To Print or not to Print

Core Meltdown In Europe?

By Jeff Harding

Things are getting rather serious in Europe as the bond vigilantes are hammering sovereign bonds. The carnage is starting to spread to France, Finland, Netherlands, and Austria.

Bond yields across the Continent jumped as prices dropped, in a sign of investors’ faltering confidence in officials’ ability to keep the debt crisis contained in the euro zone’s troubled peripheral countries. Tuesday’s selloff came amid news that the euro zone’s economy scarcely grew in the third quarter.

Trading of anything but German bunds—seen as safe securities akin to U.S. Treasurys—became difficult. Investors sold bonds issued by triple-A rated France and Austria. Even prices of bonds issued by fiscally upright Northern European triple-A nations such as Finland and the Netherlands fell. Among the cash-strapped periphery, Italian bonds again rose above 7% and Spanish yields surged to 6.358%, according to Tradeweb. …

Tuesday’s plunge began in Asia and the Middle East, where there was heavy selling of European bonds, market participants said. Of note also, they said, was that much of that was coming from long-term investors such as pension funds and mutual funds, rather than hedge funds. …

Germany’s central bank, the Bundesbank, and the country’s economic and political mainstream are vehemently opposed to a more activist ECB, arguing that large-scale bond-buying would fuel inflation and turn the central bank into a plaything of spendthrift Southern European politicians.

The more the crisis of investor confidence spreads into Europe’s core economies, however, the less euro-zone governments can do to solve it. Already, France’s government is wary of any policy measures that could call its vulnerable triple-A credit rating into question and drive up its borrowing costs.

If the capital flight from bond markets continues, the ECB will increasingly become the only institution in Europe that is capable of stabilizing the situation. A change in thinking in Germany would likely be needed before the ECB embraced a bigger firefighting role, however. …

Investors are also paying more for protection against debt defaults. The five-year credit-default swaps of Italy, Spain, France and Belgium all hit records, while the levels for Austria and the Netherlands pushed wider as well. Italian default swaps briefly pierced 600 basis points for the first time.

Europe is at one of those impasses whereby the Germans don’t want the ECB to print the eurozone out of the problem, yet, with bond yields going up, it puts pressure on these countries’ ability to pay their debt. This is scaring off investors, so rates are climbing.

Two days ago, Bundesbank president Jens Weidmann said that Germany is strongly opposed to the European Central Bank buying sovereign debt of eurozone countries:

Mr Weidmann highlighted the stance being taken by the Bundesbank by arguing governments, not central banks, were mainly responsible for ensuring financial stability. Mario Draghi, the ECB’s new president, has said it is not the ECB’s job to act as lender of last resort, but Mr Weidmann went further, saying such a step would breach Europe’s ban on “monetary financing” – central bank funding of governments.

If you think political impasses are confined to the U.S., then let me introduce you to the fiasco that is the euro. There are only two things that can happen here. They can let these countries who are about to default, default. That would mean massive economic chaos in not only those countries, but it would spread to the rest of Europe and ultimately to the rest of the world as economic activity declines. Or they can print. 

Germany can complain all it wants about the inability of its fellow EMU members to solve their fiscal problems, but for many of them the situation is critical. I believe that the European Central Bank will print. That is, they will engage in massive buying of bonds of member states, thereby monetizing sovereign debt. And, if Italy, France, Spain, and the Netherlands continue to be hit with rising interest rates, that time is not far off.

Germany thinks they have a veto here, but they don’t.

The omnipotent powers of the State

Constitutional or Not, Obamacare Has To Go

By David Harsanyi

Is not doing something the same as doing it, and should government be allowed to force you not to do the thing you're already not doing by making you do it so you don't not do it anymore?

That is just one of the perplexing legal questions the Supreme Court will likely find a way to say "yes" to in July after it wrestles with the constitutionality of Obamacare.

Once the court upholds the individual mandate -- a provision that allows politicians to coerce citizens to purchase products in private markets (or, in this case, state-backed monopolies) -- we will have precedent that puts few limits on the reach of Washington and crony capitalism. And beyond policy, Obamacare demonstrated why we should be cynical about government.

I suppose it starts with process. Obamacare was shoved through the sludge of parliamentary trickery, lies, horse trading, cooked-up numbers and false promises. Even after waiting to see what was in the bill, as Nancy Pelosi suggested, there was a historic electoral backlash. (Some people just don't know what's good for them.)

As for the court's decision, it probably won't imbue many people with any more confidence in process. Supreme Court Justice Elena Kagan -- only recently charged with defending the administration's positions in federal courts as solicitor general, working there while the health care law was being written and picking the legal team to defend it -- will be rendering her entirely untainted decision on the matter.

Nor, as we learned this week, is it reassuring to find out that while the House was debating passage of Obamacare, Kagan and well-known legal scholar Laurence Tribe, then in the Justice Department, did a little dialoguing regarding the health care vote, and according to documents obtained by Media Research Center, Kagan wrote: "I hear they have the votes, Larry!! Simply amazing."

