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RealClearPolitics - Articles - Thomas Bray





Last Build Date: Wed, 20 Dec 2006 08:04:53 -0600

Copyright: Copyright 2007
 



As 2006 Closes, Reasons for Optimism

Wed, 20 Dec 2006 08:04:53 -0600

President Ronald Reagan and Pope John Paul II had both been shot, and British Prime Minister Margaret Thatcher had narrowly escaped a terrorist bomb. Huge anti-American demonstrations, fanned by Soviet propaganda and cash, were taking place in Western Europe over the issue of whether to allow deployment of modernized missiles. Japan was thought to be in the process of replacing America as the planet's leading economic power.

And the intellectuals were approvingly reciting to each other the glum lines from the Nobel Prize-winning Irish poet William Yeats in the wake of the slaughter of World War I: "Things fall apart; the center cannot hold...The best lack all conviction, while the worst are full of passionate intensity."

As we now know, however, the center did hold. The missiles were deployed, and it was the Soviet Union, not the Free World, which collapsed. The American economy not only recovered, it went on to nearly a quarter century of robust expansion interrupted by only two mild pauses. The social fabric finally began to show signs of repair, helped along by a welfare reform bill signed into law by a Democratic President.

This time could be different, of course.

Al Gore has attacked the Iraq war as "the worst strategic mistake in the entire history of the United States," and maybe he will turn out to be right - though one wonders what he makes of the decision to send troops into Vietnam, where 47,000 of them were killed. Predictions that the fiscal deficit and the trade deficit could bring an economic reckoning may turn out to be correct, too. And we may not see the likes of Ronald Reagan, Margaret Thatcher and Pope John Paul any time soon.

But each of our historical crises seems to have brought forth the leadership and the ideas needed to deal with them. For that I credit our republican system of government.
It is not just the best except for all the others, as Winston Churchill famously put it. It is qualitatively superior, a great and very durable system based on a realistic appraisal of human nature, which allows for adaptation, correction and collective judgments that tend to be wiser than that of any single individual.

There may be no permanent victories. But neither are there any permanent defeats.
And I also credit our capitalist economic system. Its dynamism, based, as my old friend and colleague Warren Brookes used to say, on "the economy in mind," the unlimited natural resource known as the human spirit, not only builds wealth, it builds decency, civility and space for political liberty. That doesn't mean there won't be tough times, but it does mean that progress is possible, even likely.

So, as John Paul told the Poles in a much darker time than this, "be not afraid." There are good reasons to think that even better times lie ahead.




Dollar Protectionism: It's Never Enough

Wed, 13 Dec 2006 10:56:22 -0600

And the National Association of Manufacturers, which is now headed by former Michigan Gov. John Engler - who has long embraced the Detroit view that much of the Asian manufacturing advantage stems from currency manipulation - says its No. 1 goal is somehow forcing the Chinese to revalue their currency. The NAM claims that it is undervalued by as much as 40 percent.

It's déjà vu all over again. But as the Caldwell example shows, it's never enough. The Japanese yen has more than doubled in value against the dollar, yet Detroit's competitive problems remain severe, perhaps fatal. Bankruptcy has scythed through the automotive industry even as Toyota, Honda and others, to hedge against protectionism, have established strong beachheads inside the American market, mostly in right-to-work states.

And when governments start tinkering with currencies, or are even suspected of doing so, the market is quick to react. Think of the stock market crash of 1987, which followed a public spat between the U.S. Treasury and the German Bundesbank over currency issues. (At that point, the yen was about 150 to the dollar.) Only strong intervention by the new Fed chairman, Alan Greenspan, may have saved us from a new Depression. How good were the 1930s for manufacturing?

The current Fed chairman, Ben Bernanke, has been getting strong reviews of late. But he may yet be tested in the marketplace, particular if his decision to travel to China at the same time as Treasury Secretary Paulson is perceived as an attempt to strong-arm Beijing into a major currency realignment. The dollar has been declining for weeks, perhaps in expectation of a devaluation of some sort, Paulson's claim that he favors a strong dollar notwithstanding.

With Democrats in charge of Congress, the forces favoring dollar protectionism may be gaining ground. Michigan Democratic Congressman John Dingell, who will chair the powerful House Energy and Commerce Committee, says he plans to make currency issues a top priority. Translation: there might still be little appetite for old-fashioned trade barriers, such as tariffs, but the premise that the nation's trade deficit - now running at a rate of $229 billion with China alone -- poses a threat to American prosperity will provide plenty of cover for the more subtle poison of dollar protectionism.

The Bush administration needs to be clear: retreat from the global economy, by whatever means, is not an option. Indeed, the trade deficit is a fairly meaningless construct. Maine has a trade deficit with California. What of it? What really counts is a growing American economy, and dollar protectionism - or even the threat of it -- could bring that to a rapid halt.




