Saturday, May 28, 2011

At Last, Peggy Noonan Says Something Interesting: “We Don’t Accept That Card Anymore.”

I rarely make it through a Peggy Noonan article. Her WSJ column soars into the stratosphere, high above the political fray. She muses in rhetorical flourishes about the human condition. She offers little advice or analysis that I consider of practical use.

Enter the mainstream media and their newfound consensus: The Republican Ryan plan to change Medicare from a card guaranteeing senior citizens medical care to a voucher to buy private insurance will hand the 2012 election to the Democrats.

I suggest that the Republicans offer a prize for the shortest and clearest explanation of why senior citizens are better off with the Ryan voucher. This task is not easy. It requires that voters understand that “there is no such thing as a free lunch.” (I offered a parable in my posting of yesterday).

Noonan, so far, is my nominee for the prize. She notes the great political appeal of Medicare as it is currently constituted:

“Here's the great thing about Medicare: You turn 65 and it's there. They give you a card and the nurse takes it. Supporters of Mr. Ryan's Medicare plan must talk very specifically about how this would all work, and why it would make your life better, not worse.”

And here is the nugget buried in her column:

“They also have to make two things clearer. One is that if nothing is done to change Medicare, the system will collapse. You'll give the card to the nurse and she'll laugh: ‘We don't take that anymore.’ This already happens in doctors offices. Without reform it will happen more often.”

“Sorry, we do not take that card anymore” should be the Republican rallying cry.

I can imagine the 20-second commercial: A timid elderly couple walks into the doctor’s office to be told by a frosty receptionist: “Oh, you want to see the doctor. We haven’t taken that card for years. I’d tell you to go at the cash clinic at Walmart but they have been on strike every since they unionized.”

In confusion and tears, the elderly couple stumbles out of the office.

Thursday, May 19, 2011

Stunning Announcement: Global Warming Caused by the Sun! (Imagine the following news report, NYT December 15, 2015)

After a ten year study of satellite data, the U.S. National Scientific Council announced that the increase in average temperatures over the past half century is the result of increasing intensity of cosmic rays from the sun. The satellite study shows that increasing CO2 concentrations actually held down temperatures by increasing cloud cover. A peer review of this study by the authoritative Academy of the Academy of National Sciences confirmed the authenticity of these findings. Trading on the Chicago carbon cap-and-trade board was halted as the price of carbon futures fell by 99 percent.

This stunning news evoked angry responses from a spokesperson of the Allied Council for Climate Defense. Spokesman E. Everit Leverit questioned the timing of the release of the study’s results: “We at the Allied Council were not given adequate time to find a new threat to mankind’s existence. We are extremely upset by the release of these results at such an inopportune time.” Off the record, Leverith disclosed that the Allied Council would switch its attention to the proliferation of microwaves in the atmosphere, which pose an existential threat and require urgent international governmental action.

Universities and research labs throughout the country face a loss of more than $10 billion in climate research funding from the federal government and from charitable foundations. A spokesperson (who asked for anonymity) stated: “Mankind is not out of the woods yet; there must be hundreds of other existential threats out there. Just give us the money and we’ll find them.”

A spokesperson of the JcPierpont Charitable Trust declared that they were tipped off by insiders to the study. Given their charter of saving mankind, they are exploring new frontiers of existential dangers that we have not yet heard of. Dangers from meteors or threats from extra-terrestrials do not fall under their charter because they are not caused by humans.

It should the noted that climate scientists themselves are not affected by the results of this study. They are still needed to study the effects of the sun and finding clues to how long this warming is going to last. Most endangered are policy and legal specialists, whose task it had been to translate global warming into public policy and new taxes.

Saturday, May 14, 2011

A Banner Day for Media Bias: The NYT’s Friday the 13th On Global Warming

The New York Times outdid itself in media bias on Friday the 13th. It reported that “the nation’s scientific establishment” as represented by the National Research Council has reaffirmed that “global warming is real” and that “its effects are already becoming serious.” The NYT warns that we must act now because “adverse changes in the climate system…may be impossible to undo.”

The NYT regrets that “the answer comes at a time when efforts to adopt a climate-change policy have stalled in Washington, with many of the Republicans who control the House expressing open skepticism about the science of climate change. Other legislators, including some Democrats, worry that any new law would translate into higher energy prices and hurt the economy.”

For those few and uninformed skeptics, the NYT assures us that “Not only is the science behind the climate-change forecast solid, but the risks to future generations from further inaction are profound.” Already, “the sea level is rising in many American towns” and the average United States air temperature has increased by two degrees in the last 50 years.

The only skeptic cited is Texas Representative Joe Barton, who “swiftly dismissed the council’s findings.” But pay no attention to Barton. We are informed he is “leading the charge against further regulating carbon emissions,” presumably a stooge for Texas’s “Big Oil.” (A photo of a scowling Barton is attached to the article).

