More Complaints!

Let’s spend a moment discussing how awful this administration has been so far:

(1) The new “corporate loophole” tax plan is imperialistic and stupid. No other major economic power purports to tax earnings that were made in other countries. Obama basically just declared NATO allies Ireland and the Netherlands to be rogue states, for the sin of deciding to have low corporate tax rates. Then Obama attacks check the box, which while unfair, still only hurts the country where the corporate profits were made in the first place. Meanwhile, Obama proposes nothing for the biggest international corporate tax problem, “transfer pricing”, where corporations use crafty and unrealistic pricing mechanisms to shift profts from domestic parents to foreign subsidiaries.

(2) The new “cap & trade” scheme that Obama delegated to Henry Waxman, among the most liberal Congressman, is a joke that will do nothing to solve global warming. Instead of auctioning off the permits, Waxman has now proposed that the permits be handed out for the next 10 years. What will these limits be set at? If Europe is any guide, they will be set at a level higher than current emissions. In short, cap & trade will be the equivalent of CAFE - a way for Democrats to claim they are doing something when in reality they are doing nothing. Meanwhile the planet will continue warming. Instead Democrats should line up behind Representative Bob Inglis’s (R-SC) plan to tax carbon based emissions, and offer a corresponding cut in payroll taxes. Car companies and utilities have lobbied for this plan, in part because it’s the best way to make “green” cars profitable.

(3) On higher education, Obama has proposed moving a host of new higher education spending into mandatory spending. Mandatory spending is essentially permenantly out-of-bounds for budget trimming, which is unfortunate, because 63% of the current budget is mandatory spending, and this % rises each year as seniors retire. Yet instead of attacking the bulk of the budget, Obama proposes that even more of the budget be off limits to reasonable spending cuts, and instead he only offers symbolic spending cuts in the 37% and shrinking of the rest of the federal government. It’s insane. It’s positively Potemkin.

(4) The one thing we have heard on social security is that Obama has hinted that he wishes to means-test social security benefits. This is not a bad idea as part of a comprehensive solution. But how do you means-test when the primary way that the government means-tests in general is to look at income, and seniors don’t work and have no income? Their only income is 401-K and IRA distributions, as well as defined benefits programs that are steadily disappearing. So basically, as far as I can tell, Obama will effectively confiscate Americans’ 401-Ks, just not as brazenly as Argentina just did.

What If?

I have just finished a fascinating set of essays published under the title "What If?" The book provides a set of hypothetical counterfactual histories that would have occurred if military history had turned out slightly differently. For example, if the Assyrian army outside Jerusalem had not succumbed to a mysterious disease in 701 BCE? Judaism probably would have disappeared, and derivative religions Christianity and Islam would never have been created. If the Greeks had not fought and won at Salamis, the great flowering of Athens would never have occurred. If Augustus's legions had not been slaughtered by Teutonic tribes, Germany would have had a history of Roman occupation, and possibly a different conception of the purposes of warfare and imperialism in the modern age. If the Romans had been victorious against the Visigoths in 378 CE at Adrionople, the Western Roman Empire may have remained intact, and the Middle Ages may never have occurred. If Charles Martel had lost to the Islamic invaders at Poiters in 732 CE, the more advanced Islamic society of Spain may have spread to the rest of Europe, and Islam would be the worldwide religion today. If Genghis Khan's son had not died in 1241 CE, the Mongolian army in Eastern Europe would have leveled every European city, and Europe would have been relegated to a perpetual Dark Ages. If the French had heeded the Pope's call to fight the Turks in the Balkans in 1572, the Balkans may have attained consolidated rule earlier, and WWI would not have had its sparkplug. If the winds had blowed differently in 1588 CE and the Spanish fleet had adopted more modern tactics, the Western hemisphere would all speak Spanish. If Benedict Arnold had not been so heroic and ingenious at Saratoga or Lake Champlain, or if Washington had actually attacked in Boston or Brooklyn in 1776, the British would have squelched the American Revolution. If Napoleon hadn't invaded Russia, a French continental system would have taken hold rather than the Treaty of Vienna's defense of the ancien regime. If the South had won at Gettysburg, America would be split into two countries and would not be the predominant world power today. If Germany generals had followed through on the pre-war plan in 1914 CE or had Britain not inexplicably entered the war, France would have been decisively defeated, there would have been no punitive Treaty of Versailles, and no Nazism. There also might have been no Russian Revolution. If D-Day had failed or Japan had won the Battle of Midway as they should have the whole course of the 20th century would have been vastly different. If Ike hadn't overruled Patton and U.S. troops had marched the Russians back to Moscow in 1945 CE, Eastern Europe would have been saved the dictatorships of the 20th century. If Chiang Kai Shek had accepted a Communist state in Manchuria in 1945, China would not have gone Red in 1949, and there would have been no Korean or Vietnam wars.

