A Major Problem with State Schools

John Major wasn't posh-bashing - he was rightly critiquing state schools

by TIM BLACK

How on earth has ex-Tory prime minister John Major, a man hitherto associated with a back-of-the-throat monotone, rumours of grey pants, and a political vision encapsulated by the cones hotline, suddenly become the talk of the Westminster town? Simple: he made a speech that seemed to chime with the mainstream commentariat prejudices about politicians, particularly Conservative ones.

That wasn’t all he did last Friday, when confronted by the amassed ranks of the Norfolk Conservative Association. He also had a go at greedy bankers, and their collapsing banks; he even had a go at those who have spent more than they earn, and stored up debt for future generations, calling it ‘immoral’. But none of this quite hit the mark. After all, which mainstream politician today doesn’t spruce up his tired attacks on the opposition with naughty-banker sentiments, and a bit of ‘won’t someone think of the children’ grandstanding. He needed to say something with the taint of controversy. And then it happened. ‘In every single sphere of British influence’, he monotoned, ‘the upper echelons of power in 2013 are held overwhelmingly by the privately educated or the affluent middle class. To me from my background, I find that truly shocking.’

By Sunday, when the speech had been taken up by the media, its meaning was assumed. Major was attacking today’s government of the posh, with prime minister David Cameron and chancellor George Osborne firmly in his sights; he was waging war on the privately educated cabal running the country and keeping the poor and impoverished in their place; and, for many broadsheet commentators, this now made him ‘one of us’.

There has been no shortage of class warriors willing to join Major at the barricades. ‘Private schools… are symbolic of the wider link in this country between how much money your parents have and how much opportunity you’re given’, noted one commentator. ‘The problem is clear’, she concluded, ‘the question is whether we want to do anything about it’. Another pundit at the 

How Obamacare Accomplishes The Unthinkable

The enrollment figures and poll numbers show reform has backfired

By Ben Domenech

President Obama’s signature domestic policy may have accomplished something previously unthinkable: taking an issue where one party had a dominant hold on public opinion, and reversing it in favor of the opposing party.

If the latest poll numbers and enrollment figures are to be believed, we could be witnessing a political achievement unequaled in modern political history: the complete demolition of one party’s long-term dominance on an issue area – the Democrats’ ownership of the health care issue – in the space of a few months. Quinnipiac finds that young people trust Republicans in Congress more on health policy than the president; that a plurality of Hispanics, long the most pro-Obamacare faction, are now opposed to the law; and that overwhelming majorities (70+ percent) of Democrats, Republicans, and Independents are in favor of delaying the law. And that’s not all:

Only 19 percent of American voters say the quality of care they and their families receive will improve in the next year because of the Affordable Care Act (ACA), while 43 percent say it will get worse and 33 percent say ACA won't affect their health care. Voters oppose the ACA 55 - 39 percent, with men opposed 59 - 37 percent and women opposed 51 - 41 percent. American voters are divided 46 - 47 percent on whether Obama "knowingly deceived" the public when he said people could keep their existing health insurance plans if they wished. Voters also support 73 - 20 percent extending the March 31, 2014 deadline for signing up for coverage without facing a penalty.

No wonder we’re seeing these kinds of numbers, when even die-hard supporters of the law are getting hit hard by its ramifications. And for what? The enrollment figures released today illustrate that the administration has failed thoroughly in managing Obamacare’s launch, with just 26,794 people having enrolled via Healthcare.gov (and even that definition is dubious, given that the federal site reportedly is unable to process payments at this time). Comparison to the four million or so people who have lost their existing plans is laughable.

 All told, the federal exchange enrollment figures work out to just 23 people per day per state signing up via the site. The whole project now looks like the creation of a tiny high risk pool and a Medicaid expansion in half the states. 

As the American Action Forum outlines in this chart, the project is so far behind the expected and hoped-for pace, it seems unthinkable that it would ever approach estimates in the near future:

All this has led Ezra Klein to publicly voice the concerns that smart progressives have been whispering about for weeks now:

The Affordable Care Act's political position has deteriorated dramatically over the last week. President Bill Clinton's statement that the law should be reopened to ensure everyone who likes their health plans can keep them was a signal event. It gives congressional Democrats cover to begin breaking with the Obama administration. 

