Al Gore Loses Yet Another Recount

On December 18 1999, NASA lifted the Terra (EOS AM-1) satellite into sun-synchronous orbit aboard an Atlas IIAS SLV from Vandenberg AFB [California]. Its five sensors began collecting data on February 24 2000 with the mission of monitoring Earth’s atmosphere in order to quantify climate change. The results? “The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show. There is a huge discrepancy between the data and the forecasts that is especially big over the oceans.”

In other words, the “settled science” of man-made global warming was wrong. The panicky push for carbon regulation has been based on bad science, and has cost the world economy hundreds of billions of dollars in GDP (and therefore jobs). The administration’s focus (read: wasted subsidies) on green jobs has stifled the real economy while trying to recover from a severe recession.

This administration’s jihad against oil has added to the needlessly weakened dollar in keeping energy costs high, and cost thousands of jobs, all of which will only get worse if our national credit rating gets downgraded. And now they want to eliminate depreciation rules for corporate aircraft, putting 14,000 jobs in the civil aviation industry at risk. Even their made up “jobs saved” nonsense doesn’t work when you think about it: any job truly “saved” by “stimulus” funding vanishes when “stimulus” money dries up. Everything this administration has done has either vastly increased indebtedness, strangled business or directly cost jobs. All in the name of recovery. No wonder our foreign policy – in the name of advancing American interests – is in shambles.

Liberalism isn’t being opportunistically attacked by conservatives – it’s being attacked for the real harm it’s doing to America and its people. It just hasn’t worked, and that’s the bottom line (and the worst sin in the eyes of Americans). We will grumble and moan as we “eat our peas,” if it works; we get angry if we suffer through it for nothing. And we as a nation, Democrats as a Party, and liberals as a movement, knew this going in. Henry Morgenthau Jr, FDR’s Treasury Secretary and an architect of the New Deal, questioned the value of the deficit spending that had not reduced unemployment and only added debt: “We have tried spending money. We are spending more than we have ever spent before and it does not work. I say after eight years of this administration we have just as much unemployment as when we started … And an enormous debt to boot.” Eight years! How many years do we punish ourselves with failed ideology this time around?


Dr Roy Spencer, University of Alabama [Huntsville] press release, July 26 2011.

John Morton Blum, Roosevelt and Morgenthau, Houghton Mifflin, 1970 p. 256.

Henry Morgenthau Diary.

a Case of Mistaken Identity

Democrats liken President Obama to FDR, who, interestingly, had his legacy salvaged by Fleet Admiral Isoroku Yamamoto; while Republicans liken him to Mikhail Gorbachev, who struggled to sustain a doomed theory of governance. The Democrats’ dependency agenda – swelling their own ranks by swelling the ranks of government employees, multiplying government-subsidized industries, enveloping evermore individuals into the entitlement culture – is buckling under the intractable contradiction that it is incompatible with economic growth sufficient to create enough wealth to feed the ever-increasing tax-eaters. You can’t have more takers than makers.

Large systems don’t turn corners, they flow from one state to the next. The Republican gains of 65 House seats and six Senate seats in 2010 were historic, yet only gave them control over one-half of one-third of government. Big things change slowly and that’s good. It tends to attenuate whims and fads, yielding vector-changes only after multiple corrections. This reduces shock to the system while constantly aspiring to harmonize to the greater currents of history.

The lessons here for the Tea Party are to hold firm but have patience. Time is on their side. If they wish to continue to exert a positive force on American politics, they should realize that their agenda isn’t going to be installed “all at once.” Nor should it be. The problem with weaning people from vampiric dependency is that they are … well … dependent. We are losing the culture of achievement, and that is what must be reinstated before a return to the America that achieved greatness once again becomes self-sustaining. In the meantime, there is enough evidence that Europeanization is wrongheaded – just look at Europe itself: Greece, Italy, Spain, Portugal, Ireland, and the states that have most vociferously bought into the myth: California, Illinois, New York. A move away from meritocracy is a move away from posterity.

The Republicans are losing the public debate on the debt-ceiling because they are arguing budget issues instead of debt-creating criteria. While this may seem like hair-splitting, there is an important difference: a promise to balance the budget is meaningless – Democrats aren’t even serious about the attempt. Five months ago, the president submitted a budget that would have accelerated indebtedness, and that the Senate rejected 97-0. It didn’t even pass the laugh-test with Democrats. Just three months ago, he was demanding a “clean” increase in the debt ceiling, containing nothing to slow the spending orgasm. Today, he admits “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up (assuming tax increases to be a given).” Last year, he advertised ObamaCare as a sufficient reform of healthcare (including Medicare). He denounces Republicans as uncompromising regarding tax increases, but then demonstrates his own intransigence by vowing: “I will not accept” a deal without increased taxes. Negotiations chaired by Vice President Joe Biden had identified $2 billion in 2012 discretionary spending cuts – a sum equal to a rounding error in the General Motors bailout. In his press conference Saturday, President Obama began by disdaining “finger-pointing and assigning blame,” and then spent the next thirty-five minutes pointing fingers and assigning blame. Welcome to the 2012 campaign.

