In the Vicinity of Beijing's 4th Ring, or More Properly, What America Should be Shooting For

I think what was most disappointing was simply the quality of the questions students asked during the Q&A. The first one was “In your dealings with President Obama, what have you found to be his best quality?” And it was simply downhill from there. Now, if this man was addressing a group of third graders, that question might have been appropriate (maybe), but among a group of college students and academics it’s simply absurd. Consider the situation. Here you are, a college student (or professor, or whatever), with an opportunity to discuss anything, from the anemic job market, the depressed housing market, a rapidly nuclearizing Iran, a debt-to-GDP ratio north of 100%, or the impeding collapse of the post-World War II world order, and you essentially ask, “Why is the President soooooo awesome?” I think this little episode perfectly encapsulates what is wrong with American higher education today. Instead of thinking critically about events around it, the academy is so radically self-absorbed and out of touch and so obsessed with its own ideology, it’s simply laughable. Is this really all that the best and brightest of North Carolina is capable of? Maybe it was a fluke, or maybe some rogue from Duke snuck in, but it was kind of embarrassing.

Secretary Donovan, when he wasn’t answering inane questions from the audience, also did a fair amount of pontificating. Apparently, the administration is convinced that we can educate ourselves out of this recession. If only we spend (a lot) more on higher education and push as many people as we can through the system, we’ll all be happy again. Color me a skeptic, but the plan he described, where the federal government subsidizes education through new tax credits, etc., guarantees low-interest loans for all comers, and then requires those borrowers to make only bare minimum payments on those loans, seems awfully similar to American housing policy circa 2008 (which incidentally, HUD bears a lot of responsibility for). I suppose if the idea is to create a giant education bubble, such that when it pops, everyone forgets about the housing problem because the education bubble is so much bigger, then this is a great idea. But if the idea is to generate genuine economic growth, this is certainly not the way to go.

And what’s a State of the Union talk without some mention of trains? Aren’t those things amazing? If only we had more of them, those pesky Chinese wouldn’t even be able to touch us. Actually, the best part of the Secretary’s little speech was when he was talking about China’s impressive infrastructure and how the Chinese are just light-years ahead of us in this regard. He clearly has no idea what he’s talking about. If he did know what he was talking about, he would know that, even in the (very crowded and polluted) major cities (i.e. places like Beijing), you can’t drink the tap water or flush toilet paper because the sewer systems are so old and so out of date. He would also know that electricity is also a problem, and that you actually have to buy surge protectors to insulate your electronic goods from regular power surges. Indeed, even China’s much lauded trains aren’t much to write home about. When they’re not falling off bridges, many of China’s trains are (very) overcrowded, smelly, and generally a very hellish experience. And their highway system isn’t anywhere nearly as well developed as ours. Now, don’t get me wrong, China’s quite a charming place, but the U.S. is definitely winning the infrastructure game.

Shiny!

There was also a fair amount of green energy hype. The Secretary informed us that while there might be a few Solyndras along the way (who doesn’t mind a little government corruption after all), we can’t expect the government to make the right choice every time when it comes to deciding which business to support. This, of course, is the whole point! The government can’t make these decisions, because they are infinitely complicated and not something that some bureaucrat hiding in the basement of a federal building can make. Such choices are properly left to the market, which is a better evaluator  of risk and profit than the government will ever be. When the government tries to make these decisions, you end up with Solyndra. Solyndra isn’t merely a side effect of government intervention in the market, it is its natural conclusion.

All in all, this event was pretty disappointing. The questions were childish, and we got the same old, same old from the administration. It’s simply too bad that what could have been a really interesting event on the future direction of the country devolved into a Why Barack Obama is the Greatest Thing Since Baked Bread event.

"Daddy, I want it all!"

Our country is currently involved in a very intense debate about the future of the Welfare State (primarily Medicare and Social Security). The debate has mostly focused on the fiscal aspects of these programs, but the moral aspect is just as important. Many people have come to view the gravy train coming out of Washington as some sort of God-given right. Merely suggest raising the retirement age for Social Security (much less eliminating the program altogether), and you’re met with a maelstrom of self-righteous indignation: “How dare you intrude on my right to Social Security,” etc. But look at the consequences such an entitlement culture creates. You’ve got the country running full steam ahead right off the edge of a cliff while the beneficiaries of 50 years of government largesse refuse to compromise. Then you’ve got 20-something-year-olds suing their mothers over birthday checks. Just add that to the list of “rights”: a free college education, a free house, free health insurance, free cell phones, Social Security, and now birthday checks. Just how do you expect to “win the future” when you’ve got a people that feels like they’re all owed something? If people are so busy suing over birthday checks will they have the time (or even the desire) to invent “the next big thing”? I think it’s pretty clear the answer is no. After all, there’s no point in working if Obama (or your mommy) is just going to dip into his stash and send you a check.

