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Nile Gardiner reacts to Kremlin Obama love.

The White House should be thoroughly embarrassed by this endorsement from the leader of one of America’s biggest strategic adversaries, the head of an increasingly dangerous, aggressive and authoritarian regime with an appalling human rights record. It is a particularly telling moment for a US administration that has spent a great deal of its time engaging many of America’s enemies and appeasing hostile powers while treating traditional allies such as Great Britain and Israel with thinly veiled contempt.

Medvedev’s adoring praise is a damning indictment of President Obama’s weak-kneed approach at a time when US leadership is being increasingly challenged from the Middle East to the Near Abroad. When the Kremlin clearly has a soft spot for the leader of the free world, you know something is monumentally rotten at the heart of American foreign policy.

Jonathan Tobin writes on the latest hit piece on Clarence Thomas from the NY Times.  

When it comes to media coverage of Supreme Court Justice Clarence Thomas, the rules have always been very different from that of other judicial figures. Sunday’s front page feature in the Sunday New York Times about Thomas and his various associations with rich people is the sort of thing that one simply cannot imagine being written or published about anyone else on the high court.

The piece is a 2,800-word insinuation about ethical violations that are never spelled out. Reporter Mike McIntire was sent out on a fishing expedition looking for juicy material about this liberal bête noire and clearly came up empty. But instead of spiking the story, the Times (whose new editor Jill Abramson’s career was made via slanders of Thomas) printed it anyway.

The worst allegation in the piece is that Thomas may have helped persuade a wealthy donor to contribute to the building of a museum about the culture of poor Gullah-speaking African-Americans along the Georgia coast where the jurist grew up. …   

More on this from Ann Althouse.

Instapundit says:

“But of course, the New York Times piece isn’t really about ethics. It’s battlespace preparation for the Supreme Court’s healthcare vote. The problem for the Times is that Thomas doesn’t care what the New York Times thinks. Which means this is more about preparing a narrative of failure for ObamaCare — It was struck down by evil corrupt conservative judges. I think they’re going to be kept quite busy constructing failure narratives over the next couple of years.”

And a comment on the Althouse site has this. . .

… I read the NYT piece this morning early, while still groggy, and went back for a second, slow pass to see what I was missing. Which was nothing. The Times can be slow to act on egregious matters (maybe John Edwards is a good example) that are right beneath their noses, but they will strive mightily to produce a hint of a whiff of an infraction, especially if it regards someone they simply despise.

So I say to the Times: Die you egg sucking pigs!

Some straight energy talk from Ezra Levant in the Toronto Sun.

An OPEC billionaire has publicly said what everyone long suspected, but just hadn’t heard out loud before: Saudi Arabia doesn’t want the world to develop unconventional sources of oil, like Canada’s oilsands.

Saudi Prince Al-Waleed bin Talal, the world’s 26th richest man, worth more than $19 billion, told CNN he’s worried if oil prices stay around $100 a barrel, the West will look for other sources of oil and Saudi Arabia would lose its dominant position.

“We don’t want the West to go and find alternatives,” he said, “because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives.” Give the sheik full marks for honesty. Saudi Arabia has the West just where they want us. They don’t want us getting any big ideas that would reduce our dependence on his dictatorship, and terrorist states like Iran.

It’s like when the head of Russia’s state-controlled natural gas company, Gazprom, denounced new technologies to produce shale gas, saying he was worried about the safety of “American housewives.” No, Gazprom executives and Vladimir Putin are not concerned about human rights and environmentalism in Russia, let alone the West. They’re concerned about competition that would free America and Europe from reliance on Putin’s natural gas. …

So, how come the blue states suck at educating their kids? The more parsimonious red states are doing better according to  -  Newsweek!  Walter Russell Mead has the story.

When it come to excellence in education, red states rule — at least according to a panel of experts assembled by Tina Brown’s Newsweek.  Using a set of indicators ranging from graduation rate to college admissions and SAT scores, the panel reviewed data from high schools all over the country to find the best public schools in the country.

The results make depressing reading for the teacher unions: the very best public high schools in the country are heavily concentrated in red states.

Three of the nation’s ten best public high schools are in Texas — the no-income tax, right-to-work state that blue model defenders like to characterize as America at its worst.  Florida, another no-income tax, right-to-work state long misgoverned by the evil and rapacious Bush dynasty, has two of the top ten schools.

Newsweek isn’t alone with these shocking results.  Another top public school list, compiled by the Washington Post, was issued in May.  Texas and Florida rank number one and number two on that list’s top ten as well. …

A columnist for the Milwaukee Journal-Sentinel celebrates events in Wisconsin.

So the state’s deficit is fixed, its finances are honest for the first time in about a decade, public services are trimmed but not decimated and no taxpayers were skinned to make it happen. All in all, it’s been a good week for Wisconsin, especially its hard-pressed, middle-class taxpayers.

And, if I might get political, the first six months of the Age of Walker have left conservatism in a surprisingly solid condition in Wisconsin.

You might not know that from the theatrics in Madison – the fringe of tents, the bucket-drummers in the rotunda, the activists telling Progressive magazine it’s time to make the state “ungovernable.”

But that all is precisely theatrics, a show, a tale. The reality is that in our purple battleground of a state, conservative ideas now hold the high ground. Let us count the signs: …

City Journal looks for the perfect GOP candidate.

Having dodged the Trump bullet, the Republican Party is still searching for a candidate who can win. This early in the race, of course, it’s usually hard to spot a winner. How many people would have bet in 2007 that an inexperienced African-American senator could become president? Yet in 2012, it’s clear what a Republican candidate needs to win: he or she must harness the support of the Tea Party without alienating independent voters. Without the enthusiasm of the Tea Party, the candidate cannot energize the Republican base. Without the support of independents, the candidate cannot win a majority in the general election. The midterm elections demonstrated this principle: candidates who could straddle the two groups won, while candidates who couldn’t lost.

The good news is that this isn’t an impossible task. …

And John Tamny says the Media can’t save Barack from the economy he created. 

With the Obama economy limping along thanks in part to the Administration’s policies in favor of extreme dollar weakness, there’s growing speculation as to his re-election chances in 2012. Will a difficult economic situation that includes high levels of unemployment make Obama a one-term president? History says no given the power of incumbency.

Added to that, another popular narrative of late points to an Obama victory owing to the supposed economic illiteracy of the electorate, along with a media that will provide our weakened president with positive media coverage no matter the state of the economy. Of course the problem with this bit of theorizing is that Americans aren’t stupid, and after that, past elections suggest that those same Americans tend to tune out the media.

Ronald Reagan’s two terms in office tell the tale here. As USA Today media reporter Peter Johnson has put it, “Over the course of his campaigns and eight years in office, Ronald Reagan’s press peaked and fell but was always negative. … In his re-election bid in 1984, 91 percent of his coverage was negative.” …

Amity Shlaes with what we might expect from the economy. 

Is our economy headed back into a recession? A look at a past double-dip, the recessions of 1980 and of 1981-1982, suggests we are due. That double-dip also suggests the Federal Reserve should raise interest rates earlier and faster than you might think.

In fact, the 1980s experience points to something horrible: We need a recession to get a true recovery. …

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Robert Gates might become an administration critic according to Alana Goodman.

During an interview with Newsweek today, departing Defense Secretary Robert Gates questioned whether the Obama administration is willing or able to continue America’s leading role in the world, indicating that he may become a thorn in the side for President Obama’s 2012 bid.

“I’ve spent my entire adult life with the United States as a superpower, and one that had no compunction about spending what it took to sustain that position,” Gates told Newsweek. “It didn’t have to look over its shoulder because our economy was so strong. This is a different time.” …

While we’ve been enjoying the story of David Mamet’s conversion, Christopher Hitchens has been fuming. He’s one of our favorites so we’ll give him a look.

… I am writing this review in the same week as I am conducting a rather exhausting exchange with Noam Chomsky in the pages of a small magazine. I have no difficulty in understanding why it is that former liberals and radicals become exasperated with the pieties of the left. I have taught at Berkeley and the New School, and I know what Mamet is on about when he evokes the dull atmosphere of campus correctness. Once or twice, as when he attacks feminists for their silence on Bill Clinton’s sleazy sex life, or points out how sinister it is that we use the word “czar” as a positive term for a political problem-solver, he is unquestionably right, or at least making a solid case. But then he writes: “The BP gulf oil leak . . . was bad. The leak of thousands of classified military documents by Julian Assange on WikiLeaks was good. Why?” This is merely lame, fails to compare like with like, appears unintentionally to be unsure why the gulf leak was “bad” and attempts an irony where none exists.

Irony is one of the elements of tragedy, a subject with which Mamet is much occupied. He has read — perhaps before Glenn Beck’s promotion of it on the air — Friedrich von Hayek’s classic defense of the market, “The Road to Serfdom.” (I would guess he has not read Hayek’s essay “Why I Am Not a Conservative.”) Briefly, Hayek identified what he called “the Tragic View” of the free market: the necessity of making difficult choices between competing goods. Classical economics had already defined this as “opportunity cost,” which is just as accurate but less tear-jerking. We have long known it under other maxims — “to govern is to choose” — or even under folkloric proverbs about having cakes and consuming them. But to Mamet, Hayek is the brilliant corrective to the evil of Franklin Roosevelt, who “dismantled the free market, and, so, the economy,” and shares this dismal record with Nazis, Stalinists and other “Socialists.” More recent collapses and crimes in the private capital sector, and the Bush-Obama rescue that followed, strike him as large steps in the same direction. …

Fresh off his Spring hiatus, David Warren makes a point about laws as a product of morality, not the cause of it. He uses Anthony Weiner to make his point.

As a man with feminist credentials, he is probably against using social media to prey on women. Yet there is no law against it, so what is the problem?

Here, to my view, is the crux of the issue. To the “progressive” mindset, there is nothing wrong with anything until there is a law passed against it, for the law creates morality and ethics, and not vice versa. There is no “natural law,” no antecedent right and wrong, of which human law provides an imperfect expression. “Justice” is, like Brooklyn and Queens, something entirely man-made.

Compare, the incredible media trawl through the e-mail correspondence of Sarah Palin, when governor of Alaska – the purpose of which was to find any instance, in more than 100 kilos of paper printout, in which she had, even unknowingly, contravened some state or federal regulation, however minor. …

… “Legalism” is the word for this very political phenomenon.

Remember when Reagan campaigned for re-election with the slogan ”Morning In America?” Matthew Continetti says the GOP should run against Obama with “Mourning in America.”

Trying to stay upbeat? Avoid the business section. Unemployment stands at 9.1 percent. Growth is narcoleptic. The housing market hasn’t hit bottom. Fears of a Greek default are roiling markets. The deficit is running more than a trillion dollars for the third year in a row and won’t be shrinking anytime soon. A U.S. fiscal crisis may be only a few years (or months) away. President Obama, meanwhile, seems to think our problems would be solved if only we banned ATMs and built solar-powered bullet trains. His “propellerheads”—Geithner, Bernanke, Sperling, et al.—are spinning to the ground. Alert the authorities: Stop these men before they stimulate again.

The Republican presidential candidates have a powerful case to make against the Obama economy. A year ago, on June 17, 2010, the White House kicked off “Recovery Summer” by sending Joe Biden to home weatherization sites across the country. The headline for Timothy Geithner’s August 2, 2010, New York Times op-ed was “Welcome to the Recovery.” Geithner, it turns out, was about as honest with readers as he was with the IRS.

Normally, America goes into overdrive as it exits a recession. This time we’ve been limping along. Why? Because the president is more concerned with tax-and-spend politics than aligning incentives to promote innovation, productivity, efficiency, and debt reduction. Obama’s stimulus failed on its own terms, his health care plan hangs like a sword of Damocles over small business, and his regulatory agencies—from the EPA to the NLRB to the Federal Reserve to the Consumer Financial Protection Bureau—have become economic uncertainty machines. …

NY Post Op-Ed has more on the ATM gaffe.

… “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers,” President Obama told Ann Curry on the “Today” show Tuesday. “You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”

Let’s quickly run through some of the major conceptual errors behind that statement: ATMs and airport check-in kiosks are not new, though persistently crushing levels of unemployment are. Moreover, the number of bank tellers actually has grown over recent decades.

