LESSONS LEARNED #59: “When the Right partners with business the Left calls it crony capitalism. When they partner with business the Left calls that smart government.” -Old Pithy

Posted by PITHOCRATES - March 31st, 2011

Microsoft Learns the hard way to Lobby Congress

Microsoft was a rogue corporation.  A big, profitable, rogue corporation.  And it was in the government’s crosshairs.  With all of their going about their business.  Alone.  Without any federal assistance.  Who did these people think they were?  They didn’t spend a dime lobbying the federal government for anything.  As if they could just go on about their business competing in the free market.  Scoffing at the government’s business resources.  All those things they could bring to the table.  To make an unorganized market organized.  Make Microsoft better.  Make Microsoft’s products better.  All for a nominal fee.  Some campaign contributions.  A vacation junket or two.  A little monkey business with someone you’re not married to.  A Roman indulgence of intoxicating substances and flesh.  You know, lobbying stuff.  But no!  Not Microsoft.  Those holier than thou sons of bitches.  Who did they think they were?

Well, Microsoft went too far.  Pissed off the wrong people.  People with friends in Washington.  People with power.  And a justice department.  Empowered with antitrust legislation.  Big, nasty, legal teeth.  Their crime?  They gave away Internet Explorer free.  And that was unfair to their competitors.  But it was a sweet deal to the consumer.  None of them complained.  They were happy to get IE free.  It saved them money.  It was their competitors that were pissed.  Because they couldn’t sell something that Microsoft was giving away free.  So the Department of Justice (DOJ) sued Microsoft claiming they violated the Sherman Antitrust Act.  Which Congress passed in 1890 to protect consumers.  And here the DOJ was fighting a case.  And if the DOJ won, the consumer lost.  They would have to pay for IE or a web browser from one of Microsoft’s competitors.  Which just goes to prove that it is never a consumer that complains about ‘predatory’ pricing.  It’s always a competitor that can’t compete at the same price that runs to the DOJ crying for antitrust protection.

Microsoft learned a very important lesson.  When you sit on big piles of money you don’t dis the federal government.  You show them the proper respect and give them some of that money. For your own protection.  For if you don’t they will go after you.  Like they did with Microsoft.  Who is smarter now.  Today, Microsoft spends millions on lobbyists.  To pay tribute for the pleasure of being left alone to operate in the free market.

Money Corrupts, Big Piles of Money Corrupt Absolutely

Microsoft is not alone.  There are a lot of honest companies out there.  But, sadly, there are a lot that aren’t.  Especially if they have a friend in Washington.  Because Washington sits on great big piles of money courtesy of the tax payers.  And a select few spend that money.   Put these two together and it’s a recipe for corruption.  Because one person can skim a little off the top of a huge transaction that is all but impossible to see.  Unless you start living like a Rockefeller on a government salary, that is.

The Teapot Dome scandal was the biggest government scandal of its time.  It involved leases to oil reserves transferred from the Navy to the Department of the Interior.  These were strategic reserves for our navy in case we went to war.  Important to have.  Because you don’t want to run out of oil during a war.  Albert Fall was the Secretary of the Interior.  And it was his job to lease those oil reserves.  Which he did.  But they didn’t go to the low bidder.  They went to the one that made it most worth his while.  Ultimately it was all that ‘making it worth his while’ that did him in.  He became a very rich man.  Which was impossible on his salary.  So they caught him.

Congressmen profit as Shareholders in Crédit Mobilier

The Teapot Dome was a big scandal perpetrated by a few players.  The Crédit Mobilier scandal, on the other hand, had far greater tentacles.  And is a good example of how government partnering with business goes wrong.  It involved the Union Pacific Railroad.  A sham company they created called Crédit Mobilier.  And some 30 Congressmen. 

The railroad to the pacific was a risky proposition.  It would take a very long time to build.  It would go through some very difficult terrain and hostile Indian country.  And there were few shippers on the proposed road.  In other words, it would take a long time to earn any revenue on this line.  And it was possible that they would never complete it.  Or ship enough freight to operate it profitably.  So the government stepped in and partnered with the Union Pacific.  And the fraud began.

The trick was how to make this loser a winner.  Railroad profits weren’t the answer.  So how can a railroad company make a profit without running any trains?  Why, from construction, of course.  That’s where Crédit Mobilier came in.  They built the railroad.  Billed Union Pacific.  Who then billed the government.  And, surprise, surprise, construction costs went way over budget.  Because they were overbilling Union Pacific.  Who then overbilled the government.  But the government just kept on paying.  Why?  Because they had shares in the very profitable Crédit Mobilier.  You see, when you share in the obscene profits of a government contractor you have little incentive to see or stop the fraud.

Government Steps into the Mortgage Business and Gives us the Subprime Mortgage Crisis

For years the federal government implemented policies to increase home ownership.  In their models, this was the driver of all economic activity.  A lot of material and labor builds a house.  And a lot of material and labor builds the things that furnish a house.  Ergo, the more people who bought houses the greater the economic activity.  And that meant everyone.  Even the people who couldn’t qualify for a mortgage.  A lot of which were minorities.  So if a bank denied anyone a mortgage, it just reeked of racism.  So lenders had to find a way to make the unqualified qualified before the DOJ charged them with discrimination in lending.  So, in the mid 1990s, they figured out how to make the unqualified qualified.  Along with a little help from the government.

The subprime mortgage was the vehicle.  Adjustable Rate Mortgages (ARMS).  And No Income No Asset (NINA, aka, Ninja) loans.  Of course, these by themselves didn’t solve any problem.  Because no respectable lender would ever approve such risky mortgages.  This is where government came in.  Or, rather, the Government Sponsored Enterprise (GSE).  Better known to you and me as Fannie Mae and Freddie Mac.  Here’s how it worked.  The GSEs bought those risky loans from the lenders.  Then sold them to Wall Street.  Where investment bankers packaged them into Mortgage-Backed Securities (MBS) and Collateralized Debt Obligations (CDO).  High risk loans became low-risk, high-yield securities.  The risk was transferred from the bank to the taxpayer and then to the investor.  And back to the taxpayers when they had to pay for the bailout of the subprime mortgage crisis.

The enabler for this great financial crisis was the government.  First ‘encouraging’ banks to loan to the unqualified.  And then by their partnership with the GSEs.  Encouraging more and more risky behavior because they were getting a piece of the action.  So they turned a blind eye.  Even when some warned the committees responsible for their oversight.  They laughed.  Said they were just mean racists trying to deny fair and affordable housing to minorities.  And they insisted that these GSEs were financially strong and healthy.  Up until the world learned they weren’t.

Crony Capitalism can be Smart Government if it Saves the Environment

There’s one reason why government partners with business.  Corruption.  Crony capitalism.  Either an unscrupulous business trying to buy favors for personal gain.  Or an unscrupulous politician trying to sell favors for personal gain.  And good luck if you run an honest business.  Because the buying and selling of favors simply becomes paying tribute to be left alone.

Both sides are guilty of this.  Though the Left says it’s the Right that is in the pocket of the corporations.  Which is funny.  Because the Left is just as guilty.  But when they do it, it serves a higher purpose. So it’s smart government.  Such as when one of the world’s largest corporations, GE, doesn’t pay any income taxes.  By using some creative accounting practices.  But they’re very cozy with the current administration.  So they get a pass.  And they’re eager to cash in on all that green legislation.  To help them sell their green products.  You see, that’s good for the environment.  So it’s okay that they don’t pay income taxes.  And, more importantly, they have lobbyists.  They know how to play the game.  And they play it well.

But when the Right wants to cut the corporate income tax to stimulate the economy to create jobs, that’s just corporate welfare.  They’ll fight that every day of the week.  But if a corporation’s lobbyists treat them well, they’ll make the incandescent light bulb illegal.  So that corporation can sell more of their compact fluorescent lamps.  But that’s not crony capitalism.  That’s just smart government.  Because it saves the environment.

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When it Comes to the Libyan War, Obama must see George W. Bush when he Looks into the Mirror

Posted by PITHOCRATES - March 30th, 2011

Dumb things and Turd Sandwiches

President Obama called what he’s doing in Libya dumb.  In 2002 when he was criticizing George W. Bush for toppling the brutal dictator Saddam Hussein in Iraq.   He may not have changed much from this position.  Someone told Savannah Guthrie, NBC News, that the president used a phrase of a national security aide to describe his Libyan operations, calling them a “turd sandwich.”  You have to hand it to the president, he sure knows dumb and turd sandwiches.  Because they really describe well the Obama Doctrine in Libya.  And though it’s not a great delicacy, we the people may have to learn to enjoy this sandwich.  For we may be taking a bite from this sandwich for a very long time.

Libya to become a Recruiting Ground for al Qaeda?

First it was a no-fly zone.  Then we were attacking Qaddafi’s ground forces.  Now we’re taking it up a notch.  We may be supplying arms to the opposition forces.  And Obama has CIA operatives on the ground.  But I’m sure they’re not wearing boots.  For Obama promised there would be no boots on the ground. 

Get ready to take another bite of that sandwich.  Even though the UN Resolution 1973 did not authorize regime change, we’re sure acting like that’s what we’re doing.  And we really don’t know who the opposition is.  But what the hell?  What’s the worst that can happen in this chaotic, rapidly changing situation (see Al Qaeda’s Libya Pilgrimage by Ron Moreau & Sami Yousafzai posted 3/30/2011 on The Daily Beast)?

As debate rages in Washington over whether to arm anti-Gaddafi rebels, an exclusive report by The Daily Beast indicates al Qaeda forces are gearing up to join the rebels and seize power in Libya…

Since the anti-Gaddafi revolution began last month, al Qaeda—especially Libyan-born affiliates—have viewed the fighting as an opportunity to spread their radical Islamist ideology. Indeed, as one Afghan Taliban operative who helps facilitate the movement of al Qaeda militants between the tribal area and Pakistani cities told The Daily Beast earlier this month: “This rebellion is the fresh breeze they’ve been waiting years for. They realize that if they don’t use this opportunity, it could be the end of their chances to turn Libya toward a real Islamic state, as Afghanistan once was…”

According to the Afghan commander, al Qaeda fighters can’t believe their good luck that U.S. and NATO aircraft—the same forces that have dropped bombs on their heads in Afghanistan and Pakistan—are now raining down ordnance against Gaddafi.

You mean our actions in Libya will attract al Qaeda operatives?  Wait a minute.  Let me see if I understand this.  A country where radical Islamists were persecuted and exiled who then went abroad to get battle experience in foreign wars want to come home now because of the Obama Doctrine?  Why, that’s not good.  In fact, Obama can call his actions in Libya dumb again.  For he criticized George W. Bush for doing this in Iraq.  Recruiting al Qaeda where there was no al Qaeda.  And here is Obama.  Recruiting al Qaeda to Libya.  Talk about the pot calling the kettle black.

Today, along the tribal border region, al Qaeda’s thirst for more immediate news has led even top leaders like Abu Yahya al-Libi, a Libyan who serves as the movement’s senior Islamist ideologue and bin Laden’s head of operations for Afghanistan, to become almost foolhardy. The Afghan commander says that Yahya and some of his countrymen have even risked visiting villagers’ houses that have satellite television dishes on the roof to watch the latest Western and Middle Eastern news feeds from Libya. Their movements in public areas could easily expose these high value targets to human and UAV surveillance, and a deadly drone strike.

When important bad guys risk their lives for Libyan War updates you know something is afoot.

