Thursday, October 23, 2008

Reasons Not to Vote for Obama

Havana 11 queries about the propriety of the Hatcher voting against a Phillies fan during a World Series Run. I would ask the opposite of him - given what you know about Philly fans, does VP rank high on the list of things that they are generally qualified for?

Anyway, winning game 1 of the World Series is very nice, but no Philly fan can avoid thinking "1983", when we took the first game and dropped the next 4 to Baltimore. But I believe we played that first game at home, so they are not quite the same. And last night's victory gives this particular team more playoff victories in a season than any Phils team ever, if only by virtue of the expanded playoff platform. But every silver lining has a cloud. We should have Hamels come back and pitch game 4 and 7 (if necessary) and squeeze Jamie Moyer out of the rotation for the World Series - he is this year's Mitch Williams - a guy who helped get us here but has nothing left. But instead Manuel is sticking with him. Also our hitting is reminiscent of the Flyers scoring in the 1987 Stanley Cup finals against Gretzky's Edmonton Oilers. In that series, the Oilers would get 33 shots on goal, the Flyers would manage 3 (all slap shots from the blue line), and they managed to win three of the games 3-2.

This World Series run begins my run of sleepless nights that culminates with the election. The Wife and Hatcher and I are planning to invite some of the conservatives in the neighborhood over for an election night party because one way or another I am going to want a couple of drinks. The night will either culminate with celebrating the biggest upset since Truman-Dewey (which I still think is possible) or we will all stay up into the wee hours of the morning waiting for the Swiss banks to open.

I've been thinking about reasons I can tolerate people giving me for voting for Barack Obama. but it is much easier to think of the opposite list, which is quite a bit longer.

A reason I can tolerate is not a reason I would agree with. So, if you are pro-choice, I can understand voting for him as he is the most unabashedly open supporter of abortion that has ever run for President. I don't agree with it, but given that sort of preference, he is the obvious choice. Similarly, if you hold the view that a lot of money should be redistributed from rich to poor, or that, to the same effect, the tax burden should be even more disproportionately placed upon the rich than it is today, then he is clearly your guy. Again, I don't think this is altogether admirable (independent from any unintended economic consequences) or even altogether smart given the potential broader effects on the economy, but if this is the kind of thing you like, then he is clearly your guy.

So if you go down the list of issues where anyone can and probably has formed an opinion, and it is clear what you would push for and what the respective candidates would push for on these issues, you pick the menu choice that would seem to best fit. I understand that completely. I am not exactly fine with it, but it makes sense.

The "President" as a choice from a menu ignores the intangibles such as "leadership" and "character." Naturally, we all want to tell ourselves that our choice from the menu also possesses leadership and character in spades, because we want to view those who agree with us on important public matters (that often have a very moral dimension) as being uniquely possessed of personal virtue and fortitude. Lousy people are, in my view, probably evenly distributed across the political spectrum. If faced with a conservative Republican candidate capable of the moral terpitude of a Bill Clinton, I'd choose him over a liberal Democrat who is neverheless very admirable at a personal level (not that I can name any). And Bill Clinton (and arguably Hillary) is evidence of the same behavior on the part of liberals - as one women journalist once boasted, she would galdly be his accomplice in adultery in exchange for his support of abortion (although according to Clinton the exact form of adultery she proposed is not sex). At the end of the day for partisan people character and leadership is less important than a person's policy views.

The whole issue of character and leadership is a play for independents who, for whatever reason, cannot be swayed between the two based on issues. Here are a few reasons being offered suggesting Obama is something special and unique with respect to the intangibles (i.e. these are things you can say for him that would not apply to McCain or most other poles), all of which can be easily rejected:

1) He is changing the tone of our politics.

