Car Crash Politics

If we go back to the day before the presidential election of 2000 we can see that the two political parties in the US were both trying to stake out the center ground. Democrats were the New Democrats of the Clinton era. Republicans were the "compassionate conservatives" of George W. Bush.

Obviously, that era is over. Instead of Clinton's promise to end welfare as we know it, triangulating the Republicans on welfare, we have Donald Trump doing a Macchiavellian forced march to get his entire agenda done in the first weeks of power. And we have Democrats erupting over Trump's first immigration initiative.

Obviously President Trump's shock and awe rollout was carefully planned. Someone decided that Trump had to get his agenda going before the Democrats had time to get organized. Obviously the Democrats' immediate response to Trump's immigration pause was carefully planned. Reducing immigration destroys the Democrats' strategy to replace today's America with a new nation of immigrants that will vote Democrat for a generation or two.

Both sides in the political wars are deciding that they have to go for broke. You can see how that makes sense for both sides.

For Republicans the "compassionate conservatism" of the Bush years turned into a bust. A bipartisan No Child Left Behind education effort with Sen. Ted Kennedy failed because Republicans compromised on more spending but got stiffed on school choice. The Iraq invasion, a continuation of the bipartisan "regime change" policy, fell apart after Democrats got redirected by their anti-war faction.

For Democrats the whole New Democrat era was a massive frustration, because Democrats live for big new programs, universal health care, climate change, bending the arc of history towards justice for all the marginalized and oppressed of the world.

So when Democrats retook Congress in 2006 and the presidency in 2008 they went for broke. They didn't say they were going to do that. They didn't have to. They just needed to let their activists go to work and let the media nod it through. And anyone that objected was a racist, sexist, homophobe, or a denier.

The only problem with the Democrats going for broke was that it immediately provoked push back. First there was the Tea Party in 2009. Then there was the flip of the House in 2010. Then there was the flip of the Senate in 2014. Now we have the most Republican national government since 1928. Obviously, someone out there in the hinterlands ain't happy.

Notice the difference between the two movements. The Democratic push to the left was driven by its activist core that is connected to its leaders in Washington by ties of patronage in the vast administrative state and the activist community.

But the Republican push to the right was a genuine populist rebellion that took the GOP establishment by surprise. It was telling that House Leader Nancy Pelosi spoke of the Tea Party as astroturf. Of course it was; all Democratic activist groups are astroturf, so Nance assumed that the same was true of right-wing activism. But it wasn't. It was earnest middle-class people doing their earnest civic thing.

The populist rebellion wanted leaders that would fight back against the Democratic administrative state and political correctness. But how? The whole GOP establishment was reared on the idea of go along to get along with the liberal power structure. As blogger Mencius Moldbug writes, the Democrats are the Inner Party; they get to rule when in power. The Republicans are the Outer Party; they get to govern when in office.

But where would the Republican populists get a leader they wanted: a man who would take the fight right down the Democrats' throat?

Amazing isn't it, that Donald Trump should turn out to be that man. Who woulda thunk it?

Obviously, nobody knows how this will turn out. Both parties have stopped circling each other; each is driving right at the other. It is going to end in a mighty car crash.

The only thing to hope for is that the crash doesn't end up as a real shooting civil war.

Democrats are Chained to Their Activist Base

Democratic activists are totally pissed off that Sen. Chuck Schumer (D-NY) has voted for three of Trump's nominees.

But President Trump is pissed off that Sen. Chuck Schumer (D-NY) is slow walking his nominees, with the confirmation rate way behind the confirmation of President Obama's nominees in 2009.

And the word is that the battle over President Trump's first Supreme Court will go nuclear, with Democrats filibustering until Sen. Mitch McConnell (R-KY) changes the rules and eliminates the filibuster on Supreme Court nominees.

And of course left-wing activists have surged to the nation's airports to protest Trump's immigration executive order.

I'll bet that, in his heart, Sen. Chuck Schumer (D-NY) would be quite happy to deal with President Trump; that's what politicians are like in their heart of hearts. They happily do deals with each other to spend the taxpayers' money.