Ending the Entitlement Culture is just as important as reigning in the costs of the Entitlement State. The Entitlement State warps a person and degrades his dignity, in much the same way that drugs reduce an addict to nothing more than a pathetic shadow of a human being, removing his ability to think or operate outside the context of where his next fix will come from. The vastness of the national debt is merely a symptom of a moral problem which has reduced millions of Americans to little more than sniveling, entitled children. The debt is as much a moral problem as it is a fiscal one.

Price per Gallon of Regular Unleaded Gasoline (data from the Federal Reserve)

January 26, 2009: $1.838

April 18, 2011: $3.844

Price Change: 109.14%

Would anyone care to explain to me why the Obama Administration thinks it’s a good idea to subsidize oil production in South America while curtailing any attempts to exploit our own, local resources, all while the price of gas doubles? Furthermore, why is no attention given to this dramatic price swing when we are in the midst of a rather tenuous economic “recovery”?

Ben “The Helicopter” Bernanke likes to say that inflation has been rather subdued. Looking at the CPI, one could get that impression. But considering that fuel costs typically take up a substantial portion of a household’s budget, a doubling of those costs is going to have significant psychological and economic implications for how the household is able to spend the rest of its budget. When people see the price of gas double, their first instinct tends to be depressive, i.e. they associate higher gas prices with a lousy economy and act as if they are in a lousy economy (even if the economy is performing well- which wouldn’t really apply in this case anyway). They then have to reallocate the rest of their income to account for the higher fuel costs. So, they spend more money on fuel and less on splurges at the mall. So, this is really a double-whammy for economic growth, and yet no one’s talking about it.

On a side note, if you look at the data, you’ll notice that gas prices really take off right as the FED began implementing its QE2 program. I can’t really say anything authoritatively without looking into it more, but the correlation is certainly interesting, particularly considering that one of the main criticisms of the QE2 program was that it would produce significant inflation. I’d say that an approximately 30% price jump over a 6-month period counts as significant. Although some of that may include added risk-premiums to compensate for the Middle East’s increased instability of late. But that’s not likely the entire explanation, as gas prices were on their way up well before the Arabs started getting restless.

2. In what circumstances, if any, would the president have constitutional authority to bomb Iran without seeking a use-of-force authorization from Congress? (Specifically, what about the strategic bombing of suspected nuclear sites — a situation that does not involve stopping an IMMINENT threat?)

The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.

As Commander-in-Chief, the President does have a duty to protect and defend the United States. In instances of self-defense, the President would be within his constitutional authority to act before advising Congress or seeking its consent. History has shown us time and again, however, that military action is most successful when it is authorized and supported by the Legislative branch. It is always preferable to have the informed consent of Congress prior to any military action.

As for the specific question about bombing suspected nuclear sites, I recently introduced S.J. Res. 23, which states in part that “any offensive military action taken by the United States against Iran must be explicitly authorized by Congress.”

However, it seems that somewhere along the lines, Congress got left out of the process in favor of the United Nations Security Council and “the court of international opinion.” While I’m sure the people at the Security Council and in the “court of international opinion” are all well-intentioned people, they have no accountability to the American people. The decision to commit American military forces to a conflict rightly lies within the sovereignty of the American people and, the whims of France and the UK should not trump that sovereignty.

The wisdom of engaging in this conflict is also highly debatable. Effectively what we have here is yet another African, tribal civil war. What strategic interests is the United States protecting by embroiling itself in this conflict? Why is this particular situation special, differentiating it from similar situations in other countries (e.g. Iran, Sudan, etc.)? In short, what’s our bone in this fight? Answering some of these questions might be a little easier if the President were capable of projecting some sort of leadership in this situation. It might be easier to agree or disagree with his decision if he at least said what his decision is. Right now, there appears to be no clear strategy and no clear goal. The best I can tell, Europe decided it doesn’t want Gaddafi killing people, and Obama kind of sort of agrees with them.

There’s also the fiscal issue. Our military forces are already committed in Iraq and Afghanistan. This by itself raises several questions. Does our military have the capability to successfully execute three different wars at the same time? War tends to be expensive, and with the highest annual budget deficits in history, will our military have the resources to put forth its best effort in all three conflicts? There’s also the human cost. While some defense systems are automated, you generally need to use real people to take out the bad guys. Does our military even have enough people to conduct these campaigns without producing an undue strain on our armed services? Considering that the vast majority of our armed services are real people and not robots, this is a question that deserves due consideration.

