Stromata Blog

The Hindmost in Tripoli

For the next several news cycles, I anticipate, we will hear much from the Obami about the virtues of “leading from behind”. It worked in Libya, we’ll be told. Colonel Gadhafi and his brood of vipers are gone, no American blood and little American money have been expended, and who but a carping partisan can complain? The end proves that the means were justified.

Success deserves an accolade, it is true, yet this success is an odd one, for it crowns a strategy that seemed almost to have failure as its objective. Gadhafi would have been gone months ago if the United States had imposed a no-fly zone at the outset of the Libyan uprising, when the regime was in disarray and the insurgents were sweeping through the country almost unopposed. Instead the President waited while Gadhafi assembled a mercenary army, recaptured key cities and reduced his enemies to little more than their Benghazi redoubt. When we intervened at last, it was almost too late. Then, after an initial round of air and missiles strikes, we withdrew from active combat, leaving the burden of fighting on the shoulders of Britain, France, Italy and lesser powers. It’s vastly to their credit that they undertook the task, but their forces were quantitatively and qualitatively barely up to it. Their militaries are now exhausted, their munitions stocks are depleted, and their defense budgets are in disarray.

Just a couple of weeks ago, it looked like European leaders were on the verge of giving up, hinting that compromise between Gadhafi and the rebels might be the best feasible outcome. Had victory been delayed much longer, it is doubtful that it would have come at all.

The Obama Administration insisted on justifying the Libyan war “kinetic military action” as an humanitarian venture. From that point of view, it was a failure, bordering on disaster. Keeping America on a leash minimized the cost to us. To the people of Libya, it meant thousands of unnecessary casualties, hundreds of millions of dollars in destroyed property and lost oil revenue, and a heightened risk that the next act will be civil war rather than a transition to the rule of law.

The effect on our national interests remains to be seen. Nobody pretends to know a lot about the rebels, except that they are a congeries of factions, some apparently pro-Western and democratic, others no friendlier to us than Gadhafi was. There is no sign that the Administration will take any steps to enhance the position of potential friends or thwart the designs of hard-core enemies, and our passive attitude during the war is unlikely to have earned a large stock of good will. If the government that ultimately takes shape in Tripoli is on our side in the War on Terror, the credit will go to good luck.

Happily, luck may run our way. Gadhafi has screamed for over 40 years that America is his Enemy Number One. In Libyan eyes, that’s bound to be a recommendation, notwithstanding that our enmity has of late been somewhat muted. If Libya emerges as our friend, Ronald Reagan will, I think, deserve a large share of the credit.

Global Warming and the ETI’s

A trio of authors – ostensibly scientists but possibly, as their unwieldy names (Baum, Haqq-Misra, Domagal-Goldman) suggest, undercover comedians – have published a paper on the potential dangers of First Contact with extraterrestrial intelligences (ETI), one paragraph of which calls attention to a new threat posed by Global Warming:

But if ETI doubt that our course can be changed, then they may seek to preemptively destroy our civilization in order to protect other civilizations from us. A preemptive strike would be particularly likely in the early phases of our expansion because a civilization may become increasingly difficult to destroy as it continues to expand. Humanity may just now be entering the period in which its rapid civilizational expansion could be detected by an ETI because our expansion is changing the composition of Earth’s atmosphere (e.g. via greenhouse gas emissions), which therefore changes the spectral signature of Earth. While it is difficult to estimate the likelihood of this scenario, it should at a minimum give us pause as we evaluate our expansive tendencies.

But wait a minute – I thought that Anthropogenic Global Warming was going to destroy civilization. Shouldn’t that alien observers be delighted to see the menacing humans in the process of eviscerating our ability to expand? If advanced alien civilizations really do fear species who emit anomalous quantities of greenhouse gases, they must believe that carbon dioxide spurs the growth of civilization as well as flora. No doubt their own left-wingers have stifled this strength-giving gas, leaving their planets enfeebled in the face of us CO2 addicts.