And that is what most Americans believe in their heart of hearts. If you put a group of Americans into a room to solve a political problem they will solve it by giving everyone a piece of the action.

But then we have the revolutionary tradition of the left. It believes in "resistance," in "direct action," in "peaceful protest." And all the other deceptive words in the left's lexicon. It thinks that the only way to bend the arc of history towards justice is through politics. And politics is civil war by other means. And that is the point of the leftist code words like protest and resistance. It is a show of force; it argues that, unless you concede to us, we will make the streets run with blood.

As I have written before, we had a left that thought that street action was going to transform America 50 years ago. Inspired by chaps like Herbert Marcuse, the left flooded the streets and rioted and rampaged.

But the result was not what the left expected. The American people hated the street action and elected Richard Nixon, twice. Then they elected Ronald Reagan, twice.

After losing three elections in a row the Democrats decided to nominate a man that presented himself as a centrist, a New Democrat. Bill Clinton got elected in 1992 and got reelected in 1996.

But after George W. Bush got elected by a hair Democrats restarted the activist machine. And, what with the failures of the Iraq War and the Crash of 2008, Democrat Barack Obama got elected with big majorities in Congress. And community organizer President Obama encouraged the activists to activize. (Daughter Malia recently attended a protest against the Dakota Access pipeline. Daddy's daughter.)

The question is whether the American people are going to react against the new wave of left-wing activism and resistance the way they did in the 1970s and 1980s.

The answer is: We Don't Know. That is why we have elections.

But we have a clue. After Obama comes President Trump. A Republican Senate. A Republican House. Tons of Republican governors. A lot of Republican state legislatures Somewhere in there I think that Americans are sending their leaders a message.

But we really don't know what the American people think. But we will get another clue in the 2018 midterms and again in the 2020 presidential elections. Until then, everything is fake news and poll-tested talking points.

Silly Scientists Don't Know From Science

Of course, the very idea of a Scientists' March on Washington is an oxymoron. Science doesn't care about politics; it says, with Galileo, Eppur si muove, and yet it moves, whatever you political and religious chaps say. These scientists are like the officials of the physicists' union in The Hitchhikers Guide to the Galaxy by Douglas Adams: "We demand rigidly defined areas of doubt and uncertainty."

The brilliance of that statement never ceases to amaze me.

Anyway, I decided to take a look at the website of the Scientists' March on Washington. Because I reckoned that, being silly liberals, they were bound to have bollixed things up. And I was right.

There are only three paragraphs on the website. But what a bunch of baloney.

Slashing funding and restricting scientists from communicating their findings (from tax-funded research!) with the public is absurd and cannot be allowed to stand as policy. 

Er, no. The modern research university was invented by the Prussians in the Napoleonic Era. The idea was to strengthen the state, to use and develop knowledge to make the German lands strong enough to end the hegemony of France. Ever since, science has been a creature of the state, and scientists have ever been willing to spend taxpayers' money on whatever the ruling class wanted. Bombs and airplanes to help the state fight its wars? No problem. Social sciences to help the government regulate and control the populace? No problem. Dodgy computer models to assist the global ruling class in its climate change hysteria? Yes, siree.

When you sign up with the devil, scientists, you have to dance to the devil's tune. But you would know that; you are scientists.

Here's another beauty:

There are certain things that we accept as facts with no alternatives.  The Earth is becoming warmer due to human action.

Oh dear, oh dear. Ain't you scientists ever read (or heard about) David Hume? That philosopher argued that we cannot know cause and effect; we can only know correlations. You can never say that "this" caused "that." Because Hume.

We do not know that the Earth is becoming warmer due to human action. We have a) a temperature record going back about a century and a half that tells us that the Earth is warmer now that it was then, and we have b) a theory that the increase in temperature is due to the increase in so-called greenhouse gases like carbon dioxide and water vapor. That is all. The temperature record may or may not be accurate. The theory may or may not be valid. Period. That is all that science can say; all the rest is politics.

Here's another one:

The diversity of life arose by evolution. 

