Entries Tagged as 'United States'

Tony Blair’s Wise Advice For The GOP

David Frum June 15th, 2011 at 7:49 am 21 Comments

In an interview today with Britain’s Sun newspaper, Tony Blair rebuked current Labour leader Ed Milliband, and urged the Labour Party to end its drift to the left: “I am happy to give [Milliband] my full support. I always will do for the leader of the Labour party, and I think he should be given a chance to set out his agenda. But in my view Labour will win if it fights from the centre.”

Asked about Ed Milliband’s comment after winning the Labour leadership that Blair’s New Labour era was “past”, Blair retorted: “The concept can’t possibly be over because the concept isn’t time related. It is about the Labour Party constantly being at the cutting edge, being a modernising party — always being full of creative ideas and isn’t pinned in its ideological past. That is always the choice for the Labour Party. It is the choice for progressive parties.”

Blair then proceeded to praise David Cameron’s education and welfare ideas as continuations of his own.

Probably most American conservatives who read the interview will think: those are wise words. Yes, exactly, Labour should avoid the left-wing extremism that overwhelmed the party in the 1980s and led to repeated election defeats.

It’s easy to recognize across the aisle the danger of the tendency of political parties to recoil upon their bases after a defeat — and to pile a second and worse defeat after a first and narrower defeat, as George McGovern did after Hubert Humphrey in 1972, as Britain’s Michael Foot did after James Callaghan in 1983, as the German left did after Helmut Schmidt lost power in 1982.

Much harder is to recognize the tendency in oneself. Yet the same tendency tempts the right too. It has tempted the American right these past three years. The rationalizations are always the same, in Britain, the US and Germany. “We lost because we forgot who we were. We did not keep faith with the voters who put their faith in us. The voters will prefer a real Tory/Democrat/CDU over a fake Tory/Democrat/CDU.” Etc. Etc. Etc.

If you can detect the fallacy when uttered by Ed Milliband, you should be able to detect the fallacy in the mouth of its American exponents. If Blair’s words seem wise in the British context, try repeating them yourself in the American.

Are Obama’s Billions Backfiring?

June 13th, 2011 at 1:08 pm 26 Comments

The question worth asking now is pretty simple: will America’s current capital investment program bring about economic growth?

A lot of the capital spending going on at this moment is driven by government planning: spending on alternative “green” energy (a major  priority for the administration); infrastructure (high speed rail has got the most attention but lots of money has also gone for new road and bridges); and Internet bandwidth. All very significant. Alternative energy alone has got subsidies of about $95 billion. If these government financed bets are “right, sick ” and people want these things, recipe the Obama administration will look very smart and the economy will recover.

If it’s wrong, treatment however, no amount of capital spending will do a whit of good.

Like David Frum, I’m skeptical of the idea that additional tax cuts of any sort will really spur an economic recovery in the short term.  That said, increased capital investment and higher worker productivity (and worker productivity growth is pretty healthy right now) is always and everywhere a good thing — as long as it meets what the market demands.

In the long run, living standards will rise only if productivity increases: without more productivity per worker, the size of the pie does not grow in real terms and the entire economy becomes the zero-sum game. If healthier job growth resumes (and it may not) then the most recent economic numbers and the story of higher capital investment with lower job growth will, in hindsight, be considered a painful but necessary move like the corporate downsizing of the early 1990s.

But sustained productivity growth can come only as a result of capital investment that meets market needs. Simply throwing money at building roads, bridges, manufacturing plants, computers or whatever doesn’t do the trick: the former Soviet Union and Japan from 1980 to the present did more capital investment than the United States but fell behind in the long run.

In relatively poor countries, investment-heavy centrally planned efforts work because low-hanging fruit such as making sure everyone has electricity, installing air conditioning in warmer areas, and shifting from cottage industries to centralized manufacturing plants raise productivity everywhere they are tried.

