January 6, 2010

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Thomas Sowell writes about the corrosive effects of intellectuals. His latest book, Intellectuals and Society, has just been released.

…Some of the most distinguished intellectuals in the Western world in the 1930s gave ringing praise to the Soviet Union, while millions of people there were literally starved to death and vast numbers of others were being shipped off to slave labor camps.

Many of those same distinguished intellectuals of the 1930s were urging their own countries to disarm while Hitler was rapidly arming Germany for wars of conquest that would have, among other things, put many of those intellectuals in concentration camps — slated for extermination — if he had succeeded.

The 1930s were by no means unique. In too many other eras — including our own today — intellectuals of unquestionable brilliance have advocated similarly childish and dangerous notions. How and why such patterns have existed among intellectuals is a challenging question, whose answer can determine the fate of millions of other people.

Sarah Palin’s ability to turn a phrase is still working. She says, “We need a commander in chief, not a law professor.”

President Obama’s meeting with his top national security advisers does nothing to change the fact that his fundamental approach to terrorism is fatally flawed. We are at war with radical Islamic extremists and treating this threat as a law enforcement issue is dangerous for our nation’s security. That’s what happened in the 1990s and we saw the result on September 11, 2001. This is a war on terror not an “overseas contingency operation.” Acts of terrorism are just that, not “man caused disasters.” The system did not work. Abdulmutallab was a child of privilege radicalized and trained by organized jihadists, not an “isolated extremist” who traveled to a land of “crushing poverty.” He is an enemy of the United States, not just another criminal defendant. …

In Powerline, John Hinderaker comments on a Telegraph article that is sure to cause the Obami pain: the UK had warned the US about Abdulmutallab.

The Obama administration has gone out of its way to poison relationships with traditional allies such as Great Britain, and it seems that the favor is now being returned, as the Prime Minister’s office has disclosed publicly that British intelligence, MI5, warned the US about Umar Abdulmutallab. The Telegraph reports:

Umar Farouk Abdulmutallab was named in a file of people based in Britain who had made contact with radical Muslim preachers. The file was sent to the US authorities in 2008. …

… in an official briefing, the Prime Minister’s spokesman said that British intelligence was shared with the Americans. He said: “Clearly there was security information about this individual’s activities and that was information that was shared with the US authorities. That is the key point.” …

Christopher Hitchens discusses what we know about Iran’s progress towards developing nuclear weapons. Here is the opening:

Some distance into Sunday’s New York Times report on the Obama administration’s increasingly worried internal discussions about Iran, there came a couple of paragraphs that repaid closer scrutiny:

Mr. Obama’s top advisers say they no longer believe the key finding of a much disputed National Intelligence Estimate about Iran, published a year before President George W. Bush left office, which said that Iranian scientists ended all work on designing a nuclear warhead in late 2003.

After reviewing new documents that have leaked out of Iran and debriefing defectors lured to the West, Mr. Obama’s advisers say they believe the work on weapons design is continuing on a smaller scale. [Italics mine.]

Leaving to one side the alarming possibility that any of Obama’s people ever did believe the preposterous arguments of that National Intelligence Estimate (denounced by your humble servant in this space on Dec. 10, 2007), one must wonder what sort of scale is implied by “smaller.” That ostensibly reassuring usage might, in fact, be accurate. The new documents alluded to in the article were published in the Times of London in the second and third weeks of December and have been extensively reviewed by numerous authorities, none of whom have chosen to challenge their authenticity. And the documents do, in point of fact, throw light upon something “smaller scale.” To be precise, they show the internal memoranda of the dictatorship as they bear on the crucial question of a “neutron initiator.” Small as this device may be, it is the technical expression used for the “trigger” mechanism of a workable nuclear weapon. The critical element of the “trigger” is uranium deuteride or UD3. And uranium deuteride has no other purpose. To quote David Albright, the president of the Institute for Science and International Security in Washington: “Although Iran might claim that this work is for civil purposes, there is no civil application. This is a very strong indicator of weapons work.”