Don't you scientist chaps realize that a statement like that is equivalent to the statement that God made the world in seven days, or that the Universe started with the Big Bang. All three statements are creation myths. They are not science. But they are very useful ways of making a statement about what we believe life, the universe, and everything to be, to summarize the Story So Far.

For my money the two things to remember are these:

First, science is a social endeavor. There is a community of scientists, as argued by Thomas H. Kuhn in The Structure of Scientific Revolutions. And the community tends to enforce the current model of how the world works. Just like right now where you better not raise your head in the scientific community if you have a problem with climate science as practiced by the scientific establishment. Not if you know what is good for you and your career in science.

Instead, Kuhn argued that science was a battle between normal science and revolutionary science. La Wik:

Normal scientific progress was viewed as "development-by-accumulation" of accepted facts and theories. Kuhn argued for an episodic model in which periods of such conceptual continuity in normal science were interrupted by periods of revolutionary science.

We have come to call these periods of interruption the "paradigm shift." So the fact that 97 percent of scientist believe in climate change and that activists declare climate skeptics as "deniers" means nothing. The question is: does the current "normal science" of climate change do the job of predicting what is going on? The fact is that the community of normal scientists will go on practicing the normal science that believes in the notion of global warming by greenhouse gases until the paradigm is overturned by another theory.

All this goes back to the basic claim of Immanuel Kant, who responded to Hume's skepticism with a new view of science and knowledge. Kant argued that we only know sense impressions; we cannot know things-in-themselves. What we do is process the sense impressions to construct a world view that makes sense of the sense impressions, and is good enough to be a basis for successful action in the world.

This may seem limiting and a cop-out. I believe that the opposite is true, because once you say we don't know what lies behind it all then you have prepared your mind to think innovative thoughts, such as the idea that space is curved, and that the microscopic world is strange thing of wave-like quanta.

The marching scientists are still stuck in the Enlightenment paradigm that reason is all. But they have never read lefties Horkheimer and Adorno and their Dialectic of Enlightenment. These two lefty rich kids understood that reason is domination, not enlightenment. As I have wriitten:

Instrumental reason, the Enlightenment, write Horkheimer and Adorno, is a dance of domination, domination over nature and domination over man. "What men want to learn from nature is how to dominate it and other men."

Today's dance of domination is an argument about whether we men want to dominate nature or dominate each other, or both. As Lenin said: Who Whom, or кто кого.

But I get the rage of the scientists. Here is Donald Trump giving them a cold that is like to ruin their filibuster. How dare, how dare the American people elect a man like that to be President of the United States!

What Does Mexico Do Next?

OK, so Mexican President Enrique Peña Nieto cancelled a meeting with President Trump over the vexing question of who pays for the wall. I get it; he has to stand tall against the Trumpster. National honor and all that.

The problem is, of course, that Mexico needs the US more than the US needs Mexico. NAFTA has been great for Mexico, bringing jobs and manufacturing to backward, rural Mexico.

And, of course, the open-ish border of the last 50 years has been an invaluable safety-valve for Mexico, probably saving it from complete meltdown. The Mexican ruling class basically encouraged poor Mexicans to migrate to the US and its jobs. That way they didn't need to reform their crony economy, and could still live off the revenue from state oil company Pemex.

But right now Mexico is in a bit of a tight spot, as revenues from Pemex are down, and the left is demonstrating against retail gasoline price increases as Mexico tries to shake up its oil industry and partake of the new exploration technology. Then there is the Mexican Peso, down from $0.08 in mid 2014 to $0.047 in recent days.

The thing is that the US has the whip hand with every other country. We are the richest country of any size and everyone wants to trade and to sell to us. Much more than we want to trade and to sell to them.

So what does Mexico do? Do they stick to their principles while their economy goes down the drain, bringing in a leftist dictatorship that takes Mexico the full Venezuela route? Does it allow all its south-of-the-border manufacturing to die on the vine while Trump does trade deals with other countries with less pride?

The truth is that, for 50 years after World War II, the US acted as a benevolent uncle, shepherding its client states along, and giving them invaluable access to the US domestic market, while the US acted as global policeman and hegemon.

