How a Minority Wins An Argument.

Where..again...now?

Health care has come up again in comments and I thought I would point to an excellent (and short) piece written by Andy over at Electoral-Vote.com. It's a perfect summation of some of the conundrums of health care legislation.

If people could walk around uninsured and then be able to sign up when they got seriously sick, many people would adopt precisely that strategy. For the average family of four, health insurance costs something like $13,000 a year. If a family expected its medical costs to be below $13,000 it rationally it would forego insurance. Then if a member got seriously ill, it would sign up for insurance and couldn't be refused. The consequence of this new law would cause healthy people to cancel their insurance until the insurance companies were just insuring sick people, which would cause premiums to skyrocket and more people to drop their insurance.

The only way to prevent astronomical premiums is to make sure the pool of insurees contains very large numbers of healthy people who pay premiums and don't file many claims. That is what insurance is all about, after all, sharing risk. That is why all other industrialized countries have mandates--everyone has to buy health insurance under penalty of law, to fill the pool with healthy people. Both the Senate and House bills contain mandates, which are unpopular but essential to prevent premiums from skyrocketing.

So my question is...how do we prevent premiums from skyrocketing with no mandate? Can we really rely on having pools of health people?

Ah Hah!

Last in Line will be happy to know that I finally have an answer to his question "Why can't you get anything passed with Democrats running both the executive branch and the legislative branch?"

My answer?

It only takes one person to cause a panic by yelling "Fire!!!" in a crowded theater.

The BBC's answer?

This brilliant article from the BBC.

For Mr Westen, stories always trump statistics, which means the politician with the best stories is going to win: "One of the fallacies that politicians often have on the Left is that things are obvious, when they are not obvious.

"Obama's administration made a tremendous mistake by not immediately branding the economic collapse that we had just had as the Republicans' Depression, caused by the Bush administration's ideology of unregulated greed. The result is that now people blame him."

No shit.

"You vote to strike a blow against elitism and you receive a social order in which wealth is more concentrated than ever before in our life times, workers have been stripped of power, and CEOs are rewarded in a manner that is beyond imagining."

Double no shit!!

The List

My friend Scott from the gym (an ultra conservative) made me promise him that I put this on the blog. He never reads it, barely checks email, yet was insistent that his thoughts be known to all of you. So, without further adieu, here is The List, by Scott, of the people/organizations that are destroying our country from within and without followed by a short explanation as to why this is so.

1. The Liberal Media-all of it is liberal including Fox News now. They seek to spread lies.

2. The Hollywood Elite-Scott hasn't seen a film since Titanic (or so he claims) because he refuses to fund the liberal agenda of Hollywood.

3. Democrats-well, we know why this is here.

4. Socialists/Communists-actually, just see #3.

5. Teachers-all liberal commie pinko faggots...thanks Scott!

6. Climate Changers/Environmentalists-they're all looney and want to take Scott's money.

7. Affirmative Action Supporters-taking away jobs from people who are more qualified. Also part of a commie plot.

8. ACLU-against all that is good and Holy about our country.

9. Unions-commies

10. U.N.-Anti American to the core.

11. Illegal Immigrants-go home. We don't want you.

12. RINOS-Republicans who, in any way whatsoever, support any of them previous 11 items.

Note: This list is real and Scott was very insistent that I put it down exactly like I did.

Export What?

President Obama recently announced that he wants to double the amount of exports from the United States. I'm curious as to what exactly he would like to export. And double.

Twice the amount of financial re-shuffling services?

Well, this is just....great....

Opened my copy of the Times this morning (ah...the simple pleasure of the Sunday New York Times) and found yet another example of why we need to get into the green energy game.

TIANJIN, China — China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.

China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.

These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

Meanwhile, here in America, we have this sort of thing.

Climate Change Hoax: Inconvenient Lies Exposed

News Media Falls For Climate Change Hoax

Does Climate Change Exist?

Here's what I can't figure out...why are there millions of people in this country who I KNOW love making money and beating competitors out (especially China) blinded by the insanity of simply having to be right?

WHO THE FUCK CARES IF IT'S REAL OR NOT? PEOPLE WANT TO SPEND MONEY ON THIS STUFF!!!!!!

At this point, any person that claims to be a supporter of the free market and also believes that climate change is a liberal commie plot to fluoridate our drinking water is restricting innovation and being a complete fool.

