Another Sweet Tammys wedding cake. Hope the bride did not feel outdone.
A little political humor: An elderly man suffered a massive heart attack. The family drove wildly to get him to the emergency room. After what seemed like an eternity, the ER Doctor appeared, wearing his scrubs and a long face. He said, "Sadly, I'm afraid he is brain-dead, but, his heart is still beating.
Oh, Dear God," cried his wife, her hands clasped against her cheeks with shock. We've never had a Democrat in the family before!"
Another Hamas terrorist ring leader caught . (See 1 below.)
Israeli Government rejects extending building moratorium. Will Netanyahu buckle to American pressure that he do so? (See 2 below.)
Another academic expert Czarina has been appointed, without Congressional approval, to look after consumer fine print.
This new agency will be called The Consumer Protection Agency and it will make sure the middle class gets treated fairly. The rich can take care of themselves and the poor can't afford to buy anything so they can just eat cake.(See 3 and 3a below.)
How have government's experts been doing? They mostly fail and then ask for more power. (See 3b below.)
Liberals and their elite media supporters revel in espousing that our nation is a melting pot.
Yet when these same citizens come together, under the guise of Tea Partiers, they are called racists and bigots.
I understand when a large group assembles there will be, among them, fringe elements.
However, it is my understanding the core complaints of the Tea Partiers are the unbridled spending, spilling of the blood of our precious youth in wars poorly planned and executed by disingenuous politicians, politicians who have enriched themselves at citizen expense, the unwillingness to protect our nation's borders and legislation and policies that challenge the very precepts and spirit of our Constitution.
Rather than attack these citizens, who are exercising their legitimate right of peaceful protest and dissent, I consider them the real heroes of our nation. I applaud them.
No, I may not share their every angst but their spirited assembly, their desire to be heard at all cost, is healthy and significant.
Liberals and their friends in the media sold us a bill of goods called Obamaism. It has failed and boomeranged and their resort to disparaging Tea Partiers is typical petulant behavior. Liberals vilified Bork (to be Borked is is now part of our common language), Thomas, GW , Palin and many others who challenge their thinking, orthodoxy and who do not fit their defined mold .
In November, Liberal extremists will receive a response and if polls mean anything it will result in a solid rebuke of their nuttiness.
Throw the radical rascals out has a melodious ring.
Perhaps, just perhaps, the Tea Partiers will finally save us from the PC do gooders.(See 4, 4a, 4b and 4c below.)
New York's Republican Party, such as it is, is another justification for The Tea Party. (See 4d below.)
Syria's leader gets together with Iran's leader to plot the Middle East's future and their own. (See 5 below.)
Carter slithers out of his hole with a new book. (See 6 below.)
Meanwhile, Gov. Christie's star keeps rising. (See 6a below.)
Will Norman Podhoretz' life serve as a flashlight for Mort Zuckerman and others of his ilk? (See 7 below.)
This article is not something I totally support but does contain elements of truth. (See 8 below.)
While American's net worth falls it is reduced even more if attribution for national debt is included. (See 9 below.)
Even sadder is when a nation's culture declines. (See 9a below.)
Finally a money counterweight to Soros and his kind. (See 10 below.)
1)Hamas security chief held in Cairo as counter-terror sweep expands
Egyptian security detained Hamas' head of security Mohammad Dababesh at Cairo international airport Friday, Sept. 17, the first high-ranking Palestinian held for questioning by Egyptian security. It is not clear whether Dababesh was on his way back to or from the Gaza Strip. Sources report he is no doubt being grilled on the Grad missile attack launched against Eilat and Aqaba from Sinai on Aug. 3, in which two Egyptian border posts were destroyed.
He is senior enough in Hamas to have been in on that incident and knowledgeable about the West Bank cells responsible for murdering four Israelis near Hebron on Aug. 30 and injuring a couple at the Rimonim junction two days later. The Egyptian authorities may therefore have acted to nab Dababesh on a tip from Israel.
It was reported Friday, that a joint Israeli military-Shin Bet unit raided the Nur a-Shams camp in the West Bank town of Tulkarm and killed Iyad Assad Ahmad Abu Shalbaya, identified as deputy chief of the West Bank Hamas network responsible for those murders.
This was Israel's first major operation against known Palestinian terrorist chiefs in some years. It was carried out after Palestinian security forces failed to catch up with the perpetrators.
Shalbaya was caught in the dragnet the IDF and undercover units have cast across the northern and southern West Bank areas since early this week to thwart the wave of terror Hamas threatened for the purpose of derailing talks with the Palestinians and hitting Israel over the Jewish Yom Kippur festival which began Friday night.
The Palestinians claim Shalbaya was killed in his bed. The Israeli army spokesman reports he was shot as he ran toward them in a threatening manner and refused to stop.
His chief, Banshath al-Karmi, 34, of Hebron, is actively sought along with the Hamas cells preparing to strike in the next 24 hours, according to the latest intelligence input. Jerusalem appears to be a particular target. From Thursday night, Sept. 16, measures have been in place to keep bomb cars out of the capital, including a ban on the movement of vehicles from the Arab sector of East Jerusalem to the Israeli city as of Friday.
Military sources add that time will tell if Israel's counter-terror operations have been effective in stalling Hamas' plans or, just the opposite, galvanized Hamas into more extreme action, either on the part of their hidden West Bank cells in which the terrorist group invested great efforts, or in the form of another missile barrage from the Gaza Strip to follow the assaults of this week.
Shin Bet Director Yuval Diskin warned the Israeli cabinet session Sunday, Sept. 12 that the Hamas military arm Izz-e-din al-Qassam had given all its teams strict orders to go all-out in order to bring about the collapse of the Israel-Palestinian talks begun at Sharm el-Sheikh on Sept. 13.
Sources disclose that Hamas' West Bank commander, Al-Karmi, was arrested by the IDF in 1999, a year before the Palestinians launched their suicide killers' war on Israel. He was held for three years. Shortly after his release in 2002, he was picked up again and held in administrative detention for three months.
In 2004, he was shot and seriously injured during an IDF operation in Hebron and restricted to a wheel chair for a long period. Nonetheless, Al-Karmi has always been the live wire of Hamas' organs of terror on the West bank. Last year, he was appointed commander of the new clandestine network Hamas set up in the territory.
2)Gov’t rejects extended freeze, despite heavy pressure
By HERB KEINON AND KHALED ABU TOAMEH
PA official tells ‘Post’ he has ‘no explanation’ for US optimism; Mubarak: I told PM not to restart building, but he said he had no choice.
Despite considerable pressure from both the US and Egypt to continue the settlement construction moratorium for another three months, Prime Minister Binyamin Netanyahu’s senior ministers, a forum known as the septet, decided this week not to extend the freeze.
Since a cabinet decision was needed to put the freeze into effect last November, another cabinet decision would be needed to extend it, and the septet decided, before Netanyahu’s meeting in Jerusalem with US Secretary of State Hillary Clinton on Wednesday, not to ask for an extension.
Defense Minister Ehud Barak reportedly was in favor of an American compromise to extend the moratorium for three months in order to come to an agreement with the Palestinian Authority on final borders, so that it would then be clear where Israel would, and would not, be able to build.
Clinton, however, reiterated in a Channel 10 interview that the US still wanted to see the moratorium extended, although she said she understood Netanyahu’s argument that the PA did not take advantage of the moratorium in place for the last 9-1/2 months to enter into talks.
“The United States believes that we need to establish an environment that is conducive to negotiations,” Clinton said when asked about the moratorium.
She reiterated that both she and US President Barack Obama felt that “doing something about the moratorium” would be “an important decision by Israel,” and that this would be “in the interest of the negotiations.”
Clinton said that “if we are going to have an agreement about territory, and we are going to have a democratic, secure Jewish state in Israel and an independent, sovereign viable state for the Palestinians, everyone knows that settlements are going to have to be discussed. There are differences in their location and their numbers, but it is something that can’t be put under the rug, it has to be confronted.”
Regarding whether she supported Netanyahu’s demand that the Palestinians recognize Israel as the nation-state of the Jewish people, she said that at her meeting on Wednesday with President Shimon Peres, “he reminded me that Yasser Arafat had said, ‘Of course it will be a Jewish state.’ These are the kinds of discussion that have to be done only at the leader level.”
The Prime Minister’s Office, meanwhile, responded to reports in the Arab press that Netanyahu was considering a three-month extension by saying “the prime minister’s position in relation to the time allocated for a moratorium on new construction in Judea and Samaria is known, and there has been no change.”
Egyptian President Hosni Mubarak, meanwhile, said in a Channel 1 interview that he had urged Netanyahu to extend the moratorium by a few months so as to give the peace talks a chance.
“I told him [Netanyahu] to extend the freeze for at least three or four months during the talks. I told him that this would help achieve satisfactory results,” the Egyptian leader said.
Mubarak quoted Netanyahu as saying that he wasn’t able to extend the freeze because of opposition from his coalition partners.
“I told Netanyahu to forget about all those who are hesitant and skeptical and to continue with the settlement freeze for a few more months at least,” Mubarak said.
Mubarak said that he also made it clear during his meeting with Netanyahu earlier this week in Sharm e-Sheikh that extending the freeze was a small price compared with the potentially bloody repercussions of failing to do so.
The Egyptian president expressed hope that the extension would allow Israel and the Palestinians to reach agreement within a few months.
PA President Mahmoud Abbas on Thursday reiterated his opposition to the resumption of construction in the settlements and expressed his desire to continue with the peace talks with Israel, a spokesman for Abbas said.
3)Obama Names Warren "Architect" Of Consumer Protection Agency
President Barack Obama has named Wall Street critic Elizabeth Warren to help oversee creation of a new agency to look out for the interests of consumers in their dealings with banks, mortgage companies and other financial institutions.
Obama says the agency was Warren's idea so it only makes sense that she be "the architect" working with Treasury Secretary Timothy Geithner to get it up and running.
Obama to Senate: Stick that in your advice and consent clause.
Whatever else can be said about this White House, it isn't afraid to poke a stick in the eye of its critics. How else to explain President Obama's decision Friday to put Elizabeth Warren in charge of the new Consumer Financial Protection Bureau while avoiding Senate confirmation and, for that matter, any political supervision.
The chutzpah here is something to behold. The pride of Harvard Law School, Ms. Warren is a hero to the political left for proposing a new bureaucracy to micromanage the services that banks can offer consumers. But she is also so politically controversial that no less a liberal lion than Connecticut Senator Chris Dodd has warned the White House that she probably isn't confirmable. A President with more political and Constitutional scruple would have nominated someone else. Mr. Obama's choice is to appoint her anyway and dare the Senate to do something about it.
The plan is for Ms. Warren to run the new bureau from an office at the Treasury Department. Instead of calling her the "Director" of the bureau—the statutory title for the organization's boss—Mr. Obama has appointed her an "assistant" to him and a special adviser to Treasury Secretary Timothy Geithner.
