Why don’t we turn this around?  Start with a simple, easy to understand baseline – current deficit is $1.5 trillion, proposed 2011 budget is 3.69 trillion.  If we want to drop the deficit by half this year, that’s about $750 billion, about 20% of Obama’s proposed budget.  So now we need to find $750 billion worth of savings, no?

No.  Given the political posturing, simple and straightforward is the only way.  Start with an across the board 20% cut – defense, SS, medicare, everything.  Be clear and forthright to the people as to what this implies – benefits will be cut, lines will be longer, etc.  Hold this as a baseline, and make it clear that there are three choices – a government shutdown, the across the board cuts, or a budget achieving the same savings by substituting greater cuts in some areas for lesser cuts in others.  Rather than die the slow death of a thousand cuts for each and every project being reduced, take the hit up front and force the Democrats to offer up sacrificial lambs to preserve their important projects.

Yes, there will be an initial hit.  But one can then make the case that if we keep delaying by fighting every $5 million dollar project closure then the current system is going to collapse, hard.  If we want to keep these programs we need to cut back, now and in the future, and by significant amounts.  Yes it may hurt some, but people should be clear to their legislators what their preferences are and let them figure out which programs best support that.  No company would fight at the corporate board level over every project and sub-project.  The board sets the major spending levels and lets subgroups figure out how to best meet corporate goals with the funding in question.  Similarly,  Congress can’t continue to fight every small program closure – we need to specify a savings amount and make it stick.

The key to the Senate’s operation lies in two main factors – it is not a democratic body, and it is intentionally constructed so that the minority has a significant ability to obstruct, interfere, and generally slow down “progress”.  Although seen as a problem by current Democrats, both of these factors help to ensure that the Senate is not a mere “tyrrany of the majority”, but rather that passage in the Senate presages a greater overall support for legislation by the people themselves.

The Democrats seem ready to throw that all away with their heavy-handed attempts to protect Obamacare.  Pushing everything through in the middle of the night right before Christmas?  Standard fare for politicians who even thieves would be ashamed to call compatriots.  The real concern is the attempt to change the rules to make changing portions of Obamacare against Senate rules without following proper procedure.  While this may seem an arcane bit of Senate parlimentary procedure, the key that this boils down to is simple – we won, therefore the rules are what we say they are.

Why is this such a danger to the senate?  Because if the precedent is set that the rules are merely one more political football, then we’re going to see significant and likely detrimental changes to the political process.  Consider that upon the start of a new session a majority is sufficient to set the rules, especially when the “Presiding Officer” that gets to make the call is elected by the majority party.  If a “just cause” is sufficient to rewrite the rules, why not eliminate the filibuster to take out Obamacare?  Why bother playing by the rules when the other side has shown that their respect for the rules only lasts as long as the rules are of benefit to them?

In the end, this would devolve the Senate into another House of Representatives, where the majority basically runs the show.  Is this really in the best interest of Democrats?  Are they so sure of their majorities and their pet programs that they’re willing to risk this end?  Are they really going to be happier driving us full-speed towards banana-republic status?

You spin health care as a “right” that should be available to all regardless of their ability to pay, but even you realize that if nobody pays for health care then nobody will provide health care.  Health care is a scarce resource comprised of the intersection of modern technolgy, bio-chemistry, and highly trained doctors and nurses who have put long years of their life into the studies necessary to provide health care at the quality we demand.  Like any other commodity, once overall demand exceeds supplies we must come up with some mechanism for allocating health care to individuals.  In a market system, people looking for more health care pay more for it (or have a third party pay more on their behalf), just as with any other commodity.  If there is not enough supply, prices drift upwards until demand is reduced or supply is increased.  Alternately, we can say that this isn’t “fair” in the case of life and death and set up government “exchanges”, regulations, and price controls to ensure fair and equitable treatment.  Now instead of anyone having free access we are constrained in our choices by government fiat.  It becomes “unfair” to have a policy that doesn’t cover some politician’s pet cause, or that requires out of pocket expendetures for cost containment.  Instead of the chaos of the market we get the corruption of a beauracracy.