And if we should fear machines for stealing jobs, a notion that economists such as Frédéric Bastiat, Joseph Schumpeter and Henry Hazlitt have been debunking for 200 years, Obama should step right up to the implications of his logic and announce his great bill: the De-Automation Full Employment Act.

Goodbye, electric dishwashers: Manual laborers could be doing your work. Goodbye washing machines, hello washerwomen. Think of the explosion in jobs for messengers that will follow when phones are outlawed. …

Michael Barone has a couple of posts on the gangster government.

If this article by professors at Harvard Law School and Indiana University Business School is correct (hat tip to Paul Caron’s taxprof blog and Glenn Reynolds’s Instapundit), the Treasury acted contrary to law when it ruled that post-bankruptcy General Motors could utilize $45 billion in pre-bankruptcy net operating losses to reduce any corporate income taxes it may owe. The article is entitled “Can the Treasury Exempt Its Own Companies from Tax? The $45 Billion GM NOL Carryforward,” and the authors’ answer is No.

“Treasury solved this problem by issuing a series of “Notices” in which it announced that the law did not apply. On its terms, § 382 states that the NOL limits apply when a firm’s ownership changed. That rule, the Treasury declared, did not apply to itself. Notwithstanding the straightforward and all-inclusive statutory language, GM would be able to continue to use its NOLs in full after the Treasury sold its stock.

The Treasury had no legal or economic justification for these Notices, which applied to Citigroup and AIG as well as to GM. Nonetheless, the Notices largely escaped public attention, though they had the potential to transfer significant wealth to loyal supporters (the UAW). That it could do so illustrates the risk involved in this manipulation. We suggest that Congress give its members standing to challenge such manipulation in court.”

Exempting a company from taxes contrary to law in order to confer benefits on a political ally is an act of gangster government. …

Speaking of gangster government, OC Register and San Fran Chronicle have stories about paradise lost.

The pace of companies moving partly or completely out of California has accelerated in 2011, according to Irvine business relocation expert Joe Vranich.

Through June 16, 129 California companies have moved jobs, work and/or headquarters out of state, says Vranich who has been tracking what he calls “disinvestment events” for three years. That is 60 more since his last round-up April 15.

So far this year, the departures average 5.4 a week, compared to 3.9 a week in 2010 and one a week in 2009, Vranich says.

Separately, Register reporter Mary Ann Milbourn reports that out-of-state recruiters are starting to come after California workers too.

“Our losses are occurring at an accelerated rate,” Vranich says. “Also, no one knows the real level of activity because some companies are not required to file layoff notices with the state because of their small size.

“A conservative estimate is that only one out of five company departures becomes public knowledge,” he adds, “so that means California may suffer more than 1,000 disinvestment events this year.

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Mark Steyn gets us up to speed on the latest hoax.

Last week was a great week for lesbians coming out of the closet – coming out, that is, as middle-aged heterosexual men. On Sunday, Amina Arraf, the young vivacious Syrian lesbian activist whose inspiring blog “A Gay Girl In Damascus” had captured hearts around the world, was revealed to be, in humdrum reality, one Tom MacMaster, a 40-year-old college student from Georgia. The following day, Paula Brooks, the lesbian activist and founder of the website LezGetReal, was revealed to be one Bill Graber, a 58-year-old construction worker from Ohio. In their capacity as leading lesbians in the Sapphic blogosphere, “Miss Brooks” and “Miss Arraf” were colleagues. “Amina” had posted at LezGetReal before starting “A Gay Girl In Damascus.” As one lesbian to another, they got along swimmingly. …

… The pretty young lesbian Muslim was exposed as a portly 40-year-old male infidel at the University of Edinburgh with the help of “Paula Brooks,” shortly before “Paula” was exposed as a 58-year-old male construction worker from Ohio. “He would have got away with it if I hadn’t been such a stand-up guy,” the second phony lesbian said of the first phony lesbian. As to why stand-up guys are posing as sit-down lesbians, “Paula” told the Associated Press that “he felt he would not be taken seriously as a straight man.”

“He got that one right,” sneered the Toronto gay magazine Xtra.

Indeed. A century ago, a British Army officer went to the Levant and reinvented himself as Lawrence of Arabia. Now a middle-aged American male college student goes to the Internet and reinvents himself as Florence of Arabia. We have become familiar in recent years with the booming literary genre of the fake memoir, to which Oprah’s late Book Club was distressingly partial. …

… From CNN to The Guardian to Bianca Jagger to legions of Tweeters, Western liberalism fell for a ludicrous hoax. Why?

Because they wanted to. It would be nice if “Amina Arraf” existed. As niche constituencies go, we could use more hijab-wearing Muslim lesbian militants and fewer fortysomething male Western deadbeat college students. But the latter is a real and pathetically numerous demographic, and the former is a fiction – a fantasy for Western liberals, who think that in the multicultural society the nice gay couple at 27 Rainbow Avenue can live next door to the big bearded imam with four child brides at No. 29 and gambol and frolic in admiration of each other’s diversity. …

… You can learn a lot from the deceptions a society chooses to swallow. “Amina Arraf” was a fiction who fit the liberal worldview. That’s because the liberal worldview is a fiction.

While Mark was busy, the village idiots of Montgomery County, MD were providing him with a subject for next week’s column. They put the squeeze on a some kids’ lemonade stand.

Lemonade stands are supposed to come with lessons — about camaraderie, teamwork, entre­pre­neur­ship.

Or, if you are in an elegant swath of Montgomery County, outside the gates of Congressional Country Club and the U.S. Open, the all-American rite of passage might instead become a master class in government overreach and how officials can score some truly atrocious press.

But is there any extra credit for the complete backpedal?

First, the basics: On Thursday, the first day of the Open, a cameraman from WUSA (Channel 9) captured a county inspector attempting to shut down a roadside stand manned by a half-dozen adorable children. They didn’t have a vendor’s permit, the inspector informed the moms. The result? A $500 ticket. …

The president who thinks we need to know his opinions on a never-ending variety of subjects has been curiously quiet on a very important one. WSJ editors tell the story of the NLRB v Boeing.

Did you hear what President Obama said about the National Labor Relations Board’s complaint against Boeing Co.? We didn’t either.

Mr. Obama has been touting his plan to double the country’s export growth by 2015, thereby creating two million new jobs. Now one of the country’s foremost exporters is under assault for seeking a lower-cost venue for manufacturing to stay globally competitive, and the President has had nothing to say. …

As far as the recent “joke” from the president about the lack of shovel ready jobs, Jonah Goldberg reminds us;

… Obama has pretty much said the same thing several times. In a New York Times Magazine profile last October, the president admitted he had to learn the hard way that there’s “no such thing as shovel-ready projects.”

This is a staggering indictment of the president, the team he assembled, and the journalists who accepted this administration’s arrogant assertions that they knew exactly what to do, how to do it, and what would happen as a result. Remember, this is the administration that to this day insists it is “pragmatic” and simply cares about “what works.” 

“I think we can get a lot of work done fast,” President-elect Obama said shortly after a gathering of governors in December 2008. “All of them have projects that are shovel-ready, that are going to require us to get the money out the door.”

Jared Bernstein, economic adviser to Vice President Joe Biden — the White House’s point man on the stimulus — said in a cable-news interview in February 2009: “I think what people need to understand is that this really isn’t rocket science.” Spend a bundle on public works projects and — boom — you get a lot of people working.  

They were wrong. …

Points and Figures blogger says Iceland let the stupid banks fail and the economy is better off for it.

… Iceland didn’t rescue its banks.  It couldn’t afford to do it.  So, they went bust. Iceland looked like it was going down a path of permanent financial armageddon. However, Iceland is in better financial shape than the rest of Europe today. …

More on this from a WSJ Op-Ed.

Iceland’s government last week raised $1 billion through an issue of five-year bonds at yields just above 3%. This successful return to private debt markets presents the best evidence yet that financiers approve of Reykjavik’s handling of the financial crisis and think the country is on the road to recovery. Therein lies a lesson for the rest of Europe.

Three years ago, Iceland forced its over-leveraged financial sector into a painful debt restructuring instead of bailing out its banks. The government had no other choice: Icelandic banks’ assets totaled roughly 1,000% of GDP, and in the world’s smallest currency area, no less. The central bank could not take on the role of lender of last resort without igniting a currency crisis.

Critics dubbed this response disastrous, and Iceland served as the cautionary tale of an “Icarus economy” whose banks had grown too big to save. Today, though Iceland’s banking system defaulted, its government remains solvent, with debt levels close to the European average of between 80% and 90% of GDP.

Iceland’s luck was that it did not qualify for a bailout. …

Michael Barone has more, writing that governments always try to save the past, while free markets look to the future.

… With the benefit of hindsight, it seems that our leaders, in both the Bush and the Obama administrations, responded to crises and challenges all too often with measures that attempted to revive the old pre-financial crisis economy rather than with policies that would allow a new economy to grow.

As in Paulson’s comment, the thinking seems to have been that if we can just get things back in place then we can attack the underlying problems.

Such was the theory behind the now seemingly puny stimulus package agreed to by George W. Bush and Democratic congressional leaders in early 2008. And behind the Federal Reserve’s rescue package for Bear Stearns in March 2008.

It was behind the argument that Paulson used to persuade Congress to pass the $700 billion Troubled Asset Relief Program package in October 2008. He said he’d use the money to buy toxic mortgage-backed securities from the banks, but then decided to lend the banks tranches of $25 billion instead.

The Obama Democrats’ February 2009 stimulus package doled out one-third of its $787 billion to state and local governments so that public-sector employees (and union members) would not lose their jobs as so many private-sector employees were. That worked for a while but did not prevent painful cuts and layoffs later.

Then there were the various mortgage forbearance programs, designed to prevent foreclosures. Precious few homeowners took advantage of them, and many who did ended up losing their houses anyway.

And of course there was cash for clunkers, which increased car sales in the summer only to see them decline in the fall. Hundreds of millions were spent, but with no permanent effect except to increase used-car prices because clunkers traded in had to be junked.

Decision makers have responded as if they were facing liquidity crises (we don’t have enough cash to pay off debts immediately) instead of solvency crises (we will never be able to pay off these debts). Too often pain has not been prevented, but just postponed — and prolonged. …

David Brooks discovers Reckless Endangerment.

Most political scandals involve people who are not really enmeshed in the Washington establishment — people like Representative Anthony Weiner or Representative William Jefferson. Most scandals involve spectacularly bad behavior — like posting pictures of your private parts on the Web or hiding $90,000 in cash in your freezer.

But the most devastating scandal in recent history involved dozens of the most respected members of the Washington establishment. Their behavior was not out of the ordinary by any means.

For that reason, the Fannie Mae scandal is the most important political scandal since Watergate. It helped sink the American economy. It has cost taxpayers about $153 billion, so far. It indicts patterns of behavior that are considered normal and respectable in Washington.

The Fannie Mae scandal has gotten relatively little media attention because many of the participants are still powerful, admired and well connected. But Gretchen Morgenson, a Times colleague, and the financial analyst Joshua Rosner have rectified that, writing “Reckless Endangerment,” a brave book that exposes the affair in clear and gripping form. …

Brooks closed with some unfortunate thoughts which were noted by Instapundit.

Reader Jody Green writes:

“I read this rather surprising article by Mr. Brooks and thought it amazing that he might call out Michelle Bachmann as a possible star on the side of good governance but he ended with the word “Pungent” to describe her. A hard working, self made, seriously altruistic (24 foster kids), intelligent and patriotic American citizen who questions the horrid mess that the ruling class has made of the Federal Government, must be “Pungent” if she accurately questions the Ruling class and it’s corruption. Please bring on the “Pungent” horde. Am I reading this wrong?”

Alas, I don’t think so. She may be necessary, and Brooks may even realize that she’s necessary, but there’s still the NOKD factor. (Not our kind, Dear)

Mark Thiessen calls our attention to the headline writers of the NY Post.