Nothing says impartiality like double exclamation points!!

Supreme Court judges are under no legal obligation to recuse themselves from any case, mind you, though the U.S. Code has some rubbish about a judge's disqualifying himself "in any proceeding in which his impartiality might reasonably be questioned," especially when the person in question has previously served as counsel or witness in the same case or has expressed an opinion about the outcome.

Why all the distrust and cynicism, you ask? We can trust judicious elected officials not to abuse legal precedent and pass legislation that micromanages the lives of citizens. They would never force Americans, for instance, to purchase broccoli (though when this was hypothetically suggested to then-nominee Kagan, she saw no legal hurdle) or decree exactly what sort of light bulbs a citizen can purchase.

The Supreme Court may find that the commerce clause has omnipotent powers because in the age of hyper-trade and globalism, everything touches everyone and everything is interconnected. Health care is a necessity. Like food. Energy. Housing. All of it up for grabs. The court may find that if an individual acts irresponsibly -- or just acts in a way the majority deems unhelpful -- he can be impelled by the state to partake in the plans of the many.

Judges can come to any decision they'd like, but Obamacare is an affront to the spirit of the Constitution. People just need to be reminded.

Now, numerous news organizations have falsely reported that the Supreme Court agreed this week "to decide the fate" of Barack Obama's health care policy. Fortunately, the fate of Obamacare can still be decided by voters and -- more likely, in time -- by its overwhelming fiscal and moral failure. The court does not historically like to strike down federal legislation. Those who oppose Obamacare might hope for the best in July, but rather than stake their argument solely on the constitutionality question, they should be prepared to fight on grounds of bad policy and corrupt process. They have a strong case to make.

The Backlash Has Begun

Listen Up, Boomers

By WALTER RUSSELL MEAD

“Talkin’ about my generation”: the Who song once expressed the hope and self confidence of the Baby Boomers as they reached biological if not emotional maturity.  It was an attack on the older generation, a defense of the young, but it includes an ominous refrain: “Hope I die before I get old.”  Already, perhaps, the shadow of generational failure hung over the twenty something Boomers.  Those shadows have darkened considerably as the Boomer sun moves past the meridian and an unmistakable air of twilight infiltrates into the declining hours of the long Boomer day.

Talking about our generation is not going to be as much fun for the Boomers as it was in those long distant days of infinite promise.  My generation has some real accomplishments under its belt, especially in the worlds of science and technology.  And we made important progress in making American society a more open place for people and groups who were once excluded.  In every field of American life, there are Boomers who have made and are making important, selfless contributions: in hospitals, in classrooms, in government, in business, in the military.  You name it and we are there.

But at the level of public policy and moral leadership, as a generation we have largely failed.  The Boomer Progressive Establishment in particular has been a huge disappointment to itself and to the country.  The political class slumbered as the entitlement and pension crisis grew to ominous dimensions. Boomer financial leadership was selfish and shortsighted, by and large.  Boomer CEOs accelerated the trend toward unlimited greed among corporate elites, and Boomer members of corporate boards sit by and let it happen.  Boomer academics created a profoundly dysfunctional system that systemically shovels resources upward from students and adjuncts to overpaid administrators and professors who by and large have not, to say the least, done an outstanding job of transmitting the cultural heritage of the past to future generations.  Boomer Hollywood execs created an amoral morass of sludge — and maybe I’m missing something, but nobody spends a lot of time talking about the towering cultural accomplishments of the world historical art geniuses of the Boomer years.  Boomer greens enthusiastically bet their movement on the truly idiotic drive for a global carbon treaty; they are now grieving over their failure to make any measurable progress after decades spent and hundreds of millions of dollars thrown away.  On the Boomer watch the American family and the American middle class entered major crises; by the time the Boomers have finished with it the health system will be an unaffordable and dysfunctional tangle — perhaps the most complicated, expensive and poorly designed such system in the history of the world.

All of this was done by a generation that never lost its confidence that it was smarter, better educated and more idealistic than its Depression-surviving, World War-winning, segregation-ending, prosperity-building parents.  We didn’t need their stinking faith, their stinking morals, or their pathetically conformist codes of moral behavior. We were better than that; after all, we grokked Jefferson Airplane, achieved nirvana on LSD and had a spiritual wealth and sensitivity that our boorish bourgeois forbears could not grasp.  They might be doers, builders and achievers — but we Boomers grooved, man, we had sex in the park, we grew our hair long, and we listened to sexy musical lyrics about drugs that those pathetic old losers could not even understand.

What the Boomers as a generation missed (there were, of course and thankfully, many honorable individual exceptions) was the core set of values that every generation must discover to make a successful transition to real adulthood: maturity.  Collectively the Boomers continued to follow ideals they associated with youth and individualism: fulfillment and “creativity” rather than endurance and commitment.  Boomer spouses dropped families because relationships with spouses or children or mortgage payments no longer “fulfilled” them; Boomer society tolerated the most selfish and immature behavior in its public and cultural leaders out of the classically youthful and immature belief that intolerance and hypocrisy are greater sins than the dereliction of duty.  That the greatest and most effective political leader the Baby Boom produced was William Jefferson Clinton tells you all you need to know.