All of this is of course hypothetical. Some events would have turned out differently than we can guess now. But what is clear is that a few pivotal military events have played profound roles in how we live our lives today. If the Persians had won at Salamis, Western notions of individualism, liberty, and democracy may never have developed. If history is any guide, it is of the utmost importance for the world's most moral powers to have the most powerful and adaptable militaries.

Questionable

The Obama administration has been somewhat cynical in its early days. The reasons:

(1) He closed the nuclear waste storage facility at Yucca Mountain, even though he has proposed no alternative. Thus we will have another "not in my backyard" fight among the states, even though Yucca was an ideal storage point. Obama closed the facility exclusively due to a campaign promise designed to win Nevada's votes.

(2) He promises to close the detention/justice system at Guantanamo, even though he has no offered no alternative. Senior administration officials admit that Guantanamo was well-situated to administer fair justice, and that it was shut down solely for symbolic reasons. But where will the enemy combatants go? A humongous 10 agency review is making decisions for each individual detainee. The key question in each case seems to be the extent to which the government could win a case in an Article III federal court. And this is a fairer system: the government only trying a guy in an Article III court when they know beforehand that they'll win? Meanwhile, our allies have been just as reluctant as before to take in their detainees held at Guantanamo. Chances are, the majority of detainees will eventually be tried in military commissions, just at an unannounced location other than Guantanamo. Which will set up yet another "not in my backyard" fight.

(3) He leads his party in attacking Rush Limbaugh as the leader of the Republican party, a poll-tested partisan tactic that makes no sense. We are in the midst of a serious economic crisis, and the Democrats are obsessed with a partisan-driven sideshow. I am no fan of Rush, but is is ridiculous to call a radio show host the leader of a party that has no single leader.

(4) He declares that we may be in a perpetual Depression unless we pass the partisan-driven "stimulus" bill, which was basically the pre-recession Democratic agenda masquerading as a fiscal stimulus. We were already running a $1.3 trillion stimulus for '09, stimulus enough. Yet Obama felt it necessary to pass nearly a trillion in Medicaid, enhanced unemployment, welfare, Davis-Bacon union funding, and government handouts.

(5) Even though Obama declared we may never get out of this recession that he alleges he inherited, his budget just declared that the economy will grow at 3.2% next year, and 4% perpetually after that. The cynical reason underlying this optimistic projection is to make his massive spending agenda on health care and his favored green industries appear fiscally viable.

(6) Obama added on a huge new tax on any household with high ordinary income in any given calendar year, a tax he did not announce during the campaign: reducing the value of personal deductions. If he really believed that the government needed more money, why did he not announce this during the campaign? This is yet another discouragement for people to seek out higher education, to marry, to trade off hours, stress, training, or other non-income related job perks in exchange for money.

(7) Obama is still pressing forward with a massive cap & trade carbon system that appears to near-perfectly mimic a carbon tax. This carbon tax is deliberately designed to bypass Congress, even though the House has the exclusive power to draw up new taxes. The details of this system have yet to be announced, but there is no indication that this system will work any better than the failed European cap and trade system.

(8) Obama has promised universal coverage, yet has offered no plan that goes after the primary drivers of health care cost inflation, the third party payer system and the employer only health care deduction. Instead, Obama has only offered easy solutions like preventative care and drug reimportation, small matters that will have only minor effect on health care cost inflation.

(9) Obama repeatedly declares welfare payments to be tax cuts for households with zero income tax liability.

(10) Even if we believe all of Obama's irrationally rosy budget assumptions, we will still be running massive fiscal deficits for the next 10 years. Unfortunately, the cost of government will only rise due to the Boomers retiring. If Obama were responsible, he would propose massive spending cuts and massive tax hikes to account for the fact that Medicare and Social Security payments will be rising as far as the eye can see. Instead we have heard no solution to Medicare and Social Security.

(11) Obama promised $2 trillion in spending cuts. The vast majority of these were phantom - he strangely suggested that we would be spending surge-level military expenditures in Iraq indefinitely, even though the last administration signed an agreement with Iraq that would withdraw all combat troops by 2011. These are most of his "spending cuts". The other major portion is cutting farm subsidies. The Bush administration tried to cut these in 2007-2008. Obama voted against these in a cynical bid to win the votes of farm states.

(12) How can we have the promised sustained diplomacy with Iran when Iran is a year away from the nuclear bomb, by many estimates? Is this just a show? Will Obama actually participate in the inevitable future military strikes on Iran?

(13) Obama has gone around the country complaining that Americans were living high on the hog and borrowing too much from the Chinese. Then Obama's budget comes out, and he forecasts that we will be running half-trillion to trillion dollar deficits as far as the eye can see, even though he forecasts that the economy will perpetually grow at 3-5%. When we run deficits, we invite in foreign investors such as China to finance it. When foreigners invest in our country, this drives the current account deficit, which in turn drives over-consumption. Thus Obama has diagnosed a problem, yet offered no solution. Again.