All Options on Table

Central Bank Could Adopt Negative Deposit Rate, Asset Purchases If Needed

By BRIAN BLACKSTONE

The European Central Bank could adopt negative interest rates or purchase assets from banks if needed to lift inflation closer to its target, a top ECB official said, rebutting concerns that the central bank is running out of tools or is unwilling to use them.

"If our mandate is at risk we are going to take all the measures that we think we should take to fulfill that mandate. That's a very clear signal," ECB executive board member Peter Praet said in an interview Tuesday with The Wall Street Journal.

Annual inflation in the euro zone slowed to 0.7% in October, far below the central bank's target of just below 2% over the medium term. The euro dipped briefly after the comments appeared on the Journal's website.

Mr. Praet didn't rule out what some analysts see as the strongest, and most controversial, option: purchases of assets from banks to reduce borrowing costs in the private sector.

"The balance-sheet capacity of the central bank can also be used," said Mr. Praet, whose views carry added weight as he also heads the ECB's powerful economics division. "This includes outright purchases that any central bank can do."

Additional stimulus from the ECB isn't needed right now, Mr. Praet signaled, noting that inflation risks for the euro zone as a whole are balanced after last week's unexpected ECB interest-rate cut.

On Thursday the central bank reduced its key lending rate to 0.25%, a record low.

The move came days after the October inflation report fanned fears that the euro zone may slip into a period of excessively low inflation or, in some places, persistent declines in consumer prices, known as deflation. This cripples economic activity by holding wages and profits down and hampering efforts by the private sector and governments to reduce debt.

Obama Translated

Sadly, only in our new normal world is this funny...

On this day let us commemorate…

It was a straight road from Revolutionary France to Soviet Russia

By Natalie Solent

"… the victims of the French Revolution. Today is 20th Brumaire in the year CCXXII. On this day in in Year Two, 10th November 1793 in the former calendar, the Festival of Reason was inaugurated in the Temple of Reason, before and afterwards known as the Cathedral of Notre Dame."

When reading his description of the first Festival modern readers may find it difficult to share the outrage expressed by the highly partisan nineteenth century politician and historian of the French Revolution, denounced alike by Carlyle and Marx, Adolphe Thiers. The Catholic Church under the ancien régime was oppressive and parasitical, and the Festival can seem to modern eyes like nothing much worse than an embarrassingly amateur charity pageant run by the Women’s Institute:

The first festival of Reason was held with pomp on the 20th of Brumaire (10th of November) It was attended by all the sections, together with the constituted authorities. A young woman represented the goddess of Reason. She was the wife of Momoro, the printer, one of the friends of Vincent, Bonsin, Chaumette, Hebert, and the like. She was dressed in a white drapery; a mantle of azure blue hung from her shoulders ; her flowing hair was covered with the cap of liberty. She sat upon an antique seat, intwined with ivy and borne by four citizens. Young girls dressed in white, and crowned with roses, preceded and followed the goddess. Then came the busts of Lepelletier and Marat, musicians, troops, and all the armed sections. Speeches were delivered, and hymns sung in the Temple of Reason ; they then proceeded to the Convention, and Chaumette spoke in these terms :

“Legislators ! Fanaticism has given way to reason. Its bleared eyes could not endure the brilliancy of the light. This day an immense concourse has assembled beneath those Grothic vaults, which, for the first time, re-echoed the truth. There the French have celebrated the only true worship, that of liberty, that of reason. There we have formed wishes for the prosperity of the arms of the republic. There we have abandoned inanimate idols for reason, for that animated image, the masterpiece of Nature.” As he uttered these words, Chaumette pointed to the living goddess of Reason.

Kristallnacht: Anti-Semitism Then and Now

75 years on, are Jews once again being treated as ‘different’?

BY FRANK FUREDI

It’s the seventy-fifth anniversary of Kristallnacht, the name given to the violent wave of destruction against German Jews on 9/10 November 1938 which unleashed a chain of events that would eventually culminate in the Final Solution of the Nazi regime.