Is More College Such an Intelligent Idea?

Wed, 06 Dec 2006 00:06:16 -0600

We won't be able to raise national income "by dipping further into the non-college population and enticing more of that group to spend time and money in pursuit of a degree," concludes the author of the study, George Leef, formerly a business law and economics professor at Northwood University in Midland, Mi.

The remaining non-college population for the most part has made the entirely rational decision to go directly into the work force. Leef cites a 2000 study by Jeff Madrick, an economist and former staffer for Sen. Ted Kennedy, no conservative, which estimated that about 1.3 million high school graduates were "college ready." Yet colleges, hungry for ever-more revenue, admitted nearly 1.4 million applicants.

Yes, the average male college graduate was earning $52,500 in the year 2000, compared to about $31,000 for high school graduates. But more college won't change the fact that some jobs will always pay less. Nor, by itself, will it create new, higher-paying jobs. The majority of Michigan college graduates go elsewhere to work, for example, in part because of the state's heavy taxes, regulations and union-friendly policies.

Higher education supporters across the country cite a privately (and anonymously) funded experiment in the Michigan city of Kalamazoo promising to pay for a college education for the 350 or so kids who successfully complete 12 years of education in Kalamazoo's high school with a 2.0 grade average. The two-year-old experiment already has led to an in-migration of eager parents, supposedly proving that college education is a "growth" policy.

But the real test of the Kalamazoo experiment will come when those students decide whether to stay home after college. So far Kalamazoo is only stealing parents from other school districts, not adding to the state's wealth.

Leef also raises the delicate question of what society is getting for its education dollar. A National Assessment of Adult Literacy study found that only 31 percent of college graduates are "prose literate" - that is, able to comprehend what they read.

Yet because of grade inflation, a form of academic fraud that is rife on the nation's campuses, parents are fooled into thinking their kids of ready to meet the challenges of the 21st century.

Employers seem to content to go along with the fraud. Afraid to get into the business of testing prospective workers, which could open them to charges of discrimination, they instead use college as a handy screening device that indicates whether the prospective employee is at least trainable. Little attention is paid to the actual learning. The credential is what counts.

Unthinkingly throwing more money at higher education is thus a mug's game - a way to extend to 16 or more years an education that used to take 12 years. Better that our politicians stay focused on improving education at the K-12 level.




Will Supreme Court Inflict More Rust on Rustbelt?

Tue, 28 Nov 2006 11:30:29 -0600

The Supreme Court, of course, may decide to uphold a U.S. Court of Appeals ruling that the EPA was within its discretionary rights to reject greenhouse gas regulations, at least for the moment. The appellate court held that the scientific evidence for global warming is still highly speculative. And in a separate opinion Judge David Sentelle pointed out that the Supreme Court itself has long held that a plaintiff must show actual harm before he can sue for remedies.

"[I]t is not sufficient that he has merely a general interest common to all members of the public," wrote the judge.

The place for settling matters of common interest, of course, is the political process, not a courtroom or even a regulator's office. Indeed, the Supreme Court case reflects a deliberate effort to bypass the political process, because global warming enthusiasts haven't had much success persuading the elected representatives of the people that there is a need for action. Efforts to approve Al Gore's Kyoto Protocol were turned back in the U.S. Senate by a vote of 95-0.

And for good reason. The global temperature rise in the 20th century has been minimal - and much of it occurred before industrial activity and the automobile were major contributors to greenhouse gases in the atmosphere. The climate actually cooled in the middle part of the century, before heating up again (followed by sideways motion in recent years). Remember all those "experts" who predicted last year that Katrina was only a warmup for a devastating hurricane season this year?

If regulators can act on the basis of scientifically speculative threats, based on computer models that are deeply hostage to the assumptions of the modelers, what can't government do? Global warming is thus the mother of all environmental scares, justifying political intervention in the economy on a scale only a diehard Marxist would have dreamed of.

That's not an argument for ignoring potential threats to human health and welfare. But insofar as the so-called "precautionary principle" justifies action before all the facts can be known, the same principle argues for a need to be wary of government actions that can - and often do - turn out to be ill-advised, wasteful and downright dangerous.

Despite inconclusive science, government rushed to ban DDT production in the wake of ecologist Rachel Carson's famous 1962 diatribe, "Silent Spring," about chemical threats to the environment. Recently the World Health Organization concluded that had been a severe overreaction that may have cost tens of millions of people around the world their lives because of rampant malaria.

Let's hope the Supreme Court keeps that holocaust in mind this time around.