Mr. Geithner's supervision will be pro forma, however, because Ms. Warren rolled over him during the financial reform debate and has her own pipeline to the Oval Office. The President emphasized that Ms. Warren will enjoy "direct access" to him and said she would oversee all aspects of the creation of the new agency, including staffing and policy planning. For all intents and purposes, Ms. Warren will be Treasury Secretary for all consumer lending.
We would have thought a Harvard law professor would object to the extra-legality of this arrangement, but then this is also the crew that gave us ObamaCare via budget reconciliation and put Donald Berwick in charge of Medicare without a Senate debate. Remind us again why the tea party critique of Obama governance is crazy.
The new bureau was already destined to be a bureaucratic rogue. When Members of Congress objected to it being "independent" in the way Ms. Warren hoped, Mr. Dodd and the Administration cooked up a plan to make it part of the Federal Reserve without actually answering to anyone there. The bureau has independent rule-making authority and can grant itself an annual budget up to $646 million. It will draw this money from the operations of the Fed, so the bureau needn't deal with the messy intrusions of Congressional appropriators and will therefore receive limited Congressional oversight.
Ms. Warren's bureau will dictate how credit is allocated throughout the American economy—by banks and financial firms, and also by many small businesses that extend credit to consumers. The bureau's mandate under the new Dodd-Frank law is to ensure that "consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination." If those terms sound vague and overbroad now, wait until Ms. Warren's hand-picked staff begins interpreting existing laws on fair lending and writes new rules.
In a blog posting Friday on the White House website, Ms. Warren made her intentions clear enough: "President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American." Given the economic growth and jobless figures, maybe we should start calling this the "leveling" Administration.
Though her mandate goes beyond banks, the banking system is likely to suffer the most damage. Ms. Warren was a vociferous opponent of allowing regulators charged with maintaining the safety and soundness of banks to control this new bureau. No matter how destructive its new rules may be, they can only be rescinded by a two-thirds vote of the Administration's new Financial Stability Oversight Council.
And the bureau will now be staffed and shaped by an "assistant" with no obligation to appear before the Senate. The possibility that an appointed official could hold significant authority is why the framers wrote the Senate into the process of approving the President's senior hires. Article II, Section 2 of the Constitution says the President "shall nominate, and by and with the Advice and Consent of the Senate, shall appoint . . . Officers of the United States."
Article II, Section 2 also says "Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone," but Congress explicitly did not view the head of the financial consumer bureau as an inferior officer. On July 21, Mr. Obama signed a bill passed by both Houses stating that the "Director shall be appointed by the President, by and with the advice and consent of the Senate."
We have here another end-run around Constitutional niceties so Team Obama can invest huge authority in an unelected official who is unable to withstand a public vetting. So a bureau inside an agency (the Fed) that it doesn't report to, with a budget not subject to Congressional control, now gets a leader not subject to Senate confirmation. If Dick Cheney had tried this, he'd have been accused of staging a coup
3b)The Era of Expert Failure
By Arnold Kling
The additional power that is being granted to experts under the Obama administration is indeed striking. The administration has appointed "czars" to bring expertise to bear outside of the traditional cabinet positions. Congress has enacted sweeping legislation in health care and finance, and Democratic leaders have equally ambitious agendas that envision placing greater trust in experts to manage energy and the environment, education and human capital, and transportation and communications infrastructure.
However, equally striking is the failure of such experts. They failed to prevent the financial crisis, they failed to stimulate the economy to create jobs, they have failed in Massachusetts to hold down the cost of health care, and sometimes they have failed to prevent terrorist attacks that instead had to be thwarted by ordinary civilians.
Ironically, whenever government experts fail, their instinctive reaction is to ask for more power and more resources. Instead, we need to step back and recognize that what we are seeing is not the vindication of Keynes, but the vindication of Hayek. That is, decentralized knowledge is becoming increasingly important, and that in turn makes centralized power increasingly anomalous.
THE AGE OF THE EXPERT
Populists often make the mistake of bashing experts, claiming that the "common man" has just as much knowledge as the trained specialist. However, trained professionals really do have superior knowledge in their areas of expertise, and it is dangerous to pretend otherwise.
I have faith in experts. Every time I go to the store, I am showing faith in the experts who design, manufacture, and ship products.
Every time I use the services of an accountant, an attorney, or a dentist, I am showing faith in their expertise. Every time I donate to a charity, I am showing faith in the expertise of the organization to use my contributions effectively.
In fact, I would say that our dependence on experts has never been greater. It might seem romantic to live without experts and instead to rely solely on your own instinct and know-how, but such a life would be primitive.
Expertise becomes problematic when it is linked to power. First, it creates a problem for democratic governance. The elected officials who are accountable to voters lack the competence to make well-informed decisions. And, the experts to whom legislators cede authority are unelected. The citizens who are affected by the decisions of these experts have no input into their selection, evaluation, or removal.
A second problem with linking expertise to power is that it diminishes the diversity and competitive pressure faced by the experts.
A key difference between experts in the private sector and experts in the government sector is that the latter have monopoly power, ultimately backed by force. The power of government experts is concentrated and unchecked (or at best checked very poorly), whereas the power of experts in the private sector is constrained by competition and checked by choice. Private organizations have to satisfy the needs of their constituents in order to survive. Ultimately, private experts have to respect the dignity of the individual, because the individual has the freedom to ignore the expert.
These problems with linking expertise with power can be illustrated by specific issues. In each case, elected officials want results. They turn to experts who promise results. The experts cannot deliver. So the experts must ask for more power.
With the unemployment rate close to 10 percent, there is a cry for the government to "create jobs." But the issue of job creation illustrates the increasingly decentralized nature of the necessary knowledge.
A job is created when the skills of a worker match the needs of an employer. I like to illustrate this idea using an imaginary game in which you draw from two decks of cards, one of which contains workers and one of which contains occupations. For example, suppose that you drew "Arnold Kling" from the deck of workers and you drew "fisherman" from the deck of occupations. That would not be a good match, because my productivity as a fisherman would be zero.
You could do worse - my marginal product as an oral surgeon would be negative. However, you could do better if you were to draw an occupation card that said "financial modeler" or "economics teacher." One hundred years ago, if you had played this game, you had a good chance of finding a match just by picking randomly. Most jobs required manual labor, and for most people manual labor was the most productive use of their working hours.
Today's work force is more highly educated and more differentiated. As a result, the task of creating jobs requires much more knowledge than it did in the past. A New Deal program like the Public Works Administration or the Civilian Conservation Corps would not have much appeal for a recent law school graduate or laid-off financial professional.
Production today is more roundabout than it was 50 years ago. Only a minority of the labor force is engaged in activities that directly create output. Instead, a typical worker today is producing what George Mason University economist Garett Jones calls "organizational capital." This includes management information systems, internal training, marketing communications, risk management, and other functions that make businesses more effective.
When production was less roundabout, there was a tight relationship between output and employment. When a firm needed to produce more stuff, it hired more workers.
Today, additional demand can often be satisfied with little or no additional employment.
Conversely, the decision to hire depends on how management evaluates the potential gain from adding new capabilities against the risks of carrying additional costs. The looser relationship between output and employment is implicit in the phrase "jobless recovery." So how does the economy create jobs? There is a sense in which nobody knows the answer. In his essay, "I, Pencil," Leonard Read famously wrote that not a single person on the face of this earth knows how to make a pencil. Pencils emerge from a complex, decentralized process. The same is true of jobs.
What the issue of job creation illustrates is the problem of treating government experts as responsible for a problem that cannot be solved by a single person or a single organization.
Economic activity consists of patterns of trade and specialization. The creation of these patterns is a process too complex and subtle for government experts to be able to manage.
The issue also illustrates the way hubris drives out true expertise. The vast majority of economists would say that we have very little idea how much employment is created by additional government spending. However, the economists who receive the most media attention and who obtain the most powerful positions in Washington are those who claim to have the most precise knowledge of "multipliers."
Despite the many pages contained in the health care legislation that Congress enacted, the health care system that will result is for the most part to be determined. The design and implementation of health care reform was delegated to unelected bureaucrats, as was done in Massachusetts.
In Massachusetts, the promises of propo-nents have proven false, and the predictions of skeptics have been borne out. Costs have not been contained; they have shot up. Emergency room visits have not been curtailed; they have increased. The mandate to purchase health insurance has not removed the problem of adverse selection and moral hazard; instead, thousands of residents have chosen to obtain insurance when sick and drop it when healthy. The officials responsible for administering the Massachusetts health care system are no longer talking about sophisticated ways of making health care more efficient.
Instead, they are turning to the crude tactic of imposing price controls.
Once again, we have legislators putting unrealistic demands on experts. This results in the selection of experts with the greatest hubris, shutting out experts who appreciate the difficulty of the problem. When the selected experts find that their plans go awry, they take out their frustrations by resorting to more authoritarian methods of control.
THE SECURITY APPARATUS
In July 2010, the Washington Post ran a series of stories on the size and complexity of the national security apparatus that has developed in response to the terrorist attacks of September 11, 2001. Yet with all this manpower and budget, we still have incidents like the Christmas bomber, a would-be terrorist who was stopped by citizens.
There are an infinite number of potential terrorist threats. In response, one could devise an infinite number of agencies and policies. There is little or no scope for anyone to question the relationship between costs and benefits.
More than 10 years ago, scientist and author David Brin wrote The Transparent Society, a book that anticipated the problems of surveillance and terrorism in the context of technological advance. Brin advocated making surveillance tools accessible to ordinary citizens. As counterintuitive and potentially disturbing as this sounds, Brin argued that it is better than the alternative, which is giving surveillance tools to government experts only. The latter approach threatens liberty without providing security. Unfortunately, that is the approach that the United States government has adopted, and it has grown out of control.
The Department of Energy has decided that it has the expertise to select specific energy projects, such as the electric car that is being developed by Fisker Automotive of California, the recipient of a $500 million loan guarantee. In theory, if the economic prospects for this electric car were good enough, venture capitalists would be willing to risk money on its development. Now, with a loan guarantee, private investors enjoy only the potential gains while taxpayers bear the risk. Many citizens who would never have considered investing in this electric car company are now partners in the venture, except that we have only the downside and no upside.
The officials who are putting taxpayer money at risk may or may not have better expertise than venture capitalists who put their partners' money at risk. What the officials certainly have is more power.
The threat of climate change, like the threat of terrorism, can be characterized in such a way as to justify an unlimited attempt at expert control. Regardless of whether experts really can accurately measure, predict, and explain climate change, some will be tempted to exercise power as if their analysis were precise and certain.
