Tuesday, May 31, 2011

The Other Things Wrong with Obama’s Mideast Speech

The media coverage of President Obama’s May 19 Mideast speech focused mainly on the final third of his peroration, the portion dealing with the Arab-Israeli conflict. In it, the President reversed U.S. policy concerning Israel’s borders and expressed a willingness to entertain a Palestinian right of return.


Israeli Prime Minister Benjamin Netanyahu responded to the President in the Oval Office a few days later. Not only did he respond, he tore the speech to shreds and force-fed it to Obama with a side of humiliation pudding. Then he slapped Obama up and down the sidewalk while Obama’s friends were forced to watch.

I couldn’t possibly improve on what Mr. Netanyahu had to say about the President’s proposals: “based on illusions”, “can’t go back to those indefensible lines”, “wiping out Israel’s future as a Jewish state”, “not going to happen”. I thought instead I would comment on the two-thirds of Obama’s speech that did not concern the Jewish State. It received little attention, but it nevertheless demonstrated the naiveté and disregard for American interests that characterize this President. Among the key points:

“In Afghanistan, we’ve broken the Taliban’s momentum, and this July we will begin to bring our troops home and continue a transition to Afghan lead.”

For an organization that’s had its momentum broken, the Taliban is sure showing a lot of forward motion. According to today’s Wall Street Journal “Taliban insurgents widened their spring offensive to two relatively tranquil areas of Afghanistan where U.S. forces are preparing to begin handing security responsibilities to the Afghan military.” (See also, The New York Times “Taliban Attack in Herat, Far From Their Usual Areas” ). With the Taliban demonstrating its strength and the withdrawal deadline imminent, it’s fair to say the Obama’s Afghan policy is in disarray. His choice will be to delay the withdrawal or return to the days when that country hosted training camps for terrorist operations against the United States.

“We’re working with Congress to create Enterprise Funds to invest in Tunisia and Egypt. And these will be modeled on funds that supported the transitions in Eastern Europe after the fall of the Berlin Wall. OPIC will soon launch a $2 billion facility to support private investment across the region.”

Although the speech was full of pronouncements as to what the United States will and will not support, for the most part it lacked details as to what this support will consist of. The pursuit of Enterprise Funds was one of the few exceptions where the President provided specifics as to how he would influence the Arab world.

Unlike the nations of Eastern Europe, Egypt and Tunisia produce billions of dollars of black gold every year. It’s hard to see how they’ll be influenced by a few billion more coming to them at the expense of the American taxpayer. To attempt this at a time of trillion dollar deficits is irresponsible and mystifying. The only explanation I can come up with is that spending government money and calling it an “investment” is Obama’s solution to every problem (except manned space flight). In the absence of other ideas, he just went back to what he knows.

“The United States supports a set of universal rights. And these rights include free speech, the freedom of peaceful assembly, the freedom of religion, equality for men and women under the rule of law, and the right to choose your own leaders – whether you live in Baghdad or Damascus, Sanaa or Tehran.”

It is commendable that Mr. Obama supports these rights but his policies in the Mideast are unlikely to secure them for the Arab people. When elections are held in the Muslim world, the voters consistently opt for theocracy based on Muslim Sharia Law. This happened in Algeria 1990 and Turkey in 2002. Although the mullahs restricted the field of candidates in Iran’s 2005 Presidential elections, the Iranian people nevertheless elected Mahmoud Ahmadinejad, the most radical Islamist within the narrow field. In the 2006 elections for the Palestinian parliament, the majority of seats went to Hamas, an organization that the U.S. Government has condemned as terrorist.

There is every reason to believe that, if the army gives them the opportunity, the people of Egypt will also opt for theocracy. The largest block of seats in the Egyptian Parliament is already controlled by the Muslim Brotherhood an organization dedicated to the imposition of Sharia. The Egyptian public is sympathetic to this objective. In the Spring 2011
Pew Global Attitudes Project survey
, 62% of Egyptian Muslims stated they believe “Laws should strictly follow the teachings of the Quran.” The Muslim Brotherhood position received 77% of the vote in a March referendum on Constitutional changes.