Appetite for Renewed Welfare Statism is Limited

Wed, 22 Nov 2006 00:27:48 -0600

But once voters got an actual look at the proposal, they bailed out in droves. If pensions and health care packages are too expensive, the voters basically said, the legislature and school boards have a way to fix things: shift from a welfare state approach to a defined contribution, 401k-style approach. The state is doing exactly that for its own new employees.

Another signal that the welfare state has reached a dead end came from the post-election junket to Washington by the chief executives of the Detroit auto companies for a long-sought sitdown with President Bush. Among their suggestions: force Japan to revalue its currency; provide some sort of help for health care plans that are costing them up to $1,500 per car; and hike subsidies for alternative energy schemes. In other words, welfare for corporations.

By most accounts, however, the President and his team gave the auto execs a polite one-hour audience, then sent them on the way. No doubt they will get a more empathetic reaction from the new Democratic majority on Capitol Hill. House Energy and Commerce Chairman-to-be John Dingell has promised hearings on currency issues, and Illinois Sen. Barack Obama has talked about exchanging a health-care subsidy for higher production of hybrid vehicles.

But that seems unlikely to produce much either. New York Sen. Charles Schumer, a Democrat, and South Carolina Sen. Lindsey Graham, a Republican, earlier this year threatened to put forward legislation to impose trade limits on China if it didn't allow its currency to appreciate faster. But they backpedaled at the first sign of resistance from the administration (and a symbolic bump in the value of the yuan).

Besides, this week's auto show in Beijing, at which Ford, GM and Chrysler will be touting their wares for Asia's potentially huge market, underlines just how problematic any serious form of protectionism would be, even for them. The American auto industry is moving offshore as rapidly as possible in hopes of saving itself. And many legislators are likely to remember that they bailed out Chrysler once before - and that it's now owned by a German company.

Moreover, Sen. Obama's suggested deal underlines why the auto companies are not likely to get too focused on a health care bailout: it would likely only come at a very heavy price in terms of government intervention in the rest of their business. The Al Gore wing would love nothing better than to be handed leverage for enactment of carbon dioxide controls on the auto industry.

In short, the industrial welfare state is collapsing even faster than the social welfare state. Not that the latter isn't facing renewed pressure: the city of Detroit - the Model City of Great Society fame - and other municipalities will soon be forced by new accounting standards to acknowledge the obvious: that the health costs incurred to keep peace with the unions are rapidly driving them into economic bankruptcy.

Long before Democrats could piece together some version of national health care, it's likely that the states and cities will have moved on to health savings accounts and more realistic levels of benefits. What's the matter with Michigan, liberal intellectuals will then be asking. The answer: it's the poor and the middle class who suffer most from the welfare state-approach to things.

So if Democrats want to translate the current backlash against Republicans into something more permanent, they will have to find ways to move beyond the rapidly unraveling 20th century welfare state. They will need to shift from their obsession with redistribution for some to a focus on growth and opportunity for all. And Republicans, if they want to stage a comeback in 2008, will have to find ways to prevent Democrats from occupying this high ground of American politics rather than caving in to the liberal vision of ever-bigger government.




University of Michigan: The People, Damn Them!

Thu, 16 Nov 2006 00:04:12 -0600

In other words, to paraphrase a politician from another, unlamented era, "preferences today, preferences tomorrow, preferences forever." Moreover, the university may now go to the breathtakingly arrogant extreme of using taxpayer funds to try to undo what the taxpayers and voters approved by a landslide margin. The people, damn them!

Never mind that a similar lawsuit was rejected by the liberal 9th U.S. Circuit Court of Appeals after California's very similar Prop 209 was approved a decade ago, or that opponents of Michigan's Proposal 2 had already tried - and failed - to get courts to throw the measure off the ballot before the election on various trumped-up charges.

Coleman's rant was a reflection of the degree to which academia remains firmly in thrall to the forces of political correctness. A national survey of more than 1,200 professors at four-year colleges and universities in the spring of 2005 by the Institute of Jewish & Community Research, a nonpartisan group in San Francisco, found that professors were three times as likely to call themselves "liberal" as "conservative." And that probably understates the case, since most of the rest are middle of the road only by comparison to their brethren.

Thus if Coleman had not toed the line, she could expect to share the fate of Harvard's ex-president, Lawrence Summers, who was run off campus by faculty radicals (and a gutless Board of Overseers) after being caught musing about the mere possibility that gender might play some sort of role in career decisions. The egalitarian fringe would prefer to suppress dissent than to permit open discussion of such matters.

Coleman can't complain that Michigan voters didn't know what was at stake on Nov. 7. Virtually the entire political, business, union and academic establishment of Michigan had combined to mount a noisy, mendacious campaign against Proposal 2 that outspent the pro-Prop 2 forces by nearly four to one.

