Crystal Ball Watch 2012

A long-standing tradition here is to come up with some prediction for the New Year, and at the end of the year see how right or wrong I was. And this year shall be no exception. So, without further ado, it is time to mercilessly skewer last year’s set of predictions:

Mitt Romney will be nominated as the GOP’s candidate in 2012. He will defeat President Obama by a small margin, but by a large margin in the Electoral College. Pennsylvania, Indiana, North Carolina, and Florida will all shift to the GOP column on Election Night.
Partially Right: I was right in predicting that Romney would get the nomination, but his campaign failed to take on the data-driven Obama reelection effort, which stomped Romney in key battleground states. No longer will I predict that Pennsylvania will swing into the GOP column, as the chances of that are slim to none. Indiana and North Carolina did swing back to the GOP, but Romney’s losses in critical states like Florida, Ohio, Colorado, and Iowa doomed his candidacy.
The GOP will retake the Senate as the Democrats lose seats in North Dakota, Nebraska, Florida, Ohio, Missouri, and Virginia. The GOP will hold their margin in the House.
Wrong: The GOP did not retake the Senate—in fact, they lost races that they should have won. The damage to the GOP brand is clear, not only in Romney’s loss, but in the Senate results as well. The GOP did retain the House, but much of their success is due to gerrymandering on the district level. The GOP has serious issues that they need to address if they want to be a competitive national party again.
Unemployment will remain between 7-8%, and the number of discouraged workers will continue to cause problems. Efforts to spin the economy as recovering by the Obama White House will sound painfully out of touch.
Correct: The Obama team managed to win reelection in spite of a bad economy, but the real state of the economy continues to be poor at best.
The Eurozone will collapse in 2012 as Greece is unable to maintain its austerity package. Greece will leave the Euro and redenominate its debts in drachmas. Following that Italy, Spain, Portugal, and Ireland will all threaten to leave the Euro, leaving the future of the currency in doubt.
Wrong: The Eurozone teeters on the edge of collapse, but has not tipped over yet. The question is whether German money can keep the Eurozone afloat and whether the Germans have any interest in keeping that spigot running. With France doing its best to kill its economy, 2013 might be the year that the EU faces the biggest crisis in its history, and the Euro goes down.
Apple will release an iPad 3 with a Retina display as well as an iPhone 5 with a new form factor. They will sell like hotcakes. Apple will not sell a TV, however.
Correct: What I wouldn’t have seen last year was the iPad mini and an updated iPad coming so soon after the launch of the retina iPad. Apple seems to be wanting to push the pace of its product update cycles to keep ahead of the competition.
Iran will continue to threaten to close off the Strait of Hormuz, but will not actually try. Sanctions will serve to weaken Ahmadinejad and internal corruption will cause a new round of riots in Tehran and other major cities.
Incorrect: Iran has been relatively quiet this year, especially given that Syria has so dominated the headlines.
Iraq will fall into civil war, with the Shi’ites fighting the Kurds and the Sunnis. President Obama will do nothing to help the Iraqis, but will blame everything on Bush.
Thankfully incorrect: However, the situation in Iraq remains highly restive, and there is a risk of Iraq becoming a powder keg thanks to U.S. indifference. But thankfully, Iraq is holding together despite some flares of violence.
China will face a banking crisis that will spread throughout Asia. Along with the problems in Europe, the global economy will take yet another beating.
Incorrect: China’s economy may be much more troubled than the Chinese authorities will ever admit, but so far the country’s problems have been successfully papered over.
“The Avengers,” “Hunger Games,” and “Prometheus” will do well with both audiences and critics, but amount of total box office receipts will continue to decline as even more people discover that it’s cheaper and easy to stay home and watch Netflix.
Correct: Despite some decent tentpole movies this year, the box office continues to take a beating while upstarts like Netflix continue to gain marketshare and support.
SpaceX’s first resupply mission to the ISS will be a complete success, just as heads start rolling at Russia’s Roscosmos. As Russia’s Soyuz launcher starts having more and more technical issues, NASA will fast-track plans for private companies to lift astronauts to the ISS.
Correct: Despite an engine failure on their second mission, SpaceX has shown that it can perform resupply missions to the ISS and is rapidly moving towards being able to lift astronauts into orbit. And amazingly, the Obama Administration has been willing to support the development of private spaceflight in a way than the Republicans have not. Space policy is the one area that this Administration gets right.
On December 21, 2012, the universe will end when the Mayan god Kukulkan descends from the heavens and decrees an end to all existence. Unfortunately for Kukulkan, he arrives in the middle of a Lady Gaga concert, where a blood-soaked feathered serpent would attract little notice. Disgusted by everything, he figures that non-existence would actually be better than what we have, so he ascends back up into the heaven and has a few too many glasses of wine with Zeus and Thor as they complain that no one actually believes in them any more.
Incorrect?: While neither the Yellowstone volcano nor a reversal of the Earth’s magnetic poles nor aliens nor Planet X doomed all life on Earth, one never knows how close to doomsday we actually came… Then again, we have our own ignorance which presents a far greater threat to humanity than anything else.

On a more personal note, I have not been blogging much in the last few years, as is obvious from the state of this site. Being employed full-time as an attorney makes the prospect of doing more rigorous analytical writing much less fun. Further, 2012 was an annus horribilis for me in a great many ways, and has left me utterly drained. For those who still come to visit, thank you for your patronage, and hopefully 2013 will be much brighter. (But for those who will read my forthcoming predictions, don’t count on it…)

The Massacre At Newtown

Posted on December 18, 2012 by Jay Reding

The murder of 20 innocent children and 6 innocent adults in Newtown, Connecticut is nothing short of heartbreaking. As the world turns toward the Christmas season, it is fitting that we reflect on the tragedy of this shooting. Twenty-six lives cut short in a senseless act of carnage. The image of those empty places at dinner tables, the Christmas presents that will never be unwrapped by their intended recipients, the grieving families, all of them bring a sense of undeniable tragedy at a time that should be about peace and family.

Yet like nearly everything else in society today, the Newtown atrocity has become yet another excuse for the crudest of partisan politics. Mere minutes after the shootings, the predictable calls for gun control were echoing online. We are being told, in that typically histrionic style, that opposition to gun control might as well be the same as siding with the murderer. The political-media complex are already in full swing, doing all they can to shape the narrative in favor of more firearms restrictions.

Blame the Person, Not the Object

The problem with this convenient narrative is that it misses the points. Guns didn’t kill 26 people in Newtown, Connecticut. Guns are inanimate objects, not evil talismans that possess innocents and turn them into mindless killing machines. The Newtown atrocity was committed by a deeply disturbed person with what appears to be a substantial history of mental illness. It is easy to try and “control” firearms—at least on paper. But admitting that this country has a crisis in mental health is a much harder debate. Instead, the focus is on the longstanding objective of the left: disarming the American populace.

For one, that will never work. Guns exist. High-powered assault rifles exist. We can make them marginally harder to obtain, but criminals will still find a way to get them. The idea that Congress can pass a law banning certain weapons and those weapons will magically disappear is childish thinking. Indeed, we’ve already tried with the Assault Weapons Ban. But when that ban expired in 2004, the number of shootings remained constant.

The anti-gun crowd keeps making predictions of imminent disaster: if the Assault Weapons Ban is not reauthorized, blood will run in the streets! The ban was not reauthorized, and the level of violent crime continued to go down. We heard that if states adopted Concealed Carry laws, that the result would be the Wild West all over again—but the hard evidence shows that concealed-carry permit holders are in fact less likely to be involved in violent crime than the general population. The fact is that as terrible as mass shootings like the ones we have seen this year are the exception, not the rule.