(14) Obama has now come out firmly against the free trade agreements that his predecessor signed with our allies. No longer will we trade freely - instead every agreement will be subject to vetting by the union and environmental special interests. To appease the Democratic Party's special interests, our nation will now imperialistically demand to set other countries' union and environmental policies. This after arguing all campaign that we need to firm up our alliances, rebuild our popularity, and be more multilateral.

(15) Obama lectures the Big 3 that they need to be economically viable, and then he lectures them some more that they need to be more environmentally conscious, even though the Big 3's least profitable cars are its cars with the highest miles per gallon. Thus, GM spends billions in developing the Volt, which at best will be an affluent family's 3rd car.

5 Greatest Superbowls Since 1985

What are the 5 greatest Superbowls since 1985? (when I started watching football) This is my criteria: the game itself must be close and exciting, the game should have some form of epic quality about it, and there should usually be some independently interesting storyline surrounding the game. And while 1987 and 1991 are my favorite two Superbowls solely because the Redskins won, I'm excluding them because the games were routs.

First, a nod to the honorable mentions. 1988 was a great Superbowl where Joe Montana's 49ers narrowly defeated the Icky Shuffle Cincinnati Bengals. And 1990 was a close Superbowl where the Parcells Giants grinded out a boring win over the no huddle Bills. While these were great games, this is an elite list.

5. 2003 - Patriots defeat Panthers.  The 2003 Superbowl featured numerous lead changes throughout the 4th quarter, and many epic pass plays. The game was only won in the last moment of regulation. Further, this game featured the most epic halftime show ever, Wardrobegate.

4. 2008 - Steelers defeat Cardinals. Last night's game was outstanding. Roethlisberger's heroics and improvisation on the final drive are already the stuff of legend. Warner's phenomenal game should cement his HOF ticket. Fitzgerald and the Cardinals legendary WR corps fought hard. What a 4th quarter.

3. 1997 - Broncos defeat Packers. A tremendous upset where the NFC's nonstop run of 13 straight Superbowl wins was finally upended, and John Elway finally won a Superbowl after 3 humiliating losses. This game came down to the wire, and Favre's mighty defending Superbowl champions could not get it done.

2. 1999 - Rams defeat Titans. What a game. The Rams dominated the first half, then the Titans tied things up, then Warner's bomb to Bruce late in the 4th quarter, then McNair pulled off one of the greatest Superbowl plays ever, only to have the drive come up 1 yard short as time ran out. This game was a fascinating study in contrasts between the plodding Titans and the high-flying Rams.

1. 2007 - Giants defeat Patriots. This game takes first based on its epic nature. The Patriots entered the game seeking to become the first 19-0 undefeated team. They also were caught cheating earlier in the year, so the entire world rooted for the underdog Giants. There were two thrilling late 4th quarter drives, the Manning to Tyrell miracle, then the beautiful Plaxico fake-out of Hobbs. Easily #1.

The Golden Age of Men's Tennis

We have quietly entered a golden age in men's tennis. Gone is the era where the big servers dominated and the rallies usually lasted a few shots. In its place we have the best men's tennis rivalry since the 80s in Nadal/Federer. Each man has a unique playing style. Nadal puts more spin on the ball than any other player in history. Federer has unusual grace and control, and has an uncanny ability to rise to the moment. Below this elite duo, youngsters like Djokovic, Tsonga, Simon, and Murray keep things interesting. The best part about the modern men's game is the long rallies and the constant breaks of serve. It used to be that if one guy broke serve, the set was basically over. Nowadays, sets sometimes are still hotly contested when a guy goes up two breaks. I think one reason why tennis isn't more popular in America right now is the lack of top men's players. But Roddick has just fought his way into another Grand Slam semifinal, and Blake continues to be among the more entertaining players in the sport. Further, just because a player grew up across the pond, does this mean we can't root for him or enjoy the matches? We are smack dab in the middle of the primes of two of the top 5 to 10 players of all time. Outstanding.

Why Iraq?

Many people are obsessed with shifting U.S. troops out of Iraq. While I disagree with this view, it is perfectly sensible. But what doesn't make any sense is why someone would favor redeploying all Iraq-based U.S. troops, and yet still favor massive U.S. military deployments in South Korea, Japan, Germany, and Turkey. Iraq is a strategically vital country in the heart of the Middle East. It is no longer a war zone, and our troops are vital towards maintaining a still-fragile peace between long-bickering Shiites, Sunnis, and Kurds. Out of all places in the world, why would we withdraw our troops from this essential spot? If we really want to bring troops from a foreign country back to the U.S., we should consider the 35,000 troops that we have in Japan, or the 36,000 troops we have in South Korea where the majority of residents appear to dislike the U.S. But why Iraq? Obama's spokesman yesterday was still speaking about a 16 month drawdown of all U.S. troops except for a vaguely-defined "residual force". This just baffles me. If our troops are no longer needed in Iraq, by all means we should redeploy them. But why continually focus on the troop drawdown based on plans that were formulated a couple years ago when Iraq appeared doomed to civil war?

