Democracy in America: Chapter 2

I'm skipping chapter 1, because it's an overview of the physical geography of the United States. Things don't really get interesting until chapter 5 or so, but we'll go one at a time anyway.

In Chapter 2 Toqueville deals with the original colonists in the United States. He barely touches on the South, I suspect because even by Toqueville's time the political power of the North had become controlling in the Union. It could also, though, be because the political philosophy of the Puritans most conformed to Toqueville's ideals. At any rate he deals with the South principally by saying that the men who came there were gold seekers and adventurers without resource or character and that the institution of slavery defines the early South.

The North, however, was populated by Puritans and Pilgrims. These Puritans (I'll ignore the difference, since he does) were upright citizens, generally of independent means, who were leaving their mother country not to pursue a quick buck but to escape the religious turmoil of the seventeenth century. Additionally the Puritan ethic extended not just to conventionally religious matters but also, importantly, to the view that men owned themselves and the product of their labor. Views that are essential to the establishment of modern democracy and republicanism.

More US Democracy

From E.J. Dionne today (h.t. Ramesh Ponnuru):

In a normal democracy, such majorities would work their will, a law would pass, and champagne corks would pop. But everyone must get it through their heads that thanks to the bizarre habits of the Senate, we are no longer a normal democracy.

Because of a front of Republican obstruction and the ludicrous idea that all legislation requires a supermajority of 60 votes, power has passed from the majority to tiny minorities, sometimes minorities of one.

Ramesh noted the inconsistency between Dionne's prior support for judicial filibusters (and though Ramesh doesn't offer a citation, I will. Washington Post Feb 20, 2003 (I can't find it online, but Dionne's column in that paper was justifying the Democrat filibuster of Estrada)) but I want to go somewhere else. We're now not a normal democracy? What changed? Lets go through some history of the Senate:

1789

At the founding the Senate is elected, not by the people, but by the State legislatures. The rules of the Senate do not allow for a filibuster

1806

Under a question by Aaron Burr, the Senate changed its rules and it became possible to refuse to cut off debate. In theory at this point a single Senator could prevent a vote on a bill

1837

The first filibuster occurs

circa 1850

In the first half of the 19th century states started conditioning their election of state representatives to their choice for the US Senate.

1913

The Constitution is changed to formally allow the citizens of a state to directly elect Senators (still not possible to force a vote on a bill if even a single Senator refuses)

1917

At the urging of Wilson, the rules of the Senate change to allow a two-thirds majority (66 votes) to overcome a filibuster.

1975

Lead by Strom Thurmond, the Senate changes the rules to the current three-fifths majority

So, now that we've had our little stroll down political memory lane, at what point in the past does Dionne think we ceased to be a normal democracy? When a Democrat made it possible to filibuster in 1806, when the progressives changed to direct election of the senate, when a Democrat changed the rules to make it a two-thirds majority to stop a filibuster, or when a Democrat changed the rules again to make it a three-fifths majority? Or was it, perhaps, when Democrats (including Dionne) decided it was acceptable to filibuster not just legislation but also nominations?

Book Review

I'm presently reading Toqueville's Democracy in America, and I think this is quite possibly the most important work on politics ever written. When I say this I mean important to modern study, not important to the development of the polity. Obviously the circumstances of its authorship never occur without other important political luminaries laying the groundwork for 1776, but 1776 (and, for that matter, 1688 and 1215) has come and gone. I don't think it likely that humanity regresses toward the idea that some men were born to rule others, so the important question from 1776 to today is not whether or not men are created equal but whether government exists to bestow equal rights or equal results and what the causes and effects of these two types of government are.

In light of its importance, I'm seriously cosidering embarking on an extended review of it and my impression of its application today. I'd love for my reader (is there more than one of you) if you think this would be useful or interesting. I'll be reading the 2004 update of the Library of America edition but I linked a free translation above I may reference.

UN Human Rights

I missed this because I was traveling, but evidently the UN sent a "special rapporteur" to New York to investigate human rights abuses due to inadequate housing.

I can only assume that "inadequate housing" to the UN is substantially below the level of the average Somali, or the average citizen of a Favela outside the Rapporteur's hometown in Brazil.

Or are human rights violations due to inadequate housing only possible in the US?

Friends like Olympia Snowe

As you probably know by the time you read this, Olympia Snowe voted yesterday to approve an outline (not a bill) of a healthcare plan out of the finance committee. There are quite a few conservatives upset by that, but I'm not. Snowe has never been a conservative and to think she would take a conservative position on any particular issue would be rather foolish. I am, however, upset by a statement she made shortly after that on ABC's Good Morning in America. I can't find a video clip or transcript so I'm going to have to do my best to get the wording close. She was asked "Is one Republican in favor enough to really have bipartisanship?" to which she responded "It's not enough. We need more Republicans and centrist Democrats to look seriously at this bill and what it can do for the American people." With that sort of statement from a Republican I have to wonder if we would be better off with a Democrat in Maine.

The reason this horrifies me so much is that she implies in the statement that the reason we don't have bipartisanship in Washington is because more Republicans aren't willing to be like her and sign on to legislation that no Republican (and certainly no conservative) had a part in drafting. I've read crazy articles stating that the Congress around 2002 was the most partisan ever, but I still recall most of the important bills had bipartisan cosponsors. None of the big bills coming out of this Congress have any Republican input at all. The very fact that she's arguing centrist Democrats who, lets remember, are Democrats need to get in line with the party indicates that the hardline Democrats aren't just rejecting unreasonable conservative suggestions, they're rejecting any non-progressive suggestions. If you want to see a bipartisan bill try the McCain-Kennedy immigration bill or the McCain-Feingold campaign finance reform bill, or the No Child Left Behind Act (sponsored by John Boehner and Ted Kennedy). I note I think each of these is a disaster, but each is an important bill, introduced in a Republican congress, and written and sponsored in part by a Democrat. The "stimulus bill", the climate bill and the healthcare bill have all be the work entirely of Democrats with no Republicans consulted on drafting and no Republican amendments accepted.