That would be to phrase it mildly. …

John Fund focuses our attention on the Senate race that could, if we are very lucky, be the undoing of Obamacare.

In the two months since voters gave Republican candidates impressive wins in the New Jersey and Virginia governor’s races, unemployment has increased to 10% under a Democratic White House, and Democrats have focused on jamming an increasingly unpopular health care bill through Congress. Now comes another statewide race this month that will likely be read as a follow-up referendum on the Obama administration. Massachusetts holds a special election on January 19 to fill the U.S. Senate seat left open by the death of Ted Kennedy, and even in this bluest of states it may not be a cakewalk for the Democrat.

At first glance, the chances of an anti-Democratic tide here appear remote. The Bay State gave Barack Obama 62% of its vote last year, the state hasn’t elected a Republican to the Senate since 1972, and Democrats hold seven out of every eight seats in the state legislature. But one of the few Republicans in that legislature, State Senator Scott Brown, is making a serious play to upset the conventional wisdom, which holds that Democratic Attorney General Martha Coakley is a shoo-in for the Kennedy seat. In the process, Mr. Brown is irritating Democrats to distraction.

His first TV ad begins in black and white with John F. Kennedy describing his 1962 tax cut bill: “The billions of dollars this bill will place in the hands of the consumer and our businessmen will have both immediate and permanent benefits to our economy.” The screen slowly morphs into an image of Mr. Brown as he calls for a new tax cut by finishing Kennedy’s remarks: “Every dollar released from taxation that is spent or invested will help create a new job and a new salary. And these new jobs and new salaries can create other jobs and other salaries, and more customers and more growth for an expanding American economy.” …

Comments on the same race from John Steele Gordon in Contentions.

…But Brown is certainly making a game try. This commercial is, I think, nothing short of brilliant. It invokes the magic Kennedy name and uses John F. Kennedy’s own words, calling for tax reductions as a way to boost the economy and create jobs.  Democrats, naturally, are screaming bloody murder, probably because the ad is so effective, especially since the Democratic candidate, Martha Coakley, recently said on record, “We need to get taxes up.”

The odds are still against Brown, but given the prospect of a low-turnout election, nervousness regarding Obama’s tax plans, ever-rising opposition to the health-care bill, knowledge that Brown would be in office for less than three years until the expiration of the late Ted Kennedy’s term, and a sense that there is too much power in the hands of one party in Washington, it’s by no means impossible. I’m not the only one who thinks so.

If a Republican were to win Ted Kennedy’s old seat in ultra liberal Massachusetts, the political fallout would be huge. Every Democrat in Washington up for election in November would be reaching for the Maalox — or perhaps the Scotch bottle — and those in marginal districts or states might well begin to peel off the official line to save their own hides. Equally important, the balance in the Senate would shift from 60-40 to 59-41, and the filibuster-proof majority would be gone. The people of Massachusetts thus have it in their power to derail the health-care bill.

Mr. Gordon also posts on some interesting items in the Obamacare bills, and recounts a government overreach during the Depression that was eventually overturned by the Supreme Court.

The Times this morning ran a story on yet another fiddle that has been uncovered from the depths of the health-reform bill that passed in the Senate on Christmas Eve. This one favors construction unions. While, under the act, most companies with fewer than 50 employees would not have to provide government-mandated health insurance or pay a tax, those in the construction business would be exempt only if they have fewer than five employees. At least the Times notes that:

The construction industry provision is receiving a second look as work begins in earnest this week to resolve differences in bills passed by the Senate and the House to remake the nation’s health care system. Other provisions sure to be scrutinized include a tax break for the Blue Cross and Blue Shield plan in Nebraska; Medicare coverage for residents of Libby, Mont., sickened by a mineral mine; extra Medicaid money for Massachusetts, Nebraska and Vermont; and a special dispensation for a handful of doctor-owned hospitals.

