Commentary Magazine


Topic: Economist

Fayyad’s Bonfire Lights the Way to Hatred, Not Peace

The popularity of Palestinian Authority Prime Minister Salam Fayyad among Israeli and American observers has always greatly exceeded his standing among his own people. Both dovish and hawkish analysts hold the American-educated technocrat as a unique Palestinian politician: honest, skilled at economics and governing, and dedicated to peace. But lately, even his Israeli and American fans have begun to notice that Fayyad’s dedication to peace is being undermined by his efforts to make himself more loved by Palestinians.

Fayyad is at a disadvantage when he competes with Hamas and other factions because the bona fides of any Palestinian political faction has always been defined by the amount of Jewish blood spilled. Unlike other major Palestinian figures, the University of Texas-trained economist has no gunmen or terrorist cadres at his disposal. So instead, he must wage war against the Jews using the tools of his own trade — by championing the boycott of Israeli goods produced in Jewish communities in the territories.

Even an admirer like Dalia Itzik, an important figure in Kadima – the party that the Obama administration hopes will somehow eventually replace Benjamin Netanyahu’s Likud – thinks Fayyad’s decision to embrace such tactics is a blow to the hopes for peace that Fayyad has done so much to encourage in the past. No right-winger, Itzik is a former Labor Party speaker of the Knesset, but even she understands that what Fayyad is doing when he allows himself to be photographed throwing Israeli products into a bonfire is burning the chances for cooperation between the two peoples. As Itzik writes in the Jerusalem Post, it is “hope that is being boycotted” most of all in this campaign.

As to be expected, Fayyad’s bonfire photo-op got more sympathetic coverage in the New York Times last week as its article played along with the notion that his mobilization of the slender resources of the PA to conduct a witch hunt weeding out Israeli goods in Palestinian stores was merely a matter of “nonviolent resistance.”

But Fayyad’s administration was supposed to focus on development, heightened security, and the promise of peaceful interaction with Israel. But as both Itzik and other Israelis have rightly noted, the whole premise behind the boycott is a campaign of incitement in which anything created or sold by Jews is seen as illegitimate. It also feeds into the Palestinian notion that, despite Fayyad’s talk of peace, the Jewish state is, itself, illegitimate.

If Fayyad’s notion of peace rests on the premise of the expulsion of every single Jew from the territories and a Palestinian boycott of Israel, it is hard to see how even this paragon of Palestinian politicians is doing much to foster a spirit of peace. Rather than fighting to create a saner Palestinian political culture, Fayyad appears to be attempting to gain points with his public by pandering to the basest Palestinian instincts. The problem with such a plan is that no matter how many bonfires of Jewish products Fayyad builds, he can never really compete with the guys who have the guns and the explosives for the affection of the Palestinian public. All of which ought to lead us to wonder why so much attention and so much hope is being wagered by both Israel and the United States on his success.

The popularity of Palestinian Authority Prime Minister Salam Fayyad among Israeli and American observers has always greatly exceeded his standing among his own people. Both dovish and hawkish analysts hold the American-educated technocrat as a unique Palestinian politician: honest, skilled at economics and governing, and dedicated to peace. But lately, even his Israeli and American fans have begun to notice that Fayyad’s dedication to peace is being undermined by his efforts to make himself more loved by Palestinians.

Fayyad is at a disadvantage when he competes with Hamas and other factions because the bona fides of any Palestinian political faction has always been defined by the amount of Jewish blood spilled. Unlike other major Palestinian figures, the University of Texas-trained economist has no gunmen or terrorist cadres at his disposal. So instead, he must wage war against the Jews using the tools of his own trade — by championing the boycott of Israeli goods produced in Jewish communities in the territories.

Even an admirer like Dalia Itzik, an important figure in Kadima – the party that the Obama administration hopes will somehow eventually replace Benjamin Netanyahu’s Likud – thinks Fayyad’s decision to embrace such tactics is a blow to the hopes for peace that Fayyad has done so much to encourage in the past. No right-winger, Itzik is a former Labor Party speaker of the Knesset, but even she understands that what Fayyad is doing when he allows himself to be photographed throwing Israeli products into a bonfire is burning the chances for cooperation between the two peoples. As Itzik writes in the Jerusalem Post, it is “hope that is being boycotted” most of all in this campaign.

As to be expected, Fayyad’s bonfire photo-op got more sympathetic coverage in the New York Times last week as its article played along with the notion that his mobilization of the slender resources of the PA to conduct a witch hunt weeding out Israeli goods in Palestinian stores was merely a matter of “nonviolent resistance.”

But Fayyad’s administration was supposed to focus on development, heightened security, and the promise of peaceful interaction with Israel. But as both Itzik and other Israelis have rightly noted, the whole premise behind the boycott is a campaign of incitement in which anything created or sold by Jews is seen as illegitimate. It also feeds into the Palestinian notion that, despite Fayyad’s talk of peace, the Jewish state is, itself, illegitimate.

If Fayyad’s notion of peace rests on the premise of the expulsion of every single Jew from the territories and a Palestinian boycott of Israel, it is hard to see how even this paragon of Palestinian politicians is doing much to foster a spirit of peace. Rather than fighting to create a saner Palestinian political culture, Fayyad appears to be attempting to gain points with his public by pandering to the basest Palestinian instincts. The problem with such a plan is that no matter how many bonfires of Jewish products Fayyad builds, he can never really compete with the guys who have the guns and the explosives for the affection of the Palestinian public. All of which ought to lead us to wonder why so much attention and so much hope is being wagered by both Israel and the United States on his success.

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U.S. Defense Merits Spending

Big surprise. Reason magazine, the libertarian Bible, favors cutting defense spending. But it would be hard to come up with a more unpersuasive argument if they tried. Contributor Veronica de Rugy of George Mason University, a bastion of free-market economics, writes:

Liberals often view the Pentagon as an item that should be cut but can’t for political reasons. … Yet such cuts have been achieved in the past. … During the last 70 years, the defense budget was cut 26 times by an average rate of 10 percent. … The biggest cuts followed World War II, with a 72 percent reduction in 1947. The last cut was in 1998. … Most of the cuts have taken place after the end of a war. But cuts were also achieved in the late 1960s and early ’70s, despite the ongoing conflict in Vietnam. Politicians explicitly debated how to cut spending without cutting security, and they still managed to get re-elected.

So let me see if I have this straight: de Rugy thinks that defense cuts in the late 1940s, early 1970s, and early 1990s are a good model to follow? In all three instances, major wars were winding down (World War II, Vietnam, and the Cold War, respectively), and the political class was eager to spend a “peace dividend.” Ms. de Rugy is an economist, not a historian, but she would be well advised to study the historical record for what happened next.

In all three cases, the result was to make America less secure and to embolden our adversaries. The precipitous decline in defense spending after World War II left us ill-prepared to confront Communist aggression in Korea. The drawdown after the end of the Vietnam War led to a “hollow army” that could not stand up to Soviet aggression or the Iranian hostage crisis in the 1970s. And the 1990s drawdown, which included slashing a third of the Army’s active-duty strength, left the armed forces overstretched and ill-prepared to deal with a host of low-intensity conflicts, from Somalia to Iraq and Afghanistan.

Since 9/11, the trend has reversed, with a big increase in defense budgets, but most of the money has gone for current operations and personnel costs (including health care and pensions) – the latter line item consuming an ever-larger share of the budget since the abolition of the draft in 1973. The U.S. armed forces have not been able to acquire enough big-ticket items to replace weapons designed and bought during the Reagan years or even earlier. (B-52 bombers and KC-135 tankers date back to the Eisenhower administration.) The Army has grown slightly, but it is still far below its strength at the end of the Cold War, when it had 710,000 active-duty soldiers. (Today the figure is 560,000.)

It’s true that we spend as much on defense as the rest of the world combined, but our commitments are also greater because the U.S. armed forces have to maintain peace and security across the globe – something that is increasingly hard to do when the Navy, for example, has just 286 ships (down from almost 600 ships in the Reagan years). We can certainly afford to keep spending as much on defense as we do today – or even spend more. As de Rugy notes in passing, defense spending is hardly a crippling burden, insofar as it accounts for less than 20 percent of the federal budget and 4.6 percent of GDP (down from 6.2 percent in the 1980s).

She seems enamored of studies that claim that great efficiencies can be achieved “by eliminating a few controversial weapons systems or by reforming the Pentagon’s supply chain, I.T., and personnel management practices.” There is little doubt that the Pentagon – one of the world’s largest bureaucracies – can be more efficiently run. But, to refer once again to the historical record, every secretary of defense since the post was created in 1947 has tried to cut “waste, fraud, and abuse.” This may have saved a few bucks at the margins, but at the end of the day, no green-eye-shade legerdemain can produce a budgetary miracle of less spending and more defense capabilities.

The bottom line is: either we keep spending a lot for defense, or we will watch our strategic position decline. And the consequences of such a decline – as we learned in the 1950s, 1970s, and 1990s – will be far more costly in the end than maintaining a robust deterrent capacity to begin with.

Big surprise. Reason magazine, the libertarian Bible, favors cutting defense spending. But it would be hard to come up with a more unpersuasive argument if they tried. Contributor Veronica de Rugy of George Mason University, a bastion of free-market economics, writes:

Liberals often view the Pentagon as an item that should be cut but can’t for political reasons. … Yet such cuts have been achieved in the past. … During the last 70 years, the defense budget was cut 26 times by an average rate of 10 percent. … The biggest cuts followed World War II, with a 72 percent reduction in 1947. The last cut was in 1998. … Most of the cuts have taken place after the end of a war. But cuts were also achieved in the late 1960s and early ’70s, despite the ongoing conflict in Vietnam. Politicians explicitly debated how to cut spending without cutting security, and they still managed to get re-elected.

So let me see if I have this straight: de Rugy thinks that defense cuts in the late 1940s, early 1970s, and early 1990s are a good model to follow? In all three instances, major wars were winding down (World War II, Vietnam, and the Cold War, respectively), and the political class was eager to spend a “peace dividend.” Ms. de Rugy is an economist, not a historian, but she would be well advised to study the historical record for what happened next.