The New York Post is famous for its page one headlines, such as the classic “Headless Body in Topless Bar” and the understated “UN Meets” (with a photo of weasels sitting in the French and German chairs of the UN Security Council before the Iraq war). But the Anthony Weiner scandal has been an unprecedented headline bonanza for the New York tabloid. … 

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Craig Pirrong has an unbelievable quote from the supposedly brilliant president. It would be funny, except that the president’s economic ignorance has cause so much damage for so many.

The annals of presidential idiocy on economics could fill libraries, but Barack Obama deserves pride of place for this gem:

‘ President Obama explained to NBC News that the reason companies aren’t hiring is not because of his policies, it’s because the economy is so automated. … “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” ‘

Read it.  Savor it.  Breathe deep the inanity.

Where to begin?…

Growing use of capital makes individuals more productive, which increases their standard of living…Yes, automating some functions eliminates some functions…But that frees up labor and human capital that can be used to do other things, and if labor markets are allowed to function, that’s just what will happen.  People will flow to their highest value occupations.  With greater technology and more capital, the same number of people can make more stuff, meaning there is more stuff per person.  …

Obama, on the other hand, seems to believe that there is only a certain amount of stuff to be produced, and if each person becomes more productive, that means fewer people are required to produce it.  That gets an F- in Econ 101. …

In the Daily Caller, Jim Treacher makes fun of the president’s comment. He starts with the title that Obama believes ATMs cause unemployment.

No, really, he does! That’s not a joke headline. He said it out loud in front of the whole world and everything. On yesterday’s Today Show, Obama told Ann Curry his brilliant theory about why the economy hasn’t been doing so well since he became president: “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.” That’s right, the Smartest President Ever just said innovation is a job-killer. His next step, presumably, will be to demonize the Republicans for making such deep cuts to the Department of Buggy Whips. Hey, why is the President of the United States blaming machines for unemployment … on TELEVISION? Doesn’t he care about all those out-of-work town criers?

In the Corner, Peter Kirsanow explains Obama’s logic, starting with the problem with ATMs…

. . . is not so much that they destroy jobs, but that in at least 50 of 57 states you can’t conduct transactions in Austrian, making it difficult to withdraw enough cash to spread the wealth around to Midwesterners, who then become bitter and cling to guns and religion and antipathy toward people who aren’t like your doctor, who you can keep (if you like him) but you probably won’t because for extra cash he unnecessarily performs tonsillectomies and amputates the feet of people from Kansas, where a while back 10,000 were killed by a tornado that also air-raided villages and killed civilians in Afghanistan, from which we need to begin withdrawing troops by July so we can use the funds to save or create jobs for people who don’t use air pressure gauges to keep the tires on their cash-for-clunkers car properly inflated, requiring them to buy more gas than they otherwise would at $3.84 a gallon and thereby reducing their disposable income and causing them not to buy consumer products, resulting in slower GDP growth that can only be jumpstarted by another round of stimulus spending so the economy won’t go into a double-dip recession that would result in layoffs and a higher unemployment rate than we had even after the oil spill in the Gulf of Mexico that everyone knows was George Bush’s fault.

Economics is hard.

Newsbusters notes the media will take a pass on telling us how dumb he is.

…Curry moved on to another subject without addressing the faux pas, but she’s not the only journalist to gloss over the story. Despite the fact that the automated teller machine was invented decades before Obama took office, a Lexis search revealed that not a single major news network, including ABC, CBS, NBC, CNN, FNC, and MSNBC, has covered the remark on air.

…Contrary to the president’s assertion that ATMs contribute to nagging unemployment, the Bureau of Labor Statistics (BLS) predicted that teller jobs would grow about 6 percent from 2008 to 2016.

In addition, NRO’s Jonah Goldberg pointed to statistics indicating expansive growth in banking jobs since the self-service banking era began in 1985: “At the dawn of the self-service banking age in 1985, for example, the United States had 60,000 automated teller machines and 485,000 bank tellers. In 2002, the United States had 352,000 ATMs – and 527,000 bank tellers.” …

In Cato at Liberty, Daniel Mitchell explains that recessions are usually followed by periods of accelerated growth. Not this time.

…The key question, of course, is why growth has been anemic, resulting in (what seems to be) a permanent loss of output. In his presentation, Lucas warns that bad government policy is playing a big role. He says that “the problem is government is doing too much,” and he specifically highlights the “likelihood of much higher taxes, focused on ‘the rich’” and a “large increase in the role of government” in the healthcare sector.

In his conclusion, Professor Lucas is not overly optimistic about recovering lost output. He doesn’t make any flamboyant claims, but he does note that “European economies have larger government role and 20-30% lower income level than US.”

The obvious connection, as I’ve pointed out on many occasions, is that America is becoming a European-style welfare state and it is unavoidable that we will suffer from European-style economic malaise.

P.S. It should be noted that America’s anemic economic performance in recent years is not solely Obama’s fault. As the White House repeatedly points out, he inherited a downturn. That is completely accurate. My complaint, however, is that Obama promised hope and change but instead has exacerbated the big government policies of his predecessor.

The Investor’s Business Daily editors explain the ATM issue so simply, even a president could understand.

…ATMs and automatic check-ins were invented since the stimulus? They weren’t around when the country was enjoying 4.5% unemployment under George W. Bush? It’s a socialist fairy tale to blame automation for killing jobs; it’s always brought new jobs because it lets businesses expand faster.

In 1963, AFL-CIO president George Meany similarly called automation “a curse” and “a real threat” that “could bring us to national catastrophe.” But automation reduced the price of any and every type of manufactured good, and made more wealth available for new projects and new jobs. Has the U.S. economy of the last half-century been a “catastrophe”? …

Charles Krauthammer discusses how the president is siding with unions in economic issues, which hurts the economy, but enriches unions and Dems.

…One obvious way to increase exports is through free-trade agreements. But unions don’t like them. No surprise then that for two years Obama has been sitting on three free-trade agreements — with Colombia, Panama and South Korea — already negotiated by his predecessor.

Under the pressure of dire economic conditions and of the consequences of stiffing three valued allies, Obama appeared ready to relent — only to put up a last-minute roadblock. He’s demanding an expansion of Trade Adjustment Assistance — taxpayer money (beyond unemployment compensation) given to workers displaced by foreign competition, something denied to Americans rendered unemployed by domestic competition. It’s an idea of dubious fairness but nicely designed to hold up ratification, while placing blame on Republican heartlessness rather than on political sabotage by Democrats beholden to unions for the millions they pour into Democratic coffers. (A deal reportedly may be near. But the years of delay have been costly. Colombia, for example, is negotiating broad trade deals with China, including a possible Chinese-built railway to bypass the Panama Canal.)

Nothing new here. In 2009, Obama pushed through a federally run, questionably legal, bankruptcy for the auto companies that robbed first-in-line creditors in order to bail out the United Auto Workers. Elsewhere, Delta Air Lines workers have voted four times to reject unionization. A federal agency, naturally, is investigating…

John Fund looks at one of the Liberals many embarrassments: DNC Chair Debbie Wasserman Schultz.

…”We own the economy,” she said this week at a breakfast sponsored by Politico.com. “We own the beginning of the turnaround, and we want to make sure that we continue that pace of recovery.” The economy, she said, “has turned around” since President Obama took office, leaving many reporters who had asked her about rising unemployment numbers scratching their heads in puzzlement. “I’ve really seen such a velocity of spin with so little heft behind it,” one told me.

But that’s only the beginning. Last week she said that Republicans “want to literally drag us all the way back to Jim Crow laws and literally and very transparently block access to the polls to voters who are more likely to vote for Democratic candidates than Republican candidates. And it’s nothing short of that blatant.” Their crime? Republican governors have recently signed laws that require voters to show photo ID at the polls, a position backed by more than 80% of Americans in many published surveys.

The week before that statement, Ms. Wasserman Schultz announced that the GOP was engaged in “a war on women” and for good measure were backing a Medicare reform plan that would allow insurance companies to “throw you to the wolves” and “deny you coverage and drop you for pre-existing conditions.” This prompted FactCheck.org to declare her statements on Medicare “simply wrong.” …

Colin Carter and Henry Miller explain the insanity of ethanol payoffs, in Forbes.

Imagine if the U.S. Congress were to mandate subsidies for the dumping of 40% of the U.S. corn crop into the ocean every year. That would certainly boost prices, which would be a boon for corn farmers and a menace to everyone else. Such a program would lead to widespread inflation, more hunger and political instability in poor countries around the world, and slower global economic growth.

This scenario may sound far-fetched, but it captures the essence of current U.S. subsidies for corn-based ethanol — except that in some ways it would be less harmful than the current subsidy scheme.

The price of corn is pivotal in the world food equation, and food markets are on edge because U.S. corn stocks are plummeting. In fact, the U.S. Department of Agriculture recently forecast that corn inventories could dwindle to 5% of annual use before the 2011 harvest is brought in, the smallest fraction since the Great Depression.

The drawdown of corn inventories is due to huge U.S. government subsidies of corn-derived ethanol. These create an artificial market for corn and remove supply from the food market. Spurred by the corn shortage, the World Bank’s food price index is up about 30% in the past year, which has tipped millions of people in the developing world back into poverty and malnutrition.

…Roughly 40% of the U.S corn crop was diverted to the production of ethanol for gasoline in 2010, up from 20% in 2006. The sharp increase was due to government mandates on ethanol use, the so-called Renewable Fuels Standard. And just a few months ago, the government raised the allowable ethanol blend from 10% to 15%. Citizens are told, in effect, that they must burn this inferior, engine-damaging fuel in their cars, reducing their gas mileage at a time when gasoline prices hover around $4 per gallon. …

The WSJ editors report on what may finally be the beginning of the end of ethanol payoffs.

…The 73-27 vote on an amendment sponsored by California Democrat Dianne Feinstein—33 Republicans, 38 Democrats and both independents in favor—was the kind of supermajority that usually waves through new subsidies for the fuel made from blending corn and tax dollars. Ending the annual $6 billion subsidy, along with the tariff on foreign ethanol, marks the first time in memory that the ethanol lobby has lost a major vote, as the left-right coalition that wants to eliminate its subsidies and mandates continues to grow.

For now, this victory for energy and fiscal sanity is incomplete, because the underlying bill—a new engine for green subsidies—is unlikely to pass the Senate, let alone the House. Still, ethanol’s decades on the public dole appear to be numbered. The 27 “nays” were essentially the Farm Belt contingent, with the disappointing addition of Ohio Republican Rob Portman.

The House also voted yesterday, 283-128, to bar public spending on the special blender pumps and tanks necessary for higher concentrations of ethanol. This is significant because the ethanol lobby has been counting on the pump and tank subsidy to replace the tax credits and tariffs. The Senate defeated a similar amendment from John McCain yesterday, so House Members will need to be on the lookout for this to appear at 3 a.m. in some “must have” legislation. …

Ed Morrissey has another scandal involving former Representative Weiner.

…The New York Daily News did a little investigating after seeing expired tags on his Nissan Pathfinder, and discovered that not only has the car not been registered, but the plates on them belong to a different car (via JWF)…

…As abuses of power go, this one is decidedly tamer than the scandal surrounding Weiner the last couple of weeks.  Still, as one investigator told the NYDN, swapping plates is something one would normally expect of a criminal, not a member of Congress.  Or is that a redundancy?

This new peek into Weiner’s approach to responsibility may lend itself less to double entendres and hilarious jokes, but it may also be more revealing.  Until now, Weiner earned $174,000 in annual salary as a Congressman.  His wife earns almost the same amount working for Hillary Clinton, putting their combined household income at a figure exceeding $325,000 per year.  Weiner has agitated for higher taxes and more government regulation, but has apparently evaded his responsibility to pay for fees owed the state of New York for the last four years — even switching plates to save himself a few hundred dollars. …

In the Spectator, UK, James Delingpole sings the praises of Pickerhead’s alma mater.

…Let me give you one example: a place called Hillsdale College, Michigan. It’s the only 100 per cent privately funded university in the whole of the US…

…these people look after Hillsdale, to the tune of perhaps $50 million a year. Why do they do it? Because besides being a first-class university, Hillsdale is also a last bastion in that battle to save civilisation. And if Hillsdale is Helm’s Deep, then the orcish hordes are the forces of progressivism represented by the state and federal government.

