An act of national criminal insanity

Marco Rubio vs. Rand Paul

By Patrick J. Buchanan

In August 2008, as the world’s leaders gathered in Beijing for the Olympic games, Georgian President Mikheil Saakashvili, hot-headed and erratic, made his gamble for greatness.

It began with a stunning artillery barrage on Tskhinvali, capital of tiny South Ossetia, a province that had broken free of Tbilisi when Tbilisi broke free of Russia. As Ossetians and Russian peacekeepers fell under the Georgian guns, terrified Ossetians fled into Russia.

Saakashvili’s blitzkrieg appeared to have triumphed.

Until, that is, Russian armor, on Vladimir Putin’s orders, came thundering down the Roki Tunnel into Ossetia, sending Saakashvili’s army reeling. The Georgians were driven out of Ossetia and expelled from a second province that had broken free of Tbilisi: Abkhazia.

The Russians then proceeded to bomb Tbilisi, capture Gori, birthplace of Joseph Stalin, and bomb Georgian airfields rumored to be the forward bases for the Israelis in any pre-emptive strike on Iran.

The humiliation of Saakashvili was total, and brought an enraged and frustrated John McCain running to the microphones.

“Today, we’re all Georgians,” bawled McCain.

Well, not exactly.

President Bush called Putin’s response “disproportionate” and “brutal,” but did nothing. Small nations that sucker-punch big powers do not get to dictate when the fisticuffs stop.

What made this war of interest to Americans, however, was that Bush had long sought to bring Georgia into NATO. Only the resistance of Old Europe had prevented it.

And had Georgia been a member of NATO when Saakashvili began his war, U.S. Marines and Special Forces might have been on the way to the Caucasus to confront Russian troops in a part of the world where there is no vital U.S. interest and never has been any U.S. strategic interest whatsoever.

A U.S war with Russia — over Georgia, Abkhazia and South Ossetia — would have been an act of national criminal insanity.

Days later, there came another startling discovery.

McCain foreign-policy adviser Randy Scheunemann had been paid $290,000 by the Saakashvili regime, from January 2007 to March 2008, to get Georgia into NATO, and thus acquire a priceless U.S. war guarantee to fight on Georgia’s side in any clash with Russia.

What makes this history relevant today?

Last week, Sen. Marco Rubio, rising star of the Republican right, on everyone’s short list for VP, called for a unanimous vote, without debate, on a resolution directing President Obama to accept Georgia’s plan for membership in NATO at the upcoming NATO summit in Chicago.

Rubio was pushing to have the U.S. Senate pressure Obama into fast-tracking Georgia into NATO, making Tbilisi an ally the United States would be obligated by treaty to go to war to defend.

Now it is impossible to believe a senator, not a year in office, dreamed this up himself. Some foreign agent of Scheunemann’s ilk had to have had a role in drafting it.

And for whose benefit is Rubio pushing to have his own countrymen committed to fight for a Georgia that, three years ago, started an unprovoked war with Russia? Who cooked up this scheme to involve Americans in future wars in the Caucasus that are none of our business?

The answer is unknown. What is known is the name of the senator who blocked it — Rand Paul, son of Ron Paul, who alone stepped in and objected, defeating Rubio’s effort to get a unanimous vote.

The resolution was pulled. But these people will be back. They are indefatigable when it comes to finding ways to commit the blood of U.S. soldiers to their client regimes and ideological bedfellows.

Back in 2008, however, as Bush was confining himself to protesting the excesses of Russia’s response, his ex-U.N. ambassador was full of righteous rage and ready for military action.

In the London Telegraph, Aug. 15, 2008, John Bolton declared that Russia had conducted an “invasion,” that Georgia had been a “victim of aggression,” that America had “fiddled while Georgia burned,” that we had played the “paper tiger”when faced by the snarling Russian Bear.

As for the European Union, in bringing about a ceasefire, it had achieved results “approaching Neville Chamberlain’s moment in the spotlight at Munich.”

But did not Georgia launch the attack that started the war?

“This confrontation is not about who violated the Marquis of Queensbury’s rule in South Ossetia,” scoffed Bolton. Russia planned this “rape” because brave little Georgia refused to be “Finlandized.”

Restoring America’s credibility, said Bolton, now requires “drawing a clear line for Russia” in the Caucasus and elsewhere.

And who is John Bolton?

Newt Gingrich told two groups Wednesday he intends to name Bolton secretary of state.

With Newt appointing as America’s first diplomat an uber-hawk who makes Dick Cheney look like Gandhi, and Mitt Romney’s foreign policy team crawling with neocons primed for war with Iran, a vote for the GOP in 2012 looks more and more like a vote for war.

Like the Bourbons of old, the Republican Party seems to have learned nothing and forgotten nothing.