In ten years, when China is sitting on a fat pile of cash, people will ask why the United States didn't step up as an international competitor in the green energy sector. The answer will be simple.

The Wrecking Crew.

Yet Another Game Changer

I'm going to be talking about this one for the next few days. This is a long video (1 hour and 7 minutes) so take your time with it.

Some initial thoughts....has anyone ever seen another president do this before? I'm not trying to be snarky...I honestly don't know or don't recall.

The first line bit that jumps out at me....

When asked about the later health care conferences not being televised, President Obama said "It’s a legitimate criticism. So on that one, I take responsibility.”

Funny, though. Isn't that actually the fault of congressional leaders? Last time I checked he ran the executive branch.

God Loves The Marines

A while back, I became a "friend" of the Department of Defense on Facebook. They put out a lot of cool info every day and so, from time to time, I thought I would share it with all of you.

American Forces Press Service
TYNDALL AIR FORCE BASE, Fla., April 22, 2009 – All 64 major Air Force bases in the United States are participating in a campaign to change out incandescent bulbs with energy-efficient compact fluorescent bulbs, or CFLs.

In the past year, beginning with Earth Day 2008, Air Force participants have changed out more than 228,000 bulbs. This will save millions of pounds of greenhouse gases and enough energy to power 3,841 homes for a year, officials said. The Air Force will save $7.5 million over the lifetime of the bulbs.

And that's not the only way that our armed forces are going green. In fact, they have a whole section of their web site devoted to it. Check it out.

Pretty cool, huh? Well, that is if you think that climate change is not a stinkin' commie liberal plot designed to sap and impurify all of our precious bodily fluids. If you are someone who thinks this way, what runs through your head when you see all of these green initiatives from the DoD? Heck, I'm not even convinced that man made climate change is happening with a hundred percent certainty yet I still think it's great.

Hats off to our brave men and women in the armed forces who, once again, are going above and beyond the call of duty.

Three For Thursday

1. State of the Union-I thought it was great but what does it matter? 30 million people hate him no matter what he says or does so I'm still feeling like a cynical and bitter fuck today. They want him to fail especially if it means success for this country...which would mean they were wrong about their ideology...which means the end of all that is holy.

2. No Ben-I think Ben Bernanke should not be elected to a second term as Fed Chair. Clearly, he wants to maintain the status quo on Wall Street. How about we nominate Jim Manzi? Or Bruce Bartlett?

3. Karma-Apparently conservative activist James O'Keefe, last seen dressed like a pimp and entrapping ACORN (aka actually being the person engaging in voter fraud) has now been arrested. Apparently, O'Keefe and some of his pals thought it would be cool to try to tap into Louisiana senator Mary Landrieu's phone system. Ah, the mid 20s mafia (geek conservative subset)....I take comfort in the fact that if they do go to prison, they can enjoy all the "luxuries" from our hard earned tax dollars:).

Bitterness Rising

I'm feeling bitter and cynical tonight. I've always been excited on the night of the State of the Union speech regardless of who was in office. The part when the Congressional Sargent at Arms yells, "Madame Speaker, the President of the United States!" But tonight, no matter what President Obama says, it won't matter.

The vomitous spew that is our current political climate will gnaw over the metaphorical piece of meat that is our president...removing all honor, dignity, and truth from anything he says. No doubt he has the best of intentions but does anyone really care any more?

No.

The chief concern of most media outlets is to sell advertising through higher ratings. They get these ratings by presenting what is essentially political porn. Whatever your political stripe, there is a channel for you to wax your poly-rod whilst thumping your chest and feeling happy that your side is "right."

Meanwhile, our country is falling apart and all of the solutions slip away in a vitriolic spew of propaganda.

State of the Union (Part Eight)

Manzi leaves us with two other broad reaching fix-its. The first one obviously hits close to home.

Over the coming decades, we should seek to deregulate public schools...We now need a new vision for schools that looks a lot more like Silicon Valley than Detroit: ­decentralized, ­entrepreneurial, and flexible.