There are, of course, those who would welcome an alien invasion, such as former economist and Enron adviser Paul Krugman. The rant at the link is a great example of why Professor Krugman is properly styled “former economist”.

Let’s suppose that the government embarked on a gigantic military buildup to counter an extraterrestrial armada. All sorts of resources – raw materials, energy, labor – would be devoted to constructing goods that would then either be destroyed in combat, if the invasion came to pass, or scrapped as useless, if it did not. To reduce matters to their simplest form, imagine that well-intentioned aliens who had read Professor Krugman undertook to strengthen our economy by vaporizing several billion tons of steel, several quadrillion BTU’s of energy production and several million human beings, replacing them with slips of green paper. That is the essence of the Krugman prescription for the American economy.

Perhaps Professor Krugman is himself an alien agent tasked with staving off humanity’s push into space. That hypothesis explains a lot.

Mother Thekla (1918–2011), R.I.P.

In the normal course of life, Mother Thekla (née Marina Sharf) would have passed into eternity without an obituary in the Daily Telegraph, known only to God and a small circle of the faithful. It happened, however, that she inspired a composer, Sir John Tavener, for whose vocal works she wrote a number of libretti. She was born in Russia during the Revolution, brought to England as an infant, educated at Cambridge, mentioned in dispatches for service during World War II, noted as a striking beauty. But she left the world behind in 1966 to follow a life of prayerful simplicity.

I went on a retreat and met Mother Maria and that was it. I was called to it. It’s a bit like a thunderbolt. You can’t deny it when it hits you. I used to love things like visiting second-hand book shops, but you can’t compare life now with life before. It’s like walking through a mirror backwards.

* * * *

It is the monotony of our lives which frees the spirit; all the imminent things drop away. It’s quite painful being faced with your real self without the trimmings. There’s time here to pray for the world. That’s our work: it’s not something we do on our Sunday off.

Memory eternal!

A Triple-A Country and Its Triple-F President

Imagine that George W. Bush had responded to 9/11 with a speech criticizing “gridlock in Washington”, denying the terrorism posed any genuine threat, assuring us that “modest adjustments” would be enough to deal with it, and promising “to present my own recommendations over the coming weeks on how we should proceed”. Osama bin-Laden would to this day be comfortably ensconced in Kabul, while al-Qa’eda ranged at will through America, Europe and the Middle East.

President Obama’s response to the S&P downgrade was on that level. Jen Rubin captured the body language that accompanied the President’s dismal presentation:

He was a half hour late. His head turned from side to side as if he were attending a tennis match. He practically never looked in the camera, as if he were averting our gaze. And those were the strong parts of President Obama’s disastrous speech.

It was a bit like a slow-motion car crash. After a while, one stopped listening to the blather and simply watched the stock ticker go down and down. And down some more.

A few of the lowlights:

• The President said that it was true “the day I took office” that “we need a balanced, long-term approach to deficit reduction”. That perception must, however, have come to him very recently. There was no hint of it during his first two years, when he and Democratic majorities in Congress could have enacted deficit reduction measures if they’d wanted to, nor in his aborted budget proposal earlier this year. “We knew last year that the dam was going to break, but there were all these other things we wanted to do instead of repairing it.”

• The root cause of our economic woes, from the President’s point of view, is “a prolonged debate over the debt ceiling – a debate where the threat of default was used as a bargaining chip. . . . That threat, coming after a string of economic disruptions in Europe, Japan and the Middle East, has now roiled the markets and dampened consumer confidence and slowed the pace of recovery.” Leaving aside the fact that not raising the debt ceiling would have led to a partial government shutdown rather than a default (unless the Administration deliberately chose to stiff creditors), and that plenty of Democrats were openly yearning for a rerun of 1995’s shutdown confrontation, this analysis defies the arrow of time. Economic growth has been near zero all year (0.4% in the first quarter, 1.3% in the second). It slowed before the “string of economic disruptions” and well before the debt ceiling became a visible issue.