The financial crisis spawned demands for new regulatory powers. However, the crisis itself clearly resulted from the misuse of regulatory power in the first place. It was government policy that attempted to promote home "ownership" by encouraging lending with little or no money down to speculators and inexperienced borrowers. It was government capital regulations that steered banks toward AAA-rated securities, with no need to investigate the true underlying risks. It was the view of leading regulators at the Federal Reserve and the International Monetary Fund in 2005 and 2006 that the financial system had become adept at managing and distributing risk. The regulators were not powerless to stop the risky behavior; instead, they were convinced that they had everything under control.
If the regulatory experts could not prevent the financial crisis of 2008, the most reasonable inference to make is that financial crises cannot be prevented. There is no such thing as a financial system that is "too regulated to fail." The recent Dodd-Frank legislation gives broad new discretionary powers to regulators.
Many of the important rules, such as bank capital regulations, are left up to the experts. The decision to use new authority to break up or take over risky financial institutions is discretionary.
Unfortunately, the resolution of troubled financial institutions requires rules rather than discretion. With discretion, there is a problem of time inconsistency. No matter how loudly the regulators proclaim that they will not bail out failing institutions, history shows that when a crisis comes the officials in charge would rather do a bailout than face the uncertainty associated with shutting an institution down. Large failing banks will only be closed if there are strict rules in place that tie the regulators' hands to make bailouts impossible.
Discretionary resolution authority is authority that will never be used. Banks and their counterparties know this, and they will behave accordingly.
THE KNOWLEDGE-POWER DISCREPANCY
As Hayek pointed out, knowledge that is important in the economy is dispersed. Consumers understand their own wants and business managers understand their technological opportunities and constraints to a greater degree than they can articulate and to a far greater degree than experts can understand and absorb.
When knowledge is dispersed but power is concentrated, I call this the knowledgepower discrepancy. Such discrepancies can arise in large firms, where CEOs can fail to appreciate the significance of what is known by some of their subordinates. I would view the mistakes made by AIG, BP, Freddie Mac, Fannie Mae, and other well-known companies as illustrations of this knowledge-power discrepancy in practice.
With government experts, the knowledge- power discrepancy is particularly acute.
As we have seen, the expectations placed on government experts tend to be unrealistically high. This selects for experts with unusual hubris. The authority of the state gives government experts a dangerous level of power.
And the absence of market discipline gives any errors that these experts make an opportunity to accumulate and compound almost without limit.
In recent decades, this knowledge-power discrepancy has gotten worse. Knowledge has grown more dispersed, while government power has become more concentrated.
The economy today is much more complex than it was just a few decades ago. There are many more types of goods and services.
Consumers who once were conceived as a mass market now have sorted into an everexpanding array of niches. In the 1960s, most households had one television, which was usually tuned to one of just three major networks. Today, some households have many televisions, with each family member watching a different channel. Some people still watch major networks, but many others instead focus on particular interests served by specialty cable channels. Still others watch very little TV at all.
This increased diversity of consumer tastes in a world of tremendous variety makes the problem of aggregating consumer preferences more difficult. It becomes harder for government experts to determine which policies are in consumers' interests. For example, is a national broadband initiative going to give consumers access to something they have been denied or something that they do not want? The advances of science are leaving us with problems that are more complex. As fewer Americans die of heart ailments or cancer in their fifties and sixties, more of our health care spending goes to treat patients with multiple ailments in their eighties and nineties. Given the complexity of each individual case, it seems odd that health care reformers believe that government can effectively set quality standards for doctors.
In business, performance evaluation of professionals is undertaken by other professionals who are in the same work group, observing their workers directly, and who understand the context in which the professionals are working. Even then, performance evaluation and compensation-setting are challenging tasks. In health care, proponents of government "quality management" propose to evaluate the decision-making of professionals and adjust their compensation on the basis of long-distance reports. Taking into account the knowledge-power discrepancy, this notion of quality management from afar is utterly implausible.
Financial transactions have gotten extremely complex. Some critics blame the use of quantitative risk models and derivative securities.
However, removing these tools would not remove financial risk, and in many respects could make it more troublesome.
One consequence of modern finance is that it exacerbates the knowledge-power discrepancy.
It is as futile for financial regulators to try to track down all sources of risk as it is for security agencies to try to keep track of all possible terrorist threats.
How can we deal with the knowledgepower discrepancy in government? It would be great if we could solve the problem by increasing the knowledge of government experts. Unfortunately, all experts are fallible.
If anything, expert knowledge has become more difficult for any one individual to obtain and synthesize. Analysts of the scientific process have documented a large increase in collaborative work, including papers with multiple authors and patent filings by groups and organizations. Scientists tend to be older when they make their key discoveries than was the case in the first half of the 20th century.
When he was an executive at Sun Microsystems, Bill Joy said, "No matter who you are, the smartest people work for someone else." Joy's Law of Management applies to government at least as much as to business. There is no way to collect all forms of expertise in a single place.
Instead, the way to address the knowledge- power discrepancy is to reduce the concentration of power. We should try to resist the temptation to give power to government experts, and instead allow experts in business and nonprofit institutions to grope toward solutions to problems.
LIVING IN A COMPLEX WORLD
To summarize: We live in an increasingly complex world. We depend on experts more than ever. Yet experts are prone to failure, and there are no perfect experts.
Given the complexity of the world, it is tempting to combine expertise with power, by having government delegate power to experts. However, concentration of power makes our society more brittle, because the mistakes made by government experts propagate widely and are difficult to correct.
It is unlikely that we will be able to greatly improve the quality of government experts.
Instead, if we wish to reduce the knowledgepower discrepancy, we need to be willing to allow private-sector experts to grope toward solutions to problems, rather than place unwarranted faith in experts backed by the power of the state.
Arnold Kling is a Cato Institute adjunct scholar. His books include From Poverty to Prosperity and Unchecked and Unbalanced.
4)Take Back America: What Does It Mean?
By Lloyd Marcus
Handing me my morning cup of coffee, Mary said, "The water is off. I forgot to pay the bill." Though slightly annoyed, twenty years of marriage had taught me that the best response was silence. Then she added, "A plane crashed into one of the twin towers." I thought, "Wow, how could that happen?" A short while later, a plane hit the second tower.
September 11, 2001, my big problem of the day was having to get my water turned back on. Meanwhile, thousands of my fellow Americans were faced with the unimaginable horror of deciding whether to leap to their deaths...or be consumed in an inferno. Islamic terrorists blew up the World Trade Center towers.
Despicably, the usual suspects on the left, without an ounce of compassion or sympathy for the three thousand murdered and the eight hundred children left behind, said 9/11 was our fault. America deserved it. Far-left wackos believe George Bush blew up the Twin Towers.
This same crowd reacts as vampires at the very mention of anything Christian while preaching to us about being more tolerant of Muslims. They support the building of a mosque near Ground Zero.
Filmmaker Michael Moore, whose movies reflect a belief that America is the greatest source of evil in the world, said, "I am opposed to the building of the 'mosque' two blocks from Ground Zero. I want it built on Ground Zero."
Mr. Moore, why don't you say what you really mean: "Screw Todd Beamer and the other heroes of United flight 93, the three thousand murdered, their eight hundred kids, the dead policemen, firefighters, the Pentagon victims, and America"?
"Take Back America" is the battle cry of the Tea Party Movement. It originally meant taking back our country from an out-of-control, Obama administration, deaf to the will of the American people and aggressively forcing socialism down our throats.
The mission of the Tea Party Movement has evolved into something far greater. "Take Back America" now means no longer kowtowing to political correctness and standing up to arrogant left-wing idiots like Michael Moore. It means voting principles over political party. It means inviting God back into the public square. It means, as Brother Glenn Beck stated, "restoring honor" in our great country.
And my pet peeve: "Take Back America" means no longer allowing the left to put us on the defensive. I am "so done" with trying to prove that my fellow Tea Party patriots are not racists. The left and their liberal media buddies know we are not. Well aware of the manipulative power of accusing decent people of racism, the left uses it to silence our reasonable discord.
Rather than being on the defensive, we must turn the table back on them. Make the left accountable for their despicable behavior. For example, I called NAACP president Ben Jealous a liar on national TV. Jealous said he saw signs which read "Lynch Barack Obama" and "Lynch Eric Holder" at Tea Parties.
If such signs existed, they would be viral on YouTube. Jealous is a liar slandering millions of Tea Party patriots by suggesting they would tolerant such signs.
Folks, I am in no way advocating violence or even rudeness. But when the liberal media conspire with their homeys on the left to maliciously, without evidence, slander millions of decent Tea Party patriots, they must be called on their evil bad behavior.
Quoting Edmund Burke, "The only thing necessary for evil to prosper is for good men to do nothing."
"Take Back America" also means to stop walking on eggshells to appease those who seek our destruction. Iman Feisal Abdul Rauf warned of violence if the mosque is not built at the Ground Zero site. "But if we don't do this right, anger will explode in the Muslim world."
My fellow Americans, the day we allow terrorists to dictate our behavior is the day we cease being America. The Duke (John Wayne) would roll over in his grave.
Brother and sister patriots, to quote Oliver Cromwell, "put your trust in God; but mind to keep your powder dry." We are winning! The left is on the run. The Duke would be proud.
Lloyd Marcus, Proud Unhyphenated American
4a)This Is Your Brain in a Crock-Pot
By Chuck Rogér
I gotta roll, can't stand still; got a flaming heart, can't get my fill.
- Led Zeppelin, 1971
Led Zeppelin's "Black Dog" lyrics saluted the "if it feels good, do it" culture spawned in the 1960s. Zeppelin had already played to teens' libidos in 1969 with "Whole Lotta Love" at the same time that my high school friends and I mistook John Lennon's "Come Together" as an ode to orgy. Later in the same school year, I walked smack into a post outside the school bookstore as a buddy and I were mourning the Beatles' breakup and agreeing how great it was to still have Zeppelin. Getting a bloody nose while exalting dopers who exalted promiscuity should have alerted me that something was wrong.
Something was wrong. An anything-goes morality was shifting into high gear. The seduction of the American mind was underway. Tools were being fashioned to erase the republic and build a collectivist paradise. One such tool would win the White House in 2008.
Back in 1969, while teenagers debated the message behind a barefooted McCartney on the "Abbey Road" album cover, little Barry Soetoro, son of an absent communist father and future protégé of a communist mentor, was slogging through an unhappy childhood in Indonesia. Barry would take the name Barack, partner with Pentagon bomber William Ayers, and use a school reform project to push left-wing ideology and social unrest on young minds. Barack would become America's most radical president. William would express no regrets for his Weatherman underground's 1970s marching orders to youngsters: "Kill all the rich people. Break up their cars and apartments. Bring the revolution home. Kill your parents."
My friends and I sort of liked our parents. Besides, decoding song lyrics and procuring fake IDs for beverage purchases left little time for revolution.
Our favorite bands pushed controlled substances and out-of-control sex. Hard radicals like Ayers channeled anger into violence against "the man" and "the system," only to later infiltrate the system and become the man. Soft radicals like Barack Obama infiltrated from the outset. Products of neglectful and often bizarre upbringings, Obama types developed insatiable urges to cure society's ills. No one should feel less-than. Everyone must be made equal.