Purity of intention is enough to justify any social experiment gone awry

Slaves to Democracy

The Servile Mind: How Democracy Erodes The Moral Life , Kenneth Minogue, Encounter, 374 pages

By Paul Gottfried 

Kenneth Minogue is a distinguished figure for serious students of political thought. A longtime professor (now emeritus) at the London School of Economics, president of the Mont Pelerin Society, and the author of provocative works on nationalism, ideology, and egalitarian democracy, Minogue is one of the most illustrious representatives of what survives of the European classical liberal tradition. A disciple of Michael Oakeshott and an incisive critic of public administration, Minogue has been open about expressing his views ever since he left his native New Zealand, first for Australia and then for England. He is for whatever social democrats are against—bourgeois culture, free-market economics, and as strict a separation as possible between the administrative state and civil society.

In The Servile Mind, Minogue makes clear where he stands. He does not view the democratic experiment as it has gone forward in his lifetime—he was born in 1930—as favorable to freedom. He believes our current politics are driven by a popular demand, fed by intellectuals and politicians, for the imposition of ever greater equality. This demand for “fairness” or “social justice” nurtures the soft totalitarianism of political correctness and redistributionist policies.

A major problem of democratic welfare states, according to Minogue, is that they turn citizens into slaves. They produce what he considers “servile minds” that fit into what Hilaire Belloc a hundred years ago described as the “servile state.” Modern states manipulate and transform onetime members of families and communities into fragmented subjects addicted to state control. In the name of equality, political authorities reshape the moral development of increasingly isolated individuals.

Minogue clearly does not set out to praise democracy in its contemporary form as humanity’s greatest blessing. Nor does he wish to inflict our late modern regime on the entire world. He would agree with a judgment that Milton Friedman expressed in a Liberty Fund interview shortly before his death, that economic and civil freedom usually suffer with the advance of political freedom. By extending the franchise too far and by making too many human arrangements subject to “what the people want” or “what they think is just,” we destroy our economic liberties and right of free association. Minogue gives his work the suggestive subtitle How Democracy Erodes the Moral Life.

He is in favor of well-ordered freedom but not necessarily the democracy to which liberty is often tendentiously linked. Minogue is more sober in his judgments about democratic regimes than were two of his heroes in Austrian economics, Ludwig von Mises and Friedrich Hayek. These otherwise astute economists generally assumed that democracy was the only form of government that protects economic and civic freedoms. When Hayek noted that the match didn’t work out as well as expected, he attributed this failure to not having the right kind of democracy. If only democratic countries would take the model of Swiss republicanism at its best, then our freedoms, according to Hayek, would be secure.

Minogue, by contrast, does not cherry-pick his examples. He deals with democracy as it has developed most widely over the last century. The colonization of the family by state functionaries and public educators, government inroads into our earnings and business enterprises, and the state-sponsored cult of victim groups are for Minogue the predictable outcomes of modern democratic rule. They are the state’s attempts to satisfy the demand that government itself incites for greater equality of condition.

This process began, we are told, with a change in the size of the electorate, the ultimate effect of which was to turn “democracy as denoting a kind of political arrangement” into democracy as a “moral, social and political ideal.” By the 20th century, a “relatively slight change in electoral practice” had led to a “comprehensive critique and, in many cases, a rejection of the inherited mores of European states.”

All of this became more acute when Labour parties and other social-democratic forces entered the scene. English Labourites often began with “a small technical change in the constitution” and ended their rule with the “remarkable idea of democracy as a critic of an entire civilization.” As mass democracy progressed into social democracy, 

ranks, classes, and formalities, forms of respect, habits of clothing and much else were swept aside in what one might in retrospect call an ‘orgy of informality’ and elections became forms of voter seduction, in which specific classes of voters were promised concrete benefits resulting from the use of political power to redistribute wealth from those who had acquired it in the economy.

Perhaps Minogue’s most noteworthy contribution to political analysis—albeit one that runs counter to what American conservatives have been taught to accept—is an understanding that the left has strong moral values. The problem is not that the left is run by moral relativists but rather that it is driven by a yearning for social justice. Unlike equivocating Republican operatives, the left believes all too passionately in what it says. In fact, it is trying to “politicize everything.” The “bigots for justice” on the multicultural left see all human interactions as opportunities for manipulation. It just so happens that their project requires them to get rid of bourgeois civilization to clear the field for imposing their vision. But this certainly does not mean that these reformers lack all conviction. As Minogue explains in an earlier work, Politics:

In this new sense of politics, there are no limits: where people cut their wrists or children are beaten, or lesbians are not fully accepted, political action ought to be taken, and what it requires is that attitudes be changed in order that, ultimately, harmony will prevail. Politics becomes, in a famous formula in political science, ‘the authoritative allocation of values.’