More Details on Gitmo

The Washington Post ran an interesting article this morning providing more details on Obama's "plan" to close the terrorist facility. I put "plan" in quotes because there isn't much of a plan concerning what to do with the 245 combantants currently detained at Gitmo. Instead, a separate commission will classify each detainee into three categories: releasable, triable, or non-triable. Of course, the Bush administration had been trying to release a number of detainees for some time, but their home countries refused to take them. This unfortunate situation will not change. One detainee who was released has since emerged as a leading Al Qaeda figure in Yemen, the site of the USS Cole bombing. One hopes that Obama's commission will be more careful about releasing detainees, but his campaign rhetoric suggests otherwise.

It is unclear how many detainees will fall under "triable" and "non-triable". I seriously question the U.S. domestic criminal courts' ability to handle terrorist trials. I followed the Zacarias Moussaoui "20th hijacker" trial closely in the Eastern District of Virginia, and Moussaoui made a mockery of our court system with his incessant rantings, his frequent firing of his defense attorneys, and his non-stop threats and disrespect towards the court. This is the model that Obama envisions for other terrorists?

Obama has concluded that some terrorists will be "non-triable", meaning that they are too dangerous to be released, but the government will be unlikely to win a trial in domestic courts. But this raises precisely the same issues that people complained about so bitterly during the Bush Administration. Basically, the government will only try terrorists where they know they can win, and they will not try terrorists where they think they will lose. Instead, these terrorists will be tried before some form of military commission. Or in other words, they will be tried pursuant to the exact same procedure and forum that the Bush administration established and Congress agreed to by an overwhelming majority. So much for change.

My guess is that the greatest effect all of this chicanery will have is refocusing our anti-terrorist agencies' priority away from preventing terrorist attacks, and towards building a prosecutable case against terrorists that we already have in custody. We have seen this model before during the Clinton era. In 1996, Bill Clinton had the chance to apprehend Bin Laden in Sudan, but he turned down this golden opportunity because he believed that we did not yet have sufficient evidence to convict Bin Laden in our court system. To be fair, Bin Laden had not yet established the bulk of his terrorist operation. But imagine how many lives would have been saved had we had more sensible anti-terror priorities back in the 90s. Yet we are returning to this 90s mindset today.

Questions Based On Obama's First Day

(1) Roubini estimates that the U.S. banking system is currently insolvent, meaning that it has more credit losses than capital assets. This is currently the most pressing problem for our country. How do we fix this? How would a "bad bank" / new RTC value toxic banking assets, when the current owners of these toxic assets don't know how to value them?

(2) Everyone wants to close Gitmo. The question is: what do we do with the dozens of truly dangerous prisoners there? Do we try them in federal court, and risk more Moussaoui-like mockeries of our criminal justice system? Do we open a new Gitmo on American soil, risking another NIMBY quarrel among the different possible new locations? The best solution is to establish a new National Security Court, but without the due process or burden of proof requirements of our domestic criminal system. But is it even constitutional to set up a parallel criminal system yet without our constitutional protections? Would a Goldberg/Kelly interest analysis provide new guidelines for these hearings?

(3) You've spoken about entitlement reform in the abstract. Do you mean it? How will we cut senior benefits?

(4) You have now eliminated enhanced interrogation and rendition. But what happens the next time that a prisoner like KSM with knowledge of imminent terrorist threats refuses to talk? Are the deaths of thousands of innocents really worth the temporary suffering of one terrorist? Certainly any interrogation approaching torture should never happen based solely on retribution, but how is it moral to not save thousands of lives based on inflicting temporary discomfort on one person? If these enhanced techniques are truly ineffective then we should not use them. But the public evidence available suggests that they have stopped numerous terrorist attacks.

(5) The employer-based health insurance system is broken. The expansion of SCHIP to include households well above the U.S per capita income indicates a movement towards the single payer system. Is this where our health care system is headed? If so, how will this system hold down skyrocketing health care costs? Electronic health records, weakening drug patent protections, and preventative care will have minimal effect on health care cost inflation. What tough choices do we have to make on health care?

(6) How will you raise the price of carbon-based fuels when you have explicitly ruled out a gas tax? How can you bemoan the unitary executive when your most likely plan involves a massive new carbon cap regulatory regime that deliberately avoids congressional approval?

