It is the Entitlements, Stupid!

Unsustainable public entitlements seem to be the most talked about secret in the nation.  There does not appear to be a pundit out there who has not addressed the necessity for cuts in or fixes of the entitlement system.  Europe has started facing down this monster while US states (who have to balance their budgets) have begun the reform process.  Yet, strangely the federal government has done little to address the nation's budgetary mess.

In today's Wall Street Journal, Charles Koch wrote a poignant editorial about the need to fix America's fiscal situation.  He called on the government to tackle the overwhelming burden of the nation's entitlement system.

In spite of looming bankruptcy, President Obama and many in Congress have tiptoed around the issue of overspending by suggesting relatively minor cuts in mostly discretionary items. There have been few serious proposals for necessary cuts in military and entitlement programs, even though these account for about three-fourths of all federal spending.

His criticism is not solely reserved for the Democrats.  The GOP is equally culpable in the mismanagement of the national finances.  Koch attacks the concept of crony capitalism, which is seemingly endemic on both sides of the aisle.  Democrats and Republicans alike operate under a system that has utterly failed to face reality.  Koch argues that,

Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.

The purpose of business is to efficiently convert resources into products and services that make people's lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.
...
Our elected officials would do well to remember that the most prosperous countries are those that allow consumers—not governments—to direct the use of resources. Allowing the government to pick winners and losers hurts almost everyone, especially our poorest citizens.

Politicians, on both sides of the aisle, should heed these warnings.  Koch makes a powerful - and true - argument.  If American politicians, for fear of electoral retribution, fail to force tough choices on America, everyone will pay the price.  The federal government needs a serious dose of reform.  It needs to be smaller, more efficient, and supportive of free competitive markets.  Time to get started before it is too late.

Think Before Protesting

The controversy surrounding the recently passed immigration bill in Arizona is quickly becoming an exercise in protest for no sake other than to protest. The bill, although imperfect, sets out to accomplish a worthy and necessary goal. And in contrast to many criticisms, it has very little downside.

One of the primary aims of the bill is to allow the state of Arizona to enforce federal immigration laws that are not being adequately handled by federal forces. It now makes the federal crime of being in the country illegally a state crime. The law, which has in practice already been implemented in some parts of Arizona, allows local authorities to manage the large numbers of illegal immigrants that are in the state. While, according to Gallup Polls, 51% of those who have heard of the law, support it, its passage has sparked widespread, albeit misguided, controversy.

The major criticism is that the bill opens the doors for racial profiling. Obviously, it would be intolerable to establish a “police state” where the authorities could stop anyone, at any time, to ask for identification. If such a bill was passed (if it even could be passed) it would be a serious breach of individual liberty and a gross power grab by the state.

However, that is not the case in Arizona. The fears, fanned by media sensationalism, of a Nazi-esque state are ill-founded. If one takes a brief peak at the legislation it is plainly obvious that the language precisely prohibits such heinous behavior. The bill states,

A law enforcement official or agency of this state or a county, city, town or other political subdivision of this state may not solely consider race, color or national origin in implementing the requirements…

This was further affirmed by Arizona Governor Jan Brewer, “We must enforce the law evenly, and without regard to skin color, accent or social status.”

It further emphasizes that law enforcement officials are only to act under “reasonable suspicion.” In other words, the police are only able to check for immigration status when some action, other than race, leads them to believe that a person is an illegal immigrant.

The fact of the matter is that despite critics’ attempts to ignore or dismiss this protective language, their inclusion is evidence of an important safeguard against the main fear backing the opposition to the new law. Furthermore, those who choose to dismiss the language fail to realize that this type of protection already, and successfully, exists in regards to a whole slew of current laws. There is, generally, no wanton abuse of police power – and when there is the courts deal with them in an appropriate fashion. As John Lott points out,

Police today already have to deal with the “reasonable suspicion” standard all the time in other areas of law enforcement, and most understand very well how this standard limits what they can do. Police know that they can't pull over drivers for fear that they are smuggling drugs just because they are black.

