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Archive for May, 2010

I was talking to one of my graduate students on Friday about the European economic crisis and the inevitable collapse of socialism. He had an interesting reaction: “Well, of course, a welfare state in Greece, or Italy, or Spain is a really bad idea. But Germany is doing fine. Economists don’t appreciate the importance of culture. There’s nothing intrinsically wrong with the welfare state; it just requires a culture of hard work and orientation toward the future.”

That prompts the thought: Maybe socialism can work in the right set of cultural circumstances. Maybe, if the people do work hard; have children; save and invest for the future; and take advantage of the benefits of the welfare state only when they truly need to, a socialist economy can succeed. I’ve argued before that the welfare state is a pyramid scheme and is therefore ultimately unsustainable. But population growth could provide the exponential growth in the base that a pyramid scheme needs.

Is socialism sustainable, given an appropriate culture? For a while, surely. But how does one sustain that culture? How long can Germany remain Germany under a socialist system of economic organization? The empirical evidence from all across Europe is that socialism undermines the desire to work hard, have children, and save and invest for the future. In 1960, Europeans worked just as many hours as Americans; now they work far fewer. That represents a significant cultural shift. The welfare state, I think, is responsible for much of it.

Max Weber saw the Protestant Ethic as underlying the growth of capitalism. The growth of capitalism may underlie the growth of the welfare state, as prosperous people believe that they can afford to help those in need. Needs expand into wants, and the welfare state undermines both prosperity and the culture that made it possible.

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Five hundred fifty-seven years ago today, Constantinople fell, ending the Eastern Roman Empire and subjecting Greece and the Balkans (including many of my own ancestors) to more than 400 years of Islamic oppression.

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More confirmation that the problem of terrorists entering the country through Mexico are real:

2009 Apprehensions

That’s 162 people in one year! And presumably those apprehended are a small percentage of those making it through.

And now there’s a terror watch for the Texas-Mexico border.

The Department of Homeland Security is alerting Texas authorities to be on the lookout for a suspected member of the Somalia-based Al Shabaab terrorist group who might be attempting to travel to the U.S. through Mexico, a security expert who has seen the memo tells FOXNews.com.

The warning follows an indictment unsealed this month in Texas federal court that accuses a Somali man in Texas of running a “large-scale smuggling enterprise” responsible for bringing hundreds of Somalis from Brazil through South America and eventually across the Mexican border. Many of the illegal immigrants, who court records say were given fake IDs, are alleged to have ties to other now-defunct Somalian terror organizations that have merged with active organizations like Al Shabaab, al-Barakat and Al-Ittihad Al-Islami.

In 2008, the U.S. government designated Al Shabaab a terrorist organization. Al Shabaab has said its priority is to impose Sharia, or Islamic law, on Somalia; the group has aligned itself with Al Qaeda and has made statements about its intent to harm the United States….

Security experts tell FOXNews.com that the influx of hundreds of Somalis over the U.S. border who allegedly have ties to suspected terror cells is evidence of a porous and unsecured border being exploited by groups intent on wrecking deadly havoc on American soil….

In addition to the Somali immigration issue, Mexican smugglers are coaching some Middle Eastern immigrants before they cross the border – schooling them on how to dress and giving them phrases to help them look and sound like Latinos, law enforcement sources told FoxNews.com.

“There have been a number of certain communities that have noticed this, villages in northern Mexico where Middle Easterners try to move into town and learn Spanish,” Neuhaus Schaan said. “People were changing there names from Middle Eastern names to Hispanic names.”

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M3 is plunging at a rate not seen since the Great Depression. The Obama administration shrugs; the Keynesians inhabiting it have never read Friedman and Schwartz’s Monetary History of the United States, and don’t think money supply is interesting enough even to report. They pile on debt at unprecedented rates, and are now contemplating further “stimulus,” since earlier attempts, though dwarfing all previous deficit spending, seem to have accomplished nothing.