I see about 16 Obama ads for every McCain ad. The ads are no different in tone than any others - they show grainy unflattering pictures of McCain (is that about the issues?), and mischaracterize McCain's positions. A recent ad began with Obama saying that "John McCain wants to scare you," which is an odd comparative claim coming from the head of the political party who tells us everyday that without draconian changes in our life, we'll all be boiled slowly like frogs in a global warming stew. It is an odd claim from a guy who repeatedly (and in my view irresponsibly) compares the current financial crisis to the Great Depression.

In fact he will make the tone of our politics more severe because it is those who are most rancorous and shrill (the hard left) who revere him most, and who will come after anyone who is critical of him. And he is a creature of that hard left. For example, Joe the Plumber, despite not being a public candidate, has been investigated by the Obama campaign itself for dirt, not to mention every major news outlet. His crime - asking a question that was answered honestly by the candidate. If this doesn't scare you it should. We've also been told that "community organizer" and "socialist" are conservative code words for the "N" word. You are a racist for mocking Obama's touting "community organizing" as a qualification for President, but it's a laugh a minute that someone who started as a small town mayor is now running for VP.

He has advocated on the stump "getting in the face" of your opponents and arguing with them. He has orchestrated campaigns to boycott a Chicago radio station that dared to bring on a critic who has looked into some troubling associations from the past. His campaign has signaled that, regardless of merit, it will bring claims of libel against critics, cynically using the tort system (which is costly to defendents even in the case of frivolous claims) to quell criticism. The only way the tone will change is if certain people just shut up, and that will start with the Fairness Doctrine.

2) He is focusing on the issues and not engaged in personal attacks.

He doesn't need to focus on personal attacks, because he has three major networks and most newspapers doing the dirty work for him. It's conveniently easy to stay away from that when you have powerful surrogates who have perfected it over the years. The NYT has run unsubstantiated hit pieces on both McCains, one alleging a recent affair. Maybe he would stay away from that anyway, but it is highly doubtful, and it is more likely that it is a very strategic move given his own history. It is not a very good strategy for a guy who admits to prior cocaine use, who attended the church of an anti-American racist for 20 years, who got a sweetheart real estate deal from a convicted slum lord, and who pals around with an unrepentant terrorist to make personal history a centerpiece of his campaign when his opponent's history includes subjecting himself to unspeakable torture out of loyalty to his country and his fellow soldiers. His strategy is pure genius because it totally turns the tables - if you bring these things up, it is because you are not focused on the issues and are instead concerned with personal attacks. The accusation that your opponent is attacking you personally becomes, ironically, the last permissable way to attack your opponent personally.

3) He has leadership skills.

Name one thing he has ever lead. And don't tell me his campaign. Leading an orchestrated well-funded effort to present yourself as a leader is not really leadership, because in fact such efforts are not lead by the candidates. He did nothing to distinguish himself in the Illinois Senate, let alone the U.S. Senate. He is a good orator, which is one attribute of leadership - perhaps necessary, but not nearly sufficient. Name one cause that he has advanced in his political career through his leadership.

Leadership also requires a certain strength of personality, which it doesn't appear that he possesses. His wife appears to have a much stronger personality. His associations with people like Wright and Rezko, both of whom he threw under the bus once he had to, suggest a certain go along to get along demeanor towards people who do have a greater strength of personality, for better or for worse.

4) He will restore America's reputation in the world.

There are two types of countries that hate us - those whose anti-Americanism comes from their own inability to measure up and who resent our prominence in the world (France), and those who need us as the enemy in order to sustain their own totalitarian regimes (Iran, North Korea, Cuba). We are told that the world was with us on September 11 - that is the first category of countries that hate us. And why? Because we were helpless victims. They themselves relish that position, and were happy for the company. But we didn't stay that way - we got up and fought and their own comparative impotence was highlighted once again.

The truth is that most of our European allies, because they long ago latched on to the same welfare state policies embraced by Obama, have had to rely upon significant immigration from Muslim countries. These Muslim minorities already exert significant influence on their politics, and unabashadly for the worse. This is a problem that will grow much worse over time - because whereas Europeans long ago gave up child-rearing, their Muslim populations are filling the maternity wards. We had better get used to not having the explicit support of these countries, because getting and keeping it over time will mean incrementally capitulating in some way to the most illiberal force in the world - radical Islam.