As economies get more sophisticated, however, figuring out the right competitive niche becomes a lot harder and once-successful central planning efforts often fall on hard times.

The Soviet Union’s twelfth (and final) five year plan saw the country become the world’s leading producer of robots but these robots proved next-to-useless because Soviets didn’t have the computer technology to help them do anything. Japan’s vaunted bureaucracy, likewise, misallocated billions on government-planned pipe dreams like a unique high definition television standard that was impractical to manufacture in quantity and a Japan-only computer bus that never caught on. Finally, America’s current stagnation resulted from a similar government-driven over-investment in home building.

In the short run, however, even the “wrong” capital investment can create a patina of growth and prosperity but, when they don’t meet market needs, they are about the worst way the spend money imaginable. It’s better for a society to spend money on life improving things almost everyone would consider frivolous—say, designer clothes and fancy restaurant meals— than to dump it into useless “capital” investments like “roads to nowhere” or manufacturing plants that produce things nobody wants.

Washington Moves Slowly After Debt Warning

April 19th, 2011 at 2:46 pm 13 Comments

Standard and Poor’s unexpected announcement yesterday that it had put United States sovereign debt on watch with “negative” implications shocked Washington. But while Congress may heed the warning and raise the debt limit, sales it’s unclear if S&P’s announcement will push both parties to a longer-term debt stabilization plan.

The White House called the S&P announcement “a political” document;  Secretary of Treasury Tim Geithner said it provided more impetus for a long term debt agreement;  and Japanese officialdom said this morning that the United States bond market was still a good place to invest under current circumstances.  More importantly, neither China nor Europe had anything to say on the S&P announcement.

As in the story, “The Dog that Didn’t Bark,” China’s silence comports with its earlier announcement this year that it was paring back on its American sovereign debt holdings.  Along with the decision by the largest bond fund in the world, PIMCO, to sell all its American debt, it’s clear market participants view the upcoming three to five years as critical to the relative security of United States issuance.

S&P has a reputation of being the most cautious of the American-based rating agencies, so its analyses draw a little more attention than other sources.  All rating agencies have suffered as the financial crisis revealed a business model that some believe called into question the validity of their ratings.  However, the rating agencies moved quickly to identify the European debt crisis and downgraded quickly the sovereign debt of several countries.  Subsequent facts have validated rating agency behavior in the case of Euroland.

What did S&P really say?  It said that it was putting American long-term debt on watch with negative possibilities.  It based that action on a judgment — a forecast if you will — of how budget negotiations will turn out in Washington.  Since the budget process will be inherently political, it’s fair to say that S&P was making a judgment about how political behavior in Washington will evolve.  Thus, the White House was obliged to say that it was confident in the ability of Congress and the President to reach a significant long-term debt agreement that will reduce projected indebtedness over the next 20 years.  In essence, the White House’s political forecast differs from S&Ps.

As we wrote yesterday, Members of Congress aren’t hearing too much about debt and deficits on this two-week recess.  Most talk will be about $4 a gallon gasoline, lack of jobs, flooding and tornadoes, and home foreclosures.  The President, to his credit, has begun a speaking tour in which he will use the bully pulpit to pound home the message that America must act now on a long-term debt reduction plan.  When the recess ends, we expect that the Senate’s “Gang of Six” will have completed their plan for deficit restraint.  Senate Budget Committee Chairman Kent Conrad is a serious fiscal thinker who has announced that he will not run for re-election.  He certainly wants to do all he can to leave behind a legacy of real accomplishment in budget policy.

So, all the elements for a possibly productive budget settlement seem in place.  Meetings under the aegis of Vice President Joe Biden will start the first week in May, with representatives from the House, Senate, and Administration.  Senior staff from Congress and the White House have substantial prior experience in dealing with large budget negotiations.  Deficit hawks can take some solace from these steps forward.

