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Preview: RealClearPolitics - Articles - Bruce Bartlett

RealClearPolitics - Articles - Bruce Bartlett

Last Build Date: Tue, 10 Jul 2007 00:24:39 -0600

Copyright: Copyright 2007

Changing World of Commentary

Tue, 10 Jul 2007 00:24:39 -0600

In those days, most major cities had several papers -- at least one in the morning and another in the afternoon. Since editorial policies were one way that papers competed, if one was liberal, the other, usually the afternoon paper, tended to be conservative.

But as work patterns and lifestyles changed, most cities became one-newspaper towns. The morning paper usually survived, while the afternoon newspaper died, generally eliminating the conservative voice. Even when the morning paper was the conservative one, it generally became liberal once it had a monopoly.

For a few years, once the competition was eliminated, newspapers were cash machines making enormous profits. But investors came to demand such profits year after year. As competition from talk radio and the Internet undercut their position, newspapers responded by sharply slashing costs in order to maintain high profit margins.

One way they cut back is by reducing budgets for columnists and becoming dependent on those that came at no additional cost from the New York Times and Washington Post news services. Now it seems as if every paper is running the same few columnists -- like David Broder from the Post and Tom Friedman from the Times. Their main attraction is that they mirror the conventional wisdom and seldom upset anyone with controversial opinions about anything.

Those who wanted more biting opinion gravitated to the Internet, where there are vast numbers of people offering commentary along every single point on the political spectrum. It became very easy to find writers expressing exactly one's own personal opinion about everything. Bloggers also have the advantages of no space constraints, and an ability to post comments in real time and to offer links to supporting documents and sources. Now they even have audio and video.

As a result, the demand for traditional column writing has pretty much dried up, just as the demand for buggy whips collapsed when the automobile came along. I don't mourn the old system. I am a great fan of bloggers and learn far more from them than I do from the Broders and Friedmans of the world, who have largely become irrelevant to serious political discussion.

Furthermore, the basic medium through which columnists operate -- newspapers -- are dying a slow death. It's a rare week when some major paper doesn't announce new layoffs, buyouts or other severe cost-cutting measures, such as reducing the size of the paper to save on costly newsprint, as The New York Times will do next month. At some point, the bloodletting will end, but not before many more papers fold. Eventually, we will probably be left with a handful of national papers, with all the rest devoted exclusively to local news.

Broadcasters are under the same pressures, and I suspect that the traditional nightly network news program will eventually go the way of the dodo. Those who care about the news will get it from cable, the Internet or talk radio.

I think there will always be a market for quality commentary, however, and some day someone will figure out a better way to make money from it. In the meantime, I have decided to devote myself to writing books, where authors still have control over their output and can make better money. I will continue to pen the occasional column, but this is the last one I plan to write on a weekly basis. I offer thanks to all my readers and editors for their support.

Who Is the Anti-Bush?

Tue, 03 Jul 2007 00:22:51 -0600

Thus we see that only about 7 percent of Republicans nationally view Bush as having Reagan-like qualities. Seventy percent to 80 percent say he is not at all like Reagan. Yet most Republicans say they would like to see a candidate who is another Reagan.

Strategic Vision has also asked about that. In a poll taken in Iowa last week, 65 percent of Republicans said it was very important or somewhat important for the Republican nominee to be a conservative in the Reagan mode. A poll of Georgia Republicans released the same day showed 75 percent of Republicans saying that the party's nominee should be Reagan-like.

When you contrast the percentage of Republicans favoring a Reaganite nominee with the extremely low percentage who see Bush as being in the Reagan mode, it would seem that there is a great opportunity for one of the Republican candidates to articulate an anti-Bush, pro-Reagan message. Yet, oddly, no one is doing so. On the contrary, all the major candidates seem to be trying to avoid a confrontation with Bush and mostly echo him on key issues such as Iraq.

This approach has been most damaging to Arizona Sen. John McCain. Once widely admired for his independence, he seems to have decided about a year ago to run as Bush's lapdog. Toward that end, McCain has not only been the strongest supporter of the war among the Republican candidates, but he even backed Bush on his extraordinarily unpopular immigration reform plan. This strategy has basically destroyed McCain's campaign.

Former Massachusetts Gov. Mitt Romney is trying the hardest to appear to be another Reagan. But while Reagan had been deeply involved in the conservative movement for many years before becoming president, Romney comes across as a Johnny-come-lately conservative who didn't govern as a one and adopts conservative positions only because he has to in order to win the nomination.

This view of Romney may be unfair, but it is widely held. He is probably the candidate with the most to gain by becoming the anti-Bush. It would be a simple matter to lay out all of Bush's anti-conservative policies, starting with immigration. Romney can then go on to lambaste the No Child Left Behind Act, the Medicare drug giveaway, campaign finance reform, the failure to veto pork-laden spending bills and so on. Such a strategy could give Romney the credibility that he has been lacking and make him the true heir to Reagan.

Former New York Mayor Rudi Giuliani is really just a one-issue candidate. We are supposed to believe that because he did an admirable job on 9-11 that this alone qualifies him to be president. I don't really see this as being enough, but I'm not sure he has much more to offer. I think the vast bulk of his support comes from those Republicans who simply think he has the best chance of winning the general election. This support will vanish if the polls show another candidate with a better chance.

That candidate could be former Tennessee Sen. Fred Thompson, who like Reagan, also had a long career in Hollywood. Thompson looks and sounds the part, which is why he is leading some polls despite not even being an official candidate. If he were to hire some of Reagan's speechwriters and articulate a clear Reaganite vision for the future that explicitly repudiates Bush's deviations from conservative principles, Thompson could go all the way.

