Politicians Wreck Economies, Chinese and US

After the three-day market rout it's time for an I Told You So article on the follies of the politician-driven Chinese economy. Writes Rich Lowry:

China might have bright, shiny airports and gauzy GDP numbers, but that is window dressing on a badly distorted economic system that is being managed about as well as you’d expect by a group of corrupt, self-interested statists, which is to say not well at all.

Hmm. Politicians distorting the economic system, with the result that "A country famous for its 'ghost cities,' massive unoccupied developments, obviously has a huge malinvestment problem." Where have I heard that before? Which country has a huge problem with politicians throwing government subsidies at malinvestments in, e.g., "affordable housing" and "green energy?"

Rich Lowry says that at least the Chinese government knows it has a problem.

The Chinese government has talked up reforms as it seeks to put the economy on a sounder long-term footing. The list of necessary changes is incredibly long. For a truly modern economy, China needs a commercial banking system, less powerful state-owned enterprises, free capital flows, greater labor mobility, and a proper retirement system, not to mention the rule of law, property rights, and an independent judiciary, among other things.

What Lowry is saying is that the politicians everywhere need to get out of picking winners and losers and directing the economy with their corrupt (and probably economically incompetent) nominees.

What about the United States? Where is the groundswell of political opinion from the heartland demanding that the government get out of its endless interventions in the economy? For instance, libertarian activist Stephen Moore can't get a mortgage, because Dodd-Frank, even though he's putting 25 percent down, and people that put 25 percent down don't walk away from their mortgages.

Virtually all the defaulted loans had low down payments, with many having less than 5 percent down, thanks to government "affordable housing" mandates.

Moore is being denied because he has a low credit score -- for two late credit card payments and $300 in unpaid parking tickets. Meanwhile the government is still on its "affordable housing" kick.

While I'm making a 25 percent down payment, the government insurance underwriters -- the Federal Housing Administration, Fannie Mae and Freddie Mac -- are backing with taxpayer dollars hundreds of thousands of loans made with as little as 3 percent down. These are the loans that will likely default. And taxpayers are on the hook for hundreds of billions of dollars.

What could go wrong? If you add in the tens of thousands of crony-green wind turbines that unroll beneath you as you fly across the fruited plain, you remind yourself that there is plenty of ruin in the United States.

We should be careful in sneering at China. We have plenty of screwed up economic nightmares waiting to happen right here at home.

The reason that China has a screwed-up economy is that its corrupt Communist Party un-elected oligarchy doesn't have a clue about how to run the economy. The reason that the US has a screwed-up economy is that the voters keep electing politicians to office that don't have a clue about how to run the economy.

Hello people! If you want to know what to do about the economy, don't listen to a word the politicians say. They will say anything to get your vote.

The people to trust with the economy are the businessmen. They are idiots, of course, but unless they have politicians in their pocket they are forced to adjust their businesses to the reality of the market every day. And that is what makes them grow the economy.

Unwinding Obama's Transformation of America

In The Politico, old hand Jeff Greenfield in "Democratic Blues" told fellow Democrats that the verdict was still out on the "policy" of the Obama era. But the Obama "politics" had reduced the Democratic party to "its worst shape since the Great Depression—even if Hillary wins."

Now that I think about it I'm not too sure just what Greenfield means by "policy" and "politics." I suppose he means by "policy" the things that Obama has done with the government, and by "politics" his party's electoral fortunes. Of course Greenfield is writing for Democrats and bucking up their spirits by telling them that, just because the Republicans have captured majorities in both houses of Congress and the majority of state houses, not everything is lost. Historians could one day praise Obama for his controversial policy initiatives.

But I think that old hand Phil Gramm has a better grasp of the situation when he critiques the Obama "policy" in "How Obama Transformed America."

Obama "learned" from previous progressive failures that the way to push the progressive agenda was to hide controversial details that could provoke opposition, and then ram the details through with administrative and executive action. This was what Democrats learned from the abortive Clinton intitiatives. Gramm writes:

Americans have always found progressivism appealing in the abstract, but they have revolted when they saw the details. President Clinton’s very progressive agenda—to nationalize health care and use private pensions to promote social goals—was hardly controversial during the 1992 election. But once the debate turned to the details, Americans quickly understood that his health-care plan would take away their freedom. 