In all three cases, the result was to make America less secure and to embolden our adversaries. The precipitous decline in defense spending after World War II left us ill-prepared to confront Communist aggression in Korea. The drawdown after the end of the Vietnam War led to a “hollow army” that could not stand up to Soviet aggression or the Iranian hostage crisis in the 1970s. And the 1990s drawdown, which included slashing a third of the Army’s active-duty strength, left the armed forces overstretched and ill-prepared to deal with a host of low-intensity conflicts, from Somalia to Iraq and Afghanistan.

Since 9/11, the trend has reversed, with a big increase in defense budgets, but most of the money has gone for current operations and personnel costs (including health care and pensions) – the latter line item consuming an ever-larger share of the budget since the abolition of the draft in 1973. The U.S. armed forces have not been able to acquire enough big-ticket items to replace weapons designed and bought during the Reagan years or even earlier. (B-52 bombers and KC-135 tankers date back to the Eisenhower administration.) The Army has grown slightly, but it is still far below its strength at the end of the Cold War, when it had 710,000 active-duty soldiers. (Today the figure is 560,000.)

It’s true that we spend as much on defense as the rest of the world combined, but our commitments are also greater because the U.S. armed forces have to maintain peace and security across the globe – something that is increasingly hard to do when the Navy, for example, has just 286 ships (down from almost 600 ships in the Reagan years). We can certainly afford to keep spending as much on defense as we do today – or even spend more. As de Rugy notes in passing, defense spending is hardly a crippling burden, insofar as it accounts for less than 20 percent of the federal budget and 4.6 percent of GDP (down from 6.2 percent in the 1980s).

She seems enamored of studies that claim that great efficiencies can be achieved “by eliminating a few controversial weapons systems or by reforming the Pentagon’s supply chain, I.T., and personnel management practices.” There is little doubt that the Pentagon – one of the world’s largest bureaucracies – can be more efficiently run. But, to refer once again to the historical record, every secretary of defense since the post was created in 1947 has tried to cut “waste, fraud, and abuse.” This may have saved a few bucks at the margins, but at the end of the day, no green-eye-shade legerdemain can produce a budgetary miracle of less spending and more defense capabilities.

The bottom line is: either we keep spending a lot for defense, or we will watch our strategic position decline. And the consequences of such a decline – as we learned in the 1950s, 1970s, and 1990s – will be far more costly in the end than maintaining a robust deterrent capacity to begin with.

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Obama Failing on the Things the Public Cares Most About

We’ve seen oodles of polls of late, all reflecting a precipitous decline in Obama’s approval ratings. But none is more interesting than the poll by the Economist. It is all the more fascinating — and devastating for Obama — because it is a  poll of all adults, not registered or likely voters, which normally would tilt more to the Left. In other words, among likely voters Obama would probably be doing even worse.

The results show a president struggling. On the oil spill, 28% approve and 42% disapprove of his performance. On taxes, government spending, immigration, gun control, national defense, and terrorism the respondents say they are closer to the Republican Party than the Democratic Party. On gun control and national defense there is a double-digit gap. Democrats do better on regulating business (but within the margin of error), the environment, abortion (also within the margin of error), gay marriage, health care (by four points) and energy policy. In an enormous turnaround since Obama took office, the parties tie on the economy.

38 percent support the goals of the Tea Party movement; 27 percent do not. In a slew of areas (the Middle East, Afghanistan, energy policy, the environment, the economy, job security, health-care coverage, education, entitlement programs, the financial system, and Wall Street) the public thinks we are worse off than two years ago. There is no area in which the public thinks things have improved. They disapprove of Obama’s performance on Iraq, the economy (39 percent strongly so), immigration (41 percent strongly so), the environment, terrorism, gay rights, social security, the deficit (57 percent strongly or somewhat), Afghanistan, and taxes. On education they approve, but within the margin of error. Overall 44 percent approve of his performance and 49 percent do not.

With the exception of education and health care, the areas respondents are most concerned about (the economy, terrorism, social security, the budget deficit, and taxes) are ones on which Obama is doing very poorly and which most respondents believe have gotten worse in the last two years.

Finally, with regard to personal qualities, some of the results are stunning. Only 14 percent describe Obama as experienced, 47 percent don’t. (After 18 months in office, that is.) 31 percent  do not describe him as effective, only 25 percent do. 35 percent would not describe him as unifying, only 18 percent would. Although within the margin of error, more would not describe him as patriotic or in touch.

I go through these in some detail because the results present a picture of a president failing in nearly every area the public cares most about and who has lost the advantage on personal qualities, which were the foundation of his appeal as a candidate. In 18 months he has gone from “a sort of God” to “a sort of goat.” Maybe he can turn things around, but he has a long way to go.

We’ve seen oodles of polls of late, all reflecting a precipitous decline in Obama’s approval ratings. But none is more interesting than the poll by the Economist. It is all the more fascinating — and devastating for Obama — because it is a  poll of all adults, not registered or likely voters, which normally would tilt more to the Left. In other words, among likely voters Obama would probably be doing even worse.

The results show a president struggling. On the oil spill, 28% approve and 42% disapprove of his performance. On taxes, government spending, immigration, gun control, national defense, and terrorism the respondents say they are closer to the Republican Party than the Democratic Party. On gun control and national defense there is a double-digit gap. Democrats do better on regulating business (but within the margin of error), the environment, abortion (also within the margin of error), gay marriage, health care (by four points) and energy policy. In an enormous turnaround since Obama took office, the parties tie on the economy.

38 percent support the goals of the Tea Party movement; 27 percent do not. In a slew of areas (the Middle East, Afghanistan, energy policy, the environment, the economy, job security, health-care coverage, education, entitlement programs, the financial system, and Wall Street) the public thinks we are worse off than two years ago. There is no area in which the public thinks things have improved. They disapprove of Obama’s performance on Iraq, the economy (39 percent strongly so), immigration (41 percent strongly so), the environment, terrorism, gay rights, social security, the deficit (57 percent strongly or somewhat), Afghanistan, and taxes. On education they approve, but within the margin of error. Overall 44 percent approve of his performance and 49 percent do not.

With the exception of education and health care, the areas respondents are most concerned about (the economy, terrorism, social security, the budget deficit, and taxes) are ones on which Obama is doing very poorly and which most respondents believe have gotten worse in the last two years.

Finally, with regard to personal qualities, some of the results are stunning. Only 14 percent describe Obama as experienced, 47 percent don’t. (After 18 months in office, that is.) 31 percent  do not describe him as effective, only 25 percent do. 35 percent would not describe him as unifying, only 18 percent would. Although within the margin of error, more would not describe him as patriotic or in touch.

I go through these in some detail because the results present a picture of a president failing in nearly every area the public cares most about and who has lost the advantage on personal qualities, which were the foundation of his appeal as a candidate. In 18 months he has gone from “a sort of God” to “a sort of goat.” Maybe he can turn things around, but he has a long way to go.

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Unemployment Insurance I

If an astronomer were to casually claim that Ptolemy was right and the sun revolves around the earth, or if a paleontologist were to suddenly subscribe to Archbishop Ussher’s idea that the world was created as we know it now in the night preceding October 23, 4004 BCE, they would be laughed out of their disciplines. The evidence for the modern understanding of such matters is, after all, overwhelming. So to make such a claim would require massive and unequivocal data to back it up.

However, if an economist does the equivalent, the entire profession, instead of collapsing in laughter, says, ” . . . . oh, look! A squirrel!” Economists, it seems, suffer no loss of respect by their peers if they utter ex cathedra pronouncements that are in flat contradiction of the most basic tenets of the discipline. All they have to do is to be advancing a political agenda at the time, and all — no matter how ridiculous — is forgiven.

When Senator John Kyl said that “continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Paul Krugman wrote in his New York Times column “To me, that’s a bizarre point of view — but then, I don’t live in Mr. Kyl’s universe.”

Really? Here’s what Paul Krugman wrote in his own textbook, Macroeconomics:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. … In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

As James Taranto pointed out, “It seems Krugman himself lives in two different universes — the universe of the academic economist and the universe of the bitter partisan columnist.”

When the Wall Street Journal noted last week that extending unemployment benefits tends to keep unemployment high by reducing the incentive to look for work — and quoted Lawrence Summers, writing in 1999, to that effect — they received a furious letter from Mr. Summers, now head of Obama’s National Economic Council. The Wall Street Journal had a field day in response, pointing out that,

The Summers argument is that increasing unemployment insurance increases aggregate demand and thus reduces unemployment. This is because he and the neo-Keynesians believe that the impact on macroeconomic demand of this jobless spending outweighs the microeconomic harm on individual incentives. In other words, if government pays people for not working, then more people will work. Subsidize unemployment and you will somehow get less of it.

Summers’s idea is the economic equivalent of a perpetual motion machine.

If economists want to get the same respect that people give to real scientists, they are going to have start behaving like real scientists. They have to denounce nonsense from a fellow economist when they hear it, even if that economist is wearing a political hat rather than an academic one.

If an astronomer were to casually claim that Ptolemy was right and the sun revolves around the earth, or if a paleontologist were to suddenly subscribe to Archbishop Ussher’s idea that the world was created as we know it now in the night preceding October 23, 4004 BCE, they would be laughed out of their disciplines. The evidence for the modern understanding of such matters is, after all, overwhelming. So to make such a claim would require massive and unequivocal data to back it up.

However, if an economist does the equivalent, the entire profession, instead of collapsing in laughter, says, ” . . . . oh, look! A squirrel!” Economists, it seems, suffer no loss of respect by their peers if they utter ex cathedra pronouncements that are in flat contradiction of the most basic tenets of the discipline. All they have to do is to be advancing a political agenda at the time, and all — no matter how ridiculous — is forgiven.

When Senator John Kyl said that “continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Paul Krugman wrote in his New York Times column “To me, that’s a bizarre point of view — but then, I don’t live in Mr. Kyl’s universe.”

Really? Here’s what Paul Krugman wrote in his own textbook, Macroeconomics:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. … In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

As James Taranto pointed out, “It seems Krugman himself lives in two different universes — the universe of the academic economist and the universe of the bitter partisan columnist.”