The part of the President’s speech dealing with the Arab-Israeli conflict was not the only part “based on illusions” – the whole speech suffered from that defect. Specifically the speech was based on the illusion that the well-organized Islamists rushing to fill the Mideast power vacuum share our dedication to freedom. Mr. Obama failed to recognize the ideological gulf that separates the United States from the Muslim Brotherhood and its fellow travelers, both in Egypt and elsewhere. The Brotherhood’s ideology is totalitarian – it subordinates every facet of life to the Quran. It is hostile to freedom, science, women, and non-Muslims. Like all totalitarians, the Brotherhood should be fought with the disinfectant of sunlight. With the world watching, Mr. Obama had an opportunity to do so in his Mideast speech. It is unfortunate that he did not.

Because so few are sounding the alarm bells, the result of this spring’s Arab uprising is likely to be that the Muslim Brotherhood and its allies will steal the revolution. A group of reprehensible, mostly unelected dictators who were friendly to the United States will be replaced by a group of reprehensible, elected dictators who are hostile to the United States. This is a tragedy indeed, both for U.S. interests and for the many genuine Arab freedom fighters who demonstrated in town squares in order to secure real liberty.

Thursday, May 26, 2011

Santorum on Gay Rights

Since I'm a libertarian, conservatives are my natural allies. But I'll still call them out when they're really not making sense...

Santorum on Gay Rights

Wednesday, May 25, 2011

We lost a special election. Whatever shall we do?

Hochul beats Corwin
Yesterday, Democrat Kathy Hochul beat Republican Jane Corwin in a special election in the 26th Congressional District of New York, giving Democrats control of a seat that has been held by Republicans for forty years. Although the MSM attributes the Hochul's victory to the GOP's "extreme" position on Medicare, it should be noted that independent Jack Davis garnered enough votes to affect the outcome. Having run and lost three times as a Democrat, Mr. Davis entered the race as the "Tea Party" candidate this time around, although he apparently has no actual affiliation with the Tea Party or its positions. Nevertheless, according to CNN, Democratic National Committee chairwoman Debbie Wasserman Schultz said the election "demonstrates that Republicans and Independent voters, along with Democrats, will reject extreme policies like ending Medicare that even Newt Gingrich called radical...With this election in the rear-view mirror, it is my hope that Republicans will accept the message being sent by voters in this race, in the polls and at town hall meetings across the country and work with Democrats to get our fiscal house in order while protecting Medicare and other initiatives vital to our economic recovery."

As a general rule, it's a bad idea to take advice from people who do not wish you well.

Tuesday, May 24, 2011

After two years of Obama ... Here's your change!

My cousin sent this to me. He didn't say where he got it, but to the extent that I'm familiar with the numbers, they appear to be accurate as of a couple months ago. In most cases, things are even worse since then...

January 2009 TODAY % chg Source
Avg.. Retail price/gallon gas in U.S. $1.83 $3.44 84% 1
Crude oil, European Brent (barrel) $43.48 $99.02 127.7% 2
Crude oil, West TX Inter. (barrel) $38.74 $91.38 135.9% 2
Gold: London (per troy oz.) $853.25 $1,369.50 60.5% 2
Corn, No.2 yellow, Central IL $3.56 $6.33 78.1% 2
Soybeans, No. 1 yellow, IL $9.66 $13.75 42.3% 2
Sugar, cane, raw, world, lb. Fob $13.37 $35.39 164.7% 2
Unemployment rate, non-farm, overall 7.6% 9.4% 23.7% 3
Unemployment rate, blacks 12.6% 15.8% 25.4% 3
Number of unemployed 11,616,000 14,485,000 24.7% 3
Number of fed. Employees 2,779,000 2,840,000 2.2% 3
Real median household income $50,112 $49,777 -0.7% 4
Number of food stamp recipients 31,983,716 43,200,878 35.1% 5
Number of unemployment benefit recipients 7,526,598 9,193,838 22.2% 6
Number of long-term unemployed 2,600,000 6,400,000 146.2% 3
Poverty rate, individuals 13.2% 14.3% 8.3% 4
People in poverty in U.S. 39,800,000 43,600,000 9.5% 4
U.S.. Rank in Economic Freedom World Rankings 5 9 n/a 10
Present Situation Index 29.9 23.5 -21.4% 11
Failed banks 140 164 17.1% 12
U.S.. Dollar versus Japanese yen exchange rate 89.76 82.03 -8.6% 2
U.S.. Money supply, M1, in billions 1,575.1 1,865.7 18.4% 13
U.S.. Money supply, M2, in billions 8,310.9 8,852.3 6.5% 13
National debt, in trillions $10.627 $14.052 32.2% 14
Sources:(1) U.S. Energy Information Administration; (2) Wall Street Journal; (3) Bureau of Labor Statistics; (4) Census Bureau; (5) USDA; (6) U.S. Dept. Of Labor; (7) FHFA; (8) Standard & Poor's/Case-Shiller; (9) RealtyTrac; (10) Heritage Foundation and WSJ; (11) The Conference Board; (12) FDIC; (13) Federal Reserve; (14) U.S. Treasury

