Friday, March 27, 2009

Gun Control, Mexican Style

During the campaign, Obama was coy about his plans for gun control. He made conflicting statements but the upshot was that gun owners had reason to believe that gun control would not be a priority in his administration. This followed the common wisdom among Democratic leadership that this was too sensitive a topic to touch. The number of single-issue, pro-gun voters were enough that Al Gore lost his home state and therefor the election in 2000. Clinton made gun control a priority in his administration and this was a factor in the Republican takeover of Congress in 1994. Given this record and Obama's other priorities, it would seem foolish for him to take on an additional interest group.

That's not how things are playing out. The MSM has been full of stories about rising levels of violence in Mexican border towns caused by drug lords. These stories always say that the guns fueling the conflict come from the US. They often add the claim that these guns are bought legally at gun shows then smuggled across the border.

A closer look at the stories shows that the gun show story is fiction. The Mexican gangs are using fully automatic weapons and grenades, weapons that are not legally available in the US. The press, which tends to be anti-gun, is dutifully repeating this. Here is an example from MSNBC

"I feel very strongly we have a co-responsibility," Clinton told reporters, adding: "Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians."

Criminals are outgunning law enforcement officials, she said, referring to guns and military-style equipment such as night-vision goggles and body armor that the cartels are smuggling from the U.S.

"Clearly, what we have been doing has not worked and it is unfair for our incapacity ... to be creating a situation where people are holding the Mexican government and people responsible," she said. "That's not right."

Clinton said she would repeat her acknowledgment as loudly and as often as needed during her two-day visit to Mexico City and the northern city of Monterrey. Officials said her priorities included encouraging the administration of Mexican President Felipe Calderon to increase its battle against rampant corruption by promoting police and judicial reform.

In the 1990s, President Clinton failed to convince the country that we had to ban informal gun purchases through gun shows in order to save ourselves from gun violence. Now President Obama and Secretary of State Clinton are trying to outlaw gun show sales in order to protect the Mexicans from US guns.

Even if Mexican guns were coming from the US, the obvious solution is to close the border to both drugs and guns (and illegal workers). It is the open border that is fueling Mexican drug trade. To his credit, Obama has taken steps to secure the border but this has not slowed Hillary's speeches about American guns coming into Mexico nor Congressional talk about reviving assault weapon legislation.

Ever the opportunists, the Obama administration is using a false premise as an opening for new gun regulations.

3/31/9 Update: The campaign against guns isn't working. Law enforcement personnel testifying before Congress indicated that the Mexican weapons are coming from multiple countries, often bought and shipped to the Mexican army then diverted to the drug lords.

Wednesday, March 25, 2009

Power Grabs

What was the furor about the AIG bonuses really about? I'm not sure that any of the outraged could tell you except in the most general terms. Here are some of the reasons that were passed around last week:
  • That bailout money was going to fund big bonus checks. (true but less than 1%)
  • That people who caused AIG's problems were still getting bonuses. (not necessarily)
  • That performance bonuses were going to people who lost billions of dollars. (false)
  • That people working for bailed-out companies are still getting high salaries.
There was a level of hysteria in Congress that did not seem to be reflected elsewhere. While there were some protests about the bonuses, they never reached the level of the Tea Party protests and these are not having any effect on Congress. Why should the bonuses cause so much uproar. I think that there are multiple answers.

First a little review - the bonuses were promised in April of 2008 in an effort to keep vital people at AIG while the company wound down its money-losing section. The worry was that, even in a bad economy, the top people were in demand and would jump ship without bonuses and AIG would collapse. A collapse is undesirable which is why the government bailed out AIG in the first place. Keep in mind that in April, 2008, we were still debating if there was a recession. The stimulus bill passed in February, 2009 would have capped or eliminated these bonuses but a crucial paragraph was quietly removed in conference allowing the bonuses to proceed. By the time the furor erupted, the checks had already gone out.

President Obama originally came out sounding outraged. Barney Frank threatened the jobs of anyone who took a bonus. The House quickly voted to enact a retroactive 90% tax on the bonuses. This violates the spirit of the Constitution if not the letter.

By Saturday the MSM was reporting protests at the homes of AIG executives. This caught my attention since it seems more organized than most protests. It turns out that the protests were actually a group of people on chartered buses going from executive's house to house to leave a letter asking that the executive return the bonus and support a tax rate of 90%. The protesters were outnumbered by the press. The whole thing was organized by the Working Families Party of Connecticut. This in turn is an offshoot of ACORN which has long-standing ties with the President.

The same day Obama announced that he wanted to regulate the top salaries of all companies in the financial sector, regardless of federal funds. He was unclear about what this regulation would consist of.