Being vigilant to prevent abuse of power and arbitrary racial profiling is essential, but that does not negate the underlying correctness of the law. Ultimately, the presence of illegal individuals within the United States cannot be tolerated. It undermines the sovereignty and security of the nation and introduces a whole host of logistical and economic problems.

However, the Arizona bill only goes halfway. As a state bill, it has no power to reform the immigration system, which is badly needed. Strict enforcement of immigration policy – a zero tolerance for illegal presence in the United States – must go hand-in-hand with increased ease for immigrants, whether permanent or temporary, to legally be in the country.

The federal government should seize the opportunity to establish a working immigration system that gives individuals the incentive to utilize legal avenues to sharing the bounty that is America. It is mutually beneficial to have a vast supply of legal immigrants. The nativism and xenophobia that opposes real reform is unfortunate, misguided, and detrimental (and probably smaller than many on the Left believe). It must not be allowed to be a force to hinder real reform; either by the Left to mis-portray the vast majority of the Right, or for the isolated xenophobes on the Right to hijack the agenda.

A Dark Day in America

With an astonishing display of fortitude and obstinacy the Obama administration and the Congressional leadership have managed to pass the healthcare reform bill.  The passage of this monumental legislation represents the first time such massive legislation has been passed without bipartisan support (both Social Security and Medicare were passed with Republican support).   It is yet another chip in the very foundation of the American system and a continued erosion of what once made America great.

The legislation was passed on the back of a deal between Obama and the pro-life Congressional Democrats, led by Bart Stupak (D-MI). Stupak’s gang of ten, who voted for the original House bill, were philosophically opposed to the Senate bill which, in their opinion, provided means for federal funding of abortions. Unfortunately for America, they were bought off by a promise from the President to sign an executive order the status quo, namely disallowing federally funding for abortions.

Obviously Obama’s pitch was convincing enough to persuade Stupak; however, it is unclear how permanent or effective the executive order will be. An executive order, which is lesser in force than legislation, can readily be revoked by any President, current or future, on a whim. While in his press conference, Stupak indicated that Obama promised not to alter the order; it is questionable whether such a commitment will remain once the pro-choice Obama is pressured by his constituents. Why Stupak was convinced that these prohibitions for federal funding of abortion-related procedures will remain unadulterated is mystifying.

But regardless of Stupak’s reasoning, the bill will now be signed into law. The so called reform unfortunately will do little to fix the problems in America’s healthcare system. The Democrats undoubtedly have had the best of intentions in trying to fix a broken system, but their turn to socialist policies undermines the very foundations of the American system. Not only does this gross expansion of government power undercut the individual liberties of every American, but it burdens an already suffering economy.

There is no doubt that the industry needed reform. Neither Republicans nor Democrats denied this. But, as has consistently been shown, in both theory and practice, the paternalistic strategy of controlling the production and distribution of economic activity creates more harm than good. Unfortunately, this healthcare package represents the naïve utopianism that sounds pleasant to the uninformed ear, but in reality is mere sophistry. The health insurance industry will remain a mess with the additional encumbrance of excessive government involvement and added burdens on the American people.

Regrettably for America, the passage of this bill will not signify the end of the healthcare debate. Republicans are already gearing up to revoke the bill either through future legislation or the court system. For instance, the constitutionality of the individual mandate to purchase insurance is questionable. The next few years will be littered with an abundance of lawsuits aimed at repealing all or part of the legislation.

Likewise, Republicans will seize on the argument of government excess in the upcoming November elections. The midterm elections will revolve around the issue of healthcare (and the economy) and will define the direction of America for years to come. Hopefully, the GOP will successfully be able to convey the message that short-run, government-led ‘fixes’, while throwing the average American small and temporary handouts, will ultimately do more harm than good. If they fail, America will continue its anesthetized erosion into a second rate nation.