The Democrats constantly scream that the Republicans won’t compromise. Compromise with what? There is no Democrat proposal on the table, only vague promises and glittering generalities. This administration just has no credibility left on these issues (as well as foreign policy, but that’s another conversation). The Tea Party should jump at the deal of spending cuts now for a promise to restructure the tax code later. Both are important to Republicans, and this deal recognizes that reining-in spending is vastly more important. This administration has brought us to the brink of risking our reputation of dependability in the world at large.

That’s where the 2012 elections should pivot.

DC Hold ‘Em

If our elected “leaders” insist on playing World Series of Poker with our economy, then the Republicans ought to go all-in and see if the President has the hole cards to get out of the corner he’s painted himself into.

President Obama is insisting on increasing revenues – apparently doesn’t have the political courage to utter the words “raise taxes” – and Wednesday added that he would veto any short term deal – he doesn’t want this debate again, even closer to the 2012 election. This leaves the Republicans with an interesting option: call his bluff.

Pass a bill through the House that raises the debt ceiling by enough to get us through the end of this fiscal year (September 30) with ~$300 billion in cuts and no tax increases. Or, they could pass a bill through the House to give the full $2.4 trillion debt ceiling raise that the President wants, but with ~$2.4 trillion in cuts after which the tax loopholes he wants to be closed are closed (cuts first, then new taxes). Let the Senate and the President reject them and explain to us why they’d rather face default (or whatever their horror story is that week) than get the increased debt ceiling they say they need.

Whatever deal is reached, Republicans should insist on getting the cuts before any tax increases take affect. Conservatives have been played by liberals for years, agreeing to tax increases now for a promise of spending cuts or reforms that never happen. This time around, Republicans need to get the cuts first (and then follow through on the taxes).

A wild card in this debate is the growing noise favoring a balanced-budget amendment to the Constitution. I’ve got a few thoughts on that subject. Although this is wholly within the purview of the Constitution – which is a document about how government should live, not how the people should live – it is pathetic when college-educated elected officials must be legislated into rationality. Having said that, it is obvious that those we choose to send to Washington are incapable of acting rationally, so an amendment is gaining popularity. The problem is that the spenders will write the amendment – it will be so shot-through with escape clauses that we will always be living under some “emergency” condition that allows them to continue spending with carefree abandon.

The way to rein-in spending with an amendment is to cap the amount of federal spending to some percentage of GDP while capping income tax revenues to the same number, requiring a two-thirds supermajority of both Houses to raise either. Honest emergencies will get the vote – political emergencies will not.

a Time for Calm

Let’s take a deep breath and look at where we are, and at what’s the norm. Everybody seems to agree that the current vector of government needs adjustment. That’s where agreement ends.

We are on track for running trillion-dollar deficits ad infinitum, so the track needs changing. The root question is, do we aim for post-World War II norms, or do we wish to set a new norm (and if so, why so). Revenues, spending and unemployment are the three metrics most often held up as points of contention, so let’s look at those. Post-World War II, we have averaged raising ~18% of GDP in taxes, and today we are bringing in ~17% of GDP. Our post-World War II average of government spending has been ~20% of GDP, right now we are spending ~26%. Post-Great-Depression, 4% unemployment has been considered “full employment”, and we have averaged ~5%, post-World War II. Today, that number is at 9.2%.

Taxes first. By far, the most potent factor in raising or lowering revenues is GDP growth or shrinkage. The problem Congress – no matter who is charge – has with sensible tax policy is that they use static scoring. They assume that human behavior doesn’t change in reaction to tax policy. This is why rate increases never raise as much revenue as Congress thinks it will. Another problematic aspect of tax policy is that Congress intentionally misleads voters on what they are doing – they call a one-time-only rebate a “tax cut” (only rate changes are “tax increases” or “tax cuts”); they talk of “millionaires and billionaires” while meaning anyone making over $200,000 or $250,000; our entire tax code is shot-through with exemptions (read: loopholes) for contributors, special interests and corporations that the authors invariably call “evening the playing field”, while they actually unfairly tilt it; on and on. While the code desperately needs simplification, there’s not time to do that before we address the current problems of deficit and debt. I would say that tax increases that would bring us back up to 18% of GDP would be fair (contingent upon spending cuts, below).