Too many Boomers high and low clung to the ideology of youth we developed back when we didn’t trust anybody over thirty and believed that simply by virtue of our then-recent vintage we represented a unique step forward in planetary wisdom and human capability; those illusions are pardonable in a twenty year old but contemptible in those whose advancing years should bring wisdom.  Too many of us clung for to that shiny image of youth and potential too long, and blighted our promise because we were hypnotized by it. This is of course narcissism, our greatest and most characteristic failing as a generation, and like Narcissus our generation missed greatness because of our fascination with our glittering selves.

What begins in arrogance often ends in shame; there are some ominous signs that the Boomers are headed down that path. Sooner or later, the kids were going to note what a mess we have made of so many things, and now, it seems, the backlash has begun.  From the Washington Post comes this column by 31 year-old Thomas L. Day.  The immediate stimulus for Mr. Day’s piece was the latest sorry tale from Penn State involving despicably selfish and unheeding choices by a 58 year old man, but Day — like many others of his generation — is beginning to draw some broader conclusions.

I’m 31, an Iraq war veteran, a Penn State graduate, a Catholic, a native of State College, acquaintance of Jerry Sandusky’s, and a product of his Second Mile foundation.

And I have fully lost faith in the leadership of my parents’ generation.

Mr. Day continues:

One thing I know for certain: A leader must emerge from Happy Valley to tie our community together again, and it won’t come from our parents’ generation.They have failed us, over and over and over again.I speak not specifically of our parents — I have two loving ones — but of the public leaders our parents’ generation has produced. With the demise of my own community’s two most revered leaders, Sandusky and Joe Paterno, I have decided to continue to respect my elders, but to politely tell them, “Out of my way.”They have had their time to lead. Time’s up. I’m tired of waiting for them to live up to obligations.Think of the world our parents’ generation inherited. They inherited a country of boundless economic prosperity and the highest admiration overseas, produced by the hands of their mothers and fathers. They were safe. For most, they were endowed opportunities to succeed, to prosper, and build on their parents’ work.For those of us in our 20s and early 30s, this is not the world we are inheriting…Our parents’ generation has balked at the tough decisions required to preserve our country’s sacred entitlements, leaving us to clean up the mess. They let the infrastructure built with their fathers’ hands crumble like a stale cookie. They downgraded our nation’s credit rating. They seem content to hand us a debt exceeding the size of our entire economy, rather than brave a fight against the fortunate and entrenched interests on K Street and Wall Street.

The coming generations will argue about what we got wrong.  Was it, as Mr. Day suggests, the reckless policies of the George W. Bush administration?  Or does the rot go deeper?  There is, I fear, plenty of blame to spread around.  The culture of narcissism and entitlement can be found on the left and the right.

No generation gets it perfectly right, and every generation has a lot of diversity in it.  But it is hard to avoid the sense, as the Baby Boom generation prepares to transit to overburdened retirement and health care systems, that somehow in our quest for new frontiers, shiny new ideas, and most of all that uncompromising demand for personal fulfillment at all costs — we neglected the most important things.

We are the generation that accepted the behavior of the multi-millionaire CEO with the trophy wife.  We are the generation that failed to protect its children from a tide of filth and debasing popular entertainment without parallel in the history of the world.  We are a generation that deliberately and cynically passed the cost of its retirement down to its children.  We are a generation that preferred and rewarded financial engineering over business construction.  We lost control of the borders and failed to make provisions for the illegal immigrants our fecklessness allowed into the country.  We embraced a free trade agenda that accelerated the hollowing out of manufacturing and took no thought about what to build in place of the industrial economy we condemned.  We shopped until we dropped, and then we got up and shopped some more.  On a scale unprecedented in American history, we broke the most solemn vows human beings can make in order to pursue something we deemed much more important than honor and fidelity.  We chased chimeras and started at fantasies but failed to take sober measures to prevent a clearly visible and, once upon a time, easily preventable budget crunch.

Failed parents often do better with their grandchildren.  Perhaps the Boomers can go out on a higher note, learning from our mistakes and spending the rest of our time smoothing the path for new generations rather than endlessly nurturing our narcissism, our selves.  As a generation the hardest lesson for us to learn appears to be that in the end it is what you give rather than what you get that really counts.  It is never too late to learn.

There is still time to do better.  We can, for example, step up to the plate and sacrifice a few benefits, putting the well being of future generations ahead of our own.  We can gracefully step back to give new generations more of a chance — even if many of the mistakes they make remind us painfully of our own younger, more foolish selves.  We can do something to rebuild the religious and community institutions our self-centered, busy lives have left gutted and empty.  We can set an example now, as we sadly failed to do for the last forty years, of forward thinking: saving money so as not to be a burden to the young, bearing the disappointments of age with fortitude and dignity, giving without thought of return and in general acting like the grown ups we tried for so long not to be.

