Entries from June 2009

Canada Well-Positioned to Benefit from Obamanomics

David Frum June 28th, 2009 at 12:01 am Comments Off

A veteran of Washington wheeling and dealing told me this story from an administration long ago:

At the mid-session budget review, the staff had to present the president with some bad news. The budget deficit would be much bigger than anticipated. The president answered firmly: No it won’t.

So the staff resumed work. What if we adjusted the inflation number? Raising the estimate for inflation in years five through 10 of the budget plan makes future revenues look much bigger. And if the raise is small enough — say from 1.6% to 1.64% — nobody will notice: 1.64 rounds down to 1.6 after all….

After a few such devices, things had been massaged into much better shape. The president got his number.

“So what lesson did you learn from this experience?” I asked the veteran.

“Never trust numbers,” he answered. You can describe numbers as very big or not so big, scary or benign, but when you see all those decimal places — you are being conned.

Just remember that as you listen to the news from Barack Obama’s Washington. Money is being spent and debt incurred at a staggering pace. On June 15, the Congressional Budget Office estimated that the Democrats’ new health plan, known as Kennedy-Dodd, would add perhaps $1.6-trillion to the budget deficits for 2010-2019 — $1.6-trillion!

Once upon a time that was real money. Now it’s explained away as less than 1% of GDP on an annual basis.
And yet that $1.6-trillion number is based on optimistic — really heroic — assumptions. It’s assumed that the plan will slow the rate of growth in health-care spending, that all kinds of savings will be discovered, that the savings are not mere gimmicks, etc., etc., etc.

So remember the advice of my friend, the budget veteran. We cannot estimate the cost of the Obama administration’s plans with any real accuracy. What we can say is this: The U.S. under Barack Obama and the Democrats is planning to spend astounding amounts of money, colossal amounts, and to pile up debt on a scale never previously contemplated in peacetime. If these plans are all enacted, the U.S. will end the next decade approximately as deeply in debt as it ended the Second World War — and this time without being able to say that the money saved the world.

Or maybe more deeply in debt — who knows?

On the other hand, the plans to spend the money may never be enacted after all. Already public opinion is balking at the Obama administration’s spending spree. The Gallup poll released June 8 reveals an ominous decline in support for the administration’s economic  plans.

Between February and June, disapproval of the administration’s economic plans rose from 30% to 42%. While the administration remains popular, when asked about Obama’s record on the budget deficit, Americans disapprove 48-46. On controlling spending, they disapprove 51-45.

Americans still express optimistic hopes that this steep, deep and prolonged recession will soon yield to a strong recovery. More Americans say that the country is on the “right track” today than in the spring of 2008, before the recession started. But bad economic news keeps arriving. On Thursday, the U.S. Department of Labor announced that 6.74 million people are now receiving unemployment insurance.

At recession’s end, the U.S. will be forced to raise taxes heavily just to pay the interest on Obama’s debts; Canada will be positioned to maintain and even reduce taxes. Obama’s indebtedness will exert unending downward pressure on the U.S. dollar, while higher energy prices and superior economic management cause the Canadian loonie to rise.

A decade ago, incomes per capita, even in wealthy Ontario, trailed those of every U.S. state except Mississippi. Obama’s poor economic management offers the opportunity for a stunning reversal of fortunes.

And maybe that’s the issue Prime Minister Harper should be sharpening as he prepares for his ultimate contest against Michael Ignatieff. Ignatieff’s goals as prime minister are hazy and maybe non-existent. Perhaps Harper could counter with one national goal: simple, clear and confident:

Canada will avoid reckless spending, avoid accumulating debt, hold the line on taxes and reduce the burden of government regulation, all to achieve, for the first time in Canadian history, higher average incomes on the Canadian side of the border than the American.

Originally published in the National Post.

The Coming Ross-Holbrooke Turf War

June 26th, 2009 at 8:55 am Comments Off

Ben Smith’s report in Politico today about Dennis Ross’ new job at the NSC makes fascinating reading.  Besides the spot-on reference to “Jones’ powerful deputy, Tom Donilon,” the implications seem pretty clear:  Ross will effectively supervise the work of four different areas of NSC policymaking ranging from Israel east to Pakistan.