So the Obamis "learned" to hide the details, as in Nancy Pelosi's famous sound bite that we could find out what was in Obamacare once we had passed it.

But Gramm points out the flaw in this strategy.

The means by which Mr. Obama wrought his transformation imperil its ability to stand the test of time. All of his executive orders can be overturned by a new president. ObamaCare and Dodd-Frank can be largely circumvented using exactly the same discretionary powers Mr. Obama used to implement them in the first place. Republicans, who never supported his program, are now united in their commitment to repeal it.

It's easy to see where the Obama strategy came from. It came from the leftist revolutionary tradition, which is all about seizing power and then just implementing the leftist agenda without benefit of a "conversation." In the original formulation implemented by Lenin the seizure of power was accomplished by armed revolution and brutal suppression of dissent. In the Gramscian "long march through the institutions" it is accomplished by a kind of office politics writ large backed up by the "political correctness" culture that makes ordinary bourgeois ideas into forbidden hate speech. There's a good piece on the whole leftist process in the American Thinker here from Scott S. Powell of Seattle's Discovery Institute.

But in the face of all this gloom and doom, I remain optimistic.

I think that the leftist model is fundamentally flawed. It negates the whole idea of humans as social animals, for all it wants to do is to conquer and dominate; all it aspires to is making its targets into enemies. All it achieves is the silence of the gaol and the wasteland of places like the former Soviet Union, the Castro brothers' Cuba, and Maduro's Venezuela.

That's why I think that the current book on the 2016 election, that Hillary Clinton has a 60% chance of winning, is a fantasy. Obama and his acolytes have humiliated too many people, have broken too many laws, have ridden roughshod over too many settled agreements. Obama has turned too many neutrals into opponents.

The reason for elections is to confine the warring spirit to defined election seasons, and agree to disagree the rest of the time. The reason for seeking the "consent of the governed" is to keep the minority moderately happy. The reason for the government to obey its own laws is to prevent the victims of government power from forming a head of rebellion. The reason for the president to assemble bipartisan majorities for his legislation is to prevent the opposition from coming to power and repealing everything he has done.

The failure of President Obama to do this is a profound misunderstanding of the nature of the human condition and the roots of peaceable human society. And we know why. Obama learned his politics from Gramsci and Alinsky, which says nothing about cooperation and everything about fighting.

It is my hope that the American people will revolt electorally against the Obama and the leftist culture in 2016. That revolt will provide a chance to heal the social wounds inflicted in the Obama era.

If we don't heal the wounds now, then we will find ourselves doing radical surgery later. And that would be a human tragedy.

When the Narrative Stops

Many conservatives like to rail against "cultural Marxism," the product of the Frankfurt School that transformed Marxism from a class-warfare argument to a culture-warfare argument.

The Frankfurt School realized after World War I that the class-warfare argument had been proved wrong, for the working class was thriving instead of "immiserating." So they proposed changing the narrative to a culture-war argument -- that certain minorities, such as blacks, women, and gays, had been exploited and oppressed by the majority white culture.

In parallel with this argument the Frankfurters developed the whole political armory we call "political correctness" in which they made explicit what had been merely implicit. They developed a political culture that would consciously control the narrative, use Marcuse's notion of "repressive tolerance" to shut up your political opponents, and execute on Gramsci's "long march through the institutions." Every ruling class does this, but nobody had really thought about it rationally, instead of merely executing on it instinctively.

The point about the "Narrative" is that it works beautifully to control what politicians are allowed to say and not say. It executes on the teenage mean-girls line "I can't believe you said that!" Also called the Overton Window.

Now the trouble about enforcing the "narrative" and shaming people that speak thoughts outside the Overton Window is that it is all a lie. You are enforcing a particular world view and forbidding anyone to think or speak outside it.

There is a -ism for that. Totalitarianism.

There's an irony here. Conservatives rail against "relativism," meaning the idea that world-views come in different shapes and sizes, while liberals celebrate their open minds and their willingness to tolerate diverse views. But in fact in today's political and cultural climate it is liberals that want to forbid any speech that threatens their monolithic liberal absolutism, while conservatives want to expand the conversation beyond the simplistic totalitarian narrative that the educated ruling class knows best and we want to acknowledge our basic ignorance about what works best.