By Monday the Obama administration was announcing its toxic debt reduction plan. This relied on exactly the same sort of investors that Obama had been railing against so he moderated his rhetoric for a while. The next day his administration suggested that the Treasury Secretary should be able to seize any business that he judged a danger to the economy. This was also sold as a way of keeping future bonuses from being paid.

So, what is going on?

The members of Congress involved in allowing the bonuses to go through insist that they were following the wishes of the Obama administration. Their outrage is probably a cover for their complicity.

The Obama administration seems to be at cross-purposes with itself. Is it in favor of the bonuses or against them? Probably both, but for different reasons.

There is a strong case to be made for the bonuses. If it is worth pouring billions of dollars of bail-out money into AIG then it is worth keeping enough of the management in place to prevent a total collapse of the company. Also, we are supposed to be a nation of laws. This means that contracts are honored, even if you don't like them.

On the other hand, the outrage is also useful for the Obama administration. It is taking advantage of the furor to propose new international regulations, to propose some level of control over executive pay of private companies, and to extend control that the government has over banks to other industries. There is even an element of increasing tax rates back to the confiscatory levels of the 1950s.

Put together and we have an unprecedented power grab. I don't know if the Obama administration is up to the follow-through on this but they have proposed taking over our financial sector. Add in their plans to take over the medical sector of the economy and we will soon have the government controlling more than half the economy.

Then there is the news that the EPA classified CO2 a pollutant. This potentially gives the president control over the rest of the economy plus how people live.

Now, ask yourself - do you trust these Bozos to run the economy? Follow-up question for anyone who answered yes - the Republicans will eventually come back in power. Do you trust them with the economy?

Thursday, March 19, 2009

Inflation and Bonds

The Fed announced that it is buying long-term bonds in order to drive down the rates. This will have two effects:

The good - lower rates for fixed-term mortgages.

There are three ways to stimulate the economy - reduced interest rates, tax cuts, and increased federal spending. Of these, reduced rates are the most successful. To date, increased federal spending has never worked because it comes too late and is targeted wrong. According to Woodward's book, the Agenda, Paul Volker convinced Bill Clinton early in his presidency that lower interest rates were the best way to solve his recession. Short-term rates are already as low as they can get so the only possible target is long-term rates. This will allow people to refinance their houses and get hundreds of dollars in their pockets. It will probably boost house building.

The bad - inflation.

The government does not have any money to buy these bonds so it is printing new money. This is inflationary. The Fed knows this and is counting on it. The same announcement said that they felt that the current inflation rate was too low to support a recovery. Deflation has been a worry.

Here's where we get into undesirable trade-offs. Inflation started picking up last year. It was triggered by Chinese demand for oil and for copper and steel. This pushed up the prices of manufactured goods. At the same time, Congress mandated an increased amount of corn should be turned into ethanol for fuel. This pushed up the price of corn. It also pushed up the price of other grains as farmers switched to corn. This affected the price of corn-fed meat (beef and chickens) and of products sweetened with corn syrup.

The Fed worried about inflation and pushed the prime rate up. This caused variable rate mortgages to go up. Since a large portion of sub-prime mortgages were variable-rate, this caused the loan-default rate to climb, triggering our current crisis.

This latest is just one of several infusions of cash that the Fed has pushed into the economy. At some point the recession will end and people will start spending that extra cash. This is likely to raise the inflation rate a lot.

At the same time, people's wages are frozen or shrinking. Lots of workers have accepted a cut in wages or at least a freeze. Inflation means that their dollars will not go as far.

As far as I can tell, all of this means that most people's standard of living is going to go down. I don't see any alternative with fixed wages and renewed inflation. I don't expect any relief from the current administration, either. Obama has made it clear that he values fairness over growth.

The Bonuses and Transparency

Remember when both Obama and the Democrats promised transparency? That was supposed to include posting legislation to the Internet days in advance of voting on it. It was also supposed to match amendments to sponsors.

Remember when the final version stimulus bill reached Congress? It was over 1,000 pages long. It arrived after midnight and was voted on around noon the next day. No one voting on it had a chance to read it - it was too urgent for Congress to know what they were approving (that was on a Friday - Obama waited until the following Tuesday to sign it).

Now, a month later we are finding out what was in that bill - or, in this case, was not in the bill. A cap on bonuses had been added into the bill with wide approval but it vanished in conference. Chris Dodd sort of confessed to allowing his staff to remove it at the urgings of the Treasury Department. There are a lot of rumors about who was actually responsible. It doesn't help that Dodd received a large campaign contribution from AIG.