As Smith writes, “Ross’s abilities in the games of politics and diplomacy, and his clarity as a briefer, are legendary, and both friends and detractors suggested his place in the White House would likely transform him into a central figure in the administration.”

So start making popcorn.  Watching Ross at NSC vs. Holbrooke at State will be very interesting.

Sex Scandals: Who Are The Hypocrites?

David Frum June 26th, 2009 at 8:50 am 3 Comments

I notice a theme in some of the comments on the NM tally of Republican and Democratic sex scandals: Republican scandals it is said are worse because they are spiced by hypocrisy, what with the GOP being the party of traditional morality and all. But if hypocrisy is the worst sin, here too Democrats are equally guilty. After all: are not they the party of feminism? Of equal respect for women? That condemns “objectification” and “the beauty myth?” So what on earth are Bill Clinton and John Edwards and many many others doing betraying their estimable wives for brainless sexpots? Seems like, hem, hypocrisy to me.

David Frum on Pajamas TV

June 26th, 2009 at 8:28 am Comments Off

David Frum discusses the Mark Sanford scandal and Rush Limbaugh on Pajamas TV.  Watch the interview here.

Not to Praise WFB, But to Bury Him

June 26th, 2009 at 8:23 am 2 Comments

As you may have heard, the novelist Christopher Buckley and the popular historian Richard Brookhiser have each written a book about Buckley’s father, the late William F. Buckley Jr.  Neither is just about WFB. Buckley’s Losing Mum and Pup tells what it was like – from battling grief to ghostwriting eulogies – to bury both parents in one year. Click here to read more

Who Scores More: GOP or Dems?

June 25th, 2009 at 9:06 pm 15 Comments

The rapid-fire sequence of Republican sex scandals this year may inspire the depressing thought: what’s wrong with our guys? But a quick tally of reported incidents finds the two parties running neck-and-neck. Their polygamous Jesse Jackson is matched by our bigamous Vito Fossella. Their treacherous and exploitive Gavin Newsom would have a lot to discuss with our John Ensign. Their Mel Reynolds might easily have shared a prison cell with our Jim West.

It’s very striking that each party manages to believe that its own scandals are uniquely unfairly publicized. Rush Limbaugh today lamented that the press refused to acknowledge John Edwards’ affair until after the failure of his campaign because he is a Democrat. Left-wing bloggers coined the self-pitying acronym IOKIYAR (“it’s okay if you are a Republican”) to describe the press’s supposed connivance at Republican moral lapses.

Yet scandals strike both parties without a pattern. The list of misbehavers includes both Christian conservatives and San Francisco liberals, gays and straights, the sober and the drunk, the seemingly happily married and the notoriously miserable. We often say that hypocrisy is the worst of political sins, but that overlooks the number of politicians who exploit vulnerable interns and employees. Their conduct would not be improved if they were more brazen about it.

All the politicians in our incomplete sample are men. Maybe one thing parties could do to protect themselves: nominate more women? On the other hand, French presidential candidate Segolene Royal found herself in political trouble after her long-time partner left her. The betrayal confirmed a perception of her as cold and unfeeling. Maybe she should have had an affair.

* * *

Republicans

Gov. Mark Sanford, South Carolina
Extra-marital affair

Sen. John Ensign, Nevada
Extramarital affair with staffer

Rep. Vito Fossella, New York’s 13th District
Extramarital affair with Air Force’s House liaison, fathered a child

State Rep. Bob Allen, Florida
Soliciting gay sex in restroom

Sen. David Vitter, Louisiana
Client of prostitution service

Sen. Larry Craig, Idaho
Solicitation of male undercover cop in airport restroom

Rep. Mark Foley, Florida`s 16th District
Sexually explicit texts to male pages

Mayor Jim West, Spokane, Washington
Sought sexual favours from underage boys

Rep. Don Sherwood, Pennsylvania`s 10th District
Extramarital Affair

Rep. Steven LaTourette, Ohio`s 14th District
Extramarital affair with staffer

Rep. Bob Livingston, Louisiana’s 1st District
Extramarital affair

Rep. Newt Gingrich, Georgia’s 6th District, Speaker of the House
Extramarital affair

