Dems Bash Rich for Midterms

First it was President Obama, who told an audience in Quincy, Illinois:

“We're not trying to push financial reform because we begrudge success that's fairly earned. I do think at a certain point you've made enough money, but you know, part of the American way is, you can just keep on making it if you're providing a good product.”

Er, I don't think that has much to do with financial reform, Mr. President. As I see it, your financial reform package is designed to maintain government control over the finance industry. What has government domination of the finance industry done for us? Fannie. Freddie. Value of the dollar down 98 percent in 100 years. On that record we are supposed to increase the government's powers?

Then it was Hillary Clinton in a speech at the Brookings Institition urging governments to "increase their public revenue collections" to spur investment.

"The rich are not paying their fair share in any nation that is facing the kind of employment issues (the United States is), whether it's individual, corporate, whatever the taxation forms are," she said.

You mean increase taxes on job creators in a recession, Madam Secretary?

Then there is Robert Reich who says that "'investing' in 'people' through education and social welfare programs leads to job and economic growth."

You mean the wonderful system that gives us 15 percent of adults "below-basic" in literacy? And welfare programs that have cratered the low-income family?

If Clinton and Reich were correct, then with the massive increase in "public revenue collections" in the 20th century from about 7 percent of GDP to about 35 percent, we should be seeing a lot more jobs and economic growth. Actually, spurts in growth happened after the government lowered tax rates in the 1920s, 1960s, 1980s, and 1990s.

In fact, rich people pay rather more than their fair share of taxes, particularly income taxes. In 2006 the "top 1 percent of households earned 18.8 percent of income and paid 28.3 percent of taxes."

Democrats seem to be eager to argue for increased taxes in the upcoming mid-term elections this Fall. We will see what the American people think of that.

Big Government's Katrina

Republicans and conservatives naturally want payback on Katrina.

Famously, President Bush's failure to respond to Hurricane Katrina within moments demonstrated what Democrats had been saying all along, that Bush was a jumped-up frat boy who wasn't intelligent enough to be president.

Now everyone is saying that the Deepwater Horizon oil spill is "Obama's Katrina."

But that would be a mistake. That would be missing the forest for the trees. As Rahm Emanuel said so succinctly: "You never want a serious crisis to go to waste."

Blaming Obama would be missing a golden opportunity to have a national conversation about Big Government.

What Deepwater Horizon shows is not that Obama is incompetent. It shows that Big Government is incompetent.

It means that all the tens of thousands of programs we have built up over the last century are a waste. All the regulations and the permits in the world can't stop people from making an honest mistake. Or misreading data. Or cutting a corner. Or being in a hurry. Or just frightened to make a decision that will cost a lot of money and get them in trouble with their boss.

There's even a book about it: Normal Accidents: Living with high-risk technologies by Charles Perrow.

Humans advance by trial and error. We don't live by the precautionary principle, that we should really think through everything before we start messing around with sacred Mother Earth. We can't. Life is too short. So we push blindly ahead and every now and again we make a mess. Sometimes it's a big mess. Then we clean it up.

The great advance in the last century is in just how good we have got in keeping things clean and in cleaning up messes.

Peggy Noonan is right to point out that Deepwater Horizon is a disaster for Obama and his political philosophy. (Imagine if this happened on President Bush's watch!) So it is.

But that's why we needed the Obama presidency. We needed the American people to see that it wasn't George W. Bush who was the problem. The issue isn't competence of presidents, the delusional god of liberals.

The problem is that you can't run a complex world with hierarchical bureaucracies and regulations and permits and "Mr. President, is it safe?" Life is much messier than that.

Let's not pile on President Obama. Even if he deserves it. Let's concentrate on the bigger picture. Let's focus on the failure of Big Government.

The American people deserve something better than blundering Big Government.

Slow Growth Hurts Obama

It's hard to know exactly when the Bush economy becomes the Obama economy. But if I were an Obami I'd be hitting the panic button right now.

