The New York Times this morning has a long lead editorial on reforming what is laughingly referred to as the New York State Legislature. As the state has relentlessly declined over the last few decades both economically and politically, the Legislature has become something straight out of Gilbert and Sullivan, populated by pompous time-servers and buffoons who do as they’re told by party leaders:

. . . I was sent
By a pocket borough into Parliament.
I always voted at my party’s call,
And I never thought of thinking for myself at all.
I thought so little, they rewarded me
By making me the Ruler of the Queen’s Navee!

And as the Times makes clear the American version of the “pocket borough”– gerrymandering — is a big part of the problem:

HONEST MAPMAKING The first item on the reform list should be drawing districts honestly. A New York State legislative seat is so secure that no scandal, not even a recent conviction, can reliably defeat an incumbent. The prime reason is that legislators create their own districts. Every 10 years, each legislator with any power tells the mapmakers: Put my pal’s house in my district and my enemy’s house out. A few of these districts look like something wiggling under a microscope, but they keep their hosts in office until death, retirement or, with increasing frequency these days, time spent in jail.

The Legislature and Gov. David Paterson should immediately agree to create a nonpartisan commission like the one in Iowa that draws districts fairly and presents the map for a yes or no vote. (A no vote means the commission, not the legislators, re-draws the maps.)

Gerrymandering dates back to the earliest days of the country (Patrick Henry and his allies who dominated the Virginia legislature, tried to use gerrymandering to keep James Madison out of the House of Representatives in 1789). In 1811, the Massachusetts legislature drew up weirdly-shaped districts that favored — surprise! — incumbents. A famous cartoon in the Boston Gazette made one of these districts into a monster with wings and beak. Gilbert Stuart — a better painter than biologist — said it looked like a salamander. The editor said “Better say gerrymander” after Governor Elbridge Gerry and the word stuck.

Computers have turned gerrymandering into a fine art and the effect has been deeply pernicious. Gerrymandering effectively disenfranchises millions of Americans. It makes primary elections more important than general elections. That, in turn, empties out the center from which this country has always been governed, as primary electorates tend to be dominated by the left and the right. That makes politics ever more partisan, bitter, and vindictive. Legislators entrenched by gerrymandering easily become both corrupt and indifferent to public opinion, and thus much more willing to do the bidding of special interests. Gerrymandering is also one of the main reasons the public favors so strongly what politicians hate so much: term limits.

It has taken the Times a long time to editorialize against gerrymandering, but better late than  never. Congress has the power (Article I, Section 4) to require fair districting and, indeed, did require it until the 1920’s. It will take tremendous political pressure to get it to do so again, however.

I hope that the Times’ call to end gerrymandering in New York State (and thus, by implication, everywhere) marks a shift in political sentiment on the issue among liberals. Gerrymandering is a clear and present danger to American democracy and its end would do more to restore political health to this country than any other single reform. And it wouldn’t even cost any money.

In the many thoughtful, and enlightening comments to my previous post there is much discussion about whether there is a consensus among climate scientists as to the existence of, and threat posed by, global warming.

It seems to me that the evidence that the world has gotten warmer in the last two centuries is pretty solid. But how much of that warming is due to the natural causes that ended the “Little Ice Age,” which began about 1300 and ended in the mid-19th century? And how much is anthropogenic, due to recent industrialization? The Little Ice Age was itself preceded by the Medieval Warm Period, which lasted from around 1000 to 1300 and was certainly not anthropogenic in origin.

In his column this morning, Paul Krugman is at great pains to keep the lid on this debate, accusing global warming “deniers” of treason against the planet–as though they give their true allegiance to some other planet and can always slip away to it when things get too hot here. There is, of course, no dispassionate discussion of the actual science in Krugman’s column. He simply declares, ex cathedra, that the threat is real and embodies the opposition in an obscure Georgia Congressman shouting “Hoax!” on the House floor. Even by Krugman standards,  this morning’s column is a pretty shoddy piece of work.

But why is the Nobel-Prize-winning economist so exercised about global warming as to be reduced to name calling instead of examining the data? Why are so many climate scientists and liberal politicians so certain of the data on global warming that they think the debate is over?

I think it is a case of the “backgammon effect.” In backgammon, the players move their pieces according to the dictates of a pair of dice. A single bad throw of the dice can convert a near-certain winner into a near-certain loser. Being human, players sometimes misread the dice and misplay accordingly. They get a six-four, for instance, but play a six-three. The opponent, if he is paying attention, points out the error,  it’s corrected, and the game goes on.

Interestingly, the player who misreads the dice and thus misplays almost always does so to his own advantage. Is he cheating? Not at all. He is simply misperceiving the real world because his self-interest leads him to do so. He wants a six-three and so he sees one in a six-four. It’s as simple as that.

Do climate scientists in general and liberal politicians to a man want global warming to be both real and anthropogenic in origin? You bet, because it’s in their self-interest for it to be so. After all, if it is, then both groups are greatly empowered by the necessity to do something about it. Only government–guided by experts–would be able to reverse a gathering climate catastrophe. The government would need vast new powers to do so. And as James Madison explained two centuries ago, “Men love power.”

Consider an earlier example. In 1936, John Maynard Keynes published his seminal work, The General Theory of Employment, Interest and Money. It provided both a theory justifying active government intervention in the economy and the means by which to do so. Keynsianism empowered both politicians and economists. So both politicians and economists quickly declared it to be true beyond any doubt. Keynsianism swept the economics profession almost overnight (Paul Samuelson’s thoroughly Keynsian and deeply influential text book first came out in 1946). Within a generation, Richard Nixon was able to say without fear of contradiction, “We are all Keynsians now.”  Thus was another “consensus” born, just as “stagflation,” impossible  in Keynsian theory, began to blight the economy of the 1970’s.

