Clinton's Legacy, a Few Thoughts

--Democrats often claim, quite rightly, that Clinton was better at cutting spending (both defense and non-defense discretionary spending) and cutting the deficit than Bush or Reagan. (Yes, Republicans in Congress helped out here but it is a Republican myth that Clinton was a spend-happy socialist from 93-95, the facts are that he didn't change the spending-level status quo during that time). One would think that liberal Democrats are therefore in favor of general spending cuts and deficit reduction. Are they?

--By the same token, why doesn't Bush get credit from liberal Democrats on the huge expansion of the welfare state he presided over? Will they come around in another ten years and realize Bush wasn't as bad as they thought, just like a lot of Republicans are coming around to the idea that Clinton actually gave them a lot of what they wanted?

--I lived through the Clinton years and I remember quit vividly that Clinton was often accused of being a closet Republican, of using Republican policy ideas, of being center-right in his economic policy, and all of this from the disillusioned socialist wing of the Democrat Party. Now they seem to cheer him for the results of his policies but when a Republican proposes much of the same they get attacked for it. I have no problem with criticizing a Republican hypocrite, but don't criticize Clinton for his economic policy in the 90s, and then praise him for it fifteen years later because of the results. That's hypocrisy too.

--This is just a hypothesis: could inadequacies in how we adjust numbers for inflation throw us far off the mark? Could Reagan-era spending levels be exaggerated because we adjust using the (flawed) CPI rather than using monetary bases? Hmmm......

--Democrats should not over-gloat. After all, Obama is making a decent showing in the Misery Index and is making Reagan and Bush's spending look like Clinton's.

How Socialism Happens

Read this article. This was posted on DemocraticUnderground to demonstrate to everybody how socialism beats capitalism. The headline of the thread was "stocks of socialist countries outperform USA" or words to that effect. I want you to read this cartoon because it is the framework of the point I'm about to make.

The whole article purports to tell professional stock traders, you know, those people whose entire livelihood depends on knowing how to buy and sell stock, that they've been doing it all wrong for decades, and that in fact American stocks are *not* among the best you can buy. Instead, they suggest that "socialist" countries like Canada (?) are better investment choices. It's worth breaking this article down to see how an otherwise rational adult can choose to believe in something like socialism against all facts and reason.

The first paragraph points to a study which allegedly shows that stocks in "socialized" countries perform better than US ones. This comes from a single chart comparing France, the US, and Japan for the past twenty-five years. The same paragraph includes that old canard about the last twenty-five years being some kind of libertarian, laissez-faire free-for-all, where Milton Friedman personally wrote all US economic policy. In reality, the opposite is true, the government grew, more and more money has been spent, more laws passed, etc. A few changes to the tax code here and there or the odd deregulation here and there is paltry evidence of a libertarian revolution. If you were in court and had to prove that statement, you'd be screwed because the proof isn't there.

They also include this study, bringing other countries into the mix.

Both studies have the same big flaw, which can be gleamed from reading this article on just the S&P 500 but the principles of which can be applied to the other studies. The long and short of it is that the first two studies do not show what the authors of these articles purport to show, they do not show that France, Sweden, etc. have had higher-performing economies over the past twenty or forty years. Even adjusted for inflation (using a different metrix for each country) they only tell one small part of a much larger story.

Stock markets are one indicator of economic performance, and among lay-people they have become *the* indicator of economic performance, but there is more to how stock markets perform (and how a country's economy has performed) than just prices. As the article above showed, if you leave out dividends and the possibility/certainty of reinvesting them, you come up with a false picture of how the stock market has performed over time.

The article tries to "balance" at the very end by quoting some left-leaning economist pointing out how these European gains in the stock market can be chalked up to market liberalization, but then balances *that* out by talking up all of the welfare state programs he likes.

There are a few other points to add, all of which are speculation and would require further research to develop:

1) For a long time, European economies were not as dynamic as America's. Because they had less economic freedom, companies at the top could stay huge without much fear of smaller competitors (I'm speaking broadly), whereas in America we have not only the entrepreneurial mindset but also the capital markets that can make a no-name company like MicroSoft or Facebook become a world-conquering giant in less than a decade. But some years ago, Britain, Belgium, France, etc. got into the act with markets for smaller companies. This could account for a large portion of growth.

2) "Government intervention" hasn't been defined and thus this study is nothing more than a bunch of somewhat-adjusted data, for what that's worth.

None of this will come as news to actual stock market traders and other financial people or economists whose job it is to be experts on the ups and downs of stock markets around the world. When your career is on the line, you do not have the luxury of misinterpreting data or relying on a shallow statistic or taking something from a study out of context or reading too much into one particular fact all for the sake of your political views.