I'll note, I don't have a problem with this. I very much wish that Republicans could get their act together and be more partisan when they hold majorities. The problem I have is that Democrats want to work without any consultation with the other party but at the same time claim to hold the mantle of bipartisanship because Republicans don't go along with purely Democrat bills. That's simply a perversion of the language.

Disruptions

I just saw this for the first time this afternoon (feel free to ignore the inserted comments, I couldn't find a raw copy of the video):




The reason I post this is that this video really cuts to the heart of the health care debate. What Axelrod is saying here is that overriding state regulations so that you can buy health care that's legal in Georgia if you live in Alabama is too "disruptive" to the consumers. The better, non-disruptive, option is to:

- establish several new federal agencies responsible overriding state regulations and telling all insurance companies what services they must provide
- fine people thousands of dollars if they don't subsidize those with more expensive health habits or illnesses by buying overpriced "insurance" that's really a way to spread wealth around
- offer a "public option" so that you have a "choice" in health care after the aforementioned restrictions put all 50 states in the same shape that Alabama is now.

I hope you'll forgive me if I'd rather be "disrupted" by being given the choice to buy health care that's currently off limits.

Medicare cost savings

The President stated again last night that half of his 900 billion dollar plan would be covered by increased efficiency in Medicare, without denying procedures or dropping coverage. That's 450 billion spread out over 10 years, so it's roughly 10% of the total Medicare budget, which I don't think in enough to bring Medicare back into solvency. Given that we do have millions of seniors depending on Medicare and that practically every economic model has it going broke in the medium term, I have to wonder why, since Democrats have ideas for such huge savings without cuts in benefits, we haven't already implemented them. I have a very hard time believing that Republicans wouldn't go along with non-benefit reducing cuts in Medicare spending if they were separated from a massive new regulatory system for private health care.

Leaving that, aside, though, I have a different proposal. In last nights speech Obama stated that the bill would be deficit neutral and he would go so far as to make a provision in the bill that if spending cuts didn't materialize at their expected rate then further spending cuts would automatically be mandated. This sounds great, pass a bill that is deficit neutral and even if everyone is wrong (as often happens) about how much reduction you actually have then make further cuts. But I don't believe that's what he meant. Smart money is, I think, on the interpretation that he's going to pass his existing "reforms" which the CBO says will save pretty much nothing, and if they don't save the amount he claims (and practically no economist agrees with) then Congress will have to make the hard choices of cutting unspecified, but now enacted, programs. That's an unacceptable gimmick. Which is easier in the future, cutting medical services to save money, or changing the bill so it no longer promises those cuts?

I have a counter proposal. If he is really that confident his Medicare cuts will work, why not stake the bill on it instead of forcing spending cuts that I don't believe will ever happen? The bills currently published don't take effect until 2013 anyway. Make a bill such that the Medicare spending cuts happen now and if Medicare costs fall $225 billion below current CBO (or HHS) estimates at the 5 year mark or $450 billion below estimates at the 10 year mark then the rest of the program to have government dictate private citizens' health care starts then. This completely removes my (and many Republicans') argument that his Medicare cuts won't work.

I'll note I still think the massive government intrusion into determining what health care I must pay for (even if I have no chance of ever receiving it) is a bad idea and I don't think we should even be considering cost savings in Medicare unless it's cost savings below that which makes Medicare solvent in the long term (which 450 billion doesn't begin to approach), but I'm so confident he can't cut 450 billion without affecting services that I'll promise not to stand in the way of a bill that is predicated on it.

Medicare cuts

I just came across this fantastic analysis of the relationship between Medicare payments and benefits. This is one of my biggest complaints to how Republicans are picking the fight on Obama's healthcare plan.

Medicare is a wildly unsustainable program that should never have existed in the first place. I have no problem with providing some degree of care to the indigent (at the state level) but the government is not competent to manage health care for the elderly. The main problem with Obama's approach to Medicare isn't that he's cutting benefits that recipients have paid for, it's that he's making the easiest cuts (and probably some that I would object to) in an utterly insolvent program and using the "savings" to fund a new, more unsustainable, program.

That's like me having a mortgage at three quarters of my salary, facing foreclosure on my home, managing to convince the bank to renegotiate to half my salary and then turning around and spending the "savings" on credit cards.

Watering the Tree of Liberty

I was listening recently to a comment about a recent protester at an Obama rally who had a shirt mentioning "watering the Tree of Liberty" which, of course, comes from Thomas Jefferson's famous quote "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

Unfortunately, the situation is more bleak than he seems to realize. The Revolution of 1776 work only because the majority of the colonists, through the unanimous approval of their elected representatives, supported first the revolution and then the Constitution. Though we certainly don't have a Constitutionally limited government anymore, we clearly still have a democracy (in fact, the root of the problem is that we have too much of a democracy and not enough of a republic). This means that our government oversteps the powers granted it by the Constitution not in spite of the approval of the majority, but because the majority wants it. This is of critical importance to this protester's cause.

If we can convince most Americans that limited government is needed to secure our freedoms, then an armed revolution is unnecessary. If we can't convince them, it is insufficient. Even if we overthrew the government it is only through tyranny that we could inflict "freedom" on a populace that wants to vote themselves the fruits of others' labor.

Human Nature

In his press conference last night, Obama stated that one of the problems with the current cost of medicine is that doctors will see a child with a sore throat and recommend a tonsillectomy, not because it is indicated, but because it has a preferable fee schedule to what is indicated. I'm sure this happens, but I think it's a slander against the medical profession to insinuate it happens often enough to be a concern with the cost of medical care.