In that same work, Minogue evokes a nightmarish picture in which normal political life becomes impossible because of the compelling power of the leftist demand for social justice in all aspects of our existence. In The Servile Mind he focuses particularly on the “great project” that informs the leftist transformation of politics:

The politico-moral idealist clearly commands the high moral ground … Ordinary human concerns about making ends meet and dealing with difficult human associates look insignificant in comparison. Some exponents of the grand project these days go on to criticize foreign holidays or indulging in an extra bottle of wine over an elaborate dinner as mere selfishness.

In comparison to the project of ending poverty and discrimination, at the trivial cost of bourgeois liberties, what can the left’s opponents present as showing a comparable degree of “moral seriousness”? Thus the ordinary person, who is brought up by the democratic state, is convinced that he must sacrifice his “morally frivolous” interest to the greater good of the world’s poor and of those groups still marginalized at home. In this moral blackmail, which comes to envelop civic life and finally international relations, people rush to accept what they are made to believe is the proper way to speak and act: “How can they pass as ethical unless they are told what words they may or may not use in describing fellow-citizens, the way their children ought to be educated, what ethnic distribution of friends they ought to have and what benevolences are required for them?”

Minogue points out that the architects and enforcers of the Great Project need never say they’re sorry. Purity of intention is enough to justify any social experiment gone awry: “Our civilization has long been rather soft on good intentions, even though most of us realize they pave the road to hell.” Equally relevant, Minogue sees the acceptance of pure intention as related to the belief that the “politico-moral idealist” holds the “high moral ground.” Because of his presumed concern with egalitarian goals, this reformer is perceived as being pure as the driven snow. Indeed, it is not good taste to dwell on well-intentioned failures, just as it is unfair to hold designated victims accountable for their misdeeds.

There are however three small points in Minogue’s work that call for clarification. Was it really a minor step that led from restricted to universal (manhood) suffrage, a widely celebrated reform that was soon extended to women in Western countries? A voluminous polemical literature by 19th-century conservatives and classical liberals, including the French premier of the 1840s Francois Guizot and many of the (actually liberal) subjects of Russell Kirk’s The Conservative Mind, warned against this leap into the dark.

The other query is terminological and may have no ready solution, given the poverty of our fashionable political vocabulary. Minogue refers to the government of Great Britain before its extensions of the electorate as being “democratic” but less ideologically and programmatically so than it would later become. Describing a monarchy with limited popular representation and an aristocratic component as a “democracy” may be a bit of a stretch. On the other hand, calling that form of government what it was, a balanced pre-democratic regime—and a good one at that—may be unimaginable to many readers.

Minogue also provides a panegyric to “liberal democracy” from pages 121 and 124, and one wonders why it was inserted. Certainly in view of everything else he writes in this book about democracy creating servile subjects, it is hard to contextualize his statements about how we have seen the “triumph of personal freedom” unequaled in human history. Further: “people have at last escaped the tutelage of their governments.” Are we speaking here about “democracy” before it lapsed into politico-moralism and continuous social engineering? Or is this meant to be a description of the existing Anglo-American regime, which neoconservatives see as the best of all possible worlds? Perhaps these pages are intended to soften the harsh tone of a work that is not likely to attract the in-crowd. In any case, it is not related to the rest of Minogue’s splendid work.

Draghi is working overtime

Is the ECB Backing Up the EuroZone via the Backdoor?

By R. Wenzel

Yesterday in the EPJ Daily Alert, I wrote:

Reuters is reporting that that overnight emergency borrowing by commercial banks in the EZ jumped to over 9 billion euros ($12 billion). translation: EZ banks are still scared to loan to each other.

The big guns need to be moved into position, or at least that's the way the banksters see it. And indeed that is what appears to be developing. Reuters is running with a leaked ECB story that the ECB may loosen collateral criteria to give banks greater access to cheap cash and offer longer-term loans. Reuters said the leak comes from "three euro-area officials" with knowledge of the deliberations.

This looks to me like the bazooka being put in place and that it is going to be used. All that junk paper the EZ banks have on their books will be allowed to be traded in for newly printed euros. The one caveat is that it must be newly printed euros and not just another sterilization program by the ECB, to get the economy going (in manipulated fashion). It sounds like it will be newly printed money,but we won't really know for sure until a few weeks down the road when the ECB balance sheet is examined to see if it has expanded.

This morning, in the Alert, I wrote:

... reports indicate the ECB has capped the maximum purchase of euro zone sovereign bonds at 20 billion euros a week for now and is not considering bigger action in response to the EZ plus 6 agreement.

That said, the ECB appears willing to back up EZ debt via the back door, as it has agreed to accept more types of debt securities from banks in discount operations. This could prove to be a very profitable arbitrage for banks, as they could buy high yielding paper off the market and have it financed by the ECB at low rates. The key will be to monitor the ECB balance sheet to see if this is going on. ECB direct sovereign bond purchases are not enough to hold the EZ together, especially given the fact that the ECB is sterilizing its purchases by draining from other sectors of the economy.