To a certain extent, he's right. He ignores the central problem with teacher today, however...they are lazy. The real problem with our education system is that it is built to not force teachers to adjust their pedagogy to fit the times and culture. Tenure, for example, should be done away with forever. His idea of the entrepreneurial student intrigues me and this gets back to teachers being lazy. Instructors need to shift their focus from themselves and onto the students. Students should decide how best they learn and should choose how to assess themselves, not teachers.

His other idea is fantastic.

We should reconceptualize immigration as recruiting...we should think of immigration as an opportunity to improve our stock of human capital...It would be great for America as a whole to have, say, 500,000 smart, motivated people move here each year with the intention of becoming citizens.

No shit. Enough with the rants against illegals. Let's be realistic. They're here...let's embrace them...and get this country moving again.

And now, of course, we come to the key, concluding idea.

Balancing economic innovation and social cohesion is the challenge of every free nation today — but it is a particularly pressing challenge for the special nation that holds in its hands so much of the fate of democracy and capitalism in our world.

On this day, I declare that the central mission of this blog will be to search for this balance and, hopefully find some answers. I can't promise that I won't get off on a rant from time to time (I am only human) but Manzi will be in the back of my mind forever.

So much hangs in the balance...

State of the Union (Part Seven)

We now come to the point in Manzi's article where he lays out solutions to the problems he identified earlier. He points to four very broad solutions to these issues.

Most obviously, government ownership of industrial assets is almost a guarantee that the painful decisions required for international competitiveness will not be made.

Agreed. But that also means that if companies start to fail they can't go hat in hand to DC and beg for money. They need to file for bankruptcy and take their lumps. Speaking of which...

When it comes to the auto industry, for instance, we need to take the loss and move on.

Also agree. Detroit has proved beyond a shadow of a doubt that they have no idea how to run a manufacturing business. And remember, our country is not about manufacturing any more.

Manzi goes on to detail how the government should pull its tentacles out of all industries and get back to the pre-stimulus status quo. I'm not certain I agree with him on this one. Banks, for example, are already causing a problem by not lending to anyone. If not the government, what is the mechanism to push them to do what has to be done in order to jump start this economy?

The financial crisis has demonstrated obvious systemic problems of poor regulation and under-regulation of some aspects of the financial sector that must be addressed — though for at least a decade prior to the crisis, over-regulation, lawsuits, and aggressive government prosecution seriously damaged the competitiveness of other parts of America's financial system.

So the government does too much or too little. Yep, pretty much says it all.

Regulation to avoid systemic risk must therefore proceed from a clear understanding of its causes. In the recent crisis, the reason the government has been forced to prop up financial institutions isn't that they are too big to fail, but rather that they are too interconnected to fail. For example, a series of complex and unregulated financial obligations meant that the failure of Lehman Brothers — a mid-size investment bank — threatened to crash the entire U.S. banking system.

The best paragraph in the entire piece, really. President Obama is basically going to do this when he takes on the banks. I can't wait. It's one of the reasons why I voted for him. Glass Stegall needs to be law again.

As we work to adapt our regulatory structure to fit the 21^st century, we should therefore adopt a modernized version of a New Deal-era ­innovation: focus on creating walls that contain busts, rather than on applying brakes that hold back the entire system. Our reforms should establish "tiers" of financial activities of increasing risk, volatility, and complexity that are open to any investor — and somewhere within this ­framework, almost any non-coercive transaction should be legally ­permitted.

Yep.

The tiers should then be compartmentalized, however, so that a bust in a higher-risk tier doesn't propagate to lower-risk tiers. And while the government should provide guarantees such as deposit insurance in the low-risk tiers, it should unsparingly permit failure in the higher-risk tiers.

Definitely. If such compartmentalization was present, a bigger bank could fail and an insurance agency wouldn't fall as well.

Such reform would provide the benefits of better capital ­allocation, continued market ­innovation, and stability. It would address some of the problems of cohesion by allowing more Americans to participate in our market system without being as exposed — or unwittingly exposed — to the brutal effects of market ­collapses. It would also help get the government out of the banking business and preserve America's position as the global leader in financial services without turning our financial sector into a time bomb.

But do the wealthy elite of this country want "more Americans to participate in our market system?" I don't think so. Herein lies the real challenge behind the second part of Manzi's solution. Why on earth would anyone want to share their power? It goes against human nature and the need to control and dominate your sphere of influence.

So, I don't see this happening any time soon in our little plutonomy.