And this followed years of lively national debate over the use of racial preferences by the University of Michigan in its admissions process. The U.S. Supreme Court tried to split the difference in the Michigan cases, ruling that a more "holistic" use of race and ethnicity was allowable. But even that was too much for Michigan's voters - perhaps because they were aware that minorities continue to gain a huge advantage over white applicants with equal qualifications.

Public colleges and universities across the country constantly moan about lack of taxpayer support. Maybe they should take a long, hard look in the mirror. Voters - and tuition-paying parents -- might be forgiven for wondering what their kids are being taught when prominent schools like the University of Michigan show such contempt for the voters and the democratic process.




No Need for Conservative Panic -- Yet

Thu, 09 Nov 2006 15:30:36 -0600

But where voters were required to consider individual questions, it was clear they weren't in a revolutionary mood. By a whopping margin, they voted down a potentially bankrupting proposal that would have guaranteed annual raises for teachers, as well as required the state to pay for any pension and health care promises that local districts decided to grant. As in nearly 20 other states, voters also approved a measure banning government takings of private property for private purposes.

And by a landslide of 58-42, they banned affirmative action practices by the state and its universities that would result in racial, gender and other preferences - despite being outspent nearly 10-1 by a well-orchestrated establishment coalition that included virtually every major business firm, labor union, academic group and Republican as well as Democratic candidates. Michigan thus becomes the third state to outlaw race-based preferences, following in the footsteps of California and Washington state.

The U.S. Supreme Court, with two new justices on the bench, is scheduled to consider two racial preference cases in this term involving the question of assigning students to public schools to achieve "diversity." The Michigan vote sends yet another clear signal, if any were needed, that voters think the time for restraint in such practices is long overdue.

The vote was all the more impressive because opponents of Michigan's Proposal 2 had tried to portray the measure as anti-woman. Well, women turned out at the polls in large numbers, giving most Democrats an advantage, but they obviously weren't buying the anti-Prop. 2 line. For most voters, it obviously was a question of fundamental fairness: all Americans deserve to be treated equally before the law.

There is no question that it was a Democratic hour. Republican gubernatorial candidate Dick DeVos can't complain that his message wasn't heard. He reportedly spent a staggering $35 million on his campaign; his ads were ubiquitous. His message may have been unpersuasive, however. He tried to portray Gov. Granholm as somehow responsible for Michigan's single-state recession and he emphasized business tax cuts as a remedy.

But it wasn't hard for Democrats to "nationalize" the economic issue, just as they were "nationalizing" elections elsewhere by tying local candidates to President George Bush and the Republican-held Congress. Michigan's economy is indeed in a parlous state, but just how much any governor could have done to prevent that was always a much fairer question than DeVos tried to pretend. Michigan's major industry has been hard hit by foreign competition, and Granholm hit DeVos hard for "outsourcing" jobs while he was chief executive of Alticor Corp., formerly Amway.

It's no great surprise that Republicans took a whomping. Voters nationwide clearly decided it was time to give the other guys a chance to make their case. Michigan will feature prominently in that exercise as well, with Detroit Congressman John Conyers as chairman of the House Judiciary Committee, Carl Levin as chair of the Senate Armed Services Committee and Rep. John Dingell as chair of the powerful House Energy and Commerce Committee.

But if Democrats run wild with their regained power, they are likely to pay a heavy price themselves in 2008. Voters may have given liberals some hope by rolling back a heavy-handed abortion measure in South Dakota, rejecting a gay marriage ban in Arizona or giving Gov. Arnold Schwarzenegger a green light for billions in "infrastructure" spending in California. But by and large voters showed a continued preference for conservative approaches on most issues.

Introspection, not panic.




The Global Warming Heat is On

Wed, 08 Nov 2006 00:24:27 -0600

England's Royal Society, for example, the oldest scientific society in the world, recently demanded that ExxonMobil cease making grants to think tanks harboring those who offer "misleading" thoughts about global warming. The society, long known for its left-wing leanings, seems to harbor no questions about the potentially corrupting effect of the $4 billion in grants that researchers receive annually from government in the U.S. and Britain.

Back in the states, the Washington Post editorialized that Bush will go down as "the President who fiddled while Greenland melted," ignoring the fact that Greenland got its name from an era - centuries before there was an industrial revolution - when temperatures went through a warming cycle. And on Grist magazines website, an author offered the thought that when global warming drowns and fries the planet, there should be "Nuremberg" trials for the "deniers," a term equating scientific skeptics with Holocaust denial.

I am not a scientist, so I can't fully judge the merits of the global warming debate. But color me skeptical if for no other reason than groups that try to suppress debate usually lack confidence in their own arguments.