Sen. Bob Packwood, Oregon
Resigned after 29 women came forward with allegations of sexual harassment and abuse

Rep. Ken Calvert, California`s 44th District
Arrested for soliciting a prostitute

Rep. Buz Lukens, Ohio`s 8th District
Offered a 16 year old girl money for sex; fondled a woman in a Capitol building elevator

* * *

Democrats

Mayor Sam Adams, Portland
Sexual relationship with 18-year old male intern

Mayor Kwame Kilpatrick, Detroit
Extramarital affair with Chief of Staff

Gov. Eliot Spitzer, New York
Client of prostitution ring

Att. Gen. Marc Dann, Ohio
Extramarital affair

Sen. John Edwards, North Carolina
Extramarital affair; funneled campaign funds; fathered illegitimate child

Rep. Tim Mahoney, Florida`s 16th District
Extramarital affair, paid extortion money

Att. Gen. Paul Morrison, Kansas
Extramarital affair with office administrator

Mayor Gavin Newsom, San Francisco
Extramarital affair with wife of campaign manager

Mayor Antonio Villaraigosa, Los Angeles
Extramarital affair with news anchor

Gov. Jim McGreevy, New Jersey
Extramarital affair with man he appointed as homeland security advisor

Gov. Bob Wise, West Virginia
Extramarital affair with state employee

Gov. Paul Patton, Kentucky
Extramarital affair

Rep. Gary Condit, California’s 18th District
Extramarital affair with intern

Jesse Jackson, Democratic activist
Extramarital affair; fathered illegitimate child

President Bill Clinton
Extramarital affair with intern

Rep. Mel Reynolds, Illinois’ 2nd District
Indicted for sexual assault, relationship with a 16-year old campaign volunteer

Rep. Brock Adams, Washington`s 7th District
Eight women came forward with allegations of sexual harassment and rape

Sen. Chuck Robb, Virginia
Allegations of affair

Rep. Barney Frank, Massachusetts’ 4th District
Paid male employee for sex

How to Kill an Economy

David Frum June 25th, 2009 at 2:16 pm Comments Off

There was a saying in Silicon Valley in the 1990s: “The thing that makes America the greatest country on earth is that it is the only place where you can borrow $100 million without owning a suit.”

Borrowing even fifty dollars is a lot tougher these days than a decade ago, suit or no suit. But as the U.S. economy struggles to recover, we all have an interest in preserving the innovation, dynamism, flexibility and creativity of the financial sector.

That’s an unpopular point of view these days, I know. You can overdo anything, even innovation—and over the past half dozen years, mortgage finance overdid just about everything. Now we are all paying the price.

Yet curiously, the Obama administration’s bank reform plan announced last week corrects almost none of the regulatory gaps that enabled the mortgage crisis. What those reforms do instead is clamp a series of restrictions on non-mortgage activity by financial institutions.

Secretary of the Treasury Tim Geithner and senior White House economic aide Larry Summers outlined the plan in an op-ed in the June 15 Washington Post. Highlights include:

* More stringent capital and liquidity requirements for all institutions, especially the largest.

* Tighter Federal Reserve supervision of firms whose failure could threaten the stability of the system.

* Closer regulation of derivatives markets.

* A new consumer protection agency with power to approve or disapprove consumer lending practices.

* A new system for “winding up” failed banks—something between a bailout and bankruptcy—with details to be provided later apparently.

Let’s consider some of the implications of these moves.

Bigger banks will be more tightly supervised—but will also get some kind of guarantee that they will never be allowed to be bankrupt. All other things being equal, that guarantee should allow them to borrow more cheaply, creating a competitive advantage. Over time, we’d expect the financial system to tilt in favor of these more subsidized financial institutions. Risk taking would diminish, innovation would ebb.

Consumer lending will be more tightly policed. That will increase the cost and reduce the availability of consumer credit. One of the proposed Obama reforms would require credit card companies to post notice of proposed interest rate increases. Yet the long history of such regulations powerfully suggests that their effect is (1) to encourage competitors to coordinate their rate increases and (2) to discourage price-cutting (because future increases may have to be justified to the regulator, but mere maintenance of existing prices never needs to be).