It is a basic axiom in police work to “follow the money.” In politics it is an equally good idea to “follow the power” if you want to understand what’s really going on.

The Cap-and-Trade bill that passed the House yesterday will be a declaration of war on the American economy if it ever is enacted into law. It is ostensibly supposed to help the American economy transition from the old, carbon-based industrial economy to the broad, sunlit (and presumably unpolluted) uplands of a post-industrial one. According to an infomercial masquerading as an AP news story,  the “climate bill may spur energy revolution.” Overlooked by the AP and other minions of the left is the fact that that revolution has been underway, largely without the federal government’s help, for more than a generation now. In 1970 a one-percent increase in GDP meant a one-percent increase in oil consumption. Today its means less than a third of one percent increase in oil consumption. It would be considerably less than that had the left not brought the development and exploitation of nuclear power to a screeching halt thirty years ago because too many of them went to see The China Syndrome. (The producers, to be sure,  arranged, in a stroke of commercial genius, for the movie to open twelve days before the accident at Three-Mile Island occurred.)

And as Kim Strassel pointed out yesterday in the Wall Street Journal, the so-called science behind this massive bill is looking increasingly shaky.

If it’s enacted in its present form, what the cap-and-trade bill will certainly do is

1) Massively increase federal power not only over the economy but over daily life as well. Building codes have always been the province of the states, but this bill, according to one blogger, would require federally mandated energy audits before you could change a window in your home and specifies the number and location of electrical outlets to be permitted;

2) Start a trade war with India and China by slapping tariffs on goods from countries that don’t conform to US standards on carbon emissions;

3) Act like the governor on a steam engine, increasingly slowing down the economy through energy taxes whenever the economy accelerates. In other words, its virtually guarantees economic stagnation at best. And most economists who are not working for liberals think it will be far more economically pernicious than that.

This last, at least, is in the great tradition of the Democratic Party. The party’s founder, Thomas Jefferson, tried to deal with the high-handed ways of the Royal Navy and French privateers by a blockade–not of their ports, but of ours. Thomas Jefferson, in other words, went to war with the American economy. In a series of acts beginning in December, 1807, that Congress passed at Jefferson’s behest, American merchants were forbidden to trade with any other country on pain of fines of $10,000 and forfeiture of goods.  The U.S. Navy was dispatched to help enforce the act by stopping vessels leaving American ports. Port cities (which at that time were all large American cities and many small ones) plunged into depression. Smuggling across the Canadian border grew so extensive that Jefferson actually declared parts of northern New England to be in a state of rebellion. The New England economy came close to collapse as it was then heavily dependent on foreign trade. (The American merchant marine at this time–mostly New England owned and built–was second in size only to Britain’s.)

The Embargo Act was, politically and economically, an utter disaster, as anyone who understood anything about commerce, economics, and human nature could have foreseen. Indeed, Jefferson’s Secretary of the Treasury, Albert Gallatin, did understand and wrote the president, “As to the hope that it may. . . induce England to treat us better, I think is entirely groundless. . . . Government prohibitions do always more mischief than had been calculated; and it is not without much hesitation that a statesman should hazard to regulate the concerns of individuals as if he could do it better than themselves.”

Good advice from a very wise man who did this country many a good service. Too bad Thomas Jefferson didn’t take it. Nor, alas, will his present-day successor if he gets a chance to sign this utterly misbegotten bill.

The state of Maine, with a Democratic legislature and a Democratic governor, has enacted the country’s first (nearly) flat tax. The previous income tax, first enacted in 1969, had four brackets ranging from two percent, which kicked in at a mere $4,849 in income, to 8.5 percent at $19,450, one of the highest rates in the country. The new tax has a flat rate of 6.5 percent for incomes below $250,000, and 6.85 percent for those over it.

To make up for anticipated lost revenue, the state has broadened the sales tax on services and cut the state budget by $300 million out of $5.8 billion. (Cut the budget to meet a shortfall in revenue — what a concept!) I would bet a modest sum that a year from now the big story will be that Maine has seen its income tax receipts exceed estimates by a substantial margin, as Maine citizens become more willing to forgo tax shelters and other means of legally avoiding taxes.

The idea of a flat tax on income is spreading relentlessly because it is good. Over twenty countries, including Russia and the Czech Republic, now employ it. Even make-the-rich-pay-their-fair-share California is considering it as a means of ending the roller-coaster ride of tax revenue bonanzas in good times and tax revenue crashes in bad ones.

The ostensible reason for opposing the flat tax is that it is not “progressive”: there is a single rate on all incomes and the “rich” therefore don’t pay more than the less rich. But this confuses the marginal rate with the effective rate. Yes, the marginal rate (the tax on the last dollar of income) is flat. But the effective rate (the percentage of income taxed away) is not. It is actually quite steeply progressive. As an example, assume a 20 percent rate, personal exemption of $10,000, and no other deductions. For a family of four, the effective rate on a $40,000 income would be 0 percent; on $50,000, 4 percent; on $100,000, 12 percent; on $1,000,000, 19.2 percent.

And, because there are no deductions, no fiddles, no sheltering income in a corporation, etc. etc. etc., you know that your neighbor down the street with the bigger income is actually paying a higher percentage of that income in taxes. Today all you know is that he probably has a better tax accountant.

