Thursday, November 17, 2011

The soulless agents of greed


Business and the Literati
For as long as the culture of business has been an integral part of American life, it has also been frowned upon by important sectors of our society. Among our intellectuals especially, the business world has been the subject of many brutal caricatures, portraying corporations large and small, and the people who run them, as heartless, soulless agents of greed. These caricatures have shaped our implicit understanding of the nature of the business world, so much that they have come to pass for conventional wisdom.
In recent years, one of the clearest expressions of the reigning caricature was that offered by the commencement speaker who addressed the graduating class of Arizona State University in May 2009. Warning the students away from what he described as the familiar American formula for success, the speaker put forward what he took to be the ethic of the business world:
You're taught to chase after all the usual brass rings; you try to be on this "who's who" list or that top 100 list; you chase after the big money and you figure out how big your corner office is; you worry about whether you have a fancy enough title or a fancy enough car. That's the message that's sent each and every day, or has been in our culture for far too long — that through material possessions, through a ruthless competition pursued only on your own behalf — that's how you will measure success. Now, you can take that road — and it may work for some. But at this critical juncture in our nation's history, at this difficult time, let me suggest that such an approach won't get you where you want to go; it displays a poverty of ambition.
As it happens, those words were spoken by the president of the United States, Barack Obama. But they could easily have been uttered by almost anyone with his education and intellectual pedigree. Those words convey an image that the architects of our elite culture's self-understanding — especially America's foremost authors and playwrights, who do a great deal to shape the way that other intellectuals, and Americans in general, think about our country — have long labored to construct.
The business of America may be business, but the business of American literature in the past century has been largely to insist that the nation is, in pursuing business, wasting itself on unworthy objects. In the eyes of most novelists and playwrights who deal with the subject, business is not an honorable vocation, but rather an obsessive scramble for lucre and status. Tycoons are plunderers. Salesmen are poor slobs truckling to their bosses, though most of them aspire to be cormorants and highwaymen, too. The mass desire to strike it rich has launched a forced march to nowhere. In short, American literature hates American business for what it has done to the souls of the rich, the poor, and the middling alike.
Right-thinking people now take it for granted that, in criticizing business, American literature has saved (or at least elevated) the nation's soul. But after a century of slander, that assumption needs revisiting. In so doing, it is worth examining the process through which our literati have framed the way we think about capitalism, and especially those who practice it. How did our culture come to hold the image of the businessman that it now does? Which literary works and authors have had done the most to shape that (mostly negative) image? And in this casting of the entrepreneur as villain in America's morality tale, which culture has been exposed as more corrupt — that of American business, or American letters?
RAKING THE MUCK