Culture Matters, But Not in the Way You Think

Saying that America’s “gun culture” is to blame is equally facetious. For one, it’s not like these shooters are card-carrying members of the National Rifle Association. The people who care about Second Amendment rights tend to be people who have a healthy respect for firearms. The NRA itself is diligent in promoting safety training and the responsible use of firearms.

There is a cultural problem here, but it has less to do with guns and everything to do with the media. The media breathlessly reports on these mass killings, even going so far as to ghoulishly shove their microphones into the faces of traumatized children from Sandy Hook School. And these killers, almost always mentally ill young men who feel ostracized from society, get exactly what they want: publicity and notoriety.

At The Week, Matt K. Lewis has a deft takedown of the media’s irresponsibility over the Newtown shootings:

To be sure, a transparent society demands reporting newsworthy incidents — and this definitely qualifies. But it should be done responsibly. And that is not what we have witnessed. We have instead a feeding frenzy that is all about beating the competition — not disseminating information.

It’s about being first, beating other media outlets, and making a name for themselves. It’s a ghoulish mentality that stokes controversy and violence — for business purposes. It’s a sort of “if it bleeds it leads” mentality that causes cable networks to create logos and theme music for such tragic events (all the while, they feign maudlin concern and outrage.)

Come to think of it, the media is guilty of doing what they criticize big business for — putting money (in this case, ratings, newsstand sales, and web traffic) ahead of humanity and decency. Just as greedy businessmen put profit and personal gain ahead of ethics, so too do our media outlets.

It is a commentary on our media that there’s a mad rush to repeal the rights protected by the Second Amendment, but none to restrict the dangers of the First Amendment. After all, the Founders never envisioned a world where irresponsible mass media could broadcast falsehoods and misinformation across the globe in a matter of seconds. The Founders could not have envisioned a world when a handful of media outlets would have such control over the public discourse and could use their power to advance their own agendas. In their time, the press consisted of numerous small region publications that could check the excesses of one another. Should not the freedom of the press be restricted only to reasonable technologies such as a basic Gutenberg press? After all, that would be more in tune with what the Founders really intended, wouldn’t it?

Of course that’s a silly argument—but why then are the same arguments used in the context of firearms? Yes, the Founders lived in a time when firearms were relatively crude and cumbersome. But that is not the point of the Second Amendment. The point is that the last and most crucial bulwark against despotism is an armed and capable populace—a nation of riflemen is far more resilient than a nation that has been thoroughly disarmed.

Our culture is the problem, but its a culture that is created by the very same media that wants to disarm the rest of us. If we want to reduce the incentives for these horrific attacks, then the media should have policy that the name of the shooter is never released, the focus is only on the victims, and sensationalism is to be avoided at all costs. Fat chance of the media ever agreeing to that, even in principle.

As The Atlantic‘s Conor Friedersdorf points out this country has already had an in-depth conversation about guns, and the pro-gun side won decisively, with anti-gun efforts failing across the country. The right to self-defense has been recognized as such, and the American people have spoken. We value our ability to keep and bear arms, and that is a choice that represents the democratic will of the American people.

Does that mean that gun violence will continue to be endemic in America? Only if you assume that the availability of firearms is the biggest factor, rather than mental illness, the breakdown of the American family, a failing prison system, etc. The fact is that the number of firearms in this country continues to rise while restrictions on firearms have been loosened—and violent crime continues to decrease.

What happened in Newtown was undeniably a heartbreaking tragedy. But using it as a launching pad for another campaign to restrict the rights of tens of millions of law-abiding Americans is not only a poor way of honoring the dead, but ultimately counterproductive as well.

Postscript: Oddly enough, it is Saturday Night Live that had the most appropriate reaction to this tragedy: having their cold open this week be a children’s choir singing “Silent Night” in front of a single candle. That a comedy show showed more class and dignity than their news operation says a great deal about the media today.

No Longer California Dreamin’

The reason why I am not a liberal is because liberal means can never achieve liberal ends—and nowhere is that more apparent than in the state of California. For decades, California has been an enclave of liberalism, an experiment in liberal governance and liberal ideology. Even when Arnold Schwartzenegger was elected governor, ostensibly as a Republican, he governed as a center-leftist. The Republican Party in California has become a virtual irrelevancy, and the California Legislature is now subject to Democratic super-majorities in both houses.

And what is the result of California’s full-throated embrace of liberal policy? This article in The Washington Examiner lays the truth bare:

What are Californians getting for all this government spending? According to a new census report released Friday, almost one-quarter, 23.5 percent, of all Californians are in poverty. One-third of all the nation’s welfare recipients live in the state, despite the fact that California has only one-eighth of the country’s population. That’s four times as many as the next-highest welfare population, which is New York. Meanwhile, California eighth-graders finished ahead of only Mississippi and District of Columbia students on reading and math test scores in 2011.

Middle-class families that want actual jobs, not welfare, are fleeing California in droves. According to IRS data compiled by the Manhattan Institute, since 2000, almost 2 million Americans have left California for other states. Their most popular destination: Texas.

It is ironic that the Democratic Party champions itself as guardians of the middle class, when California shows how liberal policies have the effect of hollowing out the middle class. California has become an enclave for the super-wealthy and the super poor—those in the middle take the worst squeeze. California has become a state where income inequality is some of the highest in the country, despite the notion that liberal social and fiscal policies will create a more equitable society. Despite years of liberal policymaking, California has not become a more equitable place to live.

At the same time, California’s tax rates are some of the highest in the nation. While liberals love to argue that Proposition 13, which limited the Legislature’s powers to raise property taxes, are the reason for California’s woes, the truth is far different. California has some of the highest tax rates of any state in the country, and has a highly progressive tax structure with seven brackets. Despite having a tax system that does everything that the left argues should be done, California is a fiscal basket case.

So what is California’s real problem?:

The real cause for California’s fiscal crisis is simple: They spend too much money. Between 1996 and 2012, the state’s population grew by just 15 percent, but spending more than doubled, from $45.4 billion to $92.5 billion (in 2005 constant dollars).

California simply spends far more than it takes in, despite having some of the richest parts of the country, California’s unquestionable prosperity cannot accommodate the needs of an ever-expanding government. And the response of California’s left-wing government has been to further raise taxes, forcing an even-greater exodus of middle-class jobs to states like Arizona and Texas. What we are seeing is a state that is coasting by on past successes, but rapidly reaching the inflection point where California threatens to become a failed state.

If that seems like hyperbole, it is not. We can already see it happening on the municipal level. The city of Stockton, California has become the largest municipality in the country to file Chapter 9 bankruptcy. (Chapter 9 is a rarely-used part of the federal Bankruptcy Code that allows cities and counties to reorganize their debts in the same way that companies may file Chapter 11 bankruptcy.) But Stockton isn’t alone: three other California cities have also filed for bankruptcy protection, an almost unprecedented event.

The root causes of these bankruptcies are overly-generous public-sector pensions that are no longer sustainable, massive public spending, and tax revenues that are shrinking as the middle class flees for more sustainable climates. Yet these trends are not being fixed, they are being exacerbated as Sacramento continues to push for more and more spending and higher and higher taxes.

Indeed, California faces a fiscal time bomb that could swamp the entire state. CalPERS, the public-sector pension system in California is facing a fiscal crisis. It has even resorted to filing lawsuits against bankrupt cities to try and get additional money to remain solvent. As California’s tax base becomes increasingly polarized, the flow of money needed to give public-sector employees lavish benefits decreases. But the powerful public sector unions have a stranglehold over state government, which makes meaningful reform virtually impossible. When CalPERS goes bust, as is inevitable, the economic effects would be dire.

And that doesn’t even get to immigration: California’s lax immigration enforcement and lavish welfare benefits have created a massive Latino underclass. Illegal immigration costs California taxpayers up to $1.6 billion every year, a sizable fraction of California’s overall yearly deficit. Even if those costs are inflated, the very real cost of providing benefits to hundreds of thousands of illegal immigrants is having an effect on California’s already-precarious fiscal situation.

