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Megan McArdle with the latest madness from left/liberal mess that is Detroit.
I’m rarely speechless, but I’m having trouble putting my emotions into words after reading the latest report on the Detroit pension situation. Now, I admit it: I’m kind of naïve. Usually when I see an underfunded pension, I think to myself “poor pensioners — undone by a combination of stupid tax rules, volatile stock markets and mismanagement by trustees who tried to restore depleted fund assets with an investment approach you might call ‘desperate optimism’.” Thus, I was not entirely prepared for the new revelations about the Detroit trustees’ custom of handing out annual holiday “bonuses” to workers, retirees and the City of Detroit. Between 1985 and 2008, they handed out roughly $1 billion this way. Had they been invested, one estimate says those funds would be worth almost $2 billion today — or more than half the current shortfall in the funds.
These “bonuses” were used to lower the contribution the city was required to make, to give retirees a little something extra around Christmas time, and to fund individual savings accounts that workers are offered along with their pensions. In 2009, when the financial markets were completely frozen and the automakers were shotgunning through the bankruptcy courts, the pension trust paid 7.5 percent interest into those accounts — which is about 7.5 percent more than they would have gotten at a bank. This while the pension funds were busy losing about a quarter of their value.
I literally slapped my forehead while reading some of the explanations that the trustees offered for their behavior. …
The Cruz phenomenon covered by John Fund.
… Cruz has for now become the “it” guy for the conservative base as a result of his speech, probably boosting his presidential ambitions. But he has also helped reshape the entire approach Republicans are taking to Obamacare. House speaker John Boehner is suggesting that Republicans will seek a one-year delay in implementing Obamacare as part of any deal to continue funding the government. The Cruz speech may be partly responsible for rattling Senate majority leader Harry Reid so much that he admitted that Obamacare’s tax on medical devices was “stupid,” even while insisting he’d accept no changes in the law. Cruz’s speech may also have spurred Democratic senator Joe Manchin of West Virginia to announce that he wants a one-year delay of Obamacare’s mandate that individuals buy health insurance. And Cruz’s criticisms of Obamacare were partially validated Thursday when the White House announced it was postponing enrollment in most of the small-business exchanges, originally scheduled to open on October 1.
The editorial board of the New York Times has dismissed Ted Cruz as “the public face of the aimless and self-destructive Tea Party strategy to stop health-care reform.” In reality, his speech may have reignited intense opposition to a law many conservatives had fatalistically accepted as unstoppable. It’s too soon to know if Cruz’s speech will have a lasting impact, but the over-the-top criticism by some liberals has revealed just how worried they are about both Cruz’s potential and Obamacare’s future. Cruz “is the most talented and fearless Republican politician I’ve seen in the last 30 years,” Democratic strategist James Carville told ABC News in May. “He is going to be something to watch.”
After all, when Ronald Reagan burst into the national consciousness with his televised “Time for Choosing” speech on behalf of Barry Goldwater’s candidacy in 1964, liberals were united in their scornful dismissal of him. As I recall, the Gipper bested his critics with the last laugh — many times over.
Matthew Continetti explains why Ted Cruz is so hated.
How fitting that Senator Ted Cruz’s 21-hour anti-Obamacare speech on the Senate floor in Washington, D.C., happened to coincide with the opening of the U.N. General Assembly and the annual meeting of the Clinton Global Initiative in New York City. Rarely is the distance separating the caste that rules our world from its few, heavily despised critics so literal.
At the midpoint of the Acela corridor, heads of state, foreign ministers, and assorted luminaries from around the world gathered to toast themselves, make new friends, snub the president of the United States, and recycle platitudes on climate change, gun control, global poverty, the health care cost curve, and the Global South, all while clogging Midtown traffic, occupying posh hotels, fooling gullible media personalities, and enjoying the best of Manhattan’s entertainment, nightlife, culture, and cuisine.
At the other end of the tracks the freshman conservative from Texas stood on the floor of the Senate and spoke for close to a day in an effort to deny money to President Barack Obama’s chief legacy—a misbegotten and unpopular law whose unintended consequences are already being felt in labor and insurance markets. Digressive, flamboyant, ideological, earnest, theatrical, self-promotional, at times touching and at other times goofy, Cruz deserved applause for his commitment and, at least, for his stamina. He established himself as the leader of the anti-Obamacare forces, forced the Democrats to defend their misbegotten law, and pulled the public discourse rightward. And while one might disagree with his strategy—neither Cruz nor his supporters have fully answered, in my view, the question of what they will do after this plan fails—one cannot help admiring the boldness and tenacity with which Cruz pursues his goal.
But that’s just me. Many other people, reasonable people, Republicans, Democrats, conservatives, and liberals, have been more than able to resist Cruz’s charms, such as they are. And their resistance has been so visceral, so virulent, so out of proportion to the reaction to earlier marathon floor speeches and filibusters that explanations seem necessary. …
Ann Coulter wants Cruz Control on all GOP models.