Although most Americans reject forced equality, since the '60s, we have dutifully bowed to the weak thinking of political correctness, the "inclusiveness" of "diversity," the "fairness" of affirmative action, and the "tolerance" of multiculturalism. We underestimated the dangers posed by evangelists preaching pretty theories that ignore human nature and sane economics. Graduates of the school of Lennon and Zeppelin, we tried to "imagine no possessions" in "a brotherhood of man" where "all are one and one is all." We smiled politely at depravity in order to show that we "appreciate differences."
Too many of us manufactured excuses for personal, family, and societal problems caused by buying into liberal dogma. And our minds weakened.
Then Barack Obama moved to 1600 Pennsylvania Avenue. Suddenly, synapses in our brains that had gone dormant fired up and began to calculate the cultural and economic ruin assured by liberalism on steroids. We quickly recognized that our lengthy foray into mindlessness had taught us how to distinguish between fact and fancy.
We learned that liberals are conceptually disabled critters who struggle to link cause to effect and place exclusive value on perception over reality. Now we clearly see ideologues clinging to childish innocence, uploading their minds to utopia, and resisting the left-to-right evolution experienced by emotionally healthy adults, a process called "maturing."
Immaturity has drawbacks. Liberals offer people compassionate but hastily conceived "helping" programs that create dependence on help and demand for more. And that's sad, because most liberals really do want to help fellow human beings.
To be fair, liberals do assist owls and the delta smelt. Whales and polar bears? Sure. But improve the human condition? Not a chance. Liberals are weighed down by childhood confusion and paralyzed by a mean truth: useful results flow from useful effort. For illustration, we look to people like Barack Obama, for whom useful solutions don't hold a candle to showy alternatives that win praise and warm the heart.
Yet the heart can mislead. Covering for the shortcomings of sons and daughters may feel good, but smart love teaches children that action and inaction have consequences. Showering people with unearned praise and unearned money might seem nurturing, but coddling must die before character can come alive. Nowhere in the liberal toolbox do we find the powerful love that lets people fail, grow up, and learn to succeed.
Many radicals never grow up. Barack Obama will relentlessly try and miserably fail to establish "social justice." Our president is an ideologue whose upbringing tied his soul into knots, a man whose mind may never escape the debilitating simmer of radicalism. Obama is a misguided man of average intelligence, told since childhood of his brilliance. In a stroke of genius, Barry-cum-Barack calls for shrinking the prosperity of high earners and small businesses in order to help people who could help themselves by taking jobs created by high earners and small businesses.
What a spectacle the American people now witness. Barack Obama grows increasingly agitated at having to account for the awful consequences of his policies. When reminded of his failures, the president treats us to how-dare-you exhibitions of petulance. Our Narcissist-in-Chief refuses to admit any error and continues to push wealth-destroying, class-dividing liberalism to extremes.
Yet in the final analysis, we have ourselves to blame for our country's condition. To be sure, Barack Obama's catastrophic presidency has crowned five decades of ever more leftward government insanity. But our mess is the logical consequence of too many Americans going liberal. Too many of us accepted too many feel-good lies and did too little too late to stop a culture-killing ideology from commandeering education, news and entertainment media, business, and government.
Decisive action is long overdue. Liberals must be reduced to harmless minorities in government. "Conservative" politicians who haven't the guts to support truth, logic, sound economics, objective science, and rational social policy must be fired. It is time to shut down the ideology that almost liquefied the American brain. Liberalism has got to go.
A writer, physicist, and former high tech executive.
4b)Barack Obama Is No James Madison
By MERRILL MATTHEWS
Today, September 17, is U.S. Constitution Day.
I know what you’re thinking: who knew? Almost no one, but thanks to President Obama, that may be changing.
It was on September 17, 1787, that 39 delegates to the Constitutional Convention met for the last time to sign the Constitution of the United States. There had been more delegates, but some had already left and three refused to sign the document.
The challenge for the Convention was in many ways the challenge we still face today: How to create a central government strong enough to perform the needed tasks to manage and defend the country, and yet limited enough to ensure that it doesn’t rob the people of their rights and freedoms.
While the Founding Fathers succeeded admirably, we have failed … miserably.
The Founders established a balance of power between the federal government and state governments—what we call “federalism.” There were powers delegated to the federal government; everything else was “reserved to the States respectively, or to the people,” as the Tenth Amendment, the last of the ten Bill of Rights, later explained.
Unfortunately, the ideal of a federal government limited by enumerated powers has eroded, slowly at first but gaining speed and momentum over the years, especially the last two. Thus, when a reporter for CNSNews asked House Speaker Nancy Pelosi last September if the Constitution allowed the federal government to require everyone to have health insurance or pay a fine, her response was, “Are you serious? Are you serious?”
That’s why we need a Constitution Day now more than ever!
The law establishing the Constitution Day holiday—previously known as Citizenship Day—was passed in 2004. Demonstrating that history has a sense of humor, the enabling legislation was introduced by the Senate’s king of pork-barrel spending: the late Senator Robert Byrd of West Virginia. Even more ironic, he attached the legislation to an omnibus spending bill that spent taxpayer funds on countless earmarks, special interests and rent seekers.
In 2005 the Department of Education issued a notice informing all publicly funded schools that they would be required to teach their students about the history of the Constitution on September 17. In essence, the department was saying to the public schools: Teach your kids about the principles of freedom and independence and the virtues of limited government enshrined in the Constitution or we’ll pull your funding.
And it’s only getting worse. This year the holiday comes on a week where 20 state attorneys general argued before a federal judge in Florida that the federal government has no constitutional authority to mandate every American have health insurance.
It is precisely this kind of federal intrusion and overreach that has generated a new-found public interest in the Constitution, its history and meaning. The Government Printing Office reported a few months ago that its most popular document by sales now is … the Constitution.
Indeed, the Constitution is discovering something of a rebirth. Let Freedom Ring is sponsoring “We Read the Constitution” on September 18; and Americans across the country will be hosting readings of the Constitution. Talk shows and the Internet are abuzz with discussions about the Constitution. And there are new websites such as www.restorethetenth.org bringing limited-government supporters together. One of the recent books, from the Heritage Foundation’s Matthew Spalding, captures the mood of the country in its title: We Hold These Truths: Rediscovering Our Principles, Reclaiming Our Future.
And we have that “constitutional scholar,” President Barack Obama, to thank for it. Not, ironically, because he has done so much to embrace the principles in the document, but because he has done so much to undermine them.
In the Federalist Papers No. 45, James Madison, the Father of the Constitution, wrote: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation and foreign commerce.”
In his inaugural address, by contrast, President Obama said: “The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.”
I’m thinking it’s safe to say that Barack Obama is no James Madison.
So on this Constitution Day, read a Constitution. Reach out to others who want to learn more about the Founders’ vision. And thank President Obama, for without his love of big government the rest of us might never have come to so strongly embrace limited government.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas, which is a cosponsor of the restorethetenth.org website.
4c)Why It's Time for the Tea Party The populist movement is more a critique of the GOP than a wing of it.
By PEGGY NOONAN
This fact marks our political age: The pendulum is swinging faster and in shorter arcs than it ever has in our lifetimes. Few foresaw the earthquake of 2008 in 2006. No board-certified political professional predicted, on Election Day 2008, what happened in 2009-10 (New Jersey, Virginia and Massachusetts) and has been happening, and will happen, since then. It all moves so quickly now, it all turns on a dime.
But at this moment we are witnessing a shift that will likely have some enduring political impact. Another way of saying that: The past few years, a lot of people in politics have wondered about the possibility of a third party. Would it be possible to organize one? While they were wondering, a virtual third party was being born. And nobody organized it.
Here is Jonathan Rauch in National Journal on the tea party's innovative, broad-based network: "In the expansive dominion of the Tea Party Patriots, which extends to thousands of local groups and literally countless activists," there is no chain of command, no hierarchy. Individuals "move the movement." Popular issues gain traction and are emphasized, unpopular ones die. "In American politics, radical decentralization has never been tried on such a large scale."
Here are pollsters Scott Rasmussen and Doug Schoen in the Washington Examiner: "The Tea Party has become one of the most powerful and extraordinary movements in American political history." "It is as popular as both the Democratic and Republican parties." "Over half of the electorate now say they favor the Tea Party movement, around 35 percent say they support the movement, 20 to 25 percent self-identify as members of the movement."
So far, the tea party is not a wing of the GOP but a critique of it. This was demonstrated in spectacular fashion when GOP operatives dismissed tea party-backed Christine O'Donnell in Delaware. The Republican establishment is "the reason we even have the Tea Party movement," shot back columnist and tea party enthusiast Andrea Tantaros in the New York Daily News. It was the Bush administration that "ran up deficits" and gave us "open borders" and "Medicare Part D and busted budgets."
Everyone has an explanation for the tea party that is actually not an explanation but a description. They're "angry." They're "antiestablishment," "populist," "anti-elite." All to varying degrees true. But as a network television executive said this week, "They should be fed up. Our institutions have failed."
I see two central reasons for the tea party's rise. The first is the yardstick, and the second is the clock. First, the yardstick. Imagine that over at the 36-inch end you've got pure liberal thinking—more and larger government programs, a bigger government that costs more in the many ways that cost can be calculated. Over at the other end you've got conservative thinking—a government that is growing smaller and less demanding and is less expensive. You assume that when the two major parties are negotiating bills in Washington, they sort of lay down the yardstick and begin negotiations at the 18-inch line. Each party pulls in the direction it wants, and the dominant party moves the government a few inches in their direction.
But if you look at the past half century or so you have to think: How come even when Republicans are in charge, even when they're dominant, government has always gotten larger and more expensive? It's always grown! It's as if something inexorable in our political reality—with those who think in liberal terms dominating the establishment, the media, the academy—has always tilted the starting point in negotiations away from 18 inches, and always toward liberalism, toward the 36-inch point.
Democrats on the Hill or in the White House try to pull it up to 30, Republicans try to pull it back to 25. A deal is struck at 28. Washington Republicans call it victory: "Hey, it coulda been 29!" But regular conservative-minded or Republican voters see yet another loss. They could live with 18. They'd like eight. Instead it's 28.
For conservatives on the ground, it has often felt as if Democrats (and moderate Republicans) were always saying, "We should spend a trillion dollars," and the Republican Party would respond, "No, too costly. How about $700 billion?" Conservatives on the ground are thinking, "How about nothing? How about we don't spend more money but finally start cutting."
What they want is representatives who'll begin the negotiations at 18 inches and tug the final bill toward five inches. And they believe tea party candidates will do that.