When the Wall Street Journal noted last week that extending unemployment benefits tends to keep unemployment high by reducing the incentive to look for work — and quoted Lawrence Summers, writing in 1999, to that effect — they received a furious letter from Mr. Summers, now head of Obama’s National Economic Council. The Wall Street Journal had a field day in response, pointing out that,

The Summers argument is that increasing unemployment insurance increases aggregate demand and thus reduces unemployment. This is because he and the neo-Keynesians believe that the impact on macroeconomic demand of this jobless spending outweighs the microeconomic harm on individual incentives. In other words, if government pays people for not working, then more people will work. Subsidize unemployment and you will somehow get less of it.

Summers’s idea is the economic equivalent of a perpetual motion machine.

If economists want to get the same respect that people give to real scientists, they are going to have start behaving like real scientists. They have to denounce nonsense from a fellow economist when they hear it, even if that economist is wearing a political hat rather than an academic one.

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Democrats Face the Voters with Lousy Economic Results

This report explains:

Real personal income for Americans — excluding government payouts such as Social Security — has fallen by 3.2 percent since President Obama took office in January 2009, according to the Commerce Department’s Bureau of Economic Analysis.

For comparison, real personal income during the first 15 months in office for President George W. Bush, who inherited a milder recession from his predecessor, dropped 0.4 percent. Income excluding government payouts increased 12.7 percent during Mr. Bush’s eight years in office.

“This is hardly surprising,” said Douglas Holtz-Eakin, an economist and former director of the nonpartisan Congressional Budget Office. “Under President Obama, only federal spending is going up; jobs, business startups, and incomes are all down. It is proof that the government can’t spend its way to prosperity.”

It’s also more bad news for Democrats this election year. It was Obama, after all, who went after his predecessor for falling incomes. (“American families, since George Bush has been in office, have seen average family incomes go down $2,000,’ Mr. Obama said in a September 2008 speech on the economy in Green Bay, Wis.”) The “Bush did it” excuse is sure to follow, but plainly Obama’s stimulus plans haven’t made a dent in incomes or unemployment as he promised they would. The report also reminds us that the AP survey of leading economists has more gloomy news: “The unemployment rate will stay high for the next two years and still be at 8.4 percent by the end of 2011. Home prices will remain almost flat for the next two years, even after dropping an average 32 percent nationwide since peaking in 2006. The economy will grow about 3 percent this year, less than usual during the early phase of a recovery, but few jobs will be added.”

It’s not a record of success by any measure, and having spent over a year producing a health-care bill the country dislikes, Democrats are going to be hard-pressed to defend their economic record. The only question remains is how badly the electorate will punish those who controlled every lever of government and failed to deliver on their economic promises.

This report explains:

Real personal income for Americans — excluding government payouts such as Social Security — has fallen by 3.2 percent since President Obama took office in January 2009, according to the Commerce Department’s Bureau of Economic Analysis.

For comparison, real personal income during the first 15 months in office for President George W. Bush, who inherited a milder recession from his predecessor, dropped 0.4 percent. Income excluding government payouts increased 12.7 percent during Mr. Bush’s eight years in office.

“This is hardly surprising,” said Douglas Holtz-Eakin, an economist and former director of the nonpartisan Congressional Budget Office. “Under President Obama, only federal spending is going up; jobs, business startups, and incomes are all down. It is proof that the government can’t spend its way to prosperity.”

It’s also more bad news for Democrats this election year. It was Obama, after all, who went after his predecessor for falling incomes. (“American families, since George Bush has been in office, have seen average family incomes go down $2,000,’ Mr. Obama said in a September 2008 speech on the economy in Green Bay, Wis.”) The “Bush did it” excuse is sure to follow, but plainly Obama’s stimulus plans haven’t made a dent in incomes or unemployment as he promised they would. The report also reminds us that the AP survey of leading economists has more gloomy news: “The unemployment rate will stay high for the next two years and still be at 8.4 percent by the end of 2011. Home prices will remain almost flat for the next two years, even after dropping an average 32 percent nationwide since peaking in 2006. The economy will grow about 3 percent this year, less than usual during the early phase of a recovery, but few jobs will be added.”

It’s not a record of success by any measure, and having spent over a year producing a health-care bill the country dislikes, Democrats are going to be hard-pressed to defend their economic record. The only question remains is how badly the electorate will punish those who controlled every lever of government and failed to deliver on their economic promises.

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ObamaCare Bedevils Romney

Mitt Romney is the most experienced presidential candidate of the 2012 aspirants, having slogged through the 2008 primary and pre-primary campaigns. He has written a book and developed an easier, less stilted demeanor and public persona. He speaks authoritatively on foreign policy. But he has a big problem: ObamaCare looks a good deal like the ex-governor’s RomneyCare, his signature health-care legislation. A former advisor and MIT economist Jonathan Gruber remarks: “If any one person in the world deserves credit for where we are now (with the passage of the new federal law) it’s Mitt Romney.” Yikes.

Romney’s plan includes mandatory insurance for individuals — an anathema to conservatives. And the plan faces hard realities, which conservatives predict will befall ObamaCare too. The Wall Street Journal editors explain:

Three of largest four — Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health — posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies.

So until the matter is resolved, the insurers have simply stopped selling new policies. A court decision is expected by Monday, but state officials have demanded that the insurers — under the threat of fines and other regulatory punishments — resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs). . . .

On top of that, like ObamaCare, integral to the Massachusetts overhaul are mandates that require insurers to cover anyone who applies regardless of health status or pre-existing conditions and to charge everyone about the same rates. This allows people to wait until they’re about to incur major medical expenses before buying insurance and transfer the costs to everyone else. This week Blue Cross Blue Shield reported a big uptick in short-term customers who ran up costs more than four times the average, only to drop the coverage within three months.

Romney cites the differences between the bills — his contained no massive tax hike and didn’t savage Medicare. Mostly, he’s focused on the Tenth Amendment — the argument that the federal government shouldn’t and can’t constitutionally occupy the health-care field, which has been subject to state regulation. It’s far from clear that this will be enough to satisfy the Republican primary electorate, which is going to hear Romney’s opponents attack him for passing ObamaCare-lite. They likely will be proposing market-based plans akin to those which the GOP proposed in Congress. But for whatever reason — perhaps concern about reviving the flip-flop label — Romney isn’t disowning his past effort and he’ll have to withstand the onslaught if he’s going to do better than second place this time around. Every candidate has handicaps but in an election in which the Republicans are trying to elect a president to rip out ObamaCare before it takes root, Romney will have his work cut out for him, living down what was once a selling point for his candidacy.

Mitt Romney is the most experienced presidential candidate of the 2012 aspirants, having slogged through the 2008 primary and pre-primary campaigns. He has written a book and developed an easier, less stilted demeanor and public persona. He speaks authoritatively on foreign policy. But he has a big problem: ObamaCare looks a good deal like the ex-governor’s RomneyCare, his signature health-care legislation. A former advisor and MIT economist Jonathan Gruber remarks: “If any one person in the world deserves credit for where we are now (with the passage of the new federal law) it’s Mitt Romney.” Yikes.

Romney’s plan includes mandatory insurance for individuals — an anathema to conservatives. And the plan faces hard realities, which conservatives predict will befall ObamaCare too. The Wall Street Journal editors explain:

Three of largest four — Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health — posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies.

So until the matter is resolved, the insurers have simply stopped selling new policies. A court decision is expected by Monday, but state officials have demanded that the insurers — under the threat of fines and other regulatory punishments — resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs). . . .

On top of that, like ObamaCare, integral to the Massachusetts overhaul are mandates that require insurers to cover anyone who applies regardless of health status or pre-existing conditions and to charge everyone about the same rates. This allows people to wait until they’re about to incur major medical expenses before buying insurance and transfer the costs to everyone else. This week Blue Cross Blue Shield reported a big uptick in short-term customers who ran up costs more than four times the average, only to drop the coverage within three months.

Romney cites the differences between the bills — his contained no massive tax hike and didn’t savage Medicare. Mostly, he’s focused on the Tenth Amendment — the argument that the federal government shouldn’t and can’t constitutionally occupy the health-care field, which has been subject to state regulation. It’s far from clear that this will be enough to satisfy the Republican primary electorate, which is going to hear Romney’s opponents attack him for passing ObamaCare-lite. They likely will be proposing market-based plans akin to those which the GOP proposed in Congress. But for whatever reason — perhaps concern about reviving the flip-flop label — Romney isn’t disowning his past effort and he’ll have to withstand the onslaught if he’s going to do better than second place this time around. Every candidate has handicaps but in an election in which the Republicans are trying to elect a president to rip out ObamaCare before it takes root, Romney will have his work cut out for him, living down what was once a selling point for his candidacy.

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False Alarm

There is understandable alarm about the ballooning size of the U.S. debt and the fact that so much of it is held by foreigners, especially the Chinese. Joe Nye of Harvard, who has been consistently right in refuting theories of American decline for years, suggests that China’s position is not as strong as it appears:

The fact China holds so many dollars is not a true source of power, as the interdependence in the economic relationship is symmetrical. True, if China dumped its dollars on world markets, it could bring the U.S. economy to its knees, but in doing so it would bring itself to its ankles. China would not only lose the value of its dollar reserves, but would suffer major unemployment.

I’m not an economist, but it’s an argument I’ve heard echoed by economists. If accurate, that suggests that we have less to worry about from debt being held in Chinese hands than some alarmists imagine. It also means, as I have argued before, that America’s decline and fall are not imminent.

There is understandable alarm about the ballooning size of the U.S. debt and the fact that so much of it is held by foreigners, especially the Chinese. Joe Nye of Harvard, who has been consistently right in refuting theories of American decline for years, suggests that China’s position is not as strong as it appears:

The fact China holds so many dollars is not a true source of power, as the interdependence in the economic relationship is symmetrical. True, if China dumped its dollars on world markets, it could bring the U.S. economy to its knees, but in doing so it would bring itself to its ankles. China would not only lose the value of its dollar reserves, but would suffer major unemployment.

I’m not an economist, but it’s an argument I’ve heard echoed by economists. If accurate, that suggests that we have less to worry about from debt being held in Chinese hands than some alarmists imagine. It also means, as I have argued before, that America’s decline and fall are not imminent.

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What an Economist Thinks Poetry Is

There’s an eye-opening profile of Paul Krugman, the economist and lickspittle New York Times columnist, in the New Yorker this week. (Among its revelations: He became an economist owing to a character in an Isaac Asimov novel; his future wife was so angry when Ronald Reagan was elected president that she left the country for England; and he thought his life was in danger because people wrote him angry e-mails about some columns after 9/11.)

