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Cities in California are declaring bankruptcy because they cannot meet their debt obligations. Most of these debt obligations are the direct consequence of the rise in power of public unions. Local politicians voted public workers high salaries and pensions, then these union members take their excessive dole and vote the same politicians back into office and eventually the city's fiscal health erodes and matters spin out of control.
There was a recent television series about three or four California cities and Birmingham, Alabama (my home town.) In the case of Birmingham, fraud and mismanagement were involved but in California it was revealed the police chief, in one bankrupt city, was earnings a salary of $300,00 and the population of his town was about 250,000. His annual pension, which allowed him to retire in his 50's, was equal to his salary. Now that city can no longer pay his pension and he and his police department are taking the city to court for breaking a sacred contract.
What does this have to do with Ryan and the deficits run up by the United States? Everything.
Though Americans received certain rights from God, I daresay God is going to pay for our profligacy. So when the cupboard is empty, those who seek now that which won't be available later will begin to endure the pain Paul Ryan is both warning about and about which he is trying to do something.
In seeking reform, Ryan is suggesting there must be changes that reflect reality. History reveals most reformers are trashed and rejected because their message is an uncomfortable one and new. Reality often is hard to accept. Particularly when you have been living a lie. The Rev. Martin Luther King is a recent example. King preached segregation was a moral blight on our nation and he and many of his supporters were bashed on the head, attacked by dogs, shunted off to jail, shot and killed for saying the obvious!
Because Ryan's proposals entail change and consequently some will not receive what their elders are the former feel cheated. The cheating is not caused by Ryan but by those who went before them. It is simple and basic math. That said, demagogues, like Obama and his thugs, are seeking to impute the fault to Ryan, raise the level of distrust through lies and falsehoods and thereby regain office.
It is the age old action of the snake oil salesmen and, let's face it, that is all Obama was when he ran the first time but he was a persuasive new face, light skinned black and articulate (the latter attribution was Biden's observation.)
This is what Obama is all about and one would hope and pray this time voters will see through the fraud he perpetrated upon the nation in the first instance.
Fool me once shame on you, fool me twice shame on me. Seems an applicable parable for voters!
(See 1, 1a and 1b below.)
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Even Barry Rubin notices media bias. (See 2 below.)
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You should know by now when I say the last memo is my last it ain't so!
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Dick
---------------------------------------------------------------------------------------------------------------------1)Paul Ryan's Neocon Manifesto
America's real interests, he understands, come from our deepest values.
By Bret Stephens
Last summer, the chairman of the House Budget Committee made a foray into foreign-policy land with a speech to the Alexander Hamilton Society in Washington, D.C. About 100 people showed up, and it got next to no coverage. That should now change—and not just because Paul Ryan's views on America's role in the world are no longer a matter of one Wisconsin congressman talking.
Here, in CliffsNotes form, is what the speech tells us about Mr. Ryan. First, that he's an internationalist of the old school; in another day, he would have sat comfortably in the cabinets of Harry Truman, Jack Kennedy or Ronald Reagan. Also, that he believes in free trade, a strong defense, engagement with our allies—and expectations of them. Also, that he wants America to stay and win in Afghanistan. Furthermore, that he supports the "arduous task of building free societies," even as he harbored early doubts the Arab Spring was the vehicle for building free societies.
It tells us also that Mr. Ryan has an astute understanding of the fundamental challenge of China. "The key question for American policy makers," he said, "is whether we are competing with China for leadership of the international system or against them over the fundamental nature of that system."
What Mr. Ryan's speech really tells us, however, is that he knows how to think.
Most foreign-policy speeches by American politicians take the form of untidy piles of verities and clichés. Here, for example, is Barack Obama on China: "As we look to the future, what's needed, I believe, is a spirit of cooperation that is also friendly competition." Here he is on the U.N.: "The United Nations can either be a place where we bicker about outdated differences or forge common ground." Here he is to the British Parliament: "The time for our leadership is now."
Mr. Ryan doesn't have the president's reputation for eloquence. Nor do his speeches ride on the windy drafts of "Yes We Can." But unlike Mr. Obama, his speeches communicate ideas and arguments, not pieties and emotions.