So for the last couple of decades we have been confined within what we might call a Beltway Narrative. Propose a tough America-first narrative on immigration and you are a bigot. Oppose abortion on demand and you are warring on women. Propose to reform entitlements and you are proposing to push granny off a cliff. Regulate home mortgages with sensible limits on borrowing and credit scores and you are redlining minorities out of "affordable housing."

But of course it has all been a lie, a lie enforced by the Cathedral: the cultural and political ruling class of the media, the academy, the entertainment world, and the activism culture. It is a lie that is all about maintaining the power of the present ruling class, the post-1848 generation. Here is Deirdre McCloskey expanding on our present ruling class in the front matter to her forthcoming Bourgeois Equality.

Yet after 1848 a virulent aversion to the bourgeoisie infected the mass of artists, journalists, professionals, bureaucrats, and intellectuals, the “clerisy” as it was called in 1818 by Coleridge. The Germans called it the Clerisei or later the Bildungsbürgertum, the cultivated and reading as against the commercial and bettering bourgeoisie. In the eighteenth century the members of the clerisy such as Voltaire and Tom Paine had courageously advocated our liberties. But in the 1830s and 1840s a much enlarged clerisy, mostly the sons of bourgeois fathers, commenced sneering at the liberties the fathers exercised so vigorously in the market and the factory.

(Bildungsbürgertum means "educated/cultured bourgeoisie." We would say "gentry liberal.")

The point about a "narrative" is that, as the Frankfurt School explained, it is an apology for power, the ruling class's power. And it works to protect the ruling class from attempts to dislodge it and delegitimize it. Until it doesn't.

I think, with the explosion of Donald Trump on the right and Bernie Sanders on the left, that the current narrative has broken down. Semi-political America, the people just below the Cathedral, have stopped buying the current narrative because it is there is just too much of a disconnect between the narrative and the reality that they experience in their lives.

Barack Obama is the living embodiment of this disconnect, and you can see it in the whole story of his rise, his election, and his governance.

The point about government, any government, is that it is founded on the "consent of the governed." Government works so long as the governed are willing to put up with it. People may not actually support the government, but they do "consent" to the government's rule.

A wise and worthy ruling class uses its control of the "narrative" to develop a genuine consent of the governed in which it persuades the governed to accept its version of reality and what to do about it. In other words, it does not try to pull the wool over anyone's eyes.

Barack Obama has not done this. He has not tried to build a consensus for his policies. He always does a cramdown, or paints his policy with false equivalences, or just flat-out lies. Then he takes out after his opponents as being almost unpatriotic.

Dr. Johnson famously proposed that patriotism was the last refuge of the scoundrel. Perhaps he meant that attacks on other peoples' patriotism is the lame resort of a tyrant that can't be bothered to cajole and persuade.

At any rate, I think that the political trench warfare of the last two decades is over, because the narrative that enforced the power of the Cathedral has broken down. The political armies are operating in open country, and that means that nobody knows how it will all turn out. We are no longer talking about frontal attacks and their wars of attrition, but flanking movements, double envelopments, and the Kesselschlacht.

Nobody knows how it will all turn out.

Pippin, A Post Sexual Revolution Musical

What do you do with the Broadway musical after the sexual revolution of the Sixties, now that it is assumed that kids get it on from a very early age -- as in: they are going to do it anyway -- and you can't have heroines as ingenues?

It's a problem, and maybe that's why the Broadway musical has gone into something of a decline since The Sound of Music that debuted on Broadway in 1959 and ran as a movie in 1965 when I was in college.

(And I remember that I studiously did not go to the movie. I was far too sophisticated for boy-meets-girl musicals back then.)

But yesterday we went to a performance of the revived Pippin road show here in Seattle. In case you didn't know the show puts notional scenes in the life of Pippin, the son of Charlemagne, King of the Franks, in the context of a circus. It breaks the "fourth wall" in the manner of Brecht, and its songs are unmemorable Seventies pop.

Since we can't have boy-meets-girl anymore, what do we do? Well, Pippin is a twenty-something lad who has just graduated from university in Padua (no wiving and thriving there for him). He doesn't know what he wants to do, but he wants it to do something "extraordinary."

In other words, to use my taxonomy, the musical Pippin character is a person of the creative self. He does not just propose to exist as a person of the subordinate self, as a client to some great patron. He does not want to live as a bourgeois responsible individual. He wants to "make a difference." He is, in other words, thoroughly modern.