The most interesting detail in the piece has to do with Krugman’s academic work, which won him a Nobel Prize. Evidently, it is actually entirely commonsensical and not all that surprising in its exploration of the reasons why some businesses develop in certain places — but it was outside the norm for academic economists and so it blew them away. His particular gift, according to the piece, was his ability to translate lucid ideas into mathematical formulae; you would think the reverse would be the case for a genuinely significant contribution to the world of ideas, but never mind. Here is the Harvard economist Kenneth Rogoff describing Krugman’s accomplishment:

“It’s poetry,” Kenneth Rogoff, an economist at Harvard, says. “I mean, you go back to his first book and there was this beautiful chart about what the Volcker contraction did to output that swept aside so much—he just drew this little graph which really cleared the air. I’ve heard economists use the word ‘poet’ in describing him for decades.”

Yes. A beautiful chart about the Volcker contraction. That’s just what I think of when I see the word poetry.

There’s an eye-opening profile of Paul Krugman, the economist and lickspittle New York Times columnist, in the New Yorker this week. (Among its revelations: He became an economist owing to a character in an Isaac Asimov novel; his future wife was so angry when Ronald Reagan was elected president that she left the country for England; and he thought his life was in danger because people wrote him angry e-mails about some columns after 9/11.)

The most interesting detail in the piece has to do with Krugman’s academic work, which won him a Nobel Prize. Evidently, it is actually entirely commonsensical and not all that surprising in its exploration of the reasons why some businesses develop in certain places — but it was outside the norm for academic economists and so it blew them away. His particular gift, according to the piece, was his ability to translate lucid ideas into mathematical formulae; you would think the reverse would be the case for a genuinely significant contribution to the world of ideas, but never mind. Here is the Harvard economist Kenneth Rogoff describing Krugman’s accomplishment:

“It’s poetry,” Kenneth Rogoff, an economist at Harvard, says. “I mean, you go back to his first book and there was this beautiful chart about what the Volcker contraction did to output that swept aside so much—he just drew this little graph which really cleared the air. I’ve heard economists use the word ‘poet’ in describing him for decades.”

Yes. A beautiful chart about the Volcker contraction. That’s just what I think of when I see the word poetry.

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The Myth of Inevitability

The subheading of the Economist’s new “Facing up to China” article reads, “Making room for a new superpower should not be confused with giving way to it.” Darn right! About time someone said … wait, what?

Making room? A new superpower? If you’re taking those for granted, then you can hardly remove “giving way” from the discussion. In recent years, Westerners have adopted a habit of labeling potential challenges “inevitable” and then shading their self-imposed impotence as partnership or diplomacy or, heaven help us, smart power.

The rise of China is certainly the most glaring example, but think of the other distasteful “inevitabilities” we invoked as causes for recent paralysis. In 2007, Time magazine coronated Vladimir Putin, making him Man of the Year for turning Russia into a “critical linchpin of the 21st century.” Meanwhile, Russia was and is in a demographic death spiral and its fragile economy was not rocked, but decimated, by the global recession. No matter, a year after the Time honor, the Man of the Year invaded sovereign Georgia. A year after that, he’s still there. The U.S. has been sitting on its hands the whole time.  Now Putin is playing games with us on the Iran nuclear question. This isn’t to say that Time gave us our Russia problem. It’s just that in the age of post-everything interconnectedness, America should remember it’s still allowed to push back against an ugly world. We need not help the bad guys ascend.

Speaking of which, consider how Barack Obama’s unstoppable Iran engagement came to the tragic rescue of the regime in Tehran. He famously “bore witness” to Ahmadinejad’s crimes because regime change seemed unthinkable. Now, however, even the realists are on board to topple the mullahs.

There are more examples, of course. Iraq was “inevitably” lost, a conviction that has locked the U.S. into a dangerously defeatist stance even as we achieve near-silent victory there.

In these we see a striking failure of imagination. One hesitates to throw the “hope and change” noise back in the faces of the Obama administration and its fans yet again, but the truth is that those two words have come to stand as markers for bottomless chasms in the Left’s disposition. Chinese superpower is as inevitable as we allow it to be. Google certainly seems less than resigned to it. After all, what seems more likely: that the U.S. can happily make room for a China that will, in the Economist’s words, “take up its share of the burden of global governance” or that the U.S. and its traditional allies can knock China significantly off course? The latter is certainly made more difficult by an unfounded faith in the former.

The subheading of the Economist’s new “Facing up to China” article reads, “Making room for a new superpower should not be confused with giving way to it.” Darn right! About time someone said … wait, what?

Making room? A new superpower? If you’re taking those for granted, then you can hardly remove “giving way” from the discussion. In recent years, Westerners have adopted a habit of labeling potential challenges “inevitable” and then shading their self-imposed impotence as partnership or diplomacy or, heaven help us, smart power.

The rise of China is certainly the most glaring example, but think of the other distasteful “inevitabilities” we invoked as causes for recent paralysis. In 2007, Time magazine coronated Vladimir Putin, making him Man of the Year for turning Russia into a “critical linchpin of the 21st century.” Meanwhile, Russia was and is in a demographic death spiral and its fragile economy was not rocked, but decimated, by the global recession. No matter, a year after the Time honor, the Man of the Year invaded sovereign Georgia. A year after that, he’s still there. The U.S. has been sitting on its hands the whole time.  Now Putin is playing games with us on the Iran nuclear question. This isn’t to say that Time gave us our Russia problem. It’s just that in the age of post-everything interconnectedness, America should remember it’s still allowed to push back against an ugly world. We need not help the bad guys ascend.

Speaking of which, consider how Barack Obama’s unstoppable Iran engagement came to the tragic rescue of the regime in Tehran. He famously “bore witness” to Ahmadinejad’s crimes because regime change seemed unthinkable. Now, however, even the realists are on board to topple the mullahs.

There are more examples, of course. Iraq was “inevitably” lost, a conviction that has locked the U.S. into a dangerously defeatist stance even as we achieve near-silent victory there.

In these we see a striking failure of imagination. One hesitates to throw the “hope and change” noise back in the faces of the Obama administration and its fans yet again, but the truth is that those two words have come to stand as markers for bottomless chasms in the Left’s disposition. Chinese superpower is as inevitable as we allow it to be. Google certainly seems less than resigned to it. After all, what seems more likely: that the U.S. can happily make room for a China that will, in the Economist’s words, “take up its share of the burden of global governance” or that the U.S. and its traditional allies can knock China significantly off course? The latter is certainly made more difficult by an unfounded faith in the former.

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Jobs Saved or Created?

Here is a press report on an event in New Hampshire on Tuesday:

“Now, if you hear some of the critics, they’ll say, well, the Recovery Act, I don’t know if that’s really worked, because we still have high unemployment,” the president said. “But what they fail to understand is that every economist, from the Left and the Right, has said, because of the Recovery Act, what we’ve started to see is at least a couple of million jobs that have either been created or would have been lost. The problem is, seven million jobs were lost during the course of this recession.

Uh, no. Not “every” economist has said such a thing. In fact, it might be closer to say that no serious economist has said any such thing.

For Obama to pretend that what he says is true is not only wrong; it is quite ludicrous. The “saved or created” meme has rightly evoked belly laughs from all sorts of quarters. Even the president’s own Office of Management and Budget has given up on using it. And for good reason: It is an utterly meaningless and indefensible claim. The numbers were grabbed out of thin air, made up, pure fiction. The Obama administration has proven unable to document anything like what it claims.

For Mr. Obama — who promised to do away with “phony accounting” as part of his “turn the page” politics — to continue to say such things will simply further damage to his credibility, which is already in a state of considerable disrepair.

For more on this see ABC’s Jake Tapper and Hot Air’s Ed Morrissey.

Here is a press report on an event in New Hampshire on Tuesday:

“Now, if you hear some of the critics, they’ll say, well, the Recovery Act, I don’t know if that’s really worked, because we still have high unemployment,” the president said. “But what they fail to understand is that every economist, from the Left and the Right, has said, because of the Recovery Act, what we’ve started to see is at least a couple of million jobs that have either been created or would have been lost. The problem is, seven million jobs were lost during the course of this recession.

Uh, no. Not “every” economist has said such a thing. In fact, it might be closer to say that no serious economist has said any such thing.

For Obama to pretend that what he says is true is not only wrong; it is quite ludicrous. The “saved or created” meme has rightly evoked belly laughs from all sorts of quarters. Even the president’s own Office of Management and Budget has given up on using it. And for good reason: It is an utterly meaningless and indefensible claim. The numbers were grabbed out of thin air, made up, pure fiction. The Obama administration has proven unable to document anything like what it claims.

For Mr. Obama — who promised to do away with “phony accounting” as part of his “turn the page” politics — to continue to say such things will simply further damage to his credibility, which is already in a state of considerable disrepair.

For more on this see ABC’s Jake Tapper and Hot Air’s Ed Morrissey.

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AP: Stimulus Is a Bust

The stimulus money to be spent on infrastructure really did nothing to save or create jobs. That’s not a conservative talking point; that’s the AP:

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Obama wants a second stimulus, but what would be the point? (“AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time.”) The reaction of economists is instructive:

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

Nor are business people impressed. (“‘The stimulus has not benefited the working-class people of Marshall County at all,’ said Isaac Zimmerle, a local contractor who has seen his construction business slowly dry up since 2008. That year, he built 30 homes. But prospects this year look grim.”) But politicians love this stuff. Despite ample evidence to the contrary, they continue to parrot the same rhetoric. Economic adviser Jared Bernstein insists, “When you invest in this kind of infrastructure, you’re creating good jobs for people who need them.” But not really.

What did we get for all this? Maybe some temporary jobs, especially in the public sector. But that’s a far cry from “creating” jobs. And we know by the unemployment figures that the Obami have been spectacularly unsuccessful in keeping unemployment to 8 percent, which they promised would be the result if Congress passed the stimulus plan. Maybe it’s time to stop repeating the same failed Keynesian policies and try something different. Lower taxes and fewer mandates on employers might be good for starters. But I think that’s not in the cards anytime soon. Well, not until the Democrats get really, really scared about the 2010 elections.