Thus this speech begins not with a cliché but with a contention: "Our fiscal policy and our foreign policy are on a collision course." It proceeds, briefly, to demonstrate the point quantitatively: Defense spending in 1970 consumed 39% of the federal budget but takes only 16% today. In the proverbial guns-to-butter ratio, our veins are already clogged.
Next there is history. Why can't the U.S. simply cede the cumbersome role of world policeman to somebody else? Didn't Britain do as much in the 1940s? It did. Yet, "unlike Britain, which handed leadership to a power that shared its fundamental values, today's most dynamic and growing powers do not embrace basic principles that should be at the core of the international system."
Associated Press
Republican Vice Presidential candidate Paul Ryan
That's not a novel insight, exactly, but it's something that needs to be said and is said only rarely. Similarly with Mr. Ryan's next point: American exceptionalism isn't a type of jingoism. Instead, it derives from the fact that it was the first nation born of an idea, and from an idea that is true not only for Americans. "America's foundations," he says, "are not our own—they belong equally to every person everywhere."
So what follows? "If you believe these rights are universal human rights . . . it leads you to reject moral relativism. It causes you to recoil at the idea of persistent moral indifference toward any nation that stifles and denies liberty, no matter how friendly and accommodating its rulers are to American interests."
Note the consistency of the logic. Note the quality of the language. Note, finally, Mr. Ryan's understanding that America's real interests are derived from our deepest values. For most other countries, it's just the opposite: The interests come first, and "values" are a synonym for justifications.
None of this means that Mr. Ryan is a foreign-policy crusader. He talks of a "healthy humility" about the degree to which the U.S. can "control events in other regions."
Yet humility should not be a prescription for passivity or fatalism. Speaking of the U.K., he notes the extent to which its postwar leaders chose their own diminished fate: "Once they concluded that they should manage Britain's decline, it mattered little what Britain was objectively capable of achieving on the world stage. The crisis of self-perception was fatal to Britain's global leadership."
What kind of congressman speaks—and maybe even writes—sentences like these? When Mr. Ryan gave the speech, in June of last year, Congress and the Obama administration were gearing up for their epic budget grudge match. He had no inkling he'd be the vice presidential nominee in 14 months and had probably already decided he didn't want to run for president. Which means he could easily have fobbed off the Hamilton Society with GOP platitudes about "keeping America strong."
Instead he delivered one of the most thoughtful speeches in years about America's global role and the means required to maintain it.
What a great thing he's on the ticket. Pity he's not at the top of it.
1a) Go for Bust, Mr. Romney
The Republican has promised to honor Winston Churchill in the White House if he wins. He should make room also for John James Cowperthwaite.
By William McGurn
Mitt Romney may have pandered when he told a London crowd he would restore the bust of Winston Churchill to the Oval Office. Then again, symbols play an important role in politics. Now Mr. Romney has given us another by choosing as his running mate Paul Ryan, the market-minded Republican congressman from Wisconsin.
In this spirit, let me suggest a man whose bust would be a good companion for Churchill as well as for Mr. Ryan. His name is Sir John James Cowperthwaite.
Sir John James Cowperthwaite
In America, Cowperthwaite's name languishes in obscurity. That should change. Cowperthwaite was the Hong Kong financial secretary whose free-market convictions helped the war-weary colony grow into an economic powerhouse. Milton Friedman once explained the significance of this example: "Hong Kong's been very useful to me and it would be hard to overestimate the debt Hong Kong owes to Cowperthwaite."
Friedman first traveled to Hong Kong in 1955, when it was flooded with refugees from Communist China and life, he wrote, was "miserable" for most of its inhabitants. He returned again in 1963, when things had improved, and there he met Cowperthwaite. Asked why he forbade officials from keeping numbers even for things such as gross domestic product, Cowperthwaite told Friedman a version of what he would tell me over lunch at Hong Kong's Mandarin Hotel three decades later. "If I let them keep statistics," he said, "they can only misuse them."
Cowperthwaite wasn't one for speeches or economic papers. So most of his philosophy must be gleaned from debates in Hong Kong's Legislative Council, where he used his formidable skills to fend off the latest hare-brained scheme for taxing Peter to subsidize Paul.