Let's assume, for the sake of argument, that the profit motive is so strong that at least a huge minority of doctors recommend costly, but unneeded, procedures on a routine basis purely to increase their billable fees. Does anyone think bureaucrats won't commit the same sins? Is it really a winning argument that we can't trust doctors to make the right decision for the person standing in front of them who can get a second opinion, but an unaccountable bureaucrat hundreds of miles away who gets to make an almost unappealable call for masses of people he will never meet will always make the call with their best interest at heart? Gallup conducts a poll on what professions are viewed as the most trustworthy and ethical every year. In the last poll doctors, nurses, and pharmacists were all in the top ten with the lowest of them having a 6% unfavorable rating. Congressmen were just above used car salesman at 48% unfavorable. They didn't poll for unelected bureaucrats, but I'd have to guess they're near or below officials you can actually vote out of office.

Or is it that doctors have a profit motive, but bureaucrats are only accountable to getting the right answer? I think we know intuitively that this isn't true. Obama previously promised that the government would be hands off in running its new car company, but the same day he called Detroit to promise that they would be staying in expensive office space there and Congress has (predictably) fought tooth and nail to prevent dealer closures in each representative's neighborhood. I don't feel qualified to make a judgment on whether or not the cancellation of the F-22 was militarily advisable, but I'm pretty sure both GA Senators wouldn't have voted against it if Lockheed's F-22 plant was in Marietta, OH.

I'm sure lobbyist groups are already putting together plans to try to get their pet procedure funded under the new government regulations. It would not at all surprise me, for instance, if the bureaucrats deciding what health insurance must cover decide you must pay for other people's abortions if you buy health insurance. At least 12 states already have mandates that require people paying for health insurance to compensate people getting IVF. I'm not saying IVF is the same as abortion, but there are people with moral objections to it and it's certainly not something any sane person would "insure" against. I'm pretty sure at no point in my life will something happen that requires me to get emergency IVF.

So what I really want to know from Obama is, assuming that Doctors are recommending needless procedures (for reasons other than lawsuit protection) so often that there's a quantifiable cost savings to preventing it, are bureaucrats and congressmen just better people than doctors, or is he going to structure the bill so that, for the first time in history, there's no way Washington can tailor their policies to the needs of special or parochial interest instead of the American people?

Rethinking the Constitution, again

I had previously written a series of posts inspired by an article by Larry Sabato summarizing his book "A More Perfect Constitution." Now there's another effort to remake the Constitution out, and I honestly think this one is a more serious effort. Robert Nelson wrote an excellent article for U. Maryland's Philosophy and Public Policy Quarterly. I say excellent not because I agree with it, but because it's extremely well thought out.

The original Constitution (including, if you like, up to the first 15 Amendments) was written primarily in an attempt to protect us from a national democracy. That is why, as I have previously noted, the Senate was originally picked by state legislatures. That is why Article I Section 8 carefully lays out the powers allocated to Congress and Amendment 10 specifies that all powers not specifically allocated to the United States are reserved to the States or the people.

But across the twentieth century, beginning with T.R. and continuing mainly through the administrations of Wilson, Hoover, FDR, Truman and Johnson, our Federal Government has moved from one that provides a very limited set of services that are enumerated in the Constitution and thought to be beyond the capabilities of the states to a Taylorist administrative state that seeks to oversee everything from what can be broadcast on media to what food your local grocery store can offer.

Nelson rightly points out that the structure of our national government is ill-suited to handle such detailed work and proposes, thouroughly consistent with Talyor and Wilson, a Chief Administrator to oversee committees of experts to run things outside the necessarily inefficient elected structure. I think his proposal is well thought out and enlightened in its structure of a national administrative state. His chosen example of the failures of the floodwall in New Orleans (which is a seperate, and much better chosen, issue from the response to that failure) is a fantastic example of the failings of the current mishmash administrative state, but also a power that makes no sense for the Federal Government to have. I understand that the Constitution allows for the establishment of Federal armies, but I don't think the framers envisioned that one of the responsibilities of that Army would be creating a permanent city below Sea Level within the boundaries of the United States.

The problem is that I think a national administrative state, though it may well be the inevitable destination of the weight of democracy, is doomed to fall into tyranny. As Tocqueville brilliantly describes in a chapter titled "What Sort Of Despotism Democratic Nations Have To Fear"

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications, and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent, if, like that authority, its object was to prepare men for manhood; but it seeks on the contrary to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness: it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances—what remains, but to spare them all the care of thinking and all the trouble of living? Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range, and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things: it has predisposed men to endure them, and oftentimes to look on them as benefits.

After having thus successively taken each member of the community in its powerful grasp, and fashioned them at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a net-work of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided: men are seldom forced by it to act, but they are constantly restrained from acting: such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

(Yes, I'm shamelessly ripping that off from Paul Rahe and I'll admit to not having read all of Democracy in America, but it's made it fairly high on my to-read list.)

Preexisting conditions

I find it almost unbelievable that both the Democrat's bill and the Republican counter offer specify that private plans (and the government plan) should not be allowed to discriminate based on pre-existing conditions. I know several people who either have or have children with very expensive pre-existing conditions, so I feel for the fact that you can't get private insurance if you have cancer. But, I don't see how you can possibly end up with a decent health insurance system if you allow people to get into the program after they're already sick.

Imagine a system where you couldn't exempt "pre-existing conditions" from home owners insurance. You would be crazy to buy insurance before your house burned to the ground, because you would have to pay to rebuild the houses of the smart people who bought their coverage when their house was a smoldering ruin. I actually suspect, based on the breakdowns that I have seen, that a fair portion of the Democrat's 50 million uninsured are currently making the gamble that if they get to the point where they need insurance they can just depend on the fact that corporate policies and Medicare can't look at preexisting conditions and get it when they get sick.

Ultimately I would like to see health insurance work something like home owners insurance does now. You can select your coverage ahead of time and choose what is covered and if you suffer something that's covered then it will get paid for. If you choose not to insure against loss then you pay dearly. I'm not claiming that the government should let people die (though, as I note in my previous post, at some point they have to), but you should bear a great deal of the burden for your choices. That's how markets pressure people to make good decisions.