Tomorrow I will wrap up my State of the Union series just in time for....the State of the Union on Wednesday.

State of the Union (Part Six)

And now we get to even more bad news for the left.

All told, finance, insurance, real estate, automobiles, energy, and health care account for about one-third of the U.S. economy. Reconfiguring these industries to conform to political calculations, and not market-driven decisions, is likely to transform American economic life. And the fiscal consequences of the spending involved will be enormous. The federal budget deficit for 2009 was about 11% of gross domestic product, which is far higher than any the United States has experienced since World War II.

Transform it, indeed. Obama's stimulus package has had an enormous impact on all of the sectors mentioned above. In fact, only about 5 percent of the federal stimulus funds went to things like roads and bridges. The rest went into the banking industry, the automotive industry, schools, food stamps and health care. One could argue that much of this funding was needed in anticipation of possible economic collapse. But this sort of spending carries with it great risks.

The Congressional Budget Office projects that existing laws will now lock in a structural budget deficit of more than 3% of GDP every year for the foreseeable future. And this assumes we will escape the current global economic situation without further financial catastrophe (and that America won't be forced into a war or other unanticipated major contingency over the next several decades). The CBO states flatly that this long-term budget path is "unsustainable."

The basic character of America's financial position is changing before our eyes. One year ago, federal government debt held by the public was 41% of GDP. Today, it is about 54% of GDP. The CBO projects that it will approach 70% of GDP by 2020, which is a level not seen since the immediate aftermath of World War II.

Clearly, not good. So what are our options?

According to Manzi, there are three: raise taxes, default on debt, or devalue our currency. I highly doubt the last two are going to happen so, more than likely, it's going to be raise taxes. Manzi talks of a value added tax but an easy fix would be to raise the top tax rate. Of course, this will never happen because raising taxes in this country is akin to going on a shooting spree at an elementary school.

An option that Manzi doesn't mention is cut spending. Does anyone out there think that is going to happen considering our government? But let's suppose it did. Where would we cut spending?

We begin to see a fairly apparent direction.

The end result would be an America much closer to the European model of a social-welfare state, which prioritizes cohesion over innovation. Of course, the European model is not an inherently terrible way to organize human society. It is, however, a model very poorly suited to America's current strategic situation, and would leave us in a far worse position to deal with the challenge of balancing innovation and ­cohesion. We do not have the luxury of drowning our sorrows in borrowed money while watching our power and influence wane.

He's right. We can't move towards a European model of socio and political economics. It won't work here and it will leave us vulnerable to our enemies in a plethora of ways.

Before I get to Manzi's solution, does anyone have any idea at all how to achieve the balance between innovation and social cohesion? Obviously, I have a few ideas of my own but would like to hear from you first.

State of the Union (20 Second Time Out)

Before we continue with the Manzi article, I just had to put this up. This is courtesy of TH from a discussion on another site.

In a political arena business power is used to influence politicians, primarily with the goal of to creating barriers to competition or even eliminating competition in markets. This has the effect of retarding many of the benefits of having a free market system. For a competitive free market to flourish what is needed is a government that is powerful enough to resist the pressure of business power so that it can be the voice of the people.

What has really been hurting the US economy for a long time is that businesses have found it more profitable to use their influence over politicians to create regulation and conditions favorable to their interests than to innovate and to compete. The lack of competitive forces at work in health care (really, health care insurance) is one of the more egregious examples of this.

With the recent reversal of Federal campaign finance laws we can only expect to see more of this sort of thing.

A perfect summation of what I have been saying for quite awhile.

State of the Union-Time Out

I would be remiss in my political commentary if I did not address the election last night in Massachusetts. First of all, the Dems have only themselves to blame for two reasons. One, they ran a lack luster campaign there thinking it would be an easy win. And two, they dicked around with election law so much that it came back to bite them in the ass.

I find it tremendously sad that Ted Kennedy, a champion of health care reform, lost his seat to someone who vows to torpedo it. It's crushing, no doubt.

The GOP have confirmed exactly what they are all about...destruction. They want Obama to fail and they really don't give a shit what harm it does to our country. Without significant reform, we are going to be in big financial trouble. It amazes me that even if conservatives are adversely affected by this, they will never admit how wrong they are.