Sooner or later, Republicans are going to have to distance themselves from the failure-ridden Bush presidency if they hope to win next year. Whichever candidate does the best job of being the anti-Bush may have the best chance of winning it all.

Climate History

Tue, 26 Jun 2007 00:29:42 -0600

Plato's student, Aristotle, who lived from 384 B.C. to 322 B.C., also recorded evidence of global warming in his work "Meteorologica." He noted that in the time of the Trojan War, the land of Argos was marshy and unarable, while that of Mycenae was temperate and fertile.

"But now the opposite is the case," Aristotle wrote. "The land of Mycenae has become completely dry and barren, while the Argive land that was formerly barren, owing to the water, has now become fruitful." He observed the same phenomenon elsewhere covering large regions and nations.

Theophrastus, a student of Aristotle who lived from 374 B.C. to 287 B.C., discussed climate change in his work "De ventis," which means "The Wind." He observed that, in Crete, "nowadays the winters are more severe and more snow falls." In earlier times, Theophrastus said, the mountains there bore grain and fruit, and the island was more populous. But when the climate changed, the land became infertile. In his book, "De causis plantarum," Theophrastus noted that the Greek city of Larissa once had plentiful olive trees, but that falling temperatures killed them all.

In the first century A.D., an ancient Roman named Columella wrote an agricultural treatise called, "De re rustica." In it, he discussed global warming that had turned areas once too cold for agriculture into thriving farm communities. Columella cites an authority named Saserna, who recorded many such cases. According to Saserna, "regions which formerly, because of the unremitting severity of winter, could not safeguard any shoot of the vine or the olive planted in them, now that the earlier coldness has abated and weather is becoming more clement, produce olive harvests and the vintages of Bacchus (wine) in greatest abundance."

In the Middle Ages, people began recording the temperature and climate-related phenomena, such as the dates when plants began to blossom annually. They were aware of a warming trend that began around 900 and a cooling trend that began around 1300. We know that during the warm period, the Vikings established settlements in Greenland, where perpetual ice had previously covered the land. Ancient Norse records tell us that these settlements were abandoned after 1250, when falling temperatures made farming less viable and spreading ice in the sea made transportation more difficult.

The cooling trend led to heavy rains in 14th century Europe that were too much for the crops, leading to reduced agricultural output and numerous famines. In the 15th century, a warming trend returned, which lasted until the middle of the 16th century, when temperatures again started to fall.

By the 17th century, it was clearly apparent that a cooling trend was altering sea routes, and changing the kinds of crops farmers could grow, fishing patterns and so on. Glaciers began to advance rapidly in many places, and rivers that had long been ice-free year round started to freeze in the winter. This "little ice age" continued well into the 19th century. Since then, we have been in a warming cycle that appears to have accelerated around 1950.

The point of this review is that we know a great deal about climate changes from the historical record and need not rely solely on scientific studies of core samples, tree rings and so on. These changes occurred long before industrialization and could not possibly have been manmade in any way whatsoever. They don't prove that man is not now affecting the climate through carbon dioxide emissions, but they do tell us that temporary warming trends are common in human history. It may only be a matter of time before another cooling trend comes along.

Synfuel Boondoggle

Tue, 19 Jun 2007 00:09:32 -0600

In the 1970s, American politicians latched onto synthetic fuels as a way of coping with Arab oil embargos. In the waning days of the Ford administration, Vice President Nelson Rockefeller proposed a $100 billion energy independence corporation that would subsidize synthetic fuel development in order to make it commercial. A similar effort today would cost close to $400 billion. Although the legislation had strong bipartisan support and passed the Senate by a vote of 80 to 10, it ran into opposition in the House, where a combination of left-wing Democrats and right-wing Republicans ganged up on it. The lefties were mostly concerned about the environmental consequences of synfuels, while the right-wingers were against government subsidies. The unholy alliance of left-wingers and right-wingers managed to stop the synfuel bill temporarily in 1975. But whenever there is the prospect of multibillion dollar subsidies on the table, it takes more than one bullet to kill the beast. The following year, synfuel supporters were back with a scaled-down program. They thought that if they could just get a few demonstration projects going, then they could gradually expand the program. Once again, the principal opposition was in the House. Although support for the new synfuel effort was much stronger, opponents also picked up some key allies. The most important was the U.S. General Accounting Office, which threw cold water on just about every argument offered by the pro-synfuel crowd. In a tense vote on Sept. 23, 1976, the synfuel bill was defeated by a single vote. Having beaten the synfuel bandwagon two years in a row, opponents thought they had put the monster away for good. I was not so sure, and I held onto all the files I had accumulated on the legislation. This paid off in 1979, when another Arab oil embargo and long gas lines reignited interest in energy independence. A new effort was launched to subsidize synthetic fuels and build a strategic petroleum reserve, with a cost of well over $100 billion. Fighting this effort was harder because gas lines made people think there was a large absolute shortage of oil. In fact, the falloff in supply was not very great. The gas lines resulted entirely from stupid Carter administration policies. In particular, it imposed price controls, so that prices couldn't rise to market-clearing levels, and allocation controls that made gas plentiful in some places and virtually non-existent in others. Basically, the Carter people did just about everything wrong that was possible to do wrong. Unfortunately, few people recognized that U.S. policies were almost entirely at fault, and they focused their ire on the Organization of the Petroleum Exporting Countries (OPEC). What better way to punish oil producers than by eliminating the need to import from them by making our own oil out of plentiful coal and oil shale, most people thought. In the end, the need to appear to be doing "something" got Congress to establish the Strategic Petroleum Reserve and the U.S. Synthetic Fuels Corp. Tax credits and other subsidies were enacted to make synfuels competitive. The program never really got off the ground, however, because one of the first things Ronald Reagan did after taking over the from the hapless Jimmy Carter in 1981 was to completely decontrol the prices of oil and gasoline. Once prices were free to clear, producers invested in new supply and consumers reduced demand by investing in more fuel-efficient autos. Prices spiked at first, but after a few years they fell to pre-embargo levels. Since synfuels were barely competitive, even with massive subsidies, when oil was at $30 per barrel, they were obviously uneconomical at $10 per barrel. Today, the price of oil is well above $60 per barrel -- far higher than the price that synfuel producers have always said they needed to be competitive. Yet they are ba[...]