I understand that it's very, very difficult to get from where we are now to a system where you can get real catastrophic coverage without severely harming people who came down with a disease while depending on their current corporate policy, but nobody seems to want to even try.

An analogy on health insurance

As a way to explain the current proposals (such as they are) to "reform" health insurance, I thought I might employ an analogy. I realize that, like all analogies, this is flawed, but I think it actually does a pretty good job of illustrating the current problems.

Lets imagine that your car insurance was run just like the current health insurance system. This would mean:

• There was a tax break for getting car insurance through your employer
• That insurance gave group rates assuming everyone at your company had the same driving history
• That insurance was not allowed to reject people because of prior driving records
• You lost that insurance if you left the company (or shortly after)
  
• Any insurance you purchased on your own not only took into account your driving records, but did not cover any defects in your cars that existed before purchase.
• The standard method for insurance is to pay for all repairs for a small copay
• There were government mandates that, for instance, if your car was dented then a full repainting must be paid for, and the coverage must include rebuilding the exhaust system of clunkers to modern emissions compliance (1).
  
• Those mandates include that oil changes, tires, and regular recommend maintenance must be covered, but allowed the insurance company to set a maximum liability payout of $10,000 in the case of an accident.
• Anyone can sue a mechanic for any reason and if they lose they pay only their own lawyer, but if they win the mechanic will likely be out many times what he makes in a year.
• There is a government program to fix the cars of old and poor people, which pays repair shops 85-90% of market rates, meaning the shops have to recoop that cost by charging you more.
  
• Other countries legally limit the price of newly developed systems, so when a new system for brake flushing or whatever comes along, they pay the cost of the actual hardware, we have to pay for all the development work.
  

As a solution to this the Democrats have offered that they'll offer another program, just like an employer provided health plan, but run by the Federal Government. They will, of course, use taxpayer money to subsidize this plan. They will likely also decide what they are going to pay doctors and legally force doctors to accept their plan, even if they don't take private plans at the same rate. This plan is not subject to state mandates, but they will have their own mandates for it (and for any competing plan, which is still subject to the state mandates, too)

Their current idea is to take out the public plan, but establish a clearing house for private plans that still have to meet their mandates (and that still meet all the other conditions above, except not being tied to their employer).

Obama claims that this will save money because part of this is a plan to make consumers better informed about their choices in healthcare. If you took your car to the mechanic and he said that it has a seal that's slightly cracked. It's unlikely to cause a problem in the next 6 months so you could just get it checked again the next time you get an oil change, but he can change it now (at a cost of a couple hundred dollars) and you won't have to pay any more. Would the information that you don't really need to get it done now really make that much of a difference?



I'll note I'm leaving off one of the major drivers of cost in the health business, which is that people will pay anything for health. If something out there has a 2% chance of saving your baby's life and costs $10 million, it's worth it. Health care costs will grow uncontrollably because we will spend on it constrained only by what we can come up with. This means that the government can never solve every health problem. There are only a few possible approaches to expensive or new treatments:

1. Do nothing and let the market decide. This will mean that in the short term people will die where we have treatments available (but as we'll shortly see, that is always going to happen) but historically treatments have gotten cheaper so hopefully in the future the treatment will be available to those with less means.
2. Set a maximum government payout and let the market decide. Same as above, but with more government involvement, which in this case means (interestingly) that we're more likely to get future treatments that are more expensive.
   
3. Make rules for who lives and who dies. This is pretty much what most current purely government plans do. They might pay for an expensive treatment for someone who is 30, but not for the same condition in someone who is 70 because they don't have enough time left to be worth the expense. Several of them also cut down on costs by having waiting lists so that some people become untreatable while waiting, allowing them to only fund operations for those who can wait that long and still be treatable. This could either go with an option to buy treatment if you're outside the rules (like Britain, iirc) or eliminate private healthcare entirely (like Canada would be if they didn't have a private system to their South)
   
4. Artificially set the price for treatment and offer it to everyone. This will work for most things now, but it will completely eviscerate future spending on development, so more people will die in the future because of cures we won't discover that would have been discovered if they were predicted to sell at a higher cost. This isn't as bad if somebody else is paying unlimited amounts for new developments since then the research cost for some things can be paid by somebody else and we can just pay for production costs(2)
   

Obviously you can have some combination of these (Canada, iirc, has rules and also artificially lowers the cost of prescriptions, which in some cases means they don't get the latest drugs imported at all.) but no matter what you do, you need to face the fact that some people are going to die as a result of your decision. You can't, as Obama seems to want to, simply say that we're going to fix it and ensure everybody will get every treatment they need.

(1) If you think this is an insane analogy, I know several states require that cancer patients be provided with wigs by insurance. I've known people in chemo and I know how much hair pieces can mean to them, but do we really need a law stating that an insurance policy must cover that?

(2) Imagine I have an idea for a new cancer drug which I think has a 10% chance of success, will cost $100 million to get through research and $5 per patient for production, and will affect 1 million people per year worldwide. If I get 7 years on my patent and spend 2 of those in approval testing with the FDA then I need to recoup $100 million in 5 years after approval. This would cost $25 per patient to recoup the costs if it's successful, but there's no way I persue it if my expected return is $25 per patient because there's a 90% chance I lose $100 million. To make the expected return equal the cost I would need to charge at least $185 per patient. If half of those patients are in country X and they normally only give double the production cost in their price fixing operation then I'll still want to sell to them if I succeed (since that's $5 per patient in profit, assuming the research is successful) but when I'm deciding if I can afford to start I need to assume I can sell to the other half of the patients at $365 to recoup the expected loss on research. In reality I don't think any of the current price fixing countries are setting prices based on production costs (with the possible exception of some African anti-virals, which don't account for substantial expected profits anyway) so it's not quite this bad, but this does illustrate why price fixes work, so long as somebody else is willing to pay for research.

