The further to the left or the right you move, the more your lens on life distorts.

Saturday, October 31, 2009

13 Days in October

In a must-read historical flashback, Warren Kozak recounts the history of the Cuban Missile Crisis, a 13 day period in October, 1962 that brought us closer to nuclear war than at any other period in history.

Because their intercontinental missiles were unreliable, the Soviet Union crafted a clandestine plan to place more reliable medium range missiles in Cuba. Kozak continues the story:
Under a false manifest, he [soviet primier Nikita Khrushchev ]sent an armada of ships carrying 60 missiles and 40 launchers along with a small army of 40,000 Soviet technicians on a clandestine journey to his new client state, Cuba. The trip took three weeks and the technicians were not allowed topside during the day in case they were seen by U.S. planes. In spite of numerous warning signs, the secret operation went undetected by Washington.

That's because the wily Soviet premier suckered the young American President, John F. Kennedy, by an exchange of messages that year. In an outright lie, Khrushchev promised Kennedy that he would not place any menacing weapons outside of the Soviet Union and Kennedy believed him. At the same time, Khrushchev stepped up the heat in Berlin—the other hot spot in the Cold War—focusing Kennedy's attention away from Cuba.

The ruse worked even though there were hundreds of reports concerning Soviet missiles coming from a variety of sources. But with each clue, the U.S. intelligence community failed the president by talking itself out of the possibility that the Russians would actually do what they were doing. However, there was one man in the federal government who felt uncomfortable with the status quo and believed it was his job to worry about exactly this kind of problem.

John McCone was a conservative Republican industrialist who had made a fortune building ships during World War II. He entered government service late, in the Eisenhower administration, and was clearly an odd duck in the group of Democratic New Frontiersmen. But on Robert Kennedy's insistence, President Kennedy placed him in charge of the CIA after the Bay of Pigs disaster in 1961. McCone was smart. He constantly put himself in Khrushchev's head and he realized that summer that if he were the leader of the USSR, Cuba was exactly where he would place his short-range missiles.

McCone pressed Kennedy for U-2 flights over Cuba to see if he was right. Kennedy refused. He worried that the U-2 flights might be seen as a provocation.

McCone would not let up, even after a National Intelligence Estimate (NIE) in September completely rejected McCone's notion. Giving one reason after another, the NIE confidently predicted the Soviets would not place offensive missiles in Cuba at that time. But the crusty CIA director refused to accept his own agency's report. Finally, prodded by McCone and some Republicans on the Hill, including Sen. Ken Keating of New York, Kennedy acquiesced to one flight on Oct. 14, 1962.

The overflight uncovered Khrushchev’s clandestine scheme and led to a tense blockade of Cuba and the ultimate removal of the weapons. Kennedy learned to be tough, but he was also lucky. He was dealing with Khrushchev, a rational actor who wanted to avoid a shooting war at all cost.

Today, Iran and Hugo Chavez’s Venezuelan government have become good and close friends. Our current President, in the naïve hope that mea culpas and soft words will convince thugs to change their approach, has worked hard not to antagonize both dictatorial regimes. It’s quite likely that both regimes view President Obama’s approach not as enlightened, but as weak.

Is it possible that Iran might consider the clandestine placement of medium range missiles in Venezuela, well within the range of the continental United States?

Since Barack Obama is such a smart guy, he might take a small amount of time out of his busy schedule and read the unvarnished history of those 13 days during the summer of 1962. The parallels are eerie.

But there is one difference. Rather than dealing with rational actors, this time President Obama might be forced to deal with Hugo Chavez and the mad Mullahs of Iran. I wonder whether he’ll be as tough as JFK?

Barack Obama should also heed the oft-used aphorism: “Those who refuse to learn from history are doomed to repeat it.”

Friday, October 30, 2009


Peggy Noonan of The Wall Street Journal writes about the dark mood that has enveloped many business people outside the Washington beltway. She writes:
The biggest threat to America right now is not government spending, huge deficits, foreign ownership of our debt, world terrorism, two wars, potential epidemics or nuts with nukes. The biggest long-term threat is that people are becoming and have become disheartened, that this condition is reaching critical mass, and that it afflicts most broadly and deeply those members of the American leadership class who are not in Washington, most especially those in business.

Many of us in the Center watch national politicians act like spoiled children. They spend trillions without any concern about the long-term effects of debt. They tax—but only millionaires (they claim)—forgetting that there aren’t enough millionaires to pay for their excesses. They lie (there is no polite way to characterize it) in an effort to convince the masses that their profligate ways are “paid for” and that government revenue (taxes) will be collected only from the “rich” to be redistributed to the “poor.” Their abject irresponsibility is breathtaking, but the funny thing is, like all spoiled children, they live in a fantasy world of unlimited resources and expanding benefits.

Peggy Noonan asks a core question and then tries to answer it:
Why aren't they worried about the impact of what they're doing? Why do they think America is so strong it can take endless abuse?

I think I know part of the answer. It is that they've never seen things go dark. They came of age during the great abundance, circa 1980-2008 (or 1950-2008, take your pick), and they don't have the habit of worry. They talk about their "concerns"—they're big on that word. But they're not really concerned. They think America is the goose that lays the golden egg. Why not? She laid it in their laps. She laid it in grandpa's lap.

They don't feel anxious, because they never had anything to be anxious about. They grew up in an America surrounded by phrases—"strongest nation in the world," "indispensable nation," "unipolar power," "highest standard of living"—and are not bright enough, or serious enough, to imagine that they can damage that, hurt it, even fatally.

We are governed at all levels by America's luckiest children, sons and daughters of the abundance, and they call themselves optimists but they're not optimists—they're unimaginative. They don't have faith, they've just never been foreclosed on. They are stupid and they are callous, and they don't mind it when people become disheartened. They don't even notice.