The stimulus money to be spent on infrastructure really did nothing to save or create jobs. That’s not a conservative talking point; that’s the AP:

Ten months into President Barack Obama’s first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an “urgent need to accelerate job growth.”

Obama wants a second stimulus, but what would be the point? (“AP’s analysis, which was reviewed by independent economists at five universities, showed that strategy hasn’t affected unemployment rates so far. And there’s concern it won’t work the second time.”) The reaction of economists is instructive:

“My bottom line is, I’d be skeptical about putting too much more money into a second stimulus until we’ve seen broader effects from the first stimulus,” said Aaron Jackson, a Bentley University economist who reviewed AP’s analysis.

Even within the construction industry, which stood to benefit most from transportation money, the AP’s analysis found there was nearly no connection between stimulus money and the number of construction workers hired or fired since Congress passed the recovery program. The effect was so small, one economist compared it to trying to move the Empire State Building by pushing against it.

Nor are business people impressed. (“‘The stimulus has not benefited the working-class people of Marshall County at all,’ said Isaac Zimmerle, a local contractor who has seen his construction business slowly dry up since 2008. That year, he built 30 homes. But prospects this year look grim.”) But politicians love this stuff. Despite ample evidence to the contrary, they continue to parrot the same rhetoric. Economic adviser Jared Bernstein insists, “When you invest in this kind of infrastructure, you’re creating good jobs for people who need them.” But not really.

What did we get for all this? Maybe some temporary jobs, especially in the public sector. But that’s a far cry from “creating” jobs. And we know by the unemployment figures that the Obami have been spectacularly unsuccessful in keeping unemployment to 8 percent, which they promised would be the result if Congress passed the stimulus plan. Maybe it’s time to stop repeating the same failed Keynesian policies and try something different. Lower taxes and fewer mandates on employers might be good for starters. But I think that’s not in the cards anytime soon. Well, not until the Democrats get really, really scared about the 2010 elections.

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On a Letter from London

Geoff Dyer’s column “My American Friends” in the New York Times is hitting my mailbox from every direction at once. If you’ve not read it, you should: it’s fun. It’s got, of course, a few swipes at George W. Bush, Margaret Thatcher, and Tony Blair, but it’s really a love letter from Britain to the United States. Dyer points out that many of the British clichés voiced about America reflect either ignorance or a barely-disguised, liberal-elite desire to bring the U.S. down a peg or two because, as too many Britons are grumpy and desperate to feel superior about something, Americans must be made out to be inferior.

He’s certainly right about the grumpiness. I’ve written about this myself, pointing out that “Britain is a more self-absorbed, less expansive, society than it was in the post-war era, and while it is more prosperous, it is also less happy and less sure of itself.” The Economist writes this week along the same lines, noting the British, of all the citizens of the advanced democracies, are among the least satisfied with the state of their nation. Of course, given the parlous condition of Britain’s economy, their dissatisfaction may be a sign of rationality, but Dyer is not alone in thinking that it’s not just the economy getting Britain down. Read More

Geoff Dyer’s column “My American Friends” in the New York Times is hitting my mailbox from every direction at once. If you’ve not read it, you should: it’s fun. It’s got, of course, a few swipes at George W. Bush, Margaret Thatcher, and Tony Blair, but it’s really a love letter from Britain to the United States. Dyer points out that many of the British clichés voiced about America reflect either ignorance or a barely-disguised, liberal-elite desire to bring the U.S. down a peg or two because, as too many Britons are grumpy and desperate to feel superior about something, Americans must be made out to be inferior.

He’s certainly right about the grumpiness. I’ve written about this myself, pointing out that “Britain is a more self-absorbed, less expansive, society than it was in the post-war era, and while it is more prosperous, it is also less happy and less sure of itself.” The Economist writes this week along the same lines, noting the British, of all the citizens of the advanced democracies, are among the least satisfied with the state of their nation. Of course, given the parlous condition of Britain’s economy, their dissatisfaction may be a sign of rationality, but Dyer is not alone in thinking that it’s not just the economy getting Britain down.

My own reaction to Dyer’s piece is twofold. First, I do think he’s onto something when he writes that Americans have better manners and are more freespoken because “deep down, everyone is agreed on the premise that America is better than anyplace else.” Of course, traditional American openness isn’t based just on this: the fact that the U.S. is a nation of immigrants, and relatively classless, has a lot to do with it. But it is easier to be civil when you’re optimistic about your nation and inclined -– partially because of religious faith -– to think well of your fellow man than it is if you think poorly of everyone.

But it’s just not true that “everyone is agreed” on the premise that the U.S. is best. The President’s oft-quoted remark that “I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism, and the Greeks believe in Greek exceptionalism” implies that, at best, he has a distinctly posmodern approach to this belief. If everyone thinks they’re special, then presumably no one really is. The poorly hidden declinism of his administration, which implies that the greatest service the U.S. can do the world is to plan a graceful exit from its role as the hegemon, also clashes with Dyer’s assessment. For my part, I think Dyer’s got a better grasp of the American people, and of reality, than Obama does, and that Obama’s unexceptional approach will be what trips him up.

Second, in the British context, Dyer is a bit glib when he argues that, because Britain’s Muslims are among the most unsatisfied in Europe, this proves that they’ve assimilated very well — in that they’re just as unhappy as everyone else. But again, he’s not totally wrong. The traditional American approach to assimilation was to be proud of the United States, to invite immigrants to restrict their Old World customs to their private lives, and to expect them to conform publicly to existing American norms and beliefs. As bin Laden might have expected, that “strong horse” approach was quite attractive: being invited to join a self-confident, assertive, and successful community is a great compliment because it implies that you, yourself, possess those qualities and will be welcomed as an equal.

Britain has done the opposite: it has tried the “weak horse” approach, consisting of lots of multiculturalism and plenty of welfare payments. Again, not surprising, this hasn’t worked terribly well: there are few reasons to want to join a community that beats itself up so relentlessly. Where Dyer is totally wrong is when he writes that “the qualities that make us indubitably British . . . are no longer conducive to Greatness.” According to Dyer, those qualities consist mostly of a mustn’t-grumble spirit that allows the British public to put up with poor quality service and to accept apologies as a substitute for actual improvements.

But this has nothing to do with the qualities the British actually displayed in the formative era of British identity, the late-Hanoverian to mid-Victorian era. Britons in those days were relentless improvers -– in the quality of government, in public services, in industry, and through charity. Not for nothing did Asa Briggs title his great history of the era “The Age of Improvement.

One of those improvements, of course, was in British manners, where Dyer now celebrates the U.S. and gripes about the U.K. But English manners before the Victorian era were nothing special: only in the nineteenth century did the idea take hold that Britain was a nation of line-formers, of forthright “manly” speakers, and of courteous, “evenin’ all” bobbies. Maybe what made Britain British above all in that era was its political pride: in the Commons, in its freedom of the press and of trade, in its religious toleration, in its limited and liberal government, and in its contributions to the spread of civilization. Those are all still great qualities. The problem is that, since the 1960s, too many Britons have forgotten about them, or even cooperated in slandering or traducing them, which in turn has made the problem of assimilation -– or simply maintaining social order -– a lot more formidable.

What Dyer is basically and accurately complaining about is the collapse of the Victorian model in Britain; he is basically praising its partial survival in the U.S. He’s not wrong to dismiss the febrile leftism that has taken its place. But in one sense, his complaints are part of the problem because the model is so far gone that even a sympathetic and obviously careful observer like Dyer no longer recognizes that it ever existed in the first place.

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The Economy Drive

The parlous state of Britain’s economy and budget and the necessity of cuts in government spending should be common knowledge. The British public certainly grasps the situation. Its one manifestation is the data by the polling firm Ipsos-MORI. In its latest monthly “Issues Index,” which invites interviewees to name as many issues of concern as they care to, “Economy/Economic Situation” stands at 49%.

By contrast, issues that Labour might be thought to own, such as “Pollution/Environment” (8%), “Poverty/Inequality” (7%), and “Low Pay” (3%) are of distinctly tertiary importance to the public. Given today’s statement by Pimco’s Head of Global Portfolio Management that Britain stands a better than 80% chance of losing its AAA credit rating, on the grounds that the government’s debt reduction plan “is lacking in conviction and . . . is lacking in details,” focusing on the economy makes a good deal of sense.

As Pimco’s criticism of the government implies, the only man not willing to grasp the nettle of reality is Gordon Brown. Mike Smithson, the proprietor of the lively Political Betting blog, points out that in a weekend interview with Andrew Marr, Brown refused to acknowledge even the possibility of cuts in government spending.  As Smithson puts it, “The interviewing trait where Mr. Brown is at his most vulnerable is when he seeks to deny something that is clearly the case. Less charitable people than me might use the word ‘porkie.’ The problem is that he does this when it is so obvious.”

A big part of dealing with the problem of government spending will be reducing the size and cost of the British civil service. This is a problem in the U.S. as well, as publications such as the Economist and columnists like Michael Barone have pointed out recently, but anything the U.S. does in this context, the UK can do worse. The most recent Sunday Times notes that in 2009, 21.1% of all UK labor was employed by the state, and that – measured by hours on the job, rate of wage inflation, or salary – it is almost always better to be paid by the government than by a private employer. Even in the highest paid job, the private sector pays better salaries, but the government offers a much larger pension.

What’s more, some British ministries have become increasingly top heavy: more generals, fewer privates. In the Ministry of Defense, for instance, the number of workers in the lowest two pay grades has fallen by about 19,000 since 1997, while the upper tiers have increased by 2,000. I have my suspicions about just how real the headcount reductions are – you can achieve seeming miracles by contracting out, as the MoD has done extensively under Labour – but even if you take the cuts seriously, they’ve not stopped total civilian pay from rising 13% from 2003/04 to 2008/09, as against a 12% rise for pay to the forces. The cost of the senior grade pay and pensions must be a major part of that increase, which is particularly scandalous given Labour’s general cheapness when it comes to defense spending, and what should have been the effect of a substantial decrease in the size of the MoD.

