Sunday, February 28, 2010

A House Divided?

As most Americans are aware, Obama's approval rating has fallen to 48% and his disapproval rating is 47%., but when we dig a little deeper and look carefully at the break down of the numbers, we encounter some fascinating information that reveals deep political and philosophical divisions among ethnic lines.

Obama's approval rating among African-Americans: 85%
Obama's approval rating among Hispanics: 76%
Obama's approval rating among Whites: 37%

Obama's disapproval rating among African-Americans: 12%
Obama's disapproval rating among Hispanics: 14%
Obama's disapproval rating among Whites: 58%

African-Americans who support Obama's health care reform: 67%
Hispanics who support Obama's health care reform: 62%
Whites who support Obama's health care reform: 31%

Here are several factors that may account for this stark divergence:

White Racism: I do not believe that this is the dominant factor, given the fact that Obama experienced a notable drop in support even among whites who voted for him.

African-American & Latino Racism: Antipathy towards whites is not a significant factor, however, race and ethno-identity-politics plays a far greater role in the voting decision of African-Americans and Latinos than it does among whites. And for reasons that I consider irrational, it is perfectly acceptable for African-Americans and Latinos to publicly declare that they should vote for the political and economic interests of their ethno-communities, while a white would be labeled an incorrigible racist for doing the same.

I consider this factor disheartening because the growth of ethno-identity politics does not bode well for the health of our republic. Ideally we want people to vote according to what they believe will promote the broadest public good for all Americans and not just the narrow interests of their ethnic groups. I would like to see more African-Americans and Latinos politically engaged as individuals and as members of geographic communities, but not as racial groups.

For example, individuals working together to pursue environmental and educational policies that benefit all the residents of their neighborhood is an example of positive civic involvement. But, when individuals lobby for the government to set aside public jobs and government contracts solely for members of their ethnic group, it's an example of an ethnic spoils systems. The implicit belief in the said system is demonstrated when political commentators on Univision frequently declare that Obama should push forth immigration reform because the majority of Hispanics supported him, not because it broadly benefits Americans of all races. The problem with this is that the growth of an ethno-political spoils system will encourage the growth of reciprocal identity politics among whites, a prospect that I do not look favorably upon.

Overlap of Class & Race: My first instinct was that was that most African-Americans and Latinos support Obama not because of race, but because as members of groups with a disproportionate number of poor and uninsured individuals, his health care proposals appealed to them. While this is a valid factor, we must not overplay it, because even among upwardly mobile minorities, Obama enjoys overwhelming support. And conversely, the poor and working class whites who comprise a notable portion of some red districts are generally not supportive of Obama.

Flawed Marketing by Republicans: Several years ago that may have been true, however during the last presidential election McCaine went out of his way to reach out to Latino voters, yet he lost to Obama by a land slide.

Divergence of Political Values & Visions: With some notable exceptions, support for limited government, free markets, economic & social liberty is less prevalent among African-Americans and Latinos. Unfortunately (from my libertarian perspective) the one element of the conservative tent that holds a wider appeal for minorities is religious conservatism, as demonstrated by the comparatively low support among Latinos for gay marriage and reproductive rights. Why these other aspects of conservatism do not hold wide appeal for the said groups is a long and complex topic that will be explored in future posts.

As a conservative who places tremendous stock in culture, values and visions and not race, the significant demographic changes that the United States is undergoing does not trouble me in itself. What made the United States the freest, most peaceful and prosperous nation in history was not race, but the philosophical and constitutional foundation laid down by the founding father. To a tremendous degree this foundational core is reflected in the values, vision, customs and culture adopted by Americans of different colors and creeds, which I refer to as the "American Way." While I do acknowledge that there is philosophical diversity within the American Way, there are some core tenants and parameters, which relative to other philosophical and political streams, conservatives are generally aligned towards.

Diverse individuals have maintained their separate cultures and traditions while still embracing these core American values. African-Americans such as Thomas Sowell, Walter Williams and Larry Elder are among the most brilliant, patriotic proponents of the American Way, so of course I consider them more American than a white, socialist douchebag like Dick Durbin. If the color and composition of the United States significantly changes, but its core values and vision remained, American will continue to be the greatest nation on earth. However, with the large number of African-Americans and Latinos embracing the expansive statism and sense of entitlement that the democratic party actively promotes, the projected demographic change holds troubling implications. And even though democrats and progressives will receive a political boost from these changes, they too should be troubled that the growing political polarization that we are experiencing is occurring along racial lines. Unity through Diversity is a great philosophy that unfortunately does not always hold true in real life.

Nearly Billion Dollar CPS Deficit!

The Chicago Public Schools are facing a nearly billions dollar deficit. The decline in revenue ($138 million) that the district experienced only accounts for 14.15% of this deficit, whereas a jump in salaries and pensions ($348 million) accounts for 35.69% of this deficit. What makes this all the more odious is that there is little or no connection between Chicago's generous per-pupil spending($11,300) and educational outcomes. So, we can assume that a large portion of the budget goes towards patronage laden administrative jobs and maintaining a hemorrhaging pension system.

Negotiations between private sector unions and businesses is generally dynamic, because they are directly negotiating with their own money. And union demands generally are bound to economic reality because of the simple realization that if the company is not economically viable it will go under and all will lose their jobs. On the other hand the CPS negotiates with teacher's unions with the tax payer's money, not their own. And all parties know that historically they could cover inflated salaries by raising revenues by increasing property taxes with little consequences, given the democratic machine's firm hold on Chicago.