Those 150k jobs that were saved or created.

I'm sure everyone has seen the chart by this point comparing Obama's prediction with and without the stimulus to the actual unemployment data. What I find interesting is the comparison of the trend line with the stimulus to Obama's new model of what would have happened without the stimulus.

Using the May BLS numbers for jobless claims we get 13,973,000 unemployed with 9.4% unemployment. I don't remember how to get the payroll numbers out of BLS data, so let's presume that it's exactly 9.4% and there are 148,648,936 people considered. That means that under Obama's predictions in January we would now have around 8.3% unemployment without the stimulus or 7.8% with. We passed the stimulus and we're now at 9.4%. So how far is his original estimate of 7.8% from the actual data at 9.4%? Well 148,648,936*.078 = 11,594,617 or a difference of 2,378,383 jobs.

The claim now is that that 9.4% number is much better than it would have been because he has "created or saved" 150,000 jobs. For the sake of argument, lets assume that his predictions were 2.3 million jobs off and yet his estimate of jobs created or saved is deadly accurate. How much worse would it be if we hadn't passed a trillion dollars in spending? That would be 150/(148648+150) or — wait for it — .1%.

Great.

Illustrations on Health Care

There were two events this week that really show what a government healthcare system would look like.

The first is the crash of the French airliner in the Atlantic. The interesting thing to me about that crash is that I just learned that damages from airlines for crashes, even resulting in fatalities, is limited to around $200k by international treaty. This treaty was passed in the early 20th century in order to promote the growth of an international airline system. It seems to have do extremely well at that, but interestingly it also seems not to have limited pressure on airlines to fly safely. If you listen to people opposing limits on liability for doctors you would expect that similar limits on air carrier would cause us to have accidents all the time, but in fact it's much safer to fly than drive and I learned about these limits only because of a very, very rare fatal crash. Comair has the worst safety rating of any North American carrier, having lost 2 planes out of 5 million. I'll go ahead and state that I would be willing to go to a doctor with such an atrocious safety record.

The second is Obama's takeover of GM. I think any reasonable observer would instantly come to the realization that his gutting the rights of top priority lien holders in favor of the UAW reflects the fact that the government takeover gives favor to parties favored by the government. We can also see this in the fact that he has already assured the Mayor of Detroit that GM's headquarters will remain there, regardless of the business sense of that. It also makes sense to question what now happens to non-government owned automakers. Can Ford fairly get fleet vehicles bought by the fed? Will the UAW negotiate terms to the independently held Ford the same as to their own automaker? If they don't and Ford takes them to court, can we expect the Federal Government to fairly hear the case that the UAW discriminated in favor of a company they jointly hold with the Federal Government? There were local utilities a decade or two ago that tried to get into the TVA's market, but were rebuffed because TVA drastically cut their prices long enough to hold them out. TVA lost money during this time, but they're a Federal agency so we were there to bail them out. Can we reasonably exclude GM from following the same pricing plan? When the government is setting safety, emissions, or fuel economy standards, would it make sense for them to look at what their line of cars already produces? How closely can we expect this to be tailored? Currently the standards are different for light trucks. How about a different standard for cars that have exactly the same weight and interior volume as the Chevy Obama?

This is the ultimate in vertical integration, and it should raise exactly the same red flags as a "government option" in healthcare.

A new convention?

I just saw this article in Thursday's Wall Street Journal calling for a new Constitutional Convention (or at least a new Amendment). I think it's a fantastic idea. I would love to see the repeal of the 17th as well, but the sections he lays out go a long way to restoring limits on the Federal Government.

Classical and Modern Liberalism

I have read with much interest a series of posts over at National Review's Corner starting with
this one about Alan Wolfe's column on liberalism. What I find interesting about them is that I had always presumed that honest modern liberals admitted, at least to themselves, that Wilson, Taylor, Dewey, and the rest of their progressive ideological ancestors made a fundamental break from Smith, Paine, Jefferson and the other fathers of Renaissance liberalism.

I see an obvious example to this in Hillary's campaign statement that the word "liberal" "originally meant you were for freedom... that you were willing to stand against big power and on behalf of the individual." Now clearly Hillary intended to imply that she was for freedom and against big power, but it's equally clear that modern progressives are for no such thing. The root of progressivism, which both Clinton and Obama embrace wholeheartedly, is that nearly all problems can be solved if you give the government enough power and have the right (naturaly Clinton and Obama respectively) people at the helm. It necessarily follows from giving the government the power to solve all problems that it also has the power to circumscribe all individual rights.
You cannot think that "liberal" classically meant "for freedom and individual liberty" and simultaneously think that modern liberalism is the same as classical liberalism.

Wolfe, unfortunately, does not explain what he thinks classical liberalism meant, but he does make it abundantly clear that he does not accept a break between it and the modern version. The members of The Corner, however, speculate on how one can naturally flow from the other end culminating in these two posts. I find this fascinating. It had never before occurred to me that Toryism (or, if you want "classical conservatism") was primarily concerned with the maintenance of the divine right of kings and thus both modern conservatism and modern liberalism flow out of the rejection of it. It does, however, once again underline to me that the difference between the two world views is best expressed in the difference between Locke and Rousseau (both Enlightenment thinkers) and their treatments of Hobbes's state of nature.

A President for this generation

I expect to complain a lot about Obama the next few years, but I really do think he's the perfect embodiment of the current generation.

Relativist: Much has been made of Obama's constant breaking of promises and changes in positions as flip flopping, but I don't think that is the case. To be a flip flop we would have to accept the existence of at least objective and probably absolute truth. I don't have survey data, but I would bet that a large chunk of society these days thinks truth is relative. If truth is relative then Obama hasn't had any problems with not being truthful. When he said he would take federal matching funds in the campaign that was true, the fact that he later didn't was only because circumstances had changed.