Immigration Political Dynamics

Tue, 12 Jun 2007 00:30:00 -0600

Once one accepts that this country will have a large and expanding Hispanic population for many years to come, one has to consider the political implications. It doesn't really matter that those currently here illegally cannot vote, because their children will. The 14th Amendment to the Constitution guarantees that everyone born on American soil is a citizen, with all the rights that confers, and it is extremely unlikely that this provision will ever be repealed. Therefore, we must accept the reality that Hispanics will be a rising political force whether or not amnesty is conferred and border enforcement is increased. According to exit surveys from the last several national elections, Hispanics vote Democratic over Republican by about a seven-to-three margin. There is no reason to think this will change anytime soon. Consequently, the more Hispanics there are in this country, the better it is for the Democrats. The White House has deluded itself into thinking that Republicans may be able to win a larger percentage of Hispanic voters by championing immigration reform. As Heather MacDonald of the Manhattan Institute points out, however, there was no wave of increased Hispanic support for Republicans after the 1986 amnesty backed by Ronald Reagan. Anyway, even if immigration reform gets enacted on George W. Bush's watch, Democrats will get the vast bulk of the credit since most of the opposition comes from Republicans in Congress. An article in Sunday's New York Times notes that the rising importance of Hispanics has changed the dynamics of the race for the Democratic presidential nomination. All the major candidates are carefully courting the Hispanic vote with advertisements in Spanish-language media outlets and other outreach efforts. One inevitable consequence of this is that other groups are going to get less attention in the future. The most important of these are blacks, who have been the Democrats' favorite minority since the 1960s. But they are now the second largest minority group in America, with a population of 40.2 million. And their growth rate is less than half that of Hispanics. As Hispanics grow in political importance, blacks are necessarily going to see their position within the Democratic Party decline. When the next Democratic president is elected, more appointments will go to Hispanics, fewer will go to blacks. Hispanic concerns about issues such as trade with Mexico are going to take precedence over black concerns about jobs, and so on. The reality is that blacks and Hispanics are natural political rivals. Since both groups belong overwhelmingly to the Democratic Party, one's gains will tend to come at the other's expense. This is true in other areas, as well. Blacks increasingly complain that Hispanics are pushing them out of public housing, taking their jobs and occupying minority slots in university admissions. This is not a new development. As long ago as 1881, Frederick Douglass, the great black leader, complained that blacks suffered from immigration. "Every hour sees us elbowed out of some employment to make room for some newly arrived emigrant from the Emerald Isle, whose hunger and color entitle him to special favor," he wrote. Hispanics have replaced the Irish of Douglass' day, but the same principle still applies. Harvard economist George Borjas has shown that increased immigration tends to force down black wages and raise black unemployment. Last month, the unemployment rate was 8.1 percent for blacks, but only 5.3 percent for Hispanics. For these reasons, I think blacks should reconsider their blind loyalty to the Democratic Party. At the same time, Republicans should recognize that blacks' concerns about immigration give them a far better chance of attracting their votes than those of Hispanics. Once Bush is gone, the party will almost certainly become overwhelmi[...]

Immigration Frustration

Tue, 05 Jun 2007 00:35:00 -0600

This was, of course, the generally held view at that time. The United States welcomed immigrants from anywhere and everywhere. But beginning in the 1930s, this country began to become more and more of a welfare state. Many government programs now confer significant benefits upon those who produce nothing. I'm not saying that illegal immigrants come to this country just for the governmental benefits, but the availability of such benefits reduces the burden of being illegal. The alternative of turning away people who may be seriously injured from hospital emergency rooms or children from schools simply is not viable. As long as they are here, such people will be accommodated. To this, most immigration hardliners have a simple answer: Send them back where they came from. Defend the border, and deport illegals to the greatest extent possible. Removing the 10 million or so illegal aliens now in the United States would be extraordinarily costly in terms of both money and liberty, however. I seriously doubt that most Americans would be willing to pay the taxes to make this happen or tolerate the intrusion on their own freedom -- such as requiring a national identification card -- that it would require. So we are left with the current situation in which free immigration of the 19th century variety is untenable and complete elimination of illegal immigrants is impossible. It is this fact that supporters of the immigration bill are exploiting to claim that since something must be done, their approach is necessarily the best we can achieve. But what about the option of doing nothing? Why this is not considered a viable option is a mystery to me. It may be the least bad alternative. Think about the current situation a little more carefully. Illegal aliens who come here do so primarily to work. I don't deny that. They do a lot of crappy jobs that, frankly, few of the native born would do. And they do so for far less than it would cost to induce the native-born to do such jobs. Moreover, aliens probably do a better job in many cases. Furthermore, illegal aliens are much more willing to do jobs that need to be done for less than the minimum wage and for cash wages that save their employers from paying a lot of taxes, such as the employer's share of the payroll tax. Since these people will never qualify for Social Security benefits, why should they pay taxes for such benefits? Looks OK to me. I wish I had that option. Finally, illegal aliens are not very likely to complain to the Labor Department or a union if they have some grievance. They are more worried about being deported than exploited, so they have no leverage. The result is that illegal aliens are willing to work cheap, which allows the native born to have inexpensive vegetables -- which doctors keep telling us to eat more of -- and other goods and services that improve our real standard of living. Meanwhile, as miserable as their lives are, for most illegal aliens this is a good deal, too. They wouldn't come here -- braving a lot of hardship in the process -- if they didn't think they were coming out ahead on the deal. In short, the status quo is really a win-win for everyone. We don't want to open the borders entirely, because that would let in a lot of riffraff. But we don't want to close the borders entirely, either, because we need the cheap labor. So, in my opinion, the optimum is to allow some illegal immigration, but with enough enforcement to keep it under control. It is precisely because of their illegal status that these immigrants are valuable and willing to work cheaply. If they become legal, as the pending legislation would establish, the next thing you know they will be demanding the minimum wage, health benefits and unions, at which point they may no longer be a net benefit to ou[...]

