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Why our President won’t fix Jobs.

Premature negativity sounds hyper-partisan,  with some random blogger here criticizing  the President’s job proposal speech before he gives it. It is President Obama, though, who is bound by that hyper-partisanship (among other things) to propose inefficient methods of job creation. Obama will be forced to propose inefficient methods of stimulus, and bound by the debt-ceiling and his view of economics.

Spending will be proposed in this speech, with likely recipients including infrastructure, R&D, education and energy. These are all worthwhile endeavors, and segments of our society that need improvement. What stops the liberal from spending effectively is sandbagging, the attachment of causes to current action. Democrats and Republicans both have a long history of adding spending to bills, even vital bills close to their heart, but liberals have it tied to their consciences.

Any spending on our infrastructure will include new paths plowed for mass transit, where the money could build twice as many roads, any research will be directed by congress to social priorities, reducing its value (regimented research is guaranteed to produce exactly nothing), any additions to education will attempt to end the achievement gap and keep teachers, needed objectives but not problems that money has been able to solve. Any energy bills will direct funds to alternative energies, promoting currently inefficient forms of electricity and fuel. In attempting to steer our nation, Obama’s proposals have thrown our economy in  the ditch. Untying the social needs from the economy will be too difficult for this president.

Money is a powerful tool, but its misuse is what got us here.

Efficient use of Capital

Jobs depend on efficient uses of capital...

Money appears to also be the only tool in a liberal’s economic toolbox, an effect that is tied to Keynesian economics and interest groups. Keynes argued that any government spending would stimulate the economy, because the people would take that money and spend it again, creating a cyclical effect that helps everyone. What legislators fail to accept, though, is that conditions were very different during the Great Depression. People who had money hoarded it, not wanting to fall victim to poverty like their neighbors. The benefit of government spending was that it forced spending, and gave wealth to those who had to spend most of it to stay alive, or at least stay in their homes. These people also had to spend in very rational ways, making the “Black Box” of demand very efficient compared to today, able to be ignored, a luxury I don’t believe we have today.

It is not my goal to debate Keynesianism, but rather to show that even Keynes wouldn’t have got us into today’s situation. In Keynes’ view, government should be pulling back on spending during the good years, but Congress hasn’t ever done that. And that is especially true for Democrats, due to liberal interest groups. These groups have causes, some good, some bad, whatever. But they promise progress and only demand funding, freeing the Democrat legislator to think only in terms of allocations and never having to wade into the mire of social policy. It has been a convenient arrangement for Democrats, but one that makes our current economic woes intractable.

So we are today caught between a rock and a hard place, and do not have the insight or tools to get out of it. Even many Republican lawmakers who have advocated for slashing spending or not raising the debt ceiling don’t fully understand the economics behind their positions. What is needed is insights into the microeconomic level of spending, something that Congress and presidents have avoided like the plague.

So President Obama cannot break through the debt ceiling, cannot go below the spending “floor,” because of ideology and opposition in Congress, and is “walled in” by inefficient spending because of conscience and interest groups. He has nowhere to go, but to propose platitudes, blame others, and appeal to our compassion. Real economics tied to effective allocation of resources will help our economy, but it is a political impossibility for this president at this time. Sadly so, I hope I am mistaken.


Political Shakeup Coming pt. 1: Democrats

A political realignment is in the works. I’ve alluded to this in a previous blog, but now there’s real news on the topic.  AFL-CIO has started playing hardball with the Democrats, and may wind up building an organized version of the TEA Party for the Left. This is only one of several undercurrents that are shifting in America today. Let’s get into what’s going on, and why I think these schisms will eventually be beneficial to America.

This will be the first in a three-part series on the political changes in America, addressing the Democrats’ situation. I’ll talk about Republicans and secular trends and issues in the upcoming installments. Here are the Democrats’ fault lines in the coming political earthquake:

First, unions and Democrats have had a schism in this state for a while. Union leadership has become tired of inaction with their money, setting up a DIME PAC here in Washington State, and in the current economic turmoil, at least some democrats have returned the favor.