Across Europe, rituals of remembrance have been organised, all highlighting the tragic consequences of the xenophobia embodied in Kristallnacht. At the time of those events, a writer for The Times said the ‘systematic plunder and destruction’ was on a scale that ‘seldom had [its] equal in a civilised country since the Middle Ages’.

Actually, what was really remarkable about Kristallnacht was not so much the scale of the destruction as the almost casual manner in which the pogrom was carried out. Some Germans were shocked by the sight of teenage members of the Hitler Youth attacking Jewish women and elderly men in the streets, but most people didn’t seem particularly bothered. Why?

Kristallnacht is, understandably, treated as a symbol of politically organised mob violence. What is often overlooked is how much this event, and the way it was justified by Nazi propaganda, expressed a very clear statement about the nature of the Jew. The pretext for the pogrom was the assassination of Ernst vom Rath, a minor German diplomat, by a German-born Polish Jew, Herschel Grynszpan. A few days after the assassination and the eruption of Kristallnacht, Joseph Goebbels, Nazi minister for propaganda, spoke of the ‘justified and understandable indignation of the German people at the cowardly assassination of a German diplomat’. In other words, it was ‘justified and understandable’ that punishment for the act of one individual should be inflicted on any individual of Jewish heritage.

Still Feel Confident About Collecting Your Pension After This?

The Party is Over

By Raoul Ilargi Meijer

If your answer to that question is affirmative, I suggest you take a good hard look at what's coming out of Detroit these days. Why don't we just call it a bail-in model, not unlike Cyprus, where the waters are tested for forcing parties who historically thought they were safe from cuts, find they no longer are.

And if you think Detroit is the only American city that has these kinds of problems, think again. It's merely the first, count on it. It's not just an American issue either, of course, and although retirements plans are set up in myriad different ways, they have one thing in common: they are in essence pyramid schemes, eat your heart out Charles Ponzi, and it's just a matter of time before the walls start crumbling.

But it's not just that. The game is stacked and fixed in favor of certain parties at the cost of others. We can all grasp how, without even knowing any details, because we should know how America, and the world at large, works these days. All games are fixed.

If you still have trouble understanding what is going on here, please do read Nicole Foss'Promises, Promises ... Detroit, Pensions, Bondholders And Super-Priority Derivatives from early September. Here's one quote from that article:

Promises that cannot be kept will not be kept. It is as simple as that. To complicate matters, however, the architecture of the financial system prioritizes promises, in a perhaps counter-intuitive, and certainly self-serving, manner. This will make the task of allocating extremely scarce resources to stakeholders lower down the financial food chain very much more difficult. It is time for a good look at the range of promises made, the competing needs of the recipients, the leverage enjoyed by powerful players in shoring up their own position, and the real world implications for municipalities far beyond Detroit.

And here's another one:

Maduro's Price Police

Price inflation will cause his demise

By Alvaro Vargas Llosa  

The Venezuelan government’s war on price inflation is not a metaphorical one—last weekend President Maduro, who owes his title to April’s rigged election, ordered the military takeover of Daka, a chain of electronic stores, and the arrest of several managers from that and other retail companies. The rhetoric employed by Maduro was inevitably interpreted by the masses as an encouragement to loot—which is what they did in the city of Valencia.

Besides the images sent out by citizen-reporters in Valencia, the picture that best captures the essence of what is happening is the one tweeted by a government minister who tried to justify the measures. The photo shows a washer/dryer that, in the words of the minister, “cost 39,000 VEF on November 1 and today costs 59,000 VEF, a nearly 100 percent rise in a week...”

Yes, minister, that is precisely what happens when you are on the verge of hyperinflation! The inflation rate is now nearing 60 percent and, as anyone who has lived under those conditions (including yours truly) knows, going from 60 percent to 1,000 percent is a lot easier than going from 3 percent to 40 or 50 percent.

For many years Venezuela has produced nothing but oil (in decreasing quantities) and has therefore had to import pretty much everything the population consumes. The artificial level at which the government has kept the bolivar in spite of the massive outflow of hard currency required to meet those import needs has, of course, caused a severe drop in foreign-exchange reserves. Government controls and the militarization of the economy have not prevented the black market from taking the real exchange rate to a level ten times higher than the official one. No wonder people who have to obtain US dollars to import even the most basic stuff sell it at much higher prices than the government Wonderland economy dictates.