The real reason the flat tax is so bitterly opposed is because the two groups principally benefited by the status quo are politically potent. These groups are 1) the very rich and 2) members of Congress. The very rich fund the campaigns of members of Congress and the members of Congress provide loopholes to make sure that the very rich don’t pay their fair share (while, of course, demanding in public that they do so). The U.S. Tax Code is amended hundreds — sometimes thousands — of times a year and most of these amendments benefit very few — but very specific — people. It is a deeply corrupt system that profoundly and adversely impacts the economy and politics of the country.

But if the flat tax begins to spread among the states that have income taxes and begins to yield big benefits in terms of revenues and economic growth, more states will join the bandwagon and pressure will begin to mount on Congress to adopt a national flat tax.

Kodachrome film will soon be no more. It’s been around since 1935 and Paul Simon wrote a song about it in 1973. But it’s been dying along with film photography in general for nearly a generation now, as digital replaces George Eastman’s once wondrous technology.

I was thinking the other day of my grandmother, who died thirty years ago this month, and for some reason began to draw up a list of the technology she never knew because she died in 1979. My grandmother was hardly a technophile but neither was she intimidated by technology (or by anything or anybody else for that matter, but that’s another story). She was more than happy to adopt things (radio, TV, automatic transmission, vacuum cleaners, washing machines, Waring blenders, etc. etc.) as they came along and made life easier and more fun.

What has come along since her death at 89 and is now found in many, if not most, American households is a remarkable list. It’s a measure of how fast the world is changing thanks to what the microprocessor (introduced to the commercial world in 1971, with the digital calculator) has made possible. Just consider some of the stuff we couldn’t get along without and which she never encountered: flat-screen TVs, microwave ovens, cordless phones, ice makers, personal computers, laptops, fax machines, home copiers and printers, GPS, cell phones, Blackberries, Ipods, CDs, DVDs, Tivo, the Internet, Facebook and Twitter, e-mail, Kindle. The list goes on, but you get the idea. Some technologies have already come and gone (VHS, for instance).

I can readily imagine my grandmother reading on a Kindle or using a Blackberry (although I shudder to contemplate the fate of someone who tried surreptitiously to check his e-mail at her dinner table) and she would have loved having a GPS in her car, although I can easily see her ignoring its instructions because she thought she knew better. The Ayatollahs took over Iran just about the time my grandmother’s life ended. They must now be regretting the new technology that has made their tyranny so much harder to sustain.

For the first time since he took office, President Obama’s approval rating in the Rasmussen Daily Tracking Poll has gone negative. Thirty-two percent of those polled strongly approved of his performance and thirty-four percent strongly disapproved. While it’s impossible to know for sure, the president’s lackluster response to tens of thousands of Iranians putting their lives at risk for freedom is likely a major part of the reason for his falling numbers. Ten days ago, the day before the Iranian “election,” he was at plus seven.

After all, it was this country that began the world’s long, often bloody march to freedom and democracy. Two hundred and twenty-three years ago,  America first enunciated the ideas that the people are endowed by their Creator individually with life, liberty and the right to pursue happiness and collectively with the sovereign power to choose their government and their leaders.

Today, those ideas have spread around the world, leaving ever fewer remnants of tyranny. And today the people of Iran are at the forefront of that march to freedom. It is too soon to know if this will be a repeat of Tiananmen Square, Beijing, in 1989 or Republic Square, Bucharest, a few months later. But the vast majority of the American people are hoping it’s the latter, with similar results for the tyrants. I suspect they are disappointed in a president who doesn’t seem to know which side he is on.

Michael Barone knows the political landscape of this country like most people know the landscape of their backyards. Moreover, he knows, in detail, how that landscape has evolved over the life of the Republic. He is, of course, the co-author of The Almanac of American Politics, which is to be found on the desk — and probably the night table — of every American politician above the rank of assistant dog catcher and every political reporter. The 2010 edition will be out August 15th. Better yet, he has a remarkable ability to make numbers speak, to tell their stories. Consider his latest column, entitled, No, Obama Can’t Govern like FDR in 1933. I’ve been in the American history business now for a long time, but until I read the column, I had no idea that a majority of the members of the House in 1933 were freshman — the last time that has happened. Nor did I know that the election of 1898 was the first time a majority of the members of the House were not freshman. As Barone points out, that tells us a lot about both the Progressive era of the turn of the 20th century and why FDR was able to move so much legislation through Congress so quickly in 1933.

Alexander Pope decried the American Indian’s “untutor’d mind” that “Sees God in clouds, or hears him in the wind.” But Pope never encountered the Indian Health Service, which delivers what it is pleased to call health care to two million American Indians living on reservations in thirty-five states. “Don’t get sick after June” is the standard advice, for by then the money allocated by Congress has mostly run out.

Indians on reservations are usually poor and often suffer from very high rates of alcoholism, obesity, and the problems that come with those conditions, such as high blood pressure and diabetes. But as the Associated Press reports, “Indian health clinics often are ill-equipped to deal with such high rates of disease, and poor clinics do not have enough money to focus on preventive care. The main problem is a lack of federal money. American Indian programs are not a priority for Congress, which provided the health service with $3.6 billion this budget year.” That’s an annual budget of a measly $1,800 per Indian. No wonder the health statistics of a people that have been guaranteed free health care by the federal government since 1787 are so terrible.

An even larger federal health care system, for veterans, is hardly better. When it was found that thousands of veterans were put at risk for HIV, hepatitis, and other infectious diseases by improperly sterilized equipment used in colonoscopies last February, an investigation was ordered. Three months later, it seems that not much has been done about the problem.