But there’s more too it than that. Far too many of the political class in Washington have never done anything but work for government or in positions connected to government. They’ve never held a real non-governmental job, never met a payroll, never grappled with limits imposed by forces that impact what you can borrow, what you can spend, and how you can acquire revenue.

That’s the profile of our President and a significant number of influential members of congress. It’s the profile of people who have lived privileged lives, gone to elite schools, and then graduated to become “leaders.” The real question is: where are they leading us?

Wednesday, October 28, 2009

Crunch Time

Think back to 2007. The entire country wanted then President George W. Bush to exit Iraq. Harry Reid suggested that the war was lost, Barack Obama (then a Junior Senator) argued adamantly that the surge would not work, members of Bush’s own party argued against adding more troops. But Bush acted like a leader. He disregarded the polls, the advice of most of his political enemies and allies and made what he thought was the right decision. Say what you will about GWB, he showed real leadership and saved the US from defeat, and Iraq from plunging into chaos.

As we watch the drawn out melodrama that encompasses Barack Obama’s decision on how to to redefine his own strategy (announced with much fanfare in March) in Afghanistan, I can only wonder when and if he’ll exhibit any leadership on this issue.

But before you leap to the conclusion that the same approach (with minor modification) will work in Afghanistan, recognize that Afghanistan is radically different than Iraq. If Barack Obama is as smart as his proponents claim he is, I’m certain that he understands the following points:

  • Afghanistan is a tribal society that is primitive by 21st century standards. There has never been a centralized government that effectively controlled the entire country.
  • An Afghan army is not a national army and never will be. Each “soldier’s” primary allegiance is to his tribe, not some centralized government in Kabul. All the training in the world will not break down centuries old allegiances.
  • The real power in Afghanistan rests with tribal war lords, and each has his own agenda. There is no chance that these warlords will give up their power.
  • The Afghan economy is driven by Opium and is nurtured by massive corruption at every level.
  • The Taliban are Islamofascists who are given safe haven across the border in Pakistan. Afghan warlords are better equipped to deal with the Taliban over the long term. If they accept their presence, that is Afghanistan’s fate—as awful as it might be.

It should not take months for our current President to digest these harsh realities.

Over the past few years, I’ve sometimes disagreed with Tom Friedman’s comments on the Middle East, but in today’s New York Times he gets it right:
It is crunch time on Afghanistan, so here’s my vote: We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper. We simply do not have the Afghan partners, the NATO allies, the domestic support, the financial resources or the national interests to justify an enlarged and prolonged nation-building effort in Afghanistan.

If Barack Obama is a true leader (and I’m not convinced he is), he should follow Friedman’s advice. The Right will scream bloody murder, just as the Left did as the Iraq surge was initiated. But that doesn’t mean their assessment is correct.

By redefining our goals in Afghanistan and moving away from a nation building effort that is doomed to failure, Obama will demonstrate that he is doing the right thing, not the most expedient thing. My guess is that he doesn’t have the courage to make that decision, but I hope I’m wrong.

Tuesday, October 27, 2009

Public Pensions

There’s a festering public policy problem that is becoming more serious with each passing year. Public pension plans are underfunded, and future pension payments are in jeopardy.

The reasons?

  • Retirees are living past the projected age that actuaries predicted when the plans were funded.
  • Fund managers have invested retirement assets in ways that have provided poor returns. Over the past 18 months, some retirement funds have seen a significant drop in net assets.
  • An increasingly smaller number of taxpayers will be asked to subsidize a growing public pension burden.
  • The number of government employees as a percentage of the private sector has grown dramatically over the past 50 years.

It’s the last point that represents the challenge going forward. Fred Zimmerman notes that:
In 1950, about two-and-a-half times as many Americans were employed in manufacturing as in government -- 15 million in manufacturing, 6 million in government. Today, governments have 22.5 million employees, while manufacturing has 13.4 million.

No state has added either construction or manufacturing employees in the past recessionary year. But 32 states have added government employees.

Maybe that’s why many of us in the Center as very concerned about the growth of government at all levels—local, state, and federal. Yet government seems to be the only place where “jobs” have been created over the past few years.

Might be time to jettison the public defined benefit pension plans for new hires and replace them with 401Ks? Nah, that wouldn’t fly. The unions would scream and our leaders from Barack Obama to the local councilman would duck for cover.

When the first public pension checks are reduced because there isn’t enough money to pay them, politicians will look appropriately aggrieved and ask: “How did it come to this?”

Taxpayer bailout, anyone?

Monday, October 26, 2009

Public Option

Why is the “public option” so important to those on the Left? Nancy Pelosi, for example, rejects any attempt at health care reform that does not include it. For that matter, why is the public option anathema to those on the Right (and many in the Center)? Blue dog Democrats, for example, are giving the Obama administration fits by withholding support for legislation that includes a “public option.”

When you listen to those on the Left discuss the public option, a publicly run, premium financed (in theory, at least) healthcare plan with close similarities to Medicare (but designed for those under 65) would increase competition with private insurers and magically reduce health care costs. When you listen to those on the Right, a publicly run plan is a first step toward Universal, government run health care and a nightmare landscape of poor service and on-going expense that just might bankrupt the country.

Like most things, the truth lies somewhere between these extremes, but in this debate, the concerns of those in the Center and on the Right hold sway. Robert Samuelson comments:
The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn't? From 1970 to 2007, Medicare spending per beneficiary rose 9.2 percent annually compared to the 10.4 percent of private insurers -- and the small difference partly reflects cost shifting. Congress periodically improves Medicare benefits, and there's a limit to how much squeezing reimbursement rates can check costs. Doctors and hospitals already complain that low payments limit services or discourage physicians from taking Medicare patients.

Even Hacker [the Yale political scientist who proposed the public option] concedes that without reimbursement rates close to Medicare's, the public plan would founder. If it had to "negotiate rates directly with providers" -- do what private insurers do -- the public plan could have "a very hard time" making inroads, he writes. Hacker opposes such weakened versions of the public plan.