Spending. There’s no question that we have embarked on an historic spending binge. The spenders will tell us that it was all necessary to address the crisis within which they found themselves. The credit markets were failing, and that has been saved (that lenders aren’t lending is now voluntary behavior, not one driven by a lack of liquidity, which was the crisis). Zeroing-out bond-holders in General Motors and Chrysler has had a negative affect on bond issues – investors can no longer trust the sanctity of contracts – and this is another hurdle for businesses getting capital, which, in turn, has an artificial depressing effect on interest rates, which invites inflation (especially with a trillion or so in pent-up liquidity in the banks and corporations). All of this begs government spending to “solve” a capital-flow problem that it created. Then there’s the voluntary creation of a vast new entitlement program in the midst of a spending crisis. ObamaCare makes sweeping changes to 17% of the American economy in one, bloated, ill-thought-out program that is permeated with intended and unintended consequences. Our legacy entitlement programs are unsustainable. Again, there isn’t time to address all of this before deficit and debt decisions must be made. I would say that spending cuts to bring us back to spending 20% of GDP would be fair (even though that sustains an historical average of a 2% of GDP annual deficit. Again, contingent upon tax increases, above).

Unemployment. There are two major factors in establishing unemployment norms: GDP growth and technology. GDP growth must at least match population growth in order to keep the ratio of economic activity to workforce stable. Increasing technological norms tend to increase automation and complexity of the workplace, the former requiring fewer people to do the same things; the latter requiring an increasingly sophisticated workforce. These are immutable forces in the American economy, not policy decisions (short of intentionally dumbing-down the economy so that automation ceases and the workplace stays at current or lower levels of complexity). GDP growth answers most of our ills – revenues, employment, research and development, innovation, entrepreneurialism, and so on.

The question is, of course, how do we get anemic GDP growth to accelerate? What are the sectors or sector-segments that can jump-start overall growth? Historically, that has been small business. Not only does small business account for 70% of new hires in this economy, they require less capital for market entry; they are far more agile in reacting to fragile markets and changing conditions; they are quicker to pick up on niche-markets and far better at adapting to fickle public tastes. By far the best way to invigorate both employment and GDP growth is to cater to small business formation.

How do we do that? Define “small business” as those employing less than 500 people, then exempting them from unnecessary regulations and unnecessary taxation. Ease venture capital flow by establishing a government guarantee of up to a million dollars for qualified startup loans (Intel was started with $80,000 of venture capital). This is one place government could actually fulfill the task, but I don’t trust politicians and bureaucrats to objectively evaluate business plans, or to keep their fingers out of the profit pie. Universities could also be of great assistance in this realm – Stanford has established a program that helps their post-grad students start up businesses based on their specialty, provided they do so in the area (can you say “Silicon Valley”?) and that the founders guest-teach classes in their specialty. Stanford also hands graduates any patents they have gained while in class. Most universities keep the patents, and have paltry “business incubators” that are no more than referral services.

All three of these fields have severe structural problems that need to be addressed, but with markets in mind, not politics. To heal the economy, politicians must concern themselves with what the economy needs, not with bottom-feeding for votes.

We simply must expect more from our elected officials than bribing us with our own money.

Russia Becomes the Preeminent Manned Space Power by Attrition

clip_image002

Our last shuttle Lifted off from Pad 39A at the Kennedy Space Center at 1129 on Friday morning, beginning STS-135, a twelve-day mission to the International Space Station. After its recovery, we will voluntarily hand manned space operations to the Russians and Chinese. America is fundamentally changing.

The orbiter Atlantis, hull number OV-104, represents the death of American manned space flight, ending around four thousand high-tech, high-paying jobs across the country – yet another economic blow to an industry reeling from the cutting of F-22 production in half (ending over a thousand and a half high-tech, high-paying jobs across the country) and denying Boeing the opportunity to create a thousand high-tech, high-paying new hires in South Carolina (plus the upcoming “luxury tax” on corporate aircraft – threatening God knows how many high-tech, high-paying jobs, and possibly some companies themselves). If this dismantling of the American aerospace industry is somehow part of the president’s jobs plan, he needs to sit down and explain it to us.

As has been widely reported, Russia will train and equip a civilian tourist and lift them to the International Space Station for $20 million each. Our already trained and equipped astronauts will be lifted in those same aging Soyuz spacecraft (they are older than the shuttles) for $50 million each.

clip_image004

Photo: Leland Kesler

The shining city on the hill just got a little dimmer.

Pound the Table and Scream

There’s an axiom for trial lawyers – if the facts are working against you, pound the table and scream the law; if the law’s working against you, pound the table and scream the facts; if both are working against you, just pound the table and scream. That’s what I got out of Richard Stengal’s Time Magazine article One Document, Under Siege. In it[1], he posits the liberal argument for the Constitution being more of a guideline than a rule.