As to your “moral, modern” society – I may agree in principle that as a society we should provide health care and certain other limited services whenever possible.  Where I disagree is in providing it through government.  I may believe that we have an obligation to aid starving children in Africa, and I am perfectly able to donate to charities to achieve these goals.  Does that imply that I have a right to break into my neighbors houses and steal their money to donate simply because I feel it is a “moral imperative”, anmd that they are “wasting their money” on frivolities?  If I don’t have the right to do this myself, why is it any better if I act by proxy through the Federal Government?  The neutral “raising revenue” for your moral social programs is outright theft, money taken by threat of force from individuals with no choice but to surrender their money or surrender their liberty.

Even beyond the moral issues of funding, I believe that “government run” itself is a recipe for disaster.  Government claims that they will find “efficiencies” and will make health care more affordable by “taking the profit out”.  Perhaps you missed Econ 101 – the profit is what brings investment dollars into the field in the first place.  Government is and will always be a tool enslaved to the present – an entity seeking to placate the greatest number of current voters at the least current cost.  In the process we’ve racked up $50+ trillion in unfunded mandates “in the future”, and seem determined to double down in this administration.  In contrast, the profit motive drives automobiles, computer technology, and most of the economy in this country.  Yes, the odd GM may drive itself out of business, but were Americans seriously worried that there would be no cars available?  Profit ensures that cars will be made in the quantities Americans desired, and profit ensured that eco-friendly hybrids became available when they were feasible and the demand had built.

These “glorious” social programs are often spoken in terms of mandates – ideas with massive popular support who’s “time has come”.  If this is indeed true, then why is it necessary to pass a government program to make it work – simply open the “Universal Health Care” charity and let the massive number of supporters fund it with their own voluntary donations.  This requires no votes, no taxes, and cannot be obstructed by your political opponents.  The only downside is that you cannot compel donations in a false moral crusade – you must persuade people to voluntarily surrender their hard-earned money to your cause.  If your “mandate” is comprised primarily of net consumers instead of net payers, then your “mandate” reduces to people voting themselves someone else’s money.  That you see no issue with this fact makes me wonder how many of the massive intellects on the left are merely well-schooled idiots spouting pleasant but impossible fictions to a clueless audience.

As for what I want from governmnet, it’s very simple.  Get out of my life and out of my way.  Stop making laws banning activities or items that make you “uncomfortable” but have not been shown to have any positive effect on reducing criminal activities.  Stop inventing “rights” from “emenations and penumbras” that we all “must embrace” while running roughshod over our existing rights.  Stop assuming that you know better than I how to spend my own money, and stop assuming that as Americans we must all act the same way and should all be shielded from the “hard decisions” by the hand of government.  Finally, stop thinking that “winning” means that you can ignore the rights and protections afforded by the Constitution to all Americans regardless of who is currently in power.  Please ask yourself … are your modern Intolerable Acts worth the price they’ll ultimately extract from the country?

There are many problems with Congress and DC – lobbyists and special interests with too much influence, overspending, ever more intrusive legislation, and a growing “nanny state” that chokes growth and constrains the engines of national growth.  While it is cathartic to place the blame on “Democrats” and “RINOs”, we need to face up to reality.  It is not the individuals in Congress that are the root cause of our current malaise, but rather the concentration of cash and power in the Federal government.  Power and money distort ones views and corrupt principles.

As long as lobbyists can get thousands or millions of dollars in government funding and support for each lobbying dollar, there will be lobbyists.  Both the smuggling of illegal drugs and lobbying have similar ROI – if government can’t stop the former despite an actual intent to do so, how likely is it that they will ever truly impact the latter, given that they are themselves the beneficiaries of the lobbying dollars?

Centralized power is also a boon to special interests, as instead of having to fight 50 seperate campaigns against local organizations, they need only fight one.  Instead of having to contend with recalls, ballot initiatives, and other means of popular control, they need only influence a handful of “on the fence” Senators or Representatives to their cause – after all, who even notices a mere $1 billion these days (note to Congress – if you have a spare $1B sitting around please give me a call).

Finally, the current arrangements allow for pandering on a scale that should never have been possible, as they allow us to borrow from international lenders (including a number of poor Chinese families who I’m sure have better uses for their money than propping up spoiled Americans) and pass the bill on to our decendants.  If I could borrow all I wanted and make my neighbor’s sons and daughters pay for it down the line, I’d be phenomenally popular too!