(7) Why will direct U.S. talks with North Korea work better than multilateral talks that include every power in the region (Russia, China, Japan, South Korea, U.S., North Korea)? Why would we deliberately exclude China, the one country that actually has any leverage over North Korea?

(8) Why would direct U.S. talks with Iran be any more successful than the ongoing, U.S. supported British/French/German/UN talks with Iran?

(9) Why will this round of Israeli/Palestinian peace talks work any better than Clinton's Camp David, Bush's 1st term Roadmap for Peace, or his 2nd term Annapolis Accords? How can any peace talks progress when Abbas has no power and no popularity?

Cult of Personality

North Korea's founding dictator Kim Il Sung justified his tyranical rule based on the philosophy of juche. Unfortunately for the people of North Korea, juche never meant anything. It was just a bunch of vacuous verbiage that sounded nice, but ultimately meant nothing. The real political philosophy underlying Kim Il Sung's rule was a vast cult of personality exalting Kim Il Sung as the Great Leader.

This weekend in DC would make Great Leader proud. I sat amidst crowds at Obama's "Day of Service" chanting "Fired up! Ready to go!" Outside, vendors at RFK sold Obama calendars and air fresheners. A concert Sunday was one long lovefest for Obama, and every time his picture was shown on the jumbotron, the crowd squealed with delight. I have never seen anything quite like it in this country.

Unfortunately, Obama's cult of personality has provided a perfect substitute for a lack of a coherent political agenda. Obama is all for hope and change, but there is not much beyond these bromides. The inaugural address was a prime example. Obama stated that we as a society needed to have the courage to make hard choices, but he declined to concomittently state what these choices actually are. What are they? Raising the gas tax? Cutting senior benefits? Making individuals bear the cost of their health care choices to reduce health care costs? Who knows? In this sense, Obamaism is a modern democratic version of a cult of personality - political popularity based not on a political philosophy, but on the charisma of one man. We'll see how far that takes us.

The TARP Miracle

Few bills have been derided quite as much as TARP, and yet few programs have been more spectacularly successful. TARP has been variously criticized as a massive bailout for irresponsible banks, huge deficit spending, and as being woefully non-specific. All of these criticisms are valid. Yet TARP is largely responsible for averting the collapse of the U.S. banking system. One common criticism of TARP is that the banks are just sitting on the money. Of course they are! Worldwide collateral requirements were raised for banks. Did we really want them all chasing scarce capital at the exact same time in a desperate bid to avoid insolvency? This is exactly what was happening in October '08 prior to TARP's credit infusion into the banking sector. As a direct result, the TED spread between bank-bank lending and t-bills have returned to normal rates from historic highs. Another common criticism of TARP is that it deviated from its original mission of buying MBSs. There's a good reason for this - it turns out there is no good way to price MBSs because each bundle contains a different set of structured securities, all with different and uncertain valuation. Paulson took a lot of heat for changing course, but it turned out to be a sagacious maneuver.

The success of TARP is in marked contrast to the heinous stimulus bill that Congress just passed. Thanks Congress for the $1 trillion in deficit-financed binge spending that I will have to pay back throughout my lifetime. The government spending/printing money indiscriminately will not stop housing depreciation, stock market freefall, mass layoffs and unemployment, or tepid consumers, and certainly not the vicious cycle currently spiralling between these different factors. Instead, I would favor steps that go directly at the problems. To combat foreclosure issues related to the insane spread of option ARMs over the past half decade, the federal government should buy bad mortgages from banks and replace the original terms with a flat 5.5% rate that no bankruptcy court can disrupt. To combat mass layoffs, the government should eliminate the employer-paid portion of the payroll tax and pass a variation of the Wyden health care plan to shift health care costs from employers. This step would also help stem the insane cost of COBRA. To preserve liquidity as a result of stock market collapse, the government should raise the capital loss from deduction from $3000 annually to $15,000 annually. To combat the perverse incentives unemployment benefits provide, the government should replace the weekly benefits that are dependent on not working to a one-time unemployment lump sum payment.

All of these steps will surgically strike at the root of our economic problems, as opposed to the traditional Democratic tax & spend agenda masquerading as an economic stimulus. The silliest part about this alleged stimulus is that fiscal policy is automatic to a great extent, because an economic downturn will automatically result in increased government benefits and decreased government revenue.

Ultimately, TARP's success is difficult to recognize because it prevented a calamitous event that otherwise would likely have occurred. Yet because it is impossible to know with certainty that a banking collapse would have happened absent TARP, TARP does not get the credit it deserves. In this sense, it is similar to other controversial Bush initiatives like the PATRIOT Act, warrantless wiretapping, aggressive interrogation, rendition, and Gitmo - they all are necessary evils designed with the purpose of preventing a greater calamity, in this case another devastating attack on the U.S. These policies all were successful in accomplishing their primary purpose. Yet they are all unpopular, in part because it is impossible to know what would have happened had these initiatives not been in place.