We cannot change our past, but the time that remains is still ours to shape.  It is too late for us to be remembered as a generation of wise statesmen, great leaders, selfless role models, responsible business people, faithful spouses, sacrificial parents, and builders and renewers of great institutions.  We have too much pillaging, wrecking and looting, too much heedless consumption of scarce social capital and too little forethought in our history for that.  But we could still be a generation that learned, that got better before the end, and that gave its final decades to help the next generations succeed where we, alas, did not.

The owl, they say, is the bird of wisdom, and it flies at dusk.  Perhaps as we Boomers go gray, we may finally find ourselves and at long last begin to deliver on some of that promise that blinded us with its splendor so many golden years ago.

A sin against history and geography

The End of Italy

Why should we be surprised Italy is falling apart? With dozens of languages and a hastily made union, it was barely a real country to begin with.

BY DAVID GILMOUR 

Italy is falling apart, both politically and economically. Faced with a massive debt crisis and defections from his coalition in Parliament, Prime Minister Silvio Berlusconi -- the most dominant political figure in Rome since Benito Mussolini -- tendered his resignation last week. Yet Italy's problems go deeper than Berlusconi's poor political performance and his notorious peccadilloes: Their roots lie in the country's fragile sense of a national identity in whose founding myths few Italians now believe.

Italy's hasty and heavy-handed 19th-century unification, followed in the 20th century by fascism and defeat in World War II, left the country bereft of a sense of nationhood. This might not have mattered if the post-fascist state had been more successful, not just as the overseer of the economy but as an entity with which its citizens could identify and rely on. Yet for the last 60 years, the Italian Republic has failed to provide functioning government, tackle corruption, safeguard the environment, or even protect its citizens from the oppression and violence of the Mafia, the Camorra, and the other criminal gangs. Now, despite the country's intrinsic strengths, the Republic has shown itself incapable of running the economy.

It took four centuries for the seven kingdoms of Anglo-Saxon England to finally become one in the 10th, yet nearly all the territories of the seven states that made up 19th-century Italy were molded together in less than two years, between the summer of 1859 and the spring of 1861. The pope was stripped of most of his dominions, the Bourbon dynasty was exiled from Naples, the dukes of central Italy lost their thrones, and the kings of Piedmont became monarchs of Italy. At the time, the speed of Italian unification was regarded as a kind of miracle, a magnificent example of a patriotic people uniting and rising up to eject foreign oppressors and home-bred tyrants.

However, the patriotic movement that achieved Italian unification was numerically small -- consisting largely of young middle-class men from the north -- and would have had no chance of success without foreign help. A French army expelled the Austrians from Lombardy in 1859; a Prussian victory enabled the new Italian state to acquire Venice in 1866.

In the rest of Italy, the Risorgimento (or Resurgence) wars were not so much struggles of unity and liberation as a succession of civil wars. Giuseppe Garibaldi, who had made his name as a soldier in South America, fought heroically with his red-shirted volunteers in Sicily and Naples in 1860, but their campaigns were in essence a conquest by northern Italians of southern Italians, followed by the imposition of northern laws on the southern state known as the Kingdom of the Two Sicilies. Yet the southern city of Naples did not feel liberated -- only 80 citizens of Italy's largest city volunteered to fight for Garibaldi -- and its people soon became embittered that the city had exchanged its role as the 600-year-old capital of an independent kingdom for the status of a provincial center. Today, its status remains reduced, and southern GDP is barely half what it is in the regions of the north.

United Italy skimmed through the normal painstaking process of nation-building and became a unitary state that made few concessions to local sentiment. Take Germany, by comparison: After the unification of 1871, the new Reich was ruled by a confederation that included four kingdoms and five grand duchies. The Italian peninsula, by contrast, had been conquered in the name of the Piedmontese King Victor Emmanuel II and remained an aggrandized version of the kingdom, boasting the same monarch, the same capital (Turin), and even the same constitution. The application of Piedmontese law over the peninsula made many of the kingdom's new inhabitants feel more like conquered subjects than a liberated people. Violent uprisings throughout the southern regions in the 1860s were savagely repressed.

Italian diversity has an ancient history that could not be suppressed in a few years. In the fifth century B.C., the ancient Greeks spoke the same language and thought of themselves as Greeks; Italy's population at the time spoke about 40 languages and had no common sense of identity. The diversity became even more pronounced after the fall of the Roman Empire, when Italians lived for centuries in medieval communes, city-states, or Renaissance duchies. This communal spirit is still alive today: When you ask citizens of, for example, Pisa how they identify themselves, they are likely to answer first as Pisans, then as Tuscans, and only after as Italians or Europeans. As many Italians cheerfully admit, their sense of belonging to the same nation becomes apparent only during the World Cup, when the Azzurri, the members of the national soccer team, are playing well.