• Don’t worry, though: “Our problems are eminently solvable.*” (The asterisk is from the White House transcript. What it refers to, I have no idea.) All that’s needed is to “ask those who can afford it pay their fair share” and make “modest adjustments to health care programs like Medicare”. Fairness is naturally in the eye of the beholder, but let me repeat, immune though progressives are to the fact, that the top one percent of taxpayers, earning 20% of all income, pay nearly 40% of all income taxes. Sure, there are other taxes, but rich people pay them, too. Progressives must, for instance, believe that estate and corporate taxes fall mainly on the wealthy (whether that’s really true is unclear); otherwise, they wouldn’t be so enamored of them. As for Social Security taxes, they are indeed capped, but so are benefits, and the benefits-to-taxes ratio declines sharply as one’s income rises. There are, in short, solid arguments for the proposition that it is the lower income brackets that aren’t paying “their fair share”. I doubt, though, that the President is making that argument.

  The best way – the only sure way – to increase tax revenue is through economic growth. No economist of any school believes that the way to spur growth is to raise taxes when the economy is barely moving. The President belatedly realized that last year, when he signed the extension of the Bush tax rate reductions. A pity that he can’t remember all the way back to last December.

  One wishes, too, that he would disclose those “modest adjustments” that will suffice to bring Medicare’s nearly-12-figure unfunded liability under control. The budget resolution passed by the House this year proposes to do that – and has been vehemently denounced by the Obama apparat. The House budget identifies that order of magnitude of the needed cost reductions. If the Obami have a “modest” way to reach the same figure, they’ve strangely neglected to tell anybody what it is.

• The President avers, “Last week, we reached an agreement that will make historic cuts to defense and domestic spending. But there’s not much further we can cut in either of those categories.” One might infer that he opposes the huge automatic cuts that are supposed to go into effect if the new “super-committee” can’t come up with a deficit reduction plan. Somehow I doubt the inference. This morning I heard his faithful ally Barney Frank on the radio calling for reducing defense spending by another $200 billion a year, i. e., retreat to Fortress America, then tear down the fortress wall.

  We can, however, be sure that the President means it when he rejects additional non-defense trimming, even though federal outlays are replete with “green energy” boondoggles, duplicative programs and useless subsidies (such as the temporarily ended – over Democratic caterwauls) funding of airports that nobody flies to).

• The speech has two concrete proposals: to extend unemployment benefits and the current year’s two percentage point FICA tax reduction. Even if those measures are beneficial, they are surpassingly trivial. Less concretely, the President wants to fight the deficit with – more spending. “We should also help companies that want to repair our roads and bridges and airports, so that thousands of construction workers who’ve been without a job for the last few years can get a paycheck again.” Ah, the good old “shovel ready projects” that worked such wonders in the first “stimulus” package!

Bringing the economic portion of his speech to a close, the President indulged in some of his familiar gaseous rhetoric, the gravamen of which was to shift blame for the current malaise to “economic factors that we can’t control – earthquakes, spikes in oil prices, slowdowns in other parts of the world”. No, the fault, dear Barack, lies not in the stars but in ourselves, that we are debt-ridden. If Japan were earthquake-free, oil prices half as high and Europe prospering, perpetual trillion dollar deficits would be – if I may use the nonce word – unsustainable. There’s not a scintilla of evidence that Barack Obama realizes that.

The Dow was already down 430 points when the President began talking. It finished down 634. Somebody has already said – but I can’t find the link now – that the Administration line is predictable: If not for the speech, the decline would have been 1,000, so the One has “created or saved” nearly 400 points.

The Reckoning Awaits

They told me that if I took a break from blogging, the U.S. government would lose its Triple-A credit rating, and . . . . Well, actually nobody told me that, and I’m glad that I followed my impulse not to kibbitz while the House Republican leadership tried to persuade President Obama and the Senate Democrats to agree to a deal that would bend the debt curve downward. What they got was paltry, at best not a step in the wrong direction. The S&P downgrade shows how much more is needed and highlights how determined the Obama/Reid/Pelosi axis is not to do it.