Whether Yahya himself will return to Libya remains to be seen, but speculation about what he’ll do is rife in the tribal area. “What Yahya will do is on the mind and in the words of everyone,” the Taliban commander adds.  “But I think he is probably preparing for his next move, contacting mujahideen in Libya and watching the situation in Libya…”

“They know they must tread cautiously, and not push too hard, for too much, too soon,” he says. Instead, he says, they expect to take a moderate line at first, while quietly trying to persuade rebel leaders that the preservation of Libyan sovereignty against Western “colonialists” depends on taking an anti-Israeli, anti-American line. Any move toward imposing Islamic sharia law, Yahya’s specialty, will have to come later. Still, Taliban sources say, if Yahya is successful in reaching rebel-held territory inside Libya, at least he’ll be able to operate with relative freedom, without worrying about Gaddafi’s secret police.

Oh my.  This is double plus dumb.  To play on an Orwellian phrase.  Some of us older people may have an eerie feeling of déjà vu.  Because this is how the Iranian Revolution went from democratic uprising to oppressive theocracy.  And we’re providing just the kind of environment to recruit mujahedeen.  Chaos.  Not only that, when they recruit them they may be already armed.  Because of the Obama Doctrine.  Perhaps it’s time to rethink this doctrine.

The Cities we’re Protecting are home to Libyan Jihadists?

All right, it looks like Islamist militants are coming home to Libya.  Thanks to our no-fly zone.  And ground support for the opposition.  Whoever they may be.  So what was this Islamist militant-Qaddafi relationship like?  And who was the real bad guy?  Well, if we focus on just this dynamic it appears that we may be backing the wrong horse (see Jihadist Opportunities in Libya by Scott Stewart posted 2/24/2011 on Stratfor).

Libyans have long participated in militant operations in places like Afghanistan, Bosnia, Chechnya and Iraq. After leaving Afghanistan in the early 1990s, a sizable group of Libyan jihadists returned home and launched a militant campaign aimed at toppling Gadhafi, whom they considered an infidel. The group began calling itself the Libyan Islamic Fighting Group (LIFG) in 1995, and carried out a low-level insurgency that included assassination attempts against Gadhafi and attacks against military and police patrols.

Gadhafi responded with an iron fist, essentially imposing martial law in the Islamist militant strongholds of Darnah and Benghazi and the towns of Ras al-Helal and al-Qubbah in the Jabal al-Akhdar region… Many LIFG members fled the country in the face of the government crackdown and a number of them ended up finding refuge with groups like al Qaeda in places such as Afghanistan.

While the continued participation of Libyan men in fighting on far-flung battlefields was not expressly encouraged by the Libyan government, it was tacitly permitted. The Gadhafi regime, like other countries in the region, saw exporting jihadists as a way to rid itself of potential problems. Every jihadist who died overseas was one less the government had to worry about. This policy did not take into account the concept of “tactical Darwinism,” which means that while the United States and its coalition partners will kill many fighters, those who survive are apt to be strong and cunning. The weak and incompetent have been weeded out, leaving a core of hardened, competent militants. These survivors have learned tactics for survival in the face of superior firepower and have learned to manufacture and effectively employ new types of highly effective improvised explosive devices (IEDs).

In a Nov. 3, 2007, audio message, al Qaeda No. 2 Ayman al-Zawahiri reported that the LIFG had formally joined the al Qaeda network. This statement came as no real surprise, given that members of the group have long been close to al-Zawahiri and Osama bin Laden. Moreover, the core al Qaeda group has long had a large number of Libyan cadre in its senior ranks, including men such as Abu Yahya al-Libi, Anas al-Libi, Abu Faraj al-Libi (who reportedly is being held by U.S. forces at Guantanamo Bay) and Abu Laith al-Libi, who was killed in a January 2008 unmanned aerial vehicle strike in Pakistan.

Oh, oh.  The rebel cities are also home to the Libyan Islamic Fighting Group?  Really?  The people who were killing Americans in Afghanistan and Iraq are the people we’re now helping in Libya?  We’re going to give these people arms?  So they can, basically, continue a struggle they started long ago to overthrow Qaddafi and impose Sharia Law?  Replacing one oppressive regime with another even more oppressive regime?  Do I understand this correctly?  Because this is dumb.  And worthy of the turd sandwich metaphor.

This toppling of brutal dictators is trickier than it looks.

The Libyan government’s security apparatus carefully monitored those Libyans who passed through the crucible of fighting on the battlefield in places like Iraq and Afghanistan and then returned to Libya. Tripoli took a carrot-and-stick approach to the group similar to that implemented by the Saudi regime. As a result, the LIFG and other jihadists were unable to pose a serious threat to the Gadhafi regime, and have remained very quiet in recent years. In fact, they were for the most part demobilized and rehabilitated.

Gadhafi’s son Seif al-Islam oversaw the program to rehabilitate LIFG militants, which his personal charity managed. The regime’s continued concern over the LIFG was clearly demonstrated early on in the unrest when it announced that it would continue the scheduled release from custody of LIFG fighters.

So Libya has been struggling with a Muslim problem.  Of the radical Islamist kind.  And some of those trying to now overthrow the regime may be Islamic militants.  How about that?  Maybe that crazy bastard wasn’t lying.  Maybe there were some chards of truth in Qaddafi’s ramblings.

This deep streak of radicalism in eastern Libya brings us back to the beginning. While it seems unlikely at this point that the jihadists could somehow gain control of Libya, if Gadhafi falls and there is a period of chaos in Libya, these militants may find themselves with far more operating space inside the country than they have experienced in decades…

While Seif al-Islam, who certainly has political motives to hype such a threat, has mentioned this possibility, so have the governments of Egypt and Italy. Should Libya become chaotic and the jihadists become able to establish an operational base amid the chaos, Egypt and Italy will have to be concerned about not only refugee problems but also the potential spillover of jihadists. Certainly, at the very least the weapons looted in Libya could easily be sold or given to jihadists in places like Egypt, Tunisia and Algeria, turning militancy in Libya into a larger regional problem. In a worst-case scenario, if Libya experiences a vacuum of power, it could become the next Iraq or Pakistan, a gathering place for jihadists from around the region and the world. The country did serve as such a base for a wide array of Marxist and rejectionist terrorists and militants in the 1970s and 1980s.

Refugees and jihadists spilling over Libyan borders?  Funny.  Because that’s sort of the focal point of the Obama Doctrine.  To prevent spillover.  That’s why we’re there.  To keep the region stable.  Avoid chaos.  And had we not intervened we may have just done that.  With less loss of life than we may have in this worst-case scenario.  And have a more stable Libya to boot.  But now we may have to nation-build for a third time in a Muslim country.  Or see jihadists radicalize the entire region.  In other words, turd sandwich.

Obama Doctrine or Chaos Theory?

Just when you thought it couldn’t get any worse in the Libyan War.  Obama Doctrine?  Truth be told there is no Obama Doctrine.  It’s chaos theory.  Without the theory.  For we sure seem to be doing a lot of things without thinking them through first.  Of course it could be worse.  If we did these things after thinking them through.  And we’re getting exactly what we expected.

Pass that sandwich.

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FUNDAMENTAL TRUTH #59: “When the Right partners with business the Left calls it crony capitalism. When they partner with business the Left calls that smart government.” -Old Pithy

Posted by PITHOCRATES - March 29th, 2011

The Right likes Capitalism, the Left likes Marxism

Crony capitalism isn’t capitalism.  At best it’s mercantilism.  At worse it’s autocracy.  But the critics of capitalism haven’t the foggiest clue of what capitalism is.  They think it just exploits the working class.  Like Karl Marx said.  Of course, Karl Marx was wrong.  His philosophy has never worked.  Whereas capitalism, true capitalism, has.  Try to point to a successful Marxist country today.  You can’t do it.  Because when you take from those according to ability and give to those according to need you have everyone trying to show as little ability and as great need as possible.  Put yourself in that position.  Do you want to show some genius and work 12-hour days and see all of your earnings go to people sitting at home collecting state benefits?  Or would you rather not work those 12-hour days, relax at home and collect those state benefits?  If these are your choices, you don’t have to answer.  Because everyone is going to choose to stay at home and collect benefits.  Because no one volunteers to be a slave.

In such a world try to imagine how many cellular towers people would install when no one wants to work.  Not many.  Which means no cell phones, no text messaging, no internet on your mobile device and no sitting in your favorite coffee shop Internet hotspot.  For no one will spend the excruciating time, money and effort to create something while he or she is paid less than those with greater need who do nothing.  In other words, there is no incentive to work hard.  So no one will work hard.  Just like you won’t work hard by working overtime hours for free.  And why won’t you?  Because when you work you sell your time to an employer.  It’s your time.  If no one is paying you for it, you’d rather do something fun.  We all would.  Because it’s our unalienable right to pursue happiness.  Like Thomas Jefferson wrote in the Declaration of Independence.  And pursue it we do.  Because when it comes to our happiness, we’re all Jeffersonians.  Even Alexander Hamilton.  Even though they often saw things differently.

And one of those things was capitalism.  Jefferson didn’t like bankers.  Especially when they were in tight with the government.  Hamilton, on the other hand, liked the bankers.  Because he knew the difference between money and capital.  Assume everyone has a few bucks in their pockets.  What is that going to buy these individuals?  Not much.  Certainly no cellular towers.  But when you pool that money together you get capital.  And capital can buy cellular towers and the other conveniences of modern society.  And this is capitalism.  There’s a little more to it but the point is capitalism provides incentive.  And incentive stimulates innovation.  People take risks, work hard and create great things.  Marxism, on the other hand, provides no incentive for anyone to innovate.  There are no risk takers and people work the bare minimum they can get away with.  And there is nothing great in a Marxist society except misery, hunger and fear.  North Korea and Cuba are about the last of the Marxist societies remaining.  The Soviet Union, Eastern Europe and Mao’s People’s Republic of China are relics of the Cold War.  Now on the ash heap of history.  And all of these countries have/had sealed borders.  People could not leave.  If they tried they often died.  Many still risked it.  Because life was horrible under Marxism.

Jefferson the anti-Capitalist turns to Capitalism

Now whenever you gather money in great big piles you invite corruption.  Especially in government.  Which is what Jefferson feared.  You need money to do things.  And if government had access to great pools of it, they could do a lot of things.  Build armies.  Build navies.  Fight wars.  Grow the size of government.  Increase the size of the federal payroll.  Buy favors.  Sell patronage.  So more and more people became part of a growing, bloated federal government.  Who then had a vested interest in seeing it continue to grow to protect and increase the power and money they had.  All the great cities in the old world (London, Paris, Madrid, etc.) were corrupt.  The bankers were in bed with the politicians.  And the people suffered.  In his beloved France, Jefferson saw firsthand this insidious combination of money and power impoverish and starve the masses.  He saw revolutionary fervor grow in the Jacobin clubs.  And witnessed the outbreak of the French Revolution.  To check the power of the absolute monarchy and instill republican ideals.  And he liked what he saw.

With the backdrop of history, two men (and their followers) pulled America in two directions.  The Hamiltonians wanted to model America after the British Empire.  Rich and powerful.  Jefferson envisioned a nation of citizen farmers.  Simple farmers toiling the land.  Free from the corruption of the banks and the merchants.  With limited government.  Working with a modest federal budget.  Without any debt.  Of course, this all went out the window with the Louisiana Purchase.  When he needed a big whopping pile of money.  And a little extraconstitutional authority as well.  Sort of like a European monarch.  Which he took.  And thanks to a little thing called capitalism, the British and Dutch put together some creative financing for the French and the Americans.  They paid cash to France in exchange for the American bonds they just underwrote.  Some would say it was a bit hypocritical considering his attacks against Hamilton, but the U.S. profited very well from that purchase.  The point being is that even an ardent anti-capitalist like Jefferson had to turn to capitalism to close this deal.  Because there was no other way a young and poor nation could ever come up with that kind of money without borrowing it.