This suggests a nightmare scenario, in which the United States accumulates a massive amount of debt only to find that it must pay the money back in dollars more valuable than those it borrowed. A lot of people have thought the Obama administration’s plan was to inflate their way out of the debt, and have been buying gold, stocks, etc., as a result. But what if the opposite happens? What if deflation occurs, and the debt, not just here, but across the world, becomes much worse than it now appears? It now appears oppressive and, for Greece, for example, unsustainable. What if it becomes unsustainable for everyone?

I’ve been puzzled for a while now by the inflation numbers, which have been well-behaved in the face of ridiculously large deficits, with more of the same projected over the next decade. Maybe their benign appearance despite indicators that would normally be inflationary is a sign that the underlying economic forces are actually deflationary.

I’m not asserting anything here. But I am worried. There is a possibility that things could get very bad very quickly.

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Taking a brief time out from the workaday quotidien-ness of the crisisblur that is the Obama Presidency, Barry, a.k.a. Whiner-in-Chief, joined Barbara Boxer for a fundraiser in San Francisco, a city that seems to bring out the best, or at least the most honest, of our Dear Leader’s Vaunted Rhetorical Skills:

“Let’s face it this has been the toughest year and a half since any year and a half since the 1930s,” he said.

Oh, uh huh.  I think JFK might disagree with you: he had a year and a half that ended really, really badly.  LBJ didn’t have it so easy, I mean, it’s hard to imagine this but there was violence in the streets in 1968 even before the Tea Partiers started their campaign of chaos and distruction.  Maybe Truman had a hard year and a half, two. I don’t think the ’40′s were a cakewalk for FDR, either.  Huh- maybe even George Bush could weigh in with a “Shucks, that’s nothin’” , if he were as devoid of dignity as our current president.

Psssst, Barry: Yeah, these problems you’re facing, that we’re all facing, they’re terrible.  What’s worse, far, far worse, is that you have handled every last one of them incompetently and with a partisanship that is paralysing the country.

Let’s take another look at your to-do list, shall we?  Biggest ecological disaster ever brewing in the Gulf Coast.  Oh, that’s right: you have to give an interview to Marv Albert and talk about basketball.  NoKo and SoKo on the verge of war, but you have time to play the links.  Iran merrily speeding toward nuclear status, and Hezbollah acquiring missiles: time to get your knickers in a twist over an apartment building in Jerusalem.   And Memorial Day, the laying of the wreath? Whoops- time for a Chi-town fix with Michelle and the girls.

I know, Barry, reminding you of your Most Megalomaniacal Moment would be mean, but that’s how I roll.  So, hey, when do the Sooper Dooper Earth Healing Powers kick in?

File under “Great Minds Think Alike”: this is the reference for the title of this post, and here is the visual, h/t MoonBattery and America is an Obamanation!

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Walter Russell Mead lists ten lessons from the economic crisis:

Aristotle1.  The American Century isn’t over.

2.  Liberal capitalism works.

3.  The rogue states are parasites.

4.  The old left is dead.

5.  Nobody really understands the world economy.

6.  That goes double for financial markets.

7.  The Battle of Financial Markets is over; the Battle of State Finance has begun.

8. The demographic crunch time is here.

9.  Culture matters.

10.  The politicization of economic governance is dangerous business.

Our chief problem, as I see it, is that our President and the Democratic Party in general have not learned even a single one of these lessons. They believe that the American Century is over; that liberal capitalism is a failure, and must yield to some form of socialism; that rogue states ought to be engaged and appeased; that the old left was essentially correct; that they understand the economy and financial markets well enough to direct them better than the marketplace; that the chief problem with State Finance is that we haven’t been spending enough on social programs; that the demographic crunch can be resolved with massive borrowing; that the culture of the English-speaking world must be apologized for and abandoned; and that politicians rather than economic agents should be making economic decisions. In fact, that strikes me as a fairly concise summary of Obama’s foreign and domestic impulses.