Boodlegraftscamgyphustlehoodwinkchiselflim-flamchicaneryrake-offskullduggeryswindle: Our language has a rich and evocative technical vocabulary for snake-bellied business dealing and the government malfeasance that is its indispensable servant. And beside the distinguished native tradition of underhandedness runs a counter-tradition of moral outrage and attempted reform, which emerged with force just as the culture of business was peaking at the turn of the 20thcentury.
In The Shame of the Cities (1904), Lincoln Steffens — dean of the muckrakers, the vanguard of investigative journalists who early in the 20th century drew the public's attention to the filthier aspects of our national life — pronounced all Americans complicit in sin: "We break our own laws and rob our own government, the lady at the custom-house, the lyncher with his rope, and the captain of industry with his bribe and his rebate. The spirit of graft and of lawlessness is the American spirit."
Soon after, Upton Sinclair's novel The Jungle (1906) became the most celebrated muckraking work of its time; a century later, it is the only one still widely read. The story relates the brutal suffering of a Lithuanian immigrant meat-packer in Chicago, and sickened the country with indignation at the execrable manner in which food was processed. Nauseating the readership had practical benefits: President Theodore Roosevelt's admiration for the novel — qualified by his distaste for Sinclair's socialism — issued in the passage of the Pure Food and Drug Act and the Meat Inspection Amendment the same year as The Jungle's release.
Sinclair's socialist loathing for the capitalist oppressors thunders through the novel. Here a speaker who will inspire the downtrodden hero to join the Socialist Party roars at the prevailing injustice:
There are a thousand [in Chicago] — ten thousand, maybe — who are the masters of these slaves, who own their toil. They do nothing to earn what they receive, they do not even have to ask for it — it comes to them of itself, their only care is to dispose of it. They live in palaces, they riot in luxury and extravagance — such as no words can describe, as makes the imagination reel and stagger, makes the soul grow sick and faint. They spend hundreds of dollars for a pair of shoes, a handkerchief, a garter; they spend millions for horses and automobiles and yachts, for palaces and banquets, for little shiny stones with which to deck their bodies. Their life is a contest among themselves in ostentation and recklessness . . . .
Thorstein Veblen, whose Theory of the Leisure Class (1899) provided the muckrakers with an abstract sociological foundation, lamented with a characteristically dry eye that vice does a man more good than virtue if he wants to get on in the world: "Freedom from scruple, from sympathy, honesty, and regard for life, may, within fairly wide limits, be said to further the success of the individual in the pecuniary culture." From Veblen, whom he read with "a continuous ebullition of glee," Sinclair learned the shame of conspicuous consumption: Lives wasted in profligate expenditure never appear more repulsive than through Sinclair's eyes. His novel The Metropolis (1908) is a 200-page catalogue of exorbitant self-indulgence by the wealthiest people in New York. Preposterous extravagance and pretensions to gentility constitute the obverse of tearing wolfishness; persons of savage appetite bare their teeth when denied their rightful pleasures. In The Moneychangers (1908), a priapic 80-year-old banker — the most powerful man on Wall Street — destroys his sexual rival and the young woman he wants, and brings on a nationwide depression in the process, just to teach the rabble to fear their masters. Sinclair's villains are peerless in their malignancy.