The California Canary in the Fiscal Coal Mine

California’s looming failure is a warning to the rest of us. California is being buoyed by its prior good fortune, it’s abundant natural resources, and its excellent climate and geography. But even these natural advantages cannot hold its decline at bay forever. Should nothing change, California will face fiscal collapse, and it could take the rest of the country down with it. A fiscal crisis in California would have massive ripple effects across the entire United States economy. But the political will for reform is simply not there. With no effective resistance to the liberal orthodoxy in California, there is nothing to slow down the stream of bad policies contributing to this mess.

But what cannot go on forever will not, and sooner or later the results of these bad policies will hit in full force. Sooner or later the unsustainable trajectory that California is on will meet the ground, and when it does, the end result will be messy at best—and that’s the most optimistic way of putting it.

What California show us is that liberalism is rife with internal contradictions. Liberalism teaches that economic inequality is dangerous, yet years of liberal policies have produced shocking inequality in California, The rich Los Angeles suburbs like Beverly Hills, Malibu, or Brentwood exist just miles from some of the most blighted urban landscapes in the country. Liberalism says that the middle class must be defended, yet California’s middle class is fleeing the state, and those that remain are getting squeezed ever tighter by high prices and high taxes. Liberalism says that government should be the solution to our problems, but California’s government is one of the most dysfunctional in the country. California is proof that liberal means can never achieve liberal ends—and each year those contradictions only grow.

What California needs is a complete reorganization. California can succeed, it has all the natural benefits in the world and still enjoys the benefits of being a center for technology, aerospace, biotech, and other fields. Despite California’s brain drain, it still has a substantial part of its educated workforce left. The ingredients for success are all there, but California’s dysfunctional government and left-wing hegemony is keeping it from success.

Restoring California’s Dream

What California needs is to reform its pension system, even if it creates massive political costs. It needs to dramatically cut unnecessary spending, including stopping giving such lavish benefits to illegal immigration. Proposition 13 may have kept California’s property taxes artificially low, but that’s been offset in some areas by insanely high property values in certain areas of the state. Property tax reform may well be necessary, but it should be combined with a simpler, flatter, and less punitive income-tax system and a reduction in both business taxes and unnecessary regulations.

California has benefitted from a highly-educated workforce, but that cannot continue so long as California’s schools are failing, both K-12 and higher education. Instead, California needs to do what the rest of the country must do: reform the educational system from a sinecure for bureaucrats into a result-driven system that teaches the skills needed for the 21st Century workforce. Right now many of the people working for California’s high-tech industries are foreigners on H1B visas—and while those workers add a great deal to the state, it’s not sustainable over the long term. Developing a better educational system will make sure that California can maintain its high-tech economy into the future. If they fail to do that, California will become an also-ran.

California demonstrates the reasons why liberalism doesn’t work: because if you do everything that liberalism says, you don’t get a more equitable or modern economy. The problem is that for many of the stakeholders in California’s broken system, there is no impetus to reform. The public sector unions have every reason to keep sucking at the teat until it runs dry. The educational bureaucracy has no desire to reform and threaten its gravy train. The ultra-rich don’t care what tax rate they pay because they have enough wealth that the difference between losing 10% to taxation and losing 5% ultimately doesn’t impact their standard of wealth. A Hollywood movie star doesn’t care what their tax rate is, they are paid an obscenely large amount of money and their finances are handled by an army of lawyers and accountants. The small business owner who can only afford a part-time bookkeeper is acutely aware of the impact of taxation. Yet the Hollywood celebrity has far more political clout than the small-business owner.

Sadly, the only way that this system will likely be reformed is when there is no other way possible. The liberal welfare state is ultimately unsustainable, but is extremely difficult to reform. California was once a symbol of America’s cultural, technological, and economic might. Yet now it is becoming a warning. If we fail to heed that warning, California dreamin’ will become a national nightmare.

The Ghosts Of September 11

It’s hard to believe that it’s been over a decade now since the World Trade Center fell. Time moves ever forward, and what was once a great psychic scar upon our nation has become just another part of history that the children born on that day now learn in school.

The World Trade Center attacked

But the inhuman events of September 11, 2001 should, must, never be forgotten. The ghosts of September 11 still haunt us today, and while we are fortunate that we haven’t been hit like that again, the world we live in no is in some ways more dangerous than the one that existed on September 10, 2011.

Even though Osama bin Laden is burning in the deepest pits of Hell, and al-Qaeda no longer exists as it did, the same factors that drove the terrorism of September 11 are still out there. Across the Arab and Muslim world, preachers of hate still find receptive audiences. The Muslim Brotherhood, the entity that was instrumental in informing al-Qaeda, is more powerful then ever. The same group that brought us Ayman al-Zamahiri and Mohammad Atta now runs all of Egypt. And rapidly, the Middle East is falling into tyranny rather than freedom. From Tunis to Tehran, radical Islamist groups are gaining new ground, taking over entire countries, and spreading their ideals across the world.

If there is one consolation to this, it is that when these groups try to lead, they fail. The beliefs of radical Islamism are anti-human. They cannot stand in the real world, and the only way they can survive is through nothing more than naked force. As it happened in Iraq, it may happen elsewhere: the people see what livinig under a violent theocracy is like, and they reject it. But that may be too hopeful.

We owe it to the victims of the September 11 attacks not to forget not only what happened on that terrible day, but to make sure than such atrocity never happens again. We are failing. A new iron curtain falls from North Africa to Central Asia, an iron curtain of radicalism and hatred. The roots of the next September 11 are growing silently right now.

As we remember the dead, let us honor them by not only carrying their names and their lives in our hearts, but by committing ourselves to a better world. On that terrible day eleven years ago, we showed the world that the forces of radicalism were nothing compared to the forces of democracy and freedom. They showed us the worst that humanity was capable of. We showed them the best. They murdered innocents in cold blood. We sent heroes into burning buildings to save as many lives as they could.

We would like to think that freedom will always conquer fear, that democracy will always conquer savagery, that peace will always beat out violence. Those are comfortable illusions for us, but they are only that. The ghosts of September 11 compel us to remember that the world is what we make of it, and that we must carry on in defense of the values that make us who we are.

The ghosts of September 11, 2001 whisper to us today. We should stop and listen.

Paul Ryan’s Tour De Force

Posted on August 30, 2012 by Jay Reding

Paul Ryan gets it. Last night’s convention speech was a tour de force, clearly and forcefully arguing not only why the Obama Administration has failed, but what the Republican Party stands for in opposition to the last four years. There were many notable lines—but the most powerful part of the speech was this:

Paul Ryan speaks at the 2012 Republican National Convention

President Obama is the kind of politician who puts promises on the record, and then calls that the record. But we are four years into this presidency. The issue is not the economy as Barack Obama inherited it, not the economy as he envisions it, but this economy as we are living it.

College graduates should not have to live out their 20s in their childhood bedrooms, staring up at fading Obama posters and wondering when they can move out and get going with life. Everyone who feels stuck in the Obama economy is right to focus on the here and now. And I hope you understand this too, if you’re feeling left out or passed by: You have not failed, your leaders have failed you.

That is one of the most damning indictments of the Obama Administration possible. Because it cuts to the quick of why Obama has failed. He came into office promising to be a different kind of politician—someone who would transcend the petty divisions of everyday politics and get America back on track. As our future Vice President eloquently stated, his lack of leadership has failed us.

Lying Liars and the Lying Lies They Lie About

And the real sign of how successful Ryan’s speech has been the cacophony of idiocy that has been unleashed by the left. The official meme is that Paul Ryan’s speech was filled with “lies”—the definition of “lie” being “things that Democrats disagree with or make Democrats look bad.