I'll bet that in the end Trump puts together a deal that keeps Mexico going economically while "making Mexico pay" for the wall.

But I don't have a clue how he will do it.

Can Trump Cut $1 trillion a Year?

To put it all in perspective, here is Club for Growth chappie Stephen Moore:

All of Washington seems to be in cardiac arrest over news reports late last week that Donald Trump is planning a budget featuring $10 trillion in cuts over the next decade.

This, as they say, is yuuuge. How huge? Well, to do that we should turn to good old usgovernmentspending.com, the go-to-site on government finances. Here are the numbers for FY2017 for federal spending.

Federal Pensions	$1.0 trillion
Federal Health Care	$1.2 trillion
Federal Education	$0.1 trillion
National Defense	$0.9 trillion
Federal Welfare	$0.4 trillion
All Other Spending	$0.6 trillion
Total Federal Spending	$4.1 trillion

You can see that $10 trillion over ten years is big. By the way, total spending in FY 2021, which is the limit of detailed budget forecasts in the budget historical tables, is $5.1 billion.

The thing is, if Social Security ($0.97 trillion) and Medicare ($0.61 trillion) and Medicaid ($0.53 trillion) and Defense are off the table, then there is not much left to cut! All Other Spending is a mere $0.6 trillion, and that includes interest payments.

Of course, there is waste, fraud, and abuse. They say that 10 percent of entitlement spending is waste, fraud and abuse. But a lot of that goes to the white working class, part of Trump's base.

So I don't know where all that money is coming from. But I do know this. All government spending, all of it, from Defense to Pensions to Health Care to Welfare is a weight on the economy, on ordinary working stiffs.

See, if I had my druthers, things would look like this. Pensions? Everyone gets their own, but people who don't have any savings through no fault of their own would be helped by liberal billionaires like George Soros. Health care? Everyone gets their own, but people who cannot afford to pay for health care through no fault of their own are helped by trustafarian liberals. Education? If kids in Ethiopia can learn to hack a tablet in six months from a standing start, then we don't need no public education. Instead of this unpaid child labor in schools, we reinstate child labor for pay. And employers would have an obligation to assist kids' education like they did in the old days of apprenticeship. Welfare? Charities and charitable individuals and liberal foundations get to relieve the poor. And they reintroduce the ABCDEFG system.

The only problem with this would be that there would be no way for politicians to reward their supporters, according to my definition of government:

Government is an armed minority that occupies territory and taxes the inhabitants thereof in order to reward its supporters.

And that would be a crying shame.

Can Trump Change the Political Game?

A week ago I reflected on then President-elect Trump's attack on Civil Rights Icon Rep. John Lewis (D-GA). And I wondered if Trump could change the political game and de-energize America's third rail on race.

Then I got an email from a reader, Brad, who wondered whether we could get the warriors of race politics like the SPLC to stand down and recognize the real terror threat, or whether we are in for a "quiet civil war" that the left has already half won.

Can President Trump change this tune? Well, he is certainly trying.

The whole point about politics is that it is a fight between Us and Them. The only question is, who is to be "Us" and who is to be "Them?" That is all.

For the last few decades, politics in the US has been the identity politics about the privileged white majority versus the underprivileged minorities and women and LGBTs.

Now Trump is proposing to change it into a populist politics of the people versus the powerful. That is what his inaugural speech was about: the many versus the few. Also, he proposed the idea of America First. So he is promoting the idea of the American nation versus the rest of the world: nationalism.

Can it work? Can Trump change the rules like that, just 'cos? Well, I'd say that's the difference between being a world-historical figure and being just another politician. And right now, we don't know.

Think about it. Eight years ago Barack Obama was hailed as a transformational figure and given a Nobel Peace Prize before his administration had got out of the gate. Today? Let us say that our liberal friends are remarkably modest in their applause. Because Barack Obama is a fool and a failure.

Here are three grounds for Trumpian optimism.