But all politicians aren’t like Thomas Jefferson.  In fact, shortly after the Founding Father generation, government began to grow.  There were political favors.  Pandering.  And corruption.  As the quality of the politician declined more unscrupulous people were attracted to government.  A growing nation needed to grow.  It needed to build things.   Armies.  Navies.  Forts.  Government buildings.  Post offices.  Canals.  Railroads.  As the nation grew it collected more taxes.  It soon had a lot of money to buy these things.  And issuing contracts for these things could be a very lucrative endeavor.  For the unscrupulous politician.  Who would only contract with those who made it worth his while.  The unscrupulous businessman.

Buying and Selling Favors for Personal Gain

This is crony capitalism.  The joining of business and government in backroom deals.  This isn’t laissez-faire capitalism.  This is the buying and selling of favors for personal gain.  And this is what many people think capitalism is.  Especially those critics on the Left.  Who think in zero-sum terms.  The only way some people can have more money is if other people have less.  Some people are lucky.  Some just aren’t.  Ability and ambition have nothing to do with it.  It’s all based on who you know.  And when money and power is concentrated in too few hands, it shuts out others from the market place.  And that’s just not nice.  Good people will be unable to make other and more important things.  So unless someone smart steps in and coordinates this economic activity, that activity will be inefficient.  It will build the wrong things.  And the wealth will accumulate in the wrong hands.

These politicians want to partner with business to make the right things.  By the right people.  The things they want to see built.  And not the things they don’t like.  A good example of this today is the electric car.  And the internal combustion engine.  They love one.  And despise the other.  They put in policies to increase the cost of gasoline-powered cars.  And the cost of gasoline.  And provide subsidies to electric car companies to help them build cars no one wants to buy.  And subsidies to consumers to reduce the price on electric cars.  So they’ll buy something they don’t want.

Currently, there is no market for the electric car.  People are buying it now for one of two reasons.  Because of the subsidies.  Or the smugness.  Yet companies are building these cars.  Why?  Well, they’re not doing it to lose money.  They’re making money.  Somehow.  But it isn’t in the market place.  And if it isn’t the market place, it can mean only one thing.  They are getting some sweet federal subsidies to build these cars no one wants.  And this just isn’t capitalism.  It’s another example of crony capitalism.

The Left hates Shareholders, not Corporations

The Left attacks the Right for being the party of the big corporations.  They’re nothing but a bunch of crooks.  The corporations.  And the Republicans.  Republicans pander to the corporations.  They want to deregulate their industries.  While consumer safety suffers.  As does the environment.  And they want to cut their taxes.  Paid for by tax hikes on the poor and working class.  To those on the Left the business corporation is evil incarnate.  Unless they want to partner with them.  And build things together.  Then they’re okay.

The Left hates corporations.  Yet it’s always the left that favors corporatism.  The partnering of business and government.  Like in Mussolini’s fascist Italy.  Or outright nationalization of the corporation.  A complete takeover by the government. Like in Hugo Chavez‘s Venezuela.  It apparently isn’t the corporations per se they hate.  It’s the shareholders.  They have no problem with these corporations making obscene profits.  As long as the politicians can share in these profits.

So there you have it.  The difference between crony capitalism and smart government.  It all depends on the amount of money flowing into the government’s coffers.  If the shareholders keep the full return on their investment then the business and Republicans are practicing crony capitalism.  If the shareholders share their return on their investment with the Democrats, then that’s smart government partnering with business.

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Obama Explains Autocratic Action in Libya was Necessary to Keep UN Legitimate

Posted by PITHOCRATES - March 28th, 2011

Obama Explains the Libyan War

President Obama finally took to the television to explain what we’re doing in Libya.  He takes a dig at George W. Bush over the Iraq War.  Says this isn’t anything like the Iraq War.  And that the U.S. role will be short and sweet (see Obama: Libya Isn’t Iraq by Carol E. Lee posted 3/28/2011 on The Wall Street Journal).

During the 2008 presidential campaign,  Barack Obama became a hero of the left for his opposition to the Iraq war. Tonight, he used the eight-year-old conflict to explain how the U.N.-backed mission to protect rebels in Libya, not overthrow Col. Moammar Gadhafi, won’t result in a prolonged U.S. engagement.

“If we tried to overthrow Gadhafi by force, our coalition would splinter,” President Obama said. “We would likely have to put U.S. troops on the ground, or risk killing many civilians from the air. The dangers faced by our men and women in uniform would be far greater. So would the costs, and our share of the responsibility for what comes next.”

He added: “To be blunt, we went down that road in Iraq.”

“[R]egime change there took eight years, thousands of American and Iraqi lives, and nearly a trillion dollars,” Mr. Obama said. “That is not something we can afford to repeat in Libya.”

Yes, we’ve been down the ‘regime-change’ road before.  And we’ve also been down the ‘no-fly-zone’ road before.  In Iraq, for example.  After the Gulf War.  Some twelve years before the Iraq War.  You see, after we threw Iraq out of Kuwait we entered into a ceasefire.  But Saddam Hussein did not behave.  Or honor many of the terms of the armistice that ended the Gulf War.  Worse, he was violently oppressing Kurds in the north and Shiites in the south that were rising up against his Sunni government.  We were hoping for regime change.  We didn’t get it.  And we didn’t try to help the Kurds or the Shiites.  For the same reasons Obama cites in the Libyan War.  Of course, the Left brutally criticized George H.W. Bush for ending the war too soon.  For not toppling the Hussein regime.  And there we were.  Watching Hussein putting down those uprisings with extreme prejudice (i.e., deadly force).  Oh, it was bad.  Like in Libya. Only worse.

The atrocities got so bad that the international community finally did something.  They established no-fly zones in the north and the south.  And maintained them for some eleven years.  Did we end them after we’ve achieved success?  No.  They ended after the Iraq War toppled Hussein from power making them moot.  You see, here’s the ugly truth.  Unless you topple the bad guy from power, those no-fly zones can never go away.  Even Bill Clinton launched an attack against Hussein while president.  Because he kept attacking the Kurds.  Even with the no-fly zone in place.

What Obama says in effect is that we’re going into Libya half-assed.  We’re not going to do anything that will have a permanent affect.  Just like after 1991 in Iraq.  And we’re leaving ourselves with an open-ended commitment that won’t end until Qaddafi dies by natural causes.  Because he ain’t going anywhere.  He’s a marked man.  And even if he finds safe sanctuary, whoever takes him in may become another Jimmy Carter and see their embassy staff taken hostage (when Carter reluctantly allowed the deposed Shah of Iran into America for medical care).

So the question remains.  Why Libya?  There’s suffering all around the world.  But we help only Libya.  Some have suggested that it was to help the Europeans protect their Libyan oil as they fear another ‘Hugo Chavez‘ nationalization of their oil assets.  Being that they made those agreements with the Qaddafi regime, I’m not sure why they would want to help the rebels trying to topple him from power.  If the Muslim Brotherhood or al-Qaeda fills the power vacuum in a post-Qaddafi Libya, you can bet that their terms on the ‘revised’ contracts won’t be as favorable to any Western economy.  So I don’t know.  It’s a stretch.  But one thing for sure Obama isn’t telling us the whole story.  There has to be a reason why Libya.  Better than the weak arguments he’s making now.

We Attacked Libya so the UN can Save Face

In making his case President Obama inadvertently attacks the role of the UN.  And tries to ease our concerns about a third war with the nation mired in recession.  And buried under a rapidly growing debt (see Obama on Libya: ‘We have a responsibility to act’ by Ben Feller posted 3/28/2011 on The Associated Press).

Citing a failure to act in Libya, he said: “The democratic impulses that are dawning across the region would be eclipsed by the darkest form of dictatorship, as repressive leaders concluded that violence is the best strategy to cling to power. The writ of the U.N. Security Council would have been shown to be little more than empty words, crippling its future credibility to uphold global peace and security.”

 Well, isn’t that a fact?  That that “writ of the UN Security Council” is pretty worthless unless backed by the wealth and military might of the United States?  The UN has no military.  Article 43 of Chapter VII of the U.N. Charter tried to build a UN military but no nation contributed any forces.  So the UN has no teeth.  Oh, sure, you can say NATO can fill that role.  But the bulk of NATO’s assets are whose?  That’s right.  Ours.  However you want to slice it doesn’t change this fundamental truth.  Any UN or NATO operation is only as strong and as effective as the size of the U.S. role in that operation.

Domestic politics got a nod, too, in a nation saddled in debt and embroiled over how to cut spending.

“The risk and cost of this operation – to our military and to American taxpayers – will be reduced significantly” Obama said.

The president said transferring the mission to NATO would leave the United States in a supporting role, providing intelligence, logistical support and search and rescue assistance. He said the U.S. would also use its capabilities to jam Gadhafi’s means of communication.

The U.S. in a supporting role?  Whenever has the U.S. played that part before?  We’re the John Wayne of international peace-keeping and humanitarian efforts.  We don’t get supporting roles.  Even if that’s all we want.  And the sop to the taxpayers?  This from the guy that is running trillion dollar deficits?  That’s ‘trillion’ with a ‘t’.  Not the ‘billion’ dollar deficits of Ronald Reagan that were irresponsible and bankrupting the country.  He has shown little regard to the American taxpayer.  Why should we believe him now?  He likes to spend tax dollars.  And he likes to tax. 

Fighting Illegal Wars and Cozying up to Big Corporations just isn’t for Republicans Anymore

And tax he does.  He and his progressive Democrats.  They go after rich people.  And big corporations.  Well, some of the big corporations (see 15 Tax Escape Artists by The Daily Beast posted 3/28/2011 on The Daily Beast).

As reported Friday, General Electric concluded 2010 with $14.2 billion in profits, for which the Internal Revenue Service is paying them a tax benefit of $3.2 billion, thanks to a shrewd use of U.S. tax loopholes, aggressive lobbying and favorable international tax provisions. They’re far from alone.

“Companies are becoming much more sophisticated in the way they arbitrage the U.S. tax system,” says Howard Gleckman, a resident fellow at The Urban Institute, which analyzes economic issues in the U.S. “GE is not the only one, there are many other companies doing the same thing.”

Did you catch that?  GE earned $14.2 billion in profits and did not pay any taxes.  In fact, the IRS paid them a tax benefit of $3.2 billion.    How does that make you feel about a ‘green’ corporation in tight with the Obama administration?  GE is a heavy Democrat donor.  And crony.  A big proponent of green energy.  Because they want to sell compact fluorescent lamps and windmills.  They’re so committed to Obama in going green that Jeffrey Immelt, GE CEO, leads Obama’s economic advisory board.  And yet it’s always the Republicans that are criticized for being in the pocket of the big corporations.  But when it’s Democrats, we don’t call it crony capitalism.  Go figure.

Is GE getting favorable treatment?  Perhaps. 

Critics argue that the avoidance of corporate income tax hurts the economy and hampers domestic investment and job creation, but defenders of the practices argue it’s the only way their companies can stay competitive on a global scale as the American corporate tax rate of 35 percent is one the highest in the world…

“GE is a symptom of a much bigger problem and GE management uses the tax code for their benefit,” says Gleckman. “I’m not offended by GE, I’m offended by a tax system that allows this to go on. They have an obligation to their shareholders and their workers to maximize after-tax profits.”