Take the most commonly-cited example of one of Ryan’s so-called “lies:”

President Barack Obama came to office during an economic crisis, as he has reminded us a time or two. Those were very tough days, and any fair measure of his record has to take that into account. My home state voted for President Obama. When he talked about change, many people liked the sound of it, especially in Janesville, where we were about to lose a major factory.

A lot of guys I went to high school with worked at that GM plant. Right there at that plant, candidate Obama said: “I believe that if our government is there to support you … this plant will be here for another hundred years.” That’s what he said in 2008.

Well, as it turned out, that plant didn’t last another year. It is locked up and empty to this day. And that’s how it is in so many towns today, where the recovery that was promised is nowhere in sight.

Immediately after the speech, Chris Matthews entered into a foaming-at-the-mouth rage proclaiming that this section of the speech was a “lie.” The left went into their usual paroxysms of rage over the supposed “lie,” claiming that the Janesville plant was shut down in mid-2008 rather than the Obama years.

But, as typical, the self-appointed “fact checkers” got it utterly wrong—the Janesville plant closed its doors for good in May 2009, even though as Ryan said, the plant had been slated to close since 2008.

This is another example of the tactics of the left—they seize upon irrelevant minutiae and try to explode it into an issue, amplifying their silliness through the left-wing echo chamber of liberal blogs, MSNBC, and the Obama Administration itself. The problem for them is that those tactics are becoming less and less effective as more and more Americans are becoming wise to them.

Why Ryan Rose Above

But enough about the left. What matters is whether Ryan connected with the average voter and demonstrated that he could take the job of Vice President. On that account, he hit a home run. Ryan was initially a little nervous—understandable for such a momentous speech in his political career. But as he went on, he hit his stride and spoke with both fluency and authority. Ryan needed to do well last night, and he did. He connected with the audience, both on the convention floor and on television.

One of the jobs of a VP nominee in a campaign is to be the attack dog, and Ryan delivered a blistering speech about Obama. But the way he did it was crucial to his success. This wasn’t a speech about blasting Obama with both barrels, this was a speech that struck a tone of disappointment. Americans don’t like Obama’s record, but they still look at him far more kindly than he deserves. What Ryan did was acknowledge that, but speak directly to the sense of palpable disappointment that many voters feel. As he put it:

It all started off with stirring speeches, Greek columns, the thrill of something new. Now all that’s left is a presidency adrift, surviving on slogans that already seem tired, grasping at a moment that has already passed, like a ship trying to sail on yesterday’s wind.

President Obama was asked not long ago to reflect on any mistakes he might have made. He said, well, “I haven’t communicated enough.” He said his job is to “tell a story to the American people” – as if that’s the whole problem here? He needs to talk more, and we need to be better listeners?

Ladies and gentlemen, these past four years we have suffered no shortage of words in the White House. What’s missing is leadership in the White House. And the story that Barack Obama does tell, forever shifting blame to the last administration, is getting old. The man assumed office almost four years ago – isn’t it about time he assumed responsibility?

Again, damning stuff, but not a full-barreled attack. Ryan didn’t need to call the President names. He didn’t need to insult his honor, he didn’t need to accuse him of wanting to harm seniors or call him a “sociopath” or go down the low road so well-trodden by the left. Ryan simply told it like it is. He hit Obama right where it hurts, and right where Obama is weakest. This is the message that the GOP needs to take to all those voters not already in Obama’s camp. This is the message that says “we get why you chose Obama in 2008, but things are different now.”

Now, Romney needs to close the deal. And I have a feeling that if he matches the rhetorical prowess that Paul Ryan displayed last night, he’ll be doing very well this fall.

A Word on Condi

But one quick post-script. I’ve been a fan of Dr. Condoleezza Rice for some time. I think she was a highly-effective Secretary of State in a tough time. But last night Dr. Rice demonstrated that she is one of the brightest stars in the GOP firmament. Her speech was powerful, direct, eloquent, and emotional at times. She displayed a passion for education reform, a deep understanding of foreign policy, and a real sense of what it is to be a conservative.

I suspect she’s far too smart to ever really consider running for President. But that’s a great loss to this country, because she would be a wonderful President.

Oh, and that supposed “war on women” that the GOP has been fighting. Judging from Dr. Rice, Ann Romney, Nikki Haley, Susannah Martinez, and the rest, that talking point is not only stale and odious. And who will the Democrats feature? Sandra Fluke, a woman whose claim to fame is a demand that government give her free birth control. Compare her to Dr. Rice, a woman who went from the Jim Crow-era South to being a concert pianist, an expert on Russian affairs, Secretary of State, and now teaches at Stanford—the contrast in what party values women as individuals of accomplishment and which party just panders to women could not be more clear.

The State Of The Race – Pre-GOP Convention Edition

When Mitt Romney chose Paul Ryan as his running mate, things were not looking up for the Romney campaign. Several polls (with highly skewed sample) showing Romney down big against Obama. The swing-state polls were not looking good for Team Romney either. And there were worries that Romney was not hitting back hard enough against a barrage of negative attacks from the Obama Campaign.

Now, just before next week’s Republican National Convention, Team Romney has reason to be happy. The polls are showing a major tightening in the race, and several polls are showing a narrow Romney lead. The Ryan pick has energized the Republican base. And Team Obama is looking increasingly desperate, and are about to make a major mistake that could cost them the election.

But first, let’s take a closer look at the polls. Fox News shows Romney with a narrow lead, while CNN shows an Obama lead of 2% – well within the poll’s 3.5% margin of error. Meanwhile, both the Rassmussen and the Gallup daily tracking polls show Romney and the President neck-and-neck. The national polls show an incredibly tight race.

The stage for the 2012 Republican National Convention

The swing-state polls are more troublesome for Romney. Ohio is a virtual must-win state for Romney, but he’s lagging in the polls there. While the new bipartisan pollster Purple Strategies shows Romney with a narrow lead in the Buckeye State, a more recent poll from CNN/NYT/Quinnipiac shows Obama with a formidable 6-point lead in Ohio. Under all but a few highly unlikely scenarios, the path to the Presidency runs through Ohio, and Romney is going to have to improve his numbers there if he wants to win the White House. Look for Ohio to be the biggest of the battleground states once more in 2012 as it was in 2008 and 2004.

What makes the 2012 race especially interesting is that the number of swing states is increasing. At the beginning of this race, Wisconsin was not considered a serious swing state. In 2008, Barack Obama swept the Badger State in a 14-point blowout. But now, Wisconsin is very much in play. Democratic pollster PPP shows Romney with a narrow lead, a finding that’s supported by GOP-leaning pollster Rassmussen. Even the CNN/NYT/Quinnipiac poll shows only a slim 2-point lead for Obama in Wisconsin. Wisconsin appears to be shifting from a reliably Democratic state to a true swing state – Kerry only narrowly won Wisconsin in 2004, and Obama’s huge win there appears to have only been an interruption of the pro-GOP trend there. With Paul Ryan hailing from the Milwaukee suburbs, it’s possible that Romney could win Wisconsin, which would help pad out his Electoral College position in a tight race.

Romney’s Missouri Problem

But Romney has a big problem in Missouri, and its name is Todd Akin. Akin’s moronic comments about women being able to “shut down” a pregnancy caused by a “legitimate rape” was absolutely inexcusable, and led to massive condemnation by nearly every member of the GOP. Akin, whose campaign is being run by his family (a major mistake for any political candidate), insists that he can still win. The chances of that are slim to zero. And what’s worse is that Akin’s idiocy could impact Romney’s chances in Missouri as well as keeping the Senate in Democratic hands. Losing Missouri would significantly impair Romney’s chances of winning in this highly-competitive race.