… Those guys waived Obamacare for themselves. If national health care is so great, why don’t they want it?
In every single category of Crap Forced On the Country by the Left, liberals always have a work-around for themselves.
They love the public schools and denounce school choice — but their kids go to St. Albans or Sidwell Friends. As Al Gore responded to a question from a black journalist for Time magazine who asked him why he opposed school vouchers while sending his own kids to private schools, “My children — you can leave them out of this!”
Oh, now I see.
Liberals are always eager to release criminals and block crucial crime-fighting strategies such as stop-and-frisk — which they announce from the safety of their antiseptic, crime-free neighborhoods. They love the homeless, but try putting a homeless shelter in their doorman buildings.
They tell us guns won’t protect us — and then we find out the loudest of them all have armed guards. Staunch gun-control advocate Mayor Richard Daley of Chicago had three armed guards with him at all times, as well as an armored car. Mayor Rahm Emanuel also has armed guards and an armored car. Chicago aldermen are allowed to carry any guns they like. But until very recently (we hope!) the people of Chicago were virtually prohibited from being armed.
Are you beginning to see the pattern?
Liberals love affirmative action — provided their offspring still get into Harvard, Yale or Princeton. How about they give up their kids’ seats to disadvantaged minorities?
Class warriors Warren Buffett and the Nation magazine’s Katrina vanden Heuvel hired phalanxes of lawyers to fight the IRS when informed they weren’t paying the government what they owed. George Soros and the Kennedy family stash their money in offshore accounts, safe from U.S. taxation.
Liberals also strongly support every manner of environmental regulation — unless it blocks the view from the Kennedy compound. In deference to Teddy Kennedy’s ferocious opposition to wind farms off the coast of Cape Cod, the federal government reduced the number of turbines, moved them farther off the coast and ordered them painted white to blend in with the view.
And now these government do-gooders shoving Obamacare down our throats have managed to exempt themselves from its wonderful provisions. Supreme Court justices won’t have to suffer under Obamacare, but will continue to have their health care subsidized by us, the hapless taxpayers forced into this rotten system. …
Peter Wehner will have none of this. He thinks Cruz is a disaster.
… As I’ve argued several times before (including here), this whole gambit was based on the fiction, perpetrated by Cruz and others, that the Affordable Care Act could be defunded (without even a single Democratic vote, according to Cruz). That was never true. That goal was an illusion. A mirage. A delusion. And surely Mr. Cruz, an intelligent and well-educated man, knew it. There was simply no way a Democratic Senate and Barack Obama would abolish his signature domestic achievement. And defunding the ACA would require just that.
No matter. Senator Cruz, along with several of his colleagues, convinced many grassroots conservatives and Tea Party members that the end game was to put a stake through the heart of ObamaCare, once and for all. If you sided with them, you were a principled conservative who opposed ObamaCare; if you were against them, you were part of the “surrender caucus.” This was cast as a Moment of Truth.
Now the whole thing is being exposed for what it was – a game. And the (inevitable) failure by Cruz and the others will leave these people crushingly disappointed and enraged. They were led to believe something that was simply not true – and many of them still don’t know they were misled.
Beyond all that is the damage this inflicts on conservatism. Conservatism, after all, is a political philosophy that is (or should be) anti-utopian, empirical, prudent, somewhat modest in its expectations and firmly grounded in reality. That’s certainly not all that conservatism is, but those elements comprise it. Yet here we are, with a large part of the conservative movement having taken a journey through the looking glass.
This whole episode was a low moment for genuine conservatism.
Victor Davis Hanson on the late great middle class.
… Obama promised to restore the middle class. In truth, he has enacted the very policies that have done it the most damage in years. That paradox may explain why his base of support remains the very rich and the very poor. Goldman Sachs, federal bureaucrats, and aid recipients are helped in a way that the strapped hardware-store owner, Starbucks barista, and part-time welder are not.
For all the talk of infrastructure or stimulus, the latest $6 trillion in federal borrowing seems to have been wasted on bailing out insider banks and green companies, growing the federal work force, regulating the private sector into stasis, and subsidizing those who are not working.
The Federal Reserve still keeps interest rates at near zero. That mostly helps Wall Street, where money flows madly in search of any sort of return.
Most real interest rates for consumer purchases somehow remain exorbitant. Banks obtain their money cheaply and lend it out expensively. No wonder that so many Wall Street and banking executives — Timothy Geithner, Jack Lew, Peter Orszag, Gene Sperling, Larry Summers — revolve in and out of the highest levels of this “no revolving door” administration.
Middle-class workers see little chance of retiring when their meager savings earn almost no interest, so they are apt to stay on the job longer. Their continuance only makes unemployment rates for young entry-level workers even worse.
Obama always threatened higher taxes on the well-off. He achieved that goal with a new 39.6 percent federal rate on upper incomes, a rate paid on top of state and payroll taxes. Yet such steep taxes do not much affect the super-rich. Their income is often exempted through sophisticated tax avoidance or, more often, earned through lower-taxed capital gains. …