Some Obama administration supporters yearn for the “boring finance” of the postwar years. But those were also years when the U.S. economy was dominated by giant oligopolistic firms that financed themselves out of retained earnings—a regime tough on newcomers with no earnings to retain.

Nor is it just newcomer firms that are threatened by the administration’s quest for stability even at the expense of innovation. The real victims of the Obama approach to the economy will be individual newcomers, especially the young, who risk entering an economy less able to generate new employment, new wealth, and new opportunity than the more dynamic economy of the past three decades. (Click here to hear a broadcast on American Public Media’s “Marketplace” in which I further detail the plan’s failings.)

And yet while the economic effects of the Obama plan induces despair, politically perhaps it offers conservatives a first glimmer of hope. Maybe the high costs of state control are a lesson that must be relearned in every generation. As the new policies go into effect and do their harm, there will be a great relearning among young voters entering the workforce after 2010. And just as today’s college students rallied to Barack Obama’s language of change—so perhaps will today’s high school students someday rally to a conservative who can re-articulate the free market’s exciting offer of hope, growth, and opportunity.

Originally published in The Week.

The Woman Who Wins in the Sanford Affair

David Frum June 25th, 2009 at 1:03 pm 57 Comments

It’s plain enough who the losers are in the Mark Sanford story: the governor, his family and loved ones. But there are winners too – the surviving GOP presidential candidates relieved of one more competitor in the crowded right edge of the party field. Who is likeliest to benefit?

Nominations are open. My guess: Gov. Sarah Palin.

Despite her advantages in opinion polls, Palin faces considerable obstacles en route to a GOP nomination.

1) It was Mitt Romney not Sarah Palin who came second in the 2008 contest – and the GOP has repeatedly turned next time to the candidate who finished second last time. (IE: John McCain finished second in 2000, Bob Dole finished second in 1988, George HW Bush finished second in 1980, Ronald Reagan finished second in 1976.)

2) Romney has already established an effective fund-raising and vote-mobilizing apparatus. Palin has to begin from zero.

3) Palin is prone to emotional mistakes, including her breach with Levi Johnston, father of her grandchild, and a man to keep inside the tent if there ever were one. (What do you bet that Johnston becames a national campaign correspondent for MTV or Comedy Central in 2012?)

Palin’s best hope is to quickly consolidate a conservative following and frame the choice as one between a “true conservative” and an unacceptably moderate Romney. Entry into the race by a Mike Huckabee, a Mark Sanford, a Newt Gingrich or a Bobby Jindal – each with their own credible conservative credentials – adds to the difficulty of her not-easy task. The fewer such entrants the better. Now there will be one fewer.

Korea 59 Years Later: Was My Dad’s Sacrifice Worth It?

June 25th, 2009 at 1:03 pm 45 Comments

Today is June 25th and I hope this year, given the international tensions all around us, we pause and consider that today is not just another day but the 59th anniversary of the start of the Korean War.

When the 300,000 troops of the North Korean People’s Army supported by tanks and artillery violently smashed across the 38th parallel to invade and overrun most of the South, they unleashed a conflagration that would grow to be a three year bloodbath pitting the forces of Communism and the Western Democracies against each other for the first time.  (It would also be the first time that the nascent United Nations would commit military forces to halt the aggression of one nation against another, showing that the UN must be backed by military will to be effective.)  After initial see-saw fighting down to Pusan, then up to the Yalu River after the Inchon landings, and then back down again after the massive Chinese intervention, the fighting settled into a brutal stalemate along a line that eventually would mimic the original pre-war border.  When the fighting finally ended in July 1953, the war left in its wake four million military and civilian casualties, including 34,000 American dead and another 100,000 wounded.  South Korea would suffer almost 1 million casualties, the other UN nations a combined 17,000 as well. An estimated 520,000 North Koreans and another 900,000 Chinese were casualties.

One of the wounded from that war was a young Second Lieutenant Jack Schaeffer from the 1st US Marine Division, my father.  Though he physically recovered from his wounds, he would spend the rest of his life dealing with bouts of depression which, though he never admitted it, I am convinced were the direct result of his experiences in that savage conflict.  In his more reflective moments, usually after a pint or three, he would tell me bits and pieces of what he saw and did there.  Needless to say, they were disturbing.  And one thing I think always went through his mind was this: was the sacrifice made by him and his fellow soldiers worth it?