I might also be more sympathetic if so many environmental prophecies hadn't turned out to be false, or at least vastly exaggerated. Remember Stanford University professor Thomas Ehrlich's claim of a "population bomb" that would lead to mass starvation by the early 1980s? Remember the so-called "Limits to Growth" study in the 1970s that we were running out of natural resources? Remember the "global cooling" consensus of the 1970s?

And even before that, how about Rachel Carson's "Silent Spring" jeremiad, which launched the modern environmental jihad against chemicals by proclaiming the death of nature from the use of DDT and other chemicals?

But, lo, no less than the World Health Organization earlier this year called for reinstating DDT as a weapon in the fight against malaria, which has cost tens of millions of lives in the last half century. When used responsibly, WHO pointed out, there is little danger to humans and animals.

Now they tell us. Where is the outrage about the tens of millions who have died a horrible, shivering death from malaria in the intervening decades? As Reason Magazine's Ron Bailey asks, will there be a Nuremberg trial for those, like the Sierra Club and the Audubon Society, who overreacted to the DDT scare and pushed world governments into policies that arguably cost millions of human lives?

Oh well, their intentions were good...weren't they? And don't we have to make such decisions even when the evidence is fragmentary? If we wait for all the facts, mightn't it be too late to do something?

Well, yes, sometimes we may not act until it's too late. But what if we had wasted hundreds of billions to combat the prophesied global cooling of three decades ago? The "precautionary principle" so loved by Al Gore and the like cuts both ways. There are plenty of reasons to take precaution against precipitous government action as well.

Indeed, if the left is in the process of making a political comeback in this country, that's something we very much need to keep in mind.




Racial Quotas: Nothing Much Changed in Ann Arbor

Wed, 01 Nov 2006 00:23:04 -0600

Proposal 2 is the same as amendments to the California and Washington constitutions that were approved by wide margins. But a multi-million-dollar ad campaign organized by labor, business and political elites of both parties in Michigan is frantically throwing sand in the eyes of the electorate with charges that Proposal 2 would be the end of civilization as we know it.

The campaign may work. From 75 percent approval, the Michigan Civil Rights Initiative has sunk to less than 50 percent in polls recently. "Michigan is a much tougher place, politically, than either California or Washington state," says Ward Connerly, the California businessman who has backed all three measures. The chair of the Michigan Civil Rights Initiative, Jennifer Gratz, who was the plaintiff in the original University of Michigan case, confesses her group has little money with which to respond.

But voters have plenty of reasons to see through the scare campaign. California and Washington are doing just fine in the wake of their bans on race preferences. Yes, minority enrollment at a few of the most selective state schools is down, but overall minority enrollment in the state system is up. Female contractors can no longer count on a big boost when bidding for government work, but female income continues to rise overall.

The anti-Prop 2 campaign suffers an even more crucial flaw: it has been simply unable to explain how more discrimination would lead to less discrimination. At a big rally against Prop 2 in Detroit 10 days ago, Jesse Jackson gave a particularly weird explanation of why he opposes a ban on preferences. Men of all skin colors play for the Detroit Tigers, he rightly noted, but no baseball fan would think to root for a St. Louis Cardinals player simply because of his skin color. "Diversity" leads to strength, he asserted.

But most people enjoy watching pro sports precisely because the players are picked solely on the basis of their amazing abilities. Competition is what makes people stronger. Do we not have a compelling interest in having our overall society perform as well as our professional sports teams?

I didn't always see it this way. Back in the 1960s and 1970s, as a journalist working in New York, I wrote articles about what a great thing it would be if the City University of New York would open itself up to minorities through an "open enrollment" system. But 40 years later -- and having seen CUNY nearly implode as a serious school as a result of open enrollment -- I say it's time to get back to first principles: treat all individuals as equal before the law.




You Think the Dems Don't Have 'Ideas'?