Obviously this is not the hope and change that was promised. Arianna Huffington herself is upset about how this was handled.
This mirrors the legislative slaying of the similarly intended amendment co-sponsored by Sen. Wyden I write about below. The culprit behind the killing of the Wyden provision remains unsolved -- but Dodd fingering Treasury adds weight to Wyden's sense that members of Obama's economic team were behind the elimination of his amendment. And, in both cases, major decisions involving taxpayer money were carried out in a way that flies not in the face of fairness, but in the face of the administration's promises of transparency and accountability.

The honeymoon is definitely over.

Wednesday, March 18, 2009

We Own You

The message about AIG and the bonuses is that once a company takes a bail-out, the government owns them and can set or change the rules at will.

Some background:

According to at least some reports, the controversial bonuses were not performance bonuses. They were a bribe to keep the top staff from jumping ship as soon as they found out the state of AIG's finances. Without these bonuses AIG would be in worse trouble than it is now.

It is rarely discussed but AIG's problems all come from the number of mortgages that are being defaulted on. At the government's insistence under the Clinton administration, most of the traditional rules for qualifying for a mortgage, things like down payments and being able to make the payments, were tossed out in order to increase minority home ownership. These mortgages were bundled into financial instruments which were made more desirable by taking out insurance on the underlying mortgages. The default rate was fairly low for decades so AIG insured a lot of these mortgages at a low rate. When the mortgage-holders began to default, the banks put in claims to AIG. This is when we bailed them out. If we hadn't then a lot more banks would have failed.

The bonuses were not always so abhorrent to the Democrats. Chris Dodd slipped an amendment into the stimulus bill requiring that pre-existing contracts be unaffected by government money. Dodd has now reversed that position.

All of this makes people wonder if the Obama administration allowed the bonuses to go through just so that they could throw a fit about them in public? Rush Limbaugh has suggested this. The alternative is that the administration didn't realize what it was pushing for. Normally I assume incompetence over conspiracy but the Obama administration has shown a compulsive need for enemies. Did they set up AIG the same way that they targeted Limbaugh?

The rational response would be to ignore the bonuses. They can't be stopped - the checks are already in the mail. That hasn't stopped Barney Frank from threatening to fire everyone who accepts his bonus. Other Democrats are talking about enacting a retroactive 100% tax on the bonuses.

If you are not troubled by this yet then here are some things to consider:

Congressmen are threatening to fire people for accepting compensation spelled out in their employment contract. What sort of of precedent is that?

Those same congressmen are threatening to confiscate pay that they consider inappropriate, even if it is legal. Again, this is a bad precedent.

That is on top of moves that Obama has already taken to cap pay for companies that have accepted government aid. The excuse is that they want to be sure that the taxpayers' money (or the borrowed Chinese money) is being used wisely. They don't have the same compunctions when approving spending bills. Obama is pretty free with the people's money in his travelling, also. I'd like to see him cut out unneeded travel instead of going on an expensive field trip every Friday.

Now that the precedent that accepting government money gives the government control over how businesses are run, expect this to be expanded. A lot of companies get government money one way or another. The Democrats have been complaining for years about the gap between the rich and the poor. Now they are doing something about it.

Businesses have noticed. Two banks have given notice that they will return their TARP funds this month. A couple of hundred others, out of around five hundred, are having second thoughts about accepting TARP funds. I expect other businesses to start being cautious about accepting TARP or stimulus money.

If I worked for a company that had accepted government money I would be looking for a new job, even if I was not in the pay ranges that the Democrats are looking at now. I expect these businesses to lose all of their top talent which will affect their long-term viability. Also, this incident means that your employment contract might be cancelled at any time at the whims of Barney Frank.

In a separate but related story, President Obama announced his plan for helping small businesses. He ordered banks to give more loans. This covered all banks, not just ones that have received TARP funds. I wonder if he is lowering the loan standards for small businesses, just like the standard for home buyers were lowered?

Monday, March 16, 2009

Economic Change that We Were Waiting For?

Back in late 2008 there were calls for President Bush to step aside and let President-elect Obama take office early. The thinking was that only the brilliant Obama could save the economy.

A few months later and the world is wondering why anyone thought that Obama could accomplish miracles. People are beginning to admit (in whispers) that the Obama administration is worse than the Bush administration. Consider:

Two months into his administration and Obama still has not announced a plan to stabilize the banks. A few outlines of plans have been floated then withdrawn.

The Obama administration is actively anti-business. Obama doesn't wants businesses to project a sackcloth and ashes image. This has hurt the convention business in general and Las Vegas in particular. In signing the omnibus spending bill, Obama talked about future limits on earmarks, but only those going to businesses. He indicated that earmarks going to public officials are always in the public's interest but earmarks going elsewhere are always suspect.