(not to mention that almost all of the countries in the latter study on stock prices appear among the top countries on the Index of Economic Freedom--hardly socialist. Notice Cuba, North Korea, most of Africa, pre-reform India and China never showed up very high on stock market ratings)

But the main thrust of my post is that most leftists will not take the pains to understand what studies like this actually mean, whether they tell the whole story, or just generally learn more about stock markets and economic performance. Rather, their thinking doesn't go much further than the headline itself. People are always asking me "why do liberals believe when the facts clearly show the opposite?"

It's easy to believe something that isn't so if you can find one manipulated set of data showing that it *is* so, no matter what every other expert has to say or how misleading that particular study may be. I think a lot of people treat "studies" as a kind of voodoo charm to ward off ideas they don't believe in.

Okay, I Couldn't Resist

A good example of a "liberal Christian" being dead wrong, and highlighting exactly what's wrong with so many of them.

"As Christians of a progressive persuasion, we are very good at listening, at empathizing, understanding the other side’s hurt, at walking a mile in their shoes. We look to reach compromise, to make everyone happy, or at least leave no one upset. And this is a good thing, a Christ-like thing, that we should never lose."

Reaching compromise, trying to make everybody happy, and he's saying these are Christ-like things? Did Christ reach a compromise when He said the only way to the Father is through Him? Did He try to make everybody happy when He up-ended the traders' tables in the temple? When He said that families would be divided because of Him? When he incensed the religious authorities of the day by ministering to prostitutes and tax-collectors?

Jesus never compromised, He was unerring in His commitment to His Godly ethics, He could do no less.

The author of this blog goes on to talk about the coming schism in the Lutheran church over the ordination of openly gay, sexually active clergy. He claims that it's better to have a schism than to compromise on the Gospel itself, which made me think he was on the side of the conservatives. But no! In his deceived brain (I use the word "deceive" for a reason, let the reader understand) it is the dismissal of Biblical ethics on sexuality and its proper role that is adhering to the Gospel. He has been deceived into thinking he is remaining faithful to God but whatever he is being faithful to, it is neither God nor His Word.

Where the Christian Left Goes Wrong (Broad Stereotypes Ahead)

As a Christian, I can't dismiss any true part of the Body of the Church, but I can point out misguided or false teaching, and I am duty bound to point out dangerous teaching. I have my problems with some political crusades taken up by so-called conservative Christians but that is not the point of this post.

The problem with the Christian left is that, by and large, faith is just an affectation for them--an accent to their political beliefs, rather than a life-transforming relationship with Jesus. (I warned you about the broad stereotypes) Why do I say this? Because they so readily surrender any aspect of the Word of God that conflicts with what the secular authors of their political faith have written. Anything that embarrasses them in front of the Richard Dawkins of the world they want to get rid of, they want to be the crowd-pleasing, unoffensive Christian. Somebody who is unwilling to call a sin a sin.

They cherry-pick what verses from the Gospel they can to paint a hippy-like picture of Christ. Rather than provide a variety of links, you can just look for left-wing Christian sites and articles yourself. I've seen God's call to care for the poor and needy as "Biblical evidence" that God favors a large welfare state. This is no different from assuming that God wants the police to break into peoples' bedrooms at night to make sure they aren't touching themselves. In both cases you are taking something God said about our own moral behavior and turning it into government policy. There is simply no Biblical basis for that.

It is this itch for egalitarianism, socialism, collectivism, statism, whatever you want to call it, that forms the lens through which they read the Bible, if they read it at all. When you read a book through a lens, rather than with an open mind, an open heart, and lots of prayer, you simply see what you want to see, nothing more. You ignore what you don't want to see, you come up with reasons to ignore it.

"It was written for another time."

"We don't know who really wrote it anyway."

"You have to read it in context."

"I don't think it fits with the Jesus I know."

I have news for you, fellow Christian, if "the Jesus you know" is telling you that the Bible isn't really God's Word, then that isn't Jesus.

Subsidies or Tax Cut?

Notice how politicians call a tax rate reduction a "subsidy" when they want to poo-poo it, and a "tax cut" when they don't want to call it a subsidy? Cut taxes on people who aren't paying taxes to begin with, and it's a "tax cut" and how dare you call it a welfare handout. Cut already high (much higher than the global average) taxes on a business in America and those same politicians (yes, I'm talking about Obama and other Democrats) call it a subsidy.

The exact difference 'tween a subsidy and a tax cut can be subtle but there IS a difference and it's not just one of point of view. But that is not the subject of this post.

Rather I want to ask how in the world politicians and their followers get away with this? Despite what you've heard, the facts don't lie and oil companies already pay much higher tax rates than most other corporations. If anything it is the non-oil companies that are being subsidized. But trashing oil companies during a period of high gas prices always works for politicians.

But for how long?

While I'm at it, I'd like to ask the left a question. You oppose domestic drilling, right? I mean, most of you seem to. You claim that there is so little oil in this country anyway, it wouldn't make a dent in world oil supply and thus prices. Right? That's the argument I hear. So my question is: if there is such a trivial amount of oil in this country, why oppose domestic drilling? If you are right, oil companies wouldn't bother extracting this oil you are trying to protect, if the cost of extracting it is too high for it to be worth the bother.