The national political landscape is being moved as well. Public unions have been the one type of unions that have grown in the last decade, but is one of the less-universally-supported types, and it is giving unions as a whole a less palatable flavor politically. Unions have been the largest contributors to Democrat SuperPACs, but the fact that DEMOCRAT SuperPAC’s exist bothers many on the Left. The Huffington Post Reports on the divide between those who think SuperPACs represent what Democrats oppose, and those who are going to use them because Republicans are.

There are several issues tearing at the Democratic coalition. Group these problems under “Union Malaise.”

Secondly, and more importantly, President Obama isn’t working out. Heaven has not come to earth, the rise of the seas has not been halted, social programs are being ruled unconstitutional, soldiers are still getting killed downrange, and pragmatism doesn’t work when you view it as incongruent with Hope. Losing takes a toll on coalitions, as factions (much more divided in the Democrat party) view each other suspiciously, and re-examine their role and relationships within the American political realm.

This is key, because one Democrat strategy in the past had been to assimilate a cause, and co-opt its leadership to partisan political operatives. There is now real tension felt by members and leadership of unions, minority groups, women’s rights groups and LGBT activists, between their stated goals and the demands of the Party.

Thirdly, interest groups themselves are being challenged, and not in the way that rallies everyone together. Feminists have to confront the concept of prominent female conservatives. The vicious attacks felt by Sarah Palin (the early-on ones, during the 2010 campaign, not the ones she earned on her own later) were indicative of the threat she posed to the political solidarity of women’s rights groups. Feminists found themselves pushing against air, fighting nothing. There was no argument on the Republican side as to the qualifications of a woman, and therefore no reason to fight, nothing to rally against. Democrat interest groups cannot continue asking for money and supporters without a bogeyman, and the internal re-tooling of various rights groups to reflect the new age will diminish the Democrat Party. This is good for the interest groups: they have won, in many cases. Women and minorities have run for office, legitimately, and hold a serious place in the conversation. But it’s very bad for the current Democrat coalition: Republicans can’t take the blame anymore, and there’s less to dish out overall.

Expect targeted moderation by Republicans to splice the factions in the Democrat Party, and a continued love-hate relationship between unions and both parties. Once unions break ranks, they will see a nuanced world out there, and new political opportunities on a case-by-case basis. My money would be on these two fault lines breaking at the Democrats for the next three years. We’ll examine the Republicans next, and how Democrats could sink their whole battleship.

Take Heart, Teabagger!

TEA Partier, listen. I’m talking to you.

I know you’ve been down as of late, looking at a debt deal that didn’t go far enough, worried that the mixed results will be blamed on you and not where it should be, squarely on the shoulders of Liberal Democrats and slightly less fiscally liberal Republicans, who argue over which thing to spend too much money on. Possibly you look at the new round of attacks, saying that you threaten the Republican coalition by not playing nice and that Boener almost lost the farm back there because of you. Worse, you still get misconstrued as the favored child in the room, who the adults have been careful to indulge while still ‘doing the work ‘ that must get done to move the nation forward, a complete reversal of reality.

I want you to relax for a minute.

What the TEA Party has done is nothing short of extraordinary, and before you jump up and tell me I’m placating, listen. We on the Right haven’t institutionalized movements the way those on the Left have. “Rules for Radicals” has really nothing for us in terms of policy. But human, grassroots movements share some similarities, whatever their origin. Let’s examine them.

A real movement comes from people who cannot take the status quo any more. These people must have two things to be a real movement: integrity and community. By integrity I mean that no matter how many (or few) other people are out there, the reformer can no longer go along to get along. This doesn’t mean they want to tear the system down, it usually means they love the system so much they won’t let it descend to ugly depths anymore. This is TEA party to a tee. Having communications and relationships is what makes the movement an actual movement, and can be seen in the small groups meeting regularly around the country.