The second thing is the clock. Here is a great virtue of the tea party: They know what time it is. It's getting late. If we don't get the size and cost of government in line now, we won't be able to. We're teetering on the brink of some vast, dark new world—states and cities on the brink of bankruptcy, the federal government too. The issue isn't "big spending" anymore. It's ruinous spending that they fear will end America as we know it, as they promised it to their children.
So there's a sense that dramatic action is needed, and a sense of profound urgency. Add drama to urgency and you get the victory of a tea party-backed candidate.
That is the context. Local tea parties seem—so far—not to be falling in love with the particular talents or background of their candidates. It's more detached than that. They don't say their candidates will be reflective, skilled in negotiations, a great senator, a Paul Douglas or Pat Moynihan or a sturdy Scoop Jackson. These qualities are not what they think are urgently needed. What they want is someone who will walk in, put her foot on the conservative end of the yardstick, and make everything slip down in that direction.
Nobody knows how all this will play out, but we are seeing something big—something homegrown, broad-based and independent. In part it is a rising up of those who truly believe America is imperiled and truly mean to save her. The dangers, both present and potential, are obvious.
A movement like this can help a nation by acting as a corrective, or it can descend into a corrosive populism that celebrates unknowingness as authenticity, that confuses showiness with seriousness and vulgarity with true conviction. Parts could become swept by a desire just to tear down, to destroy.
But establishments exist for a reason. It is true that the party establishment is compromised, and by many things, but one of them is experience. They've lived through a lot, seen a lot, know the national terrain. They know how things work. They know the history. I wonder if tea party members know how fragile are the institutions that help keep the country together.
One difference so far between the tea party and the great wave of conservatives that elected Ronald Reagan in 1980 is the latter was a true coalition—not only North and South, East and West but right-wingers, intellectuals who were former leftists, and former Democrats. When they won presidential landslides in 1980, '84 and '88, they brought the center with them. That in the end is how you win. Will the center join arms and work with the tea party? That's a great question of 2012.
4d)What on Earth Happened to the New York GOP? A dozen years ago Republicans dominated state politics. It doesn't appear they'll be a factor this falll.
By JOHN FUND
Almost every state in the nation features a competitive race for governor or the Senate this fall. But not New York. Though Republicans are running for governor and both U.S. Senate seats—one to fill Hillary Clinton's unexpired term—polls show none have much of a chance of winning.
A dozen years ago, Republicans held a majority of New York's statewide elected offices and controlled the state Senate. Now they are a hapless minority. What happened?
"Republicans began a decline in the 1960s when Nelson Rockefeller made the party his personal creature," says New York GOP Chairman Ed Cox. Since then, the party structure has continued to be treated as the personal property of one man—first Sen. Al D'Amato and then Gov. George Pataki. Principles were abandoned in favor of cutting deals to buy short-term political support.
A key low point came in 2002 when Gov. Pataki made expensive concessions to public employee unions in exchange for their backing. The Conservative Party, energized in 1965 by William F. Buckley Jr.'s race for mayor of New York and the Senate victory of his brother James in 1970, became increasingly less able to prevent Republicans from drifting left on spending and debt.
"Republicans morphed with Democrats into one party called the Demopublicans," says Rob Astorino, who last November defeated an incumbent Democrat with 58% of the vote to become county executive in tony Westchester County, which includes Scarsdale and White Plains. "Voters couldn't detect much difference and didn't see most Republicans as a vehicle for reform and change."
Mr. Astorino successfully bucked this Demopublican trend. During his campaign he proposed budget cuts of almost 10% and pledged not to raise taxes. "People ask me why I boxed myself into a corner," Mr. Astorino told me. "But I wanted to make sure I couldn't get out of that commitment and would tackle spending." Westchester voters, whom the Tax Foundation says pay the highest property taxes in the nation, give him high approval ratings—and this in a county that Barack Obama carried with 64% in 2008.
Bill Stern is a prominent Democrat who served as Mario Cuomo's campaign chairman in his first race for governor in 1982 and then became head of the state's Urban Development Corporation. Like Mr. Astorino, Mr. Stern has also come to believe the two major parties have blurred into one.
The state is dominated by an "insider commercial party" whose main business is "doing contracts," Mr. Stern says. The key disputes aren't ideological but about who gets the state's business—whether bond sales, construction contracts or rigged development deals. "Politically connected lawyers, PR firms, lobbyists and vendors are influential in this new party, and they all do well as they depend on the state for much of their livelihood," says Mr. Stern. "But the economic interests of this 'nomenklatura' aren't compatible with the state's future prosperity."
John Faso, a former leader of Republicans in the State Assembly, says the selfishness of special interests, especially public employee unions, has crippled the state's economy. "West of Albany and north of Saratoga the state is an economic dead zone," he declares. "People downstate have no idea of the anger and frustration against state government in Albany the people upstate have."
That rage manifested itself in Tuesday's GOP primary as the choices of the party establishment went down in flames. Rick Lazio, a former Long Island congressman who was designated the GOP candidate by a party convention, was defeated 63% to 37% by Carl Paladino, a wealthy Buffalo businessman whose anti-Albany rhetoric has made him a "raging bull" of state politics.
Mr. Paladino has run a truly unorthodox campaign. This week he sent 200,000 New Yorkers a garbage-scented mailing that proclaims "Something stinks in Albany." His campaign claims the smell will get worse the longer it is exposed—just like Albany. But his victory proves that grass-roots Republicans have finally had it with their party's establishment.
Further evidence came in Tuesday's primary to select a GOP nominee against Democratic Sen. Kirsten Gillibrand. The state's GOP convention picked Bruce Blakeman, who served as a cog in the Nassau County Republican machine in the 1990s, as its preferred candidate. He was challenged by economist David Malpass and former Congressman Joe DioGuardi in the primary. Mr. DioGuardi defeated Mr. Malpass narrowly, and Mr. Blakeman received only 20% of the vote.
Many Republicans suspect Mr. Blakeman was a paper candidate, put up to the race by elements of the insider commercial party. They note that he hails from Nassau County, the home turf of Mr. D'Amato, who is now a lobbyist but still a force in the state GOP.
Last April, Politico.com reported that Mr. D'Amato "has been actively working behind the scenes to make sure that no one, not even (former Gov. George) Pataki, challenged Gillibrand, whom he's known since she was a baby" and whose family he is close to. Mr. D'Amato endorsed Mr. Blakeman and denies he tried to aid Ms. Gillibrand. Yet he has also signed a letter declaring Mr. Paladino "unfit" to hold public office, a boost to Democratic candidate Andrew Cuomo.
Mr. Cuomo, who presided over his share of boondoggles and scandals while he was President Bill Clinton's secretary of housing, may appear to be an unlikely reformer. But he is actively promoting caps on property taxes and concessions from public employee unions.
Mr. Stern, who shared an office with Mr. Cuomo during the 1982 gubernatorial campaign of his father Mario, says he met with him recently for some long chats. "He thinks tax increases are clearly counterproductive and have clearly contributed to the state's decline." And the challenge from Mr. Paladino, the populist firebrand, may push him further to the right. If Mr. Cuomo were to succeed in office, it would be a welcome weakening of New York's one-party insider club.
And if he fails to deliver, a new generation of Republicans—led by officials like Mr. Astorino—would be handed a real opportunity to appeal to an electorate whose anger doesn't look like it's going away anytime soon.
5) Ahmadinejad in Syria: Mideast states will foil U.S. plan to alter region's politics
Iran, Syria presidents meet in Damscus after Assad-U.S. talks; Ahmadinejad says Israel has no place in the future of the region.
By The Associated Press
Mahmoud Ahmadinejad made the comments during a brief stop in Syria where he held talks with his Syrian counterpart, Bashar Assad.
The meeting comes two days after Assad sat down with the Obama administration's special Middle East envoy, George Mitchell, in Damascus, to discuss starting separate Syria-Israel peace talks.
The back-to-back trips underscored the battle for influence in Syria between Washington and Tehran. Seeking to isolate Iran, U.S. President Barack Obama has tried - unsuccessfully, so far - to pry Damascus away from its alliance with Tehran.
Speaking in Damascus, Ahmadinejad appeared to dismiss U.S. efforts to forge a peace agreement between Israel and the Palestinians and a wider deal with its neighbors.
"Those who want to change the political geography of the region must know that they will have no place in the future of the region," Ahmadinejad was quoted as saying by Iran's state-run news agency IRNA.
"The waves of free nations to join this resistance is spreading every day," he added.
Ahmadinejad said before his visit to Syria that he and Assad would discuss key areas of conflict and tension in the Middle East, including Iraq, Lebanon and the Palestinian territories. He also told Iranian state TV Friday that he and Assad would discuss the West's moves in the region, an apparent reference to the United States.
"We have to be ready and in harmony," he said in the state TV interview, without elaborating.
Washington is at odds with Iran over its nuclear program, which many Western nations fear is aimed at making weapons. Iran says its nuclear activity has only peaceful energy production aims.
The U.S. began reaching out to Syria soon after U.S. President Barack Obama took office, and has made repeated overtures to Damascus this year, including nominating the first U.S. ambassador to Syria since 2005 and sending top diplomats to meet with Assad.
Mitchell said during his visit Thursday that the U.S. was determined to reach a comprehensive peace in the Middle East and that the administration's efforts to resolve the Palestinian-Israeli conflict did not contradict peace between Israel and Syria.
Syria and Iran are both under U.S. pressure because of their support for anti-Israel militant groups. The U.S. also accuses Syria of secret nuclear activities, which Damascus denies.
The two leaders stressed the need for Iraqi politicians to overcome arguments that have delayed formation of a new government there after national elections in March, according to Syria's state news agency, SANA.
Ahmadinejad also called the new Israeli-Palestinian peace talks - revived this month with Washington's mediation - a failure, according to Iran's state-run Press TV. He said Israel had no place in the future of the region.
The Iranian president was also to stop in Algeria before heading to New York to attend the United Nations general assembly next week.
6)Carter in new book: Obama turned back on settlement freeze
The former U.S. president also criticizes Bill Clinton, writing that Israeli settlement building in the West Bank was especially rapid under his administration.
By The Associated Press
In his new book, former United States president Jimmy Carter criticizes President Barack Obama over his policy on Israel's settlement freeze, writing that the President has backed away from his initial commitment to a complete halt to building in West Bank settlements.
Carter also criticizes fellow Democrat and former president Bill Clinton over his policy on Israel settlement expansion, writing that settlement building was especially rapid during Clinton's administration.
This past week, the newspaper Asharq Al Awsat reported that the Obama administration has suggested Israel extend the current moratorium on construction in West Bank settlements, which is set to expire on September 26, for an additional three months.
The expiration date for the settlement freeze has loomed over the recently re-launched direct peace talks between Israel and the Palestinians. The Palestinians have threatened to walk away from the talks if the freeze is not extended.
On Thursday, the European Union called on Israel to extend the settlement freeze in light of the peace talks which began this month.
