Debt Ceiling Crisis? A Mazda Miata in Denmark.

Obama's Debt Mess is Bigger than Bush's. And this doesn't include the Bush/Obama Fed's 2009-11 400% monetary expansion. Chart Courtesy of US Government Spending.com.

In looking at the recent discussion of the so-called "debt ceiling crisis," I am surprised that no one in the legacy media unravels the cost of government operations and atavistic military strategy.  There are discussions of costs of failed but supposedly sacrosanct programs such as Medicare and Social Security, but no one seems to have asked that the federal government provide information about what percentage of these programs goes to administration, capital costs, personnel costs, and other service costs, such as consultants.  For instance, an organization called the Center on Budget and Policy Priorities points out that $705 billion go to defense, but does not clarify how much of that goes to colonels in the Pentagon sending memos to each other and how much goes to keeping America safe.

Anyone who has worked in a bureaucracy knows that empire building and waste are rules, not exceptions. As well, it is evident that numerous federal departments are complete failures and should be terminated. These include the Departments of Education, Labor and Energy.  

As well, we currently maintain more than twenty military bases in Germany.  What, exactly, are we defending Germany from?  Vladimir Putin? Fidel Castro?  Why can't Japan defend itself?  It seems to me that the Japanese, Taiwanese and South Koreans can either pay us for maintaining bases in Guam, South Korea  and elsewhere in Asia or, better yet, do it themselves.  A list of US military bases around the world is here. There are over 1,000 that cost us over $100 billion per year. Do we really need so many bases?  Our main opponents now are terrorists who are mobile, incognito, work in microscopic units and are not susceptible to orthodox warfare.  I appreciate the importance of security, but do bases in Denmark and Spain really contribute to our or to Denmark's and Spain's defense?  Are they relevant to post-modern warfare? It seems that something is rotten in Denmark, and in Washington, if  the President and Congress view a debt ceiling of $14 trillion as a "crisis" but view 1,000 military bases, including many in Germany and Denmark, as sacrosanct.

The Washington crew, including Boehner, Obama and Reid, remind me of my ex-wife who, with a $30,000 credit card balance in 1991, considered her lack of   Mazda Miata a "crisis" and went out and bought one for an additional then-$26,000 in debt.  American politicians have a multitude of Mazda Miatas: dole programs, bridges to nowhere, failed educational systems, failed energy policies and bloat in the military.

The American people have not gone brain dead.  They do not agree that indebtedness nearly equal to the nation's gross domestic product of almost $15 trillion is desirable. According to Rasmussen, fifty-five percent of likely voters believe that cuts in government will help the economy. As well, according to Rasmussen:


Just 24% of Likely U.S. Voters think tax increases help the economy. Fifty-four percent (54%) disagree and believe tax hikes hurt the economy...Most voters have said tax increases hurt the economy in every survey but one since July 2008.

If so, why do Americans continue to elect profligates like Boehner, Obama and Reid,  who think every military base is a Mazda Miata?  My guess is that the legacy media, pawns of Wall Street, bamboozle the public.

Social Security provides a benefit that is a tiny percentage of the average contributor's future value of lifetime contributions.  There are specific reasons, including its welfare component and the 21st century workers' subsidization of 20th century retirees as well as Congress's use of Social Security funds for other purposes.  But given Social Security's failure, why do 21st century Americans want it?   Why is there no discussion of voluntarization?  If Social Security is  20% of the federal budget, even authoritarians like America's Progressives should be glad to allow citizens to opt out of the failed program. But they aren't.  Every opportunity for authoritarian compulsion, badly designed programs and ignorant violence is a Progressive Mazda Miata.

Moreover, if few Americans believe that tax increases help the economy, why is John Boehner ready to capitulate to the Miata-loving Progressives in the debt ceiling discussions? 

The debt ceiling crisis is an opportunity to propose voluntarization of Social Security, the elimination of the Departments of Education, Labor, and Energy, the elimination of half of the military bases and the elimination of one third of government operations costs, including in the Pentagon. If Boehner does not take advantage of it, the Republicans need to go.

John Boehner and the Secession Party

 John Tate from the Campaign for Liberty has e-mailed that Republicrat Congressman John Boehner is thumbing his nose at the Tea Party and "planning to cave in to Barack Obama's demands for a trillion dollars in tax increases in exchange for mostly phony spending and tax cuts in order to raise the debt ceiling." The federal government is a value-destruction machine that does not contribute to our welfare. It should be slashed by 80%.