The Road to El Dorado

As Obama’s second year in office begins to pick up steam, one of his primary campaign promises has yet to be addressed.  However, as Time.com suggests, the administration will begin to push for immigration reform in 2010.  If they are wise, Republicans will take the lead and beat the Democrats out of the gate.  Not only is immigration an important issue but successful handling of reform could reap political rewards for the GOP.

If Republicans fail to offer a concrete proposal they run the risk of being portrayed as obstructionist.  This has been all too evident in the political quagmire that has become healthcare reform.  Rather than playing defense against a filibuster-proof Senate, Republicans need take the offense and offer solid, well articulated policy.  The need to frame the debate is important for two reasons.

First, as in healthcare, there are divergent principles at issue and the deck is already stacked against conservative ideals.  The Democrats’ first salvo will all but obliterate any Republican counter-attack.  In order to jumpstart the type of honest national debate that was absent in the healthcare process, Republicans need to get their ideas out first.

Primarily, the GOP needs to emphasize that the rule of law has to be maintained under any system.  Individuals who violate laws, whether immigration or otherwise, cannot be allowed to reap the benefits.  However, simultaneously, Republicans must emphasize that this is a pro-immigrant policy.  Immigration has been and will continue to be the backbone of this country.  The majority of, if not all, Americans are descended from or are immigrants.  Any Republican plan should trumpet this fact.  Upholding the rule of law means supporting the honest and hardworking immigrants, who choose to make the legal journey to citizenship or other legal status.  It does not mean penalizing them by rewarding those that chose an illegal method.

This is important in light of the second reason:  the Hispanic vote.  As a recent article in The Economist reports, Hispanics are one of the fastest growing populations in America.  Although, as a second article in The Economist reports, they voted approximately two-to-one in favor of Obama in 2008, they are far from a solid Democratic force.  The article states:

In a fair number of keenly contested states, the Hispanic population in effect holds the balance of power; and as long as they continue to vote solidly Democratic (as they did in 2008, by a whopping 67-31% margin), that is great news for the blue party. The big Hispanic vote for Barack Obama in Florida turned that vital state from Republican to Democratic; the Hispanic vote also proved crucial in Colorado, New Mexico and Nevada. It is not impossible to imagine that, in time, Texas’s huge Hispanic population could turn America’s second-largest state Democratic

If the Republicans want to avoid that fearful fate, they need to reconnect with Hispanic voters, and fast. In principle it ought not to be too hard. Culturally conservative, strongly religious, family-oriented and with a long and distinguished tradition of service in America’s armed forces, Hispanics are natural Republicans. But they are also, on the average, poorer than whites, and they are rightly incensed at anything that smacks of xenophobia.

The Republicans would be wise to heed this poignant analysis. By articulating an immigration policy that appeals to Hispanics and conservative principles, the GOP would not only fend off attacks from the Left but possibly be able to swing a number of blue states in their favor (such as New Jersey which just elected a Republican governor).  Furthermore, a successful policy maneuver will redeem the opposition Republicans’ image and give broad swaths of voters a renewed confidence in the Party’s ability to lead.  If they fail to appropriately frame the debate, the GOP will not only be demonized by the Democrats as racist, xenophobic, and anti-immigrant, but will likely lose the chance at capturing the increasingly important Hispanic vote.

Back from the Dead - Harry Reid's Public Option

Just in time for Halloween, Harry Reid has raised the dead. Like a zombie from a cheesy horror flick, the public option is now once again roaming the halls of Congress. In a recent announcement, Senate Majority leader Reid stated the newest version of health care legislation would be heading to a vote in the Senate with a government-run public option included.

Setting aside for a moment the foolishness of a public option, Reid’s insistence on including this provision in a plan is utterly baffling. The public option was killed over the summer when Democrats realized the political infeasibility of the concept. The Democrats simply did not have the votes in the Senate to avoid a Republican-led filibuster. The Democrats need every single member of their caucus (58 Democrats and 2 Independents) to agree with the plan in order to push it through without Republican support. The political reality indicated that this just was not possible. If one Democrat wavered the entire plan would fail. And so, wisely the Democrats seemed to move on from the public option. After all, they profess that their real goal is to achieve much needed health-care reform.