Monday, May 23, 2011

There’s Hope for the Next Generation After All

In the classic movie, “Around the World in Eighty Days”, an Englishman and his party arrive in San Francisco in 1872 and find themselves amidst the spectacle of American democracy. Two gentlemen by the names of Mandiboy and Camerfield are going head-to-head at the ballot box. There are banners, fireworks, torchlight parades, a squadron of Mexicans on horseback, and saloon girls in corsets and fishnet stockings. One of the travelers wonders whether the Americans are choosing a new President. It turns out they’re choosing a Justice of the Peace.


Messers Mandiboy and Camerfield came to mind recently when I was friended on Facebook by a Mr. Jonathan Loya. Although I did not know him, I confirmed his friend request on the strength of some three-dozen mutual friends in the Tea Party. I soon began to see items in my news feed like “We knocked on another 67 doors today!” and “We just called 150 more homes today as part of our last push towards election day! In total, we have now reached 2,953 homes out of approx. 5000 in town, so we will hit the 3,000 mark tomorrow!” Impressed by his hard work, I looked at his profile to see what he was running for: it turned out to be Planning Board for the town of Holliston, MA.

I commented on one of his posts that I wished I lived in Holliston so I could vote for him. A few minutes later he IM’ed me to let me know there were other ways I could help his campaign.

Well, I walked right into that one.

I joined a standout for him this past Saturday. Although there were many candidates in downtown Holliston that morning, I found Jon easily. Although there were, alas, no saloon girls, he was standing by a big red banner that overshadowed anything the other campaigns had. I stayed for about two hours, which gave me ample opportunity to talk to the candidate.

Jon graduated Holliston High School is 2008 and is now a student at UMass Lowell. You can do your own calculation as to his age. He became interested in politics while following the 2008 Presidential election and then Scott Brown’s 2010 campaign for U.S. Senate. Jon describes himself as “fiscally conservative and socially tolerant”. When I asked him what influenced his views, he said, “It’s just common sense – don’t waste the taxpayers’ money.”

The main issue in the Planning Board election is the balance of economic growth against the benefits of preserving open space and small town New England charm. Jon took this issue head on during a debate against his opponent, Neil Osterweil. “Encouraging new business while still preserving the feel of our town,” Jon said, “can help alleviate the tax burden by creating a more substantial commercial tax base.” The need to alleviate the tax burden in Holliston is considerable. According to data from Boston.com (Town-by-town assessed home values and billed property tax amounts
in Massachusetts, from 2000 to 2010), the town has one of the highest property tax rates in the Commonwealth – well above the 90th percentile. Although Mr. Osterweil also claims to seek balance between preservation and growth, his emphasis during the debate tended to be on the criteria he would impose on new developments before he could support them. He did make it clear there is one land use he welcomes unequivocally: farming. Some members of the community, however, question Mr. Osterweil’s commitment to any economic activity invented post-Industrial Revolution. During the standout, one resident told Jon, “If Osterweil wins there won’t be anything built in this town.”