A report fro the Telegraph's Ambrose Evans-Pritchard suggests that Tim Congdon from International Monetary Research is thinking along the same line that I am. Pritchard writes:

Mario Draghi, the ECB’s president, said the bank had not agreed to any sort of “Grand Bargain” with EU leaders to act as lender of last resort for sovereign states, insisting that it does not have a legal mandate to rescue sovereign states in trouble.

“We have a treaty and Article 123 prohibits financing of governments. It embodies the best tradition of the Bundesbank. We shouldn’t try to circumvent the spirit of the treaty,” he added, warning against the use of “legal tricks” to bend the bank’s mandate.

The comments caused consternation on trading floors, where expectations for a “shock and awe” action by the ECB have been running ahead of reality. Mr Draghi had earlier hinted that the ECB might be willing to do more if politicians deliver on a “fiscal compact” to anchor budgetary discipline at today’s summit in Brussels.

“This is big, he’s basically pulled the rug out from under the market,” said Brian Dolan at forex.com. “There’s a sense of shock right now because he previously suggested that if EU leaders got things together, the ECB would step up bond purchases.”...

Almost lost in the drama, the ECB cut interest rates by a quarter of a percentage point to 1pc and offered sweeping measures to shore up the eurozone’s €23 trillion (£19.6 trillion) banking system and avert a dangerous credit crunch.

It extended its unlimited credit to banks (LTRO’s) from one year to three years, and halved the reserve ratio to 1pc to free up more than €200bn in extra liquidity. It will relax collateral rules to allow wider use of asset-backed securities, a life-saver for distressed banks that were running out of eligible “kit” for the lending window.

Mr Draghi said banks were facing “serious funding pressures”, compounded by the rush to raise core Tier 1 capital ratios to 9pc. The measures to shore up lenders are intended to avoid acute “deleveraging” as banks shrink their loan books and prepare to roll over €230bn in bonds in the first quarter of next year...

Tim Congdon from International Monetary Research said the ECB bank’s support is highly significant and could prove a transforming moment in this crisis. The steps help to shore up the whole interlocking edifice of bank debt and sovereign debt, giving back-door support for governments.
“ECB lending to commercial banks can act as an important safety valve for the single currency project. It could gain valuable breathing space,” he said.

“The ECB is bending over backwards to help banks, reversing the crazy withdrawal of special credit facilities early last year. The banks can now borrow for three years at 1pc or so, and use the money to buy bonds at yields at 5pc, with gearing. It encourages them to purchase the bonds because returns could be fabulous provided the euro holds together.

As I said in the EPJ Daily Alert, let's see by how much the ECB balance sheet expands in coming weeks. If Congdon and my suspicions are correct, Draghi has opened the door for European banksters to make some EZ money, which will at the same time, through backdoor money printing, prop up the sovereign debt of the PIIGS. All very inflationary and dangerous, of course.

The plot thickens

Europe's great divorce

by Charlemagne, The Economist

WE JOURNALISTS are probably too bleary-eyed after a sleepless night to understand the full significance of what has just happened in Brussels. What is clear is that after a long, hard and rancorous negotiation, at about 5am this morning the European Union split in a fundamental way.

In an effort to stabilise the euro zone, France, Germany and 21 other countries have decided to draft their own treaty to impose more central control over national budgets. Britain and three others have decided to stay out. In the coming weeks, Britain may find itself even more isolated. Sweden, the Czech Republic and Hungary want time to consult their parliaments and political parties before deciding on whether to join the new union-within-the-union.

So two decades to the day after the Maastricht Treaty was concluded, launching the process towards the single European currency, the EU's tectonic plates have slipped momentously along same the fault line that has always divided it—the English Channel.

Confronted by the financial crisis, the euro zone is having to integrate more deeply, with a consequent loss of national sovereignty to the EU (or some other central co-ordinating body); Britain, which had secured a formal opt-out from the euro, has decided to let them go their way.

Whether the agreement does anything to stabilise the euro is moot. The agreement is heavily tilted towards budget discipline and austerity. It does little to generate money in the short term to arrest the run on sovereigns, nor does it provide a longer-term perspective of jointly-issued bonds. Much will depend on how the European Central Bank responds in the coming days and weeks.

Some doubt remains over whether and how the "euro-plus" zone will have access to EU institutions—such as the European Commission, which conducts economic assessments and recommends action, and the European Court of Justice, which Germany hopes will ensure countries adopt proper balanced-budget rules—over Britain's objections.

But especially for France, on the brink of losing its AAA credit rating and now the junior partner to Germany, this is a famous political victory. President Nicolas Sarkozy had long favoured the creation of a smaller, "core" euro zone, without the awkward British, Scandinavians and eastern Europeans that generally pursue more liberal, market-oriented policies. And he has wanted the core run on an inter-governmental basis, ie by leaders rather than by supranational European institutions. This would allow France, and Mr Sarkozy in particular, to maximise its impact.