Taking Ron Paul Seriously

Wed, 30 May 2007 00:27:11 -0600

However, significant cracks have developed in the wall of conservative support that Bush enjoyed at the beginning of the war. Today, much is known about the lack of verifiable evidence of Saddam Hussein's possession of weapons of mass destruction, and about how the White House bullied those urging caution into reluctant support and thoroughly screwed-up the Iraq occupation. Even Sen. John McCain, still a strenuous war supporter, has become outspoken on Bush's poor management of it. Consequently, more than a few conservatives have gone over to the antiwar side. Unfortunately for Ron, they are mostly former Republicans today, unlikely to vote in a Republican primary.

Among conservatives, another factor is also at work: the growing realization that Bush has never really understood or shared a Goldwater/Reagan vision of the nature of conservative governance. And even those who still cling desperately to the view that Bush is better than the Democratic alternative mostly concede that his performance in office on a wide range of issues has left much to be desired. Following are just a few examples of Bush's actions that have worn them down:

-- The explosion of spending on Bush's watch, his strong support for numerous "big government" initiatives such as the No Child Left Behind Act and the vast expansion of the Medicare program for prescription drugs, and his unwillingness to use the veto to control an orgy of pork barrel spending on his watch. Bush's recent successful veto of the defense supplemental, which yielded a bill close to what he originally asked for, confirms the view that he could have kept wasteful spending under control all along if he had simply made the effort.

-- Bush's extraordinarily poor choices for high-level government positions. The choice of Harriet Miers for the Supreme Court was perhaps his worst decision -- rectified only because conservatives finally protested one of his decisions en masse and forced him to choose the vastly more qualified Samuel Alito instead. But since then we have witnessed the gross incompetence of Attorney General Alberto Gonzales in the continuing scandal over the unnecessary -- and still unexplained -- firings of several U.S. attorneys; the comically inept actions of former Federal Emergency Management Agency Director Michael Brown during the Katrina disaster; and the forced resignation of Paul Wolfowitz as president of the World Bank, a position for which he was totally unqualified in the first place and which was given to him purely as a reward for obsequious loyalty to the president. Space prohibits listing many other such examples.

-- The incredible ineptness with which Bush has pursued conservative goals such as Social Security reform, while he has brought to bear every ounce of power at his disposal to ram though Congress an immigration bill that is viewed as abhorrent by most conservatives. If it becomes law, it will only be because of heavy support from Democrats, who correctly view the addition of millions of new Hispanic voters as a major boon to their party. Meanwhile, Bush gives short shrift to his conservative critics, just as he did in the Miers incident. This has led many of his formerly fervent conservative supporters to conclude that he essentially views them and their concerns with total contempt.

All of this has made the Republican soil highly fertile for a dissident campaign based on a genuine conservative message, such as that being offered by Ron Paul. I still don't think he can win the nomination, but he may end up playing a role not dissimilar to that played by Eugene McCarthy in the Democratic nominating process in 1968. He didn't win, either, but forced Lyndon Johnson to retire and ultimately shaped the direction of the Democratic Party for decades to come.