But since he is the title role of a post-sexual-revolution musical he can't just meet a girl and fall in love. Oh no. Because nowadays people don't do that (do they?). No, they have relationships and then after "finding themselves" they, well who knows what they might do. They might get married. Or they might realize they are gay. Or, what with Rachel Dolezal and all, they might fake being black! They might even become a world-renowned creative artist (in your dreams).

In the end, of course, most of today's twentysomething people of the creative self, living in lofts and wearing artistical black, end up living conventional lives, and that is what Pippin does.

But first there must be sex, because you always have sex, I mean love, in musicals. In this case the Leading Player runs Pippin through a series of sexual experimentations, including one in a circus animal cage with some (human) circus animals.

I kept wondering, as I sat through these crudities, sitting next to a young woman who will be a sophomore in college this year, where is the "safe space?" Suppose this young woman got triggered by the burlesque tableaux on stage? Surely, the special snowflakes now attending college are not just triggered by, e.g., a conservative feminist showing up on campus and daring to speak non-liberal thoughts and ideas? Surely the players on stage should get affirmative permission from the audience before they potentially "trigger" then with scenes that some audience members might have experienced in some regretted sexual episode.

Well, no. No "safe spaces." Which reminds us, as if we need reminding, that the whole triggering and microaggression thing is nothing but left-liberal political bullying designed to name and shame anyone that doesn't think the right thoughts and recite the right catchphrases.

Anyway, eventually Pippin does meet his blonde ingenue, only she is a young widow with a son. And because he has mental health issues on account of he can't find anything "extraordinary" to do, she has to nurse him back to mental health.

I am not kidding.

After a year of this nursing Pippin does the fatherly thing by the young blonde widow's son when the son's duck "Otto" dies. Then they kiss. Then they immediately jump in the sack right there on stage.

I don't know about you, but I don't find this post-sexual revolution world all that compelling. And I don't think it makes for a very compelling musical.

Really, of course, the whole point of the old Broadway musical was to tell the story of the immigrant girl from the 1900 immigrant wave and the great question of her coming of age: whether she dares to "marry out" of her ethnic group.

You could say that the old Broadway certainly ended on a high note in The Sound of Music when a nobody governess from the local convent beats out the rich bitch for the love of the fabulously rich Georg von Trapp by winning the love of his children using old discarded curtains for play clothes and teaching them silly songs.

I think that the whole post sexual revolution thing will eventually collapse. Because it is a really bad deal for women. In my view the current "rape culture" hysteria shows that women are finally starting to push back on the sexual revolution. But since the "rape culture" pushback is led by clueless liberal post-bourgeois feminists that never thought an original thought in their lives it has completely lost the plot.

The current "rape culture" hysteria is saying that young women can't be trusted to make sensible decisions about sex. They must be supervised by wise and caring college administrators. But that is no different from the old days, when young women were sexually supervised by their fathers.

Er, no. Sorry I got that wrong. in the old days young women were really supervised by their mothers and other mature women. But that would ruin the feminist thing about the "patriarchy." And that would never do.

Lefty Fundamentalists in Britain

Right now the Labour Party in Britain is conducting a party leadership election and the leading candidate is hard left Jeremy Corbyn. He hits all the left notes including Palestinians and the IRA.

And one thing he wants to do is "renationalize" the railways.

The British railways were privatized back in 1994 during the time that John Major was Prime Minister. But in the wake of an accident just north of London due to faulty rails, the ownership of the track was returned to a nationalized corporation. Meanwhile passenger and freight services are delivered in a complicated crony capitalist system thus, from La Wik:

Ownership of the infrastructure including the larger stations passed to Railtrack, while track maintenance and renewal assets were sold to 13 companies across the network. Ownership of passenger trains passed to three rolling stock operating companies (ROSCOs) - the stock being leased out to passenger train operating companies (TOCs) awarded contracts through a new system of rail franchising overseen by the Office of Passenger Rail Franchising (OPRAF). Ownership and operation of freight trains passed to two companies - English, Welsh and Scottish Railway (EWS) and Freightliner, less than the originally intended six.