"The European Union deems it indispensable that both parties observe calm and restraint and refrain from actions that could affect negatively the progress of the negotiation," the group stated following a meeting in Brussels. "In this regard, it recalls that settlements are illegal under international law and, with a view to ensure that these talks continue in a constructive manner, calls for an extension of the moratorium decided by Israel."
The former president's views on Israel have caused controversy in the past, such as when he likened Israeli policy in the West Bank to apartheid South Africa in his book "Palestine: Peace Not Apartheid".
6a)Christie: Jersey superstar
Last Updated: 4:04 PM, September 17, 2010
Christie gets it -- and he didn't need the Tea Party to inspire him.
Christie has been shaking up New Jersey since Day One, and now he's done it again -- proposing an unprecedented tightening of pension and health-care benefits for public employees, in order to shore up a system that's teetering at the edge of bankruptcy.
He wants to raise the normal retirement age for teachers and most state and municipal workers to 65, requiring 30 years service for early retirement instead of 25. Police would have to work 30 years for full retirement, but could retire early with reduced benefits.
He also wants public employees to:
* Contribute 8.5 percent of their salaries toward their pensions.
* Start paying 30 percent of the cost of their health premiums.
* Accept the rollback of a 9 percent raise in pension benefits granted in 2001 -- an increase he admits was put into place by Republicans, who "shouldn't have done it in the first place."
Naturally, this has the public-sector unions -- and their Democratic legislative allies -- screaming bloody murder.
But, as the governor notes, "this isn't about promises made and kept. This is about special interests squeezing benefits out of the government and taxpayers [that] we can no longer afford to pay."
Indeed, adds Christie, "we can't shelter one special group of people -- public-sector unions -- from the ravages of this recession and have that shelter paid for by the very people who are getting hurt by the recession the most: the people in the private sector."
In fact, he says, those who are moaning loudly now will be singing a different story down the road: "Ten years from now, when you have a pension to collect and health benefits to collect, you are going to be looking for my address to send me a thank-you note."
Right now, New Jersey's public pension system is underfunded by $46 billion. Without reforms, even if the state keeps making payments -- which were skipped this year in a budget-balancing move -- that would rise to $85 billion by 2025.
On the health-care side, the underfunding comes to $67 billion -- and rising.
Christie, in other words, is addressing the crisis of New Jersey's long-term obligations head-on -- in a way that may mean short-term pain for some, but long-term benefits for all.
Chris Christie is Tea Party rhetoric channeled into constructive solutions -- with the kind of political courage sadly lacking in both Washington and Albany.
No wonder he's a political superstar.
7)Aligned with liberty
By Sol Stern
A review of Norman Podhoretz: A Biography by Thomas L. Jeffers
Walking in the woods near his country house one night in January 1970, Norman Podhoretz had an epiphany. Against the evening sky, he later recalled, he saw “a kind of diagram that resembled a family tree. And it was instantly clear to me that this diagram contained the secret of life and existence and knowledge.” Podhoretz compared his vision to a verse by the seventeenth-century English poet Henry Vaughan that began, “I saw eternity the other night.”
Just turned forty, Podhoretz was completing his first decade as the editor of the prestigious liberal monthly Commentary. By all appearances, he was still a liberal Democrat and a secularist, not exactly the type to undergo a quasi-religious experience. Though educated in the essential Hebrew and Jewish texts, he was not particularly drawn to synagogue Judaism or to political Zionism. But now, according to his own testimony, he recognized that Judaism was “true” and that it provided a profound moral guide for life—not the ritualistic Judaism of the Talmud, but civilizational Judaism and the structure of natural law as revealed in the Bible. Somewhat ruefully, Podhoretz also concluded that there was no lasting value to the radical doctrines he had flirted with throughout most of the 1960s.
This is just one of many fascinating episodes, political and personal, to be found in the lively new biography of Podhoretz by Thomas Jeffers, a professor of literature at Marquette University. As background to that visionary moment in upstate New York, Jeffers shows that throughout that winter of 1969–1970 Podhoretz was gripped by a sense of turmoil and unusual self-doubt. He was still smarting from the near-unanimous negative reviews (some mocking the author personally) that his book Making It had received two years earlier. The most hurtful notices were written by erstwhile friends such as Norman Mailer, who had read the book in galleys, praised it in a private letter to Podhoretz, and written a twenty-six page put-down of the book in Partisan Review.
In this winter of his discontent, Podhoretz also found himself blocked on his next book project, a cultural and political history of the 1960s. More unsettling still were the nagging second thoughts he was having about the fashionable radicalism he had promoted in the pages of his own magazine. The infatuation of liberal New York intellectuals with the New Left had gone over the top, Podhoretz could now see clearly. But breaking completely with the Left and renouncing his own indulgent liberalism, he also realized, would inevitably mean another unpleasant confrontation with many of his remaining friends.
Jeffers believes that Podhoretz’s spiritual awakening pushed him finally to make that total political break with the Left and shows how it led to one of the most dramatic moments in U.S. and Jewish-American history of the last half-century. Using Commentary as a wedge, Podhoretz went on the political offensive against the New Left and the 1960s counterculture. He started out with no blueprint or long-term plan of action, but within a few years he managed to reinvent Commentary as the main literary and political force shaping the counter-countercultural movement that eventually came to be known as neoconservatism.
I always assumed that Podhoretz had already revealed everything there was to know about this break and the impact it had on his social relationships. After all, he put it all on the line in two brutally honest memoirs—Breaking Ranks (1979) and Ex-Friends (1999), plus an addendum or two in My Love Affair with America (2000). But Jeffers’s biography also succeeds in painting Podhoretz’s political apostasy as part of a larger cultural canvas. In some respects it’s a classic American-Jewish immigrant narrative, a real life story that could have been the raw material for a Saul Bellow novel in two parts: the first called The Adventures of Norman Podhoretz, about an ambitious young man from the tough streets of Brooklyn making it in the city of bright lights across the river, and, second, Mr. Podhoretz’s Planet, about the protagonist’s discovery of the darker side of the glittering but insular 1960s literary world confined to a few square miles of the island of Manhattan.
In the beginning, before the nasty political warfare began, there was just the very young Norman Podhoretz and “the Family.” Not his biological family, but rather that group of New York intellectuals, most of them Jewish ex-Marxists, who remained leftist in politics, modernist in literary tastes, and, more often than not, reviewed each other’s books in highbrow magazines such as Partisan Review, The New Leader, and Commentary. Podhoretz was, without question, the Family’s wunderkind; the adjectives used to describe him were “precocious,” “gifted,” and “brash.”
Podhoretz’s parents were Yiddish-speaking immigrants from Eastern Europe who arrived in America poor and remained so throughout their lives. During the Depression, Norman’s father drove a horse-drawn wagon, delivering milk door-to-door. Podhoretz grew up street-smart in the tough neighborhood of Brownsville, graduated at the age of sixteen at the top of his class at Boys’ High School, and landed a generous scholarship to Columbia University. Within two years he was the prize student of one of Columbia’s most famous professors, the literary critic Lionel Trilling. With Trilling’s support, Podhoretz won the prestigious Kellett fellowship to Cambridge University, where he soon came under the tutelage of England’s preeminent literary critic, F. R. Leavis. A year after arriving at Cambridge, Podhoretz was invited to contribute to Scrutiny, the famous quarterly edited by Leavis—which he did with a review of Trilling’s new book of essays, The Liberal Imagination.
In the summer of 1951, Podhoretz took a break from his studies to travel in Greece and Israel. He wrote a long letter to Trilling offering his impressions. Of Israel, the twenty-one year old reported
I became very depressed over a demoralized population, and finally went away a sadder and wiser man, with a slightly bitter taste in my mouth and a sense of having been strangely dispossessed. I felt more at home in Athens! They are, despite their really extraordinary achievements, a very unattractive people, the Israelis.
Not exactly a ringing endorsement of the Zionist project, but Trilling passed the letter on to Elliot Cohen, the founding editor of Commentary, the high-toned monthly magazine launched in 1945 by the American Jewish Committee (AJC).
Trilling suggested that his young protégé be asked to write for the magazine. (In fact, Trilling had been Cohen’s protégé in the 1930s.) And so it was that Podhoretz launched his career as a literary and cultural critic with a review in Commentary of Bernard Malamud’s The Natural. He followed that up by panning Saul Bellow’s The Adventures of Augie March. (Bellow never really forgave the cheeky young man.) The audacity of that review created a stir within the Family and led to assignments from Partisan Review and
After a two-year stint in the U.S. Armed Forces, Podhoretz went to work for Commentary as one of Elliot Cohen’s junior editors. Like almost all the members of the Family, Podhoretz was reflexively anti-Communist. But he had little interest in politics in general—in part because he accepted the fashionable idea that the great political and ideological debates of the 1930s had been settled. His true passion was the Republic of Letters and he continued to hone his craft as a critic with a series of New Yorker reviews on important contemporary writers, such as Albert Camus, Simone de Beauvoir, William Golding, and C. P. Snow. (Some of his colleagues thought he might eventually eclipse the New Yorker’s legendary critic Edmund Wilson.)
In 1959, the brilliant but troubled Cohen unexpectedly committed suicide. After a six-month search, the AJC’s publication committee offered the editor’s job to Podhoretz at the then-munificent salary of $17,000 and the promise of a “free hand” to shake up the magazine. The Committee elders were undoubtedly aware that choosing a writer under thirty, however precocious, to run their prized publication was a high-risk venture. They could not have imagined that over the next quarter-century this headstrong young man would boost Commentary’s reputation and readership and also lead the magazine through a turbulent, history-making, intellectual rollercoaster ride.
Almost immediately, Podhoretz began consciously moving Commentary politically and culturally to the left. It was the dawn of a new, hopeful decade in America. A noble civil-rights movement was forming and demanded attention. There was the prospective election of a young president promising radical reform to get the country moving again. On the campuses, the young were stirring after a decade of political quietude. Even the ideological certitudes of anti-Communism and the grim necessity of fighting the Cold War were now subject to necessary revision as a supposedly reformist leadership emerged in the Soviet Union. Podhoretz sensed that the country was on the cusp of big cultural and political changes, and he wanted Commentary to be at the center of the action.
Even as he had interviewed for the editor’s position, Podhoretz hid doubts that this was the right career move for him. It meant giving up his first intellectual love and ambition—his quest to be a serious (and seriously respected) literary critic. And what was he really getting in return? One of his good friends, the publisher Jason Epstein, warned him not to take the job, that Commentary was “finished, played out.” But as he put his own literary pursuits on hold, Podhoretz saw that he could reinvigorate the magazine as a cultural and political force. He got rid of the old editorial staff and manuscripts held over from the Cohen regime and went out looking for younger, risk-taking, non-academic writers in touch with the emerging zeitgeist of the 1960s.