In addition to creating conditions for tax relief, Jon wants to improve communication – in both directions – between the Planning Board and the community. Although Planning Board meetings are not currently broadcast in Holliston, Jon wants to change this. He also thinks the board needs to do a better job of getting input from neighbors before developments go forward.

Besides running for public office, Jon plays the saxophone in the band Throwback, which performs classic rock at local venues. Their demo recording of the Beatle’s Daytripper is quite good.

It’s people like Jonathan Loya who keep our democracy running – people who feel strongly about their communities and are willing to work hard to make them better. It is especially important for the young to get involved. The election is tomorrow, Tuesday, May 24 at Holliston High School (Map). If you live in the town, please consider voting Loya for Planning Board. Even if you don’t live in Holliston, there are still ways to help the campaign. Volunteers are welcome to come to the school and hold a sign for Jon (outside the 150 foot statutory limit, of course). Polls are open from 7 AM to 8 PM.

If you want to see Throwback live, their next gig is at the Trackside Grille in Ashland (Map), Saturday, June 11 at 8 PM.

Wednesday, May 18, 2011

Deficits Don’t Hurt the Economy – But Taxes Might

I was recently involved in a Facebook thread about the relationship between deficits, taxes, and the economy.

One of my friends wrote, “if you look at our past four economic recoveries (Reagan, Clinton, Bush, and Obama) and compare them with the deficit, a very clear pattern emerges: the higher the deficit, the weaker the recovery. It seems to me that if you compare them with level of taxation, another pattern emerges: the higher the taxes, the stronger the recovery. I'm not claiming that higher taxes result in economic recovery, but it's clearly not the death-knell of the economy.”

In true nerd fashion, I reacted by making charts. You can take the Black Belt out of Six Sigma but you can’t take Six Sigma out of the Black Belt.

GDP Growth vs. Previous Year Federal Surplus (Deficit) 1948-2010

The first chart shows growth in Gross Domestic Product (GDP) as a function of the previous years’ Federal budget surplus or deficit. The technical details are below. As you can see, there is no clear correlation between the size of the deficit and the strength of a recovery. Although the Clinton recovery, during a time of budget surplus was strong, and the Bush recovery, during a time of above average deficits was weak, the Reagan recovery, during a time of even bigger deficits, was the strongest of all.

When you look at the entire data set, rather than just the three peak recovery years, no correlation between deficits and GDP emerges. Within the margin of error, the trend line is flat.

GDP Growth vs. Previous Year Taxes 1948-2010

Taxes tell a different story. Again, there is no clear pattern in the peak recovery years. For the data set as a whole, there is a statistically significant trend: higher taxes equals lower growth. Every one percent increase in Federal revenues as a percentage of GDP corresponds to a 0.55% percent decrease in GDP growth. Taxes aren’t a death knell to the economy, but they do damage.

Although there is a correlation between taxes and growth, it is a weak one. Combined with the absence of correlation with deficits, the data suggests that Milton Friedman was right: other things drive the economy far more than fiscal policy. Monetary policy is one driver. As Friedman said in a 1996 interview, “One of the things I have tried to do over the years is to find cases where fiscal policy is going in one direction and monetary policy is going in the opposite. In every case the actual course of events follows monetary policy. I have never found a case in which fiscal policy dominated monetary policy and I suggest to you as a test to find a counter-example.”

Technology is another driver. The invention of the World Wide Web was clearly a factor in the strength of the Clinton recovery.

It should also be noted that the data falls into a narrow range. For almost the entire post-war period, the Federal account balance varied between a deficit of five percent of GDP and a surplus of two percent. But one data point sticks out dramatically - 2010. With deficits in excess of 10%, President Obama is taking us into new territory. The economic consequences of that remain to be seen.

Technical Details: The Federal tax and deficit data used in the charts comes from the “Fiscal Year 2012 Budget, Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits (-): 1789–2016”, and is available from the Office of Management and Budget. The GDP data used comes from the “Current-Dollar and ‘Real’ Gross Domestic Product”, April 28, 2011, and is available from the Bureau of Economic Analysis.