The solution to these problems is not to find better people for Congress (which the Founders clearly understood), but rather to structure the system in such a way as to minimize these conflicts of interest in the first place.  We need to drive to strip power wherever possible from the Federal government and return it to the states – only then will we see a long-term solution to the current morass of DC.

Returning power to the states returns competition to the system – no longer would there be a winner takes all system that once passed can never be changed.  Instead states can take different tacks, and citizens can vote with their feet and dollars if a state is on the wrong track.  States are also far more constricted in their ability to deficit spend – they have no guarantee from their printing press and thus end up evaluated as any other investment by investors, rather than as a super-safe investment.  They also don’t have the ability to hide taxes through inflation, meaning that citizens are going to be taxed to support the “rights” they claim their government must provide.  States would need not only to provide most funding from today’s beneficiaries through overt taxes, but also need to make those services sufficiently attractive to keep taxholders in state.  Without the Federal government collecting and kicking back to the states, each state has the ability to make meaningful changes to the morass of programs and regulations to attract individuals or businesses to their state.

How might this be done?  I would suggest a massive slashing of Federal rules/regulations with the explicit statement that they are being delegated to state authority as per the Tenth Amendment.  Replace it with a simple statement that the intent to evade state law within a sovereign state through inter-state commerce is a Federal crime.

Secondly, sunset all entitlement programs in one year’s time.  For each such program, any State wishing to continue the program at the state level shall be given all necessary information to administer the program that is in the federal government’s control, and shall be granted a portion of any assets accumulated by the program (such as the Social Security Trust fund) based on the state’s relative population.  Let the states decide which programs are worth the cost, but allow no favorites to be played at the Federal level – a true “going out of business” sale for each and every entitlement program, no exceptions.

We’re well past the point where we can sustain the current slew of entitlements in the long term, and Congress has shown time and again that they’re entirely unable to rein in the beast.  We need to return to the solution that we know works – force people to pay for the benefits they’re using.  Not have “the rich” pay “a little more”, not paying tomorrow for a hamburger today, but paying now for today’s benefits.

A major component of the current economic crisis is an overabundance of debt.  Financial companies borrowed in excess to feed leveraged investments to boost returns, encouraged by low lending rates and a long bull market.  Industry overextended itself, expecting that there would always be enough free capital to be found.  And individual citizens took on excessive debt not only in their houses and cars, but on credit cards and other less attractive terms.

So in comes the Fed to recapitalize banks and slash interest rates in the expectation of jump-starting lending.  I can understand this as a short-term measure to unfreeze the credit markets, but in the longer term I cannot understand how one solves a problem of excessive debt load by encouraging people to borrow even more.

Perhaps it’s just my conservative nature, but it seems to this non-politician that the only way for us to deal with excessive debt is to pay it back, and that the best way the government can help with this is to leave us more of our own money to do so.  That rather than tax the productive to send checks to support the unproductive, we should encourage the productive to invest and create jobs to make more of the population productive.  That rather than grow government and cheering the “jobs created” we should be paring government to the bone to reduce the load on society at a difficult time.

Instead we’re getting an ever-expanding “stimulus package” and support programs for all paid for by the middle class (once the rich pay their tax accountants a little more to avoid them).  We’ll make it harder to get a job through minimum wage increases and more expensive to keep employees due to mandated benefits and increased costs.  To help us get out of the recession we’re going to make it harder to get a job, harder to keep a job, and ensure that we get less money if we manage to hold on to a job.

I really fail to understand why this is so attractive to liberals.  Why do we prefer dependency over employment?  Why do we cheer when government takes choices away from us? Why is it that the call to “pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty” does not apply to our own freedom of contract?

I fear we are heading for a fall, and that far too many of us wish to close our eyes, cartoon style, and hope that if we don’t know we’ve gone over the cliff that we’ll remain aloft.  Because that always worked so well for the coyote.