One would hope that the endless number of constitutionally dubious provisions, including such lulus as requiring a supermajority in the Senate to repeal certain portions of the act, will also get a second look. …

In the WSJ, Conor Dougherty reports on continued decreasing government revenues.

…Sales taxes declined 9% to $70 billion in the third quarter compared with the year-ago period, the Census Bureau said. Income taxes plunged 12% to about $58 billion. Together, sales and income taxes make up roughly half of state and local tax revenue.

…”At minimum, cities will be working through the catastrophic drops in revenue for the next 18 months to two years,” said Mark Muro of the Brookings Institution’s Metropolitan Policy Program. …

…State and local tax revenues tend to lag behind the downturns as well as the upturns in the economy because of the time it takes for collections to catch up with depressed store sales and diminished incomes. The third quarter was the fourth consecutive quarter in which tax collections were below year-ago levels. Through the first three quarters of 2009 state and local tax revenues totaled $875 billion, nearly 8% below the $951 billion collected in the first three quarters of 2008. In the same period, federal receipts were down nearly 19%.

While the recession appears to have ended during the summer, government revenues are expected to continue to be weak. State and local governments employ 15% of American workers outside of agriculture. …

Richard Epstein gives examples of ways that governments can help the economy and increase their tax base. And they don’t require stimulus pork.

…On taxation, don’t play the mug’s game of imposing ever higher marginal tax rates on ever lower amounts of income. Play it smart for the long haul. Low-income tax rates (and no estate taxes) will attract into states and communities energetic individuals who would otherwise choose to live and work elsewhere. Treasure their efforts to grow the overall pie. Don’t resent their great wealth, but remember the benefits their successes generate for their employees, customers and suppliers. Repudiate the politics of envy for the social destruction it creates. Don’t fret about the states and communities left behind. Let them adopt the same sound policies to keep people at home. The outcome won’t be a zero-sum game. Enterprise is infectious. Open markets are the rising tide that raises all ships. High taxation is the tsunami that sinks them.

On real estate, change the culture so that getting permits for yourself and blocking them for everyone else is no longer the preeminent developer’s skill. The government can still prevent buildings from falling down and fund infrastructure through general taxation. But don’t let entrenched landowners and businesses raise NIMBY politics to a fine art. Today our dysfunctional land-use processes too often build thousands of dollars and years of delay into the price of every square foot of new construction. The instructive requirements on aesthetics and handicap access should be junked, along with the crazy-quilt system of real estate exactions that asks new developments to fund improvements whose benefit largely belongs to incumbent landowners. And for heaven’s sake, learn the lesson of Kelo and stop using the state’s power of condemnation for the benefit or private developers.

On labor, state and local governments have to junk the progressive mindset in both the public and the private sector. State and local governments should never, repeat never, be forced to negotiate with local unions. The huge pensions garnered by prison guards in California or transportation workers in New York present the intolerable spectacle of requiring ordinary citizens to pay huge subsidies to union workers far richer than themselves. On the private side, don’t force developers to hire union workers on construction sites or to block the construction of new facilities that hire nonunion labor. If unions are really efficient–and they aren’t–let them compete like everyone else. …

Daron Acemoglu, in Esquire, reviews how capitalism benefits societies. Capitalism and ….. governments that are under control.

We are the rich, the haves, the developed. And most of the rest — in Africa, South Asia, and South America, the Somalias and Bolivias and Bangladeshes of the world — are the nots. It’s always been this way, a globe divided by wealth and poverty, health and sickness, food and famine, though the extent of inequality across nations today is unprecedented: The average citizen of the United States is ten times as prosperous as the average Guatemalan, more than twenty times as prosperous as the average North Korean, and more than forty times as prosperous as those living in Mali, Ethiopia, Congo, or Sierra Leone.

The question social scientists have unsuccessfully wrestled with for centuries is, Why? But the question they should have been asking is, How? Because inequality is not predetermined. Nations are not like children — they are not born rich or poor. Their governments make them that way.

…People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That’s what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments. …

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