Obama spent the weeks leading up to his inauguration and his first few weeks in office describing the economy in terms of the Great Depression in order to get his stimulus passed. Now that it is law, he is stressing that the fundamentals of the economy are sound. He blasted McCain as an out-of-touch rich guy for saying the same thing last Fall. This abrupt about face convinced everyone that they cannot trust Obama for an honest assessment of the economy.

The current economic troubles cone from real estate and banking but Obama insists that there cannot be a recovery without universal health care and energy reform. He has not elaborated how these are connected leading many to believe that he is using the economy to give himself carte blanche. There is a great deal of skepticism on how taking control of 1/6th of the economy (health care) will solve the problem of toxic debt. It has also convinced much of the country that Obama is more interested in health care than fixing the economy. This is at odds with how most people prioritize the issues.

Candidate Obama insisted that he would pay for everything through increased efficiency, elimination of wasted programs, and taxes on the richest 5%. Now that he is in office he has added a tax on energy usage to that mix. Late last week he said that he is open to taxing existing insurance benefits in order to pay for universal coverage. These last two will hit the poor and middle-class much harder than the rich.

Obama's budget plans call for the highest deficit, by any measure, in history. He then promised to cut it in half within a few years. leaving a permanent deficit much higher (as a percentage of GDP) than any point since WWII*. Even this assumes a quick recovery followed by unpresidented growth and new taxes that are not likely to be passed in their entirety. Since it is easier to pass new spending than new taxes, the real deficit will be much worse than he projects. On top of that, the $800 billion set aside for health care is described as a "down payment". This implies that the real health care costs will be much higher.

There is already talk about the first stimulus bill failing. This is probably a recognition that it is not a stimulus bill at all, just a spending bill. How could it be anything else when most of the money will be spent after 2009? We may see another stimulus proposed before the end of the year.

Obama is currently asking the G20 conference to committing to stimulus spending on the same order that we are doing. They are objecting for several reasons. A big one is the threat of hyper-inflation. This ties in with China's finance minister openly wondering about the safety of the US bonds that China already holds. It is unlikely that he thinks that the US will default on those bonds but he could be signalling worry about hyper-inflation caused by Obama's proposed budget or he could simply be warning Obama that China will not be willing to buy a limitless amount of US debt. Either of these possibilities should be keeping the Obama administration up nights.

So we have critics from both inside and outside the US questioning Obama's competance. This should be no surprise. After all, Obama is an activist/law professor/one-term senator. There is nothing in this resume to prepare him for taking on a world economic crisis (or even a world economic downturn).

* The deficit reached Obama-levels for a couple of years during the recession of the early 1980s when unemployment neared 10%, This is often attributed to Reagan's military build-up but a graph of those years shows that the real culpret was the dip in revenue caused by high unemployment. In contrast, Obama is raising the rate-of-growth of government to unpresidented levels.

Friday, March 13, 2009

Charitable Giving

One place that President Obama wants to raise taxes is by reducing the credits from itemized deductions. White House Press Secretary Robert Gibbs put it this way:
"Well, I do think all issues are on the table," Gibbs replied. "Let's, though, just discuss the — I assume you're talking about the charitable contribution — I mean, a middle-class family donates a dollar to charity, they get 15 cents off their income tax. Bill Gates donates a dollar to charity, he takes 35 cents off his income tax. The proposal that the White House has would simply reduce those levels to the same levels that we saw during the Reagan administration."
Taking the last first, taxes were pretty high when Reagan took office and he couldn't cut everything immediately. That line is just a red herring, anyway.

Let's look at the math behind this statement. The tax rate on the middle-class family is 15%. It rises to a top rate of 35%. That means that after deducting the income tax, the average family gets to keep $0.85 of every dollar earned but Bill Gates only gets to keep $0.65. Bill makes a lot of dollars (except last year when he lost $18 billion) so that $0.65 adds up.

Currently, both the average family and Bill Gates can give a dollar to charity and deduct it from their taxable income. This policy rewards charitable giving by recognizing that you no longer have that dollar to be taxed. The Obama administration wants to change this so that when Bill Gates gives a dollar, he would still ahve to pay taxes on it, although they would be reduced - maybe $0.26 in taxes instead of $0.35. The effect of this is to make charitable giving more epensive. It will cost Bill $1.26 to give a dollar to charity ($1 to charity and $0.26 to the government).

Remember that charitable giving is voluntary. If the government raises the cost of giving then people will just give less. Bill Gates might reduce his contribution to $0.75 so that the total cost to him would continue to be $1. The charities have figured this out and are up in arms.