I think the events a few weeks back regarding the sentencing by North Korea of two American journalists, Laura Ling and Euna Lee, to twelve years hard labor for “illegal entry” would provide some comfort to my dad as to what his suffering meant.  The tragic fate of these two women is indicative of the horrors that 23 million North Koreans are forced to endure every day.  I will not get into the nitty-gritty of the starvation, exposure, poor health conditions, the physical and mental abuse, the slave labor camps, and general privations these isolated people suffer as this has been well-documented.  But I will say that if there was ever a place that resembled Tolkien’s Mordor on this earth, North Korea would be a frigid contender.

When you compare this dismal picture with the vibrant and modern South, the true value of the Allies’ intervention in 1950 reveals itself.  Again, I could list all of South Korea’s accomplishments, including its economic prowess, its high standard of living, its relatively free and open society and juxtapose that against the hermit kingdom north of the DMZ but I think this famous satellite photo says it all:

Guess where South Korea ends and North Korea begins?  Enough said.

So here then in black-and-white is the legacy of the US-led military action to stave off flagrant communist aggression and protect a vibrant society so that it could develop unmolested by those in Pyongyang who would like nothing more than bring them under their control by force.   Like all wars, the Korean War had its ugly moments, but the overall value of our actions, and the service we performed for humanity cannot be denied.  There are in fact 48 million people living in sunlight today thanks to men like my father.

I will be honest when I say I have no idea how Obama should handle the journalists’ captivity.  This is but the latest of bizarre tantrums on the part of Kim to get noticed.  Nuclear tests, cancelling the 1953 armistice technically making him at war with the UN again firing missiles.  And now this very public sentencing of these reporters.  He wants something.  But what he wants, no one can say.  It’s hard to read the mind of a sexually deviant power-mad lunatic.  Despite Robert Gibbs’ ludicrous statement that “[The journalists’] detainment is not something that we’ve linked to other issues, and we hope the North Koreans don’t do that, either,”this is clearly a test of this administration’s will.  I do not envy Obama on this one.  We do not wield that kind of power in the region any more.  And the sad reality is that without Chinese intercession there is little he can really do.  Given that the Chinese like having a buffer between Manchuria and the free nations, especially Japan — cynically condemning millions of innocents to hell on earth to protect their selfish aims — do not hold your breath waiting for their help.  (The Chinese government is hardly sympathetic to journalists anyway which is another strike against these poor women).  So here we find an example of where the rubber of Obama’s sense of his ability to use his charisma as a foreign policy tool, meets the road of the reality that it is a dangerous world in which not all leaders want what we want… and in fact care little for our way or life or human rights as a whole.  The President seems to be operating under the impression that international conflicts are mere “misunderstandings” and that if we talk it out, we will get back to a harmony that he believes is the natural state between nations.  Unfortunately, as today’s anniversary shows us, history teaches  otherwise.  It is best our leader remember this going forward.

I sincerely wish Mr. Obama luck on North Korea.  This is a tough one and if he is not sure exactly how to proceed, it’s understandable.  Only Kim knows Kim.  All I would ask is for him to really consider the nature of the despots he is trying to engage.  It would help him in this end to reflect upon what South Korea would look like today if the United States had not stepped in fifty-nine years ago and shed its blood and treasure to keep that nation free of the yolk of communist oppression that so torments the people of the North today.  If he takes anything constructive away from the plight of the two unfortunate women now presumably languishing in a North Korean labor camp, it is that he is witnessing first hand the misery that great swaths of the world would be subjected to without our imprint.  And I would like him to admit just once that no other nation in history has sacrificed so much for the benefit of others.  Maybe the next time he embarks on one of his Apologia Americana tours, he might first fly at night over the sprawling city of Seoul with its skyscrapers, bright lights, vibrant colorful streets and teeming masses of free people and then cast his eyes northward to peer into the dark void in the gloomy distance. Perhaps then he may reflect upon the fact that the United States made this contrast possible.  That the country whose standard he now bears has done a lot of good in the world.  And that proud Americans like Lt. Jack Schaeffer, USMC, have left the gift of freedom and prosperity as their legacy, giving meaning to their grim suffering far from home, in a foreign land for people they never knew.