Of course, the irony is that GE Chief Executive Jeffrey Immelt is the same person Barack Obama appointed to head the panel of external economic advisers created in 2009 to help steer the U.S. out of the economic crisis. Says Willens, “when [Immelt] was appointed to that position, people who had familiarity with GE’s tax practices had a good laugh, which are rare for tax professionals.”

Obama says our role in Libya will be limited to help the American taxpayer.  Does having the highest corporate tax rates in the world that stifle economic growth and sends jobs overseas help, too?  These tax rates are so high that it forces poor corporations to manipulate the tax code to stay competitive.  Which is okay as long as you are pouring money into Democrat coffers apparently.  Even if you outsource jobs to countries with lower tax rates.

And having the fox guard the chicken house?  In the world of Obama, there’s no conflict there.  Of course, if George W. Bush selected an oilman to lead such a board I suspect there would have been some protestation.  But Obama can do no wrong.  Although the Libyan War is now straining some of his strongest supporters.  Which should make for an interesting 2012 election.  If we have one, that is.

Going Rogue or Just in over his Head?

Special tax deals and policy influence for cronies?  Wars launched without Congressional authority or any clear idea of what exactly our national security interests are?  High taxation?  Huge deficits?  You know, there is a name for this kind of leader.  Autocrat.  Someone who does whatever he wants.  This reminds me of another leader.  You might have heard of him in the news lately.  He’s Libyan.  Goes by the name of Qaddafi.

Of course, Obama is no Qaddafi.  He’s much more conservative in dress.  And he doesn’t murder his own people.  But apart from these two things, you have to admit there are some similarities.  Both are cults of personality (before you object remember that Obama got the Nobel Peace Prize before he had a chance to do anything as president).  Friends of both get special treatment (the stimulus bill didn’t hire anyone – it went to the public sector unions and other supporters).  Both feel they’re above the law (take Obamacare, for example.  Ruled unconstitutional yet the Obama administration is still proceeding in defiance of the court’s ruling).  And they both attack their enemies (the Obama machinery bussed protesters to Wisconsin to try to prevent the elected Wisconsin Assembly from voting on the bill to restrict collective bargaining rights to public sector workers).  Oh, and even though he defied one judge (in the Obamacare ruling) he used another judge in Wisconsin to stop a law he didn’t personally like (restricting collective bargaining rights of public sector unions).

So this leaves all scratching our collective head.  Why Libya?  When you get right down to it, he must like a lot about Qaddafi.  He’s doing a lot of the same.  Only without the blood and fancy dress.  And while we’re asking questions, here’s another.  Will there be an election in 2012?  That may depend on how far his poll numbers drop.  Because there’s a limit to the number of dead people that can vote without drawing suspicion.  I’m joking, of course.  There will be an election.  Obama hasn’t gone rogue.  He’s just young, inexperienced and in over his head.  At least based on his incomprehensible actions.

www.PITHOCRATES.com

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Why does Obama move toward National Health Care when Europe moves away from It?

Posted by PITHOCRATES - March 27th, 2011

Rationing is the Hallmark of National Health Care

Supporters of Obamacare say everyone will get quality health care services.  Opponents say it will result in lower quality and rationing.  The UK has national health care.  The National Health Service (NHS).  So how are things in the NHS?  Are they overflowing with quality health care services?  Or are they rationing.  Well, let’s take a look at one example in the vast NHS system (see Dementia checks at 75 urged by Alzheimer’s Society by Adam Brimelow, Health Correspondent, BBC News).

The NHS should offer checks for dementia when people reach 75, a leading health charity says…

Dr Laurence Buckman, from the British Medical Association, says there is value in the idea of screening for dementia, and that many GPs would be happy to carry it out. But he says many would struggle to find the time.

“It takes an hour to do an assessment, during which time five other patients could have been seen. In the current economic climate, when the NHS is being asked to make huge efficiency savings and there are many equally valid competing demands, patients and the public need to have a debate over which services should be prioritised.”

The NHS should check for dementia.  But doesn’t.  They could.  But they would have to make cuts elsewhere.  Because they have limited resources.  And more people that that they can handle on their current budget.  So they don’t check for dementia.  To save money for other patients.  That sounds like rationing.  And it is no doubt the future of Obamacare.

Europeans have Learned that Less Government is Best in their Health Care

The NHS is a behemoth.  With lots of bureaucrats and bureaucracy between doctors and patients.  And one thing about bureaucracies is that they don’t change much.  If at all.  They’re like a big ship with a tiny rudder.  Change is slow.  And hard.  It pushes bureaucrats out of their comfort zones.  So they resist change.  So while technology marches on in the private sector, the old way of doing things remain in these bloated bureaucracies. 

In the public sector bureaucracy there is a saying.  If it’s broke, don’t fix it.  Because fixing it may involve change.  And they don’t like change.  This is why people tend to get exasperated dealing with government bureaucracies.  At any level.  Standing in line to renew your driver’s license can be insufferable.  You’ll see state workers standing around doing nothing.  While you stand in line.  Why?  Because they can.  Where else are you going to go?  And so it is in the NHS.  You’ll have to deal with rationing.  Long wait times.  Impersonal bureaucrats.  Why?  You have no choice.  Where else are you going to go? 

Yes, there are problems in the NHS.  But they are not unique.  All of Europe’s health care systems are having problems (see Europe’s Failing Health by Javier Espinoza posted 3/28/2011 on The Wall Street Journal).

Reformers want to reduce the state’s role in health-care delivery and introduce a competitive element…many feel that without innovation, crumbling state-backed systems will collapse as they struggle to cope with aging populations, soaring overheads and, more recently, mounting budget deficits.

The statistics paint a bleak picture. According to the Organization for Economic Cooperation and Development, the European Union will see an increase in health expenditure of 350% by 2050, whereas at the same time the economy is only set to expand by 180%.

Some work has already been done to estimate the real impact on future expenditures. Friedrich Breyer, a professor of economics at the University of Konstanz in Germany, calculates that in Germany alone between 2020 and 2030 there will be a huge spike in the number of elderly people alongside an enormous drop in young and working-age people. “This will mean a dramatic increase in individuals’ payroll tax contribution rates to health care to 20.7% in 2030 and over 23% in 2040,” he says. This compares to just 11.4% in 1980.

Like that old saying says, competition makes everything better.  Without it there’s no incentive to improve.  Or a reason to worry about costs.  You just go to the government for more money.  Unfortunately, doing that for all these years just made these costs grow out of control.  And an aging population just compounds that problem.  You can thank birth control and abortion for that.  The baby boom was the population growth rate’s last hurrah.  And now we’re stuck with declining birth rate.  Fewer young who pay taxes.  And more old who consume benefits.  In an archaic system.  That’s cost inefficient.  In other words, health care systems around the world are broken.  And someone needs to fix them.

Unlike the U.K. health-care system, where the state manages and delivers the services, systems in the rest of Europe, particularly Switzerland, the Netherlands and to some extent Germany, rely more on a system of private insurance. Switzerland has been hailed as the least over-protective system. In that country health insurers are the ones who determine their fees and the services they provide—as long as they adhere to the basic services agreed in the country’s Health Insurance Law…

As a result of less government control, the Swiss health-care system has been able to reduce waiting time for treatment and pioneers new technology and pharmaceuticals, according to the Institute for the Study of Civil Society, a London think tank known as Civitas.

While President Obama is moving the U.S. towards a more centralized, state-controlled behemoth, Europe is moving the other way.  It looks like the social democracies of Europe have learned that less government is best in health care.  Privatization lowers cost through competition.  And it’s reduced waiting times and increased quality.  And yet Obama wants to take the U.S. in the other way.  The wrong way.  Why?

…it is in the U.K. that arguably the biggest changes need to be made. The government of Prime Minister David Cameron is determined to reform the 63-year-old National Health System. It is undergoing a massive overhaul in an effort to save £1.7 billion ($2.7 billion) a year. Under the proposed plans, general practitioners are set to take control of commissioning services for patients. The government is proposing to scrap strategic health authorities and primary care trusts, which currently commission services. The government argues it does not have a choice. The country’s budget deficit is soaring and the NHS is one of the biggest drains on its resources…

Not everyone, however, is an advocate of health-care reform. In the U.K., trade unions have been vociferous in their discontent over the proposed overhaul of the NHS…

The big fear is that these reforms promote a system where you can top up. And this diminishes the quality of health and creates a two-tier system.”

The U.K. already has a two-tier system.  The rank and file British goes to the NHS.  The affluent travel to where they can buy the best health care that money can buy.

Once upon the time unions wanted to control their health care plans.  And they offered some nice plans.  Because that’s why people joined unions.  For the benefits.  Union benefits were always better than non-union benefits.  But unions everywhere want to shed their health care costs.  Because they’re just too damn expensive.  And they can’t pass these costs onto their employers anymore.  Trade union members in the U.S. have long been contributing to their health care costs.  And the size of that contribution just seems to keep on growing.  The unions want out.  They want national health care.  But not the people who currently have private health insurance.  Because they know things will get worse.  There’ll be longer waits.  And lower quality.  How do they know that?  By simply looking at what’s going on in Europe.

Obamacare:  Transferring Money from the Private to the Public Sector

There is empirical evidence everywhere that shows Obamacare is wrong.  The U.K.  Europe.  Canada.  Cuba.  It tries to replicate here what’s already been proven wrong.  Everywhere people have tried it.  So why the persistence here in the USA to nationalize our health care?

Well, first of all, you have to look at who supports national health care.  They’re all Big Government people.  Unions.  Liberals.  Government statists.  And how do these people get power?  By pandering.  And you need money to pander.  Taxes were always a good for that until they became so high people resisted further increases.  Unions were also a good source of money (union dues supported liberal/statist candidates) but market pressures squeezed their pay (and, subsequently, what they could pay in dues).  Public sector unions were their best vehicle to transfer money from the private sector to their pockets.  Because there are no market forces involved.  Salary and wage packages are set by unions and government.  The taxpayers, who pay for these packages, have no say.  But their greed has bankrupted states and cities and angry taxpayers have voted statists out of office.  And that leaves nationalized health care as their last best hope.

You see, it’s not about providing quality health care to all Americans.  It’s about transferring money from the private sector to the public sector.  That’s why they ignore the empirical evidence.  Because they don’t care.  They just want to control that money.  And at about 17% of GDP, that’s a lot of money to pass through their greedy little fingers.  So while Europe tries to improve their health care systems, Obama, Pelosi, Reid, et al, are trying to enrich their political class at the expense of our health care system.  Further impoverishing working Americans.  And giving them a poorer health care system in the process.

Boy.  With friends like this in government, I guess we don’t need any enemies.

www.PITHOCRATES.com

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UK Budget Cuts Ignite Riots, Gives Glimpse of USA Future

Posted by PITHOCRATES - March 26th, 2011

Unruly Mobs Attack the Police…in London

The riots in the Middle East were ignited by high unemployment, high food prices and little government relief for either.  Some countries have all but degenerated into civil war.  But violent unrest is not limited to the Middle East.  Even some of the most advanced Western economies are having their problems (see TUC protest march: anarchists on the rampage in London by Patrick Sawer and David Barrett posted 3/26/2011 The Telegraph).

Police fought mobs of masked thugs who pelted officers with ammonia and fireworks loaded with coins.

The anti-capitalists started fires, smashed their way into banks, hotels and shops, bringing chaos to Britain’s busiest shopping street.

The violence began as Ed Miliband, the Labour leader, addressed a TUC rally of at least 250,000 peaceful protesters in Hyde Park who had marched from Westminster to demonstrate against government spending cuts.