Every year, Hillsdale loses out on around $800,000 in local government funding and perhaps $10 million in national government funding as a result of its principled stance against arbitrary political authority. The resistance began in the 1970s when the Department of Health, Education and Welfare began sending in the men with clipboards to monitor whether Hillsdale was fulfilling the ‘correct’ admissions criteria with regard to race and gender. By the mid-1980s — and one lost Supreme Court case later — Hillsdale had had enough. It would risk financial ruin by going totally private.

Lest you leap to the conclusion that this is an exclusive Wasp white-flight ghetto protecting its own, consider Hillsdale’s history. Founded in 1844, it was the first college in America to have a charter declaring itself open to all students ‘irrespective of nation, color or sex’. In 1956, it lived up to these principles when its undefeated football team refused to play in the Tangerine Bowl after game officials said Hillsdale’s black players would not be allowed to join their white team mates on the field. Hillsdale has no problem with women or ethnic minorities. What it does very much have a problem with is the injustice of state-imposed reverse discrimination. …

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John Fund introduces today’s topic – the media’s Palin obsession and where it has led.

Call it the stalking of Sarah Palin. The former governor of Alaska has been an object of fascination and derision for many reporters ever since she burst onto the national stage in 2008. But the level of continued interest is nonetheless stunning.

Three years ago the left-wing magazine Mother Jones requested Ms. Palin’s gubernatorial emails during the 2008 election. After lengthy delays they were released last Friday in Juneau. The fact that you heard almost nothing about them is because there is almost nothing salacious or scandalous in them. As Britain’s Daily Telegraph noted, “the trove of more than 13,000 emails detailing almost every aspect of Sarah Palin’s governorship of Alaska . . . paints a picture of her as an idealistic, conscientious, humorous and humane woman slightly bemused by the world of politics.”

But the buildup to their release was treated like the prelude to the release of the Pentagon Papers. David Corn of Mother Jones salivated at the prospect of what might be in the 24,199 pages being released. “I have a reporter in Juneau who will grab our set of documents and scan the docs for us in the DC bureau,” he wrote. “I and the eight reporters in my bureau will then pore over these pages. Mother Jones, msnbc.com, and ProPublica will be putting up a searchable online database — very quickly — which will allow everybody (other reporters, readers, and GOP opposition researchers) to join in.”

Other media outlets joined in. …

Charles Krauthammer has a term for this.

… You don’t send it out to strangers to look for gotcha stuff…. And that’s exactly what the mainstream media are doing, and I think it is utterly egregious. …

… Palin Derangement Syndrome. That’s what it is.

Steve Hayward in The Corner.

Increasingly I think Sarah Palin is a real political genius. How else to appreciate how the media have made utter fools of themselves — again — gorging on her e-mail trove like it was the Nixon Watergate tapes or the Starr Whitewater/Lewinski report. The only thing that would have been better is if she’d somehow contrived to delay the release of the e-mail trove until January, when the media would have had to endure the long night and cold temperatures of an Alaska winter.  

Toby Harnden of the Daily Telegraph gets the matter right in his column Saturday.

John Fund, Steve Hayward, and later Andrew Malcolm all point to a Telegraph,UK article by Toby Harden. Here it is. 

 13,000 emails detailing almost every aspect of Sarah Palin’s governorship of Alaska, released late on Friday, paints a picture of her as an idealistic, conscientious, humorous and humane woman slightly bemused by the world of politics.

One can only assume that the Left-leaning editors who dispatched teams of reporters to remote Juneau, the Alaskan capital, to pore over the emails in the hope of digging up a scandal are now viewing the result as a rather poor return on their considerable investment.

If anything, Mrs Palin seems likely to emerge from the scrutiny of the 24,000 pages, contained in six boxes and weighing 275 pounds, with her reputation considerably enhanced. …

…To an extent, the emails remind Americans of the person they saw take the state at the Republican National Convention in Minnesota nearly three years ago – refreshing, plain-speaking, open and uncomplicated. …

Peter Kirsanow lists the stories that are less important than the Palin emails.

? China is about to launch its first aircraft carrier.

? A RAND nuclear expert calculates that within two months, Iran will have enough weapons-grade uranium to manufacture a nuclear weapon.

? An analysis of Bureau of Labor Statistics data shows that if the number of people looking for work today were the same as the number when President Obama took office, the reported unemployment rate for May would be 11 percent rather than 9.1 percent.

? Hearings are beginning in the House on allegations that the Bureau of Alcohol Tobacco and Firearms knowingly allowed criminal suspects to purchase weapons and smuggle them into Mexico for Mexican drug cartels.

? The president is creating yet another commission — this time to cut government waste.

Matt Welch, for CNN, discusses how the MSM disregard their professional duties to follow their liberal bias.

…Three weeks ago, the journalism navel-gazing community was abuzz over an academic study of more than 700 news articles and 20 network news segments from 2009 that addressed a single controversial claim of the health care reform debate.

Was it President Obama’s oft-repeated whopper that he was nobly pushing the reform rock up the hill despite the concentrated efforts of health care“special interests?” Was it his oft-repeated promise that “If you like your health care plan, you will be able to keep your health care plan,” something that is getting even less true by the minute? Was it the way Obama and the Democrats brazenly gamed and misrepresented the Congressional Budget Office’s price-tag scoring of the bill?

No. The cause for Obamacare-coverage reconsideration was not the truth-stretching claims made by a president seeking to radically reshape an important aspect of American life, but rather the Facebook commentary of … Sarah Palin. “In more than 60 percent of the cases,” the authors found, “it’s obvious that newspapers abstained from calling [Palin's] death panels claim false.” Horrors.

There is no shortage of politicians deserving to have their e-mails combed through, no dearth of urgent stories that could benefit from the kind of journalistic enthusiasm we saw Friday afternoon. …

We have a few of the opinions NY Times readers posted.

Journ-O-Lism hard at work.
Could you be any more contemptible, more bereft of integrity, more loathsomely propagandist? More intellectually dishonest? More hypocritical?
Absolute sellout hackery.

So jobs at McDonalds and Sarah Palin Investigations are the President’s plan to rescue us from unemployment?

I’m not a fan of Palin’s and I’m not a hater of Obama’s, but this is just plain pathetic. If you’re going to enlist your supposedly more-detail-oriented-and-investigatively-gifted-than-thou readers to do your work for you, please do it for any number of newsworthy stories that you aren’t currently giving enough attention to. I’m disgusted that anyone even thought this was a good idea.

The New York Times are just using the conditions of our economy to their benefit. This is a great idea! They know that because of Obama, there are so many people out of work with nothing to do, they can have thousands upon thousands of people doing their work for free. Great example of another Obama success story! Unemployment rate helps the NYT save money!

Wow – anyone you brings on this much hate from the NYtimes must be of great value!
I believe I just fell in love with Sarah!
Thanks!
You go girl!

NY Post editors weigh in.

Could Big Media look any dumber?

The all-points-bulletin attention that national media organizations gave to the release last week of official e-mails from Sarah Palin’s tenure as Alaska’s governor sure backfired. Not only was Palin not discredited by the emails, but they exposed to the public a competent leader and a rather decent human being. Imagine the disappointment of The New York Times, The Washington Post, the Los Angeles Times and other outlets.

To help sift through 24,000 pages of e-mails, coughed up via freedom-of-information requests, the publications recruited readers to wade through the pages online, in search of embarrassing tidbits. This, in addition to the teams of reporters they sent. It all yielded precious little.

A governor who tried to keep spending under control and taxes low? Simply shocking. …

Here’s what Jon Stewart thinks of the media’s obsession.

We close with a post from Anthony Malcolm in which he shows us a Palin communiqué that surfaced during the search. It is her announcement to family, friends and interested parties of the forthcoming arrival of their son Trig. This was where they told of his Down’s Syndrome. It is written as if it was God’s explanation of why this child was joining this family. The letter is a lovely example of abiding faith.

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Walter Russell Mead thinks the story of the real estate boom, bust, and great recession is finally being told. He reviews a new book that came out of the belly of the beast.  

Democrats, watch out.

The Republican Party and especially its Tea Party wing have just acquired a new weapon of mass destruction — and it has nothing to do with any of Congressman Wiener’s rogue body parts.  If they deploy this weapon effectively in the next election cycle — a big if — then they have the biggest opportunity to move the country rightward since Ronald Reagan took the oath of office back in 1981.

The Tea Party WMD stockpile is currently stored in book form:  Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. By Gretchen Morgenson, one of America’s best business journalists who is currently at The New York Times, and noted financial analyst Joshua Rosner, Reckless Endangerment gives the best available account of how the growing chaos in the mortgage and personal finance markets and the rampant bundling of dubious loans into exotically toxic securities plunged the world, and millions of American families, into the gravest financial crisis since World War Two. It is gripping reading as well, and its explanations are clear enough that readers without any background in finance will have no trouble following the plot.  The villains?  An unholy alliance between Wall Street, the Democratic establishment, community organizing groups like ACORN and La Raza, and politicians like Barney Frank, Nancy Pelosi and Henry Cisneros.  (Frank got a cushy job for a lover, Pelosi got a job and layoff protection for a son, Cisneros apparently got a license to mint money bilking Mexican-Americans of their life savings in cheesy housing developments.)

If the GOP can make this narrative mainstream, and put this picture into the heads of voters nationwide, the Democrats are toast.  The party will have to reinvent itself (or as often happens in American politics, be rescued by equally stupid Republican missteps) before it can flourish.

If Morgenstern and Rosner are to be believed, the American dream didn’t die of old age; it was murdered and most of the fingerprints on the corpse come from Democratic insiders.  Democratic power brokers stoked the housing bubble and turned a blind eye to the increasingly rampant corruption and incompetence at Fannie Mae and the associated predatory lenders who sheltered under its umbrella; core Democratic ideas may well be at fault.

This is catnip to Republicans, arsenic to Dems.  If Morgenson and Rosner are right, there is someone the American people can blame for our current economic woes and it is exactly the cast of characters that a lot of Americans love to hate.  Big government, affirmative action and influence peddling among Democratic insiders came within inches of smashing the US economy. …

… The story also undercuts what little is left of the credibility and the moral authority of the American establishment.  What is especially shocking in this story is that the higher up and more powerful people are usually the most venal and corrupt.  Low level researchers and bureaucrats are constantly raising questions and preparing devastating reports that expose the flawed premises behind Fannie Mae’s policies.  They are being constantly slapped down by the well connected and the well paid.  The American establishment does not have the necessary moral strength and intellectual acuity to run the affairs of this country; Tea Party believers will find much in this book that confirms their worst fears.

Republicans of course have a few financial scandals of their own that Democrats can take out and rattle.  But because Fanniegate offers a clear storyline, identifiable villains linked to specific disasters that have hit tens of millions of Americans in the pocketbook, and is overwhelming a story of Democratic abuses of Democratic ideas, it is potentially a game changing event.  It is also an issue that a GOP candidate for the nomination can use to break away from the field; it is an issue a contender could ride all the way to the White House.

Paul Krugman once told me that he thought that Enron would have a greater impact on American politics than 9/11.  He was wrong about that scandal, but if the GOP plays its cards right, Fanniegate could push this country into a new political era.

Mead continues the thought with a post about the “jumping of the shark” by our government.

In my last post, I wrote about “Fanniegate“, the scandalous goings on by well connected Democrats that trashed the nation’s financial system.  It was not that Republicans didn’t join the fun or that Republican malefactors of great wealth weren’t abusing the public trust in other ways.  The moral and intellectual meltdown of the American elite is a robustly bipartisan affair and there is plenty of mud to throw at all sides.

But Fannie Mae represents a special problem for the Democratic Party and Democratic ideas.  It is not just a vitally important institution led by prominent Democratic figures and part of a broader Democratic patronage network; Fannie Mae is one of the original New Deal institutions and the vision it was intended to serve stands at the heart of the concerns of the Democratic Party of the 20th century.

The fall of Fannie Mae is bigger than just another politicos run wild scandal.  It stands as one of several signs that our current way of life is reaching its limits and that big changes are on the horizon.  The Fanniegate debacle tells us that the progressive ideal is in the process of jumping the shark.