Mr Sarkozy made substantial progress on both fronts. The president tried not to gloat when he emerged at 5am to explain that an agreement endorsed by all 27 members of the EU had proved impossible because of British obstruction. “You cannot have an opt-out and then ask to participate in all the discussion about the euro that you did not want to have, and which you also criticised,” declared the French president.

With the entry next year of Croatia, which will sign its accession treaty today, the EU is still growing, said Mr Sarkozy. “The bigger Europe is, the less integrated it can be. That is an obvious truth.”

For Britain the benefit of the bargain in Brussels is far from clear. It took a good half-hour after the end of Mr Sarkozy's appearance for Mr Cameron to emerge and explain his action. The prime minister claimed he had taken a “tough decision but the right one” for British interests—particularly for its financial-services industry. In return for his agreement to change the EU treaties, Mr Cameron had wanted a number of safeguards for Britain. When he did not get them, he used his veto.

After much studied vagueness on his part about Britain's objectives, Mr Cameron's demand came down to a protocol that would ensure Britain would be given a veto on financial-services regulation (see PDF copy here). The British government has become convinced that the European Commission, usually a bastion of liberalism in Europe, has been issuing regulations hostile to the City of London under the influence of its French single-market commissioner, Michel Barnier. And yet strangely, given the accusation that Brussels was taking aim at the heart of the British economy, almost all of the new rules issued so far have been passed with British approval (albeit after much bitter backroom fighting). Tactically, too, it seemed odd to make a stand in defence of the financiers that politicians, both in Britain and across the rest of European, prefer to denounce.

Mr Cameron said he is “relaxed” about the separation. The EU has always been about multiple speeds; he was glad Britain had stayed out of the euro and out of the passport-free Schengen area. He said that life in the EU, particularly the single market, will continue as normal. “We wish them well as we want the euro zone to sort out its problems, to achieve stability and growth that all of Europe needs.” The drawn faces of senior officials seemed to say otherwise.

The 23 members of the new pact, if they act as a block, can outvote Britain. They are divided among themselves, of course. But their habit of working together and cutting deals will, inevitably, begin to weigh against Britain over time.

Mr Sarkozy and Angela Merkel, the German chancellor, have given notice of their desire for the euro zone to act in all the domains that would normally be the remit of all 27 members—for example, labour-market regulations and the corporate-tax base.

Britain may assume it will benefit from extra business for the City, should the euro zone ever pass a financial-transaction tax. But what if the new club starts imposing financial regulations among the 17 euro-zone members, or the 23 members of the euro-plus pact? That could begin to force euro-denominated transactions into the euro zone, say Paris or Frankfurt. Britain would, surely, have had more influence had the countries of the euro zone remained under an EU-wide system.

It says much about the dire state of the debate on Europe within Britain's Conservative party that, as Mr Cameron set out to Brussels, another Tory MP portentously invoked the memory of Neville Chamberlain, who infamously came back from Munich with empty assurances from Adolf Hitler. Mr Cameron may have made a grievous mistake with regard to Britain's long-term interest. But at least nobody can accuse him of returning from Brussels with a piece of paper in his hand.

Of Arrogance and Ignorance

The Declines of The New York Times, United States Steel and other American Giants
I want to place the New York Times in the context of other American businesses which became complacent and arrogant, and suffered prolonged, mostly irreversible, declines as a result. It’s a list with a lot of famous names: United States Steel, AT&T, General Motors, Boeing, at their peaks the pinnacles of their industries, but through the arrogance of their senior executives, and the inertia bred from this arrogance, they created market opportunities for new competitors who ate their lunches. A few examples:

The United States steel industry had its peak production year in 1959, and has been in a long decline ever since. It did not have to be this way, because there were technologies available to the major steel producers in the 1960′s and 70′s to lower their costs significantly, by moving production to electric “mini-mills” and continuous process steelmaking instead of integrated steel facilities, with their coke ovens, blast furnaces, separate rolling and coating facilities, etc. The big steel producers like United Sates Steel, Bethlehem, Armco, Republic, Jones & Laughlin, National, and others shunned the mini-mills, in what seemed to me at the time an illogical, macho demonstration of how real men make steel. Well, all they ended up showing is how real men go bankrupt (including almost all the above companies). They left it to the mini-mill companies they despised and ignored, like Nucor, to become the profitable players in the industry.

If Boeing had decided to introduce the B767 in the late 1970’s, Airbus would not exist. Boeing’s arrogance in trying to milk existing models provided the market opportunity for Airbus to introduce the A300, which filled a niche market. Airbus leveraged its first model to ultimately produce a broader range of aircraft than the American giant, and currently Airbus is poised to become the dominant commercial aircraft company over the next twenty years.