Language is another barometer of Italy's fractiousness. The distinguished Italian linguist Tullio De Mauro has estimated that at the time of unification, just 2.5 percent of the population spoke Italian -- that is, the Florentine vernacular that evolved from the works of Dante and Boccaccio. Even if that is an exaggeration and perhaps 10 percent understood the language, it still means 90 percent of Italy's inhabitants spoke languages or regional dialects incomprehensible to those elsewhere in the country. Even King Victor Emmanuel spoke in the Piedmontese dialect when he wasn't speaking his first language -- French.

In the euphoria of 1859 to 1861, few Italian politicians paused to consider the complications of uniting so diverse a collection of people. One who did was the Piedmontese statesman and painter Massimo d'Azeglio, who is reported to have said after unification, "Now we have made Italy, we must learn to make Italians."

Alas, the chief means chosen by the new government to achieve this aim was an effort to turn Italy into a great power -- one that could compete militarily with France, Germany, and Austria-Hungary. This attempt, however, was bound to fail because the new nation was so much poorer than its rivals.

For 90 years, culminating in Mussolini's fall, Italy's leaders were determined to create a sense of nationhood by turning Italians into conquerors and colonialists. Vast sums of money were therefore spent on expeditions to Africa, often with disastrous results; at the Battle of Adowa in 1896, in which an army was wiped out by an Ethiopian force, more Italians were killed in a single day than in all the wars of the Risorgimento put together. Although the country had no enemies in Europe and no need to fight in either of the world wars, Italy joined the fighting in both global conflicts nine months after they had begun when the government thought it had identified the winner and extracted promises of territorial rewards.

Mussolini's miscalculation and subsequent downfall destroyed Italian militarism and at the same time punctured the idea of Italian nationhood. For 50 years after World War II, the country was dominated by the Christian Democrats and the Communists. These parties -- which took their cue from the Vatican and the Kremlin, respectively -- were not interested in instilling a new sense of national identity to replace the old one.

Postwar Italy was in many ways a great success. With one of the highest growth rates in the world, it became an innovator in such peaceful and productive fields as film, fashion, and industrial design. Yet the economic triumphs were uneven, and no administration was able to reduce the disparities between north and south.

The government's political and economic failures are not the only cause of the malaise that now threatens Italy's survival. Some flaws in the national structure were inherent in the circumstances of the country's creation. The Northern League -- Italy's third-largest political party, which suggested that the country's 150th birthday in March should be cause for mourning rather than celebration -- is not simply a bizarre aberration. Its attitude to the south, xenophobic and even racist as it sometimes is, demonstrates the truth that Italy has never felt itself to be a properly united country.

The great liberal politician Giustino Fortunato used to quote his father's view that "the unification of Italy was a sin against history and geography." He believed that the strengths and civilization of the peninsula had always been regional and that a centralized government would never work. Now he looks more prescient by the year. And if Italy has a future as a united nation after this crisis, it must accept the reality of its troubled birth and build a new political model that takes account of its intrinsic, millennial regionalism -- if not as a collection of republican communes, hilltop duchies and principalities once more, then at least as a federal state that reflects the essential features of its past.

Read my lips, no new taxes

Will the GOP Establishment Blow It by Picking Romney?

By Thomas Sowell

Justice Oliver Wendell Holmes said that a good catch phrase could stop thinking for 50 years. One of the often-repeated catch phrases of our time -- "It's the economy, stupid!" -- has already stopped thinking in some quarters for a couple of decades.

There is no question that the state of the economy can affect elections. But there is also no iron law that all elections will be decided by the state of the economy.

President Franklin D. Roosevelt was re-elected for an unprecedented third term after two terms in which unemployment was in double digits for eight consecutive years.

We may lament the number of people who are unemployed or who are on food stamps today. But those who give the Obama administration credit for coming to their rescue when they didn't have a job are likely to greatly outnumber those who blame the administration for their not having a job in the first place.

An expansion of the welfare state in hard times seems to have been the secret of FDR's great political success in the midst of economic disaster. An economic study published in a scholarly journal in 2004 concluded that the Roosevelt administration's policies prolonged the Great Depression by several years. But few people read economic studies.

This economy has been sputtering along through most of the Obama administration, with the unemployment rate hovering around 9 percent. But none of that means that Barack Obama is going to lose the 2012 election.

Even polls which show "any Republican" with more public support than Obama does not mean that Obama will lose.

The president is not going to run against "any Republican." He is going to run against some specific Republican, and that Republican can expect to be attacked, denounced and denigrated for months on end before the November 2012 elections -- not only by the Democrats, but also by the media that is heavily pro-Democrat.

We have already seen how unsubstantiated allegations from women with questionable histories have dropped Herman Cain from front runner to third place in just a couple of weeks.

In short, it takes a candidate to beat a candidate, and everything depends on what kind of candidate that is.

The smart money inside the Beltway says that the Republicans need to pick a moderate candidate who can appeal to independent voters, not just to the conservative voters who turn out to vote in Republican primaries. Those who think this way say that you have to "reach out" to Hispanics, the elderly and other constituencies.

What is remarkable is how seldom the smart money folks look at what has actually been happening in presidential elections.