The pension question is particularly interesting and dangerous. The Institute of Directors estimates that the unfunded cost of public-sector pensions in Britain over the next 50 years is about 335 billion pounds. Given the relative sizes of their economies, that’s even larger than the $2 trillion shortfall the U.S. faces, according to the Financial Times. And every time Brown or Obama hires someone else, that shortfall gets a little bigger, and the size of the productive economy gets a little smaller.

It makes me think, first, of the superb “Yes Minister” episode on “The Economy Drive,” in which Sir Humphrey proves to Jim Hacker that, in order to achieve increased efficiency, you have to hire more people. And, second, of Margaret Thatcher.  The UK National Archives have just released some of her early Prime Ministerial memos. Her first priority: cut the civil service by at least 5%, and preferably by 20%. “What,” she asked, “are we doing with 566,000 that can’t be done with 500,000?” An excellent question, then and now.

The parlous state of Britain’s economy and budget and the necessity of cuts in government spending should be common knowledge. The British public certainly grasps the situation. Its one manifestation is the data by the polling firm Ipsos-MORI. In its latest monthly “Issues Index,” which invites interviewees to name as many issues of concern as they care to, “Economy/Economic Situation” stands at 49%.

By contrast, issues that Labour might be thought to own, such as “Pollution/Environment” (8%), “Poverty/Inequality” (7%), and “Low Pay” (3%) are of distinctly tertiary importance to the public. Given today’s statement by Pimco’s Head of Global Portfolio Management that Britain stands a better than 80% chance of losing its AAA credit rating, on the grounds that the government’s debt reduction plan “is lacking in conviction and . . . is lacking in details,” focusing on the economy makes a good deal of sense.

As Pimco’s criticism of the government implies, the only man not willing to grasp the nettle of reality is Gordon Brown. Mike Smithson, the proprietor of the lively Political Betting blog, points out that in a weekend interview with Andrew Marr, Brown refused to acknowledge even the possibility of cuts in government spending.  As Smithson puts it, “The interviewing trait where Mr. Brown is at his most vulnerable is when he seeks to deny something that is clearly the case. Less charitable people than me might use the word ‘porkie.’ The problem is that he does this when it is so obvious.”

A big part of dealing with the problem of government spending will be reducing the size and cost of the British civil service. This is a problem in the U.S. as well, as publications such as the Economist and columnists like Michael Barone have pointed out recently, but anything the U.S. does in this context, the UK can do worse. The most recent Sunday Times notes that in 2009, 21.1% of all UK labor was employed by the state, and that – measured by hours on the job, rate of wage inflation, or salary – it is almost always better to be paid by the government than by a private employer. Even in the highest paid job, the private sector pays better salaries, but the government offers a much larger pension.

What’s more, some British ministries have become increasingly top heavy: more generals, fewer privates. In the Ministry of Defense, for instance, the number of workers in the lowest two pay grades has fallen by about 19,000 since 1997, while the upper tiers have increased by 2,000. I have my suspicions about just how real the headcount reductions are – you can achieve seeming miracles by contracting out, as the MoD has done extensively under Labour – but even if you take the cuts seriously, they’ve not stopped total civilian pay from rising 13% from 2003/04 to 2008/09, as against a 12% rise for pay to the forces. The cost of the senior grade pay and pensions must be a major part of that increase, which is particularly scandalous given Labour’s general cheapness when it comes to defense spending, and what should have been the effect of a substantial decrease in the size of the MoD.

The pension question is particularly interesting and dangerous. The Institute of Directors estimates that the unfunded cost of public-sector pensions in Britain over the next 50 years is about 335 billion pounds. Given the relative sizes of their economies, that’s even larger than the $2 trillion shortfall the U.S. faces, according to the Financial Times. And every time Brown or Obama hires someone else, that shortfall gets a little bigger, and the size of the productive economy gets a little smaller.

It makes me think, first, of the superb “Yes Minister” episode on “The Economy Drive,” in which Sir Humphrey proves to Jim Hacker that, in order to achieve increased efficiency, you have to hire more people. And, second, of Margaret Thatcher.  The UK National Archives have just released some of her early Prime Ministerial memos. Her first priority: cut the civil service by at least 5%, and preferably by 20%. “What,” she asked, “are we doing with 566,000 that can’t be done with 500,000?” An excellent question, then and now.

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The Unmasking of Barack Obama

The overseas reviews for President Obama’s foreign policy are starting to pour in — and they’re not favorable. Bob Ainsworth, the British defense secretary, has blamed Obama for the decline in British public support for the war in Afghanistan. According to the Telegraph:

Mr. Ainsworth took the unprecedented step of publicly criticizing the U.S. President and his delays in sending more troops to bolster the mission against the Taliban. A “period of hiatus” in Washington — and a lack of clear direction — had made it harder for ministers to persuade the British public to go on backing the Afghan mission in the face of a rising death toll, he said. Senior British Government sources have become increasingly frustrated with Mr. Obama’s “dithering” on Afghanistan, the Daily Telegraph disclosed earlier this month, with several former British defense chiefs echoing the concerns.

The President is “Obama the Impotent,” according to Steven Hill of the Guardian. The Economist calls Obama the “Pacific (and pussyfooting) president.” The Financial Times refers to “relations between the U.S. and Europe, which started the year of talks as allies, near breakdown.” The German magazine Der Spiegel accuses the president of being “dishonest with Europe” on the subject of climate change. Another withering piece in Der Spiegel, titled “Obama’s Nice Guy Act Gets Him Nowhere on the World Stage,” lists the instances in which Obama is being rolled. The Jerusalem Post puts it this way: “Everybody is saying no to the American president these days. And it’s not just that they’re saying no, it’s also the way they’re saying no.” “He talks too much,” a Saudi academic who had once been smitten with Barack Obama tells the Middle East scholar Fouad Ajami. The Saudi “has wearied of Mr. Obama and now does not bother with the Obama oratory,” according to Ajami. But “he is hardly alone, this academic. In the endless chatter of this region, and in the commentaries offered by the press, the theme is one of disappointment. In the Arab-Islamic world, Barack Obama has come down to earth.”

Indeed he has — and only Obama and his increasingly clueless administration seem unaware of this. Read More

The overseas reviews for President Obama’s foreign policy are starting to pour in — and they’re not favorable. Bob Ainsworth, the British defense secretary, has blamed Obama for the decline in British public support for the war in Afghanistan. According to the Telegraph:

Mr. Ainsworth took the unprecedented step of publicly criticizing the U.S. President and his delays in sending more troops to bolster the mission against the Taliban. A “period of hiatus” in Washington — and a lack of clear direction — had made it harder for ministers to persuade the British public to go on backing the Afghan mission in the face of a rising death toll, he said. Senior British Government sources have become increasingly frustrated with Mr. Obama’s “dithering” on Afghanistan, the Daily Telegraph disclosed earlier this month, with several former British defense chiefs echoing the concerns.

The President is “Obama the Impotent,” according to Steven Hill of the Guardian. The Economist calls Obama the “Pacific (and pussyfooting) president.” The Financial Times refers to “relations between the U.S. and Europe, which started the year of talks as allies, near breakdown.” The German magazine Der Spiegel accuses the president of being “dishonest with Europe” on the subject of climate change. Another withering piece in Der Spiegel, titled “Obama’s Nice Guy Act Gets Him Nowhere on the World Stage,” lists the instances in which Obama is being rolled. The Jerusalem Post puts it this way: “Everybody is saying no to the American president these days. And it’s not just that they’re saying no, it’s also the way they’re saying no.” “He talks too much,” a Saudi academic who had once been smitten with Barack Obama tells the Middle East scholar Fouad Ajami. The Saudi “has wearied of Mr. Obama and now does not bother with the Obama oratory,” according to Ajami. But “he is hardly alone, this academic. In the endless chatter of this region, and in the commentaries offered by the press, the theme is one of disappointment. In the Arab-Islamic world, Barack Obama has come down to earth.”

Indeed he has — and only Obama and his increasingly clueless administration seem unaware of this.

On almost every front, progress is nonexistent. In many instances, things are getting worse rather than better. The enormous goodwill that Obama’s election was met with hasn’t been leveraged into anything useful and tangible. Rather, our allies are now questioning America’s will, while our adversaries are becoming increasingly emboldened. The United States looks weak and uncertain. It’s “amateur hour at the White House,” according to Leslie Gelb, president emeritus of the Council on Foreign Relations and a former official in the Carter administration. “Not only are things not getting fixed, they may be getting more broken,” according to Michael Hirsh at Newsweek. When even such strong Obama supporters as Gelb and Hirsh reach these conclusions, you know things must be unraveling.

It’s no mystery as to why. President Obama’s approach to international relations is simplistic and misguided. It is premised on the belief that American concessions to our adversaries will beget goodwill and concessions in return; that American self-abasement is justified; that the American decline is inevitable (and in some respects welcome); and that diplomacy and multilateralism are ends rather than means to an end.

Right now the overwhelming issue on the public’s mind is the economy, where Obama is also having serious problems. But national-security issues matter a great deal, and they remain the unique responsibility of the president. With every passing month, Barack Obama looks more and more like his Democratic predecessor Jimmy Carter: irresolute, unsteady, and overmatched. The president and members of his own party will find out soon enough, though, that Obama the Impotent isn’t what they had in mind when they elected him. We are witnessing the unmasking, and perhaps the unmaking, of Barack Obama.

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Reaping the Whirlwind

The riots which swept Johannesburg yesterday were, according to the Guardian, “the worst violence to hit Johannesburg since the politically-driven killings of the final years of apartheid.” Judging by the photographs, one could be forgiven for thinking yesterday’s uproar actually were scenes from the 1980’s. The targets of these roving mobs–which rampaged through not only the poor, sprawling townships on the outskirts of Johannesburg but also ravaged the city’s downtown business district–were foreigners, most of whom are Zimbabwean. South Africa has an unofficial employment rate believed to be hovering around 40%, and the presence of outsiders willing to work cheaply has for many years been a source of embitterment for South Africa’s poor blacks. (And a glaring shortcoming of the African National Congress’s promise to redistribute the country’s wealth.)

This latest outburst, while reprehensible, was bound to happen. Over the past eight years, what started as a steady stream of migrants fleeing the tyranny of Robert Mugabe has turned into a flood. At least three million (and perhaps many, many more) Zimbabweans (a full quarter of the country’s native population) now reside illegally in South Africa. Some 3,000 people cross the border every week. Zimbabwe has become, as a South African economist told me in 2006, “South Africa’s Mexico.”