The entire American automobile industry, General Motors, Ford, Chrysler and American Motors, in its arrogance, decided to try to use legal and political means, instead of producing higher quality products, to prevent Japanese auto producers from taking a large share of the US domestic market. The Japanese had two percent market share in 1970, and have 40% today. The “voluntary import restrictions” the Japanese agreed to were meaningless to them in the context of achieving their long-term strategy, but protected union and management salaries over a period of time. You will recall Ross Perot bristling in the 80′s at how out-of-touch his fellow GM board members were: they were given specially prepared new cars so often that they had no appreciation for the poor quality of the average sales model.

I could go on for hours. The stories are always approximately the same. Arrogance results in producing a poorer quality product, typically at a higher cost, than the marketplace demands. Arrogance is always characterized by denial at the senior management level of what is happening, and a resorting to contorted explanations and non-economic solutions, such as government regulation or legislation. The declines can go on for decades. Most amazingly, in example after example, the cultural inertia remains intact: the companies do not change much, despite their declining fortunes. These companies continue blaming others for their problems, often calling for the banning of the more successful products of competitors.
The New York Times fits well on this list of great institutions with declining fortunes. Its circulation is down 10% or so to 1.1 million in the last decade, during a period in which its geographic distribution increased mightlily, so the picture is even worse than it appears. Further possible evidence that the situation is getting worse may come from its announcement that it will be reporting its results in the future in a way that combines the Times with other publications, possibly obscuring the data.
Based on the track records of hard hat American companies that can’t change, we would expect change to come even harder to the Times. After all, the arrogance of the elite media is somewhat greater than that of the average executive, since they consider themselves princes of wisdom even more than princes of commerce.
Is there any possibility that the New York Times could change? I think not. As Powerline says of the Star-Tribune editorial board’s treatment of the Swiftboatvets, and it is applicable to the NYT: “I was struck by their lack of knowledge regarding most of the issues they opined about, their lack of interest in the coherence of their own arguments from one day to the next, their lack of intellectual integrity, their willingness to convert today’s Democratic Party talking points into tomorrow’s editorial, their refusal ever to articulate fairly a serious argument contrary to their own position, their sheer bullying use of their bully pulpit…. and their refusal to admit a contrary voice to their numbers.”
Do you think I am being too harsh? Then consider the opinions of a man who rose to the highest editorial position in the Times, Howell Raines, as he expressed himself in the Guardian recently:

Now for the hard part of the performance challenge – the economy. Two and a quarter centuries into its history as a nation, America has the most unfair tax system ever and the greatest gap ever between rich and poor. Even a real populist, however, would have trouble taking on these issues frontally. As Al From of the Democratic Leadership Council noted, Americans aren’t antagonistic toward the rules that protect the rich because they think that in the great crap-shoot of economic life in America, they might wind up rich themselves. It’s a mass delusion, of course, but one that has worked ever since Ronald Reagan got Republicans to start flaunting their wealth instead of apologising for it. Obama has to understand that when a cure is impossible, the doctor must enter the world of the deluded.

What does this mean in terms of campaign message? It means that he must appeal to the same emotions that attract voters to Republicans – ie greed and the desire to fix the crap-shoot in their favour. That means that instead of talking about “fixing” social security, you talk about building a retirement system that makes middle-class voters believe they will be semi-rich someday. 

That’s actually a good start. Using that promise as disinformation, he must now figure out a creative way to become a redistributionist Democrat. As a corporation-bashing populist, I’d like to think he could do that by promising to make every person’s retirement as secure as Cheney’s investment in Halliburton. But that won’t sell with the sun-belt suburbanites. Not being a trained economist like, say, Arthur Laffer, I can’t figure out the exact legerdemain that Obama ought to endorse. But greed will make folks vote for Democrats if it’s properly packaged, just as it now makes them vote Republican, and in terms of the kind of voters Obama must win away from GOP, I think the pot-of-gold retirement strategy is a way to work. Forget a chicken in every pot. It’s time for a Winnebago in every driveway.

Howell Raines understands almost nothing about America. Deluded hayseeds stuck in a crap-shoot economy who must be tricked to further the higher goal of a redistributionist country: that’s his vision of you and me.
Of course the arrogance of elitist socialist Howell Raines bowls me over, but maybe even more than that, his ignorance is staggering. Raines somehow believes that government is the answer, at least government guided by him, if people are to have good lives. But consider the evidence of the last century or so:

Here is the signal fact of our progress in the last century. If you were born in 1900, your life expectancy was in the forties, and GNP per capita was about $4000. If you are born today, your life expectancy in about eighty, and statistically, as an average American, you are ten times richer. In reality you are a hundred or a thousand times richer, if you factor in your ability to be in Paris tomorrow for $500, your ability to watch events from fifty years ago as they actually happened, etc. – not to mention that your toddler’s severe pneumonia can be reliably cured in 48 hours or so.
Only a little of this has to do with government.