Social programs should not so much be conceived as a transference of wealth from wealthy and middle class tax producers to the poor and working class tax consumers, but as a transference to a growing class of bureaucrats that administer the programs.

We have been promised school reform by teacher's unions and "experts" for 30 years with very little to show for it other than a rising deficit. It's time to try something different and give parents and students real choice. And perhaps more importantly, the $8,350 tuition (at St. Patrick's High School in Chicago) equals a per student saving of nearly $3,000 for tax payers.

More CPS job cuts as $975 million deficit looms

'INCREDIBLY SERIOUS' Teachers reject call for givebacks

February 26, 2010

BY ROSALIND ROSSI Education Reporter

To get ahead of what could be a whopping $975 million deficit next school year, Chicago Public Schools officials Thursday announced 500 mostly non-teaching job cuts -- and three weeks of furloughs for nonunion workers still left on the job.

Schools CEO Ron Huberman predicted an "incredibly serious'' fiscal year ahead and said he would need help from teachers and other unions to avoid "devastating effects'' on students.

Already, to make ends meet this year, the district is cutting back some spring non-varsity sports and eliminating lacrosse and water polo, officials revealed Thursday. A highly touted freshman orientation program is also being shortened.

With no new funding from Springfield, CPS officials projected a $700 million deficit next year. That gap could balloon to $975 million if Gov. Quinn wins a proposed 15 percent cut in state education funding, they said.

Fueling the dire projections:

• A $279 million jump -- a 91 percent hike -- in teacher pension payments.

• A $169 million increase in Chicago Teachers Union compensation, tied to 4 percent CTU raises.

• A $138 million drop in local tax revenues.

Without union concessions, more money from Springfield and pension relief, Huberman said, a "last case ... worst case scenario" would be bigger class sizes and teacher layoffs.

Increasing class sizes by one student, to a districtwide average of 31, would save $40 million and cost up to 600 teacher jobs, Huberman said. Boosting class sizes to 45 would save $270 million, but Huberman conceded many classrooms couldn't hold that many kids.

The teachers union would have to sign off on a pay freeze or furlough days, but increasing class size is an option CPS could exercise on its own. A relief value that would require legislative but not union approval would be a $300 million reduction in next fiscal year's pension payment -- a move Huberman insisted would still leave pensions adequately funded.

However, CTU President Marilyn Stewart, who faces re-election in May, quickly threw cold water on any idea of union givebacks.

"We will not agree to any proposal that either destroys our contract or fails to maintain the integrity of our pension system. Nor will we tolerate implied threats by Mr. Huberman that he may have to cut programs and services for our students or lay off teachers,'' Stewart said in a statement.

The looming deficit comes after CPS cut 557 central office and citywide jobs before the school year started and another 30 jobs and 132 vacant positions at midyear to balance this year's budget.

The newly announced job cuts and furloughs due in mid-March follow six furlough days and a pay freeze among most central office staff.

The Philosophical Foundation of Progressives & Conservatives (part III)

In my previous posts I discussed the conservative vision of individuals as active agents with the power of choice. I do acknowledge that the state has the important role of protecting individuals from the deleterious behavior of powerful corporations, such as ensuring reasonable health and environmental standards. But, in many instances, I view progressive calls for intervention on behalf of "helpless individuals" and "protected classes" as hyperbole. Rather than cultivate dependency, more progressive should empower individuals as active agents that can capitalize on changing options and opportunities. Furthermore, state entitlements and intervention should be envisioned as last resorts because they usually rest on the coercion of one party on behalf of another. Here are a few examples that come to mind:

I came across a flier that lamented the decline of "affordable housing" in Logan Square and demanded measures such as rent-control, developer set-asides and expanded housing vouchers. Underlying this is the belief that there is a necessity in intervening to prevent demographic change, in other words to prevent yuppies from displacing Latinos. I shudder to think how a progressive would respond if white residents complained about demographic change.
My response is: outside of moribund cities like Detroit, cities and neighborhoods are dynamic organisms. Demographics shift, before Logan Square was primarily Latino, Poles predominated and before that Scandinavians and before that Germans and so on. In most cases older groups advanced economically and moved on to greener pastures.
So, if an apartment becomes too expensive for you, choose another. If an area becomes too expensive for you, you have countless other choices in the city and suburbs. Rising rents simply reflect increased demand and the tax burdens imposed by the city & county. Impose rent controls and you will create shortages; it's simple economics.
And before the current recession, countless Latinos did what other groups did before them, cash in on rising property values and move on to greener pastures: bigger homes, better schools and safer neighborhoods in the suburbs.
I recall an instance in which a client of mine was rejected for an apartment because of their credit and rent-to-income ratio. Their response was that they wanted to pursue legal measures against the landlord because they (falsely) believed that they were discriminated against.
As a humanist I am opposed to housing discrimination on moral grounds and as a capitalist I am opposed to it on the grounds that it irrationally limits competition. Yet, I asked myself, "If indeed the landlord had rejected them on the grounds of their ethnicity, would it have been the end of the world? Would it have warranted the state to castigate the landlord and then compel him to accept renters that he did desire?"
I believe that the answer to all of the above is "no." At least in the case of Chicago, there are thousands of other landlords that would be thrilled to rent to them. Within the neighborhood in question, there are countless of available apartments available to them. And in an ethnically diverse market like Chicago, the market would punish a discriminatory landlords with the ultimate penalty: an empty apartment and thousands of dollars in lost income.
A progressive associate of mine lamented the fact that the federal government had not "invested more money to bring good jobs to the people of Detroit..." As much as it pains me to see how much this once great city has declined, the government cannot mandate prosperity. Of course it can pump billions of dollars to revive one locality, but that would unduly impose a burden on the people and enterprises of other localities.
Rather than helplessly wait around, countless individuals and enterprises chose to relocate to more prosperous localities. In particular, localities that created favorable environments for the creation of wealth and jobs. And those who chose to remain in Detroit capitalized on falling cost of land and labor by creating new enterprises and industries such as urban farming. This is not ideal, but for the time being it's the best we can hope for considering the unwise choices that corporations, unions and politicians undertook for 50 years.
And what of the campaign for living wages? As much as I sympathize with the noble intentions of its purveyors who are seeking to address real social problems, I cannot escape the fact that it's a terrible idea. Prosperity cannot be mandated from above, economic laws cannot be ignored and businesses cannot be coerced without engendering serious unintended consequences.
Declining wages in the retail sector simply reflect a growing surplus of unskilled labor. To mandate that a clerk at Target earn $25 will raise their living standard, but lower that of other unskilled workers via an increase in unemployment. And on another level it will destroy the said workers incentives to raise their wages through the development of skills that are in greater demand and shift their labor to industries and localities that demand it. For example, they could study web design in the evening and move to a city or suburbs in which employers are seeking web designers. Rather than arbitrarily impose wages that bear no connection to supply-and-demand, the state should do all that is possible to raise the human capital of its citizens. But, in the end we cannot coerce our fellow citizens to make wise choices. The most we can hope for is to treat them as active agents and help provide opportunities for them to make wise choices via a sound educational system. For that you should probably chat with the teacher's unions and experts that have been pushing reforms for the last 30 years, few of which have resulted in positive outcomes.

Saturday, February 27, 2010

Philosophical Foundation of Conservative & Progressive Thought (part II)

One element of progressive thought that I find most difficult to digest is it's underestimation of the dynamic nature of individuals, groups and societies. Implicit in this world view is a strong inclination to view individuals and groups as passive and largely helpless agents that need to be protected against predatory corporate and malign market forces.

In contrast, the conservative world view tends to emphasize the role of individuals and groups as active agents, with the power to adjust and evolve when they are allowed to face the positive and negative consequences of their choices, customs and cultures.

The natural outcome of progressive thought is that the primary engine of progress is a powerful state that mandates and micro-manages change from above. Whereas, conservative thought emphasizes the power of individual choice and free association in social and economic evolution. This does not mean that we should idly sit by and let individuals and groups suffer so that they'll understand the consequences of their actions. Rather, it means that most conservatives believe that when society and the state intervenes on behalf of individuals and groups it should do so with caution, so it does not undermine their power to adjust to changing circumstance, in the process disabling the dynamic mechanisms of social and economic evolution.

No where are these concepts better demonstrated than in the phenomena of fertility rates (child per woman). In premodern agricultural societies having large families was a viable strategy for maximizing economic output, to put it simply: each child equalled more farm hands. In the face of urbanization and economic development, the value of this strategy rapidly declined. Increasingly, more children meant less time and money to invest towards the educational, professional and cultural development of their children. This is especially true in a post-industrial economy that rewards skilled, specialized workers and increasingly punishes the unskilled and uneducated. So, those who did not take the necessary steps to avoid having larger families tended to be poorer and less economically mobile. Conversely, those who planned ahead and took steps to have fewer children and invest greater resources towards their education were far more likely to economically advance. So, naturally groups and even nations that have been quicker to adopt this strategy were far, far more likely to economically advance.

We see that in 1960 the average fertility rate in Mexico was 6.5 and in the United States it was approximately 3.5. Clearly this was one (of many) factors that explained the relative social and economic development in both countries. By 2007 the fertility rate in Mexico had fallen to 2.4, nearly equal to the rate of 2.1 in the United States. In other words, faced with the clear economic consequences of having too many children, as intelligent, active agents, Mexicans drastically altered their behavior and adopted more viable strategies and structures. And coupled with the conscious emphasis on family planning, an increased focus on the educational and professional development of their children occurred.

Interestingly, the fertility rate of Mexican immigrants to the United States has hovered at 3.5. In other words, a large number of Mexican immigrants have not adopted the viable social and economic strategies that their brethren back in Mexico have undertaken. I strongly believe that the nature of the American welfare state is a significant factor in this phenomena. As we are well aware, in the United State those who choose to have more children than they can economically support will enjoy generous housing, food and medical subsidies. In other words, people are largely shielded from the consequences of their choices and in a very real sense, we are subsidizing pathological social patterns. The end result is that well meaning state intervention has in this instance and many others impeded the social and economic development of individuals and groups. Whereas, the general indifference of the Mexican State towards the welfare of its citizenry, Mexicans have pursued wiser choices and evolved more sound familial structures.