On subsidies to keep water prices low: "I see no reason, for example, why someone who is content with an economical cold shower should subsidize someone who is able to luxuriate in a deep hot bath."
On taxes: "Economic expansion remains the door to social progress, and I am convinced that in our circumstances low taxation can in general produce a greater growth in revenue than can tax increases."
On picking winners: "A desirable industry was, almost by definition, one which could establish itself and thrive without special assistance in ordinary market conditions."
In a 1997 article in National Review, Friedman summed up what the principles he and Cowperthwaite shared did for Hong Kong.
"[I]n 1960," he wrote, "the earliest date for which I have been able to get them, the average per capita income in Hong Kong was 28 percent of that in Great Britain; by 1996, it had risen to 137 percent of that in Britain. In short, from 1960 to 1996, Hong Kong's per capita income rose from about one-quarter of Britain's to more than a third larger than Britain's. It is easy to state these figures. It is more difficult to realize their significance. Compare Britain—the birthplace of the Industrial Revolution, the nineteenth-century economic superpower on whose empire the sun never set—with Hong Kong, a spit of land, overcrowded, with no resources except for a great harbor. Yet within four decades the residents of this spit of overcrowded land had achieved a level of income one-third higher than that enjoyed by the residents of its former mother country."
Mr. Ryan would cheer. Like Cowperthwaite, he appreciates that the world's most effective antipoverty program is a free market.
As it happens, Cowperthwaite has been to the West Wing before. When I worked as a speechwriter for President George W. Bush, my bust of Cowperthwaite sat in the office that was Hillary Clinton's when she was first lady. Most of the time he sat proudly, but I'll admit that on occasions—ethanol mentions, for example—my speechwriters saw me turn his face to the wall.
The bust is the work of Zheng Yi-bo, a mainland Chinese sculptor who graduated from the first class of the re-opened Guangdong Arts Academy that had been shut down during Mao's Cultural Revolution. It was a gift from Jimmy Lai and Yeung Wai Hong, good friends who were also close to Friedman and are, respectively, the owner and publisher of Hong Kong's popular and fiercely free-market Next magazine. They tell me they'd be delighted to supply Mr. Romney with his own bust.
If Cowperthwaite had a credo, surely it was the opposite of "You didn't build that." For him, Hong Kong was all about the enterprises ordinary people can build for themselves if only given the freedom. As he told me at that same lunch in 1996, "I did very little. All I did was to try to prevent some of the things that might undo it."
What a splendid thing it would be for a president to have the bust of such of man in the Oval Office, a pointed reminder of modesty in a Washington prone to assuming it knows how to spend the people's money better than the people themselves.
1b) The Forgotten History of Ryan's Medicare Reform
How the House budget chairman developed his premium-support concept, which was originally supported by Democrats. It's the only plan that won't send grandma over a cliff.
By JOSEPH RAGO
There was a small but instructive moment in 2010, the summer after the passage of the Affordable Care Act, that shows why Paul Ryan is so unusual for Washington.
A panel at the American Enterprise Institute featured Richard Foster, the Medicare actuary who estimates that ObamaCare's $716 billion in Medicare cuts will cause one of six hospitals to become unprofitable. In the audience was Chip Kahn, the president of a for-profit hospital trade group that lobbied for ObamaCare, who stood up to defend the bargain his industry cut in return for 30 million new subsidized customers.
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Editorial board member Joe Rago on the Ryan budget and Medicare plan.
Mr. Foster noted that the cuts, which come via a technical change to Medicare payment rates, apply in perpetuity. But the hospitals only get the extra patients once, so the wedge between costs and benefits for hospitals widens over time.
"Well," Mr. Kahn replied, "you can say, 'Did you make a bad deal?' Fortunately I don't think I'll probably be working after 2020." When Mr. Foster pressed him, he joked again, "I'm glad my contract only goes another six years."
This kind of short-range thinking—and intellectual exhaustion—dominates both parties and their many clients in Washington, in health care especially.Mr. Ryan's political character has always been different. He saw before anyone else that one era of government was inexorably ending, and that if we want things to stay as they are, things will have to change.