First, I believe that leftist politics has always been a reactionary movement against the irresistible tide of the Great Enrichment. Its workers vs. owners politics of 1850 was plausible at the time, but has since been revealed as rubbish. The worker and the business owner need each other; they should be friends, even though the road to the middle class is a hard one. When the left's class politics failed, the left reinvented itself with the identity politics of minorities and women vs. the privileged and oppressive white patriarchy. Again, it was plausible, except that white men are not that interested in power. If you come to the white middle class with a grievance they will listen to you and try to accommodate you. Unlike lefties in the university. So the basic assumption of leftist politics is flawed. The bosses and the patriarchy are not like a political ruling class. They are just not that interested in power.

Second. There is a lot of talk on the right about the inevitable failure of multiculturalism and the mixing of the west with non-western cultures, nearly all of which do not believe in assimilating to the western limited-government, free-market, multi-religious cultural model. But I think there is a counterforce at work. The fact is that the social-economic marketplace of the modern world rewards people who will work with people and trust anyone that is trustworthy. Every barista, every store clerk, every salesperson, every cubicle worker is trained to interact in a friendly and helpful way with everyone else. And the more that each of us is immersed in this world the more that we experience other people as people and not as "other."

I think that the hilarious Case of the Intolerant Liberal on a flight from Baltimore to Seattle makes the point. Who is the nasty liberal? An obviously up-scale white woman. Who is the man she is abusing? An obvious middle-middle-class white Deplorable. Who are the cops that escort the nasty liberal and her husband off the plane? They are African Americans. Never forget that, while elite liberals are beavering away thinking up new ways to divide us by race and gender, ordinary people are just doing their jobs and interacting with other people according to the protocols of modern public politeness. And that changes things.

Third. Ordinary, average people want ordinary things. "Americans want great schools for their children, safe neighborhoods for their families, and good jobs for themselves," said Donald Trump. So it is telling that liberals had a conniption when the new Trump White House took down climate change civil rights and Spanish pages and LGBT from the White House website and substituted meat-and-potatoes economic issues.

This crystallizes, for me, the failure of the whole Obama administration. The Obama liberals spent the whole eight years running down liberal rabbit holes like climate change, LGBT rights, race politics, instead of doing what really matters to Americans, which is jobs, safe neighborhoods, schools. You never know, but it could be that Americans of all stripes could warm to a president that keeps his eye upon the donut, and not upon the hole.

I'm not that taken with the basic Marxist doctrine of the base and superstructure, the materialist notion that the economy determines everything. In the base/superstructure concept the base is the means and the relations of production, and they define the whole society. The superstructure, including art and politics, is derivative of the economic facts on the ground, the means of production and the relations between the various productive actors. But like much of Marx, the base/superstructure concept has a point. The economy matters, and it profoundly affects the rest of society. If people want to wive and thrive, they need to get with the program, and the program is the program of the market economy and its miraculous Great Enrichment.

And that is why I have hope that Trump can change the axis of politics from identity to nation. When you get a president that focuses on the bread-and-butter of life, people just might start to notice. And applaud.

Here Is Exactly Why We Need President Trump, Chuck Schumer

Just before the end of the Obama administration the FHA issued regs lowering the rate paid on mortgage insurance by people taking out low-down mortgages.

"After four straight years of growth and with sufficient reserves on hand to meet future claims, it's time for FHA to pass along some modest savings to working families," said Castro.

"This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers."

First thing the Trump administration did was cancel those regs.

Next thing we have Sen. Chuck Schumer (D-NY) chiming in.

"What a terrible thing to do to American homeowners. President Trump, with the flick of a pen, ended that new policy, making it harder for Americans of modest means to obtain their piece of the rock, the American dream – home ownership," 

No, Chuck. You've got it exactly backwards.

First of all, it might have been a good idea to lower mortgage insurance rates from, say 2009-2016. Because since home prices had taken a big fall, the downside risk on low-down mortgages would not have been very great.

Second, it is clear that in the winter of 2017 the real-estate market is warming up. We really don't need to put fuel on the fire and turn the recovery into a huge real-estate boom. That would set the stage for  another bubble and another crash. Am I right, Chuck, or am I right?