By contrast, a favored public plan would probably doom today's private insurance. Although some congressional proposals limit enrollment eligibility in the public plan, pressures to liberalize would be overwhelming. Why should some under-65 Americans enjoy lower premiums and others not? In one study that assumed widespread eligibility, the Lewin Group estimated that 103 million people -- half the number with private insurance -- would switch to the public plan. Private insurance might become a specialty product.

“So what?” cry those on the Left. If the evil private medical insurers go out of business, we’ll all be better off.


In a predictably brilliant essay on government provided “benefits,” Richard Fernandez of The Belmont Club writes:
Whenever a proposal is advanced to expand government oversight over activities such as child rearing, education and health care — and this includes subjects like euthanasia or family abuse — those who want to leave major choices to individuals or families, despite the fact they may sometimes or often do the wrong thing are described as uncaring, and ‘regressive’. In contrast, those who wish to shift the power of decision to government are characterized as “compassionate”, “enlightened” or “progressive”. And since there are often cases when government does better than individuals the substance of the decision can be argued back and forth.

One of the arguments for centralizing power in government is that it reduces variance. People get ’standard’ care, which is ‘equitable’ and predictable. This is contrasted with the wider distribution of outcomes when the same decisions are left to individuals. In the health care debate for example, there are people who obviously get great health care and others who get relatively bad insurance. Wouldn’t it be better if the variance were reduced by a government program?

And that, I think, lies at the crux of this debate. Those on the Left support an ideology that demands that we limit variance. Stated somewhat simplistically, everyone has a right to eat, and its best if everyone gets the same meal, even if that meal is gruel.

Fernandez continues:
Left out of this argument [about variance] is the idea of systemic risk. Leaving decisions to individuals makes it unlikely that they will all get it right but it equally implies they almost never get it all wrong. Society based on individual choices has a diversified portfolio of outcomes. In contrast if a government gets it wrong, it goes spectacularly wrong.

And there’s the rub. If the members of Congress pass an ill-conceived health care bill, it’s just possible that they’ll get it spectacularly wrong, especially if they try to reduce variance using a public option that could morph into a program that controls half of more of our healthcare system.

If it does go spectacularly wrong, all of us will look back wistfully at our current “broken” healthcare system.

Friday, October 23, 2009

Chocolate Chip Ice Cream – II

The six Western nations meeting with Iran in Vienna set a strict deadline of 12:00 midnight on this date for Iran to accept their latest proposals for third party nuclear enrichment. Iran, of course, appears to have let the deadline pass. Reuters reports:
VIENNA (Reuters) – Iran told the U.N. nuclear watchdog it is favorably examining a plan for it to cut an atomic stockpile the West fears could be used for weapons, the agency said, but delayed a response to next week.

Iranian officials gave a more negative message earlier on Friday by saying Tehran preferred to acquire enriched uranium abroad rather than send out its own under the U.N.-drafted plan accepted by the United States, Russia and France.

Their remarks suggested that instead of engaging with the IAEA's draft, Iran was following a well-tested strategy of buying time to blunt Western pressure for harsher international sanctions while it presses on with nuclear research.

About a month ago, I wrote:
And that’s at the core of the problem. President Obama, a man who supposedly analyzes changing situations and adapts accordingly, seems wedded to his non-confrontational approach to this Islamist regime. He remains committed to long-term negotiations, soft power, and, well, dare I say the word “appeasement.”

If we just offer the right collection of “incentives” and “sanctions,” the Mullahs will see the light. Never mind that any agreement will be abrogated, that other secret facilities will continue to operate, and that their rogue regime (you remember, the one the violently suppressed its own citizens less than two months ago) will not change its ways. Ultimately, further down the line, the world may pay a very heavy price, but for now, we can all play make-believe and think happy thoughts—the Iranians are only enriching Uranium inside a fortified mountain for medical purposes.

The Iranians are playing us, but why shouldn't they? Our behavior has been considerably less than resolute, and they have nothing to fear from "soft power" and appeasement diplomacy. Besides, President Obama is perceived (correctly) as unwilling to act in any aggressive manner.

As part of that earlier post, I quoted Investor’s Business Daily who used a memorable analogy to describe our feckless approach to Iran’s provocative behavior:
Which leaves us with what might best be called Chocolate Chip Ice Cream Diplomacy. Dustin Hoffman, the divorcing dad in the movie "Kramer vs. Kramer," haplessly warns his bratty little boy again and again not to get the chocolate chip ice cream out of the freezer before finishing dinner.

"You take one bite out of that, you're in big trouble," the ever-more-ridiculous-looking father says. As the bite gets closer to the boy's lips, he says: "You put that ice cream in your mouth and you are in very, very, very big trouble. Don't you dare go anywhere beyond that. Put it down right now. I am not going to say it again."

That's us now. Neither Iran nor any other terror state has any reason to believe America's tough words have steel behind them.

Whipped cream, anyone?

Tuesday, October 20, 2009


I live in South Florida. The locals have a saying that describes this place and at least some of the people who populate it: “A sunny place for shady people.” Shady people come in many packages—con artists, Ponzi scheme merchants, people with ties to the criminal underworld, and one group that is more benign, but no less despicable. I’ll call them “posers.”

A poser is someone who spends money he or she doesn’t have. He does so in a profligate manner, with no concern about how the money is to be paid back. The poser must have a Ferrari (or Bentley), must have a 10,000 square foot house on the water, must visit Tiffany weekly, must have $4,000 suits ... you get the picture. For the poser, spending money is the only thing that makes him feel good about himself.

And when the bills come due, the poser borrows still more money to pay for them. In a way, it’s a localized Ponzi scheme that ultimately crumbles once all of the sources of borrowing (or in some cases, criminal activity) run dry. Posers are like spoiled children. They want something and they grab it, never thinking of the long-term consequences.