This company does not currently produce any vehicles, but we’re just as likely to be manufacturing automobiles a year from now as General Motors. Should we do so, we would inevitably providing valuable employment to many low-skilled workers, but are just as likely to end up unionized due to the clout of the UAW. As such, we will be applying for our very own pre-bailout of $50 billion to invest in order to pay the inordinate benefits we’re going to have to give in the future. Not granting this bailout would put at risk all the future jobs we might create, which are especially important in the middle of a recession.

And for fair disclosure, in the unlikely event that we are not able to produce vehicles, we will use the pre-bailout to stabilize housing markets (through the paying off of shareholders’ mortgages), followed by direct injections into the stock markets to help place a floor under the DOW. So as you can see, this is clearly a win-win solution for both the government and the taxpayers, with the shareholders reluctantly accepting the burden.

Any takers?

Typically runs D+11, ran unopposed in 2002 and 2004 (and possibly much further back). Opposed run by a Communist party member in 1988 garnered ~20% of the vote. Last held by a Republican in 1949. Mass GOP link, for what it’s worth.

There is nothing special about recounts – they’re simply another count of the existing ballots. It is known that some fraction of votes can be damaged in a recount (depending on the ballot technology), and there is nothing in a recount that avoids the inevitable (if small) errors that can occur with even the best technology.

So why do we bother? Why substitute a second count (often with a less reliable method such as hand counts instead of automated counts) when effectively you’re just throwing the dice again and hoping the random errors come out the same? It seems it would be easier and less contentious to simply say that there’s one count that gets certified, and further challenges need to prove that there was a significant error in the existing count to justify reopening the results.

I think it behooves us all to realize that contrary to our inclinations, BOTH conservative AND liberal ideas do work. The catch is that they are attempting to satisfy two very different desires, and I believe it is the tension between the two that leads to the cyclical nature of American politics.

The “conservative” approach makes economic growth the primary focus, with the general idea that a rising tide lifts all boats. The past century has proven that the most efficient means to this end yet discovered is the engine of capitalism – directing peoples’ greed and desires for material improvement into activities that benefit all of society. There is no doubt that this works to improve economic growth, but there is also no doubt that it often generates painful dislocations as technology shifts and skill sets move from in demand to useless in far less than a generation. There is something of a “caveat operator” mindset here – you own your own employment and if circumstances change it’s your responsibility to adapt. These dislocations and changes definitely feel “unfair” and lead to individual economic uncertainty even in the good times, laying the ground for someone who can render the economic changes more “fair”.

The “liberal” approach is in many ways a more optimistic philosophy – the idea that “yes, we can” do better as a society. That as a society we have the ability to do better, to improve in a way that makes things better for all, and that helps blunt the rough edges and dislocations that are part and parcel of the capitalist system. This would be fine, admirable even, as a private philantropy effort. As a government-run effort however it inevitably ends up overly broad and poorly managed, draining resources from the productive sectors of society while increasing disincentives for the unemployed/underemployed to remain that way. Eventually this comes to a head as the inefficiencies of “fairness” and government mis-management drag down the economic growth of previous cycles, leading to a conservative upswing to improve efficiency and clear the barriers to business for the next turn of the wheel.

Hardcore conservatives may claim that the conservative approach is clearly superior, as economic growth will lead to better overall conditions than restricted “fair” growth. Hardcore liberals will point out the clear misplaced priorities of the market and of society and feel that the elite – those who “know better” – could clearly direct better priorities than the ignorant masses. But between them is the vast mass of the moderate middle, who ultimately decide the direction of the country.

Conservatives need to understand that while running actual conservative candidates would be a big step forward for the GOP, we need to do more. We need to shift the focus of the “liberal” policies away from a reliance on government alone to implement them. If “universal health care” or worker retraining were provided through privately funded foundations instead of government they’d inevitably be better run, but also wouldn’t threaten to bankrupt government in the looming future. It is not sufficient to say that libeal ideas are inefficient or bad for the economy, as many will trade a little economic growth for increased stability. We must realize that there are aspects of the liberal agenda that are very attractive to many Americans, and that as long as they remain in the political arena rather than the cultural arena we can expect an ongoing give and take between the parties depending on the conditions of the day.

We would all do well to remember that the Democrat coalition is not a unified socialist majority marching in lockstep to a common drummer, but a collection of interest groups come together to achieve shared goals. It is easy to campaign on “hope” and “change” and nebulous government promises to help people. Far harder is agreeing on priorities and working through the mechanics given the inevitable differing priorities within your coalition.