The real estate industry is similarly outraged for the same reason. Obama plans to reduce mortgage deductions the same way. This will not make any difference to Bill Gates but people inbetween Gates and Obama's magic $200,000 income ($250,000 for families) will notice if their mortgage costs go up by 25%. The ones who were already stretched paying for their mcmansions may default and we will have another wave of bad credit. Even if the default rate is low this will push up the cost of buying houses the same way that a big jump in interest rates would do. This will hurt the top-end real estate market which is why the realitors are up in arms.

Realistically neither of these measures is likely to pass. That means that revenues will be below Obama's projections and the deficit will be even higher than he projected.

Wednesday, March 11, 2009

Obama at 50 Days

Obama is halfway through his first 100 days. How well does his performance match his rhetoric? Remember, he set a high standard for himself with comparisons to Lincoln, FDR, and Reagan. He made a lot of promises during his campaign (at least twice as many as most candidates make). Many of these were going to be top priority tasks. He also insisted that he was holding his appointees to a higher standard than every before.

Most of his accomplishments have been simple stroke-of-the-pen presidential orders reversing Bush policies. He has strung these out for maximum effect. His order on stem-cell research which was signed this week could have been signed six weeks ago.

Aside from signing new versions of a couple of pieces of legislation that Bush vetoed, Obama's major legislative accomplishment has been the stimulus bill. While the White House staff was celebrating its passage, this bill will come back to haunt him. First, it was passed as being so urgent that Congress could not be given time to read it but Obama took three days from passage until he signed it. That's three days that Congress could have used to find out what they were passing. Obviously the urgency was to keep the opposition from seeing what was included.

Combined with the omnibus spending bill that was just sent to Obama's office, discretionary spending is up 80% over last year. A lot of this goes into the baseline budget for next year which will permanently increase government spending. The Omnibus spending bill alone increases spending by 8%. Some items in the stimulus will also increase the baseline but no one has documented these, yet. This is one place that the stimulus will come back to haunt Obama.

Obama's biggest mark has been on the economy in general and the stock market in particular. Both are tanking and Obama has a lot to do with this.

While selling the stimulus, Obama stressed how bad the economy is. As soon as it was passed he submitted his first budget which projected that the recession would end in the middle of this year, long before the stimulus could have any effect. Either he lied when he said that the stimulus was urgent or he lied when he made his budget projections.

The budget proposal calls for new taxes, carbon fees, and makes a "down payment" on universal health care. It does not give details on any of these. This is contributing to the uneasiness on Wall Street. Obama's obvious disdain for Wall Street also contributes the the worsening economy.

Obama's cabinet and staff have been a major embarrassment. He has set new records for the number of officials forced to withdraw their nominations. The Treasury Department is missing most of the people at the top and is making due with a crowd of unappointed advisers instead of 17 deputies. As the economy continues to sink, this is arguably this is the most important department in the government and it is understaffed at the top.

Obama has complained that he doesn't want to spend his time working on the economy. Neither did Bush, Clinton, or Reagan, all of whom took office during a recession. When you become president you are supposed to put the country first and your agenda second. Obama seems to be pursuing both at the same time giving the impression of a government that is not focused on the economy.

There are rumors that Obama is shocked at the presidential workload. Possibly he believed Michael Moore and others who painted Bush's first nine months as constant vacation. The reality is that the President never gets a day off. Even his vacations include daily briefings. Regardless of the truth of the rumors, it is obvious that Obama does not like Washington. He takes weekly field trips every Friday to some other part of the country. After scolding bank executives for using private jets, this seems hypocritical. People have noticed.

Maybe part of the problem is that there is no one to delegate to. Of the 1,200 posts that require senate confirmation, only 73 have actually been appointed.

Foreign affairs were supposed to be a strong point under Obama. That hasn't worked out so well. On his first visit to Canada he had to assure the Canadians that he was not planning on renegotiating NAFTA. The White House staff has been so focused on domestic affairs that they slighted British Prime Minister Gordon Brown. Iran spurned his offer to talk. His administration offered to cancel plans to deploy an anti-missile that Russia objects to in exchange for Russian help dealing with Iran. Russia publicly rejected the offer which was the first that the countries that are to host the anti-missile system heard of the offer. Hillary offered to let the Russians push the "reset" button on relations but couldn't get a decent translation and instead offered the "overcharge" or "overload" button. They pushed it anyway.

Obama sent 13,000 additional troops to Afghanistan without a clear plan on what they will do. Relations with Pakistan are deteriorating. Closer to home, Mexican drug violence has made border towns no-go zones and is spilling over into the US. No one is suggesting the obvious first step - closing the border.

Halfway into his first 100 days it is obvious that Obama is not FDR. His administration seems at one overwhelmed, overambitious, and arrogant. Moderates who supported him over McCain are having buyer's remorse. Even reliable liberals like Paul Krugman are calling for real leadership rather than empty rhetoric. He is not off to a good start.