Mr Stengal begins with the familiar stanza: “Here are a few things the framers did not know about: World War II. DNA. Sexting. Airplanes. The atom. Television. Medicare. Collateralized debt obligations. The germ theory of disease. Miniskirts. The internal combustion engine. Computers. Antibiotics. Lady Gaga.” This is the main thrust of liberal attacks on the credibility of the Constitution – it’s old! It was written by a bunch of rich white guys who never heard of Lady Gaga[2]! What’d they know?!

I have no idea what any of Mr Stengal’s examples has to do with the Constitution.

He offers a general soliloquy about some of our modern situations by asking what the Framers would think about them, narrowing the discussion to focus on four such issues: our participation in Libya’s civil war; the debt ceiling; the Affordable Care Act; and immigration. Before espousing on those subjects, however, he mentions in passing the “crazy” idea of each state having equal representation (despite vast population differences) in the Senate. I wish Mr Stengal had made this one of his more detailed arguments, as it, in absentia of explanation, leaves only a rather astonishing ignorance of our bicameral system of federalism, and why the Framers established it.

Using Libya as exemplar of the unconstitutionality of the War Powers Resolution, I tend to agree with him (and all US presidents from Nixon to GW Bush) that the Resolution does usurp Congress’s power to commit the nation to war and to sue for peace. There are presidential tools to deploy weapons-hot forces in an actual emergency (e.g., impending or immanent attack), but the run-up to situations like the ones Mr Stengal mentions (Libya in 1986, Panama in 1989, Somalia in 1992, Bosnia in 1995 and Kosovo in 1999) included ample time for the president to acquire a congressional declaration ante bellum. Made more complicated by being a UN undertaking, our current involvement in Libya is no different – in fact there was an inordinate amount of time before our entry into combat operations to stretch credulity qualifying it as an “emergency.”

The furor swirling around the debt ceiling is hopelessly clouded by disingenuousness. The (multiple) “drop-dead-lines” are arbitrarily set by the Treasury Department; inflowing revenues comprise over 70% of everything the Democrats want to spend, debt service being ~6% of that; and Mr Stengal is correct in saying that actually defaulting on debt held by the United States is forbidden by the Constitution (14th Amendment, Section 4). What would have to happen, should the debt ceiling be frozen, is that the Executive would have to pick and choose what programs to fund at what levels in order to maintain interest payments and Treasury Bond redemptions. The rest is all politics.

The constitutional question regarding the Affordable Care Act is the mandate justified by the Commerce Clause, and that is being adjudicated as I write. The Sixth District in Cincinnati, by a three-judge panel, just upheld the mandate 2-1, saying “Congress had a rational basis for concluding that the minimum coverage provision is essential to the Affordable Care Act’s larger reforms to the national markets in healthcare delivery and health insurance.” Well yeah, but “essential” doesn’t necessarily mean “constitutional.” Mr Stengal goes on to say that “[the mandate is] not universal; people who are on Medicare and Medicaid, for example, don’t need that coverage.” Huh? Medicaid is the program all those “who like their coverage” are being pushed into by the Affordable Care Act – Medicare and Medicaid are, themselves, insurance coverages, so no, they won’t be compelled to buy private policies. Specious argument.

On immigration, Mr Stengal proffers an excellent explanation of the 14th Amendment’s anchor-baby provision and its post-slavery rationale. While I agree that it has outlived its usefulness to assure slaves that they and their progeny are unequivocally citizens, I don’t agree with him that jus soli should be waived as a qualification for a candidate for the presidency.

So after an opening hostile to the Constitution as written, Mr Stengal’s detailed discussion seems to uphold the Constitution’s provisions he chose to highlight, the anchor-baby provision excepted. The article concludes by continuing the opening’s hostility toward assuming the Authors meant what they wrote. He failed to make an actual argument that discredits the Constitution’s ability to deal with any of the contemporary issues claiming to require interpretive agility. Mr Stengal obviously has a problem with people questioning the legal pedigree of the Affordable Care Act’s mandate, but that is being adjudicated. He notes that, “a constitution in and of itself guarantees nothing. Bolshevik Russia had a constitution, as did Nazi Germany. Cuba and Libya have constitutions,” all of which is true, but he fails to mention that all of those are strong executives of the sort he argues we need. Those societies are of the type from which our Constitution, as written, differentiates us. The balance of the branches – each having oversight of the others – all but renders such disregard of a constitution impossible. We’re living an example of that process as some 26 cases work their way through the courts, serving as a check on the legislature (an executive check – signing or vetoing – already having taken place). Liberals may well find the Constitution inconvenient, but I see nothing here that transgresses beyond that.


[1] Richard Stengal, One Document, Under Siege, in Time Magazine, June 23 2011.

[2] But they were conversant with Aristotle, Plato, Thomas Aquinas, Thomas Hobbes, John Locke and Adam Smith, among others.