Yay! Earlier this week The Telegraph ran an come-on-fellahs article "A state-owned railway would be a costly mistake" that weakly pleaded that the Brits not renationalize the railways. OK, nothing much to see there. Except when you get to the comments. You see, 60 percent of Brits think the railways should be renationalized, and the comments tell you why.

Profits, The City, Foreigners, Things were great in the old days: You name it. People don't like private enterprise. They want the nice cozy government to take care of everything.

As Nassim Nicholas Taleb, the Black Swan guy, recently tweeted. "The free-market system has salient flaws and hidden benefits. All other systems have hidden flaws and salient benefits." Everyone is pissed off with the corporations that sell them amazing products and services. But they stubbornly defend the government health care and education systems that barely function.

OK, we know why people support the government systems that barely function. It's the free stuff.

I was reading the front matter for the upcoming volume three, Bourgeois Equality, of Deirdre McCloskey's Bourgeois Era trilogy. And she's talking now about how the educated elite turned against capitalism following the failed revolutions of 1848. But the big point, that she makes over and over, is that the Great Enrichment of the last 200 years has made the average person  between 30 times and 100 times richer. There has been nothing like this, ever.

McCloskey's insists that this was not due to "capital accumulation" (as in "capitalism") but from new ideas that transformed the production and delivery of products and services.

So let's rehearse the reasons why government is no good and making things and delivering services.

1. Socialism can't work because it can't compute prices.
2. The bureaucrat in the national government cannot know what a million producers and consumers know through the price system. Not even close.
3. Government does not come up with new ideas. In fact the whole purpose of government is to stop new ideas.

These notions are, or ought to be, settled science. Every child should be taught them in school as a matter of course. And yet, patently, the vast majority of people have no clue about this, no clue about the fundamentals about our amazing and unprecedented wealth and prosperity.

As you can see in the comments section of The Telegraph in Britain.

Expecting Too Much of the Beltway Republicans

I'm a little confused by the whole "cuckservative" meme, the idea that Beltway Republicans -- and their bribed neocons in the media -- have betrayed conservatives, Republicans, and the nation with their timid acquiescence to President Obama and the PC culture.

So therefore Donald Trump, who ain't afeered to tell it like it is.

I suppose that the angry Republican base, at this stage of the political cycle, has no target for our anger but our own politicians. And politics is about nothing if it is not about anger.

OK, let's think about politics as civil war by other means. The number one thing to remember about war is that you don't want to give battle unless you think you have a really good chance of winning. Otherwise you keep marching.

There are always hot-heads in any army that want to give battle, but the wise general usually denies their request, or sends them off to some inconsequential skirmish.

Anyway, what the hot-heads are really signalling is that they have the cojones to lead. As in Ted Cruz and his filibuster over Obamacare. As in Donald Trump going very un-PC. As in Scott Walker telling a union protester: "I am not intimidated by you."

(Really. What do those union protesters think they are doing? Scott Walker would probably pay to have his speeches disrupted by union thugs.)

The problem that Republicans have is that every time they stage a public confrontation with the Democrats the mainstream media lines up with the Democrats and make the Republicans look like the bad guys. As in government shutdowns. But, it turns out, the Republicans can do a lot of damage to the Democrats by operating below the radar. For instance, they can provoke a budget battle and cave on the headline issue while putting through tens of other issues. And they do. Because the public square only has the bandwidth for about one and a half issues at one time.

But it all happens below the radar.

And the other thing is that when you want to pass something big you don't want to do what the Obama Democrats have done and ram it down your opponents' throat. You want to stage a "bipartisan consensus" to make it look like everyone agrees with your reform. Otherwise you just gin up the opposition.

Of course today everything is up in the air. All we have are the egregious policies and naked illegalities of the Obama administration. How can we stand around and allow this to continue?

We stand around because we don't want to give battle and suffer a humiliating defeat.

There are, after all, two possible outcomes. One is that the Obama cramdowns will mostly stick, and become settled law. The other is that the next Republican administration will knock them all down and chart a new course for America.

My money goes on the idea that the Obama cramdowns will prove to be a strategic blunder that will set the stage for massive Republican reforms. That's based on my readings of the great political texts.

And don't forget that if the Republican base is pissed off the Democratic base must be just as pissed off. African-Americans were promised a new era, a Promised Land, with the election of the First Black President. Instead, nothing has changed. And I wonder what Hispanics are thinking right now.