Ronald Reagan won two landslide elections when he ran as Ronald Reagan. Vice President George H.W. Bush then won when he ran as if he were another Ronald Reagan, with his famous statement, "Read my lips, no new taxes."

But after Bush 41 was elected and turned "kinder and gentler" -- to everyone except the taxpayers -- he lost to an unknown governor from a small state.

Other Republican presidential candidates who went the "moderate" route -- Bob Dole and John McCain -- also came across as neither fish nor fowl, and also went down to defeat.

Now the smart money inside the Beltway is saying that Mitt Romney, who is nothing if not versatile in his positions, is the Republicans' best hope for replacing Obama.

If conservative Republicans split their votes among a number of conservative candidates in the primaries, that can mean ending up with a presidential candidate in the Bob Dole-John McCain mold -- and risking a Bob Dole-John McCain result in the next election.

The question now is whether the conservative Republican candidates who have enjoyed their successive and short-lived boomlets -- Michele Bachmann, Rick Perry and Herman Cain -- are prepared to stay in the primary race to the bitter end, or whether their conservative principles will move them to withdraw and throw their support to another conservative candidate.

There has probably never been a time in the history of this country when we more urgently needed to get a president out of the White House, before he ruined the country. But will the conservative Republican candidates let that guide them? 

When they come preaching equality, what they want is power

The Equality Racket

By Patrick J. Buchanan     

Our mainstream media have discovered a new issue: inequality in America. The gap between the wealthiest 1 percent and the rest of the nation is wide and growing wider.

This, we are told, is intolerable. This is a deformation of American democracy that must be corrected through remedial government action.

What action? The rich must pay “their fair share.” Though the top 1 percent pay 40 percent of federal income taxes and the bottom 50 percent have, in some years, paid nothing, the rich must be made to pay more.

That’s an appealing argument to many, but one that would have horrified our founding fathers. For from the beginning, America was never about equality, except of God-given and constitutional rights.

Our revolution was about liberty; it was about freedom.

The word “equality” was not even mentioned in the Constitution, the Bill of Rights or the Federalist Papers. The word “equal” does not make an appearance until the 14th Amendment’s “equal protection of the laws” after the Civil War. The feminists’ Equal Rights Amendment was abandoned and left to die in 1982 after 10 years of national debate.

When Thomas Jefferson wrote that memorable line – “All men are created equal” – he was not talking about an equality of rewards, but of rights with which men are endowed by their Creator. He was talking about an ideal.

For as he wrote John Adams in 1813, Jefferson believed nature had blessed society with a “precious gift,” a “natural aristocracy” of “virtue and talents” to govern it. In his autobiography, a half decade before his death in 1826, he restated this idea of “the aristocracy of virtue and talent which nature has wisely provided for the direction of the interests of society.”

Equality, egalite, was what the French Revolution, the Bolshevik Revolution, Mao’s Revolution of 1949, Castro’s Revolution of 1959 and Pol Pot’s revolution of 1975 claimed to be about.

This was the Big Lie, for all those revolutions that triumphed in the name of equality were marked by mass murders of the old ruling class, the rise of a new ruling class more brutal and tyrannical, and the immiseration of the people in whose name the revolution was supposedly fought.

Invariably, “Power to the people!” winds up as power to the party and the dictator, who then act in the name of the people. The most egalitarian society of the 20th century was Mao’s China. And that regime murdered more of its own than Lenin and Stalin managed to do.

Inequality is the natural concomitant of freedom.

For just as God-given talents are unequally distributed, and the home environments of children are unequal, and individuals differ in the drive to succeed, free societies, where rewards of fame and fortune accrue to the best and brightest, must invariably become unequal societies.

In the 19th and 20th centuries, no nation achieved greater prosperity for working men and women than the United States, where all were born free, but equal only in constitutional rights.

Yet, though inequalities of income and wealth have endured through the history of this republic, each generation lived better and longer than the one that came before.

That was the America we grew up in. As long as life for the working and middle classes was improving, who cared if the rich were getting richer?

Today’s new inequality is due to several factors.

One is a shift from manufacturing as the principal source of wealth to banking and finance. A second is the movement of U.S. production abroad.

This has eliminated millions of high-paying jobs while enriching the executives and shareholders of the companies that cut the cost of production by relocating overseas.

With globalization, the interests of corporations – maximizing profit – and the interests of the country – maintaining economic independence – diverged. And the politicians who depend on contributions from executives and investors stuck with the folks that paid their room, board and tuition.

Yet, behind the latest crusade against inequality lie motives other than any love of the poor. They are resentment, envy and greed for what the wealthy have, and an insatiable lust for power.

For the only way to equalize riches and rewards in a free society is to capture the power of government, so as to take from those who have, to give to those who have not.

And here is the unvarying argument of the left since Karl Marx: If you give us power, we will take from the rich who have so much and give it to you who have so little. But before we can do that, you must give us power.