Why? Because the GDP growth estimate for the first quarter of 2010 has just been lowered to 3.0 percent. Already, therefore, the gangbusters growth of the fourth quarter, 5.7 percent, has moderated, according to AP.

The economy grew at a 3 percent annual rate from January to March, the Commerce Department said Thursday. That was slightly weaker than an initial estimate of 3.2 percent a month ago. The new reading, based on more complete information, also fell short of economists' forecast for stronger growth of 3.4 percent.

The usual guesstimate is that you need more than 3 percent growth to get the unemployment rate down. So 3 percent doesn't get that headline barometer on the economy down fast enough to make the Obama economy look like a winning issue, not in 2010 or in 2012.

Conservatives would say that it serves him right.

Obama's economic policy has been right out of the Keynesian playbook: print money and crank up government spending "stimulus." Next year Obama will be raising tax rates.

It's the opposite of the Reagan playbook, which was tight money, lower tax rates, and cut domestic spending.

So we are getting a laboratory test of the two competing recipes for cooking up economic growth. They can't both be right.

The reasoning behind the conservative policy is pretty simple. Government is a dead weight on the economy, so if you reduce government spending you reduce the weight. Tax rates affect economic behavior. Low tax rates encourage business activity. Easy money doesn't really help the economy. Business and savers need a solid monetary unit that keeps its value. Easy money creates a bubble economy in which the least sophisticated get burned, as we saw in the recent real-estate bubble.

We can expect more and more desperate measures from the Obama administration in the months ahead as it tries one thing after another to ignite growth. After November, of course, there's a good likelihood that the president will have a Republican Congress to deal with.

Wouldn't it be delightful if the president, against his instincts, agreed to tax cuts and spending cuts proposed by a Republican Congress--you know, with its foot on his neck, as we say these days--and then got reelected when the economy caught fire.

Because never mind whose idea it was, if the economy turns around before 2012 then it turns around on Obama's watch.

It's the Pensions, Stupid

When are we going to stop public employees from ripping us off?

O never mind that the average public employee earns about 50 percent more than the average private sector employee.

No, never mind about that. It's not the salaries. It's the pensions, stupid.

If you want the policy analysis, go to this briefing from the National Center for Policy Analysis.

If you just want the News at Eleven tidbits, Mark Hemingway is your man. He suggests you pop over to californiapensionreform.com. to check out the pensions in the great state of California. Warning: Not for the faint of heart.

[The site] provides a searchable database of all 12,201 public employees in that state earning six-figure pensions.

In case you were wondering, Bruce Malkenhorst, former city administrator from Vernon, Calif., earns a pension of $509,664 a year. Yes, you read that right.

Let's head for New York. Even The New York Times is getting into the act--actually reporting news that reflects badly on Big Government. Hemingway again.

The Times reported "13 New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s."

Well, isn't that nice.

Some day soon, some politician is going to ride the public pension scandal into national office.

Now I wonder who that would be? It would have to be a politician expert at framing an issue into a sound bite. It would have to be someone with some street cred as a common-sense conservative. And it would have to be someone with exquisite timing.

You'd almost think it would have to be a woman. Now, let me think...

Palin and Polarization

You could tell that most people were a bit embarrassed when Sarah Palin accused President Obama of being too cosy with BP last weekend. Is she crazy? Don't Democrats hate the eevil oil corporations?

But after the White House Press Secretary Robert Gibbs patronizingly responded that Palin should "get slightly more informed as to what's going on in and around oil drilling in this country", the spunky Alaskan responded by Twitter.

"Obama is the top recipient of BP PAC & individual money over the past 20 years. Dispute these facts," she wrote, linking to a Politico article citing campaign finance reporting showing more than $3.5 million given to candidates by BP since 1990.

Ouch. Be careful Bob. Palin knows quite a lot about the energy issue.

Earth to Dems: Do not misunderestimate Sarah Palin. Sarah Palin might not yet be up to speed on the arcane details of foreign policy but she is a practical politician that knows how to frame an issue.

