Click on WORD or PDF for full content
Some of our favorites react to the downgrade. John Podhoretz first.
This is a terrible day. …
… This is a colossal disaster for Barack Obama?, and anybody who says otherwise is kidding himself or trying to spin you. We know that the election of 2012 is going to be fought on jobs, the economy, and the wisdom of health care. But now the GOP has an overarching theme that I predict will be at the core of a $500 million advertising campaign: “America needs its good name back.”
As the author of a suitably apocalyptic book to be released on Monday, I’m grateful to Standard & Poor’s for providing the ultimate publicity tie-in. (Junk rating by the time of the paperback edition?) The frivolousness of the political theater in Washington this last month and its mostly fraudulent media coverage did huge damage to the United States. It confirmed to the world, as S&P’s analysis suggests, that Washington is institutionally incapable of genuine reform. This was one of those it’s-the-music-not-the-lyrics moments: As damaging as the specifics of the ”deal” were, the broader sub-text of a political class pretending that it was meaningful was even more so.
We don’t have till 2021. As I say in my column tomorrow, we have till mid-decade to turn this thing around, or it’s over. …
From Pajamas Media.
… Just a couple of years in that big house in Washington and you and your spendthrift colleagues have managed to blight the most productive economy the world has ever seen. Thank you Mr. President!
What planet are you and Joe Biden and Barney Frank and Nancy Pelosi and Harry Reid from?
In the space of two years, you have done more damage to this economy — which means the future not only of this country but the rest of what you would disdain to call the civilized world — than any President in history. You are a poor man’s Jimmy Carter, a midget Herbert Hoover, a disaster for this country and the world. …
… Since President Obama took office in January 2009, the United States has embarked on the most ambitious failed experiment in Washington meddling in US history. Huge increases in government spending, massive federal bailouts, growing regulations on businesses, thinly veiled protectionism, and the launch of a vastly expensive and deeply unpopular health care reform plan, have all combined to instill fear and uncertainty in the markets. Free enterprise has taken a backseat to continental European-style interventionism, as an intensely ideological left wing administration has sought to dramatically increase the role of the state in shaping the US economy. The end result has been a dramatic fall in economic freedom, sluggish growth, poor consumer confidence, high unemployment, a collapsing housing market, and an overall decline in US prosperity, with more than 45 million Americans now reliant on food stamps – that’s over one seventh of the entire country….
At the end of last week we trashed the idea of the super committee. Charles Krauthammer says it may have value.
Conventional wisdom holds that the congressional super-committee established by the debt-ceiling deal to propose further deficit reduction will go nowhere. I’m not so sure. There is a grand compromise to be had. It does, however, require precise sequencing. To succeed it must proceed in three stages:
(1) Tax Reform.
True tax reform that removes loopholes while lowering tax rates is the Holy Grail of social policy. It appeals equally to left and right because, almost uniquely, it promotes both economic efficiency and fairness. Economic efficiency — because it removes tax dodges that distort capital flows (and thereby diminish productivity) while cutting marginal tax rates (thereby spurring growth). Fairness — because a corrupted tax code with myriad breaks grants deeply unfair advantage to the rich who buy the lobbyists who create the loopholes and buy the lawyers who exploit them.
Which is why the 1986 Reagan-Bradley tax reform was such a historic success. It satisfied left and right, promoted efficiency and fairness, and helped launch two decades of almost uninterrupted economic expansion. …
Of course Pickings readers know that government efforts to heap mortgages on poor credit risks would have devastating unintended consequences. Thomas Sowell on how it worked out.
Many years ago, the Saturday Evening Post was one of the best-known magazines in America. But somehow I learned that the Saturday Evening Post was actually published on Wednesday morning. That was a little disconcerting at first. But it was one of the most valuable lessons, that words do not necessarily reflect reality.
Recent statistics on the average wealth or net worth of blacks are a painful reminder that rhetoric favoring blacks does not mean that politicians using such rhetoric are actually helping blacks. The media seized upon the statistics published by the Pew Research Center to show that whites averaged far more net worth than blacks, and that this disparity was now greater than it was in years past. But what is even more revealing is that the net worth of blacks in 2009 was less than half of what it was in 2005.
What happened to cause such a sharp loss in such a few years? After all, the Republicans controlled both the Congress and the White House in 2005, and the Democrats had control by 2009. There was now a black President of the United States, with much of the media celebrating the beginning of a new era in race relations.