A question that comes to mind is: how do most most people weather the economic insecurity and the near absence of a welfare state that perpetually plague Mexico? Family and friends of mine who grew up in Mexico speak prolifically of having aunts and uncles of limited means reside with them for long stretches. A wise mother was able to stretch and share limited space and resources to accommodate and assist them. It was understood that guests who were unable to contribute financially would assist their hosts by assisting them in child care and domestic tasks, a highly symbiotic arrangement because few families could afford day care. In this case and many others, family fills the role that food stamps, section-8 and head start do.

In no way am I idealizing Mexico's lack of a state sponsored safety net or elevating one culture over another, far too many Mexicans suffer from grinding poverty. Rather I am emphasizing the innate capacity of individuals and families to adjust to changing circumstances by evolving new social arrangements and structures. And more specifically, I am emphasizing the importance of family as an institution that can serve as a dynamic social and economic safety net. While many progressives would respond that we can have strong, caring, cohesive communities without a core of intact, two-parent families, evidence would indicate to the contrary.

The conclusion that we should draw from this is not that we should abolish the welfare state; rather we must be aware that an overly invasive state can diminish the capacity of individuals and groups to evolve more sustainable patterns of behavior. Some will respond that conservatives are promoting a far too individualist agenda. Quite the contrary, my concern is that the expanded state has allowed individuals and communities to outsource their social responsibility, accelerated the social atomization that progressives bemoan. And it has allowed individuals to pursue an atomized existence, rather than cultivate richer social ties to family, friends and neighbors. During times of economic prosperity, we may be able to subsidize these socially unsustainable choices via the welfare state, but as the United States plunge deeper into debt, we may have to cultivate older safety nets, such as families and friends. It may even be time to dust off our bowling shoes and say hello to our neighbors.

Sunday, February 21, 2010

Don't Blame the Helmsman

A core tenant of progressives and many conservatives (but not necessarily republicans) is a rejection of what has been popularly dubbed as "corporate welfare"and "crony capitalism." Or, more specifically a rejection of the regimen of subsidies, tax breaks and favorable treatment of politically connected corporations and industries. Most anathema to progressives are the billions of dollars in tax breaks that the oil and coal industries enjoy. And conservatives tend to focus their ire on the farm subsidies which redistributes billions of dollars of public funds primarily towards large agro-corporations, like Monsanto. And even those who accepted the bank bailouts as needed, emergency measures are troubled by the extent to which the distribution of funds reflect political considerations and connections, rather than economic logic.

Beyond these shared reservations, most progressives and conservatives sharply diverge on what they attribute as the source of and solution to corporate welfare. Implied in the progressive position is that the problem lies in the helmsman and not the ship. In other words, the problem is the direction in which "incompetent and corrupt politicians" steer the federal government's redistributionist bodies. Many lamented, "If only we had a wise and honest helmsman, the federal government could direct capital towards good people, good companies and good industries." But, much to their dismay they see that President Obama has continued most of the policies of his predecessor.

In contrast, most conservatives believe that the problem does not lie in the helmsman, but in the ship itself. Rather than view unwise subsidies as an aberration, they view them as the predictable, if not inevitable outcome of the redistributionist state. In a republic in which lobbyists increasingly hold sway over elected officials, is it not to be expected that powerful interests and industries will greatly influence redistributionist policies to their own benefit? Even a "wise and incorruptible administration," like Obama's will act in the interests of the individuals and interests who made their ascension possible via their generous campaign contributions. And unfortunately with the recent ruling of the Supreme Court in regards to corporate campaign contributions, we can expect the influence that moneyed interests hold over the formation and execution of government policies to only grow.

The same principles hold true for the fiscally destructive policies we have witnessed under the Bush and Obama Administrations. Most people lay the blame of our massive deficit spending on the foolishness of the said leaders. However, I and many other libertarians believe that the problem lies in the interventionist ship and not the helmsman. In a society beset by an inflated sense of entitlement, is it not the surest strategy of attaining and maintaining power for a politician to maximize the number of groups and interests that they cater to? A successful politician will dare not challenge the subsidies that diverse groups enjoy, from the elderly, to oilmen, from farmers to homeowners and many more. And any politician who seriously sought to pay down our national debt by increasing taxes and reducing entitlement spending would simultaneous lose (so called) conservative and liberal votes and have a very short political career. So, with few exceptions politicians will increase spending, while lowering taxes, the end result being a national debt that has spiralled out of control.

The more I study the constitution and the words of the founding fathers, the more I am certain that they were very deeply skeptical about the good will of politicians and the wisdom of the public. Much of the checks and balances and limits on the power of the federal government present in the constitution were done so precisely to guard against the foolishness of politicians and the public that we are now witnessing. They foresaw that without clear limitations on the size and scope of the federal government, most politicians would not be able to resist the temptation of utilizing the state for the benefits of powerful individuals and interests. And without a clearly circumscribed government, much of the public would not be able to resist calling on their politicians to do (and spend) more and more for them. In other words, corporate welfare and massive deficit spending would not be possible without the continuous erosion of constitutionally mandated limits on the size and scope of the federal government.