Wed, 25 Oct 2006 09:00:21 -0600

Thus in a recent interview he resisted the temptation to gloat over the current polls (or that Republicans in Michigan were unable to come up with a candidate to run against him). "There's an old saying that before you sell a bear hide you've got to shoot the bear," as he puts it. "The voters usually have their own ideas about these things." When pressed, however, he confesses to a lengthy list of initiatives that he has in mind should he once again run the committee that he chaired from 1981 to 1994. For starters, Dingell favors legislation to "reform" health care in incremental steps. His ultimate goal: universal health care along the lines of the Canadian system, an idea his congressman father first introduced in Congress in the late 1930s and that he has re-introduced at the start of each new Congress. Dingell also supports the idea of a "Manhattan Project" for energy; higher levies on food and drug companies to finance a more active Food and Drug Administration; free access to broadband digital service; an end to "unfair currency manipulation" by Japan and China; and much, much else. Insofar as "oversight, oversight, oversight" is the Democratic mantra of the moment, Dingell makes clear he will provide plenty of that as well. "You saw how I ran the committee before," he tells me with a chuckle. He loved nothing more than to call witnesses before his committee and give them the third degree - often insisting that they take an oath even when testifying on routine matters. More than one Republican went to jail for discrepancies. Not long after Republicans took control of Congress in 1994 I ran into Dingell in Washington. He looked bereft, almost physically shattered. The world that many of the old Democratic bulls like Dingell took for granted had inexplicably fallen apart. He still mourns what he sees as the "divisiveness" of politics in recent years - which a Republican might be forgiven for interpreting as stemming from a refusal to acknowledge there might be any legitimate differences of opinion. But Dingell soldiered on, briefly basking in the attention he received on his 50th anniversary in Congress last year. (Even Dick Cheney put in some kind words.) This year he says he feels positively energized despite his advancing years. "I work 12-14-hour days seven days a week, I'm getting ready to go duck hunting and I feel nothing much has changed since I was in my 30s," he asserts. In truth, Dingell has always frustrated many ideologues on the left by his willingness to work with Republicans to protect the hometown industry, Detroit's automakers. He is deeply wary of the zealotry with which Al Gore and others pursue global warming, for example. Yes, he says, global warming would be on the committee's agenda if he is chairman, but the first goal would be "to gather the facts" - even though global warming ideologues consider the debate closed. But automakers and other old-line manufacturers blame many of their economic woes on the fact that health care costs are soaring. Detroit places the cost at $1,500 a car, roughly double what they pay for steel. Among other things, Dingell favors immediate relief through a "Medicare for All" system - perhaps starting with laid-off auto workers. He says he would also work to replace the Bush drug plan with a direct government benefit. "One-third of the $2 trillion or so that we are spending is eaten up in management fees and corporate bureaucracy," he claims, and elimination of that would allow even bigger benefits. Of course, as humorist P.J. O'Rourke once pointed out, if you think health care is expensive now, wait until it's "free." And in even daring to raise the possibility of what Republicans like to term "socialized medicine," Dingell risks reminding Republicans why they should get to the polls. But Dingell makes one thi[...]



Is the GOP Losing Sight of Reaganomics?

Wed, 18 Oct 2006 14:44:37 -0600

These days, however, Republicans are having difficulty exploiting the incentivist principles that brought them to the dance. Some even seem to be downplaying them. In Michigan, for example, Republican senatorial candidate Mike Bouchard, the Oakland County sheriff and former state senator who was expected to give first-term incumbent Deborah Stabenow a stiff challenge, stresses his homeland security credentials and his tough stand towards illegal immigration.

On his website he does list 10 steps he would take to keep the economy humming. No. 1 is cutting "red tape" on small business. No. 2 is giving the president line-item veto authority - a sort of stop-us-before-we-spend-again approach. Only when we get to No. 3 do we find Bouchard calling for making the Bush tax cuts permanent.

To be sure, in the other high-visibility Michigan race, Republican gubernatorial candidate Dick DeVos is playing up the idea of tax cuts at the state level. He backed a proposal to zero out Michigan's onerous Single Business Tax. And he doubled down recently by proposing to reduce or eliminate the state's even more onerous tax on business plant and equipment.

DeVos clearly believes the proposals will buttress his claim that, as a former business executive, he knows what is needed to reverse Michigan's single-state recession. As DeVos spokesman John Truscott points out, "if we don't get the business and job situation straight, then we'll never fix our problems in the state, or get revenue going in the right direction so we can do the things like cut [individual] income taxes."

But unless DeVos first gets elected, he won't have that chance. Polls show him still within striking distance of Granholm but apparently stalled after an exceptionally strong campaign start. A weak performance in his first debate with Granholm may be partly responsible, but his strategy of cutting business taxes risks making him appear to be just another Chamber of Commerce-style Republican rather than the sort of Main Street Republican who, like Reagan, would place the economic interests of the average Joe first.

Perhaps the award of a Nobel Prize by the Swedes is a sign that an idea's power is already on the wane. (Though it should be noted that Swedish voters themselves recently elected a tax-cutting prime minister.) If so, Republican candidates may suffer an accelerating inability to keep their coalition together - particularly at a time when their inevitable defects of leadership have been so prominently on display.




Who Are the 'Progressives' These Days?

Wed, 04 Oct 2006 00:25:39 -0600

And California voters, if they approve five bond proposals totaling $43 billion for "infrastructure," may signal that the era of big government is definitely back - even under a Republican governor, Arnold Schwarzenegger.