What Made the Nazi Holocaust Possible?

Tyranny and Gun Control 

By Stephen P. Halbrook

This week marks the 75th anniversary of Kristallnacht, or the Night of the Broken Glass, the Nazi pogrom against Germany’s Jews on Nov. 9-10, 1938. Historians have documented most everything about it except what made it so easy to attack the defenseless Jews without fear of resistance. Their guns were registered and thus easily confiscated.

To illustrate, turn the clock back further and focus on just one victim, a renowned German athlete. Alfred Flatow won first place in gymnastics at the 1896 Olympics. In 1932, he dutifully registered three handguns, as required by a decree of the liberal Weimar Republic. The decree also provided that in times of unrest, the guns could be confiscated. The government gullibly neglected to consider that only law-abiding citizens would register, while political extremists and criminals would not. However, it did warn that the gun-registration records must be carefully stored so they would not fall into the hands of extremists.

The ultimate extremist group, led by Adolf Hitler, seized power just a year later, in 1933. The Nazis immediately used the firearms-registration records to identify, disarm and attack “enemies of the state,” a euphemism for Social Democrats and other political opponents of all types. Police conducted search-and-seizure operations for guns and “subversive” literature in Jewish communities and working-class neighborhoods.

Jews were increasingly deprived of more and more rights of citizenship in the coming years. The Gestapo cautioned the police that it would endanger public safety to issue gun permits to Jews. Hitler faked a show of tolerance for the 1936 Olympics in Berlin, but Flatow refused to attend the reunion there of former champions. He was Jewish and would not endorse the farce.

By fall of 1938, the Nazis were ratcheting up measures to expropriate the assets of Jews. To ensure that they had no means of resistance, the Jews were ordered to surrender their firearms.

The Economics of Disagreement

True conformity is possible only in the cemetery

BY JR NYQUIST

Disagreement is a fundamental part of life. It is essential to the economy. Just as a certain kind of agreement is necessary to life, so is a certain kind of disagreement. It is when our interests coincide that we can agree. It is when our interests and beliefs do not coincide that we disagree. When a company is formed there is an agreement, when something is paid for there is an agreed price. Is disagreement, therefore, an economic negative?

We should not be so simple as to assume that agreement is good and disagreement bad. Although we might say that all wars are about disagreement and peace is about agreement, and we might say that wealth destruction occurs in the context of disagreement while wealth creation occurs on account of agreement, there is more to this story. It is possible to imagine a destructive agreement and a constructive disagreement. A country that agrees to the wrong trade policy, for instance, may give serious strategic advantages to a competitor; domestic industries may go under, manufacturing capacity may decline with implications for military security and domestic employment (e.g., as in the trade relationship between China and the United States). A constructive disagreement may result in a parliamentary debate over a new law from which new understandings and practices emerge.

Peter Barron Stark offers 8 Steps to Constructive Disagreement. According to Stark, “Disagreements are a positive, normal and necessary part of building a great relationship or a team.” People tend to disagree on many points, and we often find this troublesome; but we must not imagine that disagreements are something to be set aside in search of perpetual agreement. Such has often proved a dangerous course to follow. Every investor and business leader would profit by reading Irving L. Janis’s Victims of Groupthink: A Psychological Study of Foreign Policy Decisions and Fiascos. As Janis points out, the desire for agreement and consensus can result in people suppressing important objections and contrary observations that prevent disaster from overtaking those who are swept along with others by the desire to fit in. In seeking agreement, and through the suppression of unpopular views, people can do incredibly stupid things. A CEO or government leader is bound to have blind spots. If there is no way to disagree or challenge his views, then disaster is bound to occur. These are especially shown in the history of powerful or charismatic leaders.

Stark tells us that 

“Good business decisions are brought about by respecting each other’s opinion, and having the ability to have a constructive dialogue where each team member has the opportunity to learn from each other, rather than purely liking each other.” 

Obamacare - Blinding You With Science

Science is glorious. But government is not science, and society cannot be managed scientifically from the center.

by Jeffrey Tucker

It is such a kick to read the transcripts from the White House’s health care “war room” in the first days of release. What a meltdown, and you get to watch it all in real-time.