According to the NYT, the committee itself “is an unusual combination of climate scientists, businessmen and politicians,” and even includes “non scientist, Jim Geringer, a conservative Republican.” Such a committee would clearly bend over backwards to be fair.

The report ends on an unsurprising note. America’s greatest scientists recommend that the federal government spend a gazillion dollars on scientific and engineering research before it is too late.

Well, anyone can read the summary of the Research Council’s report on line, which I did. Here is what I found in a few minutes of research:

1) On the Committee:
Of the first eight names, only one appears to be a climate scientist. The others are engineers, lawyers, and public policy types. There are other names, but I did not want to waste my time. I presume the pattern holds. No top climate change skeptic, like MIT’s Richard Lindzen, is included. This report was not written by climate scientists but by public policy wonks.

2) On the certainty of the science:
The report tells us, contrary to the NYT account, that the science is far from certain. I quote: “How will the climate system respond to increased greenhouse gases? The exact value of ‘climate sensitivity’—that is, how much temperature rise will occur for a given increase in atmospheric greenhouse gas concentration—is uncertain due to incomplete understanding of some elements of the earth’s climate system.” Note the wobbly use of language, such as “exact” or “some elements,” to signal that the science is “almost certain.” I can imagine the illustrious committee members searching for appropriate qualifiers that would not let the cat out of the bag.

3) If the science is uncertain, why act now?
The report, which is not a study of climate science but of risk management, argues that the potential environmental damage from temperature increases (which the committee admits we really do not understand) is so large that we cannot afford to wait until we understand the science. (With this argument, we should wipe North Korean and Iran off the map now because of the future risk of their future nuclear weapons).

4) How about the NYT’s claim of “rising sea levels in many American towns?”
Not surprisingly, I could not find this is in the report (perhaps it is hidden some where). There is only a general reference to risks to coastal areas from future rises in sea levels. The NYT’s claim is puzzling. How can sea levels be higher in one coastal town and lower in another nearby town? I’d like the NYT writer (Leslie Kaufman) to explain that one. (I do recall an earlier NYT report with “Rising Sea Levels and Global Warming” in the headline, but it turned out to be subsidence. The earth was inconveniently dropping not the sea level rising).

The NYT is again trying to tell us that the science is certain and that anyone who disagrees is a stooge or an idiot. If global warming alarmism is so scientifically proven, why is it that respected top scientists at institutions such as M.I.T., Princeton, Harvard, Pennsylvania, Virginia and Wisconsin say there is no scientific evidence to support it? Has the Times ever tried to answer this question? Global warming alarmism should not be taken seriously until and unless the question is satisfactorily answered.

Why should a layman give global warming alarmism any credence if these scientists do not? There is never such certainty in science, as the Research Council’s own report confirms.

Drivel from David Brooks: Let Future Congresses Make Future Spending Cuts!

“Conservative” NYT columnist, David Brooks, has suddenly turned optimist. He opines that the upcoming vote on the debt ceiling will force Congress into a real compromise on spending cuts. He assures us: “Something good is about to happen.” The Republicans have leverage because “the debt-ceiling limit has to pass.” This is their chance to really stick it to the free spending Democrats.

Wait a minute. In reading further, I am less optimistic: “Congress won’t be able to produce specific program cuts and policy reform in the next few weeks, but it can come up with structural rules that will obligate future Congresses to make cuts and reforms for years ahead.”

It is all clear now. We won’t make significant cuts now but future Congresses will. As Brooks notes: “The important argument now is over what kind of restrictions to impose on future Congresses.”

Last I heard, future Congresses tax and spend as they see fit in the future. Our history is littered with the carcasses of “pay as you go” agreements and promises to spend less “next year.” Republicans, who have fallen for this line, deserve what they get. George H. W. Bush might have had a second term if he had not fallen for this, the oldest of tricks.

Here is what Brooks wants: A bill that would cap federal spending at 20.6 percent of GDP, the recent historic average. If spending rose above that, automatic cuts would ensue. Well, let’s pass that one and see how long it is honored by future Congresses. The only thing that counts is what we do now. Not what we say we will do later.

Brooks seems to have great faith in rules that bind future Congresses. He credits pay-as-you-go rules “for restraining spending and debt in the 1990s.” How long did they last? Was the remarkable spending restraint of the 1990s not the result of a strong Republican majority and a Democratic president who decided to make a strong move to the center?

Rules for future Congresses mean next to nothing. The only thing that counts is who wins the 2012 elections. If the Republicans gain a strong Congressional majority, the “rules” might be followed. If not, forget about the,

My advice: If the Republicans have leverage now, they must use it to cut now.

As far as the Republicans are concerned, with David Brooks as a friend, who needs enemies?

Wednesday, May 11, 2011

Reading David Brooks and Missing William Safire

David Brooks’ “The Missing Fifth” (NYT, May 10) sent me to Google to confirm that Brooks is really the token conservative in the NYT’s stable of liberal columnists. Yes, the internet chatter says it is true.

I try to read Brooks’s columns, but I am hard pressed to find anything conservative in what he writes. Am I alone in this assessment?