There was never enough money for the “wish list” without crushing taxes as it was, and the economic crisis doesn’t help matters. There will be inevitable fractures and tensions in the coalition when a decade of supressed desires are up for fufillment, and I doubt all will agree to wait their turn. While there will be pain, with skill and support we can adjust it to the least painful and most temporary areas. It will be imperfect and draining, but necessary in the long run.

As with all things, this too will pass. Let us be rested, invigorated, and ready when it does. Remember – we’ve been here before.

I can’t abide this. The great failing here was not one of conservatism itself, but nor were the “moderates” to fault, or even the liberals. The greatest failing is a disengagement from the arena of ideas for the arena of conflict. We cannot simply be against liberal socialism as socialism, but must re-engage the public and drag them back to reality.

There is a natural drift in human society towards the current left – to more government control and support. This is to be expected, as it’s easy to look at the choices people and societies make and come to the conclusion that “someone should help them”, that “its unfair to let them suffer for bad decisions”, or that someone “smart” and “intelligent” should help guide them “for their own good”. One need only think of the idiots they’ve met in their own life to see why these tendencies are so strong. Government “solving” problems is a siren’s song given the inherent unfairness of the world.

Too many conservatives look at this and call it socialism, and denigrate those moderates looking for a middle ground as well as those liberals who still believe that good people in government can “make a difference”. This is a losing strategy. We need to be making the case that the issue isn’t intent, but results – government is the highest cost, lowest competence provider of services. We need to be asking the key questions to get people thinking, to work their minds on the issues of the day.

Universal health care sounds good, because who’s against treatment for everyone. Easy “feel-good” liberal argument. Conservatives need to push to the next level – note that health care is expensive, and ask what exactly having the government run it is going to do to bring down the costs. Ask if they think dealing with a government bureaucrat is going to be better than an insurance company. Ask what exactly makes you trust Congress more than your doctor to make your health care decisions.

Conservatives must re-engage in the war of ideas in addition to the inevitable political battles. Remember – first you win the argument, then you win the vote.

http://www.zombietime.com/leftsbigblunder/

http://www.youtube.com/watch?v=iRSmQqw65Pg

At it’s heart, a Credit Default Swap (CDS) promises a payout (the credit) in the event of a failure (default). Basically, the CDS allows the owner of a security to transfer the default risk to a third party for a fee – either the original provider of the CDS or a willing buyer. Roughly speaking, we’re insuring a higher rate of return than the “natural” rate without any underlying reason for improving the fundamentals of the economy – all we’re doing is mathematical manipulation and risk shifting, which are a zero sum game. This is critical – we can move the risk around with a CDS, and we can average out the risk/reward benefits by purchasing 1/100th of 100 securities instead of 100% of one security, but none of these machinations actually improve the flow of capital or improve risk modeling. As such, their application will not create the real economic improvements needed to raise the rate of return in the long run.

So why did we see a higher rate of return? Understanding the CDS pricing is critical to see the cliff we charged off at full speed. If the risk premium on the original security is proper, then a CDS run for zero profit should be expected to charge a surcharge in the form of fees equivalent to the difference between the security’s rate of return and the natural rate. That is to say – WITH PROPER CDS PRICING, YOU SHOULD NOT BE INCREASING THE OVERALL RATE OF RETURN ON AN INVESTMENT. If the rate of return is increasing after the purchase, either the CDS issuer is doing a better risk analysis than the market (difficult but not impossible), or someone is accumulating the risk of these securities without a commensurate reward by under pricing the CDS (either intentionally or by erroneously assuming that they understand the risks better than the market as a whole). Essentially, errors by “experts” in risk analysis (or outright bad decisions driven by commission sales) resulted in the accumulation of an unsecured liability that can only be sustained in conditions where defaults are sporadic and below average – a growing economy. When a significant downturn occurs, all bets are off.