Compare how the Dems conceded to Bush on so many issues (Iraq War, education) to what the GOP is doing with Obama. They'll never give an inch. They are, after all, The Wrecking Crew...bent on the destruction of the other side. They don't care...even it means our country going down the fucking tubes. The Dems don't get this and are still running campaigns in a very warm milk and damp toast sort of way.

People ask me all the time...how does the minority party have any say in anything? Well, three quarters of the people in this country voted for change. Two thirds wanted universal health care. Cue the hate, anger and fear machine and now we are down to 50 percent on both.

Mission Accomplished.

State of the Union (Part Five)

Well, we have had full illustrations of how wrong I have been about many things regarding our country. Now we get to the part the confirms what I have been saying on here for awhile.

As Federal Reserve chairman Ben Bernanke noted in a 2007 speech, "the share of income received by households in the top fifth of the income distribution, after taxes have been paid and government transfers have been received, rose from 42% in 1979 to 50% in 2004, while the share of income received by those in the bottom fifth of the distribution declined from 7% to 5%. The share of after-tax income garnered by the households in the top 1% of the income distribution increased from 8% in 1979 to 14% in 2004."

No one can look at this and say it bodes well for social cohesion. In fact, I'm not even sure it bodes well for innovation. Consider this.

A typical senior partner in a high-end ­investment-banking, corporate-law, or ­management-consulting firm can now expect to make upwards of $1 million per year. In the stratosphere of the economy, the increases in wealth have been mind-­boggling: Even after the recent market meltdowns, there are about 30 times as many American billionaires today as there were in 1982.

So, what then, is the intrinsic motivation for these billionaires? Why do they need to work? I get the argument that people in the welfare state are less motivated to work. Why should they when they have everything paid for by the government?

But why should the wealth elite work to innovate and keep our country competitive in the global marketplace when they have everything paid for by their wealth? Time and again, I hear how lazy people are and how if you take care of them, they will do NOTHING. Isn't that exactly what is happening right now? I submit that slovenliness knows no economic bracket.

Rising inequality would have been easier to swallow had it been merely a statistical artifact of rapid growth in prosperity that substantially benefited the middle class and maintained social mobility. But this was not the case. Over the same period in which inequality has grown, wages have been stagnating for large swaths of the middle class, and income mobility has been declining.

And all of this feeds into the growing deterioration of our culture in general. This is why I have been stating for awhile that "there is no middle class." There isn't! It's some wealthy people and the rest of us who live paycheck to paycheck...worrying constantly about unpaid leave, sick days, and the rising cost of health care.

The divisive effects of this cluster of trends — ­rising income inequality and reduced income mobility, some degree of ­middle-class wage stagnation, increased personal debt, and increased class stratification of stable social behavior — are only intensified by climbing rates of assortative mating and residential segregation, as well as an increasingly crude and corrosive popular culture combined with the technology-driven fragmentation of mass media.

The last bit says it all. We are a culture that has shifted dramatically from intrinsic motivation to extrinsic motivation. This motivation...this desire...knows no economic bracket as well. Someone who makes 15K a year has a cel phone and the latest ipod. So does someone who makes 1 million dollars a year. It's all the same mindset. We want the latest gadget and then in a year we want the next one. In fact, we are encouraged to throw the old one out because it's "sucky and not cool."

Until we begin to do things for the joy of doing them (intrinsic value), we will continue to decline.

So, is there any hope. Well, according to Manzi....no and then yes...which we will see next.

State of the Union (Part Four)

All progress is precarious, and the solution of one problem brings us face to face with another problem.

--Dr. Martin Luther King.

If the pain of innovation calls for some mitigation of its effects, but the demands of global competition require that we not unduly stifle ­innovation, clearly some balance must be found. The task of striking such equilibrium, however, is made far more difficult by the internal deterioration of our society — which harms both our ability to compete and our capacity for social cohesion.
--Jim Manzi, Keeping America's Edge.

How appropriate to think of what Dr. King said in terms of our current discussion regarding the state of our union. I have to tell you I would have loved to hear his solution to trying to find a balance between innovation and social cohesion. This is the crux of the problem. Can we have both? As we continue to examine Manzi's article, the answer becomes more elusive.