Jumping the shark, as many readers know, is an expression from the wonderful world of TV.  When the original premise of a show has gone stale, producers try to recapture audience interest by putting familiar characters in outlandish settings where strange things happen to them — notoriously, when Fonzie literally jumped over a shark as Happy Days moved into its sunset years.  When something jumps the shark, the death spiral has become irretrievable; the show has nowhere to go but down.

The progressive ideal of the last 100 years is reaching that point. …

… The fierce commitment of progressive lobbies today to dysfunctional institutions and programs has brought matters to a crisis stage; the progressive legacy is morphing from white elephant to shark.  Fierce attacks on anyone seeking to reform dysfunctional institutions combine with unreasoning devotion to unsustainable entitlements.  “Progressives” today are too often grimly determined to achieve two incompatible ends: an indefinite expansion of entitlements and benefits on the one hand — and the preservation and even the extension of inefficient organizations and methods on the other.   Everyone must have a college education, but the archaic and inefficient organization of universities cannot be touched.  Public services must be vastly expanded, but every effort to rein in pensions and benefits for government employees, or to trim the size of the public labor force through greater efficiency, must be fought to the bitter end.

Unfortunately, the process doesn’t stop here.  When enough progressive programs have become both unsustainable and untouchable, we move to the final stage.  It is bad enough when a government program becomes a shark; it is much, much worse when a social paradigm as a whole jumps past the shark stage.  A cluster of unsustainable but untouchable policies and institutions sooner or later reaches the point when it no longer threatens the country with ruin at some indefinite point in the future: imminent ruin stares us direct in the face. …

… We cannot throw away the hopes with which we have been entrusted in a futile effort to sustain insupportable programs under the shadow of bankruptcy and collapse.

We are approaching the time when the false promises can no longer be sustained.  There is a little time left.  We have not, I think, quite jumped the shark yet.  Reform is still possible, though the great white sharks thrashing around our boat are formidable — and hungry.

We can still act to conserve the essential accomplishments of the progressive era while preparing to move beyond it.  But only aggressive and accelerating reform can make that happen.  It needs to begin soon.  The money is running out. …

… We must impose our will on the fiscal chaos before the chaos works its will upon us.

The American government must not jump the shark.

We have three reviews of the book from mainstreamers. Washington Post is first.

In “Reckless Endangerment,” Gretchen Morgenson and Joshua Rosner argue that cozy connections between government and the financial industry were the primary cause of the financial crisis. In a series of clearly written narratives with many names, dates and figures, they show that government officials took actions that benefited well-connected individuals, who in turn helped the government officials. This mutual support system thwarted good economic policies and encouraged reckless ones. It thereby brought on the crisis, sending the economy into a tailspin.

While many economists — including this reviewer — have argued that government actions caused the crisis, Morgenson and Rosner use their investigative skills to dig down and explain why those actions were taken. To avoid reckless policies in the future, we need to understand their causes, and the authors’ identification of government-industry links deserves careful consideration by anyone interested in improving the economy.

The book focuses on two agencies of government, Fannie Mae and the Federal Reserve. The mutual support system is better explained and documented in the case of Fannie, the government-sponsored enterprise that supported the home mortgage market by buying mortgages and packaging them into marketable securities which it then guaranteed and sold to investors. The federal government supported Fannie Mae — and the other large government-sponsored enterprise, Freddie Mac — by implicitly backing up those guarantees and by providing favorable regulatory treatment and protection from competition. These benefits enabled Fannie to rake in excess profits — $2 billion in excess, according to a 1995 study by the Congressional Budget Office. …

The Financial Times.

… Morgenson and Rosner are particularly critical of James A. Johnson, the long-serving chief executive of Fannie Mae and an ambitious Washington operative who aspired to be Treasury secretary. Morgenson des­cribes Johnson as the architect of Fannie Mae’s drive to become “the largest and most powerful financial institution in the world” and then cites numerous examples of how he used his political connections to advance Fan­nie’s – and his own – agendas.

Although Johnson left Fannie in 1998, by the time it failed in 2008, Morgenson claims, “Fannie Mae bec­ame the quintessential ex­ample of a company whose risk-taking allowed its executives to amass great wealth. But when the gambles went awry, the taxpayers had to foot the bill.” Although the authors say they tried for five months to interview him, Johnson apparently never responded to their requests.

The authors’ arguments are powerful, drawn from decades of Rosner’s res­earch into the housing market, the GSEs and the risks created by a combination of a relentless push for homeownership by presidents Clinton and Bush, and by Federal Reserve chairman Alan Greenspan’s decision after the terror attacks on September 11 2001 to lower interest rates dramatically.

Among the many others whose record is challenged by the authors is Barney Frank …

The NY Times gave it to Robert B. Reich to review.

It’s hardly news that the near meltdown of America’s financial system enriched a few at the expense of the rest of us. Who’s responsible? The recent report of the Financial Crisis Inquiry Commission blamed all the usual suspects — Wall Street banks, financial regulators, the mortgage giants Fannie Mae and Freddie Mac, and subprime lenders — which is tantamount to blaming no one. “Reckless Endangerment” concentrates on particular individuals who played key roles.

The authors, Gretchen Morgenson, a Pulitzer Prize-winning business reporter and columnist at The New York Times, and Joshua Rosner, an expert on housing finance, deftly trace the beginnings of the collapse to the mid-1990s, when the Clinton administration called for a partnership between the private sector and Fannie and Freddie to encourage home buying. The mortgage agencies’ government backing was, in effect, a valuable subsidy, which was used by Fannie’s C.E.O., James A. Johnson, to increase home ownership while enriching himself and other executives. A 1996 study by the Congressional Budget Office found that Fannie pocketed about a third of the subsidy rather than passing it on to homeowners. Over his nine years heading Fannie, Johnson personally took home roughly $100 million. His successor, Franklin D. Raines, was treated no less lavishly.

To entrench Fannie’s privileged position, Morgenson and Rosner write, Johnson and Raines channeled some of the profits to members of Congress — contributing to campaigns and handing out patronage positions to relatives and former staff members. Fannie paid academics to do research showing the benefits of its activities and playing down the risks, and shrewdly organized bankers, real estate brokers and housing advocacy groups to lobby on its behalf. Essentially, taxpayers were unknowingly handing Fannie billions of dollars a year to finance a campaign of self-promotion and self-­protection. Morgenson and Rosner offer telling details, …

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Mark Steyn on the economy and the emperor who has no jobs.

…”I’m not concerned about a double-dip recession,” Obama said last week. Nor would I be if I had government housing, a car and driver, and a social secretary for the missus. But I wonder if it’s such a smart idea to let one’s breezy insouciance out of the bag when you’re giving a press conference. In May, the U.S. economy added just 54,000 jobs. For the purposes of comparison, that same month over 100,000 new immigrants arrived in America.

So what kind of jobs were those 54,000? Economics professorships at the University of Berkeley? Non-executive directorships at Goldman Sachs? That sort of thing? No, according to an analysis by Morgan Stanley, half the new jobs created were at McDonald’s. That’s amazing. Not the Mickey D supersized hiring spree, but the fact that there’s fellows at Morgan Stanley making a bazillion dollars a year analyzing fluctuations in minimal-skill fast-food service-job hiring trends. What a great country! For as long as it lasts. Which is probably until some new regulatory agency starts enforcing Michelle Obama’s dietary admonitions. …

…A couple of days later, Chet’s announced it was closing after nine decades. “It was the economy and the smoking ban that hurt us more than anything,” said the owner. But maybe he can retrain and re-open it as a community-organizer grantwriting-application center. The Bureau of Labor Statistics reports that the median period of unemployment is now nine months – the longest it’s been since they’ve been tracking the numbers. Long-term unemployment is worse than in the Depression. Life goes slowly waiting for a fast-food job to open up. …

Charles Krauthammer looks for the argument that will beat the president.

…It’s not that the ideological case against Obama cannot be made. Obamacare with its individual mandate remains unpopular. The near-trillion-dollar stimulus remains an albatross. Even the failed attempt at cap-and-trade — government control of energy pricing — shows Obama’s determination to fundamentally transform America. And he is sure to try again to complete his coveted European-style social-democratic project if you give him four more years.

Medicare has nonetheless partially blunted that line of ideological attack. Yet, just as the Democrats were rejoicing in the fruits of their cynicism, in came the latest economic numbers. They were awful. Housing price declines were the worst since the 1930s. Unemployment rising again. Underemployment disastrously high. And as for chronic unemployment, the average time for finding a new job is now 40 weeks, the highest ever recorded. These numbers gravely undermine Obama’s story line that we’re in a recovery, just a bit slow and bumpy.

Suddenly, the election theme has changed. The Republican line in 2010 was: He’s a leftist. Now it is: He’s a failure. The issue is shifting from ideology to stewardship.

…I would still prefer to see the Republican challenger make 2012 a decisive choice between two distinct visions of government. We are in the midst of a once-in-a-generation debate about the nature of the welfare state (entitlement vs. safety net) and, indeed, of the social contract between citizen and state (e.g., whether Congress can mandate — compel — you to purchase whatever it wills). Let’s finish that debate. Start with Obama’s abysmal stewardship, root it in his out-of-touch social-democratic ideology, and win. That would create the strongest mandate for conservative governance since the Reagan era.

In the National Review, Rich Lowry looks at long-term unemployment.

…The insidious thing about long-term unemployment is that it builds on itself — the longer you are without a job, the harder it is to get one. The Bureau of Labor Statistics finds that the chance of someone unemployed for less than five weeks finding a job in the next month is about 30 percent. For someone unemployed 27 weeks or more, it’s just 10 percent.

For an economy so famously on the mend that it experienced “recovery summer” last year, the trend has been in the wrong direction. A Pew study notes that the number of people unemployed for a year or more increased by 25 percent from December 2009 to December 2010.

The job market is now segregated by levels of educational attainment, but long-term joblessness disregards schooling. Once they are unemployed, about 30 percent of college graduates, high-school graduates, and high-school dropouts are out of a job for more than a year. It doesn’t matter what sector of the economy they come from. “More than 20 percent of unemployed workers in every non-agricultural industry,” Pew writes, “have been out of work for a year or more.”

…Democrats may want next year’s election to be about Medicare; Republicans may have thought it would be about debt. But if current conditions hold, it will instead be about unemployment and the associated economic travails of stagnant wages, falling home values, and rising prices. There is no more natural theme in our politics than “putting America back to work.” Next year, Obama could be vulnerable to it. It’s the flashing red light of his reelection.

There was a debate last night. Michael Barone had impressions of each candidate and a summary.

… This was a New Hampshire debate, but it has serious ramifications for Iowa as well. I have disparaged the idea that Romney is the frontrunner; I continue to think that given the polls no one is the frontrunner. But Romney behaved like a frontrunner tonight, one with confidence and sense of command and with the adroitness to step aside from two major issue challenges (Romneycare, his various views on abortion) he faces. Romney has wisely eschewed the Iowa caucuses this time, leaving as two major competitors there Pawlenty (from next door Minnesota and a genuine religious conservative) and Bachmann (not only from next door Minnesota but also born and raised in Iowa). Presumably they will both be competing not only in the Iowa precinct caucuses, but in the August 13 Iowa Republican straw poll in Ames. I think Bachmann emerged from this debate a more serious competitor and Pawlenty not a stronger one than he was before. You could extrapolate much from Pawlenty’s performance in support of the proposition that he is a serious candidate for the nomination. But you could extrapolate much from Bachmann’s performance that she is a serious competitor in the Ames straw poll. And if she could come out ahead of him, that would certainly shake up the race, and leave the way open for another competitor. Perhaps for Jon Huntsman, who wasn’t there tonight and who has indicated that he won’t compete in Iowa. Or perhaps for Texas Governor Rick Perry, whose 2010 race top advisers were part of the mass resignation last week from Newt Gingrich’s campaign, but who may not turn out to be a wine that will travel. Or perhaps for a draft for Paul Ryan, who it might be argued could enter late and be a substitute for Pawlenty as the competitor for Romney which Pawlenty did not succeed in being at St. Anselm’s flashy auditorium.