I have an idea. Why not have the federal government demonstrate that it can provide adequate health care to American Indians, a promise it hasn’t kept for 222 years? Then demonstrate it can provide adequate health care to veterans, a promise it hasn’t kept for 79 years. Then demonstrate that it can reform and efficiently run the health insurance system called Medicare, which it has been been making a dog’s breakfast of for the last 44 years. And then, and only then, take over all of American health care.

Or even better, why not have the mainstream media do its job for once and vigorously investigate the federal government’s actual track record in regard to health care? It’s not an impressive résumé for someone applying to run the whole show. Indeed, it’s a more-than-two-hundred-year record of failure, inadequate funding, bureaucratic indifference, and broken promises.

Unfortunately, much of the mainstream media thinks, like Newsweek’s Evan Thomas, that President Obama is “sort of God.” So can you guess what they’ll be hearing in the wind as the nation debates the future of health care?

Yesterday the stock market was in the doldrums. It opened about sixty points down on the Dow from its previous day close and drifted downward from there to be off about 130 points at 12:30. It then struggled upwards, recovering about fifty points by 3:15. At that point it shot up seventy points in a few minutes and closed up fifteen points on the day.

What happened?

According to Bloomberg News it was a speech by Paul Krugman at the London School of Economics in which he predicted the end of the recession at some point this summer.

What makes markets rise and fall in the short term can never be known for sure. But, assuming causation and not just post hoc ergo propter hoc, this is highly reminiscent — except moving in the other direction — of the famous Babson Break of September 1929.

The market had reached an all-time high on September 3rd, 1929, closing at 381.17. No one knew it at the time, obviously, but that high would not be surpassed until 1954. Then, on September 5th, a perennially pessimistic financial advisor of no great note named Roger Babson told a luncheon group in Wellesley, Massachusetts, that “I repeat what I said at this time last year and the year before, that sooner or later a crash is coming.”

This rather innocuous remark crossed the broad tape at 2:00 PM and all hell immediately broke loose on the floor of the Exchange. By the time trading ended an hour later (the market closed at three o’clock in those days) major issues had plunged five percent or more and volume in the last hour of trading was a fantastic two million shares. It proved to be the start of the great crash that climaxed seven weeks later on October 29th.

Whether the Krugman Rally will prove to be a harbinger of things to come, as the Babson Break did, only time will tell. It might be noted, however, that the Babson Break occurred at a stock-market peak and the Krugman Rally follows three months in which the market has risen by fully a third from its dismal lows in early March.

In both cases, however, it was almost certainly not the influence of Krugman and Babson that moved the market. Rather it was a case of the market wanting to move and any excuse would do.

As someone else who makes what is laughingly referred to as a living by writing, I stand as one with Max and Harlan Ellison on the subject of getting paid for it.

The idea that writers should be grateful just to see their work in print is no new problem, by the way, and writers have been fighting it for centuries. As Samuel Johnson explained to James Boswell 233 years ago, “No man but a blockhead ever wrote, except for money.”

In today’s column, Paul Krugman effectively lays the blame for all that is wrong with the country’s healthcare system at the feet of the health insurance companies. This, of course, is the party line of the American left. What Krugman, with characteristic disingenuity, fails to mention are such matters as insurance in this country being regulated by the fifty states, not the federal government. So insurance companies have to jump through fifty sets of regulatory hoops, not just one. That doesn’t make for efficiency. And states, at the behest of special interests, love to pile on mandates that most people would be happy to forgo in exchange for lower premiums. (New York, for instance, requires health insurance policies to cover chiropractic treatments and in vitro fertilization procedures among much else, greatly driving up the cost of health insurance in that state.)

And he calls for “a simplified, uniform insurance form,” which he notes that even conservative Bill Kristol called for sixteen years ago. He implicitly blames the insurance companies for not achieving it. But he doesn’t bother to note that getting such a thing through fifty state insurance commissions (not to mention the Antitrust Division of the Justice Department, which might regard such an effort as a combination in restraint of trade) is nearly impossible. We have long had national insurance markets and Congress has the power to take over regulation of them under the interstate commerce clause. It has not done so for purely political reasons. But let’s blame the insurance companies anyway.

Krugman also thinks that the “public option” would force insurance companies to clean up their acts thanks to competition. He writes that, “The ‘public option,’ if it materializes, will be just that — an option Americans can choose. And the reason for providing this option was clearly laid out in Mr. Obama’s letter: It will give Americans ‘a better range of choices, make the health care market more competitive, and keep the insurance companies honest.’”

Competition certainly forces noses to grindstones — it’s exactly why capitalism works and socialism doesn’t. Of course, there has never been a case in the history of the world — that I know of at least — in which a government competed with private companies on a level playing field. And the playing field would most certainly not be level here.

The public option would not have to answer to fifty state insurance commissions, a huge competitive advantage. And, being a federal entity, it would be exempt from federal, state, and local taxes. So competition between this “public option” and private insurance companies would be like a foot race in which every runner but one had to carry a couple of bowling balls around the track as he ran.

And, of course, Krugman fails to note that the federal government already runs a vast health insurance company called Medicare with truly stunning inefficiency, waste, and fraud. Even the Council of Economic Advisors — a White House group — writes in a report that Medicare could cut costs by thirty percent without adversely impacting healthcare.

As Virginia Postrel suggests, why not use Medicare as a laboratory for reforming the health insurance system? Once they see what works in Medicare, the private health insurance companies would be only too glad to emulate its success, assuming they are allowed to by their fifty separate sets of regulators, of course.

Abe is right on regarding the tendentious BBC headline. But it is just one example of a very widespread problem in political journalism.