Infinite repetition


Finance in Parrot Talk

By Anthony de Jasay*
George Stigler, the 1982 Nobel laureate, was almost as great a humorist as he was an economist. His deadpan irony was devastating. In his The Economist as Preacher and Other Essays he speaks of "that most irresistible of all the weapons of scholarship, infinite repetition."1
I call "parrot talk" the loud and relentless repetition of some plausible fallacy that is first launched as an original and debatable notion by some minor authority or small group, often with an axe to grind, and then, by a mysterious process of perverse selection, is taken up and hammered home by public intellectuals and the media, triumphantly becoming a firmly established truth. When used as prophecy or forecast it is liable to be self-fulfilling. When used as explanation and diagnosis, it dictates the remedy. In either case, it is capable of causing deep and lasting damage in political thought and the public policy the thought tends to shape.
In the present column and the one next month I will be dealing with a few particularly insidious and dangerous subjects of parrot talk. I will first recall a few that I had identified in earlier writings. Then I will present some more recent untruths, such as the idea of "financial capitalism", the supposedly vital need, to stock up the banks with extra capital, monetisation of the debt, and the alleged vices of modern capitalism, such as speculations and short-termism.
Fundamental Fallacies2
Among my Collected Papers there is an essay entitled "Parrot Talk."3 It treats a number of fallacies in political philosophy that, looking plausible and pleasing to most people's ears are being repeated on every possible occasion with an air of assured conviction. Each time they are declared, more academic parrots take them up and relay them in ever wider circles until they become ineradicable common knowledge that feeds prevailing political thought.
One of these fallacies, pilloried in "Parrot Talk," is the separateness of production and distribution. The gross national cake is first baked according to the laws of economics, and then sliced and distributed according to the collective decisions of society. It remains unsaid that the very reason why a cake of a certain size is baked at all (rather than a sweeter, bigger or smaller one or indeed none) is that its distribution will be of a certain kind and not a different one. Income is not a grabbed and redistributed with impunity without reacting back on production.
Another fallacy, often repeated to reassure the voter called "liberal" in English English that he has little to fear from the candidate called "liberal" in American English, is that it is possible to bring about equality of opportunity without enforcing equality of outcomes. It takes a minute of extra thought to realise that once preceding outcomes are allowed to be unequal, current opportunities cannot possible remain equal.4 But this extra minute of thought is suppressed by the rising noise of parrot talk. Finally, the essay notes that the most widely accepted modern theory of justice lays down, as its first principle, that everybody must have a right to the greatest possible liberty compatible with the same liberty for everybody else. One may ask why having a right to liberty is better, or different, than having liberty itself. Adding the "right to" should raise suspicious second thoughts, or perhaps it is just empty verbiage—but having a right always sounds nice, and passes well in parrot talk.
Must Safety-First Economics Prevail?
What the earlier "Parrot Talk" essay sought to do in political thought, the present one aims to do in the current language parrots use about finance. It is written by taking as read certain well-established theses of neo-classical economics that are basic to what in English English is called "liberalism".
Thanks to incessant repetition in the last few years, public opinion is now convinced that risk is a bad thing and ought to be purged from the economy as far as possible. Economics, on the contrary, teaches that some risk is inevitable because the future is not predictable, and necessary for efficiency. The size and severity of risk and its price should and under a regime of free contract would adjust to each other. The wish to avoid risk by paying the market to bear it (e.g. by hedging, forward dealing or insurance) would, in equilibrium, be equal to the willingness of the market to assume that risk. This situation is an optimum, because neither the marginal risk-avoider nor the marginal risk-bearer can expect to do better by moving away from it. The spectacular stock and bond market losses of 2008-2009 showed that the expectations of large operators, such as the insurer as AIG, may occasionally be spectacularly wrong (especially if biased by existing regulations and Fannie Mae activities, as was the case in the U.S. residential mortgage market), but they did not invalidate the theorem. The losses were the outcomes of zero-sum games and as far as one can tell, they involved no destruction of tangible value. As Milton Friedman would say, for every loser, there was a gainer. Damage did occur due to massive mismanagement of the shock waves, but not because risk was allocated by price in the first place. After all the ensuing parrot talk, the received truth now is that risk is bad and almost reprehensible and should be purged from the system. Poor system! Risklessly, it would be heading for an unpromising future.
The condemnation of risk and particularly of its assumption by professional risk-bearers has become a rock-solid dogma. It is not the only one that is firmly believed because everybody else seems to believe it and is saying so. The over-arching untruth that assiduous parrot talk is converting into a new truth is that the freedom of contract, the basic enabling condition for allocative efficiency in the economy, is "all right in theory but does not work in practice" and needs to be limited and regulated in an ever larger variety of sensitive contexts, many of them in finance. Loses made by any lame duck industry must be doctored because they are obviously bad things. Finance attracts the curiosity of the busybody because its techniques are ill understood and it is shrouded in an air of mystique and power.