Democrat: I mean this in the sense in which Aristotle coined the term to demean it. Throughout classical history democracy was decried as a form of government whereby the many can enslave the few through numerical superiority. This country was not founded as a democracy precisely because the founders had read the classical philosophers and understood the perils of democracy. Until the 17th amendment the only body in this country that was directly elected by the majority was the House, and they couldn't pass anything without going through the Senate, which would naturally oppose intrusion into the power of the states. Until sometime around FDR's administration it was understood that the Constitution outlined the powers available to the Federal government and that an attempt to do something not outlined in the Constitution was illegal. For a number of reasons we have come far from that. I constantly heard on the news through the last decade that we needed to establish a democracy in Iraq like that in the United States and I would suspect that most citizens don't know that the amendments to the Constitution are not what limits the power of the government. Against that backdrop we have the government deciding to run private businesses for the good of the people. That's a very democratic thing to do. Most of America aren't AIG executives, so they would have no problem with not paying AIG executives (which is essentially what Washington was proposing. In my understanding many of the people who got the bonuses were working for $1 per year with the understanding they would get a bonus after they unraveled the division).

High Self-Esteem: The Washington Post had a story a while ago about how the US leads the world in self-assessment in math, but trails in actual knowledge. Similarly everything we have seen from Obama indicates he has no experience with running anything. He has never run even a small corporation (unless you count his work with Ayers on the education challenge thing that utterly failed to promote education, but we're not supposed to talk about that). He has essentially taken over AIG, but created a mess over bonuses paid out to their executives, which were legal under the contract he had with them. But against this underwhelming backdrop he now proposes that the only reason the world's largest automobile maker has not been able to turn a profit is that the management the stockholders chose were not as good at running a car company as he will be. You might claim that that's not what he really means, but it has to be. He says his team will work with them over the next 60 days to come up with a better business plan. What explanation could there be for his team succeeding in 60 days where GM has failed for a decade other than his outstanding leadership? I'll go ahead and note that it may well be that Obama is a well of undiscovered talent and GM just got the best CEO in all the world, but we have no evidence of past performance on which to base that assertion.

Executive Bonuses

I just found out that Fannie Mae gave $600k bonuses to their top execs. Odd that that's not in the news...

Budget Surplus's and Deficits

This graph is circulating around the internet and evidently started out on the Washington Post. I have several questions about it, but the most important to me is how do they compute these official surplus/deficit numbers? I've been claiming for years that there was no surplus in 2000 and Clinton's insane 10 years projected surplus was based on the assumption not only that the recession of 2000 (weren't we recovering from that by March?) would never happen but that we would continue the dot-com stock boom forever. But here's a graph stating (probably from CBO numbers) that there was an actual $236 billion dollar surplus in 2000.

In 1999 the public debt was 5.656 trillion, in 2000 it was 5.674 trillion, and in 2001 5.807 trillion. How do you run a $236 billion surplus and end with 20 billion less than you started? I assume it has something to do with off-the-books accounting for Social Security and Medicare (which despite Obama's promise to bring war funding on the books, he for some reason hasn't moved to move those onto the books. Perhaps because then the Democrats would have to quit claiming war spending is the biggest expense of the federal government) but I really would like to know how that happens.

Since I've posted this, I'd like to go ahead and address a few other things about these numbers. It is first off not true that Obama inherited the worst economy since the Great Depression. By nearly any reasonable measure the economy was worse at the end of the Carter administration than at the end of the Bush one. I also think it strange that people keep harping on his inheriting a recession. I actually remember early 2001 and the fact that the dot-com recession started under Clinton didn't seem all that interesting to most people then. By late 2001 we were already talking about how the economy was recovering from Bush's recession but it was a jobless recovery.

He did inherit an insane deficit, but it's not a very convincing argument that after 8 years of Bush he got a 400 billion dollar deficit (including the first part of TARP 1, I think) from by far the worst year of the Bush administration so he needs to spend on average more than double that every year of his administration. I'm rarely shocked by a lack of logic, but it truly shocks me that people think that President 43 having the worst deficit ever makes it reasonable for President 44 to be twice that bad.

Obama's impressive bipartisanship.

I just saw this note on Obama's permanent campaign PAC asking people to call overly conservative Democrats who oppose his "common-sense agenda".

I must admit. I had my doubts that Obama could bring a new era of bipartisanship to Washington, but given the impressive list of Democrats he has alienated it looks like he has managed it. Despite almost overwhelming majorities in both the House and Senate he's still worried about getting his programs through a very bipartisan opposition.

States Rights?

Do states have any rights anymore? I heard this morning that the stimulus bill has a provision that the legislatures of the state can accept conditional "aid" from the Fed even if that particular State's law or constitution says the governor needs to approve it. I knew the Congress felt that Federalism might not be that great of an idea since state governments couldn't fund their programs so they need to take money from other states to even things out, but this is a ridiculous intrusion into the workings of the state governments and I sincerely hope that some Governor challenges it and gets it overturned in the Supreme Court (though that's probably political suicide) just to keep the office out of the fed's hands.

A great idea

I, sadly, don't know where the post was because I wasn't thinking about blogging on it when it happened, but sometime this week there was a note about how Gov. Jindal was saying he would have to evaluate the conditions on the money given to the states in the Obama spending bill. (I refuse to refer to it as a "stimulus package" because I don't think that was even its intent. Certainly there were progressives, Obama likely among them, who think that huge amounts of spending on liberal priorities will help the economy, but as Podhoretz brilliantly illustrates, the reason they wanted the spending bill was that they wanted the spending. They just happened to also think it would help stimulate the economy.) This is a wise move because frequently Federal grants are something like a dealer offering $5000 off on a new car. This doesn't help much if you spend $20,000 and don't need a new car.