In 2008, amid the poverty of ambition of the late Bush presidency, Mr. Ryan released "A Roadmap for America's Future," a 71-page document that was the first plan in years to take arithmetic seriously. The then-obscure Wisconsin congressman dropped by the Journal to sell his vision, no press secretary, no handlers. "I want to be the Paul Revere of the fisc," he said, according to my notes from the meeting.
Mr. Ryan knew as everyone who knows the budget knows that the federal balance sheet can't be improved by zeroing out foreign aid to Mozambique and arts funding for off-off-off Broadway plays. Medicare is such a large share of spending, and growing so much faster than any other item, that fiscal reform must include the popular entitlement.
Yet the larger goal, Mr. Ryan wrote in the roadmap's preface, was to modernize Medicare for "the realities of the new century." His aim was "not to retreat from the commitments made over the past eight decades, but to fulfill them." In a word, to preserve retirement security and the social safety net.
The core problem is that open-ended Medicare, which spends one of five dollars in health care, buys services whose costs are rapidly increasing. It is a "defined benefit." Mr. Ryan wants to move to a "defined contribution," where seniors would get a fixed-dollar subsidy to buy private insurance. Seniors who desire more generous benefits would pay at the margin. This shift to "premium support," akin to the private-sector transition to 401(k)s from pensions, would change the incentives in health care and make medicine more accountable to patient choice.
Today, Medicare's arbitrary fee-for-service price controls pay the best hospitals and the worst hospitals equally, regardless of quality or value. Innovators who deliver better care at a lower cost are rarely rewarded, as they would be in any other industry. Under premium support, networks of providers would be competing for consumers and become more efficient over time, instead of billing taxpayers for their current negative rate of productivity.
Under the 2008 roadmap, seniors would get a straight cash voucher for $9,500 a year (the amount Medicare then spent per person), indexed to a blended measure of general inflation and the rise of health costs. The poorest and the sickest would get more, the wealthiest seniors less. Nothing would change for people older than 55.
Back then, Mr. Ryan was the only Republican to give a reform agenda definition. The roadmap earned all of eight cosponsors and never got a committee vote. Mr. Ryan was drawing from a rich intellectual well. Premium support was first proposed by Stanford economist Alain Enthoven in the New England Journal of Medicine in 1978. He observed that the pervasive methods of direct economic regulation of health care did not contain costs and suggested that "managed competition" would do a better job.
Associated Press/Jacquelyn Martin
'The point," Mr. Enthoven wrote, "is that government has certain limitations that are deeply rooted, if not inherent. Government is good at some things, such as taking money from taxpayers and paying it to social-security beneficiaries, and maintaining competition in many industries; it performs badly at other things." Premium support's "cumulative effect is intended to alter the system radically, but gradually and voluntarily, in the long run."
Mr. Enthoven's reform models were the Federal Employees Health Benefits Program, created in 1959, and Calpers, the California health-insurance program for public employees. He used premium support when he designed the Stanford faculty health plan.
Mr. Enthoven's ideas won some support in the Carter administration. Deregulation czar Alfred Kahn publicly endorsed them. Missouri Democrat Dick Gephardt, of all people, pushed them in Congress.
In the 1990s, premium support's chief advocates were Henry Aaron of the Brookings Institution and Bob Reischauer of the Urban Institute. Neither shop is known as a hatchery for conservative ideology. (Mr. Aaron has since recanted.) President Clinton's 17-member Medicare commission, chaired by Louisiana Democrat John Breaux, endorsed the reform in 1999.
But Mr. Ryan did what a million blue-ribbon panels never could: In late 2010 and 2011, he led an internal struggle to educate and convince the risk-averse Republican caucus to get behind his plan. Newt Gingrich's notorious remark about "right-wing social engineering" gives a flavor of the objections. The main doubters were the careerist old guard.
When Mr. Ryan's ideas had no chance of enactment, liberals praised his sincerity. President Obama lauded "a serious proposal" worthy of "healthy debate" in 2009. When the House GOP dared to include it in their budget, liberals responded with varying degrees of hysteria. Mr. Obama recently savaged premium support as "social Darwinism," and that was the subtle part.
The main objection is that the premium supports wouldn't keep pace with the rising health costs that Medicare now promotes, forcing seniors to pay for the overflow out of pocket. But that assumes doctors and hospitals won't change their behavior when the incentives change.