The founding fathers understood that the expanded government power that could be positively wielded by a wise leader would one day be abused by a despotic or incompetent leader. So, it is sheer folly for progressives and conservatives alike to hope for the coming of an enlightened helmsman. But, we cannot simply blame politicians, because alas they are catering to the desires of the electorate. And the first lesson of economics is that while human desire knows no end, resources are painfully finite. So, the inevitable outcome of the democratic entitlement state is for politicians to steer the country into bankruptcy. But, don't blame the helmsman; for a captain can not be wiser than the ship of fools that he pilots.

Mom, You Were Right!

For years I resisted my mother's admonitions about the importance of thrift, of living within your means, avoiding waste and saving for the future. And now it is clear that a huge element in our economic debacle is the abandonment of thrift by large segments of consumers, corporations and of course the government. Liberals who entirely place the blame on predatory lenders and conservatives who entirely lay the blame on the malfeasance of the Federal Reserve and the Community Reinvestment Act are both presenting a very incomplete picture. Home owners, Realtors, lenders, appraisers and the government all worked together to make this possible through a wide spread abandonment of thrift and moderation. Perhaps wiser regulation could have moderated the growth and collapse of the bubble, but without sound values and visions, a functioning market is not possible.

Thriving with Thrift

Americans must recapture their old habits of frugality and restraint.

By Gerald J. Russello

12 February 2010

Thrift: Rebirth of a Forgotten Virtue, by Theodore Roosevelt Malloch

(Encounter, 238 pp., $16.95)

Waste not, want not. A penny saved is a penny earned. A bird in the hand beats two in the bush. Phrases like these were once part of America’s common economic wisdom. Especially in the twentieth century, Americans learned, through the Great Depression and two world wars, that it was better to hold on to your resources and use them wisely than to spend them recklessly or to gamble with them in the hope of making a greater gain. Indeed, the 1920s saw the rise of the National Thrift Movement, which took its inspiration from our nation’s thriftiest Founder, Benjamin Franklin. Many Americans who grew up in that era never forgot its privations, which imposed at least a partial check on their characteristic economic optimism.

These venerable phrases haven’t been heard much over the last 20 years, however. First came the Internet era, which seemed to suggest that there was no limit to the Dow Jones Index or to our personal fortunes; then the subprime-housing bubble, in which overly easy credit was joined to an unrealistic view of the free market and a failure of nerve in Washington. Traits like frugality and thrift were regarded as arcane ideas from another time, as if those practicing them wore the top hats and frock coats of somber Victorian burghers.

In his new book, Thrift, the impressively named Theodore Roosevelt Malloch seeks to return thrift to its place among commercial society’s respectable virtues. After all, the word “thrift” is cognate to the verb “thrive,” and it is Malloch’s view that thrift, properly understood, should be joined with a constellation of other characteristics that make society more just and ultimately more prosperous. Thrift does not mean poor, and its opposite is not wealth but waste. Tracing its roots to the Scottish Enlightenment, Malloch describes thrift as “a matter of the wise use of assets—accumulating where this was possible, investing where this promised a return, and avoiding waste.” Thrift is, in a sense, a principle of good stewardship and could apply to caring for the environment as well as to tending one’s bank account. It requires judgment, reflection, and the forging of sound habits that will lead to happiness. One can be generous and thrifty; the term need not, as Malloch makes clear, be equated with stinginess.

Thrift ranges widely across intellectual history, from Aristotle to the Enlightenment, from George Weigel’s reflections on European malaise to the policies that the developed world should adopt toward less developed nations, from economic theory to debates over the religious causes of prosperity. The result is a sometimes-chaotic ride through several complex subjects. Malloch is concerned, among other things, with the transition into a new kind of capitalist economy: “Instead of an economy based on saving and thrift, which launched Europe on its path of growth and prosperity, . . . we have an economy based on consumption, debt, and credit, in which saving is discouraged not only by the culture of affluence but also by the fiscal policies of governments.” Economic policy, he argues, should be directed toward reinforcing good habits of saving and proper consumption.

That doesn’t mean greater government involvement or expenditure. The rise of the welfare state over the last century, for example, has contributed to the corrosion of thrift. A government that promises everything eventually convinces the populace that it need not save or prepare for anything. This position becomes ultimately untenable, Malloch argues, sapping people’s ability to develop the habits necessary to maintaining a free society. Reliance on the government also masks the reality that government resources ultimately derive from a prosperous populace; if government action reduces those resources, its own effectiveness becomes limited. It’s curious, though, that Malloch offers not a word of complaint against the private institutions that helped further our economic troubles. While it’s true that Washington failed to restrain debt spending or to inculcate thrift, the boom and inevitable bust in housing wouldn’t have been possible without thousands of private, profit-seeking individuals and firms seeking to cash in on the frenzy.

No doubt Malloch would say that an emphasis on virtue and community-building would help lessen such destructive private actions. He notes that in a society focused on consumption, “the insatiable urge to acquire things, whether or not they are needed, has reached epidemic proportions” and “has caused severe social and cultural dislocations and warped the basic values of American society.” His shorthand solution for restoring the balance is “spiritual capital.” Michael Novak and others have long argued that a disciplined capitalism requires a complex structure of social sanction, education, and often, if not always, religious belief. While Malloch concedes that calculating spiritual capital is difficult, he brings to bear an impressive array of data that shows a correlation between prosperity and traditional religion.

Shifting at times from diagnostician to sectarian, Malloch may lose some readers, but his analysis addresses the fault lines of our current predicament. A nonjudgmental secularism combined with an amoral economic system is a recipe for economic loss and cultural degradation. Perhaps it is time to bring Franklin back into the picture.