Republican Euthanasia

Tue, 22 May 2007 00:44:23 -0600

Bush's strongest argument for passage of the Medicare bill had nothing to do with the problems some seniors were having with the high cost of prescription drugs. It was all about the politics. Republicans had to support the drug giveaway to buy the votes of the AARP, the giant senior citizens lobby, which had endorsed the legislation. Bush assured wavering congressmen that they were guaranteeing their re-elections by getting the large and growing elderly population to vote Republican. He told them that Franklin D. Roosevelt and Lyndon Johnson had gotten earlier generations of elderly voters to go Democratic by giving them Social Security and Medicare. Rather than buy the elderly's votes for good, however, they were only rented for the 2004 election -- the only one Bush cared about. There is precious little evidence that the multi-trillion-dollar drug benefit has done anything to change the basic political leanings of seniors. According to CNN, Bush got 47 percent of the over-65 vote in 2000 and Al Gore got 50 percent. Perhaps in gratitude for the largess Bush bestowed upon them, these voters gave him 52 percent of their vote in 2004, while John Kerry got 47 percent. But in the 2006 congressional elections, Republicans and Democrats exactly split the elderly vote, with both getting 49 percent. I predict that a majority of seniors will go back to voting Democratic next year. Now it seems that conservatives will once again be asked to throw away their principles for illusory political gains. Bush will no doubt explain to congressional Republicans that they must vote for the immigration bill without taking any time to study or analyze it because otherwise they will forever lose the large and rapidly growing Hispanic vote. According to a Census Bureau report released last week, Hispanics are now the largest minority group in America. There are 44.3 million of them, compared to 40.2 million blacks and 14.9 million Asians. Furthermore, the number of Hispanics is growing faster. Between 2005 and 2006, their population grew 3.4 percent. Meanwhile, the non-Hispanic white population grew just 0.3 percent. Consequently, Hispanics accounted for almost half the total U.S. population growth during this period -- 1.4 million out of a total population increase of 2.9 million. Perhaps if there were some reason to believe that Hispanics would be so grateful for this immigration bill that they will vote heavily Republican for years to come, then it might be worth supporting purely out of political expediency. But there is no reason whatsoever to believe that this will be the case, since the Democratic Congress will at least get equal credit for passage. It's worth remembering that despite Bush's support for an immigration bill last year, congressional Republicans only got 30 percent of the Hispanic vote, versus 69 percent for Democrats. This was a sharp decline from the 44 percent of the Hispanic vote Bush got in 2004. Thus whatever gratitude Hispanics might have for him because of his support for immigration reform, it is not going to transfer to other Republicans. This looks like the Medicare debacle all over again to me. Bush is going to put the screws to principled conservatives to ram a piece of repugnant legislation through Congress in order to gain votes that are never going to emerge. Hispanics are going to vote overwhelmingly for Democrats whether this bill passes or doesn't. And to the extent that it enlarges the Hispanic voting population, Republicans will be cutting their own throats. Even before the deal on immigration was reached, I was forecasting a Republican loss of the White House in 2008. Passage of the immigration bill means that it will be many years indeed before Republicans retake Congress. [...]

Wolfowitz Endgame

Wed, 16 May 2007 04:30:00 -0600

This pay raise to Wolfowitz's girlfriend became a source of contention between him and his critics on the Bank staff, who have been unhappy with some of his policies. Further details are unimportant. All that matters is that the whole issue has become a major embarrassment for the Bank. I don't know whether Wolfowitz did the right thing or the wrong thing in the way he handled the problem of becoming the boss of an organization employing his girlfriend. It's quite possible that the whole affair was blown out of proportion by people who were simply opposed to his policies and seized upon it to discredit them. All I know is that the game is over, and it's time to move on. In my opinion, a key source of the Wolfowitz problem is the means by which the World Bank president is chosen in the first place. Because of an informal understanding made just after World War II, the position has always been filled by an American. As part of the same understanding, the head of the International Monetary Fund has always been a European. Consequently, the president of the United States can pretty much pick anyone he feels like to run the World Bank. The job doesn't require Senate confirmation or even a background check. The U.S. executive director at the Bank simply puts forward the name of whoever has been designated, and it is rubber-stamped by the Bank's board. Therefore, there is really no opportunity for anyone other than the American president to review the qualifications or appropriateness of his choice. Once the decision is made, it is a fait accompli. In practice, previous White Houses have always deferred to the Treasury Department regarding the World Bank, because it monitors U.S. involvement with that institution on a day-to-day basis. However, that seems not to have been the case with Wolfowitz. According to Britain's Financial Times newspaper, the Treasury was basically cut out of the loop on Wolfowitz and only learned of his appointment when informed by the British Treasury. Apparently, Bush told British Prime Minister Tony Blair of his decision before notifying his own treasury secretary. It's easy to see why this was probably the case since the Treasury undoubtedly would have opposed Wolfowitz's appointment. He is not a banker, has done no work in the area of international economic development and is not generally considered to be a good manager. Wolfowitz's only qualification appears to have been that he was an early and ardent supporter of the Iraq war while serving as deputy secretary of defense. For this, Bush took a liking to him and gave him the high-paying Bank presidency as a gift for loyal service. Had President Bush followed the normal procedure of nominating a Bank president who had been recruited and vetted by the Treasury, he would have saved himself a lot of grief. It was a mistake for him to treat the World Bank presidency as a patronage job no more important than the ambassador to Bermuda, which is often given to someone with no qualification other than being a large campaign contributor. In many cases, an ambassador is just a ceremonial position with no power. So it doesn't really matter whether the person holding it is qualified or not. But the World Bank presidency is a powerful position that can meaningfully affect the lives of millions of people in the developing world, not to mention the thousands of people on its staff. President Bush owes it to the Bank and everyone affected by it to be more responsible in choosing Wolfowitz's replacement. He should let the Treasury do its job this time and find someone with the appropriate background and experience -- and preferably a person who doesn't have someone working there who is a spouse, boyfriend, girlfriend, child or whatever. Since my endorsement would be the kiss of death, I won't suggest any names to replace Wolfowi[...]