Yet the situation is far more dire than that of Mexico and America. The glaring deficiency with this analysis is that we don’t have a 40% unemployment rate. Moreover, you can be sure that were Mexico experiencing the tumult that Zimbabwe has over the past 8 years–a dictator stealing elections, killing his political opponents, and starving his people–America would do something about it, from enforcing stringent sanctions to carrying out regime change.

South African President Thabo Mbeki, meanwhile, has carried out a policy that has amounted to saying nothing about the human rights catastrophe next door while keeping the United Nations and Western countries at bay. South Africa is beginning to experience the chaos wrought by its negligence towards Mugabe. The only beneficial outcome of the growing refugee crisis within its borders is the possibility that it may change the government’s attitude towards the dictator.

The riots which swept Johannesburg yesterday were, according to the Guardian, “the worst violence to hit Johannesburg since the politically-driven killings of the final years of apartheid.” Judging by the photographs, one could be forgiven for thinking yesterday’s uproar actually were scenes from the 1980’s. The targets of these roving mobs–which rampaged through not only the poor, sprawling townships on the outskirts of Johannesburg but also ravaged the city’s downtown business district–were foreigners, most of whom are Zimbabwean. South Africa has an unofficial employment rate believed to be hovering around 40%, and the presence of outsiders willing to work cheaply has for many years been a source of embitterment for South Africa’s poor blacks. (And a glaring shortcoming of the African National Congress’s promise to redistribute the country’s wealth.)

This latest outburst, while reprehensible, was bound to happen. Over the past eight years, what started as a steady stream of migrants fleeing the tyranny of Robert Mugabe has turned into a flood. At least three million (and perhaps many, many more) Zimbabweans (a full quarter of the country’s native population) now reside illegally in South Africa. Some 3,000 people cross the border every week. Zimbabwe has become, as a South African economist told me in 2006, “South Africa’s Mexico.”

Yet the situation is far more dire than that of Mexico and America. The glaring deficiency with this analysis is that we don’t have a 40% unemployment rate. Moreover, you can be sure that were Mexico experiencing the tumult that Zimbabwe has over the past 8 years–a dictator stealing elections, killing his political opponents, and starving his people–America would do something about it, from enforcing stringent sanctions to carrying out regime change.

South African President Thabo Mbeki, meanwhile, has carried out a policy that has amounted to saying nothing about the human rights catastrophe next door while keeping the United Nations and Western countries at bay. South Africa is beginning to experience the chaos wrought by its negligence towards Mugabe. The only beneficial outcome of the growing refugee crisis within its borders is the possibility that it may change the government’s attitude towards the dictator.

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Boosting Navy Bandwidth

I recall a few years ago visiting an Aegis cruiser, one of the most advanced warships in the world. In its Combat Information Center, sailors can track dozens of targets and coordinate an entire battle group. So it was more than a little jarring to see that the computers that run everything showed glowing green text on black screens. I didn’t realize there were any pre-Windows computers still around. Yet here they were.

Obviously the armed forces need to do a better job of keeping up with new technology—but that’s not so easy to do given loooong procurement cycles and the demands of security and reliability. Vice Admiral Mark Edwards, Deputy Chief of Naval Operations for Communications Networks, addresses that very challenge in the new issue of the Naval Institute’s invaluable magazine, Proceedings. He notes a shocking statistic:

The two-way communication bandwidth of a single Blackberry is three times greater than the bandwidth of the entire Arleigh Burke [-class, Aegis guided-missile] destroyer. Looked at another way, the Navy’s most modern in-service multi-mission warship has only five percent of the bandwidth we have in our home Internet connection.

The problem is that the Navy is not keeping up with Silicon Valley:

As computing capabilities continue to grow exponentially, the costs of computers, servers, storage, and software are coming down. Across the commercial industry worldwide, IT budgets are actually declining as capacity goes up. But in the Navy, the opposite is taking place . . . . Moreover, every system we field takes nearly seven years to reach the Fleet. By the time it gets to the people who need it, it is already out of date. There is no agility or flexibility in our IT.

The answer, he argues, is to switch from “closed” to “open” IT architecture. That is, to end the current practice of buying from “only a few vendors who build highly integrated systems—where the software and hardware are tightly coupled and where interoperability between two or more systems is gained only by building costly middleware.” Instead, “[w]e have to . . . separate our data, hardware, and applications. We need a network architecture that is agile and can be upgraded rapidly. It must be flexible, with the ability to accommodate the expected exponential increase in demand.”

Easier said than done. The idea of an “open” architecture based on commonly available software runs counter to a long-standing military mentality. I am glad to see that Admiral Edwards is implementing reforms in the Navy, but I suspect it will be a long, costly process that is sure to be resisted by more than a few bureaucrats.

And, of course, these problems aren’t limited to the Navy. All of the armed forces rely for the most part on highly specialized, one-of-a-kind computer systems that take far too long and cost far too much to field. Addressing this problem will be crucial for maintaining America’s military edge in the 21st century. For as the Economist put it (in a line quoted by Edwards): “If Napoleon’s armies marched on their stomachs, American ones march on bandwidth.”

I recall a few years ago visiting an Aegis cruiser, one of the most advanced warships in the world. In its Combat Information Center, sailors can track dozens of targets and coordinate an entire battle group. So it was more than a little jarring to see that the computers that run everything showed glowing green text on black screens. I didn’t realize there were any pre-Windows computers still around. Yet here they were.

Obviously the armed forces need to do a better job of keeping up with new technology—but that’s not so easy to do given loooong procurement cycles and the demands of security and reliability. Vice Admiral Mark Edwards, Deputy Chief of Naval Operations for Communications Networks, addresses that very challenge in the new issue of the Naval Institute’s invaluable magazine, Proceedings. He notes a shocking statistic:

The two-way communication bandwidth of a single Blackberry is three times greater than the bandwidth of the entire Arleigh Burke [-class, Aegis guided-missile] destroyer. Looked at another way, the Navy’s most modern in-service multi-mission warship has only five percent of the bandwidth we have in our home Internet connection.

The problem is that the Navy is not keeping up with Silicon Valley:

As computing capabilities continue to grow exponentially, the costs of computers, servers, storage, and software are coming down. Across the commercial industry worldwide, IT budgets are actually declining as capacity goes up. But in the Navy, the opposite is taking place . . . . Moreover, every system we field takes nearly seven years to reach the Fleet. By the time it gets to the people who need it, it is already out of date. There is no agility or flexibility in our IT.

The answer, he argues, is to switch from “closed” to “open” IT architecture. That is, to end the current practice of buying from “only a few vendors who build highly integrated systems—where the software and hardware are tightly coupled and where interoperability between two or more systems is gained only by building costly middleware.” Instead, “[w]e have to . . . separate our data, hardware, and applications. We need a network architecture that is agile and can be upgraded rapidly. It must be flexible, with the ability to accommodate the expected exponential increase in demand.”

Easier said than done. The idea of an “open” architecture based on commonly available software runs counter to a long-standing military mentality. I am glad to see that Admiral Edwards is implementing reforms in the Navy, but I suspect it will be a long, costly process that is sure to be resisted by more than a few bureaucrats.

And, of course, these problems aren’t limited to the Navy. All of the armed forces rely for the most part on highly specialized, one-of-a-kind computer systems that take far too long and cost far too much to field. Addressing this problem will be crucial for maintaining America’s military edge in the 21st century. For as the Economist put it (in a line quoted by Edwards): “If Napoleon’s armies marched on their stomachs, American ones march on bandwidth.”

Read Less

Trade Lessons

Mainstream media outlets and conservative analysts are in rare agreement on the Democratic contenders’ stance on free trade, calling them either ignoramuses or cynical liars. If the first, they have deceived their advisers, who doggedly stick to the belief that their candidates are really smart enough to know that free trade creates jobs and is an essential component of international economic health and entirely in our own financial and diplomatic interests. They can’t be that dense, their admirers contend. No economist worth his salt would support returning to protectionism.

That leaves the second option. As DLC leader Will Marshall argues:

Apparently, the rule is that in the primaries, facts and evidence don’t matter, so bashing trade becomes a way of validating the emotions of people who feel stressed by global competition, and the facts get trampled underfoot in the process.

On the merits, this is not a tough issue. As to the Colombian trade deal, the Washington Post points out that the result of the deal would be to lift numerous restrictions on U.S. goods going into Colombia. The Post castigates both Democratic candidates for their “flimsy” rationale for opposing the deal. The Los Angeles Times points out that ripping up NAFTA “could spark a trade war with Canada and Mexico and reverse more than a decade of growth for all three North American economies.” There just isn’t much room to argue that the Democrats have attempted to resolve this issue on the merits.

So, if we go with the cynical liar option, the question remains why Democrats and their media supporters do not extrapolate a larger lesson from the candidates’ conduct. If both of them make up facts, play on voters’ fears, and shirk from telling voters unpleasant truths, how is either going to govern? It is not as if trade is unique–most issues which reach the President’s desk require hard choices. It is worth asking whether we should have similar concerns about the candidates’ pronouncements on Iraq, health care, taxes, and every other “hard” issue. This seems to be a “teachable moment” about their leadership style and personal character.

But criticisms of this kind never seem to continue beyond trade: what would follow would be a wholesale indictment of a very old-style type of politics–divisive, dishonest, anti-intellectual and fear-mongering. Too broad a criticism might shed doubt on the entire storyline for both Democratic contenders, and especially for Barack Obama, who is supposed to be above all this. And we can’t have that, can we?

Mainstream media outlets and conservative analysts are in rare agreement on the Democratic contenders’ stance on free trade, calling them either ignoramuses or cynical liars. If the first, they have deceived their advisers, who doggedly stick to the belief that their candidates are really smart enough to know that free trade creates jobs and is an essential component of international economic health and entirely in our own financial and diplomatic interests. They can’t be that dense, their admirers contend. No economist worth his salt would support returning to protectionism.

That leaves the second option. As DLC leader Will Marshall argues:

Apparently, the rule is that in the primaries, facts and evidence don’t matter, so bashing trade becomes a way of validating the emotions of people who feel stressed by global competition, and the facts get trampled underfoot in the process.