And notice that while gentry liberals can put Bernie stickers on their Nissan Leafs, the Black Lives Matter is just a Soros AstroTurf outfit. Where is the actual candidate that is speaking to black frustrations? Hillary? Martin O'Malley? Elizabeth Warren? Please.

Fasten your seatbelts, it's going to be a bumpy ride.

The Worse the Better

Why doesn't everyone agree that capitalism is the biggest boon to humans ever and let it flourish? With a little law in there to punish frauds and thieves.

I mean, in the 200 years of the Great Enrichment per capita income in the areas under the sway of capitalist ideology has gone from $1-3 per day to $120 per day. That's inflation-corrected dollars. You can see this in a chart from lefty Vox.

Glenn Reynolds has a quick answer to this. Capitalism gets a bad press because capitalism has "insufficient opportunities for graft."

I like to be a little more sophisticated. We humans have survived down the ages partly by cooperating, doing things for other people. But we have also survived by loot and plunder, with the dawn raid, with buccaneering and freeloading.

Wilfred Thesiger tells how loot and plunder really do have a place in the human story in his travel book, Arabian Sands. In southern Arabia people live by grazing sheep and goats in a land where a particular patch of land may only get rain once in two years. So the trick to survival is to know where the rain just fell so you can get your flocks there when the grass sprouts and the desert grows green for a season.

But suppose you are just unlucky and your sheep all die of hunger. What then? Well, southern Arabia has a culture of raiding. So your last resort is to raid your luckier neighbor and take off with some of his animals. But the rules say that you don't touch the women and children.

Hey. It works.

But how much of that do we need in the modern economy where there is real abundance and nobody need go without?

Not much, but there are still plenty of people that like the adventurous life, and the thrill of the chase, not to mention the lamentation of the women. Many people, particularly the people that go into activism and politics, like to lord it over other people. Because.

We have intellectuals that want to look down on businessmen, as Whole Foods CEO John Mackey observes:

Intellectuals have always disdained commerce... So the intellectuals have always sided kind of with the aristocrats to maintain a society where the businesspeople were kind of kept down.

We have an example of this in a recent New York Times article painting a lurid picture of life "Inside Amazon." Well, I dare say it is a "bruising workplace," even if an Amazonian like Nick Ciubotariu disagrees in a flood of corporate-speak. People go work at a place like Amazon because they want to be in a challenging group where only the best need apply. Think the corporate equivalent of Special Forces. If you don't like that sort of challenge then don't go work for Amazon.

And that's the miracle of capitalism. It takes ambitious aggressive guys like Nick Ciubotariu and puts him to work creating an amazing company that is revolutionizing retail. Just think: in former ages he might have been stealing cattle. Or marching across Europe. Or fomenting political revolution.

But there are always people that want to resort to force. Just now in America they are people like the gay marriage advocates that want to punish Christians that don't agree with their religious views on marriage.

Oh, of course, nearly everyone that supports gay marriage agrees that gays ought to be allowed to marry like everybody else. But Matt Barber reminds us that the core activists have another agenda: to "render marriage reality meaningless."

Masha Gessen, a lesbian journalist, activist and author, expressly admitted this fact in a 2012 interview with ABC Radio: “It’s a no-brainer that [homosexuals] should have the right to marry,” she said. “But I also think equally that it’s a no-brainer that the institution of marriage should not exist. … [F]ighting for gay marriage generally involves lying about what we are going to do with marriage when we get there – because we lie that the institution of marriage is not going to change, and that is a lie.”

So that's not going to end well.

Glenn Reynolds also likes to rehearse the tweet from Jon Gabriel: "The best part about the Obama era is all the racial healing."

Our progressive friends have had a pretty good run in the Obama era, because President Obama has encouraged his supporters to go for the gold. They haven't tried to build consensus; they've just pushed their cultural and political power to the max and rolled over their opponents.

The thing about limited government and the rule of law is that it is designed to stop that sort of thing, because the abuse of power builds rage and resentment in the people on the receiving end.

For a conservative like me there is a Leninist quality to the Obama overreach: the worse the better. The American people need to really see that they don't like what Obama and the Obamis have done to America, so we can build a movement of reform.

But how do you roll back the oppressions and the injustices of the Obamis without making yet another "community" angry?

I don't know. Because the whole point of the left is to exploit anger and blow it up into a political movement.