I’m not trying to be cruel to the kindly despots who have wrecked so much of what worked in the existing system, only to replace it with an unworkable central plan that’s robbing people all over the country.

But still, there is justice in this humiliation.

Somehow, the Republicans forced the Obama administration to cough up the details, and it is from these transcripts that we discovered the truth about HealthCare.gov’s mysterious first day. Only six people enrolled. That’s six of 7 million people eligible for the great new dawn for “affordable” health care.

It’s no wonder the Obama administration tried to hide the numbers from you. But in a digital age, even the White House can’t keep this stuff secret anymore. Every aspect of reality is logged in real-time.

It’s a double-edged sword. True enough, they are still logging our lives, which is tremendously annoying. But at the same time, they are also logging their own failures. In real-time, nonetheless. And this provides unprecedented insight into many great disasters of our time.

Here is a screenshot I pulled from one such transcript:

If you’re critical of the government, this is a beautiful failure.

Supporters of the president and the health care law in his name see this as a small hiccup. To be sure, people say that all of these problems will be fixed. That the problems with creating an account are mere technical issues. Top technicians from the best companies have all been hired by the government to make it right.

A government that would rape, torture a man to find a fistful of drugs is not worthy of our allegiance, obedience or respect

The government will continue to act like that until we say “enough.”

Some excellent and insightful comments from Ken White, writing at the Popehat blog, writing about the anal rape of an innocent 62-year old man by law enforcement officials and medical professionals that took place in New Mexico earlier this year:

What’s terrifying is that though the warrant is extraordinarily flimsy, there’s a decent chance a judge might find it sufficient. That’s because the judiciary has been steadily ground down by decades of law-and-order thin-blue-line rhetoric and by the purported imperatives of the Great War on Drugs, and judges routinely shrug and accept transparently bogus police speculation and awful warrants.

What’s terrifying is that a judge who has bought the government’s narrative may decide that the amount of drugs that can be hidden in a man’s rectum justifies detaining him, X-raying him, repeatedly digitally probing him, and despite a total lack of indication he is carrying drugs, sedating him and subjecting him to a colonoscopy.

What’s terrifying is that the Fourth Amendment to the United States Constitution is only as strong as judges allow it to be — and, by extension, only as strong as We the People insist that it must be. We the People are easily frightened into agreeing that the promise of safety outweighs the Fourth Amendment.

I’m not afraid because police officers violated David Eckert’s constitutional rights by raping and torturing him because they thought he might have a trivial amount of drugs. I’m afraid that they might not have violated his rights as defined by the courts, because we have allowed those rights to wither away out of fear and indifference.

The government will continue to act like that until we decide, collectively, that a government that would rape and torture a man to find a fistful of drugs is not worthy of our allegiance, obedience, or respect. The government will continue to act like that until we say “enough.” 

A Quick Fix Courtesy of Karl Marx

Privatize Social Security and the economy will roar back

by NATHAN SMITH

It is always a good time to privatize Social Security. In the long run, it is better for people to save for retirement, via portfolios of stocks and bonds, than to be dependent in old age on government handouts. The long-run case for Social Security privatization has been discussed before, especially in 2005, when George W. Bush had just been elected on a platform featuring Social Security reform. But doing it now has short-run benefits. Privatizing Social Security is the best way to get us out of this economic slump. Here’s why.

In broad terms, a pay-as-you-go system of public pensions, such as America’s Social Security program, reduces the overall savings rate, and therefore the growth of the capital stock and the economy. It corrupts the political system, turning it into a tug-of-war for society’s resources, as older generations demand payback for years of forced contributions—but get it from younger generations’ current production, via public tax-and-transfer systems. The government gets more current income, which it spends, and long-term obligations, burdening future taxpayers. Pay-as-you-go systems cheat the future, but the government can’t save without partially nationalizing private banks and corporations.

As for the current recession, economists and other pundits have a number of explanations. Keynesians like Paul Krugman and Matt Yglesias blame a “liquidity trap,” in which further injections of liquidity don’t stimulate the economy; they just get hoarded. In their own way, “market monetarists” like Scott Sumner (who blogs at www.themoneyillusion.com) believe this as well. 