What is lacking in this whole situation is any sense of leadership from Obama. He has left dozens of questions about this conflict unanswered and seems to have made this decision on the spur of the moment. He hasn’t even attempted to rally the American people behind his decision largely because he hasn’t really made one. This is a rather inauspicious start to a war that seems likely to devolve into a very sticky situation.

In order to demonstrate their devotion to democratic ideals, the rule of law, and the ability to hold adult conversations, the Democrat members of the state legislature have … (wait for it)… fled the state! Really? What do they really expect to accomplish by running away? It’s not like they can hide forever. Eventually, they’ll either have to resign their seats or return to the capital. For a fun mental exercise, imagine if a group of Republicans tried this. Would they be commended by the President for their commitment to democracy? No! And rightly so. Such a move is a huge blow to the rule of law and popular sovereignty.

What these legislators are effectively saying is that last November’s election is irrelevant and that the will of the people can be ignored when it conflicts with their politics. Such actions are shameful and a direct assault on the core values of this country. What makes the situation worse is the national Democrat’s machine declared intention to spread this labor rebellion to other states. The President would do well to remember the oath he took to “preserve, protect, and defend the Constitution of the United States.”

We operate under a system of government that provides a constructive outlet for political disagreements. We have regular, open and free elections to select people to represent the interests of the people in our government. Between elections, we are free to contact our representatives, encouraging them to support the passage or defeat of legislation. The representatives themselves have the advantage of public forums and open legislatures to argue their position. There is no need to threaten the safety of those legislators and hamstring the operations of the state assembly by mobbing the capitol. Illusions to Hitler are completely unnecessary and only serve to further polarize the opposing factions. If the AWOL legislators truly respect the people they claim to serve, they will recognize that they lost last November, return to the capitol, and have a mature and civil conversation about the issues confronting Wisconsin. The longer this anarchy persists, the more damage will be done to this country’s great institutions.

1. I’ve been looking for an excuse to use that title, and I think I just found it.

2. I’ve also seen an interesting thought kicked around the Internet the last few days. Does anyone find it the least bit ironic that the winner of the 2009 Nobel Peace Prize (i.e. BHO) just threw a big party for the oppressor (and jailer) of the 2010 Nobel Peace Prize Winner? While I’m not calling for complete disengagement with the Chinese, it does seem a bit inappropriate for our government to be hosting official state dinners with a regime that is still imprisoning political dissidents. For a presidency that is so concerned with maintaining the moral high ground in foreign relations, O’s reception of Hu does seem a bit hypocritical.

Beautiful

Surpassing even the 1994 Revolution, last night’s 60+ seat conversion in the House and 6+ conversion in the Senate is a loud and clear message from the American people that the Obama Agenda is not what this country needs nor wants and a return to sanity and clear-thinking is what is desired.

A special shout-out goes to the North Carolina General Assembly, where the GOP picked up not one, but two chambers. With 31 seats in the state senate (a veto-proof majority) and 66+ seats in the state House (depending on the returns in 4 still-outstanding races, also a possible veto-proof majority), conservatism will finally make itself heard in the halls of North Carolina state government, after wandering in the wilderness for over 100 years. That is change I can believe in.

I’ll also give a special shout-out to Bob Etheridge who, when he’s not wandering the streets mugging unsuspecting college students, apparently thinks it’s still Halloween and is pretending to be Al Gore. You sir, do your state, district, and party proud.

But really, who can blame them? I know that if my agenda was rejected wholeheartedly by the American people, I might feel a little upset, and might begin to act rashly. But this should really come as no shock to the Left. Anytime the mask slips, and they reveal who they really are and put liberalism on full display for the whole country, the electorate rejects them. After campaigning as a moderate and governing as a hard-core leftist, surely the One had to see this coming. Not that that excuses the fraud. But the very existence of the fraud underscores the rather pathetic state of liberalism in this country. They are unable to win people’s hearts and minds, so they must resort to more extraordinary measures to maintain any sort of sway in the political process.

Anyway, one of the bits from the book that I found most striking is this anecdote from Dr. Collier:

“While I was directing the World Bank’s research department, the most controversial paper we produced was one called ‘Growth is Good for the Poor.’ Some NGO’s hated it, and it was the only time in five years that Jim Wolfensohn, the Bank’s president, phoned me to voice his concern.”