Tuesday, March 10, 2009

The Democrats War on Science

First, I have to admit that I'm not the first one to think of this title. Here's someone else's thoughts on the subject with a link here. Of course, the title really comes form a popular book, The Republican War on Science. The premise of this book is that the Bush administration ignored or distorted accepted science in an effort to appease its base. When President Obama lifted the ban on federal funding for research on post-2001 stem cell lines, he made it clear that he saw this as restoring science to its rightful place in policy.

From the title of this post it is obvious that I have a different opinion of the Republicans' and Democrats' treatment of science. I will go over it briefly here.

Let's start with stem cell research since it got a lot of press yesterday when Obama signed his executive order. The coverage was ecstatic. At last, science returns to the White House! The problem is that this is not a scientific question. It is an ethical one with a strong political element. Is a human embryo a human being with protected rights? The Democrats say no but they do not say when it becomes human. This ties into the abortion debate which holds that a fetus becomes a human sometime around its 6th month unless it is aborted. In its efforts to support late-term abortion, the Democrats refuse to talk about ethics. Instead they turn their backs, put their fingers in their collective ears, and shout, "La, la, la." Insisting that this refusal to discuss ethics constitutes a return to science is a departure from reality worse than anything that the Republicans are guilty of. More on stem-cell ethics here.

After stem cell research, the big argument about science usually centers around global warming. Bush critics lead by James Hansen of NASA insist that the Bush administration ignored or minimized the consensus on climate change. But they don't stop there. They continue on and tell you about all of the disasters that are going to befall humanity unless we act immediately. They cross the line between scientist impartially delivering the truth and hysteric scare-monger trying to frighten you into correct behavior. They insist that only they know the truth and that any dissenters have been bought off by "big carbon". This is exactly what they accuse the Bush administration of doing - distorting scientific evidence in order to appease their base. Two top Obama appointees are know to do this. Obama's energy secretary, Steven Chu, predicted that future warming would dry up all agriculture in California by the end of the century, even though no climate models show this. Then there is Obama's science advisor, John Holdren, who, in the 1980s, predicted that a billion people would be dead from global warming by 2020. When Obama's top scientists engage in scare stories, we have to judge his entire administration as being less than honest.

But, let's accept for now that global warming is happening and that we have to do something about it quickly. James Hansen recently named coal burning power plants as the biggest targets. He refers to them as death factories. Energy Secretary Chu says that "coal is his nightmare". Obama has committed to doubling the amount of electricity generated by renewable sources by the end of his first term. The biggest renewable source of electricity is hydropower but we don't have any more rivers to dam up (and environmentalists don't like dams, anyway). Obama is mainly talking about expanding solar and wind power. These are currently very tiny sources of power. They are also unreliable since they only produce power when the wind blows or the sun shines. What's more, the nation's biggest wind farm project has been opposed by the Kennedy family because it might spoil their view.

What about nuclear power? That has the biggest potential. But Democrats have opposed new reactors for years. There is also the problem of nuclear disposal. A facility has been designated in Nevada but Obama has signaled that he will not open it, preferring to keep storing radioactive waste at the plants. This is politics, not science-driven.

Other complaints always seem to come from the left. Remember the endangered Northern Spotted Owl? Except it is the same bird as the non-endangered Southern Spotted Owl, it just lives further north. Science has shown that there is no link between vaccinations and autism but the left disagrees. Other baseless complaints come from the left, also for such things as soft vinyl and Teflon. It is the left that opposed thinning forests which is the cause of devastating forest fires.

I could go on but I think I have made my point. Democrats like to think that they are the "reality based" party but they engage in as much or more distortion of science. Science seldom gives straightforward answers. There are ambiguities and trade-offs. Worse, there are ethical considerations. Any administration that says that it is basing all of its decisions on pure science is lying in order to occupy a moral high ground that they have no right to possess.

Thursday, March 05, 2009

Obama and Alinsky

It is no secret that Barack Obama is a follower of Saul Alinsky, the original radical. Obama's first job was as a "community organizer", a term and job that Alinsky invented. The goal was to organize the community into a workers' movement.

It only took a couple of years before Obama became disillusioned with Alinsky's ideal of organizing from the bottom up without a charismatic leader. He did not give up on all of Alinsky's principles, though. Alinsky established a set of rules for radicals, ways for radicals to challenge the established order. Several of Obama's recent moves can be traced straight back to Alinsky's influence.

Here are the rules with commentary as applies:

RULE 1: "Power is not only what you have, but what the enemy thinks you have." Power is derived from 2 main sources - money and people. "Have-Nots" must build power from flesh and blood. (These are two things of which there is a plentiful supply. Government and corporations always have a difficult time appealing to people, and usually do so almost exclusively with economic arguments.)