On the other side, Tyler Cowen sees the 2008 financial crisis and the slump that followed as a symptom of a “Great Stagnation” that has been decades in the making, while Casey Mulligan argues that we are suffering a “redistribution recession” because minimum wages, more generous unemployment insurance, and other policy changes have made people less willing to work.

Escaping the Liquidity Trap

All of them are right. But it is the liquidity trap that Social Security privatization could solve. Two charts will help to illustrate what the liquidity trap means. First, business investment (using Bureau of Economic Analysis data):

The Language of Inflation

Modernity is the idea that society is understandable, hence must be designed, by humans

By Dylan Grice

Regular readers of our irregular publication will be aware of our thoughts on inflation, but for those who are not we would summarize them thus: inflation is not measurable. We can summarize our views on money with similar succinctness: it is poorly understood. And as for the economy, we know only this: it is a complex system. From these observations can be derived a straightforward corollary on economic policy makers: trying to control a variable you can’t measure (inflation) with a tool you don’t fully understand (money) in a complex system with hidden, unobservable and non-linear interrelationships (the economy) is a guaranteed way to ensure that most things which happen weren’t supposed to happen.

One such unintended consequence of the past three decades’ economic experiments with “inflation” targeting has been the unprecedented inflation of credit which today leaves the world burdened with debt as it has never been burdened before. In Issue 12 we wrote about another unintended consequence of this monetary experiment, a redistribution of wealth from the poor to the rich and, relatedly, a growing distrust both within countries and between them. Since money is based on trust, we concluded, devaluing money devalues trust.

Now, with the help of Google’s fabulous Ngram Viewer (which allows users to search word usage in five million digitized books published since 1600) we’ve recently stumbled upon another possibility, which is that the past three decades’ hidden devaluation of money has caused a subtle but significant devaluation of language too.

This might sound abstract. But language is the machinery with which we conceptualize the world around us. Devaluing language is tantamount to devaluing our ability to think and to understand. Inflation, whether credit inflation or otherwise, messes things up because it sends false signals. For the ordinary steward of capital in such an environment the near impossible task of judging what is real from what is not is difficult enough. But what chance does he have if in addition, his linguistic software has coding errors to which he is oblivious? This is a question which is perplexing us here at Edelweiss and what follows is an exploration of some of the issues as best we can untangle them.

We start our journey into the financial imagination at the beginning, by tracing an important idea which has had a profound effect, namely that society and the economy are things to be manipulated by expert policy makers. As Taleb opines in his wonderful bookAntifragile:

Modernity is not just the postmedieval, postagrarian, and postfeudal historical period as defined in sociology textbooks. It is rather the spirit of an age marked by rationalization (naive rationalization), the idea that society is understandable, hence must be designed, by humans. With it was born statistical theory, hence the beastly bell curve. So was linear science. So was the notion of “efficiency”—or optimization.

Supporting Taleb’s idea, the following chart shows how the word “optimal” has steadily gained prominence in the 20th century.

America's Descent to Tyranny

Tyranny is always capricious

By Mark Steyn

In the year 1215, Magna Carta provided a freeman of England with the right to a trial in a fixed, local law court, and protected him from being “amerced [fined] for a slight offence, except in accordance with the degree of the offence; and for a grave offence he shall be amerced in accordance with the gravity of the offence, yet saving always his contentment; and a merchant in the same way, saving his merchandise” – i.e., even for a “grave offence,” a man shall not be deprived of the ability to make his living.

Four-fifths of a millennium later, a 21st-century American merchant does not enjoy the rights of his 13th-century English forebear. The Economist reports on yet another case of “civil forfeiture” by the corrupt and diseased IRS – a Michigan grocery store owned by the Dehkos family:

Fairly often, someone takes cash from the till and puts it in the bank across the street. Deposits are nearly always less than $10,000, because the insurance covers the theft of cash only up to that sum.

In January, without warning, the government seized all the money in the shop account: more than $35,000. The charge was that the Dehkos had violated federal money-laundering rules, which forbid people to “structure” their bank deposits so as to avoid the $10,000 threshold that triggers banks to report a transaction to the Internal Revenue Service (IRS).