Do you get my meaning, Chuck? By lowering mortgage insurance rates you Democrats were bringing more people into the market. Which means that you would be pushing up home prices. Which means that some time down the line the Fed will have to raise interest rates to stop the bubble. Which means that "working families" and minorities and women with poorly collateralized loans would lose their homes. Again.

Are you still with me, Chuck? Now is the time to reduce government subsidies, now that the housing market has recovered,and interest rates are still low. But you want to raise the subsidies. And you like the idea of scoring a cheap shot on President Trump.

Government mucking around with the mortgage market is the same as government mucking around with the price system with wage and price controls. Wage and price controls wreck the economy by wrecking the price signals that freely contracted wages and prices send to workers, employers, producers and consumers.

When government mucks around with the mortgage market by subsidizing mortgages it basically gives everyone a coupon to add to their income and balance sheet so they can bid with more money in the real-estate market. But all that does is mean that everyone can bid more. It doesn't help low-income people to get homes. It just means that low-income people can compete with each other and raise the price of homes -- and enrich the folks that already have homes.

But of course the damage goes deeper than that because the mortgage market is part of the credit system and the credit system is the very life blood of the economy.

Now, Chuck, are you still with me? If you read Walter Bagehot's classic book on the money market, Lombard Street -- and I am sure you have, being as you are the senator from Wall Street and all -- you will remember that Bagehot lays out two vital principles for the healthy functioning of the credit system.

1. Credit should be properly collateralized so that loans can be fully liquidated if the borrower cannot pay. Otherwise people begin to doubt the soundness of improperly collateralized loans; they lose confidence, and that could lead to a panic.
2. Borrowers need to have the income to service their loans. If a question arises about the borrower's ability to pay, then people begin to lose confidence in the institution holding the borrower's paper, and that could lead to a panic.

In good times, of course, a little bit of shaky loans isn't too much of a problem. But who cares about that? What matters is what happens during a market break when things are not looking so bright. That's when the soundness of the credit system really matters.

So it's all very well to want to help "working families" get their first home. But what's the point, Chuck, if their shaky finances and their badly collateralized loans threaten the whole credit system? As they did in the Crash of 2008. And what's the point if the "working families" lose their homes when the crash comes and they are the first to be laid off?

But here you are in 2017 and it reads like you didn't get the message from the Crash of 2008, because here you are, Chuck, demanding the injection of badly collateralized mortages and borrowers into the financial system.

Look, I get it. You Democrats, willingly assisted by your Democratic operatives with bylines in the media, put out the narrative that the crash was all the fault of greedy bankers.

Well, of course. The bankers wanted to cash in on the torrent of bad paper that government policy hosed upon the credit system. As in Fannie and Freddie. Actually, if they didn't shovel out bad loans to bad borrowers the activists and the congers-critters like you, Chuck, would demand to know the reason why.

The Crash was not the bankers' fault. It was your fault. It was your policy that flooded the world with bad paper. Because you wanted to help "working families" buy that first home.

How bad was your policy? Thanks for asking, Chuck. I just happen to have a page at my usgovernmentdebt.us which shows the growth in "Agency Debt" since World War II. Take a look at Chart D.23f, Chuck. It shows that Agency Debt (i.e., debt from outfits like Fannie and Freddie) went from zero after World War II to 50 percent of GDP just before the Crash.

So we have the official Federal Debt at about 100 percent of GDP, which everyone agrees is a Bad Thing. But then we have the Agency Debt, which is also an obligation of the Federal Government. So, if you add the two together, suddenly the total debt hits 150 percent of GDP.

And that doesn't count the unfunded liabilities of Social Security and Medicare.

Golly, geewillikins, Chuck. Do you think that the growth in Agency Debt just might have had something to do with the Crash of 2008?

Just imagine, Chuck, if you chaps hadn't hosed the economy with your cheap mortgages. Just imagine if the economy had set fair after a little wobble in 2008. Just imagine if you Democrats hadn't lost the House in 2010 and the Senate in 2014. Just imagine if you Dems hadn't run the worst politician in America for president in 2016. Just imagine if you chaps had realized the danger in the rust belt states from the white working class dying of despair.

Why, Chuck, you would be Senate Majority Leader right now and King of the World.