Mead analyzes the dangers, which run deep, and echoes Aristotle in his worry that democracy would eventually destroy itself:

The rise in the economic importance of the state during the twentieth century–however necessary and in many ways benign this role may have been at various points along the way–inevitably brings politicized governance and regulation in its wake in ways that make bubbles, panics and crashes both more destructive and more likely.

To take one important example, when government workers make up a substantial portion of the electorate, they can influence their own wages and pensions by voting as a bloc. They can — and they do.  California, Illinois and Greece have a lot in common.

But even this is just the tip of the iceberg.  The increased economic role of the state naturally and inevitably multiplies conflicts of interest and creates moral hazard.

Texas Dust BowlAfter discussing the farm bubble induced by the Homestead Act that culminated in the Dust Bowl, and the housing incentives that culminated in our recent difficulties, he generalizes:

Yet it is clear that the mix of democracy and capitalism is a dangerous if necessary brew; after decades in which we failed to think the costs and risks through, we are now suffering the consequences of policies that create dangerously perverse incentives in both political and economic spheres.  Reducing damaging but popular forms of state intervention in the economy while ensuring the state retains the authority and the ability to provide the effective legal and regulatory frameworks without which no modern economy can flourish is the fiendishly difficult and delicate task which Europeans and Americans alike must now undertake.

This is the problem Aristotle held to be insoluble. In the past, we managed it by way of Constitutional protections against redistributive policies. Since 1937, however, those Constitutional protections have largely been overthrown, and Obama’s court picks seem designed to gut them further or even turn them into mandates for redistribution. I don’t mean to be pessimistic; I think the problem does have a solution. My worry is that, maybe, we can’t get there from here.

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William A. Jacobson points out that ‘little noticed’ is the new ‘unexpected.’ It’s not just the law of unintended consequences; it’s the law of unintended law. He lists twenty recent examples concerning the Obama health care bill alone. That’s what happens when people vote on bills they can’t be bothered to read.

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Barack Obama spoke at West Point, laying out his vision for a foreign policy based on multilateralism. And Joe Biden spoke in Brussels, proclaiming it as the Capital of the Free World.

CopernicusJust as Copernicus held that we are not the center of the solar system but instead revolve around the sun, Obama and Biden are announcing that we are not the center of the free world; we revolve around Europe. That’s not at all a surprising thought to one who knows the worldview common in academia. But it’s a revolutionary thought nevertheless, particularly at a time when Europe is astoundingly weak both financially and militarily (not to mention demographically—none of this is likely to change any time soon).

Richard Fernandez recognizes the importance of the change:

Obama understood that power must ultimately be undergirded by economic strength. That is fair enough. But if the steps the Federal Government have been undertaking at “home”, both in the form of unprecedented deficits and its deference to the Green Lobby and the teacher’s unions sap the strength of the American economy and saddle it with mega-programs, then Obama’s new “international order” simply becomes a statement of intention to beg abroad after he has blown his wad on the new domestic order. After propping up a number of politically sacrosanct interest groups that are “too big to fail” the Administration may be frankly telling the West Pointers that there will simply be no money left for anything else. In way the West Point speech can be restated in this way: ‘after we have finished doling out the tax dollar for entitlements, entitlements which we cannot sustain anyway; and after having raised taxes to the level where business growth tapers off to zero, then that’s all she wrote. Therefore we are going to deal with all future international crises — and by that I include global warming and nation building — through multilateralism and diplomacy.’

The risk inherent in this approach is that it will pay in weakness abroad for political pork at home. Can this new multilateral world order work? Probably not without a core of hard power. Because Europe has been underinvesting in security for decades and ploughing their money into welfare states the hard power is not going to come from there….

What the President left out of the speech was a description of how the West, once it has collectively purged itself of hard power, will can wield soft power effectively.

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WSBTV Atlanta does a powerful segment on an under-appreciated risk: Middle Eastern terrorists entering the United States by way of Mexico.