Mostly it is because far more than 50% of everything ever invented in the history of humanity was invented in the last 130 years, and over 50% of that was invented by Americans. Milton Hershey invented the candy bar, Carrier invented the air conditioner for a tire plant, Sears invented catalogue distribution, Henry Ford invented cheap cars, some guys from Texas Instruments invented the transistor. It is almost impossible to overstate the importance of the invention and wide use of brand names, which communicate the quality and dependability of every product we buy. This alone deserves the Nobel Prize. And it was a large and growing market, the availability of risk capital, and protection of intellectual and personal property by the courts that made this possible.

I’ve met a number of people like Raines, who think that American prosperity arose magically because of Samuel Gompers, the Sherman Act, muckrakers, and the alphabet programs of the New Deal. It bothers him not that he understands almost nothing about the US economy.
As long as the culture is in place that gave rise to Raines’ success at the NYT, it is foolish to expect change. Expect louder and even shriller denunciations of the Republican attack machine, in place of meaningful anaysis of Obamas truthfulness. Expect a once-great American institution to continue in the path of decline, well worn from the US Steel’s and GM’s that have preceded the Times.

Value for money in education

The Khan Academy and Tech Guy Labs

by The Dinocrat

We encourage you to get acquainted with Khan Academy and Tech Guy Labs. They are a window into how university education will be likely changing due to technology. Salman Khan is a polymath who delivers hundreds, if not thousands, of fascinating mini-lectures on all sorts of subjects. We’d wager that more than 80% of college courses aren’t as chock-full of knowledge and as succinct and well-delivered as those of Mr. Khan.

If Khan’s formula is an excellent replacement for the college lecture, Leo Laporte’s Tech Guy Labs offers something of a replacement for the college seminar. Laporte broadcasts a technology radio program for six hours on the weekend, and offers all sorts of other tech programming live and on podcasts. One of the interesting features is his seminar — really, it’s a chatroom — with a thousand participants or more online during the broadcasts. In those instances when the highly knowledgeable Laporte doesn’t know the answer to a particularly arcane question, the hive often provides real-time answers to questions that come in live over the phone lines. We’ve never encountered a more well-informed group of seminar participants.

There’s one other improvement over current college practices that both Khan and Laporte offer — participation is free. College education in most cases does not deliver good value for the money. Expanding educational opportunities in this country by expanding scholarships is clearly a vastly inferior policy approach to lowering delivery costs. But politicians prattle on, do they not?

Match.com

OWS & Crony Capitalists vs. The Real 99%

Trial-free, indefinite detention of anyone, including American citizens

The National Defense Authorization Act is the Greatest Threat to Civil Liberties Americans Face

By E.D. Kain

If Obama does one thing for the remainder of his presidency let it be a veto of the National Defense Authorization Act – a law recently passed by the Senate which would place domestic terror investigations and interrogations into the hands of the military and which would open the door for trial-free, indefinite detention of anyone, including American citizens, so long as the government calls them terrorists.

So much for innocent until proven guilty. So much for limited government. What Americans are now facing is quite literally the end of the line. We will either uphold the freedoms baked into our Constitutional Republic, or we will scrap the entire project in the name of security as we wage, endlessly, this futile, costly, and ultimately self-defeating War on Terror.

Over at Wired, Spencer Ackerman gives us the long and short of things:

There are still changes swirling around the Senate, but this looks like the basic shape of the 2012 National Defense Authorization Act. Someone the government says is “a member of, or part of, al-Qaida or an associated force” can be held in military custody “without trial until the end of the hostilities authorized by the Authorization for Use of Military Force.” Those hostilities are currently scheduled toend the Wednesday after never. The move would shut down criminal trials for terror suspects.

But far more dramatically, the detention mandate to use indefinite military detention in terrorism cases isn’t limited to foreigners. It’s confusing, because two different sections of the bill seem to contradict each other, but in the judgment of the University of Texas’ Robert Chesney — a nonpartisan authority on military detention — “U.S. citizens are included in the grant of detention authority.”

An amendment that would limit military detentions to people captured overseas failed on Thursday afternoon. The Senate soundly defeated a measure to strip out all the detention provisions on Tuesday.

So despite the Sixth Amendment’s guarantee of a right to trial, the Senate bill would let the government lock up any citizen it swears is a terrorist, without the burden of proving its case to an independent judge, and for the lifespan of an amorphous war that conceivably will never end. And because the Senate is using the bill that authorizes funding for the military as its vehicle for this dramatic constitutional claim, it’s pretty likely to pass.