Overrated and Underrated Presidencies

Overrated Presidencies

FDR

• Imprisoned thousands of Japanese-Americans solely on the basis of their ethnicity.
• Tyrannically ignored the two-term presidential custom that was originally established by Washington, an act widely credited as a vital consolidation of America's young democracy.
• Attempted to defenestrate an entire branch of government by packing the Supreme Court when they failed to yield to his unconstitutional aggrandizement of the federal government.
• Turned away Jewish refugees; failed to bomb concentration camps.
• Acquiesced to a half century of totalitarian governments in Eastern Europe by failing to take a tough stand at Yalta.

Jefferson

• Single-handedly caused economic depression when he unilaterally cut off trade with Europe even though the U.S. had an export-based economy.
• Attempted to defenestrate judicial branch by impeaching and ignoring any Federalist appointment.
  
• Violated own constitutional principles in signing Louisiana Purchase, even though his highest oath was to uphold the Constitution.
  

JFK

• Concealed debilitating health conditions from the public.
• Nearly led nation to nuclear obliteration, even though ICBM's made nuclear missiles in Cuba redundant.
• Presided over disastrous Bay of Pigs catastrophe.

Madison

• Submitted Declaration of War to Congress even though it appears he did not favor war.
• Failed to sufficiently protect Washington DC from British attack.
• Failed to hold generals accountable in disastrous Canada invasion in 1812.

LBJ

• Ruined U.S.'s central role in Bretton Woods international system by taking U.S. off gold standard.
• Created ruinous government overspending through Great Society, Vietnam War, and continued Apollo expenditures.
• Oversaw failed Vietnam military strategy.
• Failed to implement successful social programs to coincide with Civil Rights Act.

Wilson

• Primarily responsible for modern regime of over-legalization in international law, which today primarily serves to provide moral and legal justification for autocrats to remain in power and genocides to occur unabated.
• Conceived League of Nations, which possessed no sovereign political or military power and was incapable of independently preventing another outbreak of war. Insistence on League of Nations resulted in the failure of Congress to pass the Treaty of Versailles, and the imposition of a victor's peace on Germany, planting the seeds for WWII.
• Insistence on ethnic self-determination led to breakdown in polyethnic nation-states.
  
• Failed to abdicate power when he was medically incapacitated, leaving the nation without a president at a crucial moment in history.
• Won reelection in 1916 on the basis that he had "kept us out of war", then unnecessarily declared war in 1917 on dubious grounds, leading to hundred thousand American war deaths.

Underrated Presidencies

Fillmore

• Averted Civil War by sprearheading Compromise of 1850, after it flagged under President Taylor. Fillmore even game up his ardent abolitionist principles because he values the United States and union.

Grant

• Took hard line against KKK
• Backed radical Reconstruction which was on its way to integrating African-Americans into broader society and ending racial discrimination, until it was dismantled after his administration.
• Attempted to bring through Lincoln's legacy of a peaceful re-integration of the South into the union.
  
• Not responsible for scandals in his administration.
  

Nixon

• Opened relations with China, setting China on course of modernization.
• Successfully negotiated peace with North Vietnam.
• Established Medicare, which at the time was affordable program.
  

Hoover

• Established new benchmark in being open to press.
• Enabled prosecution of gangsters.
• Tremendous conservatonist.
• Created antitrust division in Justice Department.
• Vastly increased size and nature of government to combat Depression, but Smoot-Hawley, Fed's monetary contraction, and misplaced desire to balance budget doomed recovery efforts.
  

Raise Taxes

Both Republicans and Democrats are regularly proposing seriously flawed tax proposals. The reason is that neither party has been willing to grapple with the nature of the skyrocketing costs of Medicare and Social Security, which is caused by our aging demographics and health care cost inflation.. As had been well documented, Medicare and Social Security are taking over the federal government. Together, mandatory payments (of which Social Security and Medicare make up the vast majority) now take up 63% of the federal budget, up from 35% 25 years ago. And they will only grow larger.

To be clear, it would be foolish to raise taxes right now. We are in the midst of simultaneous crises in housing, consumers, businesses, the employment market, assets, and debt. But at some point in the next decade, we will either have to sharply raise taxes, sharply reduce senior benefits, or more likely, do both. And neither party has owned up to this fact.

The Democrats are under the impression that we can solve our long-term fiscal issues solely by raising marginal tax brackets on the "rich". By "rich", Democrats mean any household with high present calendar year ordinary income before taxes and after deductions. But even if this plan is enacted, it only amounts to $50 billion a year. This is nowhere near the trillions each year that need to be raised. The Republicans are not much better. For them, we should still be pushing tax cuts on capital gains, ordinary income, estates, and corporations. But tax cuts absent meaningful long-run spending cuts are feckless because we have to pay for our entitlement programs somehow.