More debate thoughts from Jonathan Tobin.

Coming into this debate, a lot of pundits thought Mitt Romney would benefit from having the other challengers gang up on him about health care. They were wrong since doing so would have exposed Romney’s vulnerabilities not confirmed him as the frontrunner.

Unfortunately for Tim Pawlenty, he listened to those voices urging caution and that provided the debate’s signature moment. Offered an opportunity to hit his main opponent hard on Obamneycare as he called it just a few days ago, Pawlenty whiffed. In the end, it really doesn’t matter whether it was because he was too nice or not courageous enough to call out Romney to his face. Either way he failed. It was a key moment in this race and one that Pawlenty will rue in the months to come. He walks away from the debate clearly weakened by this astonishing failure of either nerve or imagination. Instead of winning the competition between the two mainstream candidates, Pawlenty is now in danger of slipping back into the second tier. …

John Podhoretz has an enjoyable riff on David Mamet’s political conversion.

David Mamet tells me he’s like the character in one of the greatest comedies ever written, Moliere’s “The Bourgeois Gentleman,” who declares: “Good heavens! For more than 40 years I have been speaking prose without knowing it.” Mamet says he made a similar discovery a few years ago: He is a conservative and has been for decades without knowing it.

The self-mocking comparison to Moliere’s “bourgeois gentleman” is a mark of the modesty with which America’s most celebrated and successful serious playwright discusses his latest book — a white-hot work of non-fiction called “The Secret Knowledge” that is both an account of his discovery and an explication of the views he now espouses with a discoverer’s intensity.

…Mametbureaucrat — the person whose entire profit comes from skimming off the labor of others. It is only a failure to understand the independent value of work that leads people to believe it is acceptable to use the law to redistribute the earnings of a productive laborer and transfer them to someone else in the name of fairness and equity. …

, who knows a great deal about the darker recesses of the human heart, has freed himself here to express unambiguous love — love of country, love of tradition, love of his own people and (most exciting in terms of the book itself) the love of a good day’s work.

…Mamet is indeed an unapologetic “bourgeois gentleman” who believes there is nothing more profound than people working, together or separately, to produce something.

…What he loathes is the middleman,

Andrew Malcolm rounds up the late-night jokes for the LA Times.

Conan: Democrats and Republicans calling for Congressman Weiner to resign. Meanwhile, late-night comedians are calling for him to hang in there.

Leno: President Obama’s top economic advisor Austan Goolsbee is being replaced by something a little more effective — the Magic 8-Ball.

Fallon: Good news. Federal Reserve Chairman Ben Bernanke says the economy will pick up in the second half of the year. So you know what that means -– absolutely nothing.

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In Contentions, Jonathan Tobin comments on how Obama has ruined his chances at brokering peace in the Middle East.

From the beginning of the Obama presidency, the Palestinian Authority has shown that it will never allow itself to accept less than whatever the United States has demanded on its behalf. Thus, when the administration asked Israel for a settlement freeze that became a Palestinian precondition for talking with Israel. When the president decided that building in existing Jewish neighborhoods within Jerusalem was an “insult” to the United States, a freeze in Israel’s capital became another Palestinian precondition.

Now in the wake of President Obama’s decision to demand that the 1967 lines be the starting point for future Middle East negotiations, the Palestinians have adopted that point as their latest precondition for talks. Earlier this week, PA “negotiator” Saeb Erekat stated that they would only return to the talks with Israel that they have largely boycotted for three years, if Netanyahu accepts Obama’s dictat.

…While Obama may have though that each time he sought to impose conditions on Israel without making similar demands on the Palestinians he was jumpstarting the peace process, he has done the exact opposite. It isn’t clear whether the Palestinians will ever recognize the legitimacy of a Jewish state, no matter where its borders may be drawn. But they will never do so long as they think the Americans will do their negotiating for them. Every Obama statement about what Israel should give up has become an ironclad Palestinian demand. One would have thought that Obama would have learned his lesson during his first two disastrous forays into Middle East peace processing but that was not the case. American diplomats are fond of discussing what they believe to be the prime obstacles to peace. But this latest exchange proves that there is no greater obstacle to negotiations, if not peace, than the foolishness of Barack Obama.

In the NY Post, Michael Walsh discusses the government cancer that is sucking the lifeblood out of the economy.

…The government racked up $5.3 trillion in new fiscal obligations last year alone — bringing the current unfunded tab for future expenses on things like Medicare, Social Security and military medical and retirement programs to a whopping $61.6 trillion, or $534,000 per American household. Then there’s today’s bills: We’re borrowing $125 billion a month that we have no hope of ever paying back on our current course.

…And now Obama says he’s not worried about a double-dip recession. Easy for him to say: For Americans not feeding at the government trough, the first recession never ended. We are witnessing the total failure of academic Keynesian economics, with its heavy emphasis on high taxes and exorbitant government spending. Yet Obama sails blithely on, already in full campaign mode and still blaming George W. Bush and the Republicans (admittedly no models of fiscal restraint or responsibility) for everything.

Worse, the what-me-worry president continues to insist that the ongoing hard times are just a “bump in the road” — that if we can just get the “fortunate” rich to “pay a little more” everything will be just fine. Never mind that most of the “rich” got their own money by inventing a product or providing a service in the private sector. That they invested an enormous amount of their own capital and sweat equity before it paid off. …

…The truth is, the only jobs the government can “create” are more government jobs. That’s why real-estate values in DC are booming even as they’ve plunged everywhere else. …

Craig Pirrong reports on a recent world-wide Tim Geithner smackdown.

…Timmy! lectured—or should I say hectored—the world on derivatives, saying, for all intents and purposes, our way or the highway.

To say this went over like the proverbial, uhm, lead balloon would be the understatement of the year.  The Singapore Monetary Authority and the Hong Kong Monetary authority took umbrage at Geithner’s implication that they were lax regulators.  The CEO of the Futures and Options Association, Anthony Belchambers, was quite biting in his reply:

‘US Secretary Geithner’s comments do not appear to take any account of the fact that the SEC, arguably, was an equally tragic failure – and by a regulatory authority that was notably “heavy touch” but also in some areas “no touch”!’

Ouch!  Can you say “Bernie Madoff”?  I knew you could. …

Craig Pirrong has more on the smackdown.

I cannot recall a situation where a US Secretary of the Treasury, or any cabinet member, for that matter, has been the subject of such scathing rebuttals as Timothy Geithner.  The disdain that his lectures on derivatives regulation unleashed is pretty amazing.  It was not respectful disagreement.  It was disrespectful disagreement.  And not from anonymous sources, but from named representatives of government and industry bodies.  Nor is this a new thing.  The Chinese and German Finance Minister Wolfgang Schaeuble, to name but two, have been brutal in their criticisms of Geithner.

This makes it all the more curious to read in the WaPo piece that I linked to yesterday that Geithner has a very close relationship with Obama, arguably the closest relationship of all the cabinet members.  But perhaps that’s not so curious after all: for all his rhetoric about rebuilding relationships with other nations, Obama apparently has a very poor relationship with the leaders of most other countries–worse relationships than Bush.  This suggests that Obama, a notoriously aloof individual, doesn’t really care about what them furriners think.  And as the foreign criticism of Geithner demonstrates, I think those feelings are reciprocated.

Peter Schiff says the economy is only going to get worse.

…Although I have made these comparisons before, the parallel between drug addiction and the reliance on economic stimulus is just too strong to ignore. And as with drug addiction, an economy builds up a tolerance. Each time the government successively stimulates with printed money or deficit spending, ever larger doses are needed to achieve the same result. Lest we forget, coming into the Crash of 2008, the economy had been on the receiving end of years of over stimulus. President Bush and Alan Greenspan never fully weaned the economy of their shock treatments that followed the dot.com crash and the shock of September 11th. 

This time around, the stimulus-fueled recovery is so mild that the economy is already relapsing into recession before the Fed has even begun to tighten. This puts Bernanke in a very difficult position. He either follows through on his loudly trumpeted plans to end quantitative easing this summer, or abandon those plans in favor of more stimulus. Both choices are unappealing. 

…The government needs to admit its mistakes and write a completely different script. This time the story line must allow for a real restructuring. Real estate prices must fall further, and many financial institutions holding bad mortgages must fail. This means investors, creditors, and depositors will lose money. Labor and capital must be re-allocated away from services into goods production. That means jobs must be lost in government, retail sales, finance, health care, and education; and jobs must be created in technology, manufacturing, textiles, mining, energy, and agriculture. This guarantees major short-term pain. But breaking an addiction is not easy. Those who say it is are living in a fool’s paradise.   

This transition does not require any positive action from government. All it needs to do is simply get out of the way. That does not mean there is nothing the government can do to help the process. It can remove as many regulations and taxes as possible that inhibit market forces from working their magic. But this requires a completely different mindset among our elected officials. They will need the courage and knowledge to level with the American people, and do what is in our nation’s economic interests, not simply what is in their own political interest. …

David Harsanyi talks Obamacare.

…That’s not to say there aren’t people out there who really need support. The president has generously handed out nearly 1,400 Obamacare waivers to the neediest among us. About 20 percent of them have been awarded to an upmarket district in San Francisco that, by pure chance, is represented by Nancy Pelosi. Others, such as the AARP and local unions, had demanded we pass Obamacare so they could not take part in it immediately.

We’ll also soon be hearing more about the lawsuits challenging Obamacare’s individual mandate. Randy Barnett, a professor of constitutional law at Georgetown University Law Center, recently asked, “If Congress can impose this economic mandate on the people, what can’t it mandate the people to buy?” …

And let’s not forget it was Obama, the newfound holy savior of Medicare, who pinned the key cost control component of health care reform on Medicare through his Independent Payment Advisory Board, or what bitter righties call a rationing board.

Rationing boards. Political favors. Lies. Coercion. Broken promises. Precedents that can force us to buy about anything. It might not be socialism, technically speaking. But really, what’s not to like?

George Will wades into another constitutional swamp, brought to us by the politicians who voted for Obamacare: the entrenchment of a bureaucratic panel that rations healthcare.

…Diane Cohen, the institute’s senior attorney, demonstrates that the IPAB is doubly anti-constitutional. It derogates the powers of Congress. And it ignores the principle of separation of powers: It is an executive agency, its members appointed by the president, exercising legislative powers over which neither Congress nor the judiciary can exercise proper control.

Unfortunately, the IPAB may not be unconstitutional. This is because the Supreme Court, having slight interest in policing Congress’s incontinent desire to give to others the power to make difficult decisions, has become excessively permissive about delegation. Cohen notes this from Justice Antonin Scalia’s dissent in a 1989 case wherein the Supreme Court affirmed the power of the U.S. Sentencing Commission to set “guidelines” that, being binding, have the effect of statutes:

“I anticipate that Congress will find delegation of its lawmaking powers much more attractive in the future. .?.?. I foresee all manner of ‘expert’ bodies, insulated from the political process, to which Congress will delegate various portions of its lawmaking responsibility. How tempting to create an expert Medical Commission .?.?. to dispose of such thorny, ‘no-win’ political issues as the withholding of life-support systems in federally funded hospitals.”…

Robert Samuelson looks at current Medicare issues and what Representative Ryan’s plan may bring.

…few doubt that today’s health-care system has much waste: medical care that does no good; high overhead costs. In a paper, Cutler documented some evidence. In one survey, 20 percent of patients reported that doctors repeated tests because records were unavailable; the health-care sector has twice as many clerical workers as nurses and nine times as many as doctors; care of patients with chronic conditions is often slapdash, so that, for example, only 43 percent of diabetics receive recommended treatment.

Fee-for-service is open-ended reimbursement; the government’s main tool to control Medicare’s costs is to hold down reimbursement rates. Doctors and hospitals respond by ordering more services to offset the rate limits. For all its flaws, say Ryan’s critics, this system beats his. Indeed, the Congressional Budget Office has estimated that in 2022, Ryan’s plan would be more than a third costlier than the status quo, because Medicare’s size makes it more effective at restraining reimbursement rates.