But (isn’t there always a “but” in Washington?)—Members of Congress will also hear during this recess period from all the groups that oppose any changes to Medicare, Medicaid, Social Security and other entitlements in the federal budget.  We can expect demonstrators, waving of placards, all the usual picture posing that such events bring.  Also there’s good reason to fear that many “middle of the road” Senators and Congressmen will be taken aback by the fury of opposition and may come back to town with less than a happy face.

Nothing can happen without the President.  How he approaches his natural political allies who oppose any change to entitlements, and who want higher taxes across the board, will be the key point in negotiations.  Will the President continue to move more to the center of the political spectrum despite liberal grumbling?  So far, he remains slightly aloof, having no detailed plan of his own to tackle entitlements, but urging others to do so.

Yes, the debt ceiling will increase by Congressional vote sometime this summer.  And, yes, the United States will pay its debts promptly and in full.  But failure by Congress and the Administration to achieve a real, verifiable debt stabilization agreement will mean that another 18 months to 2 years will pass without progress on the most critical economic dilemma facing the country.

As we have said many times before, the bond vigilantes may be snoozing right now as investors continue a flight to perceived safety of principal in difficult international times.  But, when Ben Bernanke stops being buyer of last resort for Treasuries, and Congress and the Administration dither, maybe the bond boys will awaken.

On the Frontline With Ivory Coast’s Rebels

April 17th, 2011 at 10:28 am 12 Comments

The West African state of Cote d’Ivoire was in the news cycle this past week, where a six month power struggle culminated with French and UN attack helicopters firing rockets on the Presidential Residence in Abidjan, the economic capital of the nation of 21 million. But the war goes back further than the past six months; I was there for the beginning and early stages of that war, back in the late nineties and early oughts.

It actually began as a military pay mutiny, at Camp Akuedo on the outskirts of Abidjan. I know this because I helped train the soldiers who became known as the rebels.

One of the guys we trained in peacekeeping duties, seen here as a part of the rebel force in Bouaké, Cote d’Ivoire.

We were there as a part of a U.S. State Department program – the African Crisis Response Initiative (ACRI) – teaching peacekeeping skills to company-sized elements from five battalions of the Ivorian military. At the beginning of the program we issued new uniforms, equipment, boots, everything – to the soldiers, many of whom had arrived from their remote bases in uniforms that were little more than rags falling off their bodies, their web gear held together in places by threads

At the end of our four-month training program, the soldiers once again appeared in their rags. “What happened?” I asked one of the troops. “Where are your new uniforms, the ones we gave you?”

“The officers, they took them all back, put them in the warehouse.” Good old Third World corruption; we give them foreign aid, the guys in charge ripped it off and used it to line their pockets. Your tax dollars at work.

This guy’s nom de guerre was Ironman, because of his great physical strength. I still have the heavy steel bracelet he gave me in 1999.

One of the Ivorians asked me for some money so he could take the train back to his base up north. He was a brother paratrooper, so I shelled out ten bucks – probably a month’s pay for him. This was telling, because later that night, it was the pay thing that kicked off the whole mess.

Third World armies are paid peanuts. Actually, if they were literally paid in peanuts they’d probably be better off than the puny salaries they make. That’s where things like UN peacekeeping duty come in; UN pay is worth triple what they make, and this is crucial because their retirement scheme is practically non-existent.

Well, President Henri Konan Bedie was on TV that night, giving a big speech about how great things were going. The trouble was, things weren’t going all that great, and hadn’t been in the twelve years since the great Houphouët-Boigny – founding father of Ivory Coast – had died. The troops clustered in the dirt-floored canteen were yelling at the screen, ”Oh, yeah?! Well if things are going so good – WHERE’S OUR UN PAY?”

What happened next – after they got enough beer in them – was that they went down to the arms room, busted in and secured the firing pins for their rifles (that’s how much their own officers trusted them). Then they rocked on down to the Minister of Defense’s residence – about five miles down the road – and made known their grievances.