This is the second election cycle in a row where the Tea Party has blown a Senate race. In 2010 Christine O’Donnell and Sharron Angle took winnable races for the GOP and blew them to hell. While there is plenty about the Tea Party that I like, they have not gotten it through their collective heads that picking a hardcore conservative who says incredibly stupid things on national TV is A Very Bad Idea Indeed™. It’s not about picking the most conservative candidate. It’s about picking the most conservative candidate that can win. If Harry Reid remains Majority Leader, it will be in large part due to the Tea Party, a fact that has to be taken into account when assessing the pros and cons of the Tea Party movement.

Obama’s Impending Blunder

But, there is a silver lining to the dark cloud that is Todd Akin. And that’s that President Obama is about to completely overplay his hand on social issues. The Democratic National Convention is looking increasingly like it will be a celebration of abortion. Sandra Fluke, the abortion-rights activist will be a headline speaker along with representatives of Planned Parenthood and the pro-abortion extremist movement. While Todd Akin represents one extreme of the abortion question, the Democrats are going to embrace the other extreme. This is a mistake for two reasons:

First, the American people care about jobs and the economy, not abortion and contraception. People are wondering whether they’ll have a paycheck next year and are trying to make the paychecks they do have stretch to pay for higher gas and food costs. The more the Democrats talk about divisive social issues, the more they carry themselves away from the mainstream of American politics today.

Secondly, for the voters that do care about social issues, they tend to be more socially conservative voters. Evangelicals may not be crazy about Mitt Romney’s Mormonism, but when contrasted with the Democrats celebrating the idea of taxpayer-funded abortion on demand, that’s only going to get the more enthused about voting against the Democrats.

Obama and the Politics of Division

But all of this plays into Obama’s strategy for 2012. Obama knows he can’t run on his record. Even Democratic strategists like James Carville realized early on that running on an “economic recovery” theme was not working with voters. So what can Obama do? He can try to make Romney toxic. He can’t run on himself, so he has to bring Romney down.

And that’s why you’ve seen a barrage of attacks against Romney on Bain, on Medicare, on his tax returns, etc. It’s a scorched-earth campaign designed to keep Romney’s poll numbers down far enough for Obama to maintain a narrow win. And while it’s been partially successful, it’s beginning to backfire on the President.

Obama’s appeal with independent voters was that he was a post-partisan, post-racial President. He’s no longer even trying to make that case anymore. Instead, he’s playing it like a typical Chicago politician. That does not make him very attractive in the eyes of voters, and that’s why he’s locked in such a tight race with Romney—while voters are not sure about Romney, they are equally if not more skeptical about President Hope-and-Change becoming just another political hack.

What to Watch for at the Republican National Convention

With that background on the state of the race, the question is what the RNC must do. And first and foremost, it’s got to introduce Mitt Romney to the American people. It seems odd to suggest that someone that’s run for President twice now is not well-known to the American public, but Romney has been largely unwilling to tell his own personal story. That needs to change at the RNC. Romney needs to embrace his personal narrative and give the American electorate a look at why they should vote for him over Obama.

And that’s why the Romney campaign needs to reject the media narrative on this race. The media says that Romney dare not run on his record at Bain—that’s a load of crap. Romney should not run from what he did, but should highlight the businesses that Bain saved from Sports Authority to Staples. The media says that Romney can’t run on his record at the Olympics—again, the media is acting as a wing of the Obama campaign. Romney can and should run on his record.

The American people don’t know Mitt Romney well yet, especially in contrast to a President who wrote two autobiographies before he even accomplished anything. (Even if those autobiographies were carefully-manipulated fictions.) Romney doesn’t need to spend that much time attacking Obama—Obama’s dismal economic record speaks for itself. What Romney must do is introduce himself to the American people and paint his vision of an American Comeback.

If he can do that successfully, watch the polls. Right now Romney’s numbers are moving the right way. If he does what he needs to do at the RNC, the poll numbers are going to start to diverge into Romney’s favor. The fundamentals on the ground favor Romney, and now that the election season is beginning in earnest, the Romney campaign has the opportunity to seize on those natural advantages and build them into a political wave. Romney definitely can win, and he’s in a position to do so as he heads into the week of the Republican National Convention.

Romney Picks Paul Ryan As VP

It’s official – Mitt Romney has announced Wisconsin Congressman and budgetary guru Paul Ryan as his running mate, announcing the pick via push notification through a specialized app. I’ll be liveblogging the official announcement as it unfolds.

9:08 am The more childish the MSNBC set gets, the more you know that your arguments are right.

9:07 am Looking at the instant reactions from the left on Twitter, it shows that picking Ryan was the right choice.

9:00 am Based on the MSNBC reaction, it looks like the left is worried.

8:59 am The Obama campaign wants this to be a values election – but the Romney campaign wants that too.

8:57 am Now the talking head at MSNBC is saying that Ryan undercuts Romney’s message on the economy. Again, really?

8:56 am Watching MSNBC is like looking through the window into the alternate universe from Fringe…

8:55 am Yup, MSNBC is talking about foreign policy. Talk about grasping at straws here.

8:54 am And Rachel Maddow is attacking Paul Ryan for not having served in the military. Really?

8:53 am Switching to MSNBC to see how the far left is reacting.

8:53 am In four years it’s gone from hope and change to fear and defending the broken status quo.

8:52 am Obama has to go on the attack to win – but doing that destroys his 2008 mystique.

8:51 am Obama won in 2008 because he said he would be better than a typical politician. Now he’s just another political hack.

8:51 am Romney and Ryan are offering substantive critiques of this administration. Obama is making wild accusations.

8:50 am It shows just how childish they are in this campaign.

8:49 am I love how the left is making fun of Romney for introducing Paul Ryan as President instead of VP.

8:47 am The electoral math would have favored Portman or Rubio. But Romney made the right choice with Ryan.

8:47 am Ryan’s speech shows why he’s a rising star with the GOP.

8:45 am What the GOP needs badly is new blood and someone who can bring conservative principles to the undecided. Ryan does both.

8:44 am Ryan is hitting all the points he needs to hit. Smart and substantive.

8:43 am Our rights come from nature and God, not government. – Exactly right, and why America is exceptional.

8:42 am Ryan draws an optimistic contrast to the record of the last four years. That is what Romney must do to win.

8:40 am It is clear that Romney is not going to run away from his Bain record. And he shouldn’t. He saved thousands of jobs.

8:40 am So far Ryan is very impressive. But the real test will be when he goes one-to-one against Biden.

8:38 am Ryan is going against the new normal – this is a powerful line against the way the last four years have unfolded.

8:37 am But Ryan’s critique of Obama is smart and substantive. That’s what voters need to hear in this race.

8:37 am Whatever the excuses, this is a record of failure. Ryan’s playing the traditional attack-dog role.

8:36 am Debt, doubt, and despair – how Ryan characterizes Obama’s first term in office. Quite accurate.

8:35 am The CW was that Romney would not pick someone who could outshine him. The CW was wrong.

8:34 am And already the Obama campaign is taking their potshots at Paul Ryan: http://www.politico.com/politico44/2012/08/obama-camp-takes-first-shot-at-ryan-131750.html

8:33 am One thing for sure: Paul Ryan will not be thrown off his game in interviews like Sarah Palin was.

8:33 am Will this put Wisconsin in play? I would be skeptical, but Ryan represents a swing district.

8:31 am Ryan is a great public speaker. He has a natural sense of cadence, a key skill for a politician.

8:30 am Romney had announced that Ryan would be President rather than Vice President. I’d be OK with that… in 2020.

8:30 am “Every now and then I’m known to make a mistake” – nice moment for Romney.