It follows, therefore, that those of us who live in SoFla have learned to spot the posers among us and shake our heads as we watch them slowly self-destruct.

Oddly, as I watch the news coming out of our nation’s capital, I now believe that we’re watching another group of posers—a Congress of Posers. Driven by an ideological fervor to fix everything that’s “wrong” with our country and the planet, our poser-politicians are gripped by a spending frenzy.

A trillion dollars in stimulus money—not a problem. We need to buy jobs (and votes). Another trillion dollars for healthcare—no problem. We need to create a new entitlement that will cost additional trillions down the line. Hundreds of billions more for education, giveaways for social security recipients (i.e., if the social security COLA was computed as zero this year, why on earth give each recipient a $250 dollar check?), and similar projects.

Our political posers are like spoiled children. spending without concern and borrowing to cover their irresponsible actions. In the past when a Congress began to act in a childlike fashion, the President played the adult—slapping the Congress’s hand with vetoes and reigning in irresponsible impulses. But today, President Obama seems to be the poser-in-chief. His words are sometimes (only sometimes) those of a responsible adult, but his actions are more in line with the political posers.

A Pittsburgh Post-Gazette editorial discusses the consequences:
To cover the deficit in the short run, the United States will have to continue borrowing from foreign and domestic creditors. To pay back the $12 trillion national debt in the long run will present two unsatisfactory alternatives -- saddling young Americans with mountains of debt and taxes and letting inflation blossom so that the real size of the debt diminishes over time. Neither is fair, and the problem with inflation is it hits the working person, the one whose wages lag and whose expenses don't.

Another option, though, is to cut back, starting with the two wars, congressional earmarks and other spending. That's the one that makes sense.

But posers don’t apply common sense to anything. Instead, they borrow and spend until they crash.

Monday, October 19, 2009

Hypocritical Nonsense

Remember when Karen Hughes, a Bush administration spokesperson lambasted MSNBC for their blatantly left-wing agenda and their heavy criticism of the Bush presidency.

It wasn’t a big deal ... those things happen. But when high ranking administration officials made a concerted effort to attack a network, people took notice. On the Sunday morning talk shows, Bush’s senior advisor, Carl Rove, told George Stephanopoulos: “[MSNBC} is not really a news station. It's not just their commentators but a lot of their news programming it's really not news it's pushing a point of view. "

On another Sunday morning show, Bush’s Chief of Staff, Andrew Card, said "The way the president looks at it - we look at it - it's not a news organization so much as it has a perspective."

This, of course, created a firestorm within the mainstream media.

“An adversarial relationship between the media and the presidency, every presidency, is part of the American political landscape,” stated the senior editor of the New York Times, once considered the flagship of American Journalism.

"It’s thuggish for the President to single out one news outlet and directly attempt to deligitimize it” stated Wolfe Blitzer of CNN. “It’s really quite troubling that the President has such a thin skin.”


You don’t remember senior Bush administration officials brazenly attacking the very legitimacy of MSNBC? And you can't recall the media firestorm?

I’m not surprised. It never happened.

But senior Obama administration officials are doing just that with FOX news. David Axelrod, Obama’s senior advisor is responsible for the first bolded quote in this piece, just replace MSNBC with FOX. Rahm Emanuel, Obama’s Chief of Staff is responsible for the second bolded quote, just replace MSNBC with FOX.

And the quotes from other media outlets in response to Axelrod and Emanuel and in defense of their media brethren? Never happened. The big question is why?

Tom Bevan comments:
The current presidency, as much perhaps as any in history, is built upon the foundation of the President's personal popularity. President Obama has, out of necessity, become the Salesman-in-Chief for his progressive agenda. But as the White House continues to struggle adjusting to the reality of governing versus campaigning, it is either unwilling or unable to brook criticism of the President or his policies. Thus FOX News is targeted as the enemy.

The White House's direct attack on FOX News is only part of the strategy. As Axelrod and Emanuel made clear yesterday, they also want to drive a wedge between the rest of the media and FOX News, enlisting other television networks in the effort to paint FOX News as illegitimate.

Axelrod went out of his way to suggest to Stephanopoulos that ABC News adopt the White House strategy and not treat FOX News as legitimate. "The bigger thing is," Axelrod said, "other news organizations, like yours, ought not to treat them that way. We're not going to treat them that way. "

Emanuel suggested the same to John King later in their interview: "And more importantly is not have the CNN's and others in the world basically be led and following FOX, as if what they're trying to do is a legitimate news organization, in the sense of both sides and a sense of valued opinion."

It's actually quite brazen when you think about it. The two most senior members of the Obama White House - men who control all the information and access to the Executive Branch, the lifeblood of most news organizations - went on national television and suggested that ABC, CNN and other networks follow the White House's lead and join in its war to marginalize a competitor because it takes a "perspective" that displeases the President.

To my knowledge, there has never before been such a organized and public effort on the part of a President to delegitimize a major news organization. Every American (regardless of whether you like FOX news or can’t stand it) should be concerned.

And what about the rest of the media, usually very prickly when they are criticized by anyone. Their silence on this matter is deafening.

If Barack Obama can’t accept criticism, even criticism that is extremely partisan and ill-tempered, he never should have run for president. And if the MSM won’t defend one of its own, even if they disagree with FOX’s editorial content, their frequent protestations of Freedom of the Press are nothing more that hypocritical nonsense.

Unregulated Greed

When the markets crashed in October, 2008, I was certain of two things: (1) that Barack Obama would be elected along with strong Democratic majority in both the House and the Senate, and (2) that the new Democratic majority would (correctly) make Wall Street pay for its complete and utter irresponsibility. I was right about the first outcome, but completely wrong about the second.