Those on the Left who dismiss TEA parties as “Astroturf” are probably split down the middle between people who have an ideological impairment to believing that a conservative can organize/would believe in something strongly enough to organize, and those who are scared to death because they recognize a movement when they see one.

 Every movement has a few stages it goes through. First, people decide to be themselves, with their vote and their voice, and not live divided internally anymore. This has happened in America as many have said “Enough, taxes and debt will not solve our problems, only pass them to our children.”  These people found themselves outside of the system, but still love it and want to change it.

In the second stage communities are built as these principled people find each other, coalescing into larger groups and passing information and support to each other. A movement begins to takes shape here.

Thirdly, These groups go public. They take flack, gain enemies, and stay as strong as they can, continuing the conversation with people who hopefully go from unawareness of the problem, to hatred of it, to uneasiness with it, to complete comfort and acceptance of the new ideas. THIS IS STANDARD! Evey new idea has entered the public conversation in precisely this way.

And lastly, they get a seat at the table. The system changes a little bit to accommodate them. Before you go around dogging John Boener and the lack of progress, look at the progress! While we are in the thick of arguments about debt, the argument is ABOUT DEBT! Take heart, oh TEAbagger, your ideas are here, and news organizations can look at them and judge them with the same lenses they look at mainstream policy, because you are now mainstream. Congratulations.

Don’t rest on your laurels, of course. I am not part of a TEA Party, but I can opine along with everyone. What you need now is to kill the vampire that’s been draining our national blood: the economic beliefs that debts don’t matter, and that centralized control helps us get out of recessions. Take this last part for what it’s worth, but stay strong, stay hopeful, and keep it up!

Bachmann gets Limbaugh’s votes

Michelle Bachmann has staked her claim in this election, taking almost all of the votes that Rush Limbaugh would have received.

Rush Limbaugh typically sees about 2,000–4,000 write-in ballots every election, but don’t expect that in 2012, as whack jobs who don’t understand the political process have lined up almost entirely behind Bachmann.

Ronald Yessler, a gas station attendant from Indiana, says he still listens to Rush every day, but that his feelings for Bachmann will make him switch camps.

“She’s like Ronald Reagan and Sarah Palin rolled into one,” Yessler said, “beautiful and badass. I usually don’t like any of the candidates, with their pandering to the lame-stream media, but Michelle doesn’t do that.”

“Rush won’t get my vote for the first time since 1992,” Yessler added. “It was a tough call.”

Glenn Beck supporters have also fled to the Bachmann camp, the studies show, although he retains a larger portion of his voting bloc due to Mormonism and emotional breakdowns.

Ron Paul, of course, hasn’t lost anybody.

It’s the Economics, Stupid! Why the U.S.’s credit downgrade spells out a coming political earthquake

Standard & Poors, one of several credit rating agencies,  has downgraded the United States’ credit rating from the absolute best AAA rating to AA+, despite Congress passing a debt deal. But what really happened here?

There have been two economic debates happening behind the scenes during this entire process, as Republicans and Democrats come face-to-face with the realities of the economic games they’ve been playing. I say “behind the scenes,” because largely, the debates over the debt ceiling have used terms like ‘fiscal responsibility,’ and ‘revenue increases,’ that are talking points that cover the (more complicated) real policies.

First, the Republicans have had to deal with a growing constituency within their ranks who are articulate objectors to Keynesian economics. These people have always existed within the ranks of Republicans, because they have had nowhere else to go (Libertarian Party, anyone?) but the rise of the TEA Party has coalesced, emboldened, and educated this group, and they have made huge gains among fiscal conservatives who were already open to these arguments. For a lighthearted, entertaining,  but accurate 10-minute education on the economics, click here. It’s also worth posting the follow-up video they made, about the current debt situation.