The security element at the Minister of Defense’s place returned fire, so the mutineers pulled back and went over to the President’s residence. There was no return fire this time, so the troops took the place down, and the whole country with it.

This was in December of 1999; the wealthiest, most stable nation in West Africa had just experienced its first coup d’etat…

Click here for part two.

Originally published at STORMBRINGER.

Come Back Charles Johnson

David Frum December 1st, 2009 at 3:17 pm 107 Comments

Charles Johnson, editor of the Little Green Footballs site, has written a post declaring his personal breach with the American right.

He offers 10 reasons, but they all boil down to the same one: His outrage at the bad characters found in right-wing media and blogosphere.

And yes, there’s no shortage of bad characters. No shortage on the left-hand side either. Or the middle, for that matter. But why surrender to them? Why let them get away with their claim to define your movement? Why not stand up to them? That was Rudyard Kipling’s advice to those who felt as Johnson now feels:

If you can bear to hear the truth you’ve spoken

Twisted by knaves to make a trap for fools,

Or watch the things you gave your life to, broken,

And stoop and build ‘em up with worn-out tools;

These are days for stooping and building.

So here’s my own hastily jotted counter-list of the reasons to keep right.

It’s the American right that will sustain the war in Afghanistan, the right that will fight the administration’s overspending, the right that will resist paying for the spending in ways that cramp the future growth of the American economy.

It’s the right that champions competition in education, and it is the right that will prevent the undoing of welfare reform. It’s the right that pushes for color-blind laws, and against the abuse of the legal system for attorney gain.

It’s the right that resists, sometimes blindly but still rightly, overbearing attempts by government to direct the economy. It’s the right that sounds the alarm when government neglects public security.

It’s the right that anchors American society against fads and social experiments, the right that favors immigration policies in the national interest, the right that better respects the freedom of ordinary people to live their own lives and make their own choices.

Yes, the right is the home of a lot of junk thought and huckstering exploitation. It’s also the home of Milton Friedman and James Q. Wilson, Charles Murray and George Borjas, Richard Pipes and Robert Conquest, Tom Wolfe and Philip Larkin, Friedrich Hayek and George Stigler, Leszek Kolakowski and John Lukacs, Bernard Lewis and Fouad Ajami. I’ll offset Sarah Palin with Margaret Thatcher, Glenn Beck with Melvin Lasky, Pat Robertson with Richard John Neuhaus.

Is Charles Johnson too proud for that company? Come on back LGF – it’s when your team is doing worst that you are needed most.

The Headlines Review

August 30th, 2009 at 8:10 pm Comments Off

Napoleon Linardatos presents a humorous take on today’s headlines.

“As Internet Booms, the Postal Service Fights Back”

-New York Times, 08.28.09

The U.S. Postal Service plans to start its own email service. The users of the service will be able to send and receive emails every day except Sunday.

* * *

“Bernanke Victimized by Identity Fraud Ring”

-Newsweek, 08.25.09

The Federal Reserve Chairman, Ben Bernanke, became suspicious when his attempted online purchase of Suze Orman’s The Laws of Money was declined.

* * *

“Colorado wildlife experts get aggressive going after smart bears”

-Denver Post, 8.24.09

Bears found in Mensa meetings will be shot at once.

* * *

“GOP Offers Seniors Health Bill of Rights”

-Associated Press, 8.24.09

Article I. Congress shall make no law reducing the massive intergenerational wealth transfers instituted by our political opponents in the years past.

* * *

“Yahoo renews vow to fight Microsoft”

-Financial Times, 8.25.09

Yahoo’s CEO said “We shall fight them on the closed circuits, we shall fight them on the e-commerce platforms, we shall fight them on the copper and fiber lines, we shall never merge.”

* * *

“Anne Fine deplores ‘gritty realism’ of modern children’s books”

-The Times, 8.24.09

J. K. Rowling’s newest book Notes from the Hogwarts Underground will be out this fall.

* * *

“Iran puts leading reformers on trial over unrest”

-Reuters, 8.25.09

The dissidents are charged with disorderly contact and astroturfing.