The US taxpayer bailed out Wall Street and set the stage for a really profitable 2009 for banks and brokerages. Many Wall Street firms have reported larger profits in 2009 than they did in 2007. As a consequence, financial industry executives, including many who were responsible the debacle in October, 2008, will get multimillion dollar bonuses at the end of the year. The taxpayers, who allowed their firms to stay solvent, get exactly ... nothing.

Instead, with the acquiescence of Barney Frank’s and Chris Dodd’s Banking committee and the Democratic majority in Congress, we get toothless legislation that sets the stage for still another financial debacle down the road. It’s a disgrace.

David Paul Kuhn outlines what must be done and why it won’t be accomplished:
We now know what must be done. Far stronger capital requirements. Derivative regulation. A system to resolve "too big to fail." Walking back the exposure to risk and monitoring risk. A crack down on bad and exotic mortgages. The new Consumer Financial Protection Agency, with banks not exempted. Bank regulators conjoined into one agency, much as we learned to reorganize the intelligence community after 9/11.

But the bank lobby is mighty and is fighting reform. Thus far, Democrats have not gotten it done. To his credit, President Obama is trying. But talk is easy. Democrats must close. Or they are not worthy of their mandate.

People get the democracy they deserve. And they get the capitalism they accept. "Is capitalism flawed?" Kudlow asked. Of course it is, but only to the extent we allow it be.

The problem isn’t capitalism, it’s unregulated greed and irresponsible financial behavior. Wall Street executives are too often driven by obscene bonuses that are tied to high risk financial instruments (e.g., CDOs) that are unregulated and dangerously risky. But why worry, the taxpayers cover their incompetence when the risk blows up. After all, they’re too big to fail.

Instead of expending political capital on ridiculous and ruinous cap and trade legislation, President Obama should show some leadership in getting stringent Wall Street reform legislation passed. As each week passes, it becomes increasingly evident that our President talks a good show, but can’t seem to get a Congress with an overwhelming majority of his own party to do what needs to be done. And that is also a disgrace.

Wednesday, October 14, 2009

Handling the Truth

The last courtroom scene of the movie, A Few Good Men, starring Jack Nicholson and Tom Cruise, is a classic for many reasons. Cruise, a Navy JAG lawyer is questioning Nicholson, a Marine Colonel about the murder of another marine.
Nicholson [in a fury]: “You want answers?”
Cruise [yelling]: “I think I’m entitled … I want the truth!”
Nicholson: “You can’t handle the truth!”

The same can be said for a significant percentage of the American public. Too many of us say we want answers, but in reality, “We can’t handle the truth!”

Over the past few days, the conservative blogoshere has made much of a 2007 talk by Obama economic advisor Robert Reich in which he talks about healthcare (as well as a number of other subjects). Discussing Reich's speech, Richard Fernandez of The Belmont Club suggests that his 2007 comments have a deeper and more important message for both progressives and conservatives.

At the core of his 2007 speech, Reich suggested, correctly I think, that fundamental political truths cannot be spoken by any candidate who wants to win. Among his examples are “truths” about health care that, to channel Nicholson, much of the public (both Right and Left) simply can’t handle.

A significant portion of the American public prefers a fantasy in which there are no risks and only simple or obvious choices. The reality is that there is always risk and that choices are rarely obvious or simple. Reich suggests no one really wants to hear this and that politicians (either on the Left or the Right) will not enunciate them. Fernandez summarizes Reich’s “truths” about health care.
  • Treating more sick people will mean younger people will pay more.
  • It’s too expensive to treat older people at the end of their life “so we’re going to let you die.”
  • If we use government to control costs there will be “less innovation” in medical technology and you should not expect to live much longer than your parents.
  • Medicare will bankrupt the nation unless something is done and will impoverish the youth.

You don’t have to agree with a single item in this list to recognize the underlying truth in Reich’s overarching argument. Too often, a significant portion of the electorate would prefer fantasy to reality. And politicians, including our current President, are only too willing to feed that preference.

That’s why, for example, Barack Obama tells us that he can fund a trillion dollar health care program by cutting waste and abuse. It’s pure fantasy, but it sounds a lot better than the hard truth—all of us will have to pay a lot more in taxes, and the young will be hit hardest.

It’s likely that President Obama’s health care legislation will pass in some form. Then and only then will the fantasy of health care collide with reality of paying for it. Interestingly, there will be many who never reject the fantasy, continually looking for bogeymen (big pharma, the insurance companies, greedy hospitals) who they can blame as the country falls further into debt.

The core truth is that there is always risk and that we have to make hard choices, but more important, that the choices we make are valid only if the reality of the situation are delineated. Too often, it is not. Fernandez writes about those choices:
Choices are unavoidable, but the alternatives are not fixed over the long term. Constraints are real, but the constraints change. The reason politicians survive is that human creativity often rides to their rescue. New knowledge, new resources and new worlds have turned many a hack into statesmen. But they are the beneficiaries, rather than the creators of productivity; what is irrational is to expect genuine creativity in a world dominated by politicians. The missing pairs of choices in Reich’s list are these: creativity versus certainty, risk versus return, bureaucracy versus innovation. We can live only if we take the risk. That is the most unsayable truth of all.

For far too many of us on both the Left and the Right, Jack Nicholson’s character was right: “You can’t handle the truth!”

A Critical Milestone

And so, the Senate Finance committee passed their version of national health care legislation, setting the stage for broad negotiations between the House and Senate versions of the bill. President Obama commented immediately after the bill was passed out of committee:
Today we reached a critical milestone in our effort to reform our health care system. After many months of thoughtful deliberation, the fifth and final committee responsible for health care reform has passed a proposal that has both Democratic and Republican support.