If the CBO is correct, Ryan’s plan fails; beneficiaries’ out-of-pocket costs would roughly double to cover the added expense. But the CBO may be wrong. When a voucher system was adopted for Medicare’s new drug benefit, the CBO overestimated its costs by a third; the Centers for Medicare and Medicaid Services’ overestimate was 42 percent. When fundamental changes are made to a program, the green-eyeshade types can’t easily predict the results. Moreover, as health expert James Capretta notes, “managed care” plans in the Medicare Advantage program in 2010 did not have higher costs than Medicare’s fee-for-service for similar coverage. …

Karl Rove points out that Obama is not only shirking presidential duties, but he is breaking the law.

…Mr. Obama has ignored a law requiring he send Congress a plan to strengthen Medicare’s finances—even though members of his own cabinet have reminded him in writing of his duty to do so.

Medicare was originally designed to be paid for mostly by special dedicated taxes. Yet it has become increasingly dependent on general revenues as expenses have far outrun both projections and Medicare tax receipts. By 2024, according to the annual report of the Medicare trustees, the hospital insurance trust fund will be exhausted.

To force Washington to take action before Medicare overwhelms the federal budget, fiscal experts wrote a presidential obligation into the Medicare Reform Act of 2003. Under that provision, if Medicare’s trustees forecast that general revenues will be required for 45% or more of the program’s outlays within a seven-year period, then the president must propose legislation to correct the problem within 15 days of his next budget submission. Congress then has to give the proposal expedited consideration. …

In Bloomberg News, Virginia Postrel takes a dim view of compact fluorescent light bulbs.

…By the end of last year, CFLs had managed to capture only 25 percent of the general-purpose light-bulb market — a decent business, sure, but hardly the radical transformation evangelists were going for. Most Americans, for most purposes, have stuck to traditional incandescents.

So the activists offended by the public’s presumed wastefulness took a more direct approach. They joined forces with the big bulb producers, who had an interest in replacing low-margin commodities with high-margin specialty wares, and, with help from Congress and President George W. Bush, banned the bulbs people prefer.

It was an inside job. Neither ordinary consumers nor even organized interior designers had a say. Lawmakers buried the ban in the 300-plus pages of the 2007 energy bill, and very few talked about it in public. It was crony capitalism with a touch of green.

Of such deals are Tea Parties born. …

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In the WSJ, Martin Feldstein reviews the dismal economic numbers, and how the government is negatively impacting the economy. Feldstein, an econ prof, was Reagan’s economic advisory chair.

…Experience shows that the most cost-effective form of temporary fiscal stimulus is direct government spending. The most obvious way to achieve that in 2009 was to repair and replace the military equipment used in Iraq and Afghanistan that would otherwise have to be done in the future. But the Obama stimulus had nothing for the Defense Department. Instead, President Obama allowed the Democratic leadership in Congress to design a hodgepodge package of transfers to state and local governments, increased transfers to individuals, temporary tax cuts for lower-income taxpayers, etc. So we got a bigger deficit without economic growth.

A second cause of the continued economic weakness is the president’s emphasis on increasing tax rates. Although Mr. Obama grudgingly agreed to continue the Bush tax cuts for 2011 and 2012, his budget this year repeated his call for higher tax rates on upper-income individuals and multinational corporations. With that higher-tax cloud hanging over them, it is not surprising that individuals and businesses do not make the entrepreneurial investments and business expansions that would cause a solid recovery.

A third problem stems from the administration’s lack of an explicit plan to deal with future budget deficits and with the exploding national debt. This creates uncertainty about future tax increases and interest rates that impedes spending by households and investment by businesses. The national debt has jumped to 69% of GDP this year, from 40% in 2008. It is projected by the Congressional Budget Office to reach more than 85% by the end of the decade, and to keep rising after that. The reality is even worse since ObamaCare alone will cost more than $1 trillion in its first 10 years. The president’s boast that his health legislation would not “add a dime” to the national debt was possible only by combining that increased spending with proposed new taxes and with projected cuts in Medicare spending that will never occur. …

Jonah Goldberg is fed up with liberal spin.

…Consider that when President Reagan oversaw a huge jobs boom, the media recycled the untrue claim that these were all low-paying “hamburger flipper” jobs.

Well, McDonald’s alone may be responsible for a quarter to a half of the new jobs created in the last month. And that hiring probably wouldn’t have happened if Mickey D’s hadn’t been given a waiver from Obamacare.

And then there’s the stimulus, which the White House still touts as an unqualified success. Well, during Obama’s first year in office, more than half (119,000) of all the new jobs in the United States were created in business-friendly Texas, according to the Bureau of Labor Statistics. If Obama created those jobs, why’d he put so many of them in, of all places, George W. Bush’s home state?…

Jennifer Rubin comments on liberals’ version of events.

…Just when did Obama embrace deficit cutting? The centerpiece of his presidency has been the flurry of bailouts and stimulus plans. Are we to imagine that the itsy-bitsy savings obtained in the 2011 continuing resolution — budget dust in the grand scheme of things — is real“deficit cutting”?

…It is more accurate to say that Obama has never pivoted to effective pro-jobs policies. Feldstein suggests a few:

“The economy will continue to suffer until there is a coherent and favorable economic policy. That means bringing long-term deficits under control without raising marginal tax rates—by cutting government outlays and by limiting the tax expenditures that substitute for direct government spending. It means lower tax rates on businesses and individuals to spur entrepreneurship and investment. And it means reforming Social Security and Medicare to protect the living standards of future retirees while limiting the cost to future taxpayers.

All of these things are doable. But the Obama administration has not done them and shows no inclination to do them in the future.”

But for the left, such talk is an anathema, for implicit in that analysis is a rejection of the Keynesian economics that failed in the New Deal and failed again under Obama. Better to label the biggest spender in U.S. history as too frugal, than to own up to the failure of the liberal economic playbook. …

John Podhoretz comments on the truly frightening liberal explanation why the stimulus didn’t work: not enough money. Liberals apparently believe they can make up for their ignorance by increasing the amount of money they waste. Perhaps they also think they can fly, but only if they jump from a tall enough building. It reminds us of John Tamny’s excellent article in Friday’s Pickings, when government spending was cut in half during the 1920-21 recession and beyond, and the economy recovered. No point in politicians doing what works, though.

By now it is clear to everyone that the Obama administration bungled the 2009 stimulus package. The dispute now is over the reasons for its failure. The conventional wisdom is coalescing around a view crystallized in a column by Mr. Conventional Wisdom himself, Charlie Cook of the National Journal: “The administration’s initial response, the much-maligned economic-stimulus package, was far too modest and unfocused.”

Cook is a rational analyst, so it is striking that he is able to advance an argument that is, on its face, nothing short of demented. The idea that the 2009 stimulus, which cost $840 billion, could have been less “modest” and more “focused” does violence to the facts of very recent American history and to the arugments made for the stimulus by its advocates at the time.

…The growing consensus is that Obama’s economic policies have failed, and precisely in the ways that those skeptical of the stimulus predicted. The most expensive government intervention into the economy in this country’s history proved to have negligible macroeconomic impact. (UPDATE: A friend points out that if one adds together all the efforts taken by the administration to stimulate the economy directly, the number is not $840 billion but something like $2.1 trillion.)  This fact should force supporters of the stimulus to acknowledge that the problem was not with the stimulus as it was implemented, but with the very idea of stimulus itself. And they just can’t.

John Fund notes that Representative Weiner may still lose his seat when NYC loses a congressional district.

New York Democrats are furious with Rep. Anthony Weiner over his fall from grace and his decision to remain in Congress, which will be a lingering embarrassment to them. But even if Mr. Weiner manages to survive a pending House Ethics Committee investigation, his district may not survive the redrawing of congressional district lines that is about to be conducted by state legislators in Albany.

New York must lose two House seats in 2012 due to slow population growth, and one of those districts is almost certain to be in New York City. Mr. Weiner represents a sprawling district in Queens and Brooklyn that borders six other congressional districts and thus could be an easy target for elimination. Due to the Voting Rights Act, none of the existing districts with a majority of black or Hispanic voters can be realistically rubbed out. But Mr. Weiner lacks that protection and already sits in a district where he is on shaky political ground, having won with only 59% of the vote in the Democratic landslide year of 2010. …

In Cato at Liberty, Ilya Shapiro has an exciting post on the litigation against Obamacare.

ATLANTA — In the most important appeal of the Obamacare constitutional saga, today (June 8) was the best day yet for individual freedom.  The government’s lawyer, Neal Katyal, spent most of the hearing on the ropes, with the judicial panel extremely cautious not to extend federal power beyond its present outer limits of regulating economic activity that has a substantial aggregate effect on interstate commerce.

As the lawyer representing 26 states against the federal government said, “The whole reason we do this is to protect liberty.” With those words, former solicitor general Paul Clement reached the essence of the Obamacare lawsuits. With apologies to Joe Biden, this is a big deal not because we’re dealing with a huge reorganization of the health care industry, but because our most fundamental first principle is at stake: we limit government power so people can live their lives the way they want.

This legal process is not an academic exercise to map the precise contours of the Commerce Clause or Necessary and Proper Clause — or even to vindicate our commitment to federalism or judicial review. No, all of these worthy endeavors are just means to achieve the goal of maximizing human freedom and flourishing. Indeed, that is the very reason the government exists in the first place.

And the 11th Circuit judges saw that. Countless times, Judges Dubina and Marcus demanded that the government articulate constitutional limiting principles to the power it asserted. And countless times they pointed out that never in history has Congress tried to compel people to engage in commerce as a means of regulating commerce. Even Judge Hull, reputed to be the most liberal member of the panel, conducted a withering cross-examination to establish that the individual mandate didn’t help that many people get affordable care, that the majority of people currently without coverage would be exempt from the requirement (presumably due to their income level).

In short, while we should never read too much into an oral argument, I’m more optimistic about this case now than any other.

Jonah Goldberg is also fed up with Thomas Friedman; modern day Malthus.

As I already mentioned over at the Corner, Tom Friedman lets his inner Malthus out for a drive today:

…This is what happens when our system of growth and the system of nature hit the wall at once. While in Yemen last year, I saw a tanker truck delivering water in the capital, Sana. Why? Because Sana could be the first big city in the world to run out of water, within a decade. That is what happens when one generation in one country lives at 150 percent of sustainable capacity.”

…first a few easy shots. One of the standard complaints against Friedman is that he leaps from anecdotes and conversations…to sweeping conclusions about the state of the Universe. …

In today’s New York Times column, Friedman says that he saw a tanker truck delivering water in Sana. And this is supposedly a rich reportorial nugget suggesting that Sana may run out of water. Well it might. I confess to not knowing much about Sana. But I do have some experience seeing water trucks. I’ve seen them in lots and lots of places, from Mexico to Alaska. I’m pretty sure that if I jumped to the conclusion that Fairbanks, Alaska was running out of water because I saw a water truck, few reasonable people would find that persuasive.

I saw a taco truck setting up in downtown DC on my way into work today. Does that mean DC has reached “peak taco”? …

In Forbes, Joel Kotkin has an excellent article describing the fanatical ideology that is decimating California’s economy.

Ideas matter, particularly when colored by religious fanaticism, wreaking havoc even in the most favored of places. Take, for instance, Iran, a country blessed with a rich heritage and enormous physical and human resources, but which, thanks to its theocratic regime, is largely an economic basket case and rogue state.

Then there’s California, rich in everything from oil and food to international trade and technology, but still skimming along the bottom of the national economy. The state’s unemployment rate is now worse than Michigan’s and ahead only of neighboring Nevada.  Among the nation’s 20 largest metropolitan regions, four of the six with the highest unemployment numbers are located in the Golden State: Riverside, Los Angeles, San Diego and San Francisco. In a recent Forbes survey, California was home to six of the ten regions where the economy is poised to get worse.

…But people involved in the tangible, directly carbon-consuming parts of the economy — manufacturing, warehousing, energy and, most important, agriculture — are those who bear   the brunt of the green jihad. Farming has long been a field dominated by California, yet environmentalist pressures for cutbacks in agricultural water supplies have turned a quarter million acres of prime Central Valley farmland fallow, creating mass unemployment in many communities.