The slopes of the trend lines and the uncertainty in the slopes were calculated using the Excel LINEST function which uses the least-squares method for fitting a line to the data. My claim above that there is no correlation between deficits and GDP growth is based on the slope of the trend line being less than the deviation. In the case of taxes, the slope is between two and three deviations.

My friend pointed out that, “There's going to be a lag between policy changes and their effect.” The charts are based on a one-year lag, e.g. the 2010 GDP is plotted against 2009 deficit and receipts. I found the one-year lag gave the strongest correlation (highest R-value).

I identified the various economic recoveries with the years in which economic growth peaked. I make no claim that this is the best way, or even a good way to measure the strength of a recovery.

Tuesday, May 17, 2011

The "Right" to Health Care

Last week, Senator Rand Paul of Kentucky offered some controversial thoughts about the medical profession. “With regard to the idea whether or not you have a right to health care,” he said, “you have to realize what that implies. It’s not an abstraction. I’m a physician. That means you have a right to come to my house and conscript me. It means you believe in slavery.”

I posted video of Sen. Paul’s statement on my Facebook page with two comments: “Profoundly philosophical” and “You cannot have a right that requires the labor of other people.”

I’m blessed to have many insightful friends and relatives (and relatives of friends) on both sides of the aisle, and a spirited debate followed. Thank you D.F., T.S., S.I., D.B., P.E., K.O., and E.E.. I wanted to address a few of the points you raised (although for the most part, you already addressed each other!):

Rights can be legal or moral.

The discussion got me thinking about the relationship between the two. IMHO the Declaration of Independence got it right: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.”

It’s clear that in the minds of the Founders, rights are more fundamental than government. Rights come from God (or for us atheists, nature). All rights, therefore, are moral rights. Given that governments are instituted to secure rights, it follows that the effectiveness of a government in achieving its raison d’etre can be measured by the extent to which moral rights are also legal rights.

This is not an “honest” argument. Sen. Paul and other libertarians know perfectly well that no one plans to force doctors to provide their services.

I think what you’re saying is that this is a straw man argument, that Sen. Paul is attributing a belief to his opponents that they do not actually hold, for the purpose of refuting it. But actually, it is not a straw man argument – it is a reductio ad absurdum. As such, it is a valid logical construction. The claim is that the argument advanced by the opposing side – that there is a right to health care – would, if taken to its logical conclusion, lead to something absurd – enslavement of doctors.

This particular reductio ad absurdum is one that libertarians take very seriously. It originated with their patron saint, Ayn Rand. There are conflicting reports as to whether Sen. Paul got his name from her. He certainly got his ideas from her. In her 1963 essay, “Man’s Rights”, she wrote, “If some men are entitled by right to the products of the work of others, it means that those others are deprived of rights and condemned to slave labor.” Rand’s essay provides a thorough treatment of the issues involved; I highly recommend reading it in its entirety in her book The Virtue of Selfishness.

In his response to Sen. Paul, Bernie Sanders of Vermont asked doctors whether they consider themselves slaves. He need not have bothered. Sen. Sanders is correct that doctors are not slaves in existing single payer systems. The defining characteristics of slaves – that they are not compensated and cannot quit – do not apply to doctors in the various regulated health care systems of the developed world. In these systems, doctors "merely" have considerable restrictions on their liberty to assign a course of treatment or set the terms of their compensation.

However, this does not refute Sen. Paul’s argument for two reasons. First, Sen. Paul was talking about a universal health care system. Sen. Sanders shifted the discussion to the existing non-universal system in the United States. Second, Sen. Paul did not claim that any particular system provided a right to health care or freedom for doctors; he merely argued that you can’t have both. Consistent with his argument, existing universal systems do not provide patients with a right to health care. We see this in countries where universal health care has been implemented. Bureaucrats dictate the level of service that will be provided. If patients need or want more than decreed, they can pay for it themselves (if that’s allowed) or join a wait list and hope they don’t die before they get treatment. Long wait lists, and occasional unnecessary deaths, are inherent in the single payer systems of Canada, Great Britain, and other semi-socialist countries. The sorry record of single payer systems, and their lack of patient rights, are documented extensively by Goodman, Musgrave, and Herrick in their fine study Lives at Risk: Single-Payer National Health Insurance Around the World. Clearly patients who must pay out of pocket or die waiting do not have a right to health care.