At any rate, Mr. Ryan has always treated premium support as a guide for compromise and negotiation, not dogma. The 2012 budget, renamed the Path to Prosperity, indexed the payments to general inflation, starting at $15,000 (the amount Medicare now spends per person). Unlike the earlier roadmap, the payments would only flow to government-approved coverage options. Mr. Ryan joined with liberal budget expert Alice Rivlin to link the payments to the growth of the economy plus 1%.
The 2013 House iteration uses a competitive-bidding formula worked out with Oregon Democratic Sen. Ron Wyden. Insurers and traditional Medicare, which would remain as is, would essentially participate in a reverse auction to price the coverage in a given region. The annual premium-support payment would be set at the second-lowest bid, and seniors who chose the cheapest plan would keep the difference.
Mr. Ryan's critics claim to be technocrats, but they retain more faith in central planning than the empirical evidence supports. Their objections are really false fronts for their anti-market ideology of price setting and government control.
The reality is that the status quo that Democrats pretend is an alternative to "privatization" is already irretrievably gone and Medicare is already changing, for worse or for far worse. The Affordable Care Act pegs Medicare spending to the growth of the economy plus 1% with the crude across-the-board cuts to providers identified by Mr. Foster. A bureaucratic panel of 15 men and women will enforce the cap by decreeing how medicine should be practiced and how doctors and hospitals are organized.
Premium support is the only other plausible health-care choice, as well as the only way to pay for the promises government has made while still maintaining economic growth. The model has been tested in the real world, and it works: Not only does it already apply to members of Congress, it looks a lot like Medicare Advantage, whose private plans cover nearly a quarter of seniors, and the 2003 Medicare prescription drug benefit, whose premiums, amazingly for health care, won't increase by even a dollar next year.
Mr. Ryan's achievement has been to confront the greatest domestic political challenge of our time—the unaffordability of the entitlement state—and move a tangible and pragmatic solution to the center of the national debate. He even persuaded a politician as cautious and famously data-driven as Mitt Romney.
Mr. Rago is a member of the Journal's editorial board.
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2)
Why is Israel More Prosperous than the Palestinian: The Ultimate Demonstration of Media Bias
ByBarry Rubin - Aug 09, 2012
The Rubin Report
In almost 40 years of studying these issues I’ve never seen a better case study of mass media bias and knee-jerk narrowness than an aspect of the current flap about what presidential candidate Mitt Romney said during his trip to Israel. I’m going to focus on a single point because it brings this problem into sharp focus.
If you truly understand what you are about to read, I don’t see how you can accord most of the mass media any credibility when it comes to Israel ever again. Briefly, Romney mentioned the gap between the Israeli and Palestinian economies—ironically, he vastly understated the gap—and attributed it to “culture” by which he meant, as Romney has said elsewhere, such things as democracy, individual liberty, free enterprise, and the rule of law.
But I’m not talking about Romney here or the media’s critique of him. What is interesting is this: How do you explain the reason why Israel is so more advanced in terms of economy, technology, and living standards? The media generally rejected Romney’s explanation and pretty much all made the same point. To quote the Associated Press story, that was:
“Comparison of the two economies did not take into account the stifling effect the Israeli occupation has had on the Palestinian economy in the West Bank, Gaza Strip and east Jerusalem—areas Israel captured in 1967 where the Palestinians hope to establish a state.
"In the West Bank, Palestinians have only limited self-rule. Israel controls all border crossings in and out of the territory, and continues to restrict Palestinian trade and movement. Israel annexed east Jerusalem in 1967, but has invested much less heavily there than in Jewish west Jerusalem.”
Or, in other words, it’s all Israel’s fault. Yet in choosing to blame Israel, the media generally showed no interest at all in additional factors which are equally or more valid.
I’m not suggesting that journalists and editors thought through the following list of factors and deliberately decided not to mention them. I think that these things never entered their minds. Yet how can that be? Some of these points require knowledge of the situation on the ground and its history. Still, many should be obvious to those who have read past newspaper accounts or just use logic, not to mention research.