Democrats and Conservatives

Tue, 08 May 2007 00:53:06 -0600

While conceding the possibility that I am wrong, I think it is foolish to ignore the strong Democratic trend that is indisputable. Republicans should remember that they just barely won the White House in 2000 and 2004 against very poor Democratic candidates and with the party strongly united behind George W. Bush. I just don't see that happening again next year. The Republicans are not going to be as united, and it is almost a certainty that the Democrats will run a better campaign in 2008. I think all three of the Democrats within striking distance of the nomination will be better candidates than Al Gore or John Kerry. And because of the close losses in 2000 and 2004, the Democrats will really pull together this time. Meanwhile, voter fatigue is going to wear heavily on the Republican nominee, who is not likely to have the same unity of party that the Democrat will have. It is obvious that there is no enthusiasm for any of the Republicans, which is why so many in the party are yearning for another candidate, such as former Sen. Fred Thompson, to jump in the race. The Republican nominee will be the last candidate still standing at the end of the day, which is not a prescription for party unity. In any case, one need not accept my idea that the election next year is the Democrats' to lose to want to hedge one's bet. Many of the Republican Party's largest donors are already doing exactly that. BusinessWeek reports that John Mack, head of Morgan Stanley, a big Wall Street firm, is supporting Sen. Clinton. In 2004, Mack raised $200,000 for Bush's re-election. The New York Sun reports that a number of other big Bush contributors have also joined the Clinton camp. These and other big money people are just the leading edge of what I believe will be a steady move into the Democratic sphere in order to have some influence on the next president. This helps explain why, collectively, the Democratic candidates are raising much more money than the Republicans. It is too easy to write off such people as opportunists who just want to be on the winning side. There is a deep undercurrent of hostility to the Republican Party among many who formerly supported its candidates. They are simply disgusted with the incompetence with which the Iraq war has been waged, the total disappearance of fiscal discipline, and what they view as the party's incessant pandering to ignorant and intolerant yahoos on issues such as immigration, gays, global warming, abortion and stem cell research, among others. No doubt, a great many conservatives will say good riddance to such people. However, if the Republican Party loses everyone except religious zealots, gun nuts, anti-tax extremists and pro-life absolutists, then it is not going to win any national elections. That's not a comment on the rightness or wrongness of the views of those I just listed -- it's simple math. There just aren't enough of such people to put together a winning coalition. The price of purity is political powerlessness. Consequently, I anticipate that more and more Republicans and even a few conservatives are going to start looking at supporting one of the Democratic candidates. I suggested that Sen. Clinton may be the most conservative Democrat now running. But others believe that Sen. Obama may be acceptable because of his deeply conservative temperament, and some point to New Mexico Gov. Bill Richardson's excellent record of tax-cutting. The point is that there are better and worse Democrats from a conservative point of view. Those who prefer to go down with the sinking Republican ship may come to regret that they didn't try to exercise influence on the Democratic nomination before the nomination was sewn up. [...]

Conservatives for Hillary?

Tue, 01 May 2007 00:34:13 -0600

I'm sure that the first reaction of most conservatives will be to say that any involvement in the Democratic Party is unthinkable. They view it as the party of treason and socialism. They could no more involve themselves in Democratic politics than a God-fearing Christian would consider working with Satan just because it looked like he was going to win.

For those of you who feel this way, stop reading. There is nothing more in this column for you. But for those conservatives who don't see the 2008 election as a race between good and evil, but merely a contest between rivals within the same league, I think there is a good case for participating in the Democratic nominating process.

Here's why. Although all the Democratic candidates are more liberal than all of the Republicans, they are not all equally liberal. Among the Democrats, some are more to the right and others more to the left. It is a grave mistake to assume, as most conservatives do, that they are all equally bad and that it makes no difference whatsoever which one is elected.

To right-wingers willing to look beneath what probably sounds to them like the same identical views of the Democratic candidates, it is pretty clear that Hillary Clinton is the most conservative. John Edwards is the most liberal, and Barack Obama is somewhere in between.

The hard-core right-wingers who kept reading past the point I told them to stop probably think I've lost my mind by now. But remember, I am talking about the politics within the Democratic Party, not the nation as a whole. Moreover, at this stage of the nominating process, all of the candidates in both parties are appealing mainly to their bases. These are well to the left of the country among Democrats and well to the right among Republicans.

It is in this context that one must evaluate Sen. Clinton's position. Given the views of the Democratic base and the enormous unpopularity of the Iraq War, it is a real act of courage for her to steadfastly refuse to say her vote for the war was wrong. Of course, like all Democrats and most Americans, she opposes the war today and favors a rapid pullout.

That is why the easy thing for Sen. Clinton to do would be to just thrown in the towel, admit her vote was wrong and move on. And that's why it is an act of courage for her to refuse to do so. If conservatives weren't so blinded by their hatred for her, this would be obvious.

On economics, it is reasonable to assume that Sen. Clinton's policies would not be altogether different from Bill Clinton's. This is not a bad thing. On trade, his record was outstanding, and on the budget was far better than George W. Bush's. While Clinton raised taxes in 1993, it should be remembered that he cut them in 1997, including a cut in the capital gains tax. On regulatory policy, Clinton was no worse than the current administration and probably better on net.

Democrats know all this, which is why our most liberal pundits, like Bob Kuttner, are attacking Sen. Clinton for being a clone of her husband on economics and criticizing her support for "Rubinomics," named after former Treasury Secretary Bob Rubin. Its essential elements are a commitment to deficit reduction and globalization -- which are both anathema to the Democratic Party's liberal base. It wants a hard line against imports to save jobs and an expansive fiscal policy to pay for a wide range of new social programs.

At some point, politically sophisticated conservatives will have to recognize that no Republican can win in 2008 and that their only choice is to support the most conservative Democrat for the nomination. Call me crazy, but I think that person is Hillary Clinton.