On the merits, this is not a tough issue. As to the Colombian trade deal, the Washington Post points out that the result of the deal would be to lift numerous restrictions on U.S. goods going into Colombia. The Post castigates both Democratic candidates for their “flimsy” rationale for opposing the deal. The Los Angeles Times points out that ripping up NAFTA “could spark a trade war with Canada and Mexico and reverse more than a decade of growth for all three North American economies.” There just isn’t much room to argue that the Democrats have attempted to resolve this issue on the merits.

So, if we go with the cynical liar option, the question remains why Democrats and their media supporters do not extrapolate a larger lesson from the candidates’ conduct. If both of them make up facts, play on voters’ fears, and shirk from telling voters unpleasant truths, how is either going to govern? It is not as if trade is unique–most issues which reach the President’s desk require hard choices. It is worth asking whether we should have similar concerns about the candidates’ pronouncements on Iraq, health care, taxes, and every other “hard” issue. This seems to be a “teachable moment” about their leadership style and personal character.

But criticisms of this kind never seem to continue beyond trade: what would follow would be a wholesale indictment of a very old-style type of politics–divisive, dishonest, anti-intellectual and fear-mongering. Too broad a criticism might shed doubt on the entire storyline for both Democratic contenders, and especially for Barack Obama, who is supposed to be above all this. And we can’t have that, can we?

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Mr. Smith Bears Left

The collapse of even watered-down versions of Marxism has fruitfully pushed a number of leftist British intellectuals into a reconsideration of Adam Smith. The publication in 2001 of Emma Rothschild’s Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment set off a flurry of efforts to reclaim Adam Smith from “the Right.” Rothschild rightly saw that Smith was far from the caricature of a heartless demonic elitist so dear to left wing prayer books. Three years later, Gareth Stedman Jones followed up with his book An End to Poverty, which applauded Smith for his anti-statism.

Now, according to January 18 TLS, new books on Smith have entered the lists. Two of them—Ian McLean ‘s Adam Smith, Radical and Egalitarian and Gavin Kennedy’s Adam Smith’s Lost Legacy—try with a less than scholarly touch to claim Smith for New Labor. Prime Minister Gordon Brown, a Scotsman, has written the introduction to the MacLean volume. Brown, playing up the Scottish card, claims that “Coming from Kirkcaldy as Adam Smith did, I have come to understand that his (1776) Wealth of Nations, was underpinned by his (1759) Theory of Moral Sentiments” which saw “neighborliness” as crucial to mitigating the underside of economic competition. By this Brown, following McLean, argues that Smith was as much a theorist of social justice as an economist.

Taken in a Tocquevillian light this might seem innocuous. But, in the name of “neighborliness,” MacLean and Brown want if not to replace then at least to displace “the invisible hand” of markets with the “helping hand” of the state. This argument, depending on how you look at it, is either a hypocritical perversion of Smith or a thoughtful means of reconciling British leftists to global competition.

An answer, of sorts to Brown, comes from the Tory’s shadow chancellor George Osborne in his introduction to a new edition of The Wealth of Nations. Osborne sees Smith as the definitive answer to the shapeless anti-market ideology of the anti-globalization movement which has no positive program but is skilled at playing Cassandra. Osborne accurately sees economic nationalism as the road to perdition. But invoking Smith is scant guide for how either the Brits or the Americans should respond to the neo-mercantilist sovereign wealth funds of China and some of the Gulf States which invest politically in open societies while closing their own borders to foreigners.

Smith who was a moral ironist would no doubt be amused at the attempt by contemporary British politicians to enlist his writings in their causes. He once, after all, define an elected official as “that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuation of affairs.”

The collapse of even watered-down versions of Marxism has fruitfully pushed a number of leftist British intellectuals into a reconsideration of Adam Smith. The publication in 2001 of Emma Rothschild’s Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment set off a flurry of efforts to reclaim Adam Smith from “the Right.” Rothschild rightly saw that Smith was far from the caricature of a heartless demonic elitist so dear to left wing prayer books. Three years later, Gareth Stedman Jones followed up with his book An End to Poverty, which applauded Smith for his anti-statism.

Now, according to January 18 TLS, new books on Smith have entered the lists. Two of them—Ian McLean ‘s Adam Smith, Radical and Egalitarian and Gavin Kennedy’s Adam Smith’s Lost Legacy—try with a less than scholarly touch to claim Smith for New Labor. Prime Minister Gordon Brown, a Scotsman, has written the introduction to the MacLean volume. Brown, playing up the Scottish card, claims that “Coming from Kirkcaldy as Adam Smith did, I have come to understand that his (1776) Wealth of Nations, was underpinned by his (1759) Theory of Moral Sentiments” which saw “neighborliness” as crucial to mitigating the underside of economic competition. By this Brown, following McLean, argues that Smith was as much a theorist of social justice as an economist.

Taken in a Tocquevillian light this might seem innocuous. But, in the name of “neighborliness,” MacLean and Brown want if not to replace then at least to displace “the invisible hand” of markets with the “helping hand” of the state. This argument, depending on how you look at it, is either a hypocritical perversion of Smith or a thoughtful means of reconciling British leftists to global competition.

An answer, of sorts to Brown, comes from the Tory’s shadow chancellor George Osborne in his introduction to a new edition of The Wealth of Nations. Osborne sees Smith as the definitive answer to the shapeless anti-market ideology of the anti-globalization movement which has no positive program but is skilled at playing Cassandra. Osborne accurately sees economic nationalism as the road to perdition. But invoking Smith is scant guide for how either the Brits or the Americans should respond to the neo-mercantilist sovereign wealth funds of China and some of the Gulf States which invest politically in open societies while closing their own borders to foreigners.

Smith who was a moral ironist would no doubt be amused at the attempt by contemporary British politicians to enlist his writings in their causes. He once, after all, define an elected official as “that insidious and crafty animal vulgarly called a statesman or politician, whose councils are directed by the momentary fluctuation of affairs.”

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Why Is Bush in Israel?

There is, alas, vanishingly little to say about Bush’s visit to Israel, the most profound effect of which, I feel safe predicting, will be traffic jams in Jerusalem. I share Yossi Alpher’s take: “This visit, like Bush’s Israeli-Palestinian peace process in general, looks to be all hype and superficiality.”

So instead of adding to the verbiage, I’m going to just post some links to what other people are saying.

Michael Oren: “Presidential visits are always characterized as ‘historic,’ but Mr. Bush’s trip to the Jewish state is marked by a lack of momentousness.”

The Economist speculates that Bush’s visit will provide an opportunity for the Israelis to get a read on where America’s commitment to thwarting the Iranian nuclear project stands. I am skeptical.

Amir Taheri: “The president’s tour can acquire a positive meaning only if it is used to shape a new alliance for reform, progress and democratization as the chief guarantor of Middle East peace and security.” I’m a big fan of Taheri’s, but really–is this even remotely plausible?

Jon Alterman, on the excellent new Harvard Middle East Strategy blog: “The Bush administration has been mugged by reality.”

There is, alas, vanishingly little to say about Bush’s visit to Israel, the most profound effect of which, I feel safe predicting, will be traffic jams in Jerusalem. I share Yossi Alpher’s take: “This visit, like Bush’s Israeli-Palestinian peace process in general, looks to be all hype and superficiality.”

So instead of adding to the verbiage, I’m going to just post some links to what other people are saying.

Michael Oren: “Presidential visits are always characterized as ‘historic,’ but Mr. Bush’s trip to the Jewish state is marked by a lack of momentousness.”

The Economist speculates that Bush’s visit will provide an opportunity for the Israelis to get a read on where America’s commitment to thwarting the Iranian nuclear project stands. I am skeptical.

Amir Taheri: “The president’s tour can acquire a positive meaning only if it is used to shape a new alliance for reform, progress and democratization as the chief guarantor of Middle East peace and security.” I’m a big fan of Taheri’s, but really–is this even remotely plausible?

Jon Alterman, on the excellent new Harvard Middle East Strategy blog: “The Bush administration has been mugged by reality.”

Read Less

It’s Not Unfortunate, It’s Natural

As we noted yesterday, the January 1 deadline for North Korea to turn in a complete accounting of its nuclear-weapons program, as it agreed to do last February, has come and gone without any sign that this homework assignment will ever be turned in.

The “silence has generated unease, even embarrassment, among North Korea’s counterparts in the six-party talks hosted by China,” reports the Economist. But the Chinese were not among those embarrassed. They described the delay simply as “natural.”

The Bush administration, on the other hand, reacted more belligerently, calling the North Korean misbehavior “unfortunate.” But such a harsh word is now generating repercussions.

Today, North Korea’s main newspaper, Rodong Sinmun announced that the North will “continue to harden its war deterrent further in response to the U.S. stepping up its nuclear war moves.” The Los Angeles Times explains that North Korean talk about bolstering its nuclear deterrent “usually means it thinks international powers are not treating it properly.” In Korean culture, showing respect is critical. Obviously, the State Department should have been more deferential.

To revive the talks, which have been generating so many valuable broken promises, the United States should now reverse course, publicly declare that the word “unfortunate” was unfortunate, and join the Chinese in calling the North Korean delay “natural.”

As we noted yesterday, the January 1 deadline for North Korea to turn in a complete accounting of its nuclear-weapons program, as it agreed to do last February, has come and gone without any sign that this homework assignment will ever be turned in.

The “silence has generated unease, even embarrassment, among North Korea’s counterparts in the six-party talks hosted by China,” reports the Economist. But the Chinese were not among those embarrassed. They described the delay simply as “natural.”

The Bush administration, on the other hand, reacted more belligerently, calling the North Korean misbehavior “unfortunate.” But such a harsh word is now generating repercussions.

Today, North Korea’s main newspaper, Rodong Sinmun announced that the North will “continue to harden its war deterrent further in response to the U.S. stepping up its nuclear war moves.” The Los Angeles Times explains that North Korean talk about bolstering its nuclear deterrent “usually means it thinks international powers are not treating it properly.” In Korean culture, showing respect is critical. Obviously, the State Department should have been more deferential.

To revive the talks, which have been generating so many valuable broken promises, the United States should now reverse course, publicly declare that the word “unfortunate” was unfortunate, and join the Chinese in calling the North Korean delay “natural.”

Read Less




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