8:28 am A note on optics: having a candidate descend stairs to get to the lectern is inviting disaster…

8:28 am Ryan is now taking the lectern. Air Force One is playing in the background again. Still love that music…

8:27 am Lots of talk about the middle class in Romney’s speech – contrasting against Obama’s narrative that Romney doesn’t care about the middle class.

8:26 am Getting America back to work is going to be a frequent theme for the Romney/Ryan campaign in this cycle.

8:23 am “He doesn’t demonize his opponents.” – In contrast to our current President, who does.

8:23 am Romney is talking about Ryan’s personal narrative – which is something Romney needs to do more for himself.

8:22 am Mitt Romney resembles the Platonic form of an American politician. Which in some ways works against him.

8:20 am The music announcing Romney is the theme to Air Force One. Absolutely inspired choice.

8:20 am McDonnell’s speech is very spirited, but going on a bit too long. He is announcing Romney now.

8:19 am So, how long before @BarackObama and his campaign accuses Paul Ryan of giving someone cancer? I say no more than a week.

8:12 am Even though the Ryan pick is based on the economy, holding the event there reminds voters of American strength.

8:11 am The optics of holding the announcement on the USS Wisconsin are very interesting.

8:10 am Bob McDonnell is introducing the candidates. McDonnell is the governor of Virginia and a rising GOP star.

8:03 am It is interesting that Romney didn’t go with Rob Portman, who would have helped Romney in the key swing state of Ohio.

8:01 am It will be very interesting to see the polls on how @PaulRyanVP effects the race. Ryan is not well known now.

7:58 am It is interesting that the Ryan pick was more about reinforcing Romney on the economy than filling in foreign policy chops.

7:53 am Fox News is replaying Rep. Ryan at the ObamaCare meetings. It shows how good he can be challenging the President.

7:51 am George Allen is speaking at the event – he’s locked in a close race for the Senate in Virginia.

7:49 am As a policy nerd, picking @PaulRyanVP seems like a very smart move.

7:48 am Obama’s most effective attack lines were that Romney had no plan, and that he was just repeating Bush. That attack is much harder to make with Ryan as #VP.

7:44 am The pick of Paul Ryan could not be more different than the pick of Sarah Palin in 2008, but the effect on the base will likely be the same.

7:44 am Romney and Ryan seem very well matched, which is crucial for having a coherent campaign team.

7:43 am Excerpts of Ryan’s speech can be found here – http://www.weeklystandard.com/blogs/excerpts-ryans-speech_649757.html

7:42 am Paul Ryan will speak shortly – excerpts are already appearing online.

7:39 am Despite the claims that Paul Ryan’s budget plan is radioactive, a Greenburg/Carville poll showed it polling at 52% in swing districts.

7:36 am @PaulRyanVP already has 7,000 followers, and the announcement was made in the early morning on a weekend…

7:35 am Already, Paul Ryan has an official Twitter account for his VP position – @PaulRyanVP

7:32 am The official announcement is taking place at the USS Wisconsin, docked in the key swing state of Virginia.

Milton Friedman’s Century

Today would have been the 100th birthday of Milton Friedman, the economist and author who helped inspire some of the most important economic policies of our time and helped millions of people escape poverty. Friedman doesn’t get much recognition outside of economic circles, but his achievements in that field were more than just writing a few textbooks. He helped change the face of the American economy for the better.

When Milton Friedman won the Nobel Prize for Economics in 1976, the world was enamored with the ideas of John Maynard Keynes, who taught that government spending would somehow produce a “mulitplier effect” that would lead to economic growth. The theory was that if the government were to spend $1 it would produce more than $1 in economic activity. In the 1960s, Friedman famously wrote that “we’re all Keynesians now”—a position later adopted by Richard Nixon in 1971.

In the 1950s through the 1970s, one could credibly think that the future lay not with free markets but with centrally-planned economies. Keynesianism was the dominant theory in economics and government policy. Governments across the globe were expanding the reach of central planning in a whole host of economic sectors. The ideas of the Austrian Economic School were dismissed as crackpot theories.

But then, the crash hit.

Friedman’s Revolution

In the 1970s, the world economy entered into a massive downslide. The Arab oil embargo pushed gas prices through the roof. But more critically, something happened that Keynesian theory said was impossible: stagflation – high inflation and economic recession. Conventional Keynesian theory taught that inflation and economic recession were opposites and could not happen at the same time. Yet in the 1970s, that is precisely what happened.

Across the globe, politicians tried the conventional Keynesian remedies. In the United States, Richard Nixon instituted wage and price controls to try to stop inflation, an effort that appeared to work at first until it led to massive shortages of goods. Governments tried to spend their way out of the recession, to little forward growth. The world economy was hanging by a thread, and the conventional economic theories were not helping the world pull out of its economic recession.

But it was Milton Friedman that popularized the way out of the mess. Friedman had already chipped away at the intellectual foundations of Keynesianism. He observed that Keynesian spending and the Keynesian multiplier did not work in practice—once the spigots were turned off, a fiscal hangover resulted. Because there was no new production happening to support all the extra spending, the result of Keynesian stimulus was inflation and recession. Governments wanted to try to inflate their way out of the borrowing costs of all the extra spending, which only made things worse. Further, government “investment” was taking place at the expense of private investment that would produce long-term growth.

Friedman’s theories were right, and his work led him to receive the Nobel Prize in 1976. It was not until the end of the 1970s into the early 1980s that leaders such as Ronald Reagan and Margaret Thatcher embraced his ideas that the world economy truly began to recover.

Free To Choose

But Friedman was more than just a theoretical economist. He was a gifted philosopher and writer as well, and his work on why free markets are so important to a free society is some of his most important work. His first major popular work, Capitalism and Freedom went into the details of why the economic theory of capitalism was so deeply entwined with having a free society. When it was first published, Capitalism and Freedom was a revolutionary work: Friedman advocated such bizarre notions as a “negative income tax,” an all-volunteer military, and school vouchers.

Friedman continued to popularize his pro-free market ideas in the press, writing columns for Newsweek and other publications. But it was in 1980 when Friedman published one of his most accessible works, Free to Choose, that Friedman’s ideas started truly influencing the popular conversation.

Friedman dedicated himself to pursuing advocacy for free markets and limited government, and he did it with a sense of clarity and purpose. He was able to explain why even the most well-intentioned government programs are thwarted by the complexity of a modern economy. The following clip from the Donohue show in the 1980s shows Friedman at his best:

Friedman, of course, had the better argument, and was able to not only write about economics, but to get millions of people to look at economics in a new way. Instead of viewing economics as the “dismal science,” concerned with the shuffling of abstract value, Friedman popularly imbued economics with a moral aspect. Economics was about maximizing the freedom of the individual rather than the collective or the State. It was about ensuring that individuals were best able to pursue their own ends, provide for their own families, grow their own businesses, and prosper. This shift seems common-sense to us now, and that is due in large part to the influence of Milton Friedman.

A Legacy of Freedom

Today, some of the revolutionary ideas in Capitalism and Freedom are a common part of our day-to-day lives. Milton Friedman pushed for an all-volunteer military prior to the Vietnam War, and today the military is and will remain an all-volunteer force. Friedman’s idea of a “negative income tax” blossomed into the Earned Income Tax Credit, a system where people in poverty who choose to work are rewarded for their efforts with a payment from the government. Instead of welfare, which subsidizes poverty, the EITC encourages work and employment. In 2010 alone, the EITC was responsible for lifting an estimated 5.4 million Americans out of poverty. Friedman’s ideas have lifted 200 million people from poverty into prosperity, an achievement that will stand the test of time.

Now, more than ever, we need leaders who will carry Friedman’s mantle of freedom. Keynesianism, discredited in the 1970s and later by the Japanese “lost decade” in the 1990s is making a resurgence. It isn’t that Keynesian theories suddenly work better than they did in the past, it is that governments are using Keynesianism as a rationale for consolidating political power and justifying more and more control over the world economy. Friedman would have seen right through these efforts.