Tate adds:

Senator Rand Paul has joined over 100 representatives and a handful of other senators in signing the "Cut, Cap, and Balance" pledge to demand that any effort to raise the debt ceiling be rejected unless the federal government is forced to change its ways.

I want to urge you to complete your "Cut, Cap and Balance" pledge that Campaign for Liberty will fax to your representative and senators today before the critical showdown in Congress on raising the debt ceiling takes place in a few short weeks. 

Factoring in the Big Government programs and social welfare spending already "locked in," the average American is on the hook for nearly $800,000.

Friends, it is time to join the Secession Party.

Hamilton: A Miniseries?

Dear HBO:  I am in the middle of Ron Chernow's 2004 "Alexander Hamilton."  I loved the "John Adams" mini-series; however, Hamilton would make for a much better subject than Adams.   Hamilton's story has everything: sex scandals (likely involving Hamilton's own birth and his mother's repeated love affairs as well as Hamilton himself), rags to riches, bravery in war,  brilliant ambition,  a sweeping vision that created the Constitution and the United States,  political intrigue, and a duel for honor, ending in Hamilton's death.

I am stunned that you have not turned Chernow's book into  mini-series!

Sincerely,

Mitchell Langbert, Ph.D.

Debt Limit Debate on Networks a Joke

I was in the gym on Wednesday and someone had turned on one of the television news channels. I usually watch Turner Classic Movies when on the treadmill; TCM is more informative.  The news story of the hour is the debt limit debate. The Democrats want to raise taxes so that they can pay more interest to bondholders, and the Republicans say that they don't want to raise taxes but that just enough of them are planning to vote for higher taxes that, well, they might as well be Democrats.  The network reporters don't know about government operations so that their reporting is uninformed.

When I worked in Albany, the Democratic speaker of the assembly, Mell Miller, who was later indicted, said in an assembly ways and means committee meeting that I attended that there was no fat.  Even some of the extreme left wingers with whom I worked on the Democratic WAM staff laughed privately.   The government of New York State was and is pure fat. There is nothing but fat. Even my friend, a Maoist working full time as a Democratic staffer, showed me a fictional line item that had been charged by the Department of Social Services simply to provide itself with some additional fat when Mario Cuomo had transferred a block grant program to it.  Experienced in state government, it took him two minutes to identify the increase in spending; to an outsider, it would have been next to impossible to identify it.  Another friend, also a left-winger, laughed uncontrollably when I told him that Miller had said that there was no fat.

The incompetent television coverage of the debt limit debate is grounded on the claim that government operations are efficient.  They are efficient at one thing: waste.  Even private firms waste money. Government is amateurish and deliberately wasteful. It would not hard to reduce spending by 30% for someone interested in efficiency. 

Watching news about the debt limit should make you certain of one thing: watching television news is a waste of time.

Celebrating Indepedence Day

I just returned from my good friend Mike Marnell's Marnell Family Fourth of July barbecue. Mike lives in Kingston across the street from his mom and dad. They throw a great July fourth barbecue. The Marnell family is huge; I guess there were about 80 people there, and they're all doing great. Mike's dad, Bob, is suffering from heart problems but he is in good spirits.  The food is always awesome at the Marnell parties. Mike made the BEST Buffalo wings I ever had. I brought  bottle of single malt scotch which Mike and I worked on all day.

Fireworks, family and barbecues are what the Founding Fathers envisioned for the Fourth. Upon recovering from the party and driving home I took a minute to watch my favorite scene from HBO's John Adams television series. I love when Abigail Adams (Laura Linney) reads the Declaration to her children who are recovering from an epidemic--they are America's future and one of them is to become the sixth president:

Civic Literacy Quiz

My friend Mike Marnell asked me to take the civic literacy quiz on the Intercollegiate Studies Institute website at http://www.isi.org/quiz.aspx?q=FE5C3B47-9675-41E0-9CF3-072BB31E2692&AspxAutoDetectCookieSupport=1. I got 100%; give it a try. According to ISI:

• ISI has surveyed over 28,000 undergraduates from over 80 separate colleges, and the average score on our basic 60-question civic literacy exam was about a 54%, an “F.”
• At elite schools like Yale, Cornell, Princeton, Duke, Georgetown, and Johns Hopkins, their freshmen did better than their seniors on the same test, what ISI dubs “negative learning.”
• Among adults, those with a college degree also failed on average ISI's civic literacy test, scoring little higher than their peers with a high school diploma.
• College-educated adults were particularly ignorant of the Founding and Civil War eras, constitutional themes, and the essential features of a market economy.