Ultimately, we should operate based on a set of fair, objective principles going forward to sort out this mess. First, we must prioritize long-term economic growth. Our budget issues become much easier to solve when the pie is expanding, and it is unfair to burden future generations with a lower quality of living. Second, we need to reconsider our excessive senior benefits in light of this question: would we ever set up these programs to look like this today if they did not have 80 years of inertia and the backing of the AARP and a voting majority of seniors in Florida? Third, we need to carefully consider which ways of raising federal revenue are the most economically efficient. Fourth, we need to equalize the burden of different forms of income taxation. Fifth, we need to think carefully of which taxes help our long-term fiscal burden, and which ones hurt it.

These are my admonitions to the two parties:

Democrats: (1) Stop calling subsidies to households without income tax liability tax cuts. They are not tax cuts. They simply reduce payroll taxes, which are tied directly to later-life social security benefits. But since the Democratic payroll tax cuts do not effect later-life benefits, they do nothing to solve our long-term fiscal issues. (2) Be willing to cut senior benefits. We will need to have some compromise here. (3) Come up with ways to raise revenue besides raising the top ordinary marginal tax brackets – it's not enough federal revenue to make a difference, and it does not hit the truly rich who defer income, hide income, set up personal corporations and take massive corporate deductions on income, or recharacterize ordinary income as capital gains. ( 4) Stop calling for universal health care and tax cuts for 95% of Americans, and then fail to mention the need to make tough choices to stop health care cost inflation or confront entitlement spending. (5) Start taxing health care benefits – it can raise a lot of income and stem health care cost inflation. (6) I appreciate that Obama just mentioned that the long-term federal budget is untenable. Obama's solution was to not mention any specifics, and then to delegate this problem to a McKinsey partner to figure out. But we are never going to deal with runaway Social Security and Medicare spending through technocratic machinations. We have tough choices to make as a society if we are to continue our role as the world's most dynamic economy. These are choices that only a popular president will be able to push through. We just so happen to have a popular president with huge congressional majorities and a gift for articulation. Will he have the courage to do what everyone knows is necessary?

Republicans: (1) Stop opposing all tax hikes per se, when you don't support any spending cuts. If you still do want tax cuts, propose equivalent spending cuts. (2) Be willing to raise taxes on taxes that don't punish and deter hard work and higher education – specifically the gas tax, the estate tax, and excise taxes. There is no reason to obsessively focus on eliminating the estate tax – there is a huge exemption in place already, wealthy heirs are not a particularly worthwhile constituency, and estate taxes' main distortionary effect is just subsidizing a huge estate planning industry . (3) Be willing to equalize taxes across different forms of income. There is no reason to prioritize capital gains and housing appreciation income above ordinary income. (4) Focus on special interest personal deductions – there are billions that can be raised.

Not So Wiztacular

This Wizards season is clearly lost. What next? The answer depends on two unknowns. First, the Wiz need to know what Gilbert Arenas is capable of. If he comes back as one of the NBA's best players like he was from '05-'07, the whole calculus changes and the team should focus on winning a championship immediately. If he comes back and is mediocre, the team needs to scrap everything and rebuild. Second, the team needs to develop its youth. Nick Young, McGee, Blatche, Pecherov, and D-Mac all have the potential to be rotation players on a championship team. We need to know whether these guys have the capacity to reach their potential, and the only way to know is by giving them playing time. Can Nick Young build on his impressive offensive arsenal by learning how to pass and play defense? Can Blatche ever develop a modicum of consistency? Can McGee learn how to not get pushed around the paint? Can D-Mac complement his leaping ability and hustle with a jump shot? Can Pecherov play? Can Crittendon develop into a rotation PG? There is only one way to find out the answer to these questions, and that is to play the young guys, and to sit declining veterans like Thomas, Songalia, Stevenson, and Mike James.

If Arenas comes back gimpy, or if the youngsters are not developing, the Wiz need to start over, trade Jamison and Arenas, and start building cap space. But if things get back on track, the Wizards can be truly dangerous next year, particularly if they add a star like Blake Griffin in this year's unfortunately weak draft. The Wizards potentially have the talent to compete for a championship. Butler and Jamison are perpetual borderline All Stars. Haywood was outstanding last season. Arenas played 3 seasons worth of All NBA ball. But there are a lot of unknowns sitting on the table, and we need to solve these riddles to find out what the team's strategy should be going forward.