Gerald J. Russello is a fellow of the Chesterton Institute at Seton Hall University.

Saturday, February 20, 2010

Banana Republic

Way back in the day, we would dictate domestic policy to the many nations that owed us money. As we become a banana republic that's knee deep in debt, lendors like China are starting to stick their nose in our internal affairs. Get ready - this is just the beginning.

James Pethokoukis

China questions costs of U.S. healthcare reform

Nov 16, 2009

Guess what? It turns out the Chinese are kind of curious about how President Barack Obama’s healthcare reform plans would impact America’s huge fiscal deficit. Government officials are using his Asian trip as an opportunity to ask the White House questions. Detailed questions.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Nothing happening in Washington today should give Beijing any comfort or confidence about what may happen tomorrow. Healthcare reform was originally promoted as a way to “bend the curve” on escalating entitlement costs, the major part of which is financing Medicare and Medicaid. That is looking more and more like an overpromised deliverable.

For instance, a new study from the U.S. government’s Centers for Medicare and Medicaid Services finds that the healthcare reform bill recently passed in the House of Representatives would increase healthcare spending to 21.3 percent of GDP by 2019 compared with 20.8 percent under current law. That’s bending the curve the wrong way. The study also questions the “long-term viability” of the $500 billion in Medicare cuts meant to help pay for expanded insurance coverage.

In addition, the CMS study gives a clearer cost estimate than the one provided by the Congressional Budget Office. According to the CBO, the 10-year cost of PelosiCare is $894 billion. But that analysis includes early years with little government spending, According to the CMS, the House approach would cost $1 trillion from 2013-2019, or some $140 billion a year when fully put into effect.

Few realists in Washington think any of the current reform plans make a significant dent in the long-term healthcare cost to government. Indeed, the Senate Budget Committee recently held hearing about creating a bipartisan commission to find solutions to America’s entitlements problems.

If healthcare reform really bent the curve, there would be a no need for such a commission to do Healthcare Reform 2.0.

The Chinese might want to keep up the questioning.

Friday, February 19, 2010

Progressive & Libertarian Common Ground

To the best of my knowledge, historical records do not indicate if Washington and Jefferson smoked marijuana, but we do know that they grew hemp. And the encroachment of the federal government in the private lives of its citizenry via the war on drugs would have been anathema to the Founding Fathers, something that most Democrats & Republicans seem to overlook.

A shared belief in the importance of legalizing marijuana is held by most progressives and libertarians. Most of my progressive friends see the value of social freedom, but many fail to see that economic freedom and limited government are also indispensable aspects of personal liberty and prosperity. To them I recommend that they light up a spliff and spend the night reading the works of: Jefferson, Franklin, Tocqueville, Hayek, Mises and Milton Friedman.

The Growing Rift Between Libertarians & Republicans

I came across a very interesting article in (of all places) the "Progressive Nation" which discusses the growing split between libertarians and the core of the Republic Party. Obama poses a tremendous dilemma for libertarian minded individuals, like myself: on one hand we dislike many aspects of the Republican Party on the other hand our mutual concerns about Obama's economic policies are forcing us into an unhappy and (hopefully) temporary marriage.

Most libertarians have not forgotten that GW Bush set us on the path to fiscal insolvency, corporate cronyism and warfare with no end in sight; Obama has merely accelerated our journey in that direction. The only hope I have is that changes in public sentiment will force Republicans to go beyond empty rhetoric and actually implement true conservative policies.

This brings us to several other dilemmas: Should libertarian minded individuals (like Ron Paul) seek to improve the party from within or break off and form another party? If they break off will they siphon off conservative votes and allow even worse candidates to win and (ultimately) push the country towards even even worse policies?

To view the full article, scroll to the bottom and click on the link:

The Growing Rift Between Libertarians and Republicans

October 28th, 2009

Although a temporary truce between Libertarians and Republicans has been in effect for the Tea Parties, divisions over legalizing marijuana, domestic espionage, abortion, torture, gay marriage, the separation of church/state, immigration, and de-militarization are starting to take a toll. The schism between Libertarians and Republicans is widening.

Although the Libertarian philosophy has been around since the late-Enlightenment period, the party was established in the US in 1971. The Republican Party was established in 1854, and originally “put forward a progressive vision of modernizing the United States” before increasingly becoming the home of conservatives.

There have been periodic alliances between Libertarians and Republicans in the past, although the last few years have demonstrated increasing distrust between the two.


Roots of the rift between Libertarians and Republicans can be traced to many of the policies pushed through Congress during the George W Bush presidency, in particular the invasion of Iraq, spying on Americans, and the burgeoning yearly deficits. The libertarian Ron Paul (R-TX) gained enthusiastic online and grassroots support seeking the 2008 Republican nomination for president. Despite this, libertarian ideals did not play well with the conservative GOP base, and as a consequence, he was greeted with numerous boos and not even invited to the debate sponsored by Fox ‘News’.


The first Tea Parties were libertarian events for Ron Paul, starting with the ‘money bomb’ during the Republican primary in December 2007. A few speaking events and a ceremonial dumping of barrels into Boston Harbor followed in 2008. These early Tea Parties were generally smaller events based on the libertarian platform.