It almost makes me think you're wrong and that there is actually much more oil in this country than you say. I mean, the oil companies are the people who want to drill, it's their money they want to put on the line to drill/sift/dig/whatever for this oil. Why would they push so hard for something that's of such little benefit to them?

Bin Laden Dead, Question for Obama Fans

I don't need to link to a story, I mean come on, it's all over the news. But I have a question to the Obama fans who are already saying things like "Obama did what Bush couldn't, etc." or "Obama gets Osama," etc.

My question is this; how? With all due respect to the President (and for the record, I don't hate him, I think he's a phony politician like all of the rest of them but I don't think he's evil or anything), how can this be attributed to him? I am not a military tactics expert, I doubt that more than fifty people alive right now fully understand how Osama was killed or even if it was on purpose.

But to give a politician credit for an action carried out by the military, well, hmm, how can I put this, I need to see an explanation of what discretionary actions by the President led to this happening. I say discretionary to mean, did Obama do something that other Presidents might not have? A hypothetical situation: if military experts saw their chance, knew where Osama was, and presented their plan to the President, would it have made a difference whether Obama or McCain was in office? There's also the very good possibility that the President was more or less a bystander whose job it was was to simply give the okay to proposals from the military brass.

I'm not trying to take anything away from Obama, if this kill was a result of a discretionary action or hiring by Obama, if he put the man in place who came up with the plan or something, then fine, credit where credit is due. To this day I can freely give credit to politicians I otherwise don't care for for the actions they took that I approve of. Nixon, opening trade with China, Carter deregulating airlines and finally becoming more sensible on monetary policy (he appointed Volcker), Clinton signing welfare reform bills and a variety of other free trade and free market initiatives he took. Yes, some or perhaps all of these can be explained as a politician making the best choice to maximize popularity with voters and not out of governing skills or ideology. Doesn't matter to me.

But getting back to the main point, I foresee in the coming months many many refrains of "Obama did what Bush couldn't do," etc. I would just like people to think a bit harder about that. Is it really appropriate to credit everything that happens under a President's watch to that President? If somebody in the military had, say, murdered a civilian, do we give Obama the blame for that? Or do we only credit him with the good things and chalk up the bad things to happenstance? Republicans do the same thing. Lots of people just look for reasons to praise "their guy" or trash "the other guy." Doesn't make sense to me. Politicians, at their best, are just cogs. I don't care what brand the cog is or if it agrees with me, as long as it does what it's supposed to do.

Doctor Shortage

A Cato guy wrote this article on the growing doctor shortage. I sense that many people will read it, get the gist of it, and say "well the solution here is easy, the government should just pay more to providers."

A shallow, stage-one analysis makes the suggestion seem okay, but a deeper look reveals that whether the government is under-paying or over-paying providers, in both cases we have essentially the same thing going on: the decisions of panels of government bureaucrats setting prices are taking the place of the normal, market-based, supply-and-demand determination of prices (of course, given the existence of occupational licensing and a host of other government interventions into the health care industry, we aren't even close to a free market system, Medicare or not).

As it exists right now, the government pays doctors too little, which means that to be profitable (or to break even) providers must charge more on their private patients--those with private insurance or people who pay out-of-pocket. Or opt out of the government system as much as possible.

If the government decided to start paying doctors more, it would attract more doctors to the government programs and do something towards easing the (artificially-created) health care labor shortage. But the story doesn't end there, at stage one. This means doctors will change what they charge private patients. As government reimbursement per service went up, doctors would be able to charge private patients less as a result and the prices paid by both welfare recipients and private patients would be closer to the same dollar amount per service. But this would cost tax-payers more and create friction there.

The government could also overpay providers and have two choices about what to charge private patients, either extract the same amount of money from them as they get from the government (which would make people unhappy, imagine if an envelope company said "sorry, we get dollars a box from the government now, so now we're charging you ten dollars a box instead of the usual three"), or charge them less than they charge the government. That is a politically unsustainable situation (to say nothing of the economics). Voters would see they are being ripped off by providers and not stand for it. The government would pay less to providers.

The third option is for the government to not set prices at all, but to pay whatever providers charge. The government would be saying to providers "just think of us as another customer, and whatever you charge them, charge us." This might actually work if we had a properly functioning health care industry that could be more receptive to consumer demand and hence prices would be more liquid, but what with the health care industry being one of the most tightly regulated and inefficient industries in the country, I don't see it happening. If the government made it known that it would pay whatever providers want to charge, then providers, knowing they can exploit the tax-payers, will do so, and overcharge.

Another option, the best option (for as long as we have some kind of socialized medicine), is for the government to give every recipient a dollar amount per year, possibly with some sort of bonus for using fewer dollars, and providers simply have to work with that. Say, for example, $4,000. Then providers know they can't extract more than that per recipient, they will have to be more economical and less likely to mandate high-cost, low-return tests, treatments, etc.