Yeah, you read that right.  London, England.  Unbelievable, isn’t it?  The violence against the police?  And property?  Wow.  And look who’s doing it.  Bloody anti-capitalist anarchist thugs. 

After five hours of running battles, there were 75 arrests. At least 30 people, including five police officers, were injured. Police said the anti-capitalists threw lightbulbs filled with ammonia at them…

They ordered limited use of “kettling” to contain the rioters but admitted that such was the scale of the violence, they could not protect property.

The UK has big time budget problems.  High taxes are hurting the economy.  Ever increasing public benefits require more and more tax revenue.  And increases the debt.  They cannot sustain this spending without crashing the economy.  Or bankrupting the nation.  But the anarchists don’t care.  Because they’re anti-capitalists.  And simply don’t understand rudimentary economics.  Or numbers with a ‘£’ in front of them.

From Rich Empire to Bankrupt Nanny State

So just how bad are things in the UK?  Bad.  The country is at a crossroads.  It may forever change if it doesn’t change course.  During World War II it was the Nazis threatening their survival.  Today it’s their own spending (see Britain’s leaders should come clean on the true depth of the fiscal crisis by Liam Halligan posted 3/26/2011 on The Telegraph).

The UK’s fiscal crisis is of monumental historic importance. The future of the free world may not be at stake as it was in Churchill’s day. What is in the balance, though, is the prosperity of the British people for at least the next few decades and our status as a top-ranking nation.

This is a common theme among great nations that fall from greatness.  Out of control government spending.  It brought down the Roman Empire.  And the British Empire.  But the great nation that built it remains.  For now, at least.  But the government spending is burdening Britain more than her empire ever did.

Over the last 12 months, then, this country’s “on-balance-sheet” liabilities have risen by £147bn. That’s roughly what we spent on the NHS and defence combined in 2010 – and that was merely, during this last year of “austerity”, the incremental increase in what Britain has put “on tick”.

That’s my point – and I will keep making it until it fully enters the public discourse. It is the total debt numbers that Osborne, the Tories and our politicians in general should focus on, not the size of the annual deficit.

This is another common theme with great nations.  They have big military forces.  To protect what is theirs.  And to maintain the peace.  The Royal Navy built the British Empire.  And maintained world peace.  As did the Roman Legions.  That’s why there was a Pax Romana.  And a Pax Britannica.  These empires ushered in great periods of peace.  And their rule of law and free markets provided great prosperity.  But the prosperity led to entitlement.  And state benefits.  Such as the NHS (National Health Service).  State spending increases to meet the desires of voters.  And that spending is now unsustainable.  They have to cut something.  Because they just can’t borrow anymore.

In 2009, the UK spent £31bn – around 6pc of total tax receipts – on debt interest payments. That’s money down the drain. By 2015, we won’t have reached, in Churchill’s words, some “broad sunlit upland”. After four more years of deficits, debt services costs, according to last week’s Budget, will by then be £67bn a year – or almost 10pc of total tax receipts. These shocking numbers are also likely to be under-estimates, given the UK’s massive “off-balance-sheet” liabilities and the Treasury’s benign assumption of future gilt rates.

These interest costs are staggering.  Any meaningful cuts will have to be greater than the annual debt cost if they have any hope of bringing down deficits.  Or the debt.  And they were trying to make some meaningful cuts.  Almost £100bn.  And we saw what happened.  People took to the streets in violent protest.

All of us – politicians, commentators and voters – should compare the quality of our current national debate, its utter detachment from reality, with the statesmanship and candour of Churchill’s “blood, toil, tears and sweat“. For such hard truths inspired a nation, while winning Churchill untold respect.

Of course, during Churchill’s time, there wasn’t a nanny state.  After enduring World War I and the Great Depression, austerity was an all too familiar way of life.  It isn’t like that today.  Today students protest if they don’t get a free college education.  It is questionable even if Winston Churchill himself could inspire today’s entitlement culture.  They’re just too spoiled, lazy and greedy.

A Look into America’s Future

All right, so that’s what’s happening in the UK.  How about the USA?  We have our problems.  But we’re not as bad off.  Obamacare is not quite the NHS.  Yet.  But we have the same entitlement culture.  Out of control state spending is plunging us into record deficits and debt.  High taxes and regulatory compliance has drawn out the Great Recession.  And when some governors start cutting their budgets to balance their budgets, the people protested.  Our day of reckoning is coming.  And N. Gregory Mankiw wrote how a future president might inspire the American people ala Churchill in 2026.  It’s an interesting look at what could very well be our future (see It’s 2026, and the Debt Is Due by N. Gregory Mankiw posted 3/26/2011 on The New York Times).

The seeds of this crisis were planted long ago, by previous generations. Our parents and grandparents had noble aims. They saw poverty among the elderly and created Social Security. They saw sickness and created Medicare and Medicaid. They saw Americans struggle to afford health insurance and embraced health care reform with subsidies for middle-class families.

But this expansion in government did not come cheap. Government spending has taken up an increasing share of our national income.

Today, most of the large baby-boom generation is retired. They are no longer working and paying taxes, but they are eligible for the many government benefits we offer the elderly.

Our efforts to control health care costs have failed. We must now acknowledge that rising costs are driven largely by technological advances in saving lives. These advances are welcome, but they are expensive nonetheless.

If we had chosen to tax ourselves to pay for this spending, our current problems could have been avoided. But no one likes paying taxes. Taxes not only take money out of our pockets, but they also distort incentives and reduce economic growth. So, instead, we borrowed increasing amounts to pay for these programs.

This part of the story we know.  It’s how we got here.  Or there, as it were, in this tale from the future.  Now comes the debt spiral.  Which will force us to act.  And make decisions no one wants to, or is willing to, now.  Which will be even more painful hence.

For years, the United States government borrowed on good terms. Investors both at home and abroad were confident that we would honor our debts. They were sure that when the time came, we would do the right thing and bring spending and taxes into line.

But over the last several years, as the ratio of our debt to gross domestic product reached ever-higher levels, investors started getting nervous. They demanded higher interest rates to compensate for the perceived risk. Higher interest rates increased the cost of servicing our debt, adding to the upward pressure on spending. We found ourselves in a vicious circle of rising budget deficits and falling investor confidence.

When the treasury tried to auction off some bonds in this tale there were few takers.  So this future president secured a loan from the International Monetary Fund (IMF) with some draconian strings.  The IMF required big cuts in spending (Social Security, Medicare, Medicaid, Obamacare and subsidies – farming, ethanol production, public broadcasting, energy conservation and trade promotion).  And big tax increases. 

We will raise taxes on all but the poorest Americans. We will do this primarily by broadening the tax base, eliminating deductions for mortgage interest and state and local taxes. Employer-provided health insurance will hereafter be taxable compensation.

We will increase the gasoline tax by $2 a gallon. This will not only increase revenue, but will also address various social ills, from global climate change to local traffic congestion.

AS I have said, these changes are repellant to me. When you elected me, I promised to preserve the social safety net. I assured you that the budget deficit could be fixed by eliminating waste, fraud and abuse, and by increasing taxes on only the richest Americans. But now we have little choice in the matter.

If only we had faced up to this problem a generation ago. The choices then would not have been easy, but they would have been less draconian than the sudden, nonnegotiable demands we now face. Americans would have come to rely less on government and more on themselves, and so would be better prepared today.

Even in the future presidents will be making the same promises that they cannot keep.  And make the same lament.  If only we continued the policies of Ronald Reagan.  Kept government small.  And relied on ourselves.  Had we, we’d never be in this financial mess now.  Or hence.

Dead People haven’t a Care in the World

Our own greed will do us in.  Insatiable want of government benefits kills great nations.  Even the UK and the USA are not immune from this.  But the easy political road is to pander to the people.  Give them what they want.  To get their votes.  They do this knowing full well they are destroying the future.  So why do they do it?  Because most of those in government are old.  And when it comes time to pay the piper, it will be a moot point.  Because they will be dead.  And dead people haven’t a care in the world.

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Obama’s ‘help’ may Lose the Middle East to Radical Islam

Posted by PITHOCRATES - March 25th, 2011

Libya no Worse than other Humanitarian Crises

Everyone is still asking that question.  Why Libya?  The Middle East and Africa are full of humanitarian crises.  Yet we’re not bombing them.  Is their suffering not as bad as the Libyan suffering?  Or are their people simply not worth saving?  People want to know.  Because people are suffering everywhere. 

[Syria]  Violence erupted around Syria on Friday as troops opened fire on protesters in several cities and pro- and anti-government crowds clashed on the tense streets of the capital in the most widespread unrest in years, witnesses said.  -By Associated Press, The Washington Post, 3/25/2011 

[Bahrain]  Clashes erupted in Shiite villages across Bahrain on Friday as antigovernment protesters defied a government ban on public gatherings, despite a beefed-up presence by the military and security forces.  -By Joe Parkinson, The Wall Street Journal, 3/25/2011 

[Ivory Coast]  Up to one million Ivorians have now fled fighting in the main city Abidjan alone, with others uprooted across the country, the UN Refugee Agency (UNHCR) said on Friday as violence escalated in a 4-month power struggle.  – Stephany Nebehay, Reuters, 3/25/2011 

[Yemen]  With hundreds of thousands of rival demonstrators on Sanaa’s streets, soldiers fired warning shots to prevent loyalists whipped up by Mr Saleh’s speech attacking anti-regime protesters on Friday, the Muslim day of prayers and rest… The rallies came one week after a bloodbath in which 52 protesters were gunned down by Saleh loyalists, drawing widespread international condemnation and a spate of defections from within his ruling circle.  -By AFP, ABC News, 3/25/2011 

And there’s more.  Iran.  North Korea.  And others.  It’s everywhere.  Suffering.  But you know why we’re not helping any of these nations?  Because it’s too much for anyone to do.  Suffering is bad but it is NOT the United States’ duty to end it all.  And yet we’re trying to do just that in Libya.  Was the Qaddafi regime a great threat to American security interests?  No.  He’s been pretty quiet since the Iraq War.  He seemed content to oppress his people and leave others alone.  Perhaps the others noted above were even less dangerous than Qaddafi.  Perhaps in comparison they’re just docile pussy cats.

If any Nation Deserves Regime Change it’s Syria

Let’s look at Syria.  They make no secret of the fact that they don’t like America.  Or Israel.  They are behind a lot of unrest in the Middle East.  They want to see the whole region under Sharia Law.  And be less friendly with the West.  As bad as Qaddafi was, he did sell a lot of his oil to the West.  So that would make Syria more of a national security concern than Libya.  But we’re not bombing Syria.  Perhaps the Syrian violence just isn’t that bad (see Resident says troops open fire on protesters in Daraa, other Syrian cities by Associated Press posted 3/25/2011 on The Washington Post).

The violence erupted after tens of thousands of Syrians took to the streets across the country, shouting calls for greater freedoms in support of a more than week-long uprising in Daraa, according to witnesses, activists and footage posted online…

An activist in Damascus in touch with eyewitnesses in the southern village of Sanamein said troops there opened fire on demonstrators trying to march to Daraa, a short distance away. He said there had been witness reports of fatalities, some claiming as many as 20 slain, but those could not be independently confirmed…

About 200 people demonstrated after the Friday prayers at the Thawra Bridge, near the central Marjeh Square, chanting “our souls, our blood we sacrifice for you Daraa!” and “freedom! freedom!” They were chased by security forces who beat them some of them with batons and detained others, an activist said on condition of anonymity for fear of government reprisals.