Of the many social and cultural changes that have rocked American society over the past half-century, the most relevant to the state of our political economy today may be the growing bifurcation of America. Increasingly, our country is segregated into high-income groups with a tendency to bourgeois norms, and low-income groups experiencing profound social breakdown.

Bifurcation, indeed, and not just the social breakdown of the lower class. We are a house divided in so many ways. We have a ruling, wealthy elite and everyone else. Our country has become a plutonomy....an oligarchy...in which the majority of the wealth is controlled by a small number of people. For unequivocal proof of this, please refer to this document and this one put out by Citigroup in 2005.

In addition to this, we have political division that has become...well...a gigantic pile of shit. I'll be the first to admit that I have been a contributer to that pile. Vitriol, acrimony, and anger have always been popular in various sporting events. Football and boxing come to mind as two examples of this. Now, these three things drive our political environment. In fact, they make money off of it. Fox News, for example, makes a ton of money from raising the hate, so to speak, and essentially being the political porn version of Jenna Jameson...getting the rocks off of conservatives everywhere...telling them exactly what they want to hear.

As a reaction to this, MSNBC has added liberal commentators over the last few years who, in addition to failing to tell the whole story in an unbiased way, add further to the hate and fear pile by simply reacting to what Rush Limbaugh says on a daily basis and give him a wider audience. I have done this many times myself.

All of this is showcased under the banner of "The Battle for America's Soul."

This breakdown did not happen overnight. Longstanding academic and avant garde attacks on traditional social norms exploded into a political and popular movement identified with the left in the 1960s. In the '70s, American attitudes and behavior began to change on a mass scale. This cultural shift naturally stimulated a response in defense of tradition from the right.

One thing I do agree with in terms of where many on the right stand is a decided lack of spirituality in our country. I wonder what might have happened if Dr. King had lived. Would today's liberals and conservatives be different? I think so. Would there be as much of a divide? I think not. Of course that is why he was killed.

How ironic, then, that each party has decided to tell us what to do with our lives. The Democrats have decided that government should be the entity to control social cohesion which basically means that they get to tell us what to do with our money. The Republicans also think that government should be the entity to control social cohesion. In their case, however, it's in the name of Manzi's "defense of tradition" (gay marriage, abortion etc.) Both parties desire cohesion yet both are failing miserably in achieving due to their incredibly thick ideological blinders.

Post-war America had much more widely shared bourgeois norms, and so was better able to contend with the negative side effects of the welfare state. Today's American underclass, however, is increasingly developing in the absence of such norms — to a large degree as the result of the welfare state itself. Meanwhile, the need for innovation and the pressures of a global economy only continue to reinforce the causes of our social bifurcation.

Imagine if we lived in a country where everyone--and I mean everyone--was actually generous with their money. There would be no need for this debate. In fact, the conservative dream would be realized as there would be no more need for social programs. The liberal dream would also be realized as social inequality would be greatly diminished.

Of course, being generous isn't enough. Accepting and using that money wisely is the other part of the bargain. Many Americans would fail at this and, as Manzi describes, have regressed from social norms. In fact, there's no doubt in my mind that many affluent people have probably given in the past only to be burned by pathetic loser after ignorant asshat. I have seen this personally many, many times.

And, sadly, we seem no closer to an answer on the balance of innovation and social cohesion.

State of the Union (Part Three)

Innovation is in danger of being squashed in this country. This is happening for several reasons. The first is that the Democratic Party has decided that social cohesion is more important than remaining competitive in the global economic order.

Another big reason is that the innovation that we have had (and something I have talked about quite a bit here) is made up of nothing. The CDO, the hedge fund, and the complex stock derivative have replaced actually investing in actual goods. Part of the reason for this is that our country is not really a manufacturer of goods any longer. Just as we changed from an agricultural society to an industrial one, now we are shifting from an industrial one to a global-technological-served based one.

Yet another reason is that change is just fucking difficult for cultures. Manzi describes the historical effects of this quite well. He concludes his discussion of societal transformation with these two paragraphs.

One obvious response is to use the political process to both slow down the rate of innovation to an acceptable pace and redistribute the country's economic output in a manner designed to maintain social ­harmony. That way, the pain of innovation is avoided and the pain of stagnation is mitigated — especially for the middle and lower classes, who are most vulnerable to the effects of both. This is the logic of the welfare state, and the direction pursued by much of Western Europe since the Second World War.