But will Palin turn out to be too polarizing to win in 2012? I listened to an east-coast gay tell how he "loathed" Sarah Palin--because of all the usual Democratic talking points, especially gay marriage.

You wonder whether the Democrats have managed to define Sarah Palin as so out of the mainstream to make it very difficult for moderate women to support her.

No doubt Palin would disagree. Her book Going Rogue went to great lengths to present her as a Common Sense Conservative. In her speeches since she has said "common-sense conservative" with practically every other sentence. She is obviously aiming for the center.

The danger for Democrats is that when the moderate women get to know Palin in the middle of 2012 they may discover that she is completely different from the image that Democrats have invented for her.

But still, Palin has a long uphill road to travel. Unlike a certain American politician who, despite a career as a left-liberal, presented himself to the American people in his immaculate conception at the Democratic Convention in 2004 as a healing moderate.

Who knows what will transpire? But we do know this. Sarah Palin sure has a way of putting herself in the middle of everything. She did it with her "death panels" remark on ObamaCare and now she is doing it with the gulf oil spill.

What issue will come next? Taxes? Supreme Court? Public Pensions?

Whatever it is, it will be timed to have the maximum impact.

One minute Nancy Pelosi is trumpeting jobs, jobs, jobs.

The next minute she is telling the Democratic Party's creative artists that "you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care."

Huh? How do those go together?

It all goes back to Marx, writes Bill Kristol. The young Marx wrote that people wouldn't be stuck in a single occupation in the socialist society. Instead they would be able to follow their bliss. The older Marx worked on the excruciating policy analysis economic necessities in Das Kapital.

Then later, along came John Maynard Keynes, who promised a life free from economic necessity and the hag-ridden "pseudo-moral principles" of the last 200 years, but not yet.

This promise of two incompatible things before breakfast reflects the over-under nature of the Democratic Party. On the one hand it is the party of creative elitists who want a life of ease so they can follow their bliss into arcane academic research and the creative arts. But it also represents the ordinary worker who just wants a good paying job.

Conservatives, writes Kristol, want none of this dual delusion.

We conservatives, for our part, reject this as the worst of both worlds: stultifying big government statism on the one hand, and dangerously utopian liberationism on the other...

And we conservatives differ from Keynes in having regard for the bourgeois virtues. We believe those virtues (itself a conservative word, these days) do have a certain worth and dignity—that bourgeois life does not make fair foul and foul fair.

So for conservatives, it’s jobs in the day and tea parties after dinner, with hunting and church and patriotic parades on the weekends. Not to mention a flourishing private sector to provide jobs, jobs, jobs, jobs to all the Pelosi Democrats voted out of office this November.

Amen to that, brother.

It's Really the Liberal Trilemma

Yesterday we introduced the Rodrik Trilemma: How to reconcile democracy, national sovereignty, and global economic cooperation.

But it's not really Rodrik's problem. It's the Liberal Trilemma. We wouldn't have this problem if liberals didn't insist on running everything.

Democracy? Sure, the people should rule, through the rule of the politicians, as explained by Joseph Schumpeter. But the people (or rather the politicians) should not exercise the power to grab all the resources of the nation to distribute to their pals. Or more to the point, the politicians should be wise enough to insist on limited government. Because too much political power will end up destroying society.

National sovereignty? Sure, nations should be a power unto themselves. But they should be careful what they wish for. Absolute national sovereignty is national autarky, where a nation wants for nothing outside its own borders. But you can't have that in practice, nor should you want to. A nation should take its place in the family of nations, jealous of the others for sure, but anxious to lower the level of family argument.

Global economic cooperation and free trade? Sure. As much as you can stomach. It is, after all, only the desire to reward our supporters and flip off other nations that induces us to restrict the free flow of goods and services in this world.

It's not too hard is it? Everything in this world would be better if only liberals weren't messing things up with their Culture of Compulsion.

When liberals abandon their delusive dream of a world of liberals, by liberals and for liberals, then we can get on with the human project.

Right, all we seem to do is clean up liberal messes: the corrupt, cruel, unjust, and wasteful precipitate of liberal delusions.