No.  That isn’t it.  That’s some pretty bad violence.  That’s Qaddafi bad.  Killing your own people.  And it is far worse than what Mubarak was doing in Egypt.  He didn’t turn the army against his people.  And yet Obama said he had to go. But we’re not attacking Syria.  With bombs.  Or words.  Perhaps Syria is a strategic force for stability in the Middle East.  Like how Iraq balanced Iran once upon a time.  We supported Iraq then.  Because Iraq balanced the greater risk in Iran.  Like that old saying.  The enemy of my enemy is my friend.  So maybe Syria offsets the ‘big bad’ in the Middle East.

Assad, a close ally of Iran and its regional proxies, Hezbollah and Hamas, has promised increased freedoms for discontented citizens and increased pay and benefits for state workers — a familiar package of incentives offered by other nervous Arab regimes in recent weeks.

No.  That ain’t it either.  Syria is cozy with all the ‘big bads’ in the Middle East.  The powers that want to kill Jews, Americans and all other infidels.  But wait.  It gets worse.

Shaaban, the presidential adviser, also said the Baath party would study ending a state of emergency that it put in place after taking power in 1963.

The emergency laws, which have been a feature of many Arab countries, allow people to be arrested without warrants and imprisoned without trial. Human rights groups say violations of other basic liberties are rife in Syria, with torture and abuse common in police stations, detention centers and prisons, and dissenters regularly imprisoned for years without due process.

The Baath party?  Sound familiar?  That was the party of Saddam Hussein.  Emergency laws since 1963?  Arrests without warrants?  Imprisoned without trial?  Torture and abuse?  No due process?  This is bad stuff.  What some would call a humanitarian crisis.  Like the one in Libya.  But as bad as that all sounds, it’s the Iraq connection that is most troubling.

Before the Iraq War, Iraq and Syria were close.  So close that many think those weapons of mass destruction we were looking for in Iraq were hidden in Syria during the run-up to war.  We know Saddam had them.  He used them on the Iranians.  And the Kurds.  But he never documented their destruction.  So if he hid them in Syria they may still be there.  They may have been hesitant to use them thus far because we could probably trace them back to them.  Especially if they had Iraqi markings on them.  But if all these ‘democracy’ movements in the Middle East and North Africa gather steam, they could become a problem.  If the region goes Muslim Brotherhood and is closer to Iran and/or al Qaeda, Syria won’t be the only country to see the world the way they do.  And they may feel safe enough to use these weapons.  Should they have them.  Oh, and Israel would be surrounded by countries that have the destruction of Israel at the top of their top-10 list.  And that is very bad.  Because that could start a world war.  Shut off the oil supply to the Western economies.  And plunge the world into a depression.

The Muslim Brotherhood Establishing an Islamic State in Egypt?

So let’s back up a bit.  Let’s take a closer look at these ‘democracy’ movements.  Are they really democracy movements?  Or are they more theocracy movements?  Well, in Egypt, things aren’t looking good for democracy (see Islamist Group Is Rising Force in a New Egypt by Michael Slackman posted 3/24/2011 on The New York Times).

In post-revolutionary Egypt, where hope and confusion collide in the daily struggle to build a new nation, religion has emerged as a powerful political force, following an uprising that was based on secular ideals. The Muslim Brotherhood, an Islamist group once banned by the state, is at the forefront, transformed into a tacit partner with the military government that many fear will thwart fundamental changes.

It is also clear that the young, educated secular activists who initially propelled the nonideological revolution are no longer the driving political force — at least not at the moment.

Sound familiar?  This is what happened in Iran.  The young people who started the revolution didn’t end the revolution.  Ayatollah Khomeini ended it.  With one of the most oppressive theocracies in the Middle East.  And those young women in the Iranian Revolution?  They don’t protest anymore.  They live good Muslim lives under Sharia Law.  Whether they like it or not.

“There is evidence the Brotherhood struck some kind of a deal with the military early on,” said Elijah Zarwan, a senior analyst with the International Crisis Group…

 “We are all worried,” said Amr Koura, 55, a television producer, reflecting the opinions of the secular minority. “The young people have no control of the revolution anymore. It was evident in the last few weeks when you saw a lot of bearded people taking charge. The youth are gone…”

When the new prime minister, Essam Sharaf, addressed the crowd in Tahrir Square this month, Mohamed el-Beltagi, a prominent Brotherhood member, stood by his side. A Brotherhood member was also appointed to the committee that drafted amendments to the Constitution.

The big question was would Mubarak turn the army on the people.  Or, should he, if the army would follow that order.  You see, the people respected the army.  Most had family that had or were serving in the army.  The army was good.  It was the security forces the people hated.  Not the army.  It was the army the people thought they could trust.  And now we’re hearing that they struck a deal with the Muslim Brotherhood?  That’s very ominous.  As are the beards.  That’s hardcore, conservative Islam.  Like they have in Iran.  And that sure ain’t what the protestors wanted in Egypt.  I mean, there were women in those crowds.  If Egypt goes the way of the bearded men, these women will never protest anything ever again.  Just like in Iran.

And the lying has begun.  Egypt was a secular country.  But they still had their religion.  It was still a Muslim country.  Like Turkey.  There’s the state.  And the religion.  Both very important parts of life in these countries.  But separate parts.  Now it appears secular means state atheism.  Like in the former Soviet Union.  Or in parts of America where anything goes.  According to the more radical elements in Egypt, at least.

“The problem is that our country will be without a religion,” read a flier distributed in Cairo by a group calling itself the Egyptian Revolution Society. “This means that the call to the prayer will not be heard anymore like in the case of Switzerland, women will be banned from wearing the hijab like in the case of France,” it said, referring to the Muslim head scarf. “And there will be laws that allow men to get married to men and women to get married to women like in the case of America.”

Talk about scare tactics.  If you don’t vote for a more conservative Islam there will be no Islam.  People will be free.  Women will be free.  And gay, I guess.  All horrible thoughts to the conservative Muslim.  And a lot of Muslim men who are just not fans of feminism.

This is not to say that the Brotherhood is intent on establishing an Islamic state…

None of that has changed, Mr. Erian, the spokesman, said in an interview. “We are keen to spread our ideas and our values,” he said. “We are not keen for power.”

He would not comment on whether the Brotherhood had an arrangement with the military, but he said the will of the people to shift toward Islam spoke for itself and was a sign of Egypt’s emerging democratic values. “Don’t trust the intellectuals, liberals and secularists,” Mr. Erian said. “They are a minor group crying all the time. If they don’t work hard, they have no future.”

Warning Klaxons should be going off.  These are things that dictators say before they oppress their people.  Why, you can almost see the reassuring eyes and the soothing voice of Ayatollah Khomeini as he calmed the anxious Iranian people shortly after 1979.  Before those eyes became scary.  And we all saw how that turned out.  Oppressive theocratic rule.  And the odds just got better for the same in Egypt.

Virginity Tests in Egypt

And it’s already started (see Egypt women protesters forced to take ‘virginity tests’ posted 3/24/2011 on the BBC).

A leading rights group says the Egyptian army arrested, tortured and forced women to take “virginity tests” during protests earlier this month.

Amnesty International is calling on the authorities in Cairo to investigate.

It says at least 18 female protesters were arrested after army officers cleared Tahrir Square on 9 March.

It says they were then beaten, given electric shocks and strip searched.

The army denies the allegations.

This isn’t what the women in the crowds were protesting for.  And the reason these women were protesting?  Because they could.  Egypt was one of the most progressive countries in the Middle East.  Women had some of the greatest freedoms enjoyed in a Muslim country.  Not anymore.

A 20-year-old woman, Salwa Hosseini, told Amnesty she was forced to take off all her clothes by a female prison guard in a room with open doors and a window.

She said that male soldiers looked in and took photographs of her while she was naked.

The demonstrator said a man in a white coat later carried out a ‘virginity check’ on her and she was threatened with prostitution charges.

“Forcing women to have ‘virginity tests’ is utterly unacceptable. Its purpose is to degrade women because they are women,” a spokesperson for Amnesty International said in a statement.

Mubarak may have been bad.  But he wasn’t that bad.  The painful moral of this story is to be careful what you ask for.  The enemy you know is often better than the enemy you don’t know.  Unfortunately we sometimes learn this lesson too late.  Including presidents.  For it was a mistake to throw Mubarak under the bus.  Middle East scholars knew it then.  And the rest of us are learning it now.  And now we’re helping to destabilize Libya.  That, too, could turn out to be a mistake.  Because we don’t know who the rebels are.  Just like we didn’t know who they were in Egypt.  So the chances are good that what happens in Egypt could very well happen in Libya.  A “shift towards Islam.”

Of course, there are a couple of countries in the Middle East that probably warrant our involvement.  Two come to mind.  Iran.  And Syria.  Things could only get better in these countries.  Yet we don’t help the protesters in these sovereign countries.  So when President Obama finally tells us why Libya, perhaps he can tell us why not in countries that already hate us.  And while he’s explaining these great mysteries perhaps he can tell us why he’s undermining our allies in the Middle East.  Is there a method to this madness?  Or is it just madness?

www.PITHOCRATES.com

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LESSONS LEARNED #58: “Presidents with aggressive domestic agendas tend to have inept and naïve foreign policy.” -Old Pithy

Posted by PITHOCRATES - March 24th, 2011

Social Security:  A Fiscal Disaster just Waiting to Happen

FDR’s New Deal programs were an abject failure.  Nothing he tried ended the Great Depression.  Proof positive that Keynesian Economics doesn’t work.  But this Britain infatuated the world.  Many still cling to the teachings of Keynes.  Because he empowered Big Government.  And people in government love that.  But government is pretty inefficient.  And not very good at doing things.  Take Social Security, for example. 

It started as a payroll tax of 1%.  They argued it was a paltry price to pay to help the disabled and retired.  Of course, the actuaries never saw birth control and abortion coming.  So as the population aged, the birthrate declined.  With the boomers starting to retire, the great pyramid inverted.  More people are collecting than paying in.  Today the tax rate is 6.2%.  That’s 6.2 times the FDR rate.  Which is an increase of 520%.  The federal government has increased the rate 20 times to save the program from bankruptcy.  And, guess what?  It’s STILL going bankrupt.  It’s one fifth of the federal budget.  And it keeps getting bigger.  And it’s such a political third-rail that no one will touch it.  Taxpayers will have to pay so much in taxes that they will have to live a very austere life to pay for people they don’t even know who are collecting far more than they ever paid in.  Because, according to the actuaries, people were just living too long.  That’s another thing they never saw coming. 

In 1937, the average lifespan was 60 years.  The retirement age was 65.  So, in other words, the average social security beneficiary would be dead for approximately 5 years before they were eligible to collect Social Security.  Now that’s how you keep a program solvent.  Make sure that most of the people paying into it die before they have a chance to receive benefits.  Today the average lifespan is about 78 years.  The retirement age is 67.  So the average retiree will collect benefits for approximately 11 years BEFORE he or she dies.  The actuaries NEVER envisioned this.  Damn the American health care system and their miracle drugs.  We’ve never lived longer.  Or burdened the government more.

FDR was a domestic policy disaster.  He ruined this country.  Any objective analyst would agree.  But we still love him for getting us through the dark years of World War II.  Of course, much of the world doesn’t for his gift of the Cold War to these oppressed people.