Now why would some of the world’s leading poverty reduction organizations be so uncomfortable about economic growth? Isn’t the problem with poor people the fact that they are poor? Wouldn’t growth go a long way toward alleviating poverty?

Dr. Collier points out that some people are concerned that economic growth doesn’t always trickle down: “The growth of Equatorial Guinea, for example, produced benefits for only a handful of its people.” Thus there is a focus among anti-poverty NGO’s on “sustainable, pro-poor growth.”

As one might expect, however, the case of Equatorial Guinea “is exceptional; growth usually does benefit ordinary people.” In fact, Dr. Collier (who is scrupulously nonpartisan) warns that focus on “sustainable, pro-poor growth” has actually “inadvertently undermined genuinely strategic thinking.”

As an example, he mentions a banking expert who was trying to promote banking reform which evidence strongly suggested would improve economic growth. However, he was hindered by concerns that NGO’s wouldn’t accept it since there was considerably less evidence that the reforms would help the poor.

Is this a case of bleeding hearts gone awry? Perhaps—it certainly seems that the NGO leaders have been at least a little influenced by leftist politics.**

Leftists the world over consistently appeal to people’s envy, the only one of the seven deadly sins that does not give at least temporary pleasure (to borrow a line from George Will), which is why you hear so much whining and complaining about “inequality.”

I would like to posit here that inequality is not really a problem—or, in any case, only a rather minor problem. Consider: if a starving Ugandan doubles his annual income and is now able to feed his family, does it really matter to him if his neighbor has quadrupled his income? The first man may be a bit envious, but certainly things could be worse: his primary problem has been fixed.

As Dr. Collier declares, “We cannot make poverty history unless the countries of the bottom billion start to grow, and they will not grow by turning them into Cuba.” Paging President Obama…

*Disclaimer: Thomas Ginn does not necssarily endorse any of the views presented here. Actually, I’m pretty sure he would disagree with me on some points.

**Not to let right-wingers totally off the hook: Dr. Collier notes a tendency among the right to view poor policy as the cause of poor country’s problems. That is a problem, to be sure, but the rest of the book details other significant non-governmental problems that keep the bottom billion down.

Health Care has cleared the House of Representatives. Now, it goes to Obama’s desk. Now, we’ll see how the long-term effects play out.

The bill requires virtually everyone in the United States to purchase health insurance. It contains financial aid to help people purchase insurance, but no “public option” creating a government-owned insurance company. All policies will be purchased from private insurers. On the flip side, insurers will no longer be allowed to deny a person coverage or charge them more due to a pre-existing condition. Both policies require the other – if people were not required to buy insurance, they would simply wait until they got sick before buying. If insurance companies could turn people down, then people legally required to buy insurance couldn’t buy it.

What this essentially does is take away insurance corporation’s freedom to make business choices, while simultaneously supplying them with tens of millions of new customers. The trouble is, insurance companies currently disqualify people with pre-existing conditions because they are not likely to be profitable for the company to insure. Upon being forced to insure millions of unprofitable customers, insurance companies will quite possibly become financially insolvent in the long term and require hundreds of billions of dollars in federal bailouts to maintain our national health system. Insurance corporations would become virtually a part of the government, and the “public option” would effectively become reality.

On the other hand, the influx of new customers could create more profits for insurance companies, since many people currently without health insurance are young and healthy people who choose not to buy it. This will lead to insurance companies standing to gain from the maintenance of the current system, leading to these corporations gaining undue political influence on national policy decisions. An industry getting a  law passed which requires everyone in America to buy their product is unheard of in American history. What’s more, the bill does not contain any price controls on insurance. Once all Americans are required to own health insurance, what’s to stop insurance companies from tripling their prices? No one will have any choice but to pay. Federal financial aid is based on a person’s income as a percentage of the poverty line, not the cost of insurance. Insurance corporations have literally been given the power to bankrupt many people for their own profits if they choose to do so.

What is clear is that the health care bill will not, as Nancy Pelosi predicted, “unleash tremendous entrepreneurial power into our economy.” Neither is it a socialist bill. Instead, it represents a move towards a corporate state, where privately owned corporations become a virtual part of the government and influence the government into passing laws which serve to benefit them by increasing their customer base or harming their competition.  Corporatism is a violation of the way free markets and free democracies are supposed to work. It is not free in any sense of the term.

In short, governments should be for all the people, not just for those with lots of money and influence. Free markets should be truly free. An environment where large corporations use their influence to pass laws creating monopolies, requiring people to buy their product and expanding corporate profits is not a free market. Corporatism is as much of a threat to American freedom as socialism.