The political winds since President Obama took office have meant that conservatives who usually fall in line with monetarism have had access to new rhetorical ammo they previously wouldn’t touch, and they have been using it. Criticisms of Timothy Geithner and Ben Bernanke’s monetary policy can be traced very quickly to statements by Ron Paul and others who criticize the Federal Reserve’s existence. Republicans have a fight brewing between these re-branded conservatives and the moderates who want spending to go from 25% of GDP to 19% or so. Both have a case to make, but are mutually exclusive, which is why Republican candidates will not be having this argument publically. The schism could have radical consequences within the Party if it does.

Democrats are in an even worse predicament because of the downgrade, because a large and, for a long time, growing wing of the party has been saying that “Debts don’t matter.” Clearly, credit rating agencies disagree. This form of bastardized Keynesianism is something that Keynes himself wouldn’t endorse, a radical simplification of a nuanced theory by daft politicals. Part of the reason that Hayek followers have made such headway is the cartoon version of economic policy that so many of the Left have signed up for.

Real Keynesianism would have government acting as a counter-weight in the boom-and-bust economic cycle, making money more available in hard times, and less available when the economy is getting too optimistic. The re-election demands of politics however, mean that no congressman or congresswoman will ever actually vote for decreasing the economy or saving money/reducing debt in good times. The political attack ads are pre-written for this: “But Mr. So-and-so has voted against sensible legislation to help our kids, leaving our economy worse off. Tell So-and-so to go to Hell this November.”

So Democrats talk about responsible (Keynesian) policy, while voting for more, ever more stimulus and Republicans talk about “fiscal sanity,” but just make sure they vote for military spending during the boom, which is justifiable spending with their constituents. Economists are a tiny voting bloc, after all. But the country must still be governed.

So where do we go?

Progressives in the Democrat Party are serious that they want more stimulus, and angry that Obama has given away the farm, so to speak, while Ron Paul supporters are incensed that the debt ceiling was increased at all, giving away the farm in their eyes. The middle is seen as squishy and spineless by both sides. These two economic theories are irreconcilable in negotiations; they must be dealt with by economists.

Politicians cannot solve this problem.

I recommend economic education for Americans, for two reasons. First, when wide exposure is made within a group, the talented people are found. Most people out of Oklahoma who can play football, know they can play football. Most people in Alaska, not so much.  If everyone gets exposure to this key need, we will find the cream of the crop, and down the road have the ideas needed to articulate solid theory. Secondly, the interaction of ideas improves those ideas, and when a critical mass of people talk about an issue, the “national conversation” is elevated and real solutions can found, and good decisions can be made.

Secondly, we should let the political shake-ups happen. The current alliances in politics has produced a piss-poor dichotomy that has left many Americans in the cold, not really identifying with either party. I’m not advocating third parties, but rather the re-alignment of coalitions within the parties. Both sides will be pushing for the other side to break up, and trying to conserve their own Party, but both know the triggers, or fault lines, and can likely run candidates and release platforms that tear at the fabric of their political opponents. Unions should consider endorsing Republican candidates, Pro-life Christians should look at Democrats, and everyone should avoid Ron Paul.

May God Bless America.

What the Frack!?

Fracking, or hydrolic fracture mining of natural gas, is safe and plentiful, and it is dangerous and overstated. Politics has dictated and cajoled in the discussion about whether fracking is safe, and I don’t hope to resolve all of the issues, but felt that as I could summarize and enumerate the arguments succinctly for everyone. Feel free  to add to this.

Feelin’ Frack-tastic!

  • Tiny Footprint for mining
  • Drills well below aquifers
  • “Small amounts of additives we use every day around our households”
  • Water could be lit on fire before drilling

Frack No, we won’t go!

  • Examples of lighting water on fire
  • Current boom means installations are flouting laws and regulators
  • higher methane, and industry won’t release baseline numbers
  • water pollution from “wash up”

Tell me where I’m missing key points!

Repost: Increase the value of labor and decrease unemployment

Here is an interesting opinion article about labor, and a good straightforward view of conservative thought on labor policy. I don’t agree with everything there, e.g. I think the federal government should have a basic minimum wage in place, but this makes more than talking points, it’s a coherant worldview of the topic.