In the main, however, ballot propositions have been the friend of conservatives for the last quarter century. There is considerable irony in that. The Initiative and Referendum Institute, which is affiliated with the University of Southern California School of Law, notes that the I&R movement of the early 20th century was spawned by progressives who shared a Jeffersonian belief in the basic wisdom of the people. They saw direct voting on issues as a way to bypass supposedly hidebound, corrupt legislatures.

But beginning in 1978 with voter approval of California's famous Proposition 13, which limited property taxes, the biggest users of the ballot proposal became conservative populists. The progressives, to paraphrase William F. Buckley, were relegated to standing athwart history, yelling stop, as one conservative proposal after another was enacted into law by voters rebelling against the nanny state.

Indeed, the emerging strategy of the left is to prevent people from voting at all on many ballot proposals. In Montana this summer, left-wing critics persuaded a district judge to throw a TABOR proposal - as well as a measure that would subject judges to the recall process - off the ballot because of a "pattern" of fraud by petition gatherers. (The decision is under appeal.) In Missouri a Democratic secretary of state refused to certify the TABOR and eminent domain proposals on the exceedingly fussy grounds the petitions weren't properly numbered by county.

In Michigan, opponents of Proposal 2 ludicrously tried to argue - unsuccessfully as it turned out - that the federal Voting Rights Act required that there be no vote on a measure to ban racial preferences.

And judges in several states have junked proposals barring the taking of private property for the benefit of another private interest on grounds that the proposals violated the "single subject" requirement for ballot issues. The proposals also would have required state compensation for "regulatory takings" - an environmental rule, for example, placing limits on a property's uses. Never mind that the measures had the single purpose of protecting property rights.

Maybe November will show that conservatism is running out of intellectual steam. But the run-up to November already is showing that progressivism ain't what it used to be.




Michigan's DeVos Weathers Granholm Counterattack

Wed, 27 Sep 2006 09:30:47 -0600

The good news for DeVos is that Granholm's effort to play the class warfare card appears to have flopped. Early Democratic TV ads and Granholm speeches hammered the fact that under DeVos's leadership, his Alticor Corp., the huge direct sales outfit formerly known as Amway, cut about 1,000 jobs in hard-pressed Michigan while pouring hundreds of millions of investment dollars into China.

But the Detroit automakers have been doing much the same thing - and in far bigger numbers - for years. Yet Granholm hasn't criticized them, as local commentators have noted. And Alticor, unlike the car companies, is still turning a profit, placing it in a position to create new jobs in the future. DeVos managed to enlist Lee Iacocca, one of the most popular figures in Michigan business history - and a man who has been closely associated with Democrats in the past - to make just that point in a devastating new TV ad.

Meanwhile the DeVos campaign continues to stress the need for fundamental change in the Michigan economic climate, starting with elimination of the state's detested Single Business Tax. Granholm crows about her success in bringing a Google office to Ann Arbor and several Japanese auto operations to other areas of Michigan. But the number of jobs she claims to have "created" is a drop in the bucket compared to the 100,000 or so jobs Michigan has lost since she took office in 2002.

Likewise her proposals to pour more money into education have aroused little enthusiasm - perhaps because during her tenure Michigan's K-12 system has continued to deliver mediocre results at best while costing taxpayers far more per teacher than in other states. As if to reinforce the image of a labor movement with its head in the sand, the Detroit teachers recently went on strike to demand higher pay even as students were fleeing the city in droves - some 30,000 students in just the last year, according to official statistics.

DeVos could still blow the opportunity he has created for himself. But the Granholm campaign has seemed lackluster at best. Meanwhile, local GOP activists are muttering about a Vice President DeVos in 2008 and national Republicans are excited by the prospect of a reenergized state party that could help the GOP reclaim the Michigan electoral vote in 2008 after three straight losses to Democratic presidential candidates.

In short, the Michigan GOP seems both unified and motivated to achieve the once-unthinkable, the defeat of an incumbent not so long ago hailed as a Democratic superstar.




The Lesson of the DDT Debacle

Wed, 20 Sep 2006 10:14:41 -0600

Researchers haven't even been able to show conclusively that DDT is the cause of widely-cited declines in populations of eagles and other animals. There appeared to be a strong correlation, but the type of DDT use being recommended by WHO - indoor spraying to reduce the risk of mosquito bites to sleeping humans - is no threat to nature. All this was known more than three decades ago, but so powerful had the environmental lobby become that rational decision-making was all but impossible.

There is an important lesson here. Policy decisions that aren't based on a cold, hard appreciation of costs and benefits, as well as solid science, cost lives. That's as true of oil policy as it is of DDT policy. The drumbeat these days is about global warming. The science is "settled," we are told. Failure to ban or sharply reduce use of fossil fuels will lead to a global silent spring. The fate of the earth, Al Gore informs us, depends on acting without delay.