Negative and positive rights are complex and mutually interdependent.

For those just joining us, a negative right imposes an obligation on other people not to do something. For example, your right to life obligates other people not to kill you. A positive right obligates other people to do something. The supposed right to health care is an example of a positive right.

The problem with positive rights is not they are interdependent with negative rights. The problem with positive rights is that they violate negative rights. A system of rights that is contradictory – where some rights violate other rights – cannot be put into practice. Using the example of health care again, a right to health care violates the doctor’s right to liberty. Positive rights can only be consistent with the right to liberty if individuals take on the obligation voluntarily – for example by signing a contract.

It is not fair that the government forces us to see and pay a doctor to obtain a prescription that we already know we need.

I wholeheartedly agree – on the basis of the negative right to liberty. I’d make an exception for antibiotics, since their misuse can violate other people’s negative right to life.

This is merely a semantic argument; health care is better addressed in practical terms.

If you prefer to consider the issue in purely practical terms, I again recommend the Goodman, Musgrave, and Herrick book; it systematically refutes each of the practical arguments for single payer systems. However, I do believe that, as Sen. Paul said, the rights-based argument is not an abstraction. There is a real issue involved because those who promote universal schemes often do so on the basis of a right to health care. What Sen. Paul has shown is that this concept is not intellectually coherent and that therefore a universal health care system cannot be justified on that basis.

Wednesday, May 11, 2011

Obama's Brilliance

Obama unfit for politics
Professor Haidt's comments can be found in this article

Sunday, May 8, 2011

A little Yom Ha'atzmaut Music

This week marks the 63rd anniversary of Israeli independence...

Thursday, May 5, 2011

Free Ride is Over: The President's Economic Cluelessness

As promised, I gave Obama a three-day pass in recognition of his contribution to the ending of Osama bin Laden. But now it’s time to take the gloves back off and call him out on his silly radio address about gas prices…

The President Lectures on Economics
Sources and Photo Credits

There are many things about which reasonable people can disagree. The fundamentals of economics are not among them. The laws of supply and demand are well established, both theoretically and empirically:

  • if you raise the demand for a product such as health care, either by requiring people to buy insurance or by subsidizing those who could not otherwise afford it, then, other things being equal, the price will go up.
  • if you implement a price floor on a product such as labor, and the price floor is above the market price, then, other things being equal, there will be less demand for the product. In the case of minimum wage laws, this will hurt the very people you seek to help by making them unemployed.
  • if you raise the cost of providing a product such as gasoline by eliminating tax breaks or subsidies for the producer, then, other things being equal, the price will go up. As I’ve discussed previously, there are some sound free market arguments for repealing special privileges for oil companies. However, I have no illusions that doing so will lower the price of gasoline.
There’s no nice way to say this: if the President says that Obamacare will lower medical costs, that raising the minimum wage will help the poor, and that eliminating subsidies will lower gas prices, then he really is clueless about how markets work. Or he thinks that we are.

Wednesday, May 4, 2011

Please remember the victims of last week’s tornados in their hour of need

With the death of Osama bin Laden, a royal wedding, and something about a birth certificate, it has been an eventful week and many important stories have gotten lost in the shuffle, including this one.

Red Cross Heroes
The tornados that cut a swath from Texas to New York killed hundreds of people and flattened thousands of homes and businesses. This article from ABC News tells the horrific story.

When disaster strikes, the Red Cross is on the scene, helping with the cleanup and delivering meals. In this video, a Red Cross volunteer talks to survivors and shows us some of the damage:

Please assist the people of the Red Cross in their good work. You can volunteer or make a donation at www.redcross.org. You can also text REDCROSS to 90999 to make a $10 donation to help those affected by this disaster.

Tuesday, May 3, 2011

After the Demise of Osama bin Laden. The Today Show Reports.

I got to give credit where credit's due.

Obama got one right. In recognition of this accomplishment, I'll stop making fun of him - at least for a couple of days. Fortunately, the Today Show is still fair game...

Royal Wedding: The Coverage Continues