FDR loved Joe Stalin, Joe Stalin walked all over FDR

In the 1930s, there was some serious government tinkering going on with economies.  FDR in the USA.  Hitler in Germany.  Mussolini in Italy.  And Joseph Stalin in the Soviet Union.  FDR was on the same page, especially with Mussolini and his beloved Joseph Stalin.  He loved these guys.  Until they went rogue.  FDR had no problem hating Germany.  He was never a fan of the country.  But when Germany and the Soviet Union entered into a nonaggression pact to divide and conquer Poland, thus launching World War II, it broke his heart.  He and all his New Dealers were devastated.  Uncle Joe was the model they wanted to copy.  They loved this man.  And what he was doing in the Soviet Union.  Acting bold without a pesky Congress hindering him.  They loved him so much that they didn’t try all that hard to hunt down the Soviet spies within the FDR administration.  And there were plenty of them to hunt down.

But then God answered FDR’s prayers.  Hitler launched Operation Barbarossa, a massive invasion of the Soviet Union.  This part of the war became hell on earth.  The Eastern Front.  There cruelty knew no bounds.  Scorched earth policies.  And genocide.  Hitler’s SS did most of these acts of barbarism.  And the dreaded Einsatzgruppen took systematic murder to new heights.  The Eastern Front saw the worst cruelty of man.  But there was a bright spot.  For FDR.  He could welcome Uncle Joe back into the fold.  And did. 

Roosevelt was a master diplomat.  He could charm the pants off of anyone.  He had a gift.  And it filled him with great pomposity and reckless arrogance.  People warned him about Stalin.  And Soviet Communism.  But FDR poo pooed them.  He said he could talk to Uncle Joe.  Reason with him.  Give a lot and ask for nothing.  And he did.  FDR thought Stalin would then ask for nothing more and work with him in establishing world peace.  Just like a typical progressive/liberal.  And how did that work out?  Not only did the Red Army NOT pull out of occupied countries, they tried to occupy more.  Soviet Communism took Eastern Europe, tried to take Turkey and Greece and pushed into Iran.  We pushed some of these pushes back.  But the Cold War was on.  FDR had given so much that the Soviets had control over huge populations, condemning them to the misery of life behind the Iron Curtain.  And suffer they would for 44 long years.

Despite the fiscal carnage and world misery FDR left in his wake, he is still loved and adored by those on the Left.  People as pompous, arrogant and naïve as he.  Who still want to do things the Roosevelt way.  Despite the unmitigated disaster the FDR way turned out to be. 

Mismanaging Medicare/Medicaid and the Vietnam War

We can best describe LBJ‘s Great Society as doubling down on FDR’s New Deal.  And it was as big a disaster as the New Deal was.  LBJ was going to end poverty and racial injustice.  And pour federal money into education to make it better.  He failed.  Based on the Left’s attacks on the Right, we’re still beset by poverty and racial injustice.  (Even though we elected a black president.  Go figure.)  And that the teacher unions are constantly going on strike to get more money.  For the kids, of course.  And if we still have these problems it can only mean one thing.  The Great Society failed.

Included in the Great Society were Medicare and Medicaid.  Health insurance for the elderly and the poor, respectfully.  Currently, this is another 1/5 of the total federal budget.  And it has the same problems as Social Security has.  A declining birthrate and a growing elderly population that is living longer.  The actuaries crunched their numbers before the explosion of birth control and abortion.  So their projections are just as bad as FDR’s were.  The tax rate went from 0.35% to 1.45%, and increase of 314%.  Unlike Social Security, the death rate never ran in the black for Medicare/Medicaid.  From the get-go people were living 3 years beyond the average retirement age, consuming health care benefits.  Now the average American is living 11 years into retirement.  And a lot of them aren’t doing that by a healthy diet and exercise.  They’re doing it by consuming vast amounts of health care benefits.   LBJ took the problems of the New Deal and multiplied them by ten.  The cumulative effect of these two programs crashed the economy into stagflation and misery in the 1970s.  And if that wasn’t bad enough, he pushed the nation close to civil war by his mismanagement of the Vietnam War.

JFK got us into Vietnam.  But Johnson expanded our involvement.  And tried to manage it from Washington.  With the Whiz Kids left over from JFK.  A bunch of poindexters who tried to run a war by looking at numbers in columns.  Body counts.  And restrictions on the rules of engagement.  It was a horrible way to run a war.  It just prolonged it.  Created more American casualties.  And empowered our enemy.  Can’t bomb the North.  Can’t bomb their supply routes (i.e., the Ho Chi Minh Trail).  We did everything we could to help the enemy by giving them safe sanctuaries up the ying-yang.  And when we had a chance to deliver a knockout punch after the failed Tet Offensive, we did NOTHING.  Partly because Walter Cronkite said the war was lost.  Partly because of the hippies protesting on our college campuses.  And, of course, the race riots.  LBJ couldn’t understand it.  He had given so much with his Great Society and yet people didn’t love him.  All because of that damn war in Vietnam.  JFK’s war.  How he wished they never went there.  It was a distraction to his beloved Great Society.  And it was a bitch to pay for. 

Bad Domestic Agendas, Bad Foreign Policy

Unlike FDR, LBJ could not win his war.  Of course, FDR didn’t have hippies who hated their country protesting against him.  Just a bunch of communists in his administration who were simpatico with his Big Government view.  Because of Vietnam, though, the Left would never have the same fond feelings for LBJ as they do for FDR. 

Their foreign policy has made the world a less safe place.  FDR gave us 44 years of Cold War.  And LBJ weakened the United States by his failure in Vietnam.  Made us a paper tiger.  Made our enemies not fear us anymore.  They started taking chances.   Doubting our will to respond to their aggression.  Or, if we did, they figured we would just cut and run after a few casualties.  And that has been their strategy since.  Not to win.  But to make us quit.  By making us bleed.

Following World War II we had great prosperity.  Peace.  And happiness.  The 1950s.  Following Vietnam, we had stagflation and misery.  High crime rates.  Drug infestation and abject poverty in our big cities.  Abortion and birth control.  The 1970s.  All this despite the programs of LBJ’s Great Society that were to end all those woes.  And with the declining birthrate, the fiscal problems would only get worse.

Their domestic programs are pushing the nation ever closer to bankruptcy.  There appears to be no solution to the damage they’ve done.  Or will do.  Social Security and Medicare/Medicaid will either bankrupt the country.  Or ignite civil unrest as benefits are slashed.  Neither will be good for the country.  But this is what we get from presidents with aggressive domestic agendas.  Fiscal crises.  Domestic unrest.  And an unsafe world.

www.PITHOCRATES.com

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The Libyan War is the Women’s War

Posted by PITHOCRATES - March 23rd, 2011

Does anyone Know Why we’re in Libya?

There’s woe and suffering all around the world.  And yet we’re not bombing all around the world.  We’re bombing Libya.  And the BIG question is why?  Why there and not other places?  Other places that have woe and suffering?  Like North KoreaSudanRwandaZimbabweSyriaYemenIranSri Lanka.  I mean, put a map on the wall and throw a dart.  Chances are that wherever it lands there will be terrible woe and suffering.  And unless that dart lands on Libya, you can bet that the U.S. is not in that country trying to stop that woe and suffering.  So why?  Why Libya?  And not the rest of the world?

Good question.  A lot of people are asking it.  Is it oil?  Well, let’s look at who they export to.  According to Reuters, the breakdown goes like this:  Italy (32%), other Europe (14%), Germany (14%), France (10%), China (10%), Spain (9%), Other (6%) and the U.S. (5%).  Ours is the smallest piece of the pie. Over half goes to Europe.  So I can see why Europe cares.  But the U.S.?  We probably spill more oil than we buy from Libya.  Clearly oil isn’t a motive.  Unless the plan is to screw our European allies and take their Libyan oil.  Then again, it was the Europeans that dragged the U.S. into this thing.  So I doubt that.  Which leaves the BIG question unanswered.  Why Libya?

Is it to foster good will in the Muslim world?  By having a U.S.-European (i.e., a non-Muslim, or, one could say, as I’m sure they’re saying in the Middle East, Christian) coalition attack oil-rich Muslim land?  You know, this sounds familiar.  I think it’s been done before.  It had a name.  Oh, what was it?  Oh yes.  The Crusades.  And you know why it sounds familiar?  Because the people who hate us in the Middle East call everything we do there a Christian Crusade.  So, no, it can’t be to foster good will.  There has to be another reason.  Has to be.  Because nothing so far makes any sense.

Hillary Clinton, Susan Rice and Samantha Power Advise the President

So just who advised Obama to go to war in Libya?  Apparently it was the women in his administration (see What is Obama’s endgame in Libya? by David Gergen, CNN Senior Political Analyst, posted 3/20/2011 on CNN).

One irony, as a female friend put it, is that for years many of us believed that if only more women could gain power, the world would surely become more peaceful. Yet, we now see that the three people who talked Obama into using force against Libya’s Moammar Gadhafi were all women — Hillary Clinton, Susan Rice and Samantha Power. Leading male advisers were opposed.

Interesting.  The women wanted to use force.  The men didn’t.  That’s a switch.  Like Gergen’s lady friend says, it flies in the face of everything we thought we knew about women.  It was always the men that started the wars.  And the women who had to deal with the suffering resulting from them.  But Gergen is a guy.  What are the women saying?

Passion and Emotion now Determine Foreign Policy

Well, Maureen Dowd is a woman.  And she wrote a column about these Amazon Warriors, these Lady Hawks, these Valkyries, these Durgas (see Fight of the Valkyries by Maureen Dowd posted 3/22/2011 on The New York Times).

They are called the Amazon Warriors, the Lady Hawks, the Valkyries, the Durgas.

There is something positively mythological about a group of strong women swooping down to shake the president out of his delicate sensibilities and show him the way to war. And there is something positively predictable about guys in the White House pushing back against that story line for fear it makes the president look henpecked.

It is not yet clear if the Valkyries will get the credit or the blame on Libya. But everyone is fascinated with the gender flip: the reluctant men — the generals, the secretary of defense, top male White House national security advisers — outmuscled by the fierce women around President Obama urging him to man up against the crazy Qaddafi.

How odd to see the diplomats as hawks and the military as doves.

Reluctant men?  I wonder why they were reluctant.  Were they simply not manly?  Critics often call liberal men (and Obama and his staff are liberals) less than manly.  But that moniker doesn’t apply to the generals.  To become a general usually requires combat experience.  As a junior officer.  The ones up close and personal with the actual shooting.  These officers lead charges, they don’t order them.  Before you can order them you have to lead them.  And the brass promotes the ones who survive.  It ain’t like politics.  Where money and connections can make a career.  So these generals aren’t liberals.  They’re men.  They can walk it like they talk it.  So maybe the women are just strong women born with the courage, confidence and wisdom that others gain in combat.

Susan Rice, the U.N. ambassador and former Clinton administration adviser on Africa, was haunted by Rwanda. Samantha Power, a national security aide who wrote an award-winning book about genocide, was thinking of Bosnia. Gayle Smith, another senior national security aide, was an adviser to President Clinton on Africa after the Rwandan massacre. Hillary Clinton, a skeptic at first, paid attention to the other women (putting aside that tense moment during the ’08 primaries when Power called her “a monster”). She also may have had some pillow talk with Bill, whose regrets about Rwanda no doubt helped shape his recommendation for a no-fly zone over Libya.

Hell, these women aren’t Amazon Warriors.  They’re just a bunch of clueless, over-emotional women giving very dangerous advice on matters they are woefully unqualified in.  The use of force.

When President Obama listened to his militaristic muses, it gave armchair shrinks lots to muse about. As one wrote to me: “Cool, cerebral president chooses passion and emotion (human rights, Samantha, Hillary, Susan) over reason and strategic thinking (Bob Gates, Tom Donilon). Is it the pattern set up by his Mom and Michelle — women have the last word?”