Reid’s move to bring back the discussion on the public-option is a step backwards. Nothing has changed to indicate a different political environment. In fact, shortly after his announcement Olympia Snowe, the sole Republican to have voted with Democrats on some health-care related issues, backed off from her cross aisle move. She indicated she would work with Republicans to quash any health care reform that included a public option. Snowe’s rebuke was quickly followed by one from Joe Lieberman – one of the two Independents who caucuses with the Democrats. With Lieberman’s defection a public option is undoable.

So what are the left-wing Democrats trying to accomplish? The inclusion of a public option will sink any reform bill. If the Democrats truly want to reform healthcare, they need to face the reality that it cannot (nor should not – see a prior post on ANR) include a public option. Reid’s gambit seems to lead to nothing but a dead end – torpedoing the Democrats’ and Obama’s crown jewel.

Ironically, it appears that Reid is sabotaging any chance at Democrat-led healthcare reform. One possible explanation is that the Democrats are in such internal disagreement that they cannot design any plan that is amenable to all wings of the party. The tensions between the leftists and the centrists are running high. In order to avoid a failure based on the Democrats’ inability to compromise, Reid is setting up a surefire way to fail that can be pegged on supposed Republican obstructionism. At the end of the day, Democrats will point to the ‘anti-reform’ Republicans who successfully filibustered their plan, rather than their own ranks for the political failure to pass a reform bill. If one is going to fail, at least make it look like it is someone else’s fault.

The Wall Street Journal offers another relatively plausible explanation for Reid’s maneuver. Reid might be offering the plan knowing full well that he will have to drop the public option. The WSJ writes;

He could then tell the left that he did his best, only to have been beaten back to the unreliable likes of Mr. Lieberman….Meanwhile, such endangered swing-state Democrats as Blanche Lincoln of Arkansas could claim they won a great concession if the public option fails, making it easier for them to vote for a final bill that would still do enormous harm to private insurance and the federal fisc.

Reid and his cronies could be trying to push the negotiating grounds leftward in order to achieve a more Democrat-friendly outcome. This is a risky move, but opens an opportunity for Republicans. Senate Republicans should point out the foolishness of Reid’s insistence for a public option. They can easily turn the tables on the Democrats, by branding them obstructionist. How can the Democrats claim to be solving our health care problem if they are offering proposals that clearly are not passable? However, such a strategy necessitates a counter-proposal – something the Republicans have been lacking. A successful Republican-led reform will offer America the right kind of health care fix and deal the final deathblow to the leftist Democrats’ socialist ambitions. Let’s put a nail in this coffin for good.

Obama on the Attack and the Destruction of Healthcare

Obama’s artifice and politically motivated smears in his recent comments regarding healthcare are despicable. The President is not only putting undue pressure on an already delicate issue, but using scare tactics for political expediency. His attempts to cram through ‘reform’ and socialize America’s healthcare system are terrifying to say the least.

In remarks given Monday, he launched an all out partisan attack on Republicans. He preyed on emotional fears of a failing healthcare system and attempted to portray the respectably cautious Republicans as pawns of vested interest and the status quo. Obama continued his misguidance on Tuesday, again attempting to portray Republicans as the bad guys.

This is not only unfair, but patently disingenuous. As Obama points out, everyone acknowledges the system is in need of overhaul. However, the current Democrat-led plans are disastrous. Republicans, such as Bobby Jindal, are proposing alternative and better solutions which the Democrats wish to ignore.

The bottom line is that, as discussed here before, the public option is an utter sham. While Obama’s claim that “[i]f you like your current plan, you will be able to keep it. Let me repeat that: If you like your plan, you'll be able to keep it,” might be technically true, it glosses over the economics of the public option. Because a public option ultimately rests on the shoulders of the taxpayers, it can (and will) operate in a grossly inefficient fashion.