Though Tim Geithner tried to quibble, S&P’s downgrade was not only justified but overdue. The current trajectory of federal indebtedness is up, up and away.

If this goes on, the U.S. almost certainly won’t repudiate its obligations in an overt way. Treasury bondholders won’t be told to take a haircut on principal or anything of that sort. Instead, at some moment when debt service becomes more than the tax base can bear, the Federal Reserve Board will create enough new money to inflate it away. Someone who lends money to the U.S. today faces the risk of being repaid ten or 30 years from now with junk dollars.

Untroubled by such prospects, the President earlier this year offered a budget that generated trillion-plus deficits forever. He has now abandoned that document (voted down by the Senate 0–97) but has offered nothing in its place. His “plan” for fiscal stability consists of an unspecific plea for higher taxes. He opposes reducing spending on anything except national defense.

The dearth of tax revenue is indeed a problem; tax collections in 2010 were $400 billion below 2007. But that wasn’t because of some newly enacted tax break for billionaires. It was because the economy is in wretched shape. A tax system that relies on milking corporations and rich people runs into trouble when the rich aren’t getting richer. The solution – more easily said than done, of course – is to revive economic growth. To that end, the Obama Administration has dosed us with Dr. Keynes’ Expansion Elixir, i. e., federal spending – up $800 billion since 2007. That panacea has done as much for the economy as bleeding and purges did for the life spans of the French nobility of the Ancien Regime. The President naturally wants to increase the dosage.

In parallel with fiscal Keynesianism, the Fed has done what hindsight reveals it should have done in 1930. It has vastly expanded the money supply. That’s just what the country needed when money primarily meant currency and currency was so scarce in some regions that private scrips took over as the medium of circulation. “Unexpectedly”, though, what would have worked 80 years ago made no difference in an utterly different context. Abundant money then would have fostered economic activity that people wanted to engage in but couldn’t. Abundant money now sits unutilized, because the great impediment to activity is lack of the desire, rather than the means, of exchange.

A dead weight of uncertainty presses down on the economy: the short-term uncertainty of revolutionized financial regulation – the unaccountable caudillo of the Consumer Financial Protection Agency and the rest of the Dodd-Frank apparatus – accompanied by the fear that the President will get his way on tax hikes, the medium-term uncertainty of Obamacare, and the long-term uncertainty of federal obligations that will, if they come to pass, overwhelm any conceivable tax base.

Abe Greenwald has a good response to the Democrats’ effort to blame the “Tea Party” for the downgrade:

Let’s acknowledge that the Tea Party played Russian roulette with America’s future. Which means it took five bullets out of the loaded revolver the U.S. had to its head and gave the country a fighting chance. . . . When the debt-ceiling first came up, Democrats wanted no spending cuts, period. Forget Russian roulette, that’s liberal roulette and the odds are 100% against survival. Anything that the GOP proposed afterward was necessarily a walk back from the edge.

Unhappily, the President has made it clear that the abject failure of his policies to date proves only that George W. Bush’s maleficent influence is even greater than he thought. We can expect him to reiterate his demands for higher taxes and more “investment” in wealth-draining boondoggles, to block all attempts to steer toward fiscal sanity, and to devote hundreds of millions of dollars of campaign expenditures to slandering his opponents. By this time next year, “terrorist” will be the mildest of his surrogates’ epithets.

There’s always a risk of overdramatizing the moment one is in. I remember all the folks, many of them normally sober-minded, who were convinced circa 1968 that America was on the brink of a revolutionary uprising. Nonetheless, it looks very much like we are at or near a Reckoning, when our country will either take all of the bullets out of the revolver or pull the trigger. I note that the inimitable Mark Steyn has written a new book looking ahead to the second contingency. He ought to donate a few percent of his royalties to Standard & Poor’s.