Mark Twain credited Benjamin Disraeli with dividing mendacity into three categories: lies, damned lies, and statistics. Statistics were a new concept in Disraeli’s day (the word dates only to 1787), but today we swim in a sea of them, with the Bureau of Labor Statistics, Census Bureau, Federal Reserve, Congressional Budget Office, and Office of Management and Budget — to name only a few of the major sources — issuing them by the ton every day. Politicians and pundits then use and misuse them to advance an agenda.

But most people and — it seems — almost all political reporters, lack the skills to analyze these statistics in order to figure out if they are being misinformed or even deliberately lied to. One has the impression that many political reporters disdain such analysis: Hey! We’re word guys not number guys! That’s not our department.

Perhaps so, but it is their job to ferret out the truth and that means exposing lies. When a politician tells a flat-out lie (”I did not have sexual relations with that woman”) and gets caught, the consequences can be severe. But if he tells a lie using statistics — compares apples with oranges, chooses a base point for tendentious purposes, or designs a chart in order to give a false impression (to make the curve look steep, just shorten the X axis) — hardly anyone notices and, it seems, fewer care. It’s just business as usual in Washington, where even the federal books are a tissue of accounting lies to hide the true state of the public fisc.

Schools should make it a part of the basic curriculum to teach children how to spot phony and misleading statistics. And news organizations should hire an editor whose job would be to instruct and correct reporters on the subject.

I won’t hold my breath waiting for that to happen.

In his New York Times column today, Paul Krugman shows that his ability to wear two hats (Nobel-Prize-winning economist and intellectually dishonest partisan) is unimpaired.

First, he attributes the results of the Garn-St. Germain Depository Institutions Act of 1982, and thus the S&L crisis of the late 1980’s, entirely to Ronald Reagan, as though Reagan was ruling by decree. It was Democrat Fernand St. Germain, Congressman from Rhode Island, who dropped into the bill in the middle of the night the provision that raised the government guarantee on bank deposits from $40,000 to $100,000 and assorted other goodies for the powerful S&L lobby. It passed both houses with veto-proof majorities.

Second he lies with statistics, especially the “savings rate,” which measures only family income versus outgo. Mortgage payments, for instance, which add to net worth, are not counted, nor are capital gains, unless realized. In the great boom of the 1982-2007 period, families saved more by increased housing and investment gains than by old-fashioned savings.

Third, he writes, “traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. Translation: Reagan began running up the debt to unsustainable heights.

What he doesn’t say is that while the debt remained fairly steady in dollar terms in the late 40s, and in 50s and 60s (it increased by roughly a third in the 1960s though), it declined as a percentage of GDP thanks to strong economic growth. But in the 1970’s, with Congress firmly in the hands of Democrats and with weak Republican presidents Nixon (after Watergate broke) and Ford, the debt tripled in dollar terms. It declined slightly as a percentage of GDP only because of the roaring inflation of that decade.

Dan Okrent, the first Public Editor of the Times was right: Krugman has a problem with the truth.

Sometimes you just have to wonder if there is sentient life on the opinion floor of the New York Times Building.

Yesterday, the Times ran an editorial called “The Sorry State of the States” that noted that many states have budget problems, thanks to the recession. State deficits over the next two years, according to the Times, will add up to $350 to $370 billion. The editors note, happily, that federal stimulus spending will take care of about forty percent of that but fail to notes that that merely transfers the deficit from the states to the federal government.

The problem, says the Times, is “a collapse in  tax revenues brought on by the recession.” That is indeed the problem, if you regard the world as having come into existence on, say, January 20th, 2009. But since it didn’t, there are other reasons that are more important. During the prosperity of the mid-Bush years, many states increased spending both markedly and irresponsibly. The ones that didn’t are the very states that, today, have the least problems dealing with the recession.

California, for instance, increased total spending by an astonishing forty percent just since 2003 and is now–surprise!–the state with the biggest budget problem. The Times thinks the blame lies with the people of California, with their “deeply anti-tax strain” dating back to 1978 when Proposition 13 limited property tax increases.  Of course, California had a string of balanced budgets and rapidly increasing prosperity beginning in that year because other referenda imposed strict spending restraints. It was only when those spending restraints were gutted in the late 1980’s that California’s budget roller-coaster ride began. Perhaps I missed it, but I’m pretty sure that the Times did not report Californians starving in the streets during that period.

Today, Paul Krugman chimes in, backing the Times party line that California’s budget travails stem principally from its inability to raise taxes easily. Again,  Krugman blames the people for acting in their sovereign capacity to limit the ability of their servants in Sacramento to tax. To be fair, Krugman, unlike the Times’s editors, does note the state’s “irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor.” But, like the editorial, Krugman seems oblivious to the history of California’s public fisc.

When both taxes and spending were tightly controlled, the state prospered. When only taxes were constrained, things quickly began to spin out of control. Perhaps, just perhaps, the solution lies not in increasing taxation but in, once again, limiting the ability of the government to increase spending during prosperous years.

Washington and its press corps love ten-year economic projections. The executive branch is required by law to make them for all manner of things. And news outlets publish them with the same shamelessness that supermarket tabloids publish predictions of Martians landing in Central Park.

Only one problem — just like the predictions of Martians, they are completely worthless for anything except garnering headlines. Projecting such things as GDP, federal revenues and outlays, and the size of the national debt ten years out is like predicting the weather ten years out. Both predictions must fail for precisely the same reason: millions — probably billions — of variables interact in often completely unpredictable ways. So predicting the economy (or the weather) ten years out is like predicting the outcome of a backgammon game after the third roll of the dice.