"Finanzkapitalismus"
German parrot talk has achieved the feat of uniting in a single word two of the most hated ideas that in other current languages would take two or more to express.
There must be some people, though not very many, who would be happier as cavemen or nomadic herdsmen battling periodic famine and the cruelty of elements than denizens of our urban civilisation. For the rest of us, however, the populist dreams of abolishing the "dominance of money and the dictatorship of the market", as well as seeking "production for real needs, not for profit" should and can be dismissed as irrational ranting. It would be rational if we harboured a strong streak of masochism that could best be satisfied by self-inflicted economic and social pain.
At a more sophisticated level than masochistic oratory, a few standard accusations are obstinately levelled against finance, capitalism or both. Often no distinction is drawn between the two, which can be excused on the ground that finance and capitalism have flourished together and though each can be imagined without the other, the result looks painfully contrived. Quantitative economic planning by input-output matrices, on the one hand, and market socialism on the other, are examples of such contrived monstrosities. You can perhaps run an economy without prices set in a single money of account, but it looks hardly promising. You can perhaps run a money economy while suppressing the profit motive, but it looks unpromising, too.
The steady stream of parrot-talk charges come under two headings. One is morality. Capitalism is immoral because it promotes immoral or at best amoral conduct in pursuit of a morally worthless objective, profit. It also generates inequality of material conditions among men, and relations of subordination. It is not realised that all economic systems, except perhaps subsistence farming, do these things and have done so through history. Where capitalism is superior to its real or putative alternatives is in its relation to morality. It is the only system where the optimal rule to follow in order to achieve success is "honesty is the best policy", ( though following a rule is not the only or necessarily a better road to success than not following one). Capitalism, as has been recognised by the more intelligent among its defenders, systematically economises morality: it needs less of it than other systems in order to function properly. It achieves more with morally fallible human agents than in other systems could hope to do by relying on the scarce supply of clean-handed, selfless, public-spirited people they could find. Capitalism shrinks the opportunities for corruption, pre-capitalist and socialist systems open them widely.
Under the less high-minded heading of stability and efficiency, parrot wisdom, particularly since the mayhem of 2008, has it that an excessive financial superstructure renders the economy top-heavy, crisis-prone and badly in need of re-regulation after the decades of doctrinaire free-marketism of the latter part of the 20th century. This charge, for all its plausibility with bank rescues and stubborn unemployment weighing on our minds, is nevertheless an arbitrary one. The capitalist economies and in particular their financial service sectors prior to 2008 were too lightly regulated in the view of some, too heavily in that of others. They were in either view hybrids. There is no earthly way of telling, from the performance of a hybrid system, what the performance of a pure system would have been. Maybe putting the banks in straitjackets would have averted 2008, maybe setting them really free to swim or sink would have done it. Maybe neither would have made much difference. But pretending to know that more regulation was needed, as Mr. Volcker, Mr. Mervyn King, Dodd-Frank legislators and the Basel committee do and as incessant parrot talk to the same effect raises to the rank of a self-evident truth, should not be allowed to serve as an argument-stopper.
Probably the best French current affairs commentator exclaimed the other day that every day hundreds of billions of money transactions flow through the exchanges without the least attempt by governments at regulating them, and this was truly terrifying and inadmissible. She might as well have added that every day hundreds of billions of hectolitres5 of water slosh about in the oceans without the least attempts by governments to regulate them, and this was truly inadmissible and terrifying.


Footnotes
1. George J. Stigler, The Economist as Preacher and Other Essays. (Chicago University Press, 1982), p.122.

2. [Editor: Anthony de Jasay continues the great tradition in free market economics of exposing the commonly held "fallacies" which prevent clear thinking on economic matters. The 19th century French political economist Frédéric Bastiat was a master of this form (see his Economic Sophisms (1848) available online at the Library of Economics and Liberty and at the Online Library of Liberty). In our own century there is Thomas Sowell, Economic Facts and Fallacies (New York: Basic Books, 2007, 2011) and the "letters to the editor" by Prof. Don Boudreaux at Café Hayek.]

3. [Editor: To avoid confusion one needs to distinguish between the general concept of "parrot talk" which Jasay is exploring in this essay, and the essay in his Collected Papers which has the title "Parrot Talk".]

4. This point was made by Robert Nozick in his discussion of the earnings of Wilt Chamberlin in Anarchy, State, and Utopia. (New York: Basic Books, 1974), "How Liberty upsets Patterns," pp. 160 ff.

5. [Editor: A hectolitre is 100 litres, which is the equivalent of 26.4 U.S. gallons.]