Tax Winners and Losers

Tue, 24 Apr 2007 00:17:46 -0600

This is the standard liberal response to data showing that the wealthy are shouldering a greater and greater share of the income tax burden. According to the CBO, those in the top quintile paid 85.3 percent of all such taxes in 2004. In 1979, the first year of the CBO study, this group paid only 64.9 percent.

Inclusion of payroll taxes in the calculation doesn't change the picture that much because the top quintile of households paid 44.2 percent of all payroll taxes in 2004. Overall, this group paid 67.1 percent of all federal taxes -- well above their share of reported income, which was 53.5 percent.

Of course, we have a progressive tax system, and the wealthy are expected to pay more than their proportional share of taxes. The CBO data confirm that our federal tax system is indeed very progressive. Looking at all federal taxes, including payroll taxes, those in the lowest quintile paid 4.5 percent of their income to the federal government in 2004, the second quintile paid 10 percent, the third paid 13.9 percent, the fourth paid 17.2 percent, and the top quintile paid 25.1 percent.

The tax cuts enacted by Ronald Reagan and George W. Bush have lowered the top tax rate quite a bit -- it has fallen from 70 percent in 1979 to 35 percent today. Moreover, Reagan also raised the payroll tax rate by 3 percentage points. Knowing only this, one would assume that the wealthy are paying much less than they were in 1979 and the poor are paying much more. In fact, every income class has seen a decline in its effective federal tax rate (taxes as a share of income), including payroll taxes.

According to the CBO, the lowest quintile paid 8 percent of its income in total federal taxes in 1979, the second quintile paid 14.3 percent, the third quintile paid 18.6 percent, the fourth quintile paid 21.2 percent, and the top quintile paid 27.5 percent. Thus, the lower 80 percent of households saw a much greater reduction in their total federal tax rate despite the rise in the payroll tax because federal income taxes dropped much more.

These figures, however, really tell us nothing about how much each income class ought to be paying. One of the points Fleischer was making is that all Americans should pay something to finance the general costs of government. After all, the poor as well as the rich benefit from things like national defense.

A new study by the Tax Foundation attempts to calculate the benefits of government spending by income quintile in the same way taxes are calculated. It shows that government spending is also steeply progressive, with those with low incomes receiving far more than those at the top.

According to the study, those in the bottom quintile received 33.8 percent of all federal spending in 2004, the second quintile received 21.8 percent, the third quintile received 16 percent, the fourth quintile received 13.4 percent, and the top quintile received just 15 percent.

The reason for this is that many of the federal government's largest programs are geared specifically to aid those with low incomes. In the case of Social Security, the benefit formula gives those in the bottom quintile twice as much in benefits at retirement as they paid in taxes during their working lives, according to another CBO study. Those in the top quintile only get back half the taxes they paid. Consequently, the overall Social Security program, looking at both taxes and benefits, is steeply progressive -- a point that is almost always ignored by those who complain about the burden of the payroll tax on the poor.

Blogging Benefits

Tue, 17 Apr 2007 00:17:32 -0600

The point I am getting at is that blogging is finally maturing into a useful way for people to interact with each other to sort out differences. It's like being in a seminar room with some of the smartest people on the planet, where we are all searching for answers to the same questions, but coming at them with very different experiences and philosophical perspectives.

But it is really better than that -- because in a seminar room only one person can speak at a time, some people speak too long, others go off on tangents, while others effectively sabotage any effort to narrow differences by focusing only on those areas where agreement is impossible. With a blog discussion, these problems go away. There are no time constraints, people must write their comments, those that are off-topic can be skipped over, and those who abuse the forum can have their comments deleted by the host.

Also, in a seminar room people can sometimes get away with making outrageous claims or factual errors that cannot be responded to in that forum. In a blog discussion, no one can get away with such things. Fact-checkers will immediately swoop down on mistakes and often provide hyperlinks to original sources that can be checked by anyone for verification. The result is an automatic self-correction mechanism that helps keep everyone honest.

This is not to say that there is no downside to a blog discussion. Too often, those posting comments start arguing with each other about matters that have no relevance to the original post. Oftentimes, these commentators will follow each other from one blog to another, carrying on debates over matters that are unknown to readers other than themselves. And, of course, people sometimes get abusive and substitute name-calling for rational argument.

But these problems are really rather minor and result mainly from the blog host lacking the time or the inclination to police the comments, disciple abusers and delete their comments, and bar serial abusers from being allowed to post. Perhaps in the near future, some programmer will invent an effective method of deleting irrelevant, off-topic, and abusive comments automatically, thus improving the blogging experience for everyone.

Nevertheless, the sort of back-and-forth that my original article stimulated is extraordinarily useful. I learned a lot from those who commented on my article. In particular, I learned that many things I took for granted in terms of my knowledge of the economic experience of the 1970s are not widely shared. It has motivated me to write something more detailed that will explain the atmosphere and context in which SSE was developed.

I think if people understood the problem we were facing as we saw it, our actions would make more sense. As it is, both supporters and opponents of SSE implicitly view it in the context of today, thus leading to errors in thinking that what was true at one time is still true today -- or, conversely, thinking that something that is wrong today was also wrong in the past. In terms of SSE, what was right then may be wrong now.

In terms of what SSE accomplished, I still think it was the right cure for the economic problems we were facing in the late 1970s. I also think it embodies some fundamental truths that are applicable at all times. But these fundamental truths, such as the idea that high marginal tax rates are bad for the economy, are now almost universally accepted. So I say to my fellow supply-siders, let's just declare victory and move on. Insisting on a separate identity only makes enemies out of potential allies.