The problem, however, is that the United States does not exist in a vacuum, and making our internal economic changes less stressful is far from our only concern. We also face external challenges, especially rising competition from abroad. And our position in the global order means we cannot afford to go easy on ourselves and constrict ­innovation. Quite the opposite: We need rapid growth just to keep up.

Indeed. Witness the effect of what happens when you use the government to slow down the rate of innovation.

From 1980 through today, America's share of global output has been constant at about 21%. Europe's share, meanwhile, has been collapsing in the face of global competition — going from a little less than 40% of global production in the 1970s to about 25% today. Opting for social democracy instead of innovative capitalism, Europe has ceded this share to China (predominantly), India, and the rest of the developing world. The economic rise of the Asian heartland is the central geopolitical fact of our era, and it is safe to assume that economic and strategic competition will only increase further over the next several decades.

Wow. That's a 15 percent drop in global output. To be honest, we can't afford to lose 5 percent. The way our economy stands right now and given how much we owe China, our country could end up in economic ruin.

The one question I have for anyone reading is this: how did China, with its restrictive government, end up beating Europe? I have a few ideas but need some rounding out. Juris?

And now the death of Markadelphia's dream:(

It is common to think of the post-war global economy as a baseline of normalcy to which we wish to return. But it seems more accurate to see that era as an anomaly: the apogee of relative global economic dominance by the West, and by the United States within the Western coalition. The hard truth is that the economic world of 1955 is gone, and even if we wanted it back — short of emerging from another global war unscathed with the rest of the world a smoking heap of rubble — we could not have it.

Yet the strategy of giving up and opting out of this international economic competition in order to focus on quality of life is simply not feasible for the United States. Europeans can get away with it only because they benefit from the external military protection America provides; we, however, have no similar guardian to turn to. We do not live in a Kantian world of perpetual commercial peace. Were America to retreat from global competition, sooner or later those who oppose our values would become strong enough to take away our wealth and freedom.

To put it simply, the world has changed and no one has our backs. That is why I applauded President Obama's acceptance speech in Oslo. America, more than any other country in the world, has to protect the economic freedom of the world. Because the world is filled with a bunch of greedy scumbags (Chavez, Jong-il, Ahmadinejad), our armed forces are the ones that are going to insure this stability and peace.

Unfortunately, our country has currently become "A House Divided" which will be the topic of the next post.

State of the Union (Part Two)

Continuing with my analysis of Ken Manzi's Keeping America's Edge article in National Affairs, we see why America is having so much difficulty reconciling the quandary of deregulation and social cohesion.

Reconciling these competing forces is America's great challenge in the decades ahead, but will be made far more difficult by the growing bifurcation of American society. Of course, this is not a new dilemma: It has actually undergirded most of the key political-economy debates of the past 30 years. But a dysfunctional political dynamic has prevented the nation from addressing it well, and has instead given us the worst of both worlds: a ballooning welfare state that threatens future growth, along with growing socioeconomic disparities.

A dysfunctional political dynamic. I'll be the first to admit that I'm part of the problem. Granted, this is a small blog with very little readership. Nonetheless, I do add to the stink of politics and this article has made me seriously question what I am doing. Part of me wants to blow off steam when I hear people like Rush Limbaugh and Pat Robertson denigrate the people of Haiti after tens of thousands have died. Another part of me ignores them, writes a check to Doctors Without Borders. Still another is nauseated at the thought of the millions in this country who accept Limbaugh's word as gold. Any choice I make contributes to this dysfunction that Manzi has identified.

Certainly, we have the worst of both worlds. Basically, Manzi is saying that both sides lack true perception and their principles are grounded into continuing the failure.

Conservatives have correctly viewed the policy agenda of the left as an attempt to undo the economic reforms of the 1980s. They have ­therefore, as a rhetorical and political strategy, downplayed the problems of cohesion — problems like inequality, wage stagnation, worker displacement, and disparities in educational performance — to emphasize the importance of innovation and growth.

In one paragraph, Manzi sums up what I have been saying on this blog for years. Brilliant.

Liberals, meanwhile, have correctly identified the problem of cohesion, but have generally proposed antediluvian solutions and downplayed the necessity of innovation in a competitive world. They have noted that America's economy in the immediate wake of World War II was in many ways simultaneously more regulated, more successful, and more equitable than today's economy, but mistakenly assume that by restoring greater regulation we could re-create both the equity and prosperity of that era.