Professor Robert Paquette Resigns from His Chair at Hamilton College

This past January, one of the nation's leading historians and one of the history field's few conservatives, Robert Paquette, resigned from his chair at Hamilton College. He continues to teach at Hamilton but gave up his chair in protest.  Professor Paquette had obtained a multimillion dollar grant to set up a conservative leaning institute, but Hamilton College refused to permit it.  Hamilton College is where there was a controversy concerning Ward Churchill's speaking. Churchill had called the 9/11 victims "little Eichmanns" but Hamilton had invited him to speak anyway. After some controversy, the College rescinded the invitation.   I am planning to write a piece for The Lincoln Eagle about Professor Paquette. 

Alan G. Lafley is former CEO of Procter and Gamble. He is a Hamilton alum and chairman of its board of trustees.

14 January 2011

Mr. Alan G. Lafley

3 ..... Street

...., OH 4...

Dear Mr. Lafley:

Enclosed please find the medal that I was awarded some years ago after receiving the Publius Virgilius Rogers professorship.  I am resigning the title and the perquisites that go with it effective immediately. I ask that you convey this information to President Stewart.  I also ask that you convey copies of this letter to every member of Hamilton’s Board of Trustees at the March meeting.

Please know that in the classroom, I will continue as a senior professor to serve the College, as I have always done, to the best of my ability until my retirement in the not-so-distant future.  I regret, however, that I can no longer carry this title in good conscience, given my treatment by College officials over a period of almost a decade. It is sufficient for me at this stage of my career that I bear the title of chief architect of the Alexander Hamilton Institute...

...To date, I have received no explanation as to why officials of this College, including members of the Board of Trustees, after publicly announcing in 2006 that the Alexander Hamilton Center ( my creation) would “not go forward,”  not only attempted to trademark the name “Alexander Hamilton Center,” but did so using language extracted verbatim from a charter I wrote. (One might have thought that Gene Tobin’s serial plagiarism would have made someone thoughtful.)  The College documents, still publicly available on file with the US Patent and Trademark Office,  include a  sworn statement—yes, sir, a  sworn statement—that at the time of the filing Hamilton’s Board of Trustees knew of no competing claim on the name. 

To date, I have received no explanation as to why “administrative sources” informed an FBI agent (Margarita Alvarez) that I was “mentally unstable” when she was performing a routine background check in preparation for my nomination by President Bush for a prestigious seat on the National Council of the National Endowment for the Humanities.  The delay that ensued before President Bush forwarded my name to the United States Senate in 2008 quite possibly cost me that position during an election year that resulted in a change of party in the presidency...

Cato the Younger, a favorite of the founders as well as one of my personal favorites, refused to accept an award from his commander after the defeat by slaves of a Roman army of which he was a part. His honor would not permit it.  Honores mutant mores.

Sincerely,

Robert L. Paquette

Department of History

 

Reading Horatio Alger

I teach a senior seminar at Brooklyn College. The seminar's topic is success.  There are two views of success in American culture: the Jeffersonian, advocated by Thoreau, and the Hamiltonian, which has become the dominant vision of success. Progressivism and the Hamiltonian view of success, including consumerism, are intertwined.  America has made an error in overemphasizing the Hamiltonian view at the expense of the Jeffersonian view. Left wing politics is intimately linked to the Hamiltonian view: both depend on large scale, centralization, central bank control of the economy, large hierarchical structures to which pigeon-holed junior executives are expected to conform and to climb in order to achieve success.  The socialistic vision of a conformist, suppressive society where all are forced to work for the state and initiative is not only suppressed as currently but illegalized is an extreme application of the Hamiltonian/Whig model, one to which our president appears to be committed.