Cultural sclerosis

Things take 10x longer or don’t get done at all

Harry Reid claims there isn’t “a single shred of evidence” regulations cause big economic harm…”In the first six months of the 2011 fiscal year, 15 major regulations were issued, with annual costs exceeding $5.8 billion and one-time implementation costs approaching $6.5 billion…Overall, the Obama administration imposed 75 new major regulations from January 2009 to mid-FY 2011, with annual costs of $38 billion”…the Federal Register shows over 4,200 new regulations soon to hit an already battered economy — not including impending Environmental Protection Agency clean air rules, new derivative rules, the Federal Communications Commission’s net neutrality rule, fuel economy mandates, ObamaCare and Dodd-Frank financial restrictions. Yet Reid claims regs are harmless

Construction of the world’s tallest building, the Empire State Building took 14 months in 1930. The Pentagon, the world’s largest office building, took 16 months in 1941. 26 months from the beginning of construction, the World Trade Center became the tallest building in the world in 1970. It is 148 months since September 11, 2001 and its replacement is only now nearing completion. We need 10x the time to do things that were done a century ago.

Regulation certainly isn’t the whole story, but it’s a part of the story of America’s cultural decline. Look what happens when you incentivize performance and cut red tape — a project done in half the allotted time. So it can be done, but rarely these days. Daniel Greenfieldcomments that in today’s culture competence is denigrated and DC and its lawyers substitute the magic of government:

Competence is the real modernity and it has very little to do with the empty trappings of design that surround it. In some ways the America of a few generations ago was a far more modern place because it was a more competent place. For all our nice toys, we look like primitive savages compared to men who could build skyscrapers and fleets within a year… and build them well.

Obamacare Will Be Repealed Well In Advance Of The 2014 Elections

Obamacare represents the crisis of big government; the limits of administrative government have finally been breached

By Stephen Hayward

Prediction: even if HealthCare.gov is fixed by the end of the month (unlikely), Obamacare is going to be repealed well in advance of next year’s election.  And if the website continues to fail, the push for repeal—from endangered Democrats—will occur very rapidly.  The website is a sideshow: the real action is the number of people and businesses who are losing their health plans or having to pay a lot more.  Fixing the website will only delay the inevitable.

It is important to remember why it was so important for Obama to promise repeatedly that “if you like your health insurance/doctor, you can keep your health insurance/doctor.”  Cast your mind back to the ignominious collapse of Hillarycare in 1994.  Hillarycare came out of the box in September 1993 to high public support according to the early polls.  This was not a surprise.  Opinion polls for decades have shown a large majority of Americans support the general idea of universal health coverage.  But Hillarycare came apart as the bureaucratic details came out, the most important one being that you couldn’t be sure you’d be able to keep your doctors or select specialists of your choice.  The Clintons refused to consider a compromise, but even with large Democratic Senate and House majorities the bill was so dead it was never brought up for a vote.

Remember “Harry and Louise”?  Obama did, which is why he portrayed Obamacare as simply expanding coverage to the uninsured, and improving coverage for the underinsured while leaving the already insured undisturbed.  But the redistributive arithmetic of Obamacare’s architecture could never add up, which is what the bureaucrats knew early on—as early as 2010 according to many documents that have leaked.  The wonder is that Obama’s political team didn’t see this coming and prepare a pre-emptive strategy for dealing with the inevitable exposure of the duplicity at the heart of Obamacare’s logic.  Now that people are losing their insurance and finding that they may not be able to keep their doctor after all, Obamacare has become the domestic policy equivalent of the Iraq War: a protracted fiasco that is proving fatal to a president’s credibility and approval rating.  The only thing missing is calling in FEMA to help fix this Category-5 political disaster.

Founded By Geniuses And Run By Idiots

Food for thought…

H. L. Mencken correctly observed:

Government is actually the worst failure of civilized man. There has never been a really good one, and even those that are most tolerable are arbitrary, cruel, grasping and unintelligent.

Mencken also was prescient:

As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their hearts desire at last, and the White House will be adorned by a downright moron.