And here's where things get really interesting. I have espoused this on my blog as well. As we get to later portions of this document, we will see exactly how I short sighted I have been with this belief and how I was wrong.

The conservative view fails to acknowledge the social costs of unrestrained economic innovation — costs that have made themselves ­powerfully apparent in American politics throughout our history. The liberal view, meanwhile, betrays a misunderstanding of the global economic environment.

This last sentence is the bird's eye view of my lack of vision. We can't return to that "Golden Age of Capitalism." It's gone. Forever. The world has changed and I, like my colleagues on the right, have not caught up with the times. Ironically and quite hypocritically, I have accused them of believing the earth is "flat." And yet I have been thinking in just the same way.

Tomorrow we will pinpoint exactly why this happened.

State of the Union (Part One)

Most of you know that I get a lot of comments and emails about this blog. We're up to around 150-200 regular readers now and, boy oh boy, do every single one of them want to give yours truly a piece of their mind.

I've gotten some interesting ones over the years but the ones that I look forward to the most are the ones that illuminate and challenge my thoughts. Out of these and once in a great while, I get a game changer.

When President Obama makes his state of the union address in a few short weeks, I hope he takes Jim Manzi's Keeping American's Edge in mind. In fact, I hope he studies it thoroughly and puts Manzi on his staff. This link was direct to me by juris imprudent, a regular poster here and on Kevin Baker's blog, The Smallest Minority. I want to start off by thanking juris for pointing me in Manzi's direction. I not only found it interesting, as juris did, but thought it to the most significant summation of the United States in the 21st Century I have seen thus far. It has changed the way I view our country. Better still it has organized several ideas in my head in such an order that my principle goal in nearly everything in life has been achieved-greater width of vision.

I am going to spend the next several days discussing this article. I may come back to it periodically over the next few weeks. Go and read it. And then read it again. It's that fucking good.

Let's begin with what Manzi (and I) think should be our chief goal.

Beyond our short-term worries, and behind many of today's political debates, lurks the deeper challenge of coming to terms with America's place in the global economic order.

This is at the crux of everything we argue about in this country. First of all, there are many people who don't want us to become part of any global economic order. Those people, simply put, are not living in reality. The world has shrunk to the point of where any talk of isolationism is ludicrous. The real challenge is to pinpoint where we fit and how can better succeed in that role while maintaining and propagating our core value of freedom.

Now, the problem.

Our strategic situation is shaped by three inescapable realities. First is the inherent conflict between the creative destruction involved in free-market capitalism and the innate human propensity to avoid risk and change. Second is ever-increasing international competition. And third is the growing disparity in behavioral norms and social conditions between the upper and lower income strata of American society.

It doesn't get any starker than that. So the question becomes, as Manzi puts it, how do we "balance economic dynamism and growth against the unity and stability of our society?" In all honesty, I think we've done a poor job at it. We have not figured out a way to balance the stewardship of government with the freedom that the market place provides. Because of this inability to find this balance, we have suffered on both and international and national level.

Indeed, as Manzi continues...

After all, we must have continuous, rapid technological and business-model innovation to grow our economy fast enough to avoid losing power to those who do not share America's values — and this innovation requires increasingly deregulated markets and fewer restrictions on behavior. But such deregulation would cause significant displacement and disruption that could seriously undermine America's social cohesion — which is not only essential to a decent and just society, but also to producing the kind of skilled and responsible citizens that free markets ultimately require.

Who are we losing power to right now? China. As I have stated previously, China is all in with green technology. Right now, we are mostly even with them. If we continue to let the climate change issue become more polarized, we stand to lose an enormous amount of economic standing in the international marketplace. As Manzi has noted, we will cede power to those who do not share our values.

And Manzi is correct in stating that deregulation and fewer restriction on behavior is what is needed for true innovation. The monkey in the wrench, though, is that this type of deregulation leaves behind a large portion of our population. Without the government there to police "just" hiring practices and progressive taxation distribution, the private sector will descend into amorality and we will lose social cohesion. We have started to see signs of this already.

Why has this problem arouse and become so difficult to reconcile? I'll be looking at that tomorrow.