Tax Facts

Tue, 10 Apr 2007 00:42:13 -0600

-- Those with incomes below $40,000 paid no federal income taxes at all in the aggregate. The positive liability for those who paid anything was more than offset by tax rebates from the Earned Income Tax Credit for many more who paid nothing. In total, the EITC put $41 billion into the pockets of low-income workers in 2005, 91 percent of it being paid to those with no income tax liability. However, according to the Tax Foundation, three-fifths of Americans believe that it is wrong for anyone to pay no taxes at all, that everyone should pay something to finance the government.

-- So-called tax loopholes -- deductions and exclusions that reduce one's tax liability -- are mainly used by the middle class, not the wealthy. The largest tax expenditures are the exclusions for pension contributions and health benefits for workers. Among the largest deductions are those for mortgage interest and state and local taxes. In 2005, taxpayers saved $62 billion in taxes due to the mortgage interest deduction, with 72 percent of that going to those with incomes below $200,000. The child credit saved taxpayers $46 billion -- almost all of it claimed by the middle class. Just $8 million went to those with incomes over $200,000.

-- Not surprisingly, three-fifths of taxpayers believe their taxes are too high. Only 2 percent think they are too low. About a third of taxpayers would support a reduction in government services in order to achieve further tax cuts. Just 8 percent favor bigger government financed with higher taxes.

-- Support for fundamental tax reform is high. Four-fifths of taxpayers believe that the tax system is too complex. Just 3 percent believe the tax system is fine the way it is. By better than a two-to-one margin, taxpayers would be willing to give up major tax deductions, such as that for mortgage interest or state and local taxes, in order to get lower income tax rates.

-- Almost all taxpayers think that the top federal income tax rate of 35 percent is too high. More than 90 percent of taxpayers believe that the top rate should be no higher than 29 percent, with 70 percent saying that 19 percent should be the maximum.

-- The Alternative Minimum Tax (AMT) is a rapidly growing federal tax. Originally designed to tax only the rich, increasingly it is a tax on the middle class. In 2005, the AMT affected only 1.3 percent of those with incomes between $50,000 and $100,000. Unless Congress acts, this will rise to 42.8 percent this year and over 50 percent next year. This illustrates the problem with all soak-the-rich tax proposals -- eventually, they end up taxing the middle class, too.

For years, Republicans have largely ignored the problem of the AMT -- enacting temporary patches to the tax cut to keep the problem from getting worse, but not even attempting to offer a permanent fix. The latest patch expired at the end of last year, which is why there is such a sharp rise projected in the percentage of taxpayers affected by the AMT.

Consequently, Democrats really have a gun to their heads -- they must do something on the AMT by the end of the year. But because they have pledged to pay for all tax cuts, they must raise taxes somehow to pay for an AMT fix. Republicans aren't likely to offer much help in that area, making tax policy in 2007 an interesting spectator sport.

Economics on the Internet

Tue, 03 Apr 2007 00:02:54 -0600

And if you wanted analysis of economic or labor trends, you had to subscribe to obscure publications like the Survey of Current Business or the Monthly Labor Review or the Federal Reserve Bulletin. These were also the only places you could find important statistics. And to put together a time-series, you needed access to past issues, because the compendiums of such data only appeared every few years. Obviously, this was a pain in the you-know-what. But it did have compensating advantages. The main one was that those of us who could quickly get hold of the government's economic publications and statistical releases had a lot of power simply by virtue of our access to information. When I joined the staff of the Joint Economic Committee of Congress, one of the benefits was having all this material at my disposal for the first time. Now, of course, everyone on earth with a computer and an Internet connection can instantly obtain all this material that was so hard to come by just a few years ago. When the Fed chairman testifies, they can watch it live on the Web, while simultaneously printing out a copy of his statement. And such statements may contain hyperlinks to studies and data releases that would otherwise be unknown to the average person. This is all to the good. The faster information is made available and absorbed by financial markets, the better it is for everyone. It creates transparency and avoids misunderstandings, and therefore reduces errors. But old habits die hard, and I have maintained my subscriptions to all the old publications I've trusted for so long and saved all the back issues -- just in case. But 25 years or more of any publication is going to take up a lot of space, and I finally decided I had to let go. I started checking around to see what my options were and was pleasantly surprised. I discovered that the Department of Commerce posts copies of the Survey of Current Business for free and maintains archives of all issues back to 1994. The Department of Labor posts the Monthly Labor Review and makes all of those issues back to 1981 available for free, as well. I also discovered that my local public library system in Fairfax County, Va., has databases available for remote access to anyone with a library card, which residents can easily apply for online. One such database is called ProQuest, and it has every issue of the Monthly Labor Review that has ever been published since it started in 1918. ProQuest also makes available a wide number of economic publications, such as the American Economic Review, Economic Inquiry, Public Choice and many others that I have paid good money to subscribe to for many years. Sometimes, the archives only go back a few years -- but in other cases, they are quite deep. For example, every issue of the Southern Economic Journal since 1933 is online. There are thousands of publications, many of them quite expensive to subscribe to, available on ProQuest. They cover every field, including law, medicine, accounting, teaching and so on. Perhaps even more amazing is that every issue of The Washington Post and The New York Times is available online since they came into existence in 1877 and 1851, respectively. It allows anyone with an interest in history to see it the way people who lived it saw it. Space prohibits me from telling all that I have learned about research on the Internet. Suffice it to say that I now have a great deal more space in my house that previously was filled with government publications and academic journals. Now, if I could only figure out what to do with all my boo[...]