My real interest, though, came in one of the commenters, who got so mad he stated that Jindal shouldn't get any of the money, and neither should any state represented by a Senator who "obstructed" the bill. I'll leave aside for a second the possibility that one might vote against something where they had no hand in the writing and nearly every attempt to modify it was rejected because of a belief in deleterious effects of the bill and not mere political obstruction. My thought is that this is a terrific idea. If I could speak for my state I would say "terrific!" Like most conservatives, I think this bill is going to be a disaster. I think it's going to practically double the baseline budget, inflate the currency, add massively to the debt, and still not create nearly the 2.5 million jobs (that's $250k per job, assuming it works) that Obama claims. If you're giving me an opt-out, I'm in. Just don't make me or my kids pay for it, either.

In fact, why don't we develop a system of governance based on that. Here's what we could do: We could set up a limited central government (We'll call it "federal" to distinguish it from a true "national" government that can do anything) that has limits on its power to only do those things that are needed to keep the nation together: They could put together an army and a navy, keep the coast and sea lanes free, declare war when needed, regulate commerce with other nations (we tried regulating commerce independently as states during the early days of the nation; it was a disaster), create a standard currency, regulate interstate trade, and only tax enough to carry out those powers. Then if the states disagreed on how to deal with an issue they could each come up with their own solution. Liberals like California might want to give lots of money for Green Cars for government employees and monorails and increases in welfare in the hopes that giving away lots of money increases the economy enough to offset the taxes or bonds they had to have to pay for it. Conservatives like Georgia might want to cut taxes on businesses in the belief that they would create enough jobs to increase the actual revenue.

I think this is a brilliant idea. I'm surprised nobody thought of it 200 years ago.

Facebook's new Terms of Service

There's evidently a big hullabaloo about Facebook changing their Terms of Service. It's a big enough deal that I heard it mentioned on the radio this morning, which means it's gotten past the .000001% of us who actually read such things. For reference here are the old terms:

When you post User Content to the Site, you authorize and direct us to make such copies thereof as we deem necessary in order to facilitate the posting and storage of the User Content on the Site. By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing. You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.

The new terms scratch that last sentence. Big deal.

Under the new terms you give Facebook the right to relicense (at a profit) your video of your kids to be part of a porn shoot without telling you, even after you close your account. Under the old terms they could still sell it to the porn industry before you close your account, and because they relicensed it you can't do anything about sales they made prior to your account closure, but once you close that account they have to find somebody else to make new sales with.

The change even makes sense. Previously if you closed your account they technically had to go through everybody else's pages and make sure that no mention of anything you did appeared anymore. Now they can keep that stuff up.

The broader license, however, doesn't. Facebook claims they need such far reaching rights so that they can share your stuff with other Facebook users. I once knew an FCC investigator into two way radios (which are legally required to use as little power as needed) and he said he wasn't really interested in the guy running at 2000W; it was the guy talking to him with 2W that was interesting. Similarly, Flickr/Yahoo! is an interesting point of reference here. Flickr seems to do just fine allowing people to share their pictures, and this is the license they use for it:

However, with respect to Content you submit or make available for inclusion on publicly accessible areas of the Yahoo! Services, you grant Yahoo! the following worldwide, royalty-free and non-exclusive license(s), as applicable:
...
With respect to photos, graphics, audio or video you submit or make available for inclusion on publicly accessible areas of the Yahoo! Services other than Yahoo! Groups, the license to use, distribute, reproduce, modify, adapt, publicly perform and publicly display such Content on the Yahoo! Services solely for the purpose for which such Content was submitted or made available. This license exists only for as long as you elect to continue to include such Content on the Yahoo! Services and will terminate at the time you remove or Yahoo! removes such Content from the Yahoo! Services.

Some of the text here is similar (in particular the standard right to "use, distributed, reproduce, modify, adapt, publicly perform, and publicly display" content) but there is an enormous gulf between Facebook's perpetual, irrevocable, and transferable license and right to sublicense with Yahoo!'s license to use solely for the purpose for with such content was submitted for as long as you elect to continue to include such content.

Working well with others

I just read a report that the Obama State Department is, to our nations great discredit, working with the second Durbin conference on racism. The US and Israel walked out of the first conference when it (predictably) became a forum for Arab nations that put Christians in jail for keeping stores open during Ramadan, even if it isn't actually illegal, to officiously declare racist the policies of one of the two countries in the middle east where a Muslim can vote and members of all Islamic sects can build mosques.

In the Jerusalem Post it is said "Jewish leaders were told that Washington's decision to participate in the conference was being coordinated with the Israeli government." Like Obama's reaching out to conservatives on the massive-increase-in-government-spending bill, this meant not that he would actually take input from them, but rather informed them of the time he was going to go sell out to the UN.

I see a growing pattern of working well with others, so long as they go along with what was already decided.

Why amending the so called stimulus is a lost cause.

There are over 300 outstanding amendments on the Senate version of the massive-increase-in-government-spending bill that had bipartisan opposition in the house earlier. I think Republicans are wasting their time. Even if they could get every one of their amendments agreed to (and they won't) I don't trust the conference process to leave them in.

McCain for instance had a fantastic amendment that made the government curtail spending following two quarters of consecutive growth (to show that it's a temporary stimulus and not just a grab bag of pork). This was, of course, rejected by the Democrat controlled Senate, but even if it were accepted there's no reason to think it would make it into the final bill.

Just reject this bag of pork and get the House working on a real stimulus bill. At the same time the RSC or RCC leadership should arrange to meet with the House Democrats complaining about this bill and come up with a decent stimulus bill that has a chance of getting all of them plus some more Democrats and propose it to Obama as a bipartisan way out of this. He has already claimed that there is bipartisan agreement that we need to push something through fast, that he wants a bipartisan bill, and that the differences in position between him and the Republicans is minor. It would be politically devastating for him to take a bill written by Republicans with the support of 20 Democrats in the House and say he wouldn't support it.