This is the equality racket. As Alexis de Tocqueville wrote:

“The sole condition which is required in order to succeed in centralizing the supreme power in a democratic community is to love equality, or to get men to believe you love it.

Thus the science of despotism, which was once so complex, is simplified, and reduced … to a single principle.”

When they come preaching equality, what they want is power.

The case foe economic prosperity

Things can only get better with economic growth

As a new book shows, human welfare has not improved over the past 200 years in spite of economic growth but because of it.

By Daniel Ben-Ami 

One of the most pervasive of contemporary myths is that the lot of humanity is worsening over the long term. Despite the mass of evidence to the contrary, it is still widely held that the world is becoming poorer, more miserable and facing environmental catastrophe.

Simply for opposing this miserabilist worldview, the new book by Charles Kenny, a senior fellow at the Center for Global Development in Washington DC would be welcome. He marshals a lot of evidence to show that even in relation to the developing world the trend is for the welfare of humanity to increase at an unprecedented rate.

The most dramatic evidence of this improvement is in relation to the human lifespan. Average global life expectancy increased from 31 in 1900 to 66 by 2000. This alone is a huge achievement achieved in a remarkably short space of time by historical standards. A large part of the story is related to the sharp decline in infant mortality: it has become mercifully less common for parents to have to mourn the loss of their children.

Of course, the improving trend in human welfare does not imply that there are no significant problems facing humanity. On the contrary. There are still enormous challenges in relation to poverty, inequality and human well-being. The challenge is to work out how best to tackle them.

Kenny follows the mainstream view in arguing that development should attempt to improve quality of life directly by such measures as basic healthcare and education. In contrast, the consensus until the 1970s was that development needed to focus on transforming the economic structure of society. It meant attempting to turn poor countries into rich ones.

There is room for different sides to debate which is the best path as there is a mass of seemingly contradictory evidence. At a global level, it is clear that the period of modern economic growth – the past two centuries or so – has coincided with huge increases in human welfare. On average we not only live longer, but are healthier, taller, better fed, more intelligent (at least as measured by IQ) and better educated than ever before.

The coincidence of these two sets of factors does not on its own prove that growth has bolstered human welfare. Contemporary critics of economic growth typically attempt to separate economic growth from improvements in human welfare. They often attribute such improvements to technological developments and basic health measures.

It is also fairly uncontentious to argue that the poorest section of humanity clearly benefits from rising incomes. For someone living on, for example, one dollar a day, a small additional rise in income can make a tremendous difference. It can even literally mean the difference between life and death if it allows someone to buy food or much needed medical treatment. In contrast, a small increase in income is highly unlikely to have nearly such a significant impact for a richer person.

The debate gets messier when it goes beyond the poorest of the poor. Above a certain subsistence level, there is often no simple one-to-one relationship between economic growth and indicators of human welfare. For instance, Kenny shows that Costa Rica spends five per cent of what America does on health per person but the average Costa Rican lives two years longer.

He also makes much of the fact that people can buy a lot more today with a given level of income than they could in the past. For instance, average incomes in Vietnam are currently about the same as Britain in the early 1800s. Yet Vietnamese people today can buy vaccines, refrigerated food, light bulbs or telephone calls.

From these premises it follows that simple measures can dramatically improve the lives of poor people. These can include such initiatives as vaccine programmes, oral rehydration therapy and building pit latrines. In contrast, building modern hospitals or water utilities is seen as an expensive waste of scarce resources.

However, there are several reasons to question the conventional wisdom, promoted by Kenny and others, that decouples welfare improvements from economic growth. For a start, as critics of prosperity are all too willing to note, conventional economic measures are deeply flawed. Take GDP as an example. Although it is fairly good at measuring the amount of ‘stuff’ produced in a year, it finds it much harder to measure the quality of that stuff. It systematically underestimates the benefits of growth and innovation.

Perhaps the most famous example is that of Nathan Rothschild, possibly the richest man in the world when he died in 1836. Rothschild died of what is believed to have been an infected abscess. Today it could be treated by antibiotics which are cheap and widely available; but back then they had not been invented.

From this perspective it is possible to reinterpret Kenny’s arguments about goods becoming cheaper over time. The fact that, say, mobile phones have become widely available to the poor reflects a global process of growth and innovation. A related point is that economic growth and technological innovation are closely linked. It is disingenuous to focus on improvements in technology as if they could have happened without rising prosperity. Economic growth, scientific advance and technological improvements are all bound together in the process of material progress.

Nor should the economic downturn that hit the world in 2008 be forgotten. Although developing countries have generally continued to grow, the developed world has suffered from economic dislocation and squeezed living standards. If anything, this experience should be taken as a negative vindication of the importance of growth. If economic expansion is beneficial, it should be no surprise that economic contraction is so painful.

It should also be noted that growth in the rich countries can benefit those living in poorer nations. Wealthier countries can provide markets for the goods of poorer ones while their innovations can help the poor. Of course, the matching of the two sets of needs is far from perfect; but that does not mean it is not worthwhile striving for growth.