5) He shows good judgment.

Saying that he was against the Iraq war, which is now widely viewed as a mistake, is provided as evidence of his comparative judgment, without anyone probing his rationale for being against the war. Saddam was against the war as well - does that speak to his ability to be President of the United States? The reasons why he was against it matter - if he was against it and on record for reasons that coincide with the reasons why, in retrospect, most people view this as a mistake, then fine. But to my knowledge that is not the case. Even a blind squirrel finds a nut. Unfortunately he couldn't find 2, as he was against the surge which was a clear success, and his suggested course of action at the time is widely regarded as a path that would have led to complete disaster in Iraq.

I suspect, contra his rhetoric, that he will always find a reason to be against military intervention. In assessing his judgment, no doubt many who laud it will refer to his intelligence and his nuanced mind; fine, but that is not necessarily an asset for us if it is skillfully manipulated by our enemies, which I suspect it will be. All that Iran needs to give him is a bone to wrap his nuanced mind around to delay action - maybe its agreeing to talk, maybe its allowing show inspections like Saddam - whatever, just give him an excuse to avoid action and he will. If you are against military intervention generally, then he is your guy. But if you think that, in the right hands, it can be useful, don't mistake his hands for the right ones. His judgment is informed by the view that America generally does more harm than good in its foreign policy, and he will be reticent on that basis. Put another way, he won't actually exercise judgment that is responsive to circumstances in a dynamic way; instead his "judgment" will amount to a rationalization for a predictable course of action given the circumstances that prevail at that time.

6) He is a reformer who is in the pocket of no one.

Let me give you a simple policy issue as an example. There are current efforts to make "going union" votes a matter of public record, so that if you are an employee in a factory for example that is voting on whether to join a union, your vote would not be private. Currently an employer can require that such votes are private. Obama supports the unions effort to make such votes public. In what possible way could a public vote benefit the union versus a private vote? One and only one way - through intimidation and the very rational fear of retribution against those who vote against unionizing. It is hard to see how anyone could support such a change absent from pure quid pro quo politics - the unions support him, so he supports the unions. Want another example? Look no further than the fact that he was #3 on the list of top recipients of campaign contributions from Fannie Mae; he did nothing to try to reform Fannie Mae, and his party did everything they could to stop such reform.

Friday, October 17, 2008

Eat the Rich

The rich need to pay their fair share! OK, what is their fair share? How much of the total income taxes should be paid by the top 1 percent of income earners in the US? Before answering that question, let me give you some stats – in 2006, the top 1 percent comprised 1.357 million tax returns of 135.7 million. The minimum adjusted gross income for people in the top 1 percent was $388 thousand. So what percentage of total income taxes should they have paid? OK, now look at the top 5 percent, where you needed to make $153 thousand or more. So 80 percent of this group makes between $153 and $388 thousand. What share of total income taxes should these people pay?

My guess is that 99 percent of the people who complain about the rich paying their fair share have no idea what the rich actually pay as a share. So here goes for 2006 - the top 1 percent of income earners paid 39.89 percent of total income taxes, the highest percentage ever; the top 5 percent paid 60 percent, and the top ten paid 70 percent, and the top 25 paid 86 percent, all of which are higher totals then during any year of the Clinton administration. You could cut taxes for the middle class, but the problem is they hardly pay any. In 2006, the average tax rate for the middle quintile was 7 percent. For the bottom half, it was 3 percent.

That said, a tax cut is not a tax cut if you run a deficit – it is merely a deferral of taxes. Bottom line is that government spending has gone up, and so too will taxes in the future for somebody. The Bush tax cuts don’t cut taxes so much as they defer the decision as to who will bear the burden when the bill comes due. And here’s betting that it aint the middle class or lower classes. Some may say that certain social programs may get cut in the future, so that the poor will bear the burden of the current deficits. So end of the day – it’s either the rich or the poor or both who will pay, but it won’t be the middle class. And that’s the dirty little secret about politics – there is so much pandering by both parties to the middle class that they are getting screwed that it cannot possibly be true. And it isn’t. Take a government provided service like education – the rich opt out for private alternatives, the poor drop out, but both pay in (albeit the poor only a little bit) to the benefit of the middle class.