I stumbled on a perfect example of what I mean this morning, while working on a new edition of my history of the national debt, first published in 1997: It’s a Treasury Department press release titled “From Widening Deficits to Paying Down the Debt: Benefits for the American People,” and it was published in August 1999.

It confidently predicts ever-increasing budget surpluses from that point on, reaching as high as nearly $500 billion in fiscal 2009 — 3.5 percent of GDP. (In fact, the budget deficit this year will be at least $1.8 trillion — nearly 14 percent of GDP). The press release goes on to foresee that the publicly-held national debt in fiscal 2009 would be a mere $1.5 trillion (it is $6.9 trillion) and only 25 percent of GDP (it’s 49 percent). I suppose the Treasury Department economists who wrote this press release might have done a better job had they only taken the end of the dot.com bubble, 9/11, the Iraq War, and the financial crisis of 2008 into account. I wonder why they didn’t.

If economists had the scruples of meteorologists, they would flatly refuse to make these projections. Unfortunately, all too often when you scratch an economist (especially in Washington, D.C.) you find a politician.

The estimable Robert Samuelson of the Washington Post had a must-read column yesterday titled “Obama’s Risky Debt.” Samuelson writes that the administration is projecting a total of $7.1 trillion in additional publicly-held debt over the next ten years, on top of $1.8 trillion for this year alone. (The Congressional Budget Office, less enthralled by the allures of Rosie Scenario, projects the additional debt will be $9.3 trillion). Today’s publicly-held debt is $6.3 trillion. Thus, using the CBO figures, in ten years the publicly-held debt will total $17.4 trillion, 270 percent of the current debt.

That’s about the same as the percentage increase in the national debt from 1930 to 1940, when the country underwent an economic crisis orders of magnitude more severe than the current one. And in 1930 the total national debt was only about 15 percent of GDP, not the 40 percent that the publicly-held debt is today. So the country was not nearly as close to being maxed out during the Great Depression as we are today, after twenty-five years of unprecedented prosperity in the country and fiscal irresponsibility in Washington.

But Samuelson does not discuss the government-held debt that will make the situation much worse by the year 2020. By far the biggest holder of federal treasury bonds is the United States Government itself ($4.2 trillion worth, as compared to $2.7 trillion held by foreigners). Most of this debt is owned by various trust funds, principally the Social Security Trust Fund. That makes the total national debt $10.5 trillion, not $6.3 trillion, 73 percent of GDP, not 40 percent.

The big problem here is that many of these trust funds will have to start dipping into their stockpiles of treasuries in order to pay their obligations in the near future. Medicare is already doing so. Social Security will begin in 2016 according to current projections, as the tide of retiring baby boomers swells.

When the trust funds need the money, they will take their treasury bonds to the Treasury and ask for it. The government will then have three means for raising the money: 1) It can make cuts in spending in other areas of the federal budget (but not to the ever-growing portion that will have to be allocated to interest on the debt, a constitutional obligation). 2) It can raise taxes substantially to bring in new revenue. Or 3) It can go into the bond market and sell still more bonds over and above the trillions of dollars’ worth it will be selling in order to finance the Obama deficits.

Congress, ever more a re-election committee for incumbents of all parties rather than a legislature, has shown scant relish for either cutting spending or raising taxes on the middle class, both of which create instant voter resentment. So it is likely to borrow still more in the bond market.

Of course one way for a government to get out from under an unsupportable debt load is to inflate its way out of it. The national debt is dollar-denominated, so a raging inflation would make it worth less as a percentage of GDP. In the inflation-ravaged 1970’s, the national debt nearly tripled in dollar terms (from $370 billion to $909 billion) but it fell as a percentage of GDP from 39 percent to 34 percent.

The Federal Reserve’s number-one job is to maintain price stability. If the Fed — despite what will be enormous pressure from politicians desperate to avoid having to take responsibility for their folly — does that job, I don’t think the present debt course will be sustainable.

How that will play out is anyone’s guess, but it will be ugly, to put it mildly. The Republican Party, however, has a great opportunity here if it has the political machismo to take advantage of the situation. The Democrats own the government and therefore they own these numbers.

As Jennifer noted this morning, Representative Jeff Flake’s motion to have the House Ethics Committee investigate Rep. John Murtha was defeated on Tuesday, after Speaker Nancy Pelosi’s enforcers threatened Democrats with problems (in an e-mail headed “Don’t Be a Flake”) if they voted for it.

But 29 Democrats did so anyway. And this morning, the New York Times ran an editorial backing the investigation of the ever-growing pile of evidence that John Murtha has been at the center of a vast pay-to-play scheme involving defense appropriations. The Times editors wrote, “It is time to follow the money — all of it.”

To be sure, the Times’s editorial page these days has limited power, because its often highly tendentious editorials preach almost exclusively to the liberal choir. But it still has real clout  — with that choir at least.  When the Times wrote that former Senator Tom Daschle should withdraw his nomination to be Health and Human Services secretary because of his failure to pay taxes on large amounts of in-kind income, Daschle’s support crumbled and he withdrew the same day.

With the Speaker enmeshed ever more tightly in a net of her own conflicting statements about what she knew and when she knew it regarding interrogation techniques, her power to protect her close associate Murtha (who she wanted to be Majority Leader — a post the Democratic Caucus gave to Steny Hoyer) is increasingly limited.

I’d suggest that John Murtha do some serious lawyering up if he hasn’t already.

As an addendum to my earlier post, the AP is now reporting that the finances of both Social Security and Medicare, especially the latter, are in worse shape than recently thought. Medicare will pay out more money this year than it takes in and will be insolvent by 2017, a mere eight years from now.