Finally, everyone should in principle have access to the best that the world have to offer. Why should people in poor countries not aspire to be rich rather than making do with technology deemed ‘appropriate’ for them? Limiting the spread of technology and prosperity to the developing world is a form of Western elitism. The aspiration for popular prosperity should be encouraged rather than downplayed or even stigmatized as is so often the case today.

Let’s move on

Social democracy is dead 

Across Europe, labour parties are reinventing themselves to stay relevant, but they’ve been redundant for decades.

by Michael Fitzpatrick 

When I was first invited to do this talk, I thought a more appropriate title for it would have been ‘Did social democracy survive the twentieth century?’ The answer, I’m afraid, is no.

The other response I had was to go up to my loft and dig out a very old pamphlet that I wrote in 1978 called Who Needs the Labour Party? It was written in the moment before the 1979 General Election, in which Margaret Thatcher first came to power. It was actually published in September 1978 because, as people who remember that period know, then prime minister James Callaghan was expected to go to the country six months before he did. His great error was to delay the election; that delay contributed to his defeat.

But the point of that pamphlet was to call for an abstention in the election, an abstention from voting Labour, at a time when voting Labour would have been the traditional response among the constituency to which it was directed. It was about as popular as campaigning in favour of female genital mutilation. It’s hard to recollect just how profound that sense of loyalty, particularly on the left of the Labour Party and in the Labour constituency, was in that era. Certainly that’s something that has long disappeared.

The pamphlet came at the end of a turbulent decade which started around 1968, the annus mirabilis of the postwar period, the year when great eruptions took place. It was the end of the postwar boom, the collapse of consensus politics, the upsurge of trade-union militancy, radical politics across Europe, feminism, black power, national-liberation struggles around the world. It was the great upsurge, the return to significance of the Labour Party in national life after the postwar period when it had been pretty much marginal. Particularly, this time was about the rise of the Labour left.

William Wordsworth famously wrote of the period after the French Revolution, ‘What joy it was in that dawn to be alive, to be young was very heaven’. And that was what it was like in that decade between 1968 and 1978. It was a very dynamic and creative period, and the predominant sense – particularly among the young, the radical, the militant wing of the working class – was of the possibility of transcending capitalism. There was a widespread conviction that this was indeed possible, that it was possible to build an alternative social and economic system to the prevailing one. We were not talking about improving the safer neighbourhood scheme. That was not the objective of the youthful radicals of that period.

The problem that emerged towards the end of the Seventies was that the radical impulse had reached a barrier in the form of the Labour government that had come to power in 1974. It succeeded, through the mediation of its left wing, in containing that radical upsurge, particularly the militant wing of the trade unions, and it succeeded, through the form of the ‘Social Contract’, in making a deal which actually had the effect of containing wage demands, of winning the first round of cuts in public expenditure and generally creating considerable demoralisation on the left. The issue for the left was how to deal with that problem that the Labour Party manifested: that the party would become a vehicle for the containment of the radical movement rather than its advance.

One person who personified that problem in that period and after was Ralph Miliband, a man who has acquired some posthumous celebrity as the father of New Labour high flyers, Ed and Dave. At that time Ralph Miliband was well-known as a left-wing figure, an intellectual in the Labour movement. In 1961 he wrote a famous book called Parliamentary Socialism – Studies in the Politics of Labour. I notice there’s a lecture, if people are interested in this, commemorating the fiftieth anniversary of the book next month at the London School of Economics, where Miliband was a lecturer.

The point of Parliamentary Socialism was to draw out the problem that the Labour Party had become a vehicle for containing the radical movement and the possibility of the transcendence of capitalism. How could the left deal with this? Ralph Miliband resigned from the Labour Party in the mid-Sixties and was part of a whole series of intellectual and organisational movements over the next 20 years to try construct some sort of alternative to the Labour Party.

One of the ironies of Miliband’s book is that it was republished in different forms every few years with a different introduction or a different foreword or a different afterword, all of which hedged around this problem of how the left could deal with the Labour Party. In 1976, he famously wrote that the ‘most crippling of all illusions’ was the idea that the Labour Party could be transformed into a socialist party. This was an illusion to which Ralph ended up being a victim. Because what happened in the succession of episodes through this period was that every time the Labour Party was perceived as a negative force, as betraying the forward-movement of labour, the attempt to create an alternative would emerge, and then an election would come along and the whole thing would be forgotten, which is what happened in the 1978-79 period.

The whole of the left argued that the Labour Party had all these negative characteristics, but still it was the lesser evil to the Conservative Party and so everyone should succumb and vote for Labour. That was what my pamphlet Who Needs the Labour Party? was a challenge to. It provoked a very negative response because it posed very directly a political challenge to Labourism, beyond the challenge of Miliband, in terms of its understanding of the whole Labour Party but particularly organisationally. It said, look, what’s really important here is that we need to build an alternative to the Labour Party rather than endlessly try to exist within it. The entire rest of the left, and there were different factions and fragments and movements of the left, all supported the Labour Party in the election.