Any shortfall in profitability will be picked up by the taxpayer. This will allow the public option to avoid cost reduction. Managers of the public plan will be able to simultaneously undercut private insurers and avoid having to reduce costs. If America is concerned about inefficiencies in the private sector, just wait until the government gets into the business. Obama, with an unequivocal Freudian slip, admitted this: “The reforms we seek would bring greater competition, choice, savings, and inefficiencies [sic] to our health care system…”

It is unfortunate that the Democrats in Congress backed by the increasingly disingenuous Obama feel the need to cram a broken fix upon a broken system. It is even more frightening that they are attempting to cloud the scene with false economics and political sleights-of-hand. What we need is a well thought out, economically efficient plan, that corrects the flaws in the current system. Hopefully, America will wake up and halt the pending utter destruction of our healthcare system before it is too late.

Does a Teetering Iran Vindicate the Iraq War? - A Middle Eastern Domino Theory

The recent protests in Iran have added some cracks to the otherwise stable foundation of the Iranian Islamist regime. While the government is still overwhelmingly strong, the democracy movement has the ability to drastically change the political dynamics in the Middle East. Although far from a sure bet, the new Iranian revolution may very well be the second step in a modern day, Middle Eastern ‘domino theory’- preceded by the War in Iraq.

One of the more vocal criticisms of regime change in Iraq was that it unbalanced the region. Iraq kept Iran in line. By removing the Iraqi threat Iran was unleashed. However, as Robert Kaplan points out in a recent Washington Post editorial, this may have been part of the plan. (See here: http://www.washingtonpost.com/wp-dyn/content/article/2009/06/23/AR2009062303114.html?wpisrc=newsletter.) In the short-run, a rise in Iranian power is less than desirous; however, it may inevitably let loose a path to real change in the Middle East.

Because of the removal of the Iraqi threat, Iran made a grab for greater regional and international power. The regime was better able to flex its muscle and meddle in regional and foreign affairs without having to be preoccupied with its Western border. This led Iran to directly challenge America and Europe.

Iran’s power move, while seemingly bad for America, had two main effects. First, it caused rebalancing amongst the Arab states. The ‘moderate’ Sunni Arab states of Egypt and Saudi Arabia were now faced with a more imminent danger from Iran. Today, these two states now face numerous new threats to their rule, both domestically and regionally, from an unencumbered Iran. With one foe out of the picture, Iran can increase its focus on these remaining two contenders for regional hegemony. With an increase in Iranian-sponsored terrorism and a direct threat of an Iranian nuclear bomb, it is only natural that the various Sunni Arab states would need to join forces against the upstart Iran. This is beneficial because it pushes these countries closer to the United States, and enables greater strength and flexibility in the region.

Second, Iran’s excessive aggression promoted a pro-democracy movement. The Iranian revolution was born of disgust with the ruling clerics. Amongst the chief complaints, was Ahmadinejad’s bellicose language and antagonism of the West. While certainly not the only cause for revolution, the Iranian leadership’s aggression was a spark that helped incite the powder keg. The moderate reformers were unwilling to see an extremist such as Ahmadinejad lead their country into direct conflict with the U.S. It is unlikely that Ahmadinejad would have been as aggressive, and therefore as repulsive to his people, had Saddam Hussein still been in power.

One possible, fortunate outcome would be a spread of pro-democracy movements throughout the Middle East. As the Arab Street watches the tumult in Iran, it is natural to question the leadership of the remaining Arab despots. While no large movements have started yet, there is considerable talk in the Middle East about the need for reform. Kindred spirits in Egypt, Saudi Arabia, and Syria are realizing that they can fight for greater rights and freedoms and throw off the yokes of their respective regimes. Lebanon, for instance, has already rejected the Islamist movement of Hezbollah and turned towards the West.

To what extent the Iranian revolution spreads throughout the Middle East is still very much up in the air. The extent of the Iranian reformists’ success is, of course, a huge factor. The repressive measures of the Arab regimes will also play a role. Likewise, reform could come in many shapes- from wholesale regime change to more gradual, internal policy changes. However, this is a profound opportunity for real change in the region- change that has the chance of drastically altering global politics.