…Other key blue collar industries are also threatened, from international trade to manufacturing. Since before the recession California manufacturing has been on a decline.  Los Angeles, still the nation’s largest industrial area, has lost a remarkable one-fifth of its manufacturing employment since 2005. …

Michael Barone reports that the federal government doesn’t think they’ve created a large enough deficit, and are currently shoving a high-speed train boondoggle down the throats of Florida’s taxpayers.

…The FTA wants state and local governments to put in $175 million to cover half the estimated costs for Sunrail. You might not be surprised to learn that, as three European researchers cited by Cox have found, the average fixed rail project costs 45% more than projected and that 80% cost overruns were not unusual. They also found that ridership estimates turn out almost always to be hugely inflated, which means either higher fares or bigger operating deficits or both, almost inevitably. And, as Cox points out, the feds require a giveback of some federal aid if ridership levels don’t meet certain standards.

…So why do the feds continue to push fixed rail? Partly because it’s an existing program and there’s an incentive to shovel money out of the door. But why was the program created in the first place? Because of some “progressive” notions. Europe has a lot of fixed rail, and everyone knows that Europeans are more progressive than we benighted Americans are (which overlooks the fact that population density is much greater in Europe than in almost any part of the United States except the inner portions of metro New York). Fixed rail takes people out of polluting cars into energy-efficient trains (except that the trains may not be significantly more energy-efficient if they don’t have many passengers). …

What I think is at work here is bossiness: planners yearn to make everyone else live in the patterns they think are progressive. …The fact that promoters of fixed rail almost inevitably produce hugely optimistic projections of cost and ridership indicate that we are dealing here with people who are less committed to rational argumentation than they are to the promotion of something which for them takes on the importance of a religious faith.

In the WSJ, Richard Vedder makes some brilliant suggestions to dramatically decrease the price of a college education.

In a study for the Center for College Affordability and Productivity, Christopher Matgouranis, Jonathan Robe and I concluded that tuition fees at the flagship campus of the University of Texas could be cut by as much as half simply by asking the 80% of faculty with the lowest teaching loads to teach about half as much as the 20% of faculty with the highest loads. The top 20% currently handle 57% of all teaching.

Such a move would require the bulk of the faculty to teach, on average, about 150-160 students a year. For example, a professor might teach one undergraduate survey class for 100 students, two classes for advanced undergraduate students or beginning graduate students with 20-25 students, and an advanced graduate seminar for 10. That would require the professor to be in the classroom for fewer than 200 hours a year—hardly an arduous requirement.

…much research consists of obscure articles published in even more obscure journals on topics of trivial importance. Mark Bauerlein, a professor of English at Emory University, once estimated that 21,000 articles have been written on Shakespeare since 1980. Wouldn’t 5,000 have been enough? Canadian scholar Jeffrey Litwin, looking at 70 leading U.S. universities, concluded the typical cost of writing a journal article is about $72,000. If we professors published somewhat fewer journal articles and did more teaching, we could make college more affordable. …

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It’s getting so bad for the president, the Washington Post is calling BS on his speeches. Glenn Kessler gives him three out of four Pinocchios for the auto speech.

With some of the economic indicators looking a bit dicey, President Obama traveled to Ohio last week to tout what the administration considers a good-news story: the rescue of the domestic automobile industry. In fact, he also made it the subject of his weekly radio address.

We take no view on whether the administration’s efforts on behalf of the automobile industry were a good or bad thing; that’s a matter for the editorial pages and eventually the historians. But we are interested in the facts the president cited to make his case.

What we found is one of the most misleading collections of assertions we have seen in a short presidential speech. Virtually every claim by the president regarding the auto industry needs an asterisk, just like the fine print in that too-good-to-be-true car loan. …

David Skeel, in the WSJ, has more on the auto bailouts.

…The claim that the bailouts were done at little cost is even more dubious. This side of the story rests on the observation that GM’s success in selling a significant amount of stock, reducing the government’s stake, and Chrysler’s repayment of its loans, show that the direct costs to taxpayers may be lower than many originally feared. But this doesn’t mean that taxpayers are off the hook. They are still likely to end up with a multibillion dollar bill—nearly $14 billion, according to current White House estimates.

But the $14 billion figure omits the cost of the previously accumulated tax losses GM can apply against future profits, thanks to a special post-bailout government gift. The ordinary rule is that these losses can only be preserved after bankruptcy if the company is restructured—not if it’s sold. By waiving this rule, the government saved GM at least $12 billion to $13 billion in future taxes, a large chunk of which (not all, because taxpayers also own GM stock) came straight out of taxpayers’ pockets.

The indirect costs may be the worst problem here. The car bailouts have sent the message that, if a politically important industry is in trouble, the government may step in, rearrange the existing creditors’ normal priorities, and dictate the result it wants. Lenders will be very hesitant to extend credit under these conditions.

This will make it much harder, and much more costly, for a company in a politically sensitive industry to borrow money when it is in trouble. As a result, the government will face even more pressure to step in with a bailout in the future. In effect, the government is crowding out the ordinary credit markets.

None of this suggests that we should be unhappy with the recent success of General Motors and Chrysler. Their revival is a very encouraging development. But to claim that the car companies would have collapsed if the government hadn’t intervened in the way it did, and to suggest that the intervention came at very little cost, is a dangerous misreading of our recent history.

John Tamny wan a brilliant explanation of how the present government hinders economic growth, in Real Clear Markets.

…If we then look back to the most substantial economic contraction of the 20th century in 1920-21, the fact that the gold standard was unshaken amid this unsettling decline in economic activity tells why the economy rebounded so quickly. With investors confident that their delayed consumption (meaning investment) wouldn’t be clipped by the monetary authorities, capital flowed to wealth enhancing activities and the economy roared.

The early ‘20s offer other lessons that tell us why the economy boomed 90 years ago, but sags at present.

Indeed, contrary to the Krugmanesque view that governments must spend uncontrollably when economic spirits are down, in the early 1920s our federal government greatly reduced its spending burden on the U.S. economy. Though it spent $6.4 billion in 1920, by 1923 total spending had declined to $3.3 billion.

…Entrepreneurs can’t be entrepreneurs without capital, so during periods of economic ill health it’s more than necessary for governments lacking resources other than those they tax or borrow from the private sector to sit on their hands. Better to leave always limited capital in the private sector where it can fund real productivity…

In the WSJ, William McGurn explains why the NAACP doesn’t want better schools for children.

There are two ways to look at our big city public schools. The first way is to see them as institutions that give our children the tools they need to make their way in society. When the education is good, it is a great equalizer for those boys and girls without the advantages of wealth or social standing.

The second way to look at our big city public schools is this: as a vast jobs program for teachers.

Those who assume the first view find it hard to understand why it is so difficult to fire bad teachers, pay the good ones more, or close down failing schools. In the same way, they cannot understand why one of the nation’s oldest and most venerable civil rights organizations—the National Association for the Advancement of Colored People—would be suing with the United Federation of Teachers to stop New York City from closing about two dozen of its worst schools and opening charters. Even the Washington Post, which ran a terrific editorial criticizing the NAACP, called it a “mystifying decision.” …

Michael Lomax and Michelle Rhee comment on the NAACP selling out the people who need help the most, in the NY Daily News.

…The lawsuit filed by the United Federation of Teachers and the NAACP…seeks to block the city from shutting down about two dozen traditional schools whose students are not learning what they need to know to succeed at the next level – and prevent 19 public charter schools from sharing facilities with existing traditional schools. Were the plaintiffs to succeed, these schools would either be unable to enroll new children or could face closure.

…The charters in question include those operated by KIPP, Uncommon Schools and Harlem Children’s Zone, which have remarkable track records of success and primarily serve low-income kids of color. Two separate studies out of Stanford University have shown that charter schools in New York City in general outperform traditional schools. Parents and students understand this; that’s why they want their kids to enroll. This year, 50,000 New York students were declined admission to public charter schools due to a lack of seats.

…in this fight – the fight for children’s right not only to go to school but to get a good education – the NAACP seems to have switched sides. It’s fighting not for the right of kids of color to get a good education, but to keep failing public schools open and to limit kids’ ability to go to public schools that are working. …

More commentary on how the NAACP has lost its way, from Stanley Crouch, in the NY Daily News,

…Parents and visionary education reformers like Geoffrey Canada spoke out against the suit in a Harlem gathering. One parent asked, “Why is the NAACP trying to block access to a better education for my child?”

Exactly.

The suit is proof of how low a great civil rights organization has fallen since its days of advocating for racial equality in the face of tremendous hatred. …

In the National Review, Kevin Williamson discusses one man’s big plans for your money. It is about T. Boone Pickens and his plan to pick our pockets.

…Mr. Pickens is trying to sell Congress something called the Pickens Plan, a madcap, Rube Goldberg political contraption designed to appeal to the worst elements of American politics — corporate self-dealing, xenophobia, economic illiteracy — while directing billions of dollars of subsidies into businesses in which Mr. Pickens has a financial interest. The plan goes like this: T. Boone Pickens and associates build some enormous wind farms on the Great Plains, which will produce a great deal of electricity. Unfortunately, the Great Plains are sparsely populated, and the current infrastructure for transmitting electricity would not support the efficient transmission of power from Mr. Pickens’s wind farms to the country’s population centers. So, somebody has to build a new system, and somebody has to pay for it: Mr. Pickens is nominating the American taxpayer to play that role. 

But wind power is just the beginning of it. Mr. Pickens wants to create that new wind power so that he can divert a great deal of the natural gas currently feeding the nation’s electric-power plants into the transportation market, specifically into the tractor-trailer rigs that haul food and freight and much else around the nation. Mr. Pickens is deeply invested in the natural-gas business and is the majority shareholder in the leading supplier of compressed natural gas (CNG) vehicle fuel. Unfortunately for him, the nation’s freight carriers have shown very little interest in converting their 18-wheelers into vehicles powered by compressed natural gas. The reason for this is that CNG conversion is expensive and inconvenient. And because there aren’t many trucks running on natural gas, there are not a lot of gas stations and such set up to fill up CNG vehicles. You can see how this would inconvenience Mr. Pickens and his colleagues.

Since the people who buy 18-wheelers haven’t shown much interest in buying CNG-powered versions, the Pickens Plan would help them to see the light, with a combination of mandates and bribery. (The original version of the NAT GAS Act, the Pickens Plan’s enabling legislation, contained a mandate that a certain proportion of new trucks be CNG-powered. That provision has been dropped, but an industry mandate, or the threat of such a mandate, remains as essential to the Pickens Plan as the individual mandate is to Obamacare.) Converting to CNG is expensive — the tax credits would run up to $64,000 per truck, with about 8 million or so trucks operating in the country, and $100,000 per filling station to retrofit. Mr. Pickens proposes to offset that pain by offering a bunch of subsidies for the people who would be obliged to endure it. Somebody has to pay for those, too, and Mr. Pickens again nominates the American taxpayer. …

Nile Gardiner comments on German Chancellor Angela Merkel’s visit to the US, in the Telegraph Blogs, UK.

The visit of German Chancellor Angela Merkel to Washington has attracted little attention in the US media, perhaps further proof that Berlin barely ranks as a world power these days, and consistently punches under its weight in international affairs. Compared to both David Cameron and Nicolas Sarkozy, Merkel is a remarkably low-key figure when it comes to global impact, despite the size of the German economy.

Judging by the content of today’s joint press conference in the White House East Room, which has to rank as among the most dull in recent memory, almost nothing of any real substance come out of the US-German discussions. Merkel gave no ground on Berlin’s refusal to join the NATO-led military operation in Libya, and bizarrely championed the cause of European integration while the EU economic project is going up in flames back home.

Obama declared that he wasn’t concerned about the prospect of a “double-dip recession”, while noting that “we’re experiencing some headwinds”, i.e. some catastrophic bad news on the economic front. He also gave Iran yet another half-hearted warning over its extremely well-advanced nuclear programme, threatening “additional steps, including potentially additional sanctions” – whatever that means. In the meantime, Germany remains a huge trading partner with Tehran, actually increasing its trade with the Islamist, terrorist-supporting regime in 2010. …