And of course we're told to pay our fair share by the likes of Obama and Biden, who are remarkably cheap in their own charitable givings. Biden even says that rich people are being unpatriotic. Unbelievable.

Thursday, October 09, 2008

Economic Hypochondria

Truth be told, I don’t like when the economy is the news. You tell someone you’re an economist in days like these and ears perk up, and then I am immediately on the hook for saying something that seems to make sense. The fear of being found out! It’s downright primal. A proctologist never has this problem. “What do you do?” “I’m a proctologist.” End of conversation.

So it’s like you feel a responsibility to follow the ins and outs of the financial crisis so you can stay abreast. But again – where’s the money in that? But let me give you a slightly different take on the bailout, which admittedly is probably very ignorant or at least non-informative from an economic perspective.

In law, there is a concept, the name of which I forget, which makes the following free trade completely illegal: if one person is in extreme duress and can be relieved at little cost to another, than the person who can provide the relief cannot charge an exorbitant fee. For example, if a rich man is in a boat that will surely capsize in a storm, and his only hope for living is to dock the boat on the private property of another man until the storm passes, the owner of that property cannot size him up and require that he pay $1 million for the privilege of docking the boat on his property.

I say it is illegal, but in fact there is one entity that is allowed to do it at its leisure – Congress. So if your economic boat is in trouble, and you go to Congress for the fix, get ready to subsidize wooden arrow manufacturers. I cringe whenever there is a stimulus package – kick each taxpayer $600 and then kick millions at a swath to pork that lines the pockets of a few players. If there is one aspect of economic policymaking that has a shot at working, it’s monetary policy, because it’s more or less controlled by the Fed, not Congress, nobody understands anyway, and more importantly no one thinks they understand it. Arguably this entire crisis stems from our government trying to push home ownership onto people who couldn’t afford it, and it is mostly the banks holding the bill.

Knowing this, and again without looking into the legitimate economic aspects of the current aid project, when I take a step back it is pretty scary. In defense of the aid package, with respect to these banks failing, there is at least a problem. But forget about the banking crisis for a second – when it was thought to be much more limited than it in fact was, the drumbeat has been that this economy is horrible, yada yada yada. There is this perception that the economy is “headed in the wrong direction.” From 2000-2007, real GDP grew at 2.5 percent annually. That makes us approximately 22 percent richer than we were 8 years ago; another 8 years of that and we’ll be 50 percent richer. If up is considered the wrong direction, what is the alternative?

It’s one thing to say that the cure is often worse than the disease, which is a maxim that often applies to government action. But it is worse than that now because there is not that much of a disease in the first place. And so we head into this election like a hypochondriac about to choose a doctor. And the doctor we are leaning toward is our mother who has Manchausen Syndrome by Proxy. “Mom, I think I have a slight cold.” “Son, you don’t have a cold, your body is ravaged by cancer and your best hope is to get a few transplants of major organs – heart, lungs, liver, etc.” And so we have a guy who will probably dust off Smoot Hawley (perhaps the most disastrous piece of economic legislation ever passed in the US back in the Depression), increase the tax burden for investments, ramp up the regulation of a key industry that got into trouble in the first place due to the government pushing it to act against its shareholder’s interest, and coast us away from this harmful ideology of free market capitalism that somehow by accident increased our standard of living by a factor of 14 since 1926.

The banking crisis will pass. The government crisis may not.