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Congratulations to the Texas State Board of Education, which has withstood a ferocious assault from the Left and passed new social studies curriculum guidelines. The new guidelines are a significant improvement over what were already excellent guidelines:

  • They give students similar academic experiences in lower grades that create a common basis for further coursework but give high school teachers and students more flexibility. Most of the Board’s amendments have moved historical figures from the suggested to the required list for elementary and middle school students, and from the required to the suggested list for high school students.
  • They replace ideologically tendentious language with more neutral language. Examples: ‘Expansionism’ for ‘imperialism’; ‘free enterprise system’ for ‘capitalism’; ‘the reasons for U.S. entry’ into World War I, deleting ‘including propaganda.’
  • They replace vague language with more precise language. Examples: ‘Republic’ or ‘representative government’ for ‘democracy’; ‘free enterprise system’ for ‘capitalism.’
  • They improve the historical accuracy of the curriculum standards. Examples: (1) Most of the Founders were religious. They thought religion essential to the health of the republic. (2) The Venona papers show that the Soviets had infiltrated the U.S. government at high levels. (3) The new standards ask students to contrast ‘New Deal policies and opponents’ approaches’ rather than ‘Herbert Hoover’s and Franklin Delano Roosevelt’s approaches,’ which differed mostly in scale rather than in kind.
  • They improve the ideological balance of the curriculum standards. They ask students to analyze “the Social Gospel” and the “philanthropy of industrialists”; the Great Society and its unintended consequences; and to “understand how government taxation and regulation can serve as restrictions to private enterprise.”
  • They improve the depth of the curriculum standards. They include approaches to judicial interpretation; the historic origins and characteristics of fascism; Aquinas, Calvin, and Blackstone; important ancient and modern artists, scientists, and inventors; and the exploration of relations between historical, political, sociological, and economic factors.

I testified before the Board on Wednesday, and was shocked by the utter lack of sensible argument coming from the Left. Don’t take their complaints at face value; show that you’re more responsible than the Congress, the Attorney General, the State Department, etc., and read the standards yourself.

Perhaps the most telling example occurs in the elementary standards, which received relatively little attention. The Board changed

identify characteristics of good citizenship, such as a belief in justice, truth, equality, and responsibility for the common good

to

identify characteristics of good citizenship, including truthfulness, equality, respect for others and oneself, responsibility in daily life, and participation in government by educating oneself about the issues, holding public officials to their word, and voting.

In short, the old standards defined good citizenship purely in terms of believing—in justice, equality, etc.—in other words, as being a liberal. The new standards define good citizenship in terms of being and doingbeing virtuous and doing one’s duty. That’s an important and badly needed change.

Benjamin JealousTestifying before the Board was an education in another way as well. The media were there in force for the first few speakers (including me), but most left after hearing from Benjamin Jealous, the President of the NAACP, who quite remarkably had almost nothing to say. He seemed deeply concerned about one particular change, from ‘the growth of the Atlantic slave trade’ to ‘the triangular trade and the growth of slavery,’ which he called “offensive.” I didn’t get it, and neither did most of the Board, but they ended up accommodating him. As soon as Jealous finished, several dozen of his supporters, and a majority of the media, departed. Most of the media, plainly, had already written their narratives before coming for the day of public hearings. They just needed some footage to accompany the already-written story. The news isn’t so much reported as manufactured by a fairly sizable group of media personnel, public officials, and “public interest” organizations.

UPDATE: To judge the degree of media bias, consider these two pictures of Board Chair Don McLeroy, whom I observed to be unflappably fair-minded. Here is what he actually looks like (though in reality he’s thinner):

Don McLeroy

And here’s the picture from the Austin-American Statesman article about the public hearings (with his hand raised, voting; he’s not wearing a shroud!):

The State Board of Education received  a record 206 requests from people wanting to weigh in Wednesday on new social studies standards for public schools. The meeting at the Travis Building in downtown Austin went into the evening.

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