Just as it was in the 1970s, what the world needs now is not more central State planning, but more economic freedom. The solution to our economic problems is to unleash the creative energies of our people and to get government out of the way of economic growth. Friedman understood this from both a philosophical and a practical viewpoint. Friedman was right back then, and he is right today. And if we listed to his wise counsel again, our economy can come roaring back once again. Milton Friedman’s legacy of freedom can bring millions more from poverty to prosperity again if we are only willing to listen.

The Switch In Time That Betrayed Nine

Veteran Supreme Court reported Jan Greenberg reports what many had speculated—that Chief Justice John Roberts switched his vote on ObamaCare, saving the bill from being declared unconstitutional. Justice Anthony Kennedy, the crucial “swing judge” even tried to get Roberts back on the side of the Court’s conservative bloc, but to no avail.

Chief Justice John Roberts of the United States Supreme Court (AP Photo)

What Roberts did, in other words, was a betrayal of his principles as a judge. Greenberg explains why Roberts switched his vote:

Some of the conservatives, such as Justice Clarence Thomas, deliberately avoid news articles on the court when issues are pending (and avoid some publications altogether, such as The New York Times). They’ve explained that they don’t want to be influenced by outside opinion or feel pressure from outlets that are perceived as liberal.

But Roberts pays attention to media coverage. As chief justice, he is keenly aware of his leadership role on the court, and he also is sensitive to how the court is perceived by the public.

There were countless news articles in May warning of damage to the court – and to Roberts’ reputation – if the court were to strike down the mandate. Leading politicians, including the president himself, had expressed confidence the mandate would be upheld.

Some even suggested that if Roberts struck down the mandate, it would prove he had been deceitful during his confirmation hearings, when he explained a philosophy of judicial restraint.

It was around this time that it also became clear to the conservative justices that Roberts was, as one put it, “wobbly,” the sources said.

It is not known why Roberts changed his view on the mandate and decided to uphold the law. At least one conservative justice tried to get him to explain it, but was unsatisfied with the response, according to a source with knowledge of the conversation.

The problem with Roberts’ switch is that it doesn’t accomplish what he was apparently tempted to do. Yes, right now the left-wing media is praising Roberts for taking their side and saving ObamaCare, but does anyone believe that will last? If Roberts presides over another 5-4 defeat of a major liberal initiative, he’ll be damned and criticized as before. The legitimacy of the Supreme Court will always be called into question by the left so long as the Supreme Court does its job in enforcing substantive limits on the power of the federal government. All Roberts has done is buy some temporary credit.

And that temporary credit comes at the expense of the Constitution. Ostensibly, Roberts’ opinion limits the government’s ability to use the Commerce Clause to justify mandates on individuals. But there is reason to believe that future Courts will not be bound by that language as precedent. The benefit of Roberts’ alleged limitation of the Commerce Clause may not be anywhere near as great as some conservative commentators are making it to be.

Not only that, but the logic used to justify upholding the mandate as a tax is not consistent. That argument was generally rejected by lower courts, and not taken seriously during oral arguments. The whole point of a tax is to raise revenue—which the individual mandate is not supposed to do if it actually works. If you refuse to pay a tax, the government can fine you or put you in jail—yet the individual mandate is not enforceable in that manner. Congress did not intend to turn the individual mandate into a tax, and as much as Congressional intent matters in interpreting a statute, Roberts’ decision contradicts it. The dissent treats Roberts’ arguments on the tax issue with a thinly-veiled contempt—and largely for good reason.

Roberts’ decision comes off as nakedly political—and even Roberts himself seems to want to back away from its full consequences, painting it as a choice that he did not want to make by one he made because the law demanded it. But his legal arguments are so thin that his protestations ring hollow: the argument that Roberts upheld ObamaCare in the vain hopes of preserving the legitimacy of the Court in the eyes of The New York Times seems to be the most likely explanation.

But a Justice of the Supreme Court of the United States, no less the Chief Justice, should not answer to the editorial board of The New York Times. Roberts’ initial vote was the correct one: the individual mandate is an unprecedented intrusion upon the individual liberties of the people of the United States. It is not justified in a system where we have a federal government of limited and enumerated powers. Seven Justices voted that the federal government cannot use federal funding to coerce a state into enacting a federal policy: so why can the federal government use the coercion of taxation to force individuals into supporting a federal policy that would not be otherwise justified under the Constitution? The answer should have been that the federal government can no more justify the individual mandate through taxation than they could demand that individuals quarter soldiers in their homes or pay a tax “penalty.” Both are a naked end-run around the limits placed upon the federal government by the Constitution.

Chief Justice Roberts may have justified his decision by saying that it would preserve the reputation of the Court: but he is wrong. The Court should be above the whims of politics and should act in accordance with law rather than than the opinions of newspaper editorialists. Roberts’ switch on ObamaCare was a betrayal, and however justified it diminishes the legitimacy and the independence of the Supreme Court. That was clearly not the Chief Justice’s intent, but will be the outcome.

Why The Economy Sucks

The news on the economy continues to be bleak—while unemployment is down from nearly hitting double digits, it’s still stuck well above the historical average. GDP growth continues to be sluggish. Businesses are skittish about hiring, which only adds to the troubles. Despite the yearly promises from the Obama Administration about a “recovery summer” (this year’s theme: “third time’s the charm, right?”) this summer is not looking to have much more economic growth than past summers. To put it succinctly: this economy blows.

But why? What is it that’s keeping the economy in the doldrums?

President Obama has his answer: it’s all George W. Bush’s fault. And a plurality of Americans even agree with that. The problem with that theory is Bush hasn’t been President for almost four years and all the things that he did that were supposedly so terrible (Foreign wars! Tax cuts for the rich! Wasteful government spending!) have all been ratified by the Obama Administration.

They’re All Keynesians Now

The other theory popular on the Democratic side and advanced by people like New York Times columnist Paul Krugman is that what we really need is massive government spending – or what economists would call “Keynesian stimulus.”

Keynesianism is named (appropriately enough) for John Maynard Keynes, a British economist and one of the most crucial (if frequently wrong) economic minds of the 20th Century. While Keynesian economic theory is far more advanced than could be explained in a blog post (no less one that anyone would want to read), the sort of “dimestore Keynesianism” that’s popular among today’s Democrats involves the simple theory that government spending produces economic growth.

Here’s how that theory is supposed to work: it posits that the reason why the economy sucks is because of a lack of “aggregate demand.” What that means in more conventional terms is that people aren’t buying enough shiznit. And because people aren’t buying enough shiznit, factories that make said shiznit aren’t running and are laying people off, and the economy is swirling the toilet.

That sounds pretty convincing at first blush – the reason why the economy sucks is because a lack of demand. It’s simple, it’s intuitive, but as I’ll get to later, it’s also wrong.

But first let’s look to what the dimestore Keynesians think is the solution. And they say that if the problem is a lack of aggregate demand, let’s stimulate demand! We take all those unemployed workers and we put them to work on “shovel-ready” jobs. They work for 8 hours a day repairing infrastructure and the government gives them a paycheck for it. Then, they go out and spend that paycheck, which creates demand. Suddenly those people are buying shiznit again, and the shiznit factories are producing their shiznit again, and the economy restarts.

Again, on the surface this all makes sense – it’s a nice and simple description of the problem, it’s a nice and simple solution, and maybe it just might work.

But it doesn’t.

The Economy Is Turning Japanese

In fact, we know that demand stimulus doesn’t work. It’s been tried before. In the 1990s, Japan’s economy took a nosedive after a major financial crisis and a housing bubble. (Sound familiar?) So the Japanese government engaged in a massive orgy of spending. (Sound familiar again?—and I mean the spending part, not the “Japanese orgy” part…) And what was the result? The Japanese economy went into a “lost decade” in which economic growth stagnated.