Of course, as President, Obama already has lots of power but he is pushing for more. When Obama took office it was assumed that he would have to put his agenda on hold until the economy improved. Instead he has pushed his agenda of change since day one.

RULE 2: "Never go outside the expertise of your people." It results in confusion, fear and retreat. Feeling secure adds to the backbone of anyone. (Organizations under attack wonder why radicals don't address the "real" issues. This is why. They avoid things with which they have no knowledge.)

Obama violated this rule. His people seem lost on what to do about the economy in general and banks specifically. The result is just what Alinsky predicted - fear as shown in the continuing stock maket drop.

RULE 3: "Whenever possible, go outside the expertise of the enemy." Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)

It only took Obama a couple of weeks in office before he went back into permanent campaign mode. Expect to see him visit some place in the country every Friday, pushing a simplified version of his program to the general public.

RULE 4: "Make the enemy live up to its own book of rules." If the rule is that every letter gets a reply, send 30,000 letters. You can kill them with this because no one can possibly obey all of their own rules. (This is a serious rule. The besieged entity's very credibility and reputation is at stake, because if activists catch it lying or not living up to its commitments, they can continue to chip away at the damage.)

Obama is trying to do this with his supposed attempts at bipartisanship. He is not offering Republicans the slightest crumb but he says that he is. The Republicans either have to move quite a bit to the left or look like sore losers. He also did this when his Chief of Staff forced the chair of the Republican party to disown Rush Limbaugh.

RULE 5: "Ridicule is man's most potent weapon." There is no defense. It's irrational. It's infuriating. It also works as a key pressure point to force the enemy into concessions. (Pretty crude, rude and mean, huh? They want to create anger and fear.)

Even before he took office, Obama decided that he had to have an enemy. Prior to January 20, it was President Bush. Now that he is in office and Bush is in Texas, the enemy is Rush Limbaugh. Obama and his staff are not wasting an opportunity to tie Limbaugh to the Republican party. The opening attack was when he met with House Republicans to drum up votes for his stimulus package. What was quoted from that meeting was him chiding Republicans for following Rush. A suspicious person might think that Obama never expected to get any Republican support. That it was an early chance to associate Republicans with Rush.

RULE 6: "A good tactic is one your people enjoy." They'll keep doing it without urging and come back to do more. They're doing their thing, and will even suggest better ones. (Radical activists, in this sense, are no different that any other human being. We all avoid "un-fun" activities, and but we revel at and enjoy the ones that work and bring results.)

See Rule 5. Rush-baiting has been a Democratic pastime for years.

RULE 7: "A tactic that drags on too long becomes a drag." Don't become old news. (Even radical activists get bored. So to keep them excited and involved, organizers are constantly coming up with new tactics.)

It is too soon to see if Obama has learned this rule.

RULE 8: "Keep the pressure on. Never let up." Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.)

No question that Obama is following this rule.

RULE 9: "The threat is usually more terrifying than the thing itself." Imagination and ego can dream up many more consequences than any activist. (Perception is reality. Large organizations always prepare a worst-case scenario, something that may be furthest from the activists' minds. The upshot is that the organization will expend enormous time and energy, creating in its own collective mind the direst of conclusions. The possibilities can easily poison the mind and result in demoralization.)

In the lead-up to passing the stimulus, Obama kept insisting that if it failed then the economy would collapse into ruin.

RULE 10: "If you push a negative hard enough, it will push through and become a positive." Violence from the other side can win the public to your side because the public sympathizes with the underdog. (Unions used this tactic. Peaceful [albeit loud] demonstrations during the heyday of unions in the early to mid-20th Century incurred management's wrath, often in the form of violence that eventually brought public sympathy to their side.)

It is too early to see if this will apply.

RULE 11: "The price of a successful attack is a constructive alternative." Never let the enemy score points because you're caught without a solution to the problem. (Old saw: If you're not part of the solution, you're part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)

So far the closest that Obama came to a compromise was cutting back the stimulus bill a bit.

RULE 12: Pick the target, freeze it, personalize it, and polarize it." Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions.

Back to Rush, again. The Obama administration has named Rush as the head of the resistance. Rush is popular within his own circle but he has high negatives among moderates. Obama is using Rush to tar the Republicans in general, forcing them to disown him and making them look weak.

Tuesday, March 03, 2009

Global Warming "On Hold"

If you have been paying attention to all sources then you will not be surprised to read that global warming seems to have plateaued in 2001 and planetary temperatures have declined a bit since then.