Consider the points made below. You might count them for less but anyone honest should admit that they add up to a compelling case:
Consider the points made below. You might count them for less but anyone honest should admit that they add up to a compelling case:
1. The most devastating problem for the Palestinian economy has been the leadership’s refusal to make peace with Israel and to get a state. Most notably, the opportunities thrown away in 1948, 1979, and 2000 doomed both countries to years of suffering, casualties, and lower development. Today, in 2012, both Palestinian leaderships—Fatah and Hamas—continue this strategy.
2. Statistics show major advances in the West Bank and Gaza Strip during the period of Israeli occupation. A lot of money also came in from Palestinians working in Israel (or to a surprising extent on the Jewish settlements).
3. The media should be expected to explain why Israel interfered at all once, by around 1994, almost all West Bank and Gaza Palestinians were under Palestinian rule. The reason, of course, was Palestinian violence against Israel and Israelis. If there had not been such attacks, Israeli forces would not have set foot in Palestinian-ruled areas. Stability would have encouraged development and foreign investment. There would be no roadblocks. Incidentally, roadblocks and restrictions on travel have changed constantly and at times of relative quiet became almost non-existent. Of course, Israel maintained control of the borders to prevent weapons from coming in.
4. There was a large transfer of funds (as provided in the Osloagreement but PA behavior did not make Israel violate the agreement) from Israel to the PA regardingrefunds on customs' duties and workers' fringe benefits.
5. The well-documented incompetence and corruption of the Palestinian Authority. For example, there is no reliable body of law that a company could depend on there. Bribes determine who gets contracts. Literally billions of dollars have been stolen and mostly ended up in the European accounts of Palestinian leaders.
6. And where did those billions of dollars come from? They came from foreign donors who showered huge amounts of money on a relatively small population. Yet, even aside from theft, the money was not used productively or to benefit the people.
7. Because of the risks and attacks on Israel, the country stopped admitting Palestinian workers except for a far smaller number. Tens of thousands thus lost lucrative jobs and the PA could not replace these.
8. The unequal status of women in the Palestinian society throws away up to one-half of the potential labor and talent that could otherwise have made a big contribution to development.
9. And then there are the special factors relating to the Gaza Strip. Under the rule of Hamas, a group committing many acts of terror and openly calling for genocide against Israel, the emphasis was not put on economic development but on war-fighting. The shooting of rockets at Israel created an economic blockade. Note also, however, that Hamas also alienated the Mubarak regime in Egypt which also had no incentive to help it, instituting its own restrictions that were as intense as those of Israel.
10. The Palestinian leadership generally antagonized Saudi Arabia, Kuwait, and other oil-rich Arab states that were consequently not interested in helping them develop.
11. Finally, compare the Palestinians to the Egyptians, Jordanians, Syrians, or Lebanese. In those places the excuse of it’s all Israel’s fault is hard to sustain yet the Palestinians have done as well or better than those other Arabs who share a very similar political culture.
12. And incidentally remember that Israel also had to cope with war, terrorism, and defense needs unequaled by the burden faced by any other democratic state in the world. Moreover, it could not trade for most of its history with any of its neighbors--and commerce is still limited--or any of the countries in the Arabic-speaking world that surrounds it. In addition, it has almost no natural resources. So while Israel received a lot of U.S. aid most of that went into defense and not economic development. In other words, Israel's has handicaps as impressive (or almost as marked) as the Palestinian ones.
My goal here was not so much to present these twelve points but to ask the question: Why is it that these factors were barely mentioned or not mentioned at all in the media analyses of Romney’s statement?
The answer, of course, is that most of the media is set on the blame-Israel argument. Yet even given this truth, why do they have to do so virtually 100 percent of the time with nothing about the other side of the issue? This applies to dozens of other questions such as why hasn't peace been achieved. And in this as in many other cases, they virtually take the PA's talking points as their themes and facts.
The answer, of course, is that most of the media is set on the blame-Israel argument. Yet even given this truth, why do they have to do so virtually 100 percent of the time with nothing about the other side of the issue? This applies to dozens of other questions such as why hasn't peace been achieved. And in this as in many other cases, they virtually take the PA's talking points as their themes and facts.
Often, one suspects there are a lot of people in the mass media and academia who are totally uninterested in presenting anything other than an anti-Israel narrative. This article doesn't mean to generalize about everyone, of course, but you who are doing that know who you are, and you readers know who they are!
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