Social Security — whose trust fund the federal government has been raiding for years to meet current expenses — will have a surplus of only $4 billion next year instead of the $86 billion projected last year and will begin running a deficit in 2016 as the tidal wave of retiring baby boomers crests. Assuming the government redeems its IOU’s, which constitutes the trust fund’s assets, the fund will be empty in 2037.

So the Obama administration wants to “reform” American healthcare by setting up a “public option” that would compete with private health insurance and would be modeled on . . . . Medicare!

That is like an engineer deliberately designing a bridge modeled on Galloping Gertie.

The Obama Administration is bent on taking over healthcare in this country, and as Jennifer has pointed out, it is by no means above making claims that it will save money by doing so. How turning 17 percent of the American economy over to those wonderful folks who brought you Medicare is going to save money is a mystery to me.

I recently became eligible for Medicare and went online to sign up. Being logical by nature, I went to www.medicare.gov . No matter where I went on that website, however, I could not find how to sign up and was constantly asked for my Medicare number. Of course, not having yet signed up, I didn’t have one. I finally called Medicare and, having battled my way through the now-inevitable phone tree, at last got a live human being.

It turns out that you don’t sign up for Medicare by going to Medicare — silly me for thinking so. You sign up for Medicare by going to Social Security. (If you want to join the Army, do you call the Department of Agriculture?) I’m sure there is some reason for this that is bureaucratically logical, if you’ll pardon the oxymoron. But is it beyond the capacity of Medicare to put a prominent note on the opening page of its website saying, “If you want to sign up for Medicare, go here” and provide a link? Apparently it is.

All of this brought to mind a column I wrote for American Heritage a few years ago on the takeover of the phone system by the Wilson Administration. The “progressives” of that era thought that because AT&T was a monopoly, the phone system would be better and more cheaply run by the Post Office (no snickering, please). The idea was politically marketed under the name “postalization.”

Theodore Vail, the brilliant president of AT&T, cheerfully admitted that the company was, in large measure, a monopoly. But he noted that, “all monopolies should be regulated. Government ownership would be an unregulated monopoly.”

He was, of course, entirely correct. While a major reason for taking over the phone system had been to make lower rates possible, almost the very first thing the Post Office did was to raise rates, and sharply. AT&T, as a regulated utility, had had to obtain permission to raise rates. The government could just do so, and did. The Post Office also imposed a new service-connection fee.

The whole experiment lasted only slightly over a year, as public support evaporated in the face of the government’s high-handed ways and the phone system was returned to private hands. Thus the United States continued to have the best and cheapest phone system in the world for the next sixty years, until technological advances made the AT&T monopoly no longer necessary. Once AT&T was broken up, market competition quickly lowered prices dramatically.

Perhaps those who regard the nationalization of healthcare as a looming economic disaster — count me among them — need to come up with a word to describe what the Obama Administration has in mind, a word both accurate and scary.

How about “medicarization”?

The figurative mobs forming to professionally lynch John Yoo and Judge Jay Bybee are truly frightening to anyone who reveres the rule of law. But perhaps not surprising. Liberals, it seems, have no problems with mobs as long as they are leftist mobs, such as those who prevent invited speakers at colleges from having their say and those that riot during meetings of the World Trade Organization. If a single such incident has been fomented by the Right in recent years, I do not know of it. If the Left has so strong a case, why are they so tolerant of tactics reminiscent of those that helped kill the Weimar Republic?

What I still find surprising is that President Obama, who could stop this gathering monster with a single statement, has been silent. Is he really willing to throw the red meat of John Yoo’s and Jay Bybee’s professional careers — and, possibly, even their safety — to his base? If so, this country is in very deep trouble indeed.

And I’m afraid we cannot even hope for a Senate trial of Judge Bybee presided over by Chief Justice Roberts, which Jennifer thinks would be educational (and I agree). The Chief Justice presides only in the case of an impeachment trial of a president. Judge Bybee’s trial would be presided over by Harry Reid and Company. That would not be educational, at least not in the way Jennifer would like it to be.

Jennifer refers to the lead editorial in today’s Wall Street Journal, about President Obama’s openness to investigating — and perhaps trying — government officials of the Bush administration for the legal advice they gave regarding interrogation methods. The Journal notes that, “everyone agrees that senior officials, including President Bush, approved these interrogations. Is this President going to put his predecessor in the dock too?”

As a modest collector of the more delicious grotesqueries of history, I was immediately reminded of the fate of Pope Formosus, who reigned from 891 to 896. His immediate successor, Boniface VI, lived only 15 days. But Formosus was indeed tried by the next Pope, for perjury, canonical violations and even ambition to be named pope, a sin of which more than a few men of the cloth have been guilty over the last 2,000 years. But wait, you say. Popes are elected for life, so how could he be tried by a later pope? No problem. The new pope, Stephen VI (or VII, depending on how you count — don’t ask, it’s complicated), simply had the corpse of Formosus dug up - -seven months after his death — dressed in papal vestments, and propped up in a chair. A deacon was placed behind the chair to answer any questions put to the dead pope.

Not surprisingly, Formosus was found guilty. His rotting body had three fingers — the ones he had used to give blessings — chopped off and was dumped in a common grave. The corpse was later dug up and thrown into the Tiber. A hermit, who claimed he was led by a vision of Formosus, found the body washed up and gave it a decent burial.