In his first three issues, Podhoretz signaled his intention by serializing Paul Goodman’s Growing Up Absurd, which then went on to become a bestseller. Although it was one of the most overrated books of the 1960s, at the time, Goodman’s inchoate blend of anarchism, pacifism, and utopian socialism, attached to his romantic plan for a liberatory education, perfectly foreshadowed the coming sexual and cultural revolutions. Some of the staid old contributors to Commentary, as well as many middle-of-the-road readers, were puzzled. They hadn’t seen anything yet. Podhoretz followed up by introducing his readers to writers such as Herbert Marcuse, Norman O. Brown, the young Susan Sontag, and the radical Columbia University historian Staughton Lynd, who argued that the Cold War was more the fault of the conservative American political establishment than Joe Stalin. As Jeffers reminds us, Podhoretz’s new Commentary also rallied intellectual opposition to the Vietnam War, though it stopped short of joining the New Left in rooting for an American defeat.
The turn to the left was certainly good for the bottom line, and Commentary’s paid circulation tripled within five years. Contrary to Jason Epstein’s prediction, the magazine also reclaimed its reputation as a “hot book,” while its new young editor achieved instant celebrity in Gotham’s literary salons and some of its saloons.
At the age of twenty-six, Podhoretz had married Midge Decter, a recently divorced mother of two young girls and a gifted writer and editor in her own right. Despite their busy day jobs, Podhoretz and Decter became regulars on the Family’s social circuit. They dined out regularly with Jason Epstein, went to Hannah Arendt’s famous New Year’s Eve parties, and counted even the neo-Stalinist playwright Lillian Hellman among their friends. Podhoretz and Norman Mailer, the other Jewish literary Norman from the tough streets of Brooklyn, became fast friends and drinking buddies. So “in” were Podhoretz and Decter that when Jacqueline Kennedy moved to New York after her husband’s assassination and wanted to be introduced to the New York intellectual scene, the ex-White House staffer Richard Goodwin asked Norman and Midge to host a dinner party for “the widow” at their large Upper West Side apartment.
But the Family’s extended Camelot couldn’t last. By 1968, Podhoretz found himself shivering rather than celebrating over the faux revolutionary eruptions at Columbia University and the Chicago Democratic Convention. He was dismayed by the increasingly violent, anti-American rhetoric of the student New Left. He was even more outraged by the spectacle of the intellectually respectable New York Review of Books, founded by his old friend Jason Epstein, adorning its cover with a diagram for a Molotov cocktail and running a paean to black rioters burning down their own neighborhoods in cities all across America.
In the late 1960s, Commentary began fighting back against what seemed like momentary aberrations amongst the New York intellectuals. The magazine was still trying to save all that was best in left-liberalism and the Democratic Party’s internationalist and New Deal traditions from the New Left’s corrosive anti-Americanism. Podhoretz also rejected any suggestion that his magazine had turned politically “conservative.” If questioned about his politics, he called himself a “left-wing liberal.” It was not until the Democrats nominated George McGovern in 1972 that Podhoretz could bring himself to cast a vote for a Republican presidential candidate.
It was his January 1970 conversion experience that helped Podhoretz to observe, “I had not yet dropped the other shoe. I was still writing from the inside. . . . I was at a [political] way station, among the crowd of social democrats.” Podhoretz was not the only member of the Family to register principled opposition to the “radical chic” coddling of black revolutionaries by some of New York’s intellectual luminaries. Among those who spoke out and incurred the wrath of the younger 1960s radicals were liberals and social democrats such as Irving Howe and Alfred Kazin. But Podhoretz alone had reluctantly concluded that it was now impossible to reconstruct a “decent Left” and that he had to summon the courage to go into opposition to the very idea of the left. It meant crossing a “red line” that even critical public intellectuals like Howe and Kazin would never allow themselves to contemplate. It meant uttering the words, “I am a conservative” or, even worse, “I am a Republican”—words that children from New York Jewish immigrant families were taught almost from the cradle were the moral equivalent of “forgetting Jerusalem.”
When Podhoretz finally crossed that red line by launching the second political reincarnation of Commentary, he guaranteed that he would become the target of a nasty and often personal counterattack from both the decent and not-so-decent left. Even steadfast old Commentary writers and allies such as Theodore Draper, Nathan Glazer, and Daniel Bell (hardly known as liberals) could not forgive him for taking the magazine to the dark side of the political divide. The New York Times and other supposedly apolitical publications stopped asking him to review books. His own books were universally savaged in what seemed like a coordinated literary counter-
offensive. The New York Review assigned Making It to one writer, and, when the review came back with criticisms considered by the editors to be too mild, it was sent out again for something more scathing. In a statement made available only after his death, Theodore Draper acknowledged that his exceptionally vitriolic attack in The New Republic on Podhoretz’s 1982 book Why We Were in Vietnam was influenced by Draper’s resentment that Podhoretz had “changed the political line of Commentary” almost a decade earlier.
But what were the essential principles of Podhoretz’s new “political line” that could not be compromised, that made it worth losing practically all of his former friends? In my view, it was not the question of whether Podhoretz was a registered Democrat or Republican. It was, rather, the idea that the United States and its essential ally Israel were the two great beacons of freedom and decency in an increasingly dangerous world and that these two resilient democracies were worth defending—indeed, that all people calling themselves democrats with a small d should be defending. That was the rallying call behind many of the politically influential articles published by the new “neoconservative” Commentary, starting with Daniel Patrick Moynihan’s classic 1975 essay “The United States in Opposition.” Shaped by Podhoretz, the article led directly to President Nixon’s appointment of Moynihan as America’s ambassador to the United Nations. Moynihan didn’t serve for very long, but he was there long enough to give his equally historic speech (written by Podhoretz) blasting the organization for its infamous “Zionism is racism” resolution.
There’s a wonderful irony in Podhoretz’s emergence as our leading defender of America and Israel. As he often joked, he grew up in a neighborhood in Brooklyn where “there were no Americans,” only Jews and blacks and Italians and Irishmen. Nor did he evince much filial feeling for the emerging state of Israel in the 1950s and early 1960s. But by the 1970s it became clear that America and Israel were both being targeted for defeat by the most malignant ideologies in the world. Therefore it was a question of honor to defend these two countries with all the eloquence and political skill that Podhoretz could muster. This was the powerful core idea he brought to neoconservatism, to the “party of liberty.” That is why so many radical and even liberal American intellectuals will never forgive his apostasy. And it is also why I, as a former New Leftist who also came to see that it was a moral obligation to defend America and Israel, honor the writer who courageously blazed the trail.
8) Subject: Fwd: The mess Bush left us / NOT!
The Washington Post babbled again today about Obama inheriting a huge deficit from Bush. Amazingly enough,...... A lot of people swallow this nonsense. So once more, a short civics lesson.
Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January 2007 is the Democrat Party. They controlled the budget process for FY 2008 and FY 2009, as well as FY 2010 and FY 2011. In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases.
For FY 2009 though, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the FY 2009 budgets.
And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete FY 2009. Let's remember what the deficits looked like during that period: (below)
If the Democrats inherited any deficit, it was the FY 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets. If Obama inherited anything, he inherited it from himself.
In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th.
9)Americans' Net Worth Falls Along With Stocks
By MARK WHITEHOUSE
U.S. households saw their wealth decline in the second quarter despite their efforts to save more money, underscoring the economy's struggle to recover from the recession.
The Federal Reserve reported Friday that household net worth—stocks, bonds, homes and other assets, minus mortgages and other debts—fell 2.8% to $53.5 trillion in the second quarter, driven by a sharp decline in the value of stock investments. The drop, the first since the darkest days of the financial crisis in early 2009, left average net worth at about $182,000 a person—though the average is pulled up by a small group of the very wealthy.
The numbers highlight the extent to which erratic financial markets are adding to the job troubles already weighing on consumers. While markets have rebounded somewhat in recent weeks, many people are keeping a lid on spending and focusing on repairing damaged nest eggs.
"I worry every day about our financial future," said Steve Gohmann, a 62-year-old retired insurance industry executive. He said that he and his wife were cutting their discretionary spending by some 18% this year while they try to rebuild their investments, which are down about 13% from their peak in 2007. Among the cuts: Golf outings and membership in a California wine club.
Even if stock markets continue their recent rise, renewed weakness in home prices could prompt people to divert more of their income toward savings, said Ed McKelvey, senior economist at Goldman Sachs in New York. As of July, U.S. households were saving nearly 6% of their disposable income, compared with about 2% in 2007.
"Uncertainty about wealth is certainly an issue that will weigh on people," said Mr. McKelvey. In one sign of consumers' poor mood, the Reuters/University of Michigan index of consumer sentiment fell to 66.6 in the first part of September, down from 68.9 at the end of August and the lowest point since August 2009.
Reshaping the Balance Sheet;See measures of the shifting wealth and debt of U.S. households and corporations.
New data on the finances of banks and other firms reflect the persistent caution that has damped economic growth in recent months. Holdings of cash and other liquid assets at nonfinancial companies remained steady at about $1.8 trillion as they hesitated to plow profits back into expansion. At 7% of total assets, the level of cash is close to the highest since 1963.
Over the same period, banks' loans outstanding fell 1.4% to $9.1 trillion.
Despite the frugality of households and companies, total U.S. debt edged up 1.2% as state, local and federal governments borrowed to finance massive deficits. Government debt, including the liabilities of state and local governments, rose 4.6% to $11.1 trillion in the second quarter. That's nearly $38,000 a person.
Households managed to pare down their debts for the ninth-straight quarter, largely by defaulting on mortgages and credit-card debts. Total household debt outstanding fell $77 billion to $13.5 trillion in the second quarter. That's just barely more than the value of mortgage and credit-card debt that banks and other investors wrote off after borrowers defaulted. Commercial-bank records suggest such write-offs amounted to more than $70 billion.
At 119% of annual disposable income, household debt has fallen significantly from its peak of 130% in September 2007. Economists believe a sustainable level would be closer to 100% or even lower. But other measures of consumers' debt burden, such as the ratio of debt-service payments to disposable income, suggest they're closer to the point where they can start spending again.
In the quarter, people socked away an annualized $798 billion into investments such as stocks, bonds and bank deposits, the largest contribution since the first quarter of 2008.
Mike Freels, 61, an administrator at the Henderson, Ky., campus of Murray State University, said he was now putting away about a third of his paycheck in an effort to boost his retirement savings, and aimed to increase that share in the near future. The poor performance of the stock market and low interest rates on bonds and bank deposits, he said, left him with no option but to build his savings the old-fashioned way.
"Right now, the only thing a person like me can do is try to save more, because you can't count on any investments making a profit," he said
9a)Disaster in Detroit The city's orchestra is under threat. Does anyone care?
By TERRY TEACHOUT
The Detroit Symphony Orchestra is staring into the abyss. In order to survive a fix-it-or-else financial crisis—the DSO is expected to run up a $9 million operating deficit by the end of 2010—the management wants to slash the pay of its musicians by nearly 30%. The musicians have responded by voting to authorize a strike, and it is widely feared that this may lead to the orchestra's demise.