Take Brooks’ “Missing Fifth.” In this column, he asks why America has lost its “energy” as reflected in the fact that only eighty percent of American men aged 25-54 work today versus 96 percent back in 1954. According to Brooks’ source (the OECD), the American “Missing Fifth” is the highest among the G-7 countries. I suspect this is because almost 3 percent of US males in this age group are in jail. Three percentage points of Brooks’ twenty percent have lost “energy” because they are sitting in jail. If so, this brings us down to the “Missing Seventeen Percent.”

Any conservative thinker, when confronted with the question of non-working adult males, would consider the incentives and human motivations underlying the “Missing Seventeen Percent.” Brooks mentions the increase in Americans on permanent disability, but he does not ask why. It is doubtful that we collectively became less healthy in the last three decades. Nor does he ask whether there are incentives to qualify for disability that were not present earlier. Consideration of disabilities is a diversion, however. Unlike the Netherlands where at one time some ten percent of the work force was on permanent disability, our numbers are small.

Brooks does not ask whether the costs of “not working” have dropped. In 1954, unemployed men had a small percentage of their lost earnings replaced and only for a short time. Today, it is a much different story. Nor is he curious about other countries, such as Germany, where unemployment benefits have become an entitlement. With growing political pressure to extend unemployment benefits, we are only a few steps behind Germany (which is trying to correct its earlier mistake).

A glance at the latest BLS statistics shows a 9 percent unemployment rate for adult males and another three percent or more for “discouraged workers ” or workers marginally attached to the labor force. Thus, Brooks’ “Missing Fifth/Seventeen Percent” is explained mostly by unemployment and tenuous attachment to the labor force.

Brooks does not ask whether food stamps, AFDC, or more generous and extended unemployment benefits have anything to do with this. I do not know the answer, but these questions should be asked.

Instead, Brooks goes into a rambling discussion of human capital and the rise of services and other structural issues and commits the old Marxian fallacy about machines replacing men. At least Brooks concedes that Keynesian solutions are not the answer.

His proposed solution to the “Missing Fifth” is that we (meaning the government) must spend more on community colleges, wage subsidies, and extending unemployment benefits to potential entrepreneurs. Brooks’ knee-jerk reaction is: If there is a problem, the government must fix it. There is no curiosity about whether the government has caused the problem.

Brooks’ writings evoke in me nostalgia for William Safire. How about the venerable NYT hiring a real conservative columnist?

Tuesday, May 10, 2011

The NYT Reveals the Real Reason For a Flat Tax: If Congress Can Mug Big Oil, It Can Mug Anyone

When Robert Hall and Alvin Rabushka proposed the flat tax more than a quarter century ago, they justified it on the grounds of economic efficiency and tax simplification. We now understand their real reason we need a flat tax.

Under our current federal tax system, everyone pays different tax rates depending on their lobbying clout, political donations, or interest group. Differences in realized tax rates are brought about by exemptions, loopholes, and preferences, most justified as promoting the common good. If you are in good with Congress or the administration (like GE or Hollywood), your breaks are secure and you get new ones. If you cross them or are a convenient target (like “Big Oil”), they take them away. Many have learned the bitter lesson: “What one hand giveth, the other taketh away.”

Our tax code has become a blunt instrument for political mugging, shakedowns, and intimidation. It insures a steady flow of political contributions. Anyone can find themselves a target. But everyone should remember that tomorrow the shoe can be on the other foot.

Our federal tax code is not a rule of law, but a rule of the political jungle.

The New York Times, Monday May 9, provides a case in point: “Senate Democrats say they will move forward this week with a plan that would eliminate tax breaks for big oil companies…..As currently written, the bill would apply only to what Democrats have identified as the five largest and most profitable oil companies.”

The long-forgotten Article 1, Section 9 of the U.S. Constitution forbids Bill of Attainders – legislation that punishes specific persons or groups without judicial review. But the NYT declares that the proposed Democrat legislation is written specifically to deprive BP, Exxon Mobil, Shell, Chevron, and Conoco Phillips of tax advantages that other companies enjoy. These five oil companies are not named specifically, but the legislation is written to apply only to companies that meet their profile.

What would the framers of the Constitution think about this?

A concern expressed in the NYT article is that the recent drop in oil prices will reduce prices at the pump, and there will less support for this legislation. I guess this means that we should base tax regulations on good or bad fortune. If doctors are doing well, let’s take away their home mortgage deduction. Those who aren’t doing so well can keep it. If people are paying more for movie tickets, let’s take away subsidies for film producers. If unions succeed in obtaining higher fringe benefits, let’s tax them as regular income, but only for union members. This is where the logic leads us.

The flat tax has been adopted with the least difficulty in the new countries of Eastern Europe. They have been free to choose optimal institutions before powerful interest groups form. We have reached a point of no return. Too many politicians, companies, and individuals benefit from our crazy system. They have too much to lose if we move to a rational system.