Those slavering over the possibility of a show trial or two for Bush administration officials might want to take note of the fate of Stephen VI. As soon as the trial was over, an earthquake struck Rome and the populace, understandably regarding this as a sign of divine displeasure, soon forced Stephen’s abdication as Pope. Thrown into prison, he was strangled a few months later. The body of Formosus was returned to the crypt beneath St. Peter’s and buried yet again — it was the fourth burial — with full papal honors. The following year, a new pope overturned the decision of the synod that had tried Formosus and forbade trials of the dead in the future.

This sorry episode, known as the “Cadaver Synod,” is generally regarded as the low point in the Papacy’s long history.

Jennifer will get no argument from me that ethanol has been a disaster for everyone who does not happen to be a corn farmer.

However, she writes, “The law of unintended consequences never fails to disappoint.”

Just for the record, unintended consequences are not always bad ones. Take the GI Bill of Rights of 1944. While ostensibly it was to reward the millions who had fought in World War II and made victory possible, the major underlying purpose was to keep these millions out of the job market for as long as possible.

Almost all economists (their clouded crystal balls ever at the ready) thought the end of the war would bring renewed depression. So the bill offered GI’s generous incentives to go to college and trade school instead of finding a job. Academia was horrified at the prospect of hoards of the great unwashed going to college. But the unintended consequence was a much better educated workforce just when one was needed to exploit for peaceful purposes the new technology developed in the war, such as radar, large airframes, jet engines, rockets, computers, etc.

The number of college degrees awarded in 1950 was double the number from 1940. By making college affordable to groups that previously had sent few to higher education, the GI Bill also helped powerfully to open up high-level jobs to groups that had previously been largely excluded from such jobs. The age-old WASP hegemony in the American economy died at the hands of the GI Bill.

Moreover, the housing benefits in the GI Bill, also intended to make education easier to afford, had the unintended consequence of turning a nation of renters into a nation of homeowners, hugely increasing the percentage of American families owning substantial financial assets. This greatly shrunk the “proletariat” and greatly increased the middle class. (Someone should alert the Left. They seem not to have noticed this fact).

Indeed, the GI Bill was almost nothing but unintended consequences. And — suburbia perhaps an exception — the consequences were profoundly good ones.

In that intellectual wasteland known as the typical New York Times editorial, inconvenient facts and simple logic are never allowed to intrude on the pursuit of the editorial board’s agenda or on a good ad hominem attack on former President George W. Bush.

But today’s editorial on the collapse of the case against former Senator Ted Stevens rises to the level of self-parody. I’m no fan of Ted Stevens, who is a poster child for all that is wrong with Congress and members of Congress, Democrats and Republicans alike. But the abuse of power and ethical violations by the prosecutors last year led directly to their being held in contempt by the judge and the current attorney general, and to the convictions being voided, and the case against Stevens being dropped.

The Times writes, “Given the flagrant partisanship of the Bush Justice Department, it is especially reassuring to see Mr. Holder ignore party lines to do the right thing by Mr. Stevens. It has been far too long since the attorney general seemed interested in enforcing ethics and nonpartisanship in a department that has been shockingly lacking in both.”

So let’s see:  It was the Republican Bush Justice Department that, in an act of gross partisanship, indicted the longest-sitting Republican senator in history last year. And it was the Republican Justice Department that tried this Republican senator, withholding exculpatory evidence to insure his conviction a mere eight days before the general election. Almost certainly because of that conviction, the Republican senator went down in a narrow defeat — fewer than 4000 votes — giving way to the first elected Democrat in the Alaska congressional delegation in almost three decades.

Has “Saturday Night Live” infiltrated the Times? Nah, you really can’t make this stuff up.

On February 9th, President Obama visited Elkhart, Indiana, the American community with the country’s highest unemployment rate, 15.3 percent. (It had been only 4.7 percent the year before.) He was there to sell his stimulus bill, then moving through Congress and since signed. He noted that the bill would provide help for the workers who had lost their jobs and, more important, help them get their jobs back by reviving the economy.

The jobs that have vanished in Elkhart are predominantly in the recreational-vehicle industry, which is concentrated in the city of 52,000. With the severe recession the country is now experiencing, it is hardly surprising that this industry has been devastated. After all, an RV is expensive both to purchase and to operate and is hardly a necessity. But when the economy recovers, will those jobs come back as demand for RV’s returns? Or, in the meantime, will new environmental regulations championed by Obama work to impede the sales of vehicles that get only a few miles to the gallon and thereby make job growth in Elkhart an impossibility?

The latter seems to be the case. In its proposed budget for fiscal year 2010, the Obama administration has also said it would inaugurate a “cap-and-trade” program to reduce the emission of carbon dioxide into the atmosphere. This program would require all companies to buy at auction the right to emit the gas, which all fossil fuels-oil, gasoline, coal, natural gas, etc.-do, in varying amounts. The total amount of emissions allowed would be strictly limited.

Click here to read the rest of this SPECIAL PREVIEW from the April issue of COMMENTARY.

I couldn’t agree more with J. G. Thayer about both presidential humor and Barack Obama’s apparent lack thereof.  But I would put in a good word for Gerald Ford. While no John F. Kennedy in the wit and grace department, he did get off one of the great — and self-deprecating — puns in American political history when he warned the country in 1973, after being sworn in as Nixon’s vice-president, that “I’m a Ford, not a Lincoln.”

It is interesting, to say the least, that those noting Obama’s lack of humor and grace are not confined to the likes of Contentions. Would you believe a columnist for Vanity Fair? If Michael Wolff is beginning to realize that Barack Obama is “cold; he’s prickly; he’s uncomfortable; he’s not funny; and he’s getting awfully tedious,” then this presidency is already in trouble.