I seriously don’t care if you’re a liberal or a conservative or a libertarian or a Zen anarchist. So long as you aren’t Carl Levin or John McCain, the bill’s architects, you can join the Civil Liberties Caucus. Spencer writes:

Weirder still, the bill’s chief architect, Sen. Carl Levin (D-Mich.), tried to persuade skeptics that the bill wasn’t so bad. His pitch? “The requirement to detain a person in military custody under this section does not extend to citizens of the United States,” he said on the Senate floor on Monday. The bill would just letthe government detain a citizen in military custody, not force it to do that. Reassured yet?

Civil libertarians aren’t. Sen. Al Franken (D-Minn.) said it “denigrates the very foundations of this country.” Sen. Rand Paul (R-Ky.) added, “it puts every single American citizen at risk.”

This is what I mean: Give me Rand Paul and Al Franken any day of the week over the Levins and McCains of the Senate. We need more elected officials with the sensibility of Ron Wyden or Al Franken* on the left, or Rand Paul on the right. Right and left are such shoddy, ad hoc descriptors these days anyways.

What’s truly at stake when we start talking about Big Government and such is far more dangerous and preposterous than high marginal tax rates.

We’re talking about the stripping away of our most basic freedoms. We’re talking about a potential state that can call me a terrorist for writing this blog post and then lock me up and throw away the key.

What’s the line from Batman? The night is always darkest just before the dawn. I like to think that’s true, because times seem awfully dark these days.

* Update: Actually, Franken voted for the NDAA so never mind. He’s also sponsoring the PROTECT IP Act which would clamp down on free speech online.

The booming business of cronyism

Illinois: State Of Embarrassment

By Joel Kotkin

Most critics of Barack Obama’s desultory performance the past three years trace it to his supposedly leftist ideology, lack of experience and even his personality quirks. But it would perhaps be more useful to look at the geography — of Chicago and the state of Illinois — that nurtured his career and shaped his approach to politics. Like with George W. Bush and Texas, this is a case where you can’t separate the man from the place.

The Chicago imprint on Obama is unmistakable. His closest advisors are almost all products of the Windy City’s machine politic: Consigliere Valerie Jarrett; his first chief of staff, now Chicago Mayor, Rahm Emanuel; and his current chief of staff, longtime Chicago hackster William Daley, scion of the Windy City’s longtime ruling family.

All these figures arose from a Chicago where corruption is so commonplace that it elicits winks, nods and even a kind of admiration. Since 1973, for example, 27 Chicago Aldermen have been convicted by U.S. Attorney of the Northern District of Illinois.

That culture of corruption affects the rest of the state as well. Both Gov. George Ryan (who served from 1999 to 2003 and  and his successor Ron Blagojevich have been convicted a major crimes. So have four of the state’s last eight governors. Blagojevich’s felonies are part and parcel of a political climate that also includes the also newly convicted  Antonin “Tony” Rezko, a real estate speculator and early key Obama backer, sentenced late last month to a ten-year prison sentence.

Crony capitalism constitutes the essential element of what the legendary columnist John Kass of theChicago Tribune has labeled both the “Chicago way” and the “Illinois Combine”, not primarily an ideology-driven movement. The political system, he notes, “knows no party, only appetites.”

Just look at the special favors granted to vested interests while the state has imposed a 65% boost in income taxes for middle class citizens. Companies like Boeing and United, which have  head offices in Chicago, get tax breaks and incentives, while everyone else pays the full fare. This game is still afoot.  Even as the state deficit persists, other big players such as the CME group, which operates the Chicago Mercantile Exchange, the Chicago Board of Options and Sears are threatening to leave unless their taxes are also lowered.

Thus it’s not surprising then that cronyism has become a hallmark of the Obama administration. Wall Street grandees, a key source of Obama campaign funders in 2008 and again now, have been treated to bailouts as well as monetary policies that have assured massive profits to the “too big to fail” crowed while devastating consumers and smaller banks.

The evolving scandal over “green jobs” — with huge loans handed out to faithful campaign contributors — epitomizes the special dealing that has become an art form in the system of Chicago and Illinois politics.  Beneficiaries include longtime Obama backers such as   Goldman Sachs , Morgan Stanley and Google. Another scandal is building up around the telecom company LightSquared. This company, financed largely by key Obama donors,  appears to have gained a leg up for a huge Pentagon contract due to White House pressure.

If the Chicago system had proven an economic success, perhaps we could excuse Obama for bringing it to the rest of us. Most of us would put up with a bit of corruption and special dealing if the results were strong economic and employment growth.

But the bare demographic and economic facts for both Chicago and Illinois reveal a stunning legacy of failure. Over the past decade, Illinois suffered the third highest loss of STEM (science, technology, engineering and math-related) jobs in the nation, barely beating out Delaware and Michigan. The rest of the job picture is also dismal: Over the past ten years, Illinois suffered the third largest loss of jobs of any state, losing over six percent of its employment.