Louis Hartz (in The Liberal Tradition in America), like many, many writers, refers to the Horatio Alger model of success. When I read one of Alger's novels, Do and Dare: a Brave Boy's Fight for Fortune I was expecting to see a paradigm of the Hamiltonian model of success.  Alger died in 1899 in his late sixties, and he would have been one of the first Whigs (I am not certain that he was brought up as a Whig, but I imagine so because he came from Massachusetts from a Puritan background) to explicate the modern view of success as conformity to big business. 

But alas, Alger was a Jeffersonian, at least as he describes success in Do and Dare.  Elements of Alger's formulaic story line are, according to Wikipedia, a beneficent stranger, an antagonistic peer and a young man who suffers adversity and then succeeds.  These elements are present in Do and Dare.  The hero's mother is forced from her business by a selfish but honest businessman, whose son wrongly accuses the hero of having stolen merchandise. The beneficent stranger not only defends the hero, but then hires him to be his personal assistant. They travel to the wild west, where, after killing a couple of outlaws,  they meet a magazine writer who is decidedly Jeffersonian and also a success.   The beneficent stranger has inherited wealth but has no interest in business; he does, however, provide financing for the hero to invest in a mine.  The mine is successful, and with little care for its operations, the hero gains a windfall, pays back his beneficent supporter and employer, and then returns home to help his mother financially.

The book emphasizes two factors in success: (1) character and (2) luck. Alger pooh poohs lotteries, and emphasizes the importance of hard work, honesty, sobriety, and good interpersonal skills. In this he is in the Puritan tradition of Benjamin Franklin.  But success for Alger does not reflect power, rising in a hierarchy or manipulative business dealings, all of which are part of the Hamiltonian model.  Rather, he views money as a means to independence and business as a necessity that, he emphasizes, ought to minimized in importance, not maximized.

The Hamiltonian vision sees business as an end to itself. This is fundamentally anti-Aristotelian. Aristotle did not like business because he did not belive that there is a mean with respect to profit taking. The problem business faces is how to balance the quest for gain with objectives such as learning, personal development, raising a family and other contributions to society. 


One of the great strengths of Do and Dare is Alger's emphasis on character, an emphasis lacking in today's movies and books.  However, his whimsical depiction of a beneficent stranger who helps a poor rural 16-year old hero out of his financial problems is an unrealistic fantasy.  In using the phrase "Horatio Alger hero" we tend to refer to an economic dream or fantasy, but its application in today's world is very different from the more fluid world in which Alger lived.

Charles G. Koch's Market Based Management

I was pleased to receive an invitation to a market based management program hosted by the Charles G. Koch Charitable Foundation. In preparing for the conference I am taking a few days to read the materials the organizers have provided. Among these are Michael Polyani's essay "The Republic of Science," chapter two from Hayek's Law, Legislation and Liberty entitled "Cosmos and Taxis," Hayek's essay "Use of Knowledge in Society" (which I assign to my senior seminar students), and an excerpt from  Bastiat's essay "The Law."

Also included in the materials is Koch's book The Science of Success: How Market-Based Management Built the World's Largest Private Company.  The book is engaging and eminently readable. Koch describes the history of his firm and how he built his father's small oil industry services firm into the largest privately held company using basic principles of economics (specifically including the Austrian economics of Ludwig von Mises) and his philosophy of market based management.  Koch is perhaps too kind to his competitors. Few large firms are run using principles of economics, and big business tends to be inefficient and suppressive as a result.  Most of America's larger firms would not survive a competitive economy; if you doubt that, witness what happened to the automobile industry once faced with foreign competition.

Koch's market based management philosophy includes five dimensions: vision, virtue and talents, knowledge processes, decision rights and incentives.  Koch's focus and hard nosed thinking, which he attributes to his philosophy and to application of economics to management decision making, have enabled his firm to grow into a $100 billion (in sales) superstar, a nimble, huge company that keeps on growing.  His recent acquisition of Georgia Pacific for $23 billion has been a success, and success is rare in the area of mergers and acquisitions.

I am looking forward to the Koch conference. The attendees are a very impressive group and the material promises to be of great interest.

Student Defends Ron Paul

When I attended the Ron Paul fundraising event in Manhattan last April I was impressed at the crowd's youth. Given the failure of Progressivism and the ideology advocated in American universities, students are trying to figure out why America has failed now, but was successful for 120 years prior to the adoption of Progressivism in the early 20th century. This young man offers articulate responses to the legacy media's spin about Ron Paul.