Our health care system is in need of reform, so the President’s enthusiasm is understandable, but like most things, the devil is in the details. As it stands at the moment, the CBO has declared that the so-called Baucus bill will pay for itself over the next 10 years. Part of the reason (something that the CBO readily admits) is that taxes are collected to fund the bill immediately, but the main elements of the bill will not be implemented for three years. That means that 10 years of tax increases will be used to pay for 7 years of healthcare. That’s fine, until you think about the following 10 years and the 10 years that follow those. That’s when enormous deficits begin to accrue, just in time for today’s 10 year olds to be faced with accelerating and onerous payroll and income taxes in order for the government to remain solvent.

But it’s actually worse than that. The viability of the first 7 years is predicated on the addition to the medical insurance rolls of many young healthy Americans who currently see no need for insurance. Dick Morris comments:
Will a young, healthy, childless individual or couple buy health insurance costing 7.5 percent of their income, as required by Obama's health legislation? Not until they get sick. Then they can always buy the insurance [because the legislation mandates that pre-existing conditions do matter, and the Obama bill requires the insurance companies to give it to them. And if the premiums come to more than 7.5 percent of their income because they are now sick, no problem. Obama will subsidize it.

Instead, young, healthy, childless people will likely opt to pay the $1,000 fine (aka slap on the wrist) mandated in the bill. After all, even if they make as little as $50,000 a year, the fine is a lot cheaper than 7.5 percent of their Bottom of Form
So ... these young households will not contribute to the coffers of any health insurance company until they are sick and need the coverage. By then, their costs will come to vastly more than their premiums.

Who will subsidize the difference? We will.

And there’s the rub. For all of his rhetoric about no new taxes on the middle class, Obama’s health care reform will create an enormous tax burden or alternatively, an enormous deficit. It’s all very nice to want every person to have health insurance. It also fiscally and morally responsible not to saddle future generations with enormous new government entitlements. Somehow, the Obama administration seems obsessively focused on the first objective and blissfully unconcerned about the second.

Saturday, October 10, 2009

An Excess of Ideologies

More than most people, I understand the effort it takes to plan and write a book—any book. It’s for that reason that I stand in awe of a true author, an individual who uses words to create art, but at the same time delivers just a bit of wisdom along with an intriguing story populated by well-crafted characters. Carlos Ruiz Zafón is one of those authors. Early in his book, The Angel’s Game, one of Zafon’s characters makes a passing comment to the novel’s protagonist: “It seems that in advanced stages of stupidity, a lack of ideas is compensated for by an excess of ideologies.”

As I read those words, I couldn’t help but smile. The advanced stupidity of those on the extreme Left and those on the extreme Right is compensated for by an excess in ideology. More dangerously, this excess in ideology has not only pervaded our mainstream political parties and media, but has begun to become a controlling element of them. The result, I’m afraid, regardless of the party in power, is advanced stupidity.

An extreme ideology (whether on the Left or the Right) can be visualized as a triangle. Each vertex represents a core tenet, and without it, the ideology becomes unstable. There is no room for compromise or for adjustment—each vertex defiantly rejects rationality or facts that do not fit its self-imposed mime.

The extreme Left’s ideological triangle is denoted by the notion that the West in general and the United States in particular are the cause of most of the word’s problems, that big government can solve those problems, but only once it has been cleansed of capitalist thinking and all vestiges of self-responsibility, and that the “oppressed” have a right to act in barbaric ways, shielded from sanction or judgment because of their "victimization."

The extreme Right’s ideological triangle encompasses an absolutist view of abortion, suggesting that a government that they are wary of can and should intercede to control a woman’s body, that gay people are inherently unsavory and that gay marriage is somehow a “threat” to a heterosexual institution that fails more than half the time, and that the inevitable change in our national demographics is something to be resisted, rather than embraced.

There’s really no point in trying to refute these extreme ideologies. As they say, you can’t reason someone out of a position they never reasoned themselves into in the first place.

But as the structure of these ideological triangles becomes more robust, our future becomes less certain. Zafón is right. We are, it seems, entering into advanced stages of stupidity, where our political and opinion leaders are being driven not by what is right but what fits within their ideological triangle. It certainly isn’t an angel’s game.

Friday, October 09, 2009

Jumping the Shark

Barack Obama had been President of the United States for less than two weeks when nominations for this year’s Nobel Peace prize closed. It’s unclear who nominated him or what criteria they used to justify the nomination. At two weeks into his presidency, Obama, like all Presidents, had accomplished virtually nothing, had given only a few important speeches, and had established no diplomatic partnerships.

Ten months into his presidency, with hundreds of speeches behind him, but very few real accomplishments other than those aspirational speeches, the Nobel Prize committee awards our President the Nobel Peace Prize. Strange.

On the one hand, it’s quite an honor. After all, the Peace Prize has been awarded 89 times since 1901. With a few notable exceptions (terrorist thug, Yassir Arafat comes to mind), the Prize has been awarded to people of great accomplishment, people who are often unknown to the general public but deserve the honor because of their hard work and accomplishments. People like Muhammad Humas or Kim Dae-jung or Rigoberta Mechu Tum.

On the other hand, Obama’s Peace Prize is a laughable example of aspirations and celebrity trumping actual accomplishment. Ruth Marcus comments:
This is ridiculous -- embarrassing, even. I admire President Obama. I like President Obama. I voted for President Obama. But the peace prize? This is supposed to be for doing, not being -- and it’s no disrespect to the president to suggest he hasn’t done much yet. Certainly not enough to justify the peace prize.

"Extraordinary efforts to strengthen international diplomacy and cooperation between peoples?” “[C]aptured the world's attention and given its people hope for a better future?” Please. This turns the award into something like pee-wee soccer: everybody wins for trying.

… Obama gets the award for, what, a good nine months? Or maybe a good two weeks -- the nominations were due Feb. 1. The other two sitting presidents who won the prize --Woodrow Wilson in 1919 for founding the League of Nations, Theodore Roosevelt in 1906 for negotiating an end to the Russo-Japanese War -- were in their second terms.