The Wizards' goal should be winning a championship. The last 25 years of NBA history has shown that to win a championship, you need a 1st team All NBA caliber player, and you usually need to surround your superstar with an outstanding supporting cast, usually with at least 1 other All Star. The only exception to this rule has been the 2004 Pistons, who made up for their lack of superstar with 5 borderline All Stars in the starting lineup. Thus, as a general matter, NBA teams should either compete for a championship with a first team All NBA player, or do their best to acquire this caliber of player via the draft (or in rare cases, trade). In short, the Wizards need to know how good Arenas is post-injury before they know whether they are a championship contender or not. Once they have this knowledge, they will be able to make an intelligent decision on whether to rebuild or to continue trying to compete for a championship. Another possibility is to use the Wizards' host of expiring contracts (James, Songalia, Thomas) to acquire a star when the rest of the NBA is dumping salaries due to the 2010 free agent class and the recession. If the Wizards can make a Pau Gasol or Marcus Camby type trade, that would give the Wizards a starting lineup of 4 potential All Stars.

The Obama Administration

Not much will change as a result of Obama taking power in a couple weeks. Nuclear negotiations with Iran and North Korea will continue to no avail. Military commitments in Iraq, Afghanistan, South Korea, Japan, Germany, and Bosnia will continue unabated. The military base at Gitmo will keep housing hordes of terrorists. We will still be suffering the worst economic recession in 70 years. Two liberal Supreme Court justices will retire at some point in the next 4 years, and Stevens and Ginsberg will be replaced by 2 equally liberal Supreme Court justices.

Three keys things will change though. First, we will soon have a massive stimulus that just happens to identically coincide with the Democratic pre-recession agenda of more government spending and "tax cuts" for households with no income tax liability. This stimulus will do little to spur consumer spending amid unemployment fears, business spending amid consumer spending fears, or investment when housing and portfolio values have plummeted. Instead, it will mainly serve to add another trillion to the federal debt to be paid by future taxpayers, who are already liable for the trillions in unfunded entitlement liabilities that we have no idea how to pay for.

Second, we will soon have the equivalent of a carbon tax, though it will be passed via undemocratic means through an unprecedented aggrandizement of executive power. Obama will order the EPA to issue a determination on whether it needs to regulate carbon emissions pursant to the 1990 Clean Air Act, a statute originally designed to deal with pollutants like acid rain, as opposed to oil, the backbone of our economy. The EPA will declare carbon emissions to be a dangerous pollutant in need of regulation, and will pronounce a vast carbon caps regulatory scheme that will effectively raise the price of gas via artifically created scarcity. While this is a good thing, it's a far greater abuse of executive power than listening in on phone conversations between domestic and overseas terrorists.

Third, within 2 years we will have a huge new health care entitlement that purports to provide government funded coverage for anyone who does not want to fully pay for it themselves. This program will be modelled after Medicare, the single greatest threat to our nation's long-term prosperity due to its skyrocketing costs. And the upcoming health care reform will do little to stem health care cost inflation, the greatest cause behind contemporary health insurance coverage gaps, income inequality, and declining American business competitiveness. The health care reform will also not reform out severely flawed employer-based insurance model that is at the core of so many of our health policy pitfalls.

For this, millions of liberals will soon descend to destroy my city in an cacaphony of leftist ecstacy. The hangover over the coming years will be a nuclear Iran, continued recession, and eventually an era of American decline as we come face to face with untenable entitlement obligations.

Benjamin Button = Boring

The best thing that can be said about the Curious Case of Benjamin Button is that it was really creepy. It was weird both seeing Brad Pitt as a decrepit baby, and then later to see his aging lifelong romantic love interest cradling him in her arms in his old/young age. If you are interested in feeling really creeped out, I would highly recommend Benjamin Button. But if you are interested in a modicum of character development, or an interesting story, or a believable and meaningful love story, or for any plot beyond a set of disjointed events, I would recommend another epic movie out this season, Australia. Benjamin Button suffered from a slew of problems. Not only was Brad Pitt's character flat, but so was every character he came into contact with. Benjamin Button was basically Forrest Gump without the fun campiness or the commentary on recent American history. There was the Southern setting, the goddess-like single mom, the lifeling childhood love that finally spouts into romance in middle age, the questions about fatherhood, and the experience of witnessing recent American history through the eyes of an outcast. Which makes sense, because both Benjamin Button and Forrest Gump were by the same screenwriter. But Benjamin Button never inspired or humored like Forrest Gump. Instead it just senselessly dragged for 3 long hours, leaving countless unanswered questions in its wake. Why did the WWI clock make Brad Pitt live backwards? Why did Button start small and old, and end small and young? Why was the story told right before modern-day Katrina? Why did Brad Pitt leave his lifelong love when they had a child? Why did Brad Pitt spurn his lifelong love when she first propositioned him? Why was the tugboat captain so eager to fight in WWII? What was the point of Brad Pitt's first affair, and why did it drag on so long? Why were so many characters introduced and then not developed? By contrast, the only question in Australia was why the Aborigines had superpowers. Besides that, Australia featured epic drama, outstanding action, sweeping romance, and a delightful storyline.