What happened was that the political words had no relationship to the economic reality. But few people judge any administration’s effect on blacks by what actually happens to blacks under that administration.
A finer breakdown of the data on the net worth of blacks shows that the most drastic loss of net worth was in the value of the homes owned by blacks. This occurred after years of both Democratic and Republican administrations pushing policies designed to enable more blacks to buy homes. …
More on misleading words from T. Sowell.
… Virtually everyone living in “poverty,” as defined by the government, has color television, and most have cable TV or satellite TV. More than three-quarters have either a VCR or a DVD player, and nearly nine-tenths have a microwave oven.
As for being “ill-housed,” the average poor American has more living space than the general population — not just the poor population — of London, Paris and other cities in Europe.
Various attempts have been made over the years to depict Americans in poverty as “ill-fed” but the “hunger in America” campaigns that have enjoyed such political and media popularity have usually used some pretty creative methods and definitions.
Actual studies of “the poor” have found their intake of the necessary nutrients to be no less than that of others. In fact, obesity is slightly more prevalent among low-income people.
The real triumph of words over reality, however, is in expensive government programs for “the elderly,” including Medicare. The image often invoked is the person who is both ill and elderly, and who has to choose between food and medications.
It is great political theater. But, the most fundamental reality is that the average wealth of the elderly is some multiple of the average wealth owned by people in the other age brackets.
Why should the average taxpayer be subsidizing people who have much more wealth than they do? …
Canada’s National Post says the proposed solutions to no growth will continue – no growth.
… To those of us on the outside of the economics profession, the sound of the internal crash of the pillars of interventionism is becoming deafening. While contradictions pile up, the advice still keeps flowing. Deficits are bad, spending must be cut to save the economy. But if spending is cut, the economy will suffer. While politicians struggle to interpret the contradictory incantations of economists, the world is struggling under a burden of growth-killing policies.
Banks are being regulated to an extent never seen before, forcing the world’s core providers of credit for business expansion to curb their appetite for risk. Confusion reigns as global and trans-national regulators blunder their way to impose ill-conceived rules and policies. The hard reality of new rules, especially new capital requirements, is that it forces banks to accumulate risk-free liabilities while curbing risk-taking loans.
The world’s energy markets are under constant assault from governments that want to force innovation by fiat. Carbon taxes and green-energy initiatives that are uneconomic have two growth-killing impacts. First, they force capital out of economically productive investments into projects that are intrinsically uneconomic. Investors will not put money into wind turbines because they are uneconomic. Throwing subsidies at wind power does not create net new jobs and growth; it kills jobs and growth by forcing others to cover the cost of the uneconomic activity.
In the auto industry, meanwhile, sales are flat and show no signs of returning to production levels of the past. In the face of this ongoing slump, the U.S. government will force auto companies to spending billions to meet tough fuel-efficiency standards that will raise the price of cars. Whatever they teach in economics these days, some logic must seep into the curriculum. This is not a growth plan.
Similar government interventions, bolstered by constant calls for more spending and taxes, are the norm through most of the G20 membership. To end the many debt crises, the first step should be to abandon growth-killing policies. With growth, even debts cease to be a problem.
The Economist reviews a book on our history with dogs.
THE relationship between people and dogs is unique. Among domesticated animals, only dogs are capable of performing such a wide variety of roles for humans: herding sheep, sniffing out drugs or explosives and being our beloved companions. It is hard to be precise about when the friendship began, but a reasonable guess is that it has been going strong for more than 20,000 years. In the Chauvet cave in the Ardèche region of France, which contains the earliest known cave paintings, there is a 50-metre trail of footprints made by a boy of about ten alongside those of a large canid that appears to be part-wolf, part-dog. The footprints, which have been dated by soot deposited from the torch the child was carrying, are estimated to be about 26,000 years old.
The first proto-dogs probably remained fairly isolated from each other for several thousand years. As they became progressively more domesticated they moved with people on large-scale migrations, mixing their genes with other similarly domesticated creatures and becoming increasingly dog-like (and less wolf-like) in the process. For John Bradshaw, a biologist who founded the anthrozoology department at the University of Bristol, having some idea about how dogs got to be dogs is the first stage towards gaining a better understanding of what dogs and people mean to each other. Part of his agenda is to explode the many myths about the closeness of dogs to wolves and the mistakes that this has led to, especially in the training of dogs over the past century or so. …