* * *

“U.S. limits visas in Honduras, stepping up pressure”

-Reuters, 8.25.09

In an effort to improve its relationship with the Obama administration, Honduras plans to turn decidedly anti-American.

* * *

“Italy to Ask Libya for Help in Controlling Migration”

-Wall Street Journal, 8.28.09

If Libya refuses the offer, Italy plans to cut off the head of Gaddafi’s favorite camel and place it in the dictator’s bed.

* * *

“Robbers pretended to sell President Obama health insurance policies to invade Long Island home”

-New York Daily News, 8.29.09

The victims got wary when they were told that the first insurance premium payment would consist of the plasma TV, the kid’s iPod and the “really cute shepherdess lamp.”

Megrahi’s Release: Another Shoe Drops

David Frum August 30th, 2009 at 10:00 am 7 Comments

A story in the Independent on Sunday suggests that while the Obama administration was opposed to the release of the convicted mass murderer, it made clear that it was open to compromise – such as house arrest in Scotland – rather than implacably opposed, period.

US officials had “very reluctantly” backed a proposal to move Abdelbaset Ali al-Megrahi from Greenock Prison into some kind of high-security accommodation elsewhere in Scotland, senior government sources on both sides of the Atlantic confirmed.

Meanwhile, the U.K. government’s story that the release was a solo adventure of crazed lefties in Edinburgh continues to unravel. The Times reports leaked ministerial letters showing that U.K. Justice Secretary Jack Straw wrote to his Scottish counterpart two years ago to urge Megrahi’s release on national interest grounds, i.e. to accelerate an oil deal with Libya.

The British government decided it was “in the overwhelming interests of the United Kingdom” to make Abdelbaset Ali Mohmed al-Megrahi, the Lockerbie bomber, eligible for return to Libya, leaked ministerial letters reveal.

Gordon Brown’s government made the decision after discussions between Libya and B.P. over a multi-million-pound oil exploration deal had hit difficulties. These were resolved soon afterwards.

The letters were sent two years ago by Jack Straw, the justice secretary, to Kenny MacAskill, his counterpart in Scotland, who has been widely criticised for taking the formal decision to permit Megrahi’s release.

The correspondence makes it plain that the key decision to include Megrahi in a deal with Libya to allow prisoners to return home was, in fact, taken in London for British national interests.

Most of the disgrace in this matter should fall on Britain. Still, the yielding attitude of the Obama administration seems to have contributed to persuading the U.K. and Scottish governments that they had wiggle room to proceed as they wished, without too many consequences to themselves. If so, they look to have been absolutely right about that. London and Edinburgh have sent home a man guilty of the murder of 180 Americans, with so far as anybody can tell, zero negative consequences to U.S.-U.K. relations and only a few faint murmurs of “mistake” from the president and “disappointment” from the Secretary of State.

I think it’s time to stop complaining that the president no longer uses the phrase “war on terror.” Truly: the war is over as far as the U.S. and U.K. governments are concerned. Why pretend otherwise?

The Shifting Balance of Power

David Frum August 28th, 2009 at 11:13 am 1 Comment

Canadian Prime Minister Stephen Harper has just announced a new ambassador to Washington: Gary Doer, who will resign as the New Democratic Party premier of Manitoba. The NDP of course is Canada’s left-most party, although Doer is a relatively centrist NDPer as they go. Back when Republicans were important, Harper sent one of Canada’s leading conservatives: Michael Wilson, a close friend of George Shultz, and a legendarily tough on spending former finance minister. The steely-eyed Harper has apparently assessed however that the Dems are going to be running the show for some time. So he has suppressed his own inclinations and sent to Washington someone who can speak the language of Pelosi and Obama. Just another example of how the implosion of the GOP has ramifying implications for conservatives around the world.