Friday, October 03, 2008


What in the hell are Bozniaks? I kept picturing a cult of guys dedicated to following the ways of my buddy Boz, watching sports at any given chance, and sending witty rejoinders to Vegas Heavy-T’s hilariously pessimistic assessments of Philly sports teams within 30 seconds of receipt. Was Joe Biden really responsible for getting these guys to get along with the Croats and the Serbs? Do Croats and Serbs share the anxiety of the Bozniaks during Phillies games? I don't see the connection. This is the kind of verbal gaffe that would be watched incessantly for years by the extreme left whenever they need to flatter themselves about how smart they are in comparison to their cretin political opponents, who are several steps back on the evolutionary ladder, not that these yahoos even believe in the evolutionary ladder. It's OK to make fun of these things, but when you have a microphone in your face nearly 24 hours a day everyone is going to have such gaffes.

Let’s be honest. She could have come to the debate falling on her face drunk, and he could have promised the Hatcher billions of dollars in government contracts in answer to the first question, and it still wouldn’t affect my vote. So why watch? Wife of Hatcher made me watch a few minutes before we put on the Tivo version of Prison Break. I saw the sub-prime mortgage question. Palin lays the blame on greedy predatory lenders. Oy vay! You see, the American people are a bunch of suckers easily led to borrow more than we can handle and so it is necessary for government to make sure we don’t get the loans we apply for. I know it’s the populist answer, it’s probably what most people want to hear, but it still bugs me. Also saw some foreign policy question, which brings up my own questions.

The big knock against Palin is foreign policy, but how expert do you have to be to mimick Obama’s likely foreign policy? It will clearly be solely about soft diplomacy, meaning he will never commit the military to any large scale operations. Here is a little secret – anybody can do that. Pluck my third graders out of their class and ask them to recite the rules of their class, and one of them is don’t be a bully. There is no rule that allows you to kick the ass of a bully. Since my kids are rule-bound authoritarians as a simple matter of genetics, they would clearly apply these rules in foreign policy. So there is no confronting a bully – you just stop trading Pokemon cards with them. Of course, this doesn’t really affect them much because they just steal more Pokemon cards from the kids they bully. That’s not to say that you confront all bullies, but if your basic philosophy is that no bullies are to ever be confronted, well then a 3rd grader is capable of that, not to mention France. Or you tell the teacher. The problem is we are the teacher. That's why the world hates us - we're always cutting recess short.

Anyway, here we are in day 10 or so of the economic apocalypse. I am not worried and I’ll tell you why. I just watched the Inconvenient Truth. And brother, if you want a sure-fire cure for worrying about the rate on your credit cards, just contemplate Wall Street under 75 feet of extra ocean water. Why worry about a hang nail when your body is ravaged with cancer I always say! (Well, that’s actually the first time I’ve ever said that). Anyway, I hope to share some thoughts on that in next week’s blog.

In the meantime, Jim O has asked in a comment that I grade President Bush’s presidency. Without giving a letter grade, I would say right away that it will likely be viewed more kindly in time than it is now, and substantially so. We have a decent President governing in very difficult times, and I think we are about to get a very mediocre one who will also be governing in very difficult times. The difference may not be pretty. The Clinton nostalgia mistakes the man as a cause of his times, as does the Bush ennui. Clinton was the Calvin Coolidge of his time (heartfelt apologies to Calvin Coolidge), except he could never shut up as compared to Silent Cal. Remember that Churchill lost the first election after WWII. Remember that after 9/11 the economy was rocked, and yet we never dipped into recession (and still are not officially in one yet). At the time, people thought it was highly likely we’d be hit hard again, but we haven’t been. We’re winning in Iraq. You might complain about the deficit spending, or the pure level of spending, and I would agree, but the big dynamic of his administration hinges on what happens in the Middle East going forward. (Also, with respect to the deficit, the structural deficit – i.e. our known future liabilities for social security and medicare versus what we might expect to raise in taxes dwarfs any current deficits, and that has been a known problem throughout the 1990s – Clinton did nothing about it, Bush tried to reform Social Security, but failed).
And don’t give me we lost the respect of the world, blah blah blah.

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