Most of the younger readers of this blog are familiar with the phrase, “jumping the shark.” From Wikipedia: Jumping the shark is a colloquialism coined by Jon Hein and used by TV critics and fans to denote the point in a television program's history where the plot veers off into absurd story lines or out-of-the-ordinary characterizations. This usually corresponds to the point where a show with falling ratings apparently becomes more desperate to draw in viewers. In the process of undergoing these changes, the TV or movie series loses its original appeal. Shows that have "jumped the shark" are typically deemed to have passed their peak.

It is possible that Obama worship has jumped the shark. That a U.S. President as a celebrity will begin to make even his supporters mildly uncomfortable.

I hope so, because our country needs a leader, not a celebrity. It needs fewer words and more action. It needs a media that will get over its crush on our President and work to help the citizens of our country understand the issues, not "fact check" (CNN did this) comedy skits to protect Obama from derision. That will only happen when The One is forced to understand that history will judge him not on his aspirations, but on his deeds. To date, those deeds are very sparse indeed.

Tuesday, October 06, 2009

Kissinger's Take

Even at his advanced age, Henry Kissinger remains an astute geopolitical operator. Like him or not, the man gets it—he understands the Machiavellian nature of interchanges between nations. His broad experience allows him to fully appreciate the complexities of insurgency warfare. His successes and failures have tempered his view with a heavy doses of reality.

So, when Henry Kissinger talks about Afghanistan, it’s worth paying attention. In a recent article in Newsweek, he writes:
No outside force has, since the Mongol invasion, ever pacified the entire country. Even Alexander the Great only passed through. Afghanistan has been governed, if at all, by a coalition of local feudal or semifeudal rulers. In the past, any attempt to endow the central government with overriding authority has been resisted by some established local rulers. That is likely to be the fate of any central government in Kabul, regardless of its ideological coloration and perhaps even its efficiency. It would be ironic if, by following the received counterinsurgency playbook too literally, we produced another motive for civil war. Can a civil society be built on a national basis in a country which is neither a nation nor a state?

In a partly feudal, multiethnic society, fundamental social reform is a long process, perhaps unrelatable to the rhythm of our electoral processes. For the foreseeable future, the control from Kabul may be tenuous and its structure less than ideal. More emphasis needs to be given to regional efforts and regional militia. This would also enhance our political flexibility. A major effort is needed to encourage such an evolution.

Concurrently, a serious diplomatic effort is needed to address the major anomaly of the Afghan war. In all previous American ground-combat efforts, once the decision was taken, there was no alternative to America's leading the effort; no other country had the combination of resources or national interest required. The special aspect of Afghanistan is that it has powerful neighbors or near neighbors—Pakistan, India, China, Russia, Iran. Each is threatened in one way or another and, in many respects, more than we are by the emergence of a base for international terrorism: Pakistan by Al Qaeda; India by general jihadism and specific terror groups; China by fundamentalist Shiite jihadists in Xinjiang; Russia by unrest in the Muslim south; even Iran by the fundamentalist Sunni Taliban. Each has substantial capacities for defending its interests. Each has chosen, so far, to stand more or less aloof.

The question that the Obama administration should be asking isn’t only whether we should add more troops, subtract them, or leave the Afghan theater altogether. Those questions imply a unilateral approach to an intractable problem. The answer is important but it is not sufficient. The president should also be asking what actions should we take to force those who stand “aloof” to become more actively involved. You’ll note that I used the word “force,” not the word "convince."

Part of Barack Obama’s persona appears to be his seemingly endless faith that through force of personality he can convince both friends and adversaries to act in the interests of the United States. To be generous, that’s an attitude that is naïve. To be more harsh, it’s an attitude that boarders on extreme hubris. It’s also an attitude that is dangerous to our national interests.

Can events in Afghanistan be molded in a way that threatens the national interests of Pakistan, India, China, Russia, and Iran, force them to act against the Taliban? What can we do to force those events to occur? If they do occur, will the actions of Pakistan, India, China, Russia, and Iran provide unintended strategic assistance for our national interests? Those are the questions that must be answered by the President.

His first step should be to re-read “The Prince” by Niccolo Macchiavlli. Lacking that, he might give Henry Kissinger a call.

Saturday, October 03, 2009

Fiercely Competitive?

An editorial in The New York Times (the most pro-Obama daily in the country) gently suggested that the President’s sales pitch for a Chicago Olympics in 2016 was, well, politically ill-advised:
We would like to congratulate Rio de Janeiro for winning the right to host the 2016 Summer Olympics. It will be the first time that the Games are held in South America, and it is a fitting tribute to Brazil’s growing stature. That said, we have to ask: What was President Obama thinking when he flew off to Copenhagen to lobby the International Olympic Committee on behalf of Chicago?

The Times then went on to provide a possible reason for Obama’s unprecedented direct involvement:
As for why Mr. Obama went — especially if he wasn’t sure Chicago would win — here are two possible explanations: One, Mr. Obama, and his White House chief of staff, Rahm Emanuel, another Chicagoan, love a good competition; the other is that they have a tad too much confidence in Mr. Obama’s hortatory powers.
We like having an articulate, fiercely competitive president, especially one with such a strong moral compass. But guys, if you’re going to roll the dice, next time make sure the stakes are worth it.

Personally, I’m not particularly concerned about the President’s trip to Copenhagen. I don’t think it made political sense, but unlike those on the Right who have become apoplectic about everything Barack Obama does, I tend to agree with the relatively conciliatory position of The Wall Street Journal (a daily that is much less friendly to the President):
We also won't join those who pounded President Obama for taking a day to travel to Copenhagen to underscore Chicago's bid, claiming he had somehow shirked the pressing issues of health care and yesterday's dismal September jobs report. If the country is going to unravel because a President is not in Washington for 24 hours, we're in worse shape than we thought. Some also fault Mr. Obama for investing the prestige of his office in getting the games, as no President has before, but then Mr. Obama is more closely identified with Chicago than other Presidents have been with other bidding cities.

