainly isn't climate science.



Look.  Keynesian economics has its point.  When the economy is truly contracting, then it's a good idea to keep government spending going and loosen the credit strings.  But as soon as the credit system turns the corner and the economy starts to improve then it is time to cut government spending.  Because all government spending is waste.



Yes, I know.  There are some wonderful things that government does.  But in the end it all comes down to distributing free stuff to your political supporters.



Supply-sider economist Alan Reynolds has a good piece on the difference between the PIIGGS countries (Portugal, Ireland, Italy, Greece, Great Britain, Spain), the BRIC countries (Brazil, Russia, India, China), and the MIST countries (Malaysia, Indonesia, South Korea, Thailand).

All PIIGGS have two things in common. First of all, government spending grew dramatically — from an average of 43.2% of GDP in 2007 to 52.6% by 2010... [Second,] The highest income tax rate was recently increased in every one of the troubled PIIGGS except Italy[.]

 What about the other nations, the BRICs and the MISTs?

Government spending is frugal in these countries, averaging 32.1% of GDP in the BRICs and 27.4% for the MIST group...  Rather than raising top tax rates, all but one of the BRIC and MIST countries slashed their highest individual income tax rates in half; sometimes lower.

In the PIIGGS countries, governments are struggling with sluggish growth; in the BRIC and MIST countries growth is good.



So what's the lesson, according to Reynolds?

 What works, these successful economies discovered, is (1) to prevent government spending from growing faster than the private economy that supports it, and (2) to reduce rather than increase the highest, most damaging tax rates. 

Really, you wonder.  What is so hard about this?



I will tell you want is so hard.  It's no secret.  Governments all over the world, since the dawn of time, have operated like pirates and plunderers, looting the fisc to pay off their supporters with free stuff.  From time to time this looting gets out of hand, taking more from the economy than the economy can stand.



So you get a government standing around wringing its hands about greedy bankers and the rich paying their fair share.  Because all politicians know is taking money from the moneybags to give to their supporters.



When we look back at the Obama administration we can only hope that this was the moment that liberals, after suffering devastating losses in 2014 and 2016, finally abandoned their pedal-to-the-metal faith in the wonders of stimulus, cheap money, and government "investments."



If there is any divine justice in this world then liberals should be kept out of power for a generation.



Because the people that suffer from this monstrous policy are, of course, not the greedy bankers and insurance companies and Big Oil, but the rank-and-file Democratic voter that puts their faith in the charismatic leader promising free stuff.



But don't hold your breath.