Instead of small events, up to 300,000 showed up in multiple gatherings around the country. The focus was kept exclusively on economic issues: taxation, deficits, the economic stimulus package, and the national debt. This is an area where there is supposed to be common ground between Libertarians and Republicans, although the latter only pays lip service to it as explained later.

This was the moment when the Tea Parties ceased being Libertarian events, and turned into Republican ones. Despite finding some common ground ideologically on economic issues, from this point forward the party platform of the Libertarians would take a back seat to Republican and corporate plans.


The issues that divide Libertarians and Republicans are numerous and intense. Although the outward similarity on fiscal policy has bound them together temporarily, these topics are increasingly becoming points of contention between them.

Legalizing Marijuana

Responsible Fiscal Policy

Domestic espionage (Patriot Act and FISA)

Abortion Rights

Torture, Rendition, Capital Punishment

Opposing corporate welfare

Get the government out of marriage

Separation of Church and State



Libertarians believe in the full legalization of marijuana and other drugs. Republicans have been pushing the failed ‘War on Drugs’ since Reagan. This irrational prohibition on a plant and the surrounding hysteria behind it has been behind the largest increase in the incarceration rate in the world. The United States is now the world’s leading jailer, with 1 in 32 Americans either behind bars or on probation, mostly due to marijuana arrests (approaching 1 million per year).

Libertarians believe in a deficit neutral economic policy. The Republicans have given lip service to this, while actually employing the Starve the Beast policy where deficits are deliberately run sky high. Recent GOP administrations are responsible for 82% of the national debt, including the majority of the deficit for fiscal 2009 (Bush budget, Great Recession, etc.).

Libertarians believe in repealing the Foreign Intelligence Surveillance Act (FISA) and the Patriot Act to finally end domestic espionage. Republicans believe that surveillance of American citizens is an integral part of keeping the country safe.

Libertarians believe the government should be kept out of the abortion issue. Republicans continue to pander to their religious right base in pushing for more government laws to end a woman’s right to chose.

Libertarians believe in ending torture, rendition, and capital punishment. Republicans are big supporters of all three.

Libertarians believe in ending corporate welfare. Republicans have traditionally advocated supporting many big industries, such as defense contractors and Big Oil.

Libertarians believe in getting the government out of marriage, which would effectively give LGBT couples the same rights as straight folks. Republicans support the continued government mandated discrimination against gays being able to marry.

Libertarians believe in the separation of church and state. Republicans continue to support religious ceremonies in school functions, government buildings, endorsement of Christianity on legal tender, the courts, and elsewhere. In fact, it is one of the wedge issues that they use most often.

Libertarians believe in an open border policy on immigration. Republicans continue to demonize undocumented immigrants seeking a better life in the US.

Libertarians believe in a small, lean, and defensive Department of Defense. Republicans favor more military, bigger budgets, and more interventionism abroad. The US currently has over 400,000 troops stationed in 144 countries around the globe. The official cost of this has soared to almost $500 billion per year although the hidden costs easily double this. The US actually spends as much as the rest of the world combined on military expenditures, hardly a sound fiscal policy. Any talk of bringing our troops home and ending foreign wars results in Republican accusations of surrender.


The Tea Parties have been the glue that binds the two groups together so far. The think tanks behind the themes of these events have been very careful to keep the focus on economic issues, although as time passes, more conservative social and foreign policy issues are being brought to the forefront. Libertarians who dare carry signs advocating a withdrawal from Iraq, ending the drug war, or allowing gay marriage will suffer the same fate as Ron Paul during the primary debates: an angry wall of intolerance and open hostility, just like this peaceful counter-protester who dared to carry a Public Option Now sign to Glenn Beck’s 912 DC rally.

To add to this, the Republicans are going to have an increasingly difficult time with cohesion as non-economic issues are brought to the forefront. The upcoming battles over the Employee Free Choice Act and Campaign Finance Reform are not likely to cause a rebellion by Libertarians, although Immigration Reform, the closure of the torture facility at Guantanamo, and equal rights for LGBT folks certainly will. There will simply be no way for this temporary truce to last in the wake of issues such as this.

One of the main curiosities of this situation is whether the Libertarians will do as they have done before, become disenfranchised with the political system, and accept a minor 3rd party status, or whether they will stand their ground and try to create a larger movement.

There are many non-partisan community organizers in the Tea Party movement who are actively trying to stop the slide into Republican control. This is apparent in the recent division between the Tea Party Patriots and Tea Party Express as reported by the Rachel Maddow.

What this boils down to is ‘Our Country Deserves Better’, the Republican political action committee (PAC) being behind the Tea Party Express bus tour.To make matters worse, Fox ‘News’ appears to have chosen a side, not surprisingly with the Republican Tea Party Express. The Tea Party Patriots are not happy and ejected Amy Kremer, the Atlanta activist who co-founded the organization, after she jumped onboard the Express.

There is more. In September, Florida Republicans purged Libertarians from the GOP. According to the Daily Paul:

“On Friday — timed just right to minimize news coverage — Republican Party of Florida Chairman Jim Greer and the state party Grievance Committee notified a number of party members, many of them holding elective office, that they were effectively purged from the party and had been removed from their offices and would be ineligible to hold any other party positions for periods ranging from two to four years. The targets of this purge are mostly members of the Florida chapter of the Republican Liberty Caucus”

As a matter of political philosophy and organization, the cracks in the foundation are spreading. From differences in core beliefs to resentment over the Tea Party movement being hijacked, the rift between Libertarians and Republicans is growing.