But this is not about Mr. Mencken. Rather it is about some unknown individual who committed the following to the email world:

• If you can get arrested for hunting or fishing without  a license, but not for being in the country illegally … you might live in a  country founded by geniuses but run by idiots.
• If you have to get your  parents’ permission to go on a field trip or take an aspirin in school, but not  to get an abortion … you might live in a country founded by geniuses but run  by idiots.
• If the only school curriculum allowed to explain how we got  here is evolution, but the government stops a $15 million construction project  to keep a rare spider from evolving to extinction … you might live in a  country founded by geniuses but run by idiots.

The Dream of the Peruvian

Mario Vargas Llosa’s writing defends liberty and reason

by Adam Kirsch

Mario Vargas Llosa must be one of the few great writers ever to have argued that society should place less trust in great writers. “The mandarin writer no longer has a place in today’s world,” he has observed. “Figures like Sartre in France or Ortega y Gasset and Unamuno in their time, or Octavio Paz, served as guides and teachers on all the important issues and filled a void that only the ‘great writer’ seemed capable of filling, whether because few others participated in public life, because democracy was nonexistent, or because literature had a mythical prestige.” But today, “in a free society, the influence that a writer exerts—sometimes profitably—over submissive societies is useless.”

The irony, of course, is that Vargas Llosa has had a higher public profile than almost any writer of his time. He has been famous ever since emerging in the 1960s as a leading figure of the movement called the Latin American Boom, and in 2010, he won the Nobel Prize in Literature. At the same time, he has been a vocal participant in the politics of his native Peru, even mounting a serious campaign for president in 1990. Though he lost the second round of the election to the future dictator Alberto Fujimori, Vargas Llosa established himself as one of the world’s most eloquent spokesmen for democracy and free markets—a position that puts him directly at odds with most Latin American intellectuals of his generation, who are likelier to share the dogmatic leftism of his contemporary Gabriel García Márquez. Yet even as Vargas Llosa insists on the need for reason and freedom in politics, his fiction has continued to explore the imaginative realms of unreason and obsession, primitivism and violence.

Risk Management And (The Illusion Of) Insurance

A bridge too far

By Nicole Foss

The expansionist post war era has been characterized by the development of the FIRE economy (finance, insurance and real estate), with a greater and greater dependence on leveraged risk. A necessary consequence has been increasingly sophisticated mechanisms for operating at financially rarified levels far removed from any basis in real wealth. As the network of economic and financial connections has broadened exponentially, and become increasingly complex, greater attention had been paid to apportioning and diverting risk, and to anticipating and avoiding losses through insurance.

Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss…The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss.

The use of, and dependence on, insurance has spread throughout society in developed countries, and has led to changes in the perception of risk. Rather than addressing risk directly through prudent behaviour or due diligence, risk management has become highly abstract. Being able to pay to officially offset risk can lead to the perception that risk has somehow disappeared. The supposed insulation, or buffer, adds to the comfort level of operating at high levels of leverage, in the same way that driving a vehicle with many safety features can lead to people driving more recklessly, because they feel more secure in taking risks they feel they control, or have paid to minimize.

Orwell, Huxley and the Emerging Totalitarianism

Both men foresaw the future as totalitarian rather than democratic and free

by Emmet Scott 

George Orwell and Aldous Huxley, two of England’s foremost literary figures of the last century, each wrote a compelling description of a future dystopia, both of them nightmare visions of society totally under the control of a ruling clique whose only purpose is the enjoyment of power. In Orwell’s 1984 the ruling tyrant is named Big Brother and is clearly modelled on Stalin, whilst in Huxley’s Brave New World the ruler is known as the Director, a character somewhat less sinister and brutal than Orwell’s Big Brother. The two books are of course very different. Brave New World is a black comedy, which does actually make us laugh, whereas there is absolutely nothing funny about 1984. Nonetheless, there are similarities between the two, and both men can be said to have accurately predicted certain specific features of the world we now inhabit.

The most striking parallel of course is that both men foresaw the future as totalitarian rather than democratic and free. Neither presumably believed their vision of the future to be inevitable, though it is equally clear that each saw aspects of mid-twentieth century life which clearly pointed in the totalitarian direction. Thus 1984 and Brave New World may be seen as warnings against what might be if the trends identified by the two authors persisted. What these trends were and why the authors saw them leading towards totalitarianism is an important question and one that will be addressed presently.