Executive Pay Caps

I've only heard one person (and he was a relative nobody) say that Obama's proposal to cap executive pay or companies that take TARP money is socialism. First off I disagree: it's fascism. Socialism is an economic system where the government owns the means of production. Fascism is an economic system where the government controls corporations (or, at the very least, gives corporations special favors in exchange for going along with the government).

Having said that, though, Obama isn't moving us toward fascism by setting executive pay caps. When Bush bought huge stakes in private companies in exchange for guarantees on how they would run their business he moved us pretty much all the way to fascism with respect to the financial industry. (Odd that after 7 years of stupid accusations that Bush's involvement in Iraq or warrantless monitoring of international cell phone calls with suspected terrorists made him a fascist, he finally went and did something actually fascist, but nobody called him on it.) Once we've moved to intervene in the markets and determine who the winners and losers are (and how our chosen winners will behave) we're not operating under capitalism anymore.

Given that we're going to be fascist, I'd rather not give huge bonuses to the heads of failing companies the government has decided are going to be corporate winners, so I'm all for Obama's action. (I would, of course, be more for stopping the insanity and letting companies who can't produce a successful business model fail, but that's not on the table.)

Update: PowerLine has an analogous post, which points out that TARP isn't the only federally controlled corporation out there. I think his suggestion is great. I would also guess that the head of FannieMae/FreddieMac are probably getting more than $500k in salary plus bonuses.

Minor Differences

I heard yesterday that Obama was quoted as saying that Republicans and Democrats agree on the need of a quick stimulus and the differences in their positions are relatively minor. I assume this means in the interest of expediency Obama will agree to the Republican plan.

While I'm on the subject, Katie Couric, in a fashion that seems to be fairly typical of big media, states that "The President went up to the Hill to personally appeal to Republicans already, what more can he do?" He could try actually compromising. The House accepted no amendments to the porkapalousa that they're trying to pass off as a stimulus package. We can imagine Walmart having meetings with Union leaders and keeping their current stance of doing virtually anything to keep unions out of Walmart. Surely the Unions would be happy with them reaching out like that, what more could Walmart do?

It has seemed to me for years that calls for "bipartisanship" or "compromise" in Washington generally mean "the other side should agree with me" and not "I'm willing to compromise with the other side." I think this is especially true of Democrats, but that could be bias. Certainly it is quite clearly true of the current circumstance. Obama may think the differences between Republican positions and his own are fairly minor, but I'll give sizable odds that he doesn't urge Democrats to support a bill authored by Mike Pence.

Homeland Security

Business Trip
Originally uploaded by christophercraig

I had my bags searched in New York's La Guardia Airport yesterday and I must say it was on the whole a fairly decent experience. The TSA employees I have dealt with in Atlanta have all been jerks who act like a playground bully that just had the teacher put them in charge. This agent told me he needed to search my bag and asked if I wanted to have a seat and put my shoes and belt back on before he started. He then, extremely politely pulled everything out of my camera bag (body, two lenses, remote triggers, optical slave, two strobes, roll of gaff, mini-tripod, two umbrella swivels, CPL filter, rosco sample pack) scanned it for explosives, and carefully put all of it back exactly how he got it out, including facing the same direction. (It ends up the problem was my too-big-for-the-current-regulations toothpaste tube was under the camera bag and the camera had nothing to do with it).

I still oppose the very existence of a TSA and think most of their regulations are inane (particularly searching pilots. What are they going to do, take over the plane?) But this particular member of their staff was extremely professional and I'm appreciative.

Hollywood types pledging

I don't know how many of you have seen the pointless ad with various hollywood types, many of whom have been a thorn in the side of the previous administration, pledging to do something under Obama (most of which they could just as easily have done under Bush). If you haven't, don't bother.

It isn't the point of this post to bring up the fact that, unlike those featured in the ad, conservatives will do their best to support an administration they disagree with in keeping us safe from terrorism and succeeding in bringing back the economy (though certainly they will vocally oppose many of his policies, especially domestically), but I have to point it out. My point is in a particular pledge (voiced in several ways): Someone I don't know pledges to "work to make good the 200 year old promise to end slavery", Demi Moore pledges to "free one million people from slavery", and Ashton Kutcher pledges to "the abolition of 21st century slavery".

Are they going to personally take up arms against nations (including China) that have never attacked us so that they can end slavery? Or do they think they can make a movie that will finally (after not 200, but thousands, of years) bring an end to slavery in the world (and if so, why didn't they do it decades ago)? This strikes me a bit like the stupid "Free Tibet" bumper stickers progressives like to sport. I've frequently wondered what would happen if an administration casually announced "We've decided the Free Tibet people are right, and we're mobilizing our armed forces to start a war with China in order to free Tibet."

First Thoughts on President Obama

Like every President (I think), Obama's first official act was a speech. So far that's all I have to go on, and I have to say that if I believed his rhetoric I would have voted for him over McCain.

The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.

If he's serious about this he would be the first President since Reagan to attempt to end programs. For all the complaining about Bush cutting schooling, the budget of the Department of Education has grown from 38 million in 2000 to 68 million in 2008. I'm not aware of any major program that was even requested to be cut under Bush. McCain was good on earmarks, but he has never been a strong fiscal conservative so I imagine he also would not have significantly cut established programs.

This is not to say Obama is Coolidge, Reagan, or even JFK:

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control — and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart — not out of charity, but because it is the surest route to our common good.

The crisis has not reminded me, at least, that economic freedom without the watchful eye of government can spin out of control. Certainly quasi-governmental agencies underwriting housing over whom Congress refuses to exercise proper oversight, mostly at the steadfast objections of Barney Frank, are problematic, but that's a problem with fascism not freedom. The biggest problem in this collapse was a corporation entirely controlled by the government. There's a name for an economic system where the government controls corporations, and it's not "capitalism".

Having said that, though, I wish Obama luck. If he really wants to implement much of what he talked about in his speech he has a big fight coming and I'll happily side with him against Nancy Pelosi and Barney Frank.