Jimmy Carter Prize: Sarah Palin

We proudly bestow the Jimmy Carter Prize For the Advancement of Douchebaggery on Sarah Pailin for her central role in the hijacking of the (previously) non-partisan Tea Party Movement by the Republican Party. If you will recall, the Tea Party was launched in 2007 and directed much of its ire towards GW Bush. And when I attended the Tea Party a year ago, the majority of the crowd was hostile to both parties and in fact booed a Republican who attempted to give a speech. So, whether you agreed with them or not, the Tea Party initially was a movement of principles and policies, not partisanship.

So, I cannot emphasize the disgust I felt when Palin, a main stream GOP politician became the unofficial spokeswoman of the movement. This is especially absurd considering that after Palin's term as governor, Alaska was ranked number one in the entire country for deficit spending (as a percentage of spending) and was the number one recipient of federal funds (per capita), so in no way does she have the right to take up the mantle of fiscal conservatism. And she especially deserves this award for all that she's done to make conservatism distasteful for many thoughtful Americans, with her strident anti-intellectualism, false populism, empty catch phrases and cynical use of the religious and patriotic sentiments of many Americans.

Tea Party Co-Founder Blasts Mainstream GOP Imitators

by Chad Peace

Mon, Nov 30th 2009

In 2007, the modern tea party movement took shape, in a vastly different form than it now presents itself. Spurred by an impending recession, a government overrun by deception and corruption, and an unprecedented expansion of government under eight years of “conservative” leadership, the first modern day tea partiers had positive causes of action: honesty, respect for the rule of law, and protection of the rights of the smallest minority; the individual.

In late 2007, on the anniversary of the original Boston Tea Party, positive protestors laid hope in a solution. In a 24 hours period, in concert with symbolic and peaceful re-enactments of the Boston Tea Party in over 50 cities across the country, energetic tea partiers dumped over 5.2 million dollars into a long-shot presidential campaign to support a candidate that embodied honesty, respect, and sincerity in the pursuit strict constitutional leadership. The goal: to entrust our highest office to a man of principles, who would be shackled by a devotion to the constitution, rather than obligations to special interests.

I am proud to have been a participant in that tea party. In witnessing the tens of thousands of “patriots” that peacefully marched through the streets and donated extravagantly to a candidate relegated to a status of “darkhorse” by the mainstream, my respect turned to passion. I was convinced that the average American was beginning to see through the veil of scripted partisan sermons, designed to coddle fears and perpetuate the superficial battle between a “left” and “right”.

Over the next year, I harvested an addiction to contrarianism. An incessant hunger for serious political debate, fueled by coffee, cigarettes and eighteen-hour workdays changed my world. I was a dark-horse political enthusiast, with blinders on.

Then, in mid-February of 2009, Rick Santelli gave a now infamous rant on CNBC, calling for a modern day “tea party” in July. Immediately, my business partner and I set up on online tea party website. Within days, we received tens of thousands of e-mails and passionate pleas for government accountability. Our vision was to change the political debate focused on general divisions to one centered on specific solutions. We asked our supporters to question party-line politicians and demand that our leaders take a more independent and reasoned stance on the issues facing our country.

In short time, desperate partisans were soiling the sheets. Knowing we had neither the financial means nor man-power to out-publicize political perverts, I was never-the-less convinced that this independent movement would not be overrun by golden idols. I wrote to our supporters, asking them to be wary of old Republican figureheads like Newt Gingrich and current political strategists Patrick Leahy, hiding their identity behind make-shift “grassroots” websites. I was hopeful that the same talking heads, like Hannity and O’Reilly, that asked us to bend over blindly to past leaders would not have enough credibility to grandstand in front of an independent-minded movement.

At some point, reality began piercing my passion. The tea party boat started becoming a wagon of whiners. Propelled by the moving mouths on TV and the talking heads of such ironically named organizations such as the “American Family Association” (one must agree that for an admitted adulterer with three ex-wives heading the AFA is ironic, right?), the movement lost its focus. No longer were tea partiers upset with the bipartisan corruption in Washington D.C., they are mad at the "socialists communists Hitler-like Democrats." No longer did Constitutionalism mean respecting the rule of law, it meant Obama is not really our president. A movement founded on the principles of independent analysis, it has become a yelling fest for punch-drunk cynics armed with incoherent talking points.

Slowly, I’ve lost some of my unrealistic idealism. As I pull back the blinders, I try to look at the tea party from the eyes of an outsider, the average American. What I see is a bunch of people reciting partisan political sermons, coddling fears, and perpetuating a superficial battle between “left” and “right”; drowning the well intentioned idealists that remain.

As the battle rages, I have more faith than ever that an independent revolution will come. When the absurdity of our political process rises to the point where tea bags become a right wing rally cry and the left still manages to drop in the polls, there is a growing opportunity for the increasingly disenchanted to drive a stake right down the middle.

Tuesday, February 2, 2010

Public Service Announcement

In 2009 the federal government paid out $383 Billion in interest on the national debt. That number is expected to rise this year. Hope you are enjoying your change. That is all.