Does anybody care? Yes—but probably not enough to do anything about it.
The numbers tell the tale: Nearly two million people lived in Detroit in 1950. The current population is 800,000. Forty of the city's 140 square miles are vacant. Downsizing is the name of the save-Detroit game, and Mayor Dave Bing, who is looking at an $85 million budget deficit, wants to slash civic services drastically and encourage Detroit's remaining residents to cluster in the healthiest of its surviving neighborhoods.
Can a once-great city that is now the size of Austin, Texas, afford a top-rank symphony orchestra with a 52-week season? Does it even want one? The DSO, after all, is not the only one of Detroit's old-line high-culture institutions that is sweating bullets. The Detroit Institute of Arts and the Michigan Opera Theater are also in trouble, and the editorial page of the Detroit News recently declared that Detroit is "no longer a top 10 city by any measure. The reality may be that this region can no longer support a world class orchestra, or art museum, or opera company. . . . They are remnants of an era when the city was awash in automotive cash."
Brian Dickerson, the deputy editorial-page editor of the Detroit Free Press, reacted angrily in a column published last month to what he called the "elegiac resignation" of this editorial: "Some sneer that Detroit's unwashed masses can no longer discern the difference between a great orchestra and a mediocre one. . . . What's incredible, and ineffably sad, is the complacency with which Detroiters are shrugging off the disintegration of a cultural infrastructure our predecessors spent the entire 20th century putting in place." But it isn't complacent to admit that Detroit may no longer be able to afford the DSO—or that the city's "unwashed masses" won't lose any sleep if the orchestra is forced to close its doors.
As I reported in this column in June, regional orchestras all over America are struggling to stay afloat. Some have disbanded, while others are seeking out new audiences. The New Jersey Symphony Orchestra, for example, faced up to the long-term decline of Newark, its home, by reconfiguring itself as a state-wide group that gives concerts in seven different cities. That's one of the reasons why the orchestra has clawed its way back from near-bankruptcy and has accumulated nearly 80% of the $32 million in capital that is its current capital fund-raising goal.
What makes the Detroit Symphony different is that it is not a provincial ensemble. It's long been ranked as one of America's top 10 symphony orchestras, in terms of both pay scale and artistic quality. Many of the recordings that the DSO made for Mercury in the '50s and '60s remain in print to this day. But what few seem to want to admit other than euphemistically is that comparatively few of the citizens of Detroit appear to be willing to pick up the tab for such an ensemble. In a city that is itself in desperate financial straits, the care and feeding of a major orchestra is not a priority.
I agree with those musicians who argue that cutting the average salary of a DSO player from $104,650 to $75,000 will transform the orchestra beyond recognition. The DSO will inevitably lose its best members and won't be able to attract replacements of comparable quality. But the players' decision to respond to the orchestra's financial crisis by voting to strike is a classic symptom of the cultural-entitlement mentality—the assumption that artists ought to be paid what they "deserve" to make, even when the community in which they live and work places a significantly lower value on their services. Any economist can tell you what has happened: In Detroit, being a classical instrumentalist is no longer an upper-middle-class job.
We like to think that great symphony orchestras and museums are permanent monuments to the enduring power and significance of art, but in the 21st century, we are going to learn the hard way that this is simply not true. Great high-culture institutions reflect the fundamental character of a city. In America, most of these institutions were founded in the late 19th and early 20th centuries as manifestations of civic pride. But when a city's character undergoes profound changes, as has happened in Detroit, the institutions are bound to reflect that transformation. One way or another, they'll follow the money—and if there is no money to follow, they'll go out of business. The sad truth is that the Detroit Symphony is no more "permanent" than . . . well, your average auto company.
—Mr. Teachout, the Journal's drama critic, writes "Sightings" every other Saturday. He is the author of "Pops: A Life of Louis Armstrong."
10)The Republican Answer to George Soros's Money
Steven Law admires how the left organized itself during its wilderness years. Now he's got $50 million to help elect candidates on the right.
By JOSEPH RAGO
President Obama warned in a speech last month that the fall campaign season will see "a flood of attack ads run by shadowy groups with harmless-sounding names," which will "spend unlimited amounts of money to influence our elections." The midterm could amount to nothing less, he added, than "the corporate takeover of our democracy."
The president's speechwriters may well have had Steven Law in mind, or at least they should have. He is the president and CEO of American Crossroads, a new independent outfit that will spend more than $50 million this year—almost all from large individual (not corporate) donations—on behalf of Republican candidates. The goal, as it was for Democrats in 2008, is change.
"I think voters decided to give the Democrats a two-year chance to fix the economy," Mr. Law says in his spartan headquarters a few blocks from the White House. "Instead Democrats thought they had two years to radically transform the country in ways that voters didn't want. And as a result I think large numbers of Democrats are going to lose their jobs."
Of course, the irony of laments by Democrats such as Mr. Obama about (Republican) money in politics is that most outside dollars are being spent in the service of liberal candidates and causes. The progressive left has spent the better part of a decade building an archipelago of tightly linked third-party groups: MoveOn.org, Democracy Alliance, the Center for American Progress, their spinoffs and dozens of others. Bankrolled in large part by billionaires like George Soros and Peter Lewis, and along with more traditional institutions like organized labor and the environmental lobby, these organizations are effectively a shadow party that operates outside the ambit of the Democratic Party.
Mr. Law does not issue warnings about these shadowy groups and their moneyed patrons, however. Rather he admires "how the left organized themselves politically in their wilderness years" and how "they very creatively re-imagined how to operate politically in some new and very interesting ways.
"I think the Democrats figured out how to collaborate and coordinate their efforts in a way that we'd never seen on the Republican side outside of the party apparatus," he says. "They were very intentional about sharing plans, and information, and data."
American Crossroads was conceived as a counterweight amid the cinders of the 2008 campaign. Mr. Law says he and others concluded that "we ought to figure out how to do the same thing on the center right side to benefit Republicans." Present at the creation of the new organization were Karl Rove, George W. Bush's deputy chief of staff, and Ed Gillespie, former Republican National Committee (RNC) chairman. Messrs. Rove and Gillespie remain informal advisers. Another RNC veteran, Mike Duncan, now serves as the Crossroads board chairman. Mr. Law—a former chief of staff and campaign manager to Sen. Mitch McConnell and executive director of the National Republican Senatorial Committee in the 1998 and 2008 elections—left his post as the U.S. Chamber of Commerce's general counsel to take the helm.
Mr. Law says American Crossroads, which launched in April, will do much more this fall than just TV ads, phone banks and direct mail. It will conduct polls and opposition research, conduct "industrial-strength" voter turnout activities and an absentee-ballot program. The organization will target 11 key Senate races. But it will also be active in up to two dozen House seats, though on the House side it's coordinating with other outside groups so "our dollars go farther," Mr. Law says. The organization is barred by law from comparing strategy notes with a particular candidate or campaign.
The key Senate races, in Mr. Law's view, are Colorado, Missouri, Ohio, New Hampshire, Kentucky, Washington, Wisconsin, Florida, Nevada, Pennsylvania and Illinois. He also notes that the GOP will recapture a lot of the House seats Democrats won in 2006 and 2008 by running moderates who then abetted the Obama agenda against the priorities of their districts.
Nevertheless, as favorable as it seems today for "Republican resurgence," Mr. Law cautions that "the greatest danger is complacency. One of the big differences between this election and the 1994 and 1980 GOP landslides is that the Democrats are acutely aware of the danger they're in and they are developing a very sophisticated game plan to counter this."
The main Democratic tactic seems to be to drive up the negative view of Republicans, portraying them as outside the American mainstream, if not in need of clinical attention, e.g., Sharron Angle in Nevada, Rand Paul in Kentucky, and now Christine O'Donnell in Delaware.
American Crossroads (and others) might consider investing in Ms. O'Donnell, if she is able to raise significant money in the next three weeks and if polls show the race is competitive. But Mr. Law says the key is for her to show she can run a real campaign herself. He is more sanguine about the others. "Most of these candidates who won their primaries were responding to a deep need out there in the electorate, which is for clear, strong ideas and views. That's why they won." And for the most part they're pulling even with their opponents in the general election, "notwithstanding withering attacks by Democrats and their allies."
Of course, Democratic campaign committees have almost twice as much cash on hand as their Republican counterparts, and routinely outraise them as well. Union leaders have told the press they plan to spend more than $100 million. Mr. Law says that labor will have "a huge ground game and they will deliver the vote in a lot of key races, and that will be a significant challenge to us." The network of outside liberal groups will also "be a formidable force again this year."
Mr. Law says he "got to know organized labor fairly well" during his tenure as a deputy labor secretary in the Bush administration. "I was quite impressed by their courage, their dedication, their boldness, their willingness to put it all on the line to elect people who supported their political agenda," he says. "Frankly they were much bolder and more dedicated than some in the business community, which is why they continue to be successful in advancing their agenda when the political winds are against them."
Most of American Crossroads' money comes from large individual donations. And despite Mr. Obama's semi-hysterical fulminations about a "corporate takeover of our democracy," Mr. Law says that "you don't see large publicly traded businesses rushing pell-mell into overt political activity, and I think its unlikely to happen." Corporate America wants to protect its brands and avoid political retribution; "executives understandably want to get along with everybody," he says.
On the other hand, "You compare that to the unions where their future longevity and prosperity depends significantly on government," and it is clear that "unions not only invest dramatically more in politics but they do it very publicly, and in a very sophisticated and intentional manner. After the 2008 election Andy Stern of the SEIU boasted that they had gone $10 million in debt to buy more TV ads. There's not a public corporation in America that could get away with doing that."
Mr. Law says that the "parallel structure" American Crossroads is trying to build has existed on the left "going back to Franklin Delano Roosevelt's first election" because of these types of union efforts, although the Soros & Co. third-party phenomenon is more recent. It had no precise analogue on the right because "Republicans have long enjoyed the institutional strength of the party committees." Mr. Law says that "our desire is to supplement and not to replace," when asked about the disarray at Michael Steele's Republican National Committee, declining to say more.
The longer-term ambition of American Crossroads, and its policy arm Crossroads GPS, is larger than such passing troubles. Mr. Law talks about "the importance of building . . . an increasingly powerful resource that will yield dividends over a period of years." Conservative-leaning groups like the Chamber of Commerce and the National Rifle Association are important but more focused on issues than candidates and campaigns. Other GOP third parties tend to be evanescent, "developing a huge capacity and know-how and then disbanding." The Swift Boat Veterans in 2004 is the classic example.
For now, though, Mr. Law is concentrating on the next 45 days, and keenly anticipating the 112th Congress. "Now it's accountability time," he says.
Mr. Rago is a senior editorial writer at the Journal.