In 2009, President Obama passed the American Reinvestment and Recovery Act that was supposed to have created thousands of “shovel-ready” jobs and get the economy moving again. Obviously, it didn’t. Instead, unemployment continued to increase at a much higher rate than predicted. Even President Obama was forced to admit that those “shovel-ready jobs” weren’t exactly “shovel ready.” The stimulus didn’t produce the kind of job growth or GDP growth that President Obama promised. But why?

On the surface, Keynesianism makes sense, if you want to get the economy moving, get people jobs and get them to spend money. But once you scratch the surface, it all falls apart. Reason explains why in discussing the Japanese stimulus efforts:

In an attempt to encourage growth, the Japanese embarked on a massive, multi-billion-yen infrastructure program. They built roads, bridges, and airports, all with the goal of creating jobs and reviving the economy. This didn’t work either.

During the 1990s, Japan passed 10 fiscal stimulus packages, focused largely on public works, totaling more than ¥120 trillion ($1.4 trillion in today’s dollars). When one construction plan failed to stimulate economic growth, another was tried. Those plans did not succeed in reviving the economy, but they did saddle the nation with a mountain of IOUs that helped postpone recovery for years. Including “off-budget” borrowing, Japan’s debt was estimated to exceed 200 percent of GDP in 2001.

Construction plans often set job growth targets but rarely focused on project prices. From 1992 to 1999, the Japanese government spent more than $500 billion (in today’s dollars) on public works projects. Yet the construction jobs were not long-term and did not lead to sustained economic growth. Public debt sky-rocketed, unemployment actually doubled from 2.3 percent to 5 percent, and the economy remained stagnant. As Gavan McCormack, a historian at Australian National University, noted in his 1996 book The Emptiness of Japanese Affluence, “The construction state is in some respects akin to the military-industrial complex in Cold War America (or the Soviet Union), sucking in the country’s wealth, consuming it inefficiently, growing like a cancer and bequeathing both fiscal crisis and environmental devastation.” The government failed to properly identify which projects should be pursued, ignoring demand signals that the private sector is better at recognizing and responding to.

Taking Keynes To The Woodshed

So we know that Keynesian stimulus didn’t work in Japan and it didn’t work here in 2009. The passage above gives us some reasons why. Stimulus spending doesn’t work because of the way government spends money. Government does not spend money based on an economic calculus, they spend it based on a political calculus. This difference is crucial to understanding why most attempts at government intervention in the economy fails.

In a normal market, goods and services are allocated based on price signals. How does the economy know what to produce and how much of it? It’s all based on prices: when there’s too little of something the price shoots up—suddenly it makes sense to produce more of it. Then when there’s too much, the prices fall again. Supply and demand will, under normal circumstances, find an equilibrium.

The problem with government spending is that it doesn’t follow the rules of supply and demand. If a powerful Senator from South Dakota says that we need a six-lane superhighway between Podunk and East Armpit, that Senator can have the political clout to make it happen. The problem with that is that suddenly the government is spending millions to build a six-lane superhighway that isn’t actually needed and won’t produce economic growth over the long term.

“But wait!,” the Keynesians say, “Doesn’t building that six-lane superhighway to Warehouse 13 mean that workers will be employed and then they’ll have money to spend, creating economic growth?” The answer is yes, you’ll be paying people, but you won’t get economic growth from it. Why? Because the only way the government has money to spend is taxation or borrowing—so for every dollar you spend on that six-lane superhighway, you have to either take a dollar from elsewhere or borrow it and pay it back with interest.

There’s also a phenomenon called “crowding out.” This article explains the “crowding out” effect of stimulus spending in some detail. The short version is that if you take a dollar from the private sector and devote it to public spending, that’s a dollar that the private sector doesn’t have to spend. In other words, the government isn’t doing anything new, it’s just taking spending that the private sector would have done and doing itself. The net economic impact is, to put it in highly technical terms, bupkis. And if you assume that government spending is less efficient than private spending—and you should for the reasons above—the net economic impact is negative.

“But wait!” say the Keynesians again, “What about the infamous Keynesian multiplier?” The Keynesian multiplier is the theory that $1 in government spending produces more than $1 in economic growth. And whenever you hear President Obama argue that the stimulus saved “3 million jobs” and the like, here’s how he arrived at that conclusion. He had the Congressional Budget Office (CBO) assume that certain government programs had Keynesian multipliers, and then calculate based on what was spent in stimulus funds. So if you assume that infrastructure spending produces $2 in growth for every $1 spent, magically the stimulus was a fantastic success.

But the Keynesian multiplier is a myth: because of the inefficiencies in government spending and “crowding out,” the assumption that $1 in Keynesian spending produces at least $2 in economic growth is a very bad assumption to make. More rigorous studies have said that the real Keynesian multiplier ranges from zero to just over 1—which supports the idea that stimulus doesn’t produce growth over the long term.

And here is the other problem: when you try to “stimulate demand” in this way, what happens when the stimulus ends? The only thing propping up that artificial demand was government spending—and once the government spending ends, so does the stimulus. The conventional Keynesian theory is that the economy would come back, and once it did the government could retract the stimulus payments. But as Japan found out, that never happens. Stimulus becomes a vicious circle because once the stimulus ends the economy takes a nosedive—which just produces the argument that we need more stimulus to fix it. And indeed, you have Paul Krugman making the argument that we need more stimulus to get the economy moving, and if all else fails maybe we can hope for an alien invasion to get it. Someone has watched Watchmen one too many times.

The Myth Of Austerity

But the dimestore Keynesians have one more argument up their sleeves: they say that lowering government spending certainly won’t work, and will make things worse. They look to Europe, where they argue that the EU’s austerity has caused even more problems for the Eurozone. If Europe has been cutting government spending and Europe is now an economic basketcase, doesn’t that mean that fiscal austerity is a bad idea?

There are two problems with that argument: first, European governments really haven’t slashed spending as Krugman intimates they have. Except for Greece (which had little choice), most European countries have only slowed the rate of spending growth rather than cutting spending. That’s hardly “austerity” any more than only getting a 2% raise is a “pay cut.”

Second, Europe did something else that would depress economic growth—they raised taxes. European countries raised income taxes, their Value Added Taxes (VATs), and taxes on business. And sure enough, raising taxes when businesses and consumers are already feeling the pain of a recession is not a smart idea in the slightest. But the dimestore Keynesians propose doing the same thing: increasing government spending and raising taxes to pay for it. What Europe shows is not that austerity is a bad idea, it’s that government spending and tax increases are. What Krugman is doing is applying exactly the opposite message than what Europe is telling us. And the old saying goes, those who fail to learn from history are condemned to repeat it.

So, How Do We Fix This Mess?

So far I’ve been painting a pretty bleak picture: we can’t use government spending to get us out of this mess. The preferred Keynesian solution of raising taxes to stimulate aggregate demand won’t work because government spending doesn’t produce lasting economic growth. So, what can we do to get out of this hole?

Ultimately, what we need is to encourage economic growth in the private sector. But that’s not something that can be done with government policy—other than a policy of getting the hell out of the way. Government can offer tax credits for R&D and the like, but even that is an example of government picking winners and losers, which doesn’t have a particularly sterling record.

The most important thing is for the government to get its fiscal house in order. We can’t grow the economy with a huge amount of public debt hanging over our heads. We need to cut spending in real terms, not just slow the rate of increase. We need to pay down our national debt, not add to it. If we want to get more revenue into the hands of the government we need to increase growth rather than taxes. Has this been done before? Yes—and quite successfully. But that is a post for another day…