If Mr. Obama and the White House made a mistake, it was in their apparently boundless faith that somehow Mr. Obama's personal popularity would carry the day. As if, merely by seeing the rock star in person, the delegate from, say, Egypt would abandon his simmering dislike for America, forget all the dinners and deals cut with the Rio Committee, and reward Chicago. In that sense, the Olympic defeat is a relatively painless reminder that interests trump charm or likability in world affairs. Better to relearn this lesson in a fight over a sporting event than over nuclear missiles.

If President Obama and his senior advisors use the Copenhagen trip as a “teaching moment” the time spent on Air Force One will have been well worth it. If the President learns that nations vote and act from local self-interest, the United States will have been well served in Copenhagen. If he recognizes that star power alone rarely translates into solid foreign policy (or Olympic votes, for that matter), he will grow as a leader.

But if he insists on a continuation of mea culpas for his own country in the mistaken belief that it will earn us friends and serve our national interests; if he continues to believe the sophomoric notion expressed in his recent UN speech: "It is my deeply held belief that in the year 2009--more than at any point in human history--the interests of nations and peoples are shared," when in fact, our adversaries share virtually none of our core beliefs or interests, we’re in for a very rough and very dangerous future.

Thursday, October 01, 2009

The Yamal Data Set

One of the core concepts in experimental science is the “data set.” Data are collected from a specific source, are archived, and are the analyzed in a variety of different ways to develop a set of findings. The original data must always be available so that other scientists can validate both the analysis that was conducted and the findings that were derived. It’s standard operating procedure.

In most cases, as the size of the original data set grows, the validity of any analysis also grows. Sure, there can and will be a few bad data points, but these wash out statistically as the number of data points increases. To oversimply, that’s why political pollsters don’t query only six people when conducting a national poll.

It seems odd, therefore, that one of the seminal scientific studies that supports the supposition that global temperatures are rising and will continue to rise at precipitous rates (a study referenced by many climate change papers over the past decade) is based on a data set with only 12 data points. It seems even more unusual that the authors of this seminal study chose not to include well over 200 additional data points, even though they were part of the original data set. Even more intriguing is that the authors of the seminal study refused to release the original data set to other investigators for almost nine years.

The data set in question is housed at the Climatic Research Unit (BRU), University of East Anglia, Norwich, U.K. and was named the Yamal data set. It incorporated measurements of tree rings collected throughout the Yamal Peninsula in Siberia. Paleoclimatologists argue that they can determine reasonably accurate indications of ambient temperature from this tree ring data.

Richard Fernandez of The Belmont Club tells the story of a lone (retired) mathematician who spent years try to get a look at the Yamal data set. It tuns out that Yamal was used to depict what has become popularly called the “hockey stick graph.”

Popularized by Al Gore, the hockey stick graph shows a precipitous rise in global temperatures over the last few decades. Using the hockey stick graph as a base, Gore extrapolated the data to claim that catastrophic temperature change (with all of its deleterious effects) was around the corner. This claim has been adopted with religious zeal by some scientists, almost all international politicians, and the Obama administration. As a consequence, massive worldwide policy initiatives are being developed. The question is—are they being developed to solve a problem that has been improperly characterized and incompletely understood.

Andrew Orlowski provides background:
At issue is the use of tree rings as a temperature proxy, or dendrochronology. Using statistical techniques, researchers take the ring data to create a "reconstruction" of historical temperature anomalies. But trees are a highly controversial indicator of temperature, since the rings principally record Co2, and also record humidity, rainfall, nutrient intake and other local factors.

Picking a temperature signal out of all this noise is problematic, and a dendrochronology can differ significantly from instrumented data. In dendro jargon, this disparity is called "divergence". The process of creating a raw data set also involves a selective use of samples - a choice open to a scientist's biases.

Yet none of this has stopped paleoclimataologists from making bold claims using tree ring data.

In particular, since 2000, a large number of peer-reviewed climate papers have incorporated data from trees at the Yamal Peninsula in Siberia. This dataset gained favour, curiously superseding a newer and larger data set from nearby. The older Yamal trees indicated pronounced and dramatic uptick in temperatures.

How could this be? Scientists have ensured much of the measurement data used in the reconstructions remains a secret - failing to fulfill procedures to archive the raw data. Without the raw data, other scientists could not reproduce the results. The most prestigious peer reviewed journals, including Nature and Science, were reluctant to demand the data from contributors. Until now, that is.

At the insistence of editors of the Royal Society's Philosophical Transactions B the data has leaked into the open - and Yamal's mystery is no more.

From this we know that the Yamal data set uses just 12 trees from a larger set to produce its dramatic recent trend. Yet many more were cored, and a larger data set (of 34) from the vicinity shows no dramatic recent warming, and warmer temperatures in the middle ages.

In all there are 252 cores in the CRU Yamal data set, of which ten were alive 1990. All 12 cores selected show strong growth since the mid-19th century. The implication is clear: the dozen were cherry-picked.

It does seem odd that only the data that “proved” the hockey stick hypothesis was chosen, even though many more data points were available, but let’s set that aside for the moment.

It’s reasonable to assert that arguments can be made on both sides of the climate change question. And that’s the problem—this issue is NOT settled. It also seems that some of the data and many of the claims on both sides of the issue represent shoddy science and a distinct political ideology.

Rather than recognizing that the science is far from settled, Left-leaning politicians state emphatically that consensus has been reached and that those who question the “consensus” are “deniers.”

Following the lead of our President in his deliberations over Afghanistan, it might be a good idea to step back for a moment and re-evaluate the science of climate change.

We can and should move forward quickly on energy independence and work very hard to develop and commercialize alternative energy sources. But establishing arbitrary and ultimately unattainable CO2 gas reductions won’t solve the global warming problem if it does exist, but is guaranteed to impose an indirect tax on those least able to afford it.