And there it is.  Passion and emotions.  The female traits that will make the world a better, more peaceful place.  Only here they led to war.  And a very uncertain future.  These women have just made the world a more unsafe place.  The mission is unclear (regime change no regime change) because the mission was never rationally planned.  It was just emotional reaction.  And the need of a president to please the women in his life.  As far as foreign policy goes, it doesn’t get any worse than this.

Bombing in the name of Humanitarianism

It’s not just their emotions that make these women dangerous advisors.  They’re liberals.  Which means they don’t like the military.  They see it as nothing but a toy past presidents used to bully other nations with.  They don’t believe in projecting force to protect vital national security interests.  Or in deterrence.  But they have no problem in using that military for humanitarian purposes.  Of course, it’s easy for them to volunteer the military for these missions.  Because they have no idea what it’s like to serve in the military (see Women and War by W. James Antle, III, posted 3/23/2011 on The American Spectator).

To me, the more interesting angle in this case is the reluctance to go to war on the part of those with some familiarity with the military, and the enthusiasm for it on the part of those who have never faced war’s consequences.

Liberals criticized George W. Bush for deploying the military in combat operations when he did not serve in combat himself.  And now here are these Valkyries.  Who have never served in combat, either.    Advising the president to send the military on a poorly defined mission with no clear exit strategy.  So they can end the suffering.  And feel good about themselves.  Without any idea of the consequences that may result from this action. 

And who, pray tell, are these rebels we’re supporting?  Democracy-loving Muslims in a theocratic Middle East?  The Muslim Brotherhood?  Al Qaeda?  Iran-sponsored Shiites?  We just don’t know.  No one knows.  All we do know is that all of the ‘big bads’ in the Middle East feed on chaos.  And we just added a great big tsunami of chaos to the region.  It would be wise to remember how Iran became the Iran it is today.  Ayatollah Komeni swooped in during the chaos of their democratic uprising.  And before anyone knew it he established autocratic Sharia law.  Traded an oppressive dictatorship for a worse oppressive dictator ship.

We really need to be careful of what we ask for.  Especially in the Muslim Middle East/North Africa.  Especially when it results in less peace and stability in the region.  This is bad.  What’s worse is that the president of the United States is taking policy advice from these naïve pseudo-warriors.  Makes one fear what’s next on the foreign policy plate.

A Sad Chapter in American Foreign Policy

Of course, while the Lady Hawks feel good about what they’ve done, the Muslim world sees Muslim civilians dying from ‘Christian’ missile-strikes on their oil-rich land.  Will the Muslims love us for this?  For liberating these masses from a tyrant?  Well, do they love us for liberating millions of Muslims in Iraq?  In Afghanistan?  No.  They don’t.  They harbor deep suspicions.  Because we’re still there.  As we will no doubt be in Libya for a long time to come.

Libya was not a threat to vital U.S. security interests.  After we invaded Iraq, Qaddafi behaved lest he was next on the invasion list.  We had no reason to fear his brand of terrorism anymore.  We do now.  He’s pissed.  And cornered.  Who knows what money he has hidden.  And what connections he has outside of Libya. 

Yes, the suffering was bad.  But as bad as in Sudan?  Rwanda?  Zimbabwe?  Why Libya?  And not them?  Or was Libya just first?  And these are the next countries the Lady Hawks will advise the president to bomb for humanitarian reasons?  Let’s hope not.  But after Libya, anything is possible.

This is indeed a sad chapter in American foreign policy.

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FUNDAMENTAL TRUTH #58: “Presidents with aggressive domestic agendas tend to have inept and naïve foreign policy.” -Old Pithy

Posted by PITHOCRATES - March 22nd, 2011

Feeding their Egos with Illusions of their own Grandeur

First there were progressives.  Then there were liberals.  Self-proclaimed super geniuses.  Regular Wile E. Coyotes.  Smarty-pants know-it-alls.  You can’t tell them anything.  Because they know everything.  While you aren’t even smart enough to know what’s good for you.  But that’s okay.  Because they have taken it as their personal mission in life to run our lives.  To protect us from ourselves.  To tell us what to eat.  What to drink.  How to raise our kids.  How to educate them about the important things in life.  Fairness and multiculturalism.  Not math and science.  They teach us about the evils of greed.  Our greed.  Not theirs.  They can keep raising taxes to take our money so they can play with it.  But if we complain they say we hate teachers.  And children, of course.

These people start their government careers in the Ivy League.  Where they don’t learn anything useful.  They get law degrees.  Or some degree in the social sciences.  Public policy.  Philanthropy.  Degrees where they learn how to take other people’s money without providing anything useful in return.  All the while feeding their egos with illusions of their own grandeur.  They develop the cutting edge of progressive/liberal thought.  Most of it nonsense to you and me.  But in their little Ivy League world they’re saving the world.  Even though they have no idea of how the world works.  Understand things economic.  Or the role of energy in a developed economy.  They haven’t the foggiest idea about any of these things.  But they feel that only they are qualified to regulate these things.  Because they care about us.  And the planet.  Not profits.

Liberals are also not the manliest of men.  They get in touch with their softer, feminine side.  Get in touch with their feelings.  Some even cry.  Cowboys they’re not.  They’re into conflict resolution by diplomacy and timeouts.  They can be mean and nasty.  Partake in some of the worse character assassination.  But never alone.  Or without the power of the state to protect them.  You won’t see them get into any fights.  Because when it comes to actual fisticuffs, they’re not as brave as their words.  They’re the worse of bullies.  Weaklings that have others bully for them.  That’s why these people watch soccer instead of football.  Why they don’t hunt.  Why they hate the military.  They don’t like any manly behavior.  Or manly men.  No doubt from growing up in a childhood full of wedgies and swirlies.

Big Government and High Taxes

Much of a progressive’s/liberal’s life is spent getting even.  And the best revenge is living well.  And they sure do that.  Live well.  Better than most of us.  And with our money.  Either money gained through some frivolous lawsuit.  From the ‘overhead’ costs of the charitable organizations they ‘work’ for.  (Some keep more than 50% of all donations for their ‘operating’ expenses.  While the new healthcare legislations allow insurers to use no more than 20% of their premiums on their operating expenses.  How’s that for fair?)  High taxes.  Or kickbacks from the industries they regulate.

Those in government hate those in business.  Just like they hate the jocks and bullies in high school who tormented them.  But they hate business people for a different reason.  Because they have talent.  They’re able to create something people willingly pay for.  They can’t.  Of course they can play god over these people who have talent.  And they do.  Which makes up for their feelings of inadequacy.  It’s sort of a love-hate relationship.  They love taking their profits.  But they hate them because they have profits.

People need to feel a purpose.  And so it is with progressive/liberals.  Sure, having our money is good, but floating through life in the lap of luxury leaves them with an empty feeling.  Normal people may feel guilt over taking so much of our money. They just feel bored.  Like rich kids who get in trouble because they have too much time on their hands.  Bored rich kids get in trouble.  Bored liberals write legislation.  Exploit class warfare.  And go about redistributing our wealth.  They take money from the ‘rich’ people who have jobs or own businesses and give it to the needy.  And the more of these people you support with other people’s money, the more they will keep voting for you.  This allows the liberal to live a long life in politics.  Strokes their ego.  And fills that empty feeling they have from being the worthless waste of spaces they are.  And this is why they do what they do.  Keep government big.  And taxes high.

Projecting Force to Protect National Security Interests 

Liberals want power.  They want to expand government.  And expand the welfare state.  They always have big plans when they run for office.  They are never content to sitting back and let the free market work.  Because that’s no fun.  They want to control that market.  Using some bad economic theory (i.e., Keynesian Economics), they do.  They say it’s to make the markets more efficient.  But that’s not the reason.  It’s the power.  The getting even.  And getting their hands on all of that money. 

When presidents come out of the Ivy League, their heads are filled with a lot of progressive/liberal thoughts.  Ideas about income redistribution.  Fairness.  Multiculturalism.  But little about business.  Or the real world.  And as leader of the free world, that can be a problem.  Constitutionally speaking, the president’s responsibility is the real world.  The president is the commander in chief of the armed forces.  The president treats with foreign nations.  And appoints and receives ambassadors.  Nowhere in the Constitution will you see the president being responsible for income redistribution for fairness in a multicultural welfare state.

When a president goes in with an aggressive domestic agenda he comprises his Constitutional responsibilities.  It’s like a kid playing video games instead of doing his homework.  It’s fun.  But there is a cost.  The U.S. is a superpower.  And leader of the free world.  The president’s tools include military force, foreign aid and diplomacy.  And a powerful domestic economy that makes all of this possible.  If a president focuses on domestic policy over his foreign policy, both suffer.  The high taxes reduce economic activity.  Which reduces tax receipts.  And this makes budget deficits.  The progressive/liberal will not want to cut the domestic spending.  So they cut military spending and transfer it to the domestic side.  And borrow money.  Or print it.  Weakening both the military.  And the economic well being of the nation.  Which weakens the president’s ability to project force to protect national security interests. 

An Inconvenient Truth:  We Need Oil Flowing at Market Prices  

Of course, with the liberals’ disdain for the military and the military industrial complex, they don’t care.  They don’t believe there are any dangers out there.  And, if there are, it’s because we brought them upon ourselves.  For being bullies.  I mean, who are we to be a superpower and leader of the free world?  That’s just sticking our nose into other people’s business.  It’s time we stop.  Let other people live their lives.  Besides, it’s a different world today.  We don’t need standing armies or aircraft carriers.  Who’s going to invade us?

True, the chances of a D-Day type invasion landing on our shores is remote.  But there are other ways to attack our country.  9/11 comes to mind.  And there is economic warfare.  Have you enjoyed the Great Recession, the greatest recession since the Great Depression.  Probably not.  Do you remember how it started?  With $4/gallon gasoline.  Do you remember how horrible that was?  People were demanding Congress do something about it.  Amazing, isn’t it.  How high gasoline prices can trigger a recession (of course, the subprime mortgage meltdown changed that recession into the Great Recession).  Keeping oil flowing at market prices, then, is a U.S. national security interest.  Because a spike in gasoline prices will crash the healthiest of economies into recession.  Of course, this goes contrary to everything a progressive/liberal holds true.  But it’s an inconvenient truth they need to learn.

That’s why we’re in the Middle East.  We may get more of our oil from Canada, but we get some from OPEC.  More importantly, our trading partners do, too.  If that oil supply to the Western economies gets shut down, we will suffer a recession closer to the Great Depression than the Great Recession.  Oil is important to national security.  Income redistribution isn’t.  Or using the military for humanitarian purposes.  As bad as the suffering was in Darfur, Rwanda, Sri Lanka, etc., we can’t help everyone.  It would stretch our military too thin, cost more than we can afford and risk the lives of those in the military on a mission that doesn’t impact national security.  And all of this would impede the president in carrying out his constitutional responsibilities.  Protecting our national security.

We need Grownups in Charge of our Foreign Policy

Presidents often hailed for their great domestic agendas (FDR and LBJ, for example) have created economic messes that future generations have to clean up.  And because their real interests were in domestic policy, they bungled their foreign policy.  FDR may have rallied the nation to win World War II, but his naïveté gave us the Cold War.  And LBJ’s Whiz Kids mismanaged the Vietnam War so badly that the fallout nearly ignited a civil war in America.  The country changed.  And it’s never been the same since.

Kids don’t like doing their homework.  They’d rather play their games.  In this respect progressives/liberals are very much like children.  They, too, like to play their games.  And don’t like to do their homework.  But the world is a dangerous place.  We need to do our homework.  To learn the lessons of history.  More importantly, we need grownups in charge of our foreign policy.

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