That, of course, is exactly what Rachel Carson told us. Just as with the near-extinction of some bird species, natural phenomena are occurring that seem to be consistent with the theory that human activity is artificially heating up the planet. But there could be other explanations as well. There are still wide variations in predictions of just how much the earth is likely to warm, strongly suggesting that the science is anything but settled. And there are some scientists who have expressed doubts about the underlying theory of global warming itself.

Yet the environmental left, no doubt animated by visions of a giant leap forward for Big Government, is eager to clamp controls on energy use. They have allies on the right as well. The new Treasury Secretary, Henry Paulson, recently delivered a speech expressing about "China's severe environmental hazards," in particular its fast-growing consumption of fossil fuel. Paulson's real target may have been no less than George W. Bush, who has called for an end to America's own "oil addiction" but -- fortunately -- hasn't done much about it. Could the administration be preparing to cave in to those who see the answer to global warming as government controls on energy use?

Citing the so-called "precautionary principle," advocates of such controls argue that we must act even before all the facts are in. To delay is to risk catastrophe down the road, they assert. But insofar as the precautionary principle is valid, it might offer a strong reason not to act too quickly. The one thing we know about government, after all, is that it often gets things wrong - as it did with DDT.

The Kyoto Protocal calling for reductions in CO2 emissions to pre-1990 levels would cost hundreds of billions - without actually slowing global warming very much, even its supporters agree. Just imagine what an effort to roll back energy use even more radically would cost. Over time, the loss of income and jobs will mean poorer, meaner, deadlier societies - and a less healthy environment. It would be the DDT tragedy writ large.




Is Arnold an Environmental Girlie Man?

Thu, 14 Sep 2006 00:33:24 -0600

But Schwarzenegger is up for reelection and he clearly suffers from anxiety about California's potent environmental lobby. And while the CO2 measure may be mostly symbolic, symbols count in politics. California's action, however short-lived, will encourage the environmental left in the seven Northeastern states that have been tinkering with similar ideas. It also may serve to co-opt a number of major corporations in a position to reap an immediate profit from the emissions trading system that would accompany the emission caps. Ultimately the environmental left hopes to build enough support in enough states to force the federal government to adopt Al Gore's beloved Kyoto Protocol, which would require industrial nations to roll back CO2 emissions below 1990 levels. Europe has signed on to the protocol and is testing a cap-and-trade system almost identical to California's. European politicians, realizing that they are about to make themselves even less competitive if other nations don't follow them over the environmental cliff, miss no opportunity to portray America as some sort of international renegade. Never mind that the major European industrial countries already have fallen well behind their commitments under Kyoto. It's a virtual certainty that California will fail to meet its goal as well. That's why the measure signed into law last week contains an escape hatch in the measure which allows a governor to suspend the program if it imposes "significant economic harm." In an election year, significant economic harm likely will mean the loss of a single job. About the only thing the CO2 cap is likely to achieve is to empower the politicians to meddle ever more deeply in the state's economy - which itself would cost lots of jobs as businesses move elsewhere or fail to be formed in the first place. California has been here before. In the 1990s it tried to mandate the sale of electric cars as a means of reducing pollution and cutting oil imports. But when it turned out that not many Californians were eager to drive golf carts to work, the state backed away from the mandate. The Wall Street Journal last week carried a front-page article touting the supposed success of a German emissions trading system under which companies that don't meet CO2 goals can buy "credits" from companies that fall under the limits. The non-compliant companies can also earn credits by financing energy-saving schemes elsewhere in the world. But as the Journal had to admit, even this very modest program, targeted at utilities and other big energy users, has helped boost electricity rates 25 percent to 60 percent in the last two years. And that's in pursuit of a measly 0.4 percent cut in emissions. Germany has committed itself to cutting emissions 21 percent under the Kyoto protocol negotiated by Al Gore in 1997. Imagine what full implementation would mean for the cost of electricity - and the overall German economy, which in any event has created almost no new jobs in the last 20 years. No wonder the U.S. Senate voted 97-0 not to even consider ratifying Kyoto, or that succeeding Congresses have declined to impose emissions controls on the American economy. President Bush is right to emphasize that the best strategy is to provide an economic context in which the natural tendency of industry to invent efficient new technology should be encouraged, not punished with mindless controls on energy. (Germany has cut more than 50 special deals with industry to cushion the blow, but such bureaucracy-enhancing complexity is likely to be counterproductive - as well as discourage entrepreneurs from offering real alternatives to existing production methods.) None of this has st[...]