On the other hand, if you get your science news from the Discovery Channel then you only found this out yesterday. This is big news. Until now the Discovery Channel's web site has been a stream of unrelenting doom. This article on Greenland is more typical.
If Greenland's ice sheet ever melts entirely, the results would be catastrophic. The water unleashed into the ocean would be enough to raise sea level 6.5 meters (21.3 feet), jeopardizing the homes and lives of hundreds of millions of people worldwide.

For these people to admit that the world is not warming on cue shows that problems reconciling the climate models with reality can no longer be glossed over. Not that they aren't trying:

Swanson thinks the trend could continue for up to 30 years. But he warned that it's just a hiccup, and that humans' penchant for spewing greenhouse gases will certainly come back to haunt us.

"When the climate kicks back out of this state, we'll have explosive warming," Swanson said. "Thirty years of greenhouse gas radiative forcing will still be there and then bang, the warming will return and be very aggressive."

What is less clear is that this nothing but speculation. None of the climate models show the current cooling phase (referred to here as being flat). There are a couple of other stark admissions in the article:

But just what's causing the cooling is a mystery. Sinking water currents in the north Atlantic Ocean could be sucking heat down into the depths. Or an overabundance of tropical clouds may be reflecting more of the sun's energy than usual back out into space.

"It is possible that a fraction of the most recent rapid warming since the 1970s was due to a free variation in climate," Isaac Held of the National Oceanic and Atmospheric Administration in Princeton, New Jersey wrote in an email to Discovery News. "Suggesting that the warming might possibly slow down or even stagnate for a few years before rapid warming commences again."

The first admission is that they don't have any idea why the world is cooling instead of warming. The second is that some of the warming that we have been seeing is natural variation rather than human-induced climate change. This point is particularly telling since the people warning us about global warming insist that carbon dioxide is the major cause for all climate change.

A third climate-related article on shows the carbon-centric view of warming alarmists. For decades historians have known about a cooling period known as the Little Ice Age that peaked around 400 years ago. Many global warming skeptics (including me) point to this as an example of variable climate. In fact, the Little Ice Age was such a problem that climatologists spent a lot of time and effort trying to prove that it didn't exist. Now that these efforts have been discredited they are trying to fit a period of global cooling into CO2-based climatology. This article speculates that expanding wetlands absorbed CO2, causing the Little Ice Age. The problem with this hypothesis is that it is know that world temperatures cause variations in CO2 levels but the CO2 levels follow the temperature changes.

All of this brings me back to my main point - the models are wrong. All of them predicted continuous warming. None of them allowed for enough natural variation to even be detectable. If a natural cooling can overwhelm the greenhouse effect, at least for a while, then it is also probable that some of the observed warming has also been natural.

In fact, the current cooling means that we need to question everything about the predicted global warming. It is often said that peer review is the gold standard of science. It isn't. It is the silver standard. Peer review means that your paper has been run past some experts to see if it looks plausable. The actual gold standard is prediction and failability.

To really validate the climate models, you have to be able to run them forward for a few years and compare their predictions with real measurments. If they match then you have validated the models. If they fail then the model is invalidated and needs more work. All of the models that the IPCC used failed this simple test.

This is important when you remember that the developed world is making decisions based on flawed climate models. Barack Obama's 2009 budget includes new taxes on CO2 emmisions that will push electric rates 4-5 times what they are today. We should not be crippling ourselves based on disproven computer models.

Monday, March 02, 2009

How Bad is the Budget?

I think that this graph from USA Today shows just how insane the Obama budget is. For the last 30 years government spending increased in a fairly straight line. There was a jump when Bush took office (slightly obscured) but it was still a slow climb. Then we get to the Obama budget and it takes off like a rocket. In fact, maybe we should start calling this the Hockey Stick budget after the (discredited) temperature reconstruction.

The other thing to pay attention to is the area showing the deficit or surplus. The Bush deficit (still partially obscured) is in the ball park of the others. In fact, if he hadn't boosted spending so much then we would have been in a surplus for a year or two. Then we get to Obama. At the same time that government spending is rising, revenue is falling. Not only is he spending at unprecedented rates, he is also borrowing at a rate unheard of in the last 30 years.

It gets worse when you realize that he used fairly rosy projections for the economic recovery and for the tiny bit of cost-cutting that he plans and he included hundreds of billions in new taxes and fees. Assume that the real figures will be much worse, if he manages to pass his budget as is.

Supposedly Reagan proved that deficits don't matter but, as the chart shows, there is an order of magnitude between Reagan's deficits and Obama's.

I think that everyone in America should oppose this budget. It will bankrupt America. In the very near future, payments on all of this debt will crowd out Obama's new entitlements. There just will not be enough money to pay for all of this.