Politics and religion


WHAT DOES CO2 HAVE TO DO WITH CLIMATE?
BY JOHN HINDERAKER
Little or nothing, if Tim Ball is correct. This post on his web site packs more iconoclasm (and useful information) into a shorter space than just about anything I have read on the subject:

Recently a Japanese Research Institute published a satellite map of sources of CO2 emissions. It was virtually ignored by the mainstream media, but that has become an inverse measure of its significance to the climate debate. It showed a pattern that most would not expect because of the misleading information presented by the Intergovernmental Panel on Climate Change (IPCC) amplified by most media.

Here it is:
North America is a net consumer of CO2. Dr. Ball explains: 
“The map is only surprising if you believe that humans are the primary source of CO2.” 
But he is just getting warmed up:
The oceans are the main control of atmospheric CO2 as one of the atmospheric gases in constant flux between the water and the atmosphere. The ocean’s ability to absorb CO2 is a function of its temperature – cold water absorbs more CO2 than warm water.
This is why whenever the Earth’s climate gets warmer, it is followed by an increase in atmospheric CO2.
There are several misconceptions about CO2, most created because proponents tried to prove the hypothesis rather than the normal scientific practice of disproof. It helped them if the misinformation created unfounded fears. An early IPCC claim said atmospheric residency time of CO2 was at least 100 years. Done, ostensibly, for the political point that even if we stopped production immediately the damage was done. We now know the actual time is at most 5 to 6 years. The major assumption of the hypothesis says a CO2 increase causes a temperature increase. After publication in 1999 of Petit et al., Antarctic ice core records were presented as evidence. Just four years later proof that the major assumption of the hypothesis was wrong appeared. Somehow it was shuffled aside, probably because of the diversionary claim that the lag was between 80 and 800 years. It doesn’t matter, it still contradicts the basic assumption. Temperature change before CO2 change is the case in every record for any period or duration is studiously ignored by proponent and skeptic.
Humans actually have little to do with the production of CO2:
According to the IPCC, who produce the original numbers, humans produce approximately 9 gigatons of CO2 per year. This is within the error factor for the amount of CO2 from at least two natural sources. Estimates of CO2 from natural sources are very crude as evidenced by the large error factors. Reports with headlines like, “Forests soak up more CO2 than thought” and “Old-growth forests absorb CO2 too: study” keep appearing. In 2010 humans produced 9 gigatons, but ocean output was between 90 and 100 gigatons and ground bacteria and rotting vegetation was between 50 and 60 gigatons according to Dr Dietrich Koelle. Spread the human annual production across the planet and it doesn’t even show on the world map. The pattern confirms this because it reflects natural sources.
Global warming alarmism isn’t science, it it a combination of politics and religion. Dr. Ball sums up: 
“Science must be about skepticism, otherwise the science is settled, but then it isn’t science.”
UPDATE: The alarmists are trying to shut Dr. Ball up. Two of them, the notorious Michael Mann and Andrew Weaver, are suing him for libel. Dr. Ball, one of Canada’s foremost climatologists (now retired) said of Mann that he “should be in the State Pen, not Penn State,” for his role in covering up climate fraud, and of Weaver that he cherry-picked scientific data in his work with the IPCC. It would be great fun to conduct discovery on Dr. Ball’s behalf, but that costs money–money which Mann and Weaver assume that Ball, a retired academic, does not have. You can contribute to Ball’s legal defense fund at the linked web site.

Wednesday, November 16, 2011

The China Model is falling apart


By Dinocrat
Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis — on the brink of bankruptcy. In his memorable formulation: every province in China is Greece. The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not post his speech online, or “everyone will look bad,” in the audio that is now on Youtube…
Lang’s assessment that the regime is bankrupt was based on five conjectures. Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.
Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang. Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.
Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010). Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said…
Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched.Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.” Further, Xie said that official figures shouldn’t be relied on.
Oh those empty cities. Also in the piece above: “former aide to ousted Party leader Zhao Ziyang, said that high praise of the ‘China model’ is often made on the basis of the high-visibility construction projects.” We recall some of that praise from a few years ago.

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.