Korea Vet: Frustrating, Nasty, Exciting and Worthwhile

June 25th, 2009 at 1:02 pm 2 Comments

Unlike Brad Schaeffer’s father–Marine Lieutenant Jack Schaeffer–I didn’t suffer the emotional trauma and depression he apparently did from the Korean war, which started 59 years ago today.

While I was also an infantry lieutenant (in the Canadian army – the Princess Patricias), I wasn’t wounded, and the Canadian brigade didn’t experience the savage fighting that Schaeffer likely endured.

I served in Korea during the last year of the war when the battle lines were static and our role consisted mostly of fighting and reconnaissance patrols, of preparing to be attacked, and of being shelled and mortared 24 hours a day. Often it was boring, always it was frustrating, occasionally it was exciting and periodically it was terrifying.

I think it’s fair to say that we of the Commonwealth Division (whose fighting core were British, Canadian, and Australian soldiers, supported by New Zealand artillery, with other Commonwealth troops in lesser roles) would have relished being let off the leash to attack the enemy. But the politics of ceasefire negotiations at Panmunjon prevented fighting back – or winning the war. That added to frustrations and a feeling of what’s the point.

Compared to the 34,000 Americans killed in that war, Canada’s 512 dead is small potatoes. But our three battalions lost not an inch of ground, and won every battle fought against the Chinese.

The crowning moment for Canada was in April 1951, in the last great Chinese assault across the 38th parallel. The Princess Pats battalion alone was all that prevented the Chinese from sweeping down the Kapyong valley and re-capturing Seoul. With orders to neither retreat nor to surrender, the Canadian battalion was overrun, but held, and broke the Chinese attack, inflicting huge casualties. The Pats became the first Canadians to be awarded the U.S. Presidential Unit Citation which members of the second battalion of the Patricias wear it to this day.

On a particularly lethal and vulnerable position known as “The Hook,” the fact that the 1st Marine Division of Brad Schaeffer’s father was on our left flank was a great comfort to our guys. Not all units fighting in Korea were equally reliable. Not all could boast they never retreated. The 1st Marines were our favorite, most dependable allies.

As a single, underage naval officer who had caught the tail end of World War II, I served in Korea as a platoon commander, then as battalion intelligence officer, and finally with the U.S. Air Force in a “Mosquito Squadron,” flying in old Harvard planes to mark enemy targets with colored smoke for strike aircraft to bomb.

I think it’s fair to say most Canadian soldiers left Korea frustrated and wondering – as Brad’s dad apparently did – if the war was worthwhile; “was the sacrifice worth it?”

The South Korean government has a policy of inviting – cost-free – any who fought in that war to visit and see the country they defended from communism. Regardless of their frustrations as young soldiers, virtually every returning veteran sees for himself that if the war ended in stalemate, the peace was certainly won.

More than that, Koreans recognize that their allies in that war saved their country. Returning vets mostly feel that what they did was not only worthwhile but that their sacrifices are still appreciated.

Brad Schaeffer acknowledges he has “no idea how (President) Obama should handle” the machinations of North Korea’s Kim Jong Il. He is not alone in this. With a nutbar like Kim Jong Il, there is no predicting his actions. But what has repeatedly been proved is that giving food aid in return for nuclear concessions (or any concessions) doesn’t work. Kim’s promises are empty. He hops from one blackmail threat to the next.

China has some leverage, but unless the U.S. is prepared to act more than Obama seems willing to, there’s not much incentive for China to intervene. Obama is being “tested” and enemies and allies alike watch what he may do with interest and some trepidation.

Arguably the most satisfying development would be Kim Jong Il deciding to die, or being helped towards this end. In the meantime, the U.S. should persuade allies to provide no aid of any sort to North Korea (which goes to the military and the system anyway). Let North Koreans starve. Maybe the generals, whose power will increase when Kim is no more, will be more cooperative. But not yet.

As for the likelihood of North Korea attacking the South now that it has revoked the 1953 ceasefire armistice and is technically at war again – forget it. It’s all bluff. And if it isn’t bluff, well, next time we should ensure that there’s no North Korea left to negotiate with.