This ties directly in with official government policy of “combating” recession and preventing economic downturns through fiscal or monetary policy. The public has long accepted that recessions are bad, expansions good, and that the government has a legitimate interest in avoiding the former and extending the latter. But this grossly oversimplifies as recessions, while difficult for some, can be a significant net positive for the economy. They allow a chance to purge the bad bets and weak businesses from the ranks and re-allocate those resources, as well as a chance to identify business models that are not robust and cannot be sustained except in the “goldilocks” economy. They also have psychological value, in that people who have gone through a recession are more likely to realize the risks to themselves and their businesses from a downturn and manage accordingly. There’s a good argument that mild recessions that occur frequently enough to occur within living memory of most market participants leads to a better and more resilient economy. In contrast, the federal actions to avoid recession allow bad decisions to fester and risks to spread until local crises grow into systemic crises.

There is a close relationship here to forest management and forest fires. Forest fires and moderate recessions may both be suppressed for a time without exceptional effort, and this generally makes people happy even though the fires/recessions were natural, returning resources to the environment and only minimally affected the major features of the landscape. As time goes on, the prevention effort grows, and so does the failure cost – the deadwood that accumulates would fuel fires that now threaten large trees or large companies, and yet the suppression goes on. Essentially, both policies allow us to avoid periodic inconvenience at the cost of the rare barely-controllable conflagration or economic crisis.

Extending the analogy, in both cases the periodic inconvenience often results in positive action to contain the effects – deadwood management and fire breaks in the case of the forest fire, financial reserves and investments for the recession. In contrast, the rare “crisis” events may easily grow so large and so systemic that there’s little to be done to mitigate them except at the very highest levels, and thus there becomes an expectation that it’s “the government’s problem”, as only they have the tools to deal with it. By the time the crisis erupts many individuals will not have experienced a genuine recession or sustained economic downturn, and are likely to be ill-prepared for the results.

So we see that the “managed free market”, tuned precisely by economic experts has a flaw in its own perfection – the perfect counter-cyclical management that prevents recession after recession results in the accumulation of bad decisions in the system. The unwinding of bad decisions and the re-evaluation of downside risks and accompanying revaluations needs to happen, and periodic mild recessions provide a forcing function. Without this, risk can shift, spread, and accumulate unnoticed in “good times”, hidden through fiscal and monetary policy and a general rising tide, until local mismanagement and bad business models become global financial panics. The Fed and federal government, by shielding us from the failures as a consequence of mild recession merely increased the risk of large-scale failures.

So why is it conventional wisdom that this “fine-tuning” of the market is a good idea? Why do we believe that government regulation and stimulus to break out of a recession is always desirable? We need to break out of the mindset that we’re at “the end of history”, and that with wise government management we’ll all live happily ever after to the end of our days. It is just as likely that increased government intervention and management will simply postpone the day of reckoning while increasing its scale to the point that even concerted government intervention will no longer delay the inevitable.

Hard times will come and hard decisions will need to be made, regardless of our wishes, and regardless of the hand of government. But hard times lead to opportunity for those who prepared in the good times, and those willing to learn the lessons of the latest round of failures. This “creative destruction” has been one of the greatest positive forces in history – giving us the chance to shake the dust and cobwebs out of the system and start anew. Delaying the mild headaches this causes in favor of less frequent cardiac arrests is gross mismanagement – I only wish that people saw the intervention for what it is.

All too many seem to think there was bound to be a natural re-alignment to McCain after the convention, forgetting the fact that McCain is a candidate that the base *does not particularly like. * John McCain has probably offended just about every interest group in the Republican party. While this may make him the best choice for victory in this particular election, it’s a far stretch to say that should the GOP be guaranteed a victory he’d be the preferred choice. Sarah Palin’s selection both solidified the base and brought in the NRA endorsement, which is hard to spin as a “negative”

Sarah Palin has also brought in cold, hard cash and energy in unexpected quantities – prior to the convention, how many pundits were claiming that Obama and McCain would have rough financial parity in the race? How many would have been willing to say that the campaign could bring out 10,000+ at rallies in Virginia, Florida, and Southern California? How many plebeian votes does she bring in for each patrician “elite” that she repels?

Much has been made of her “negatives” – the fact that her like/dislike numbers have been growing worse. Well, that’s the entire point of the VP as “attack dog” – her job is to get the message out about the opposing presidential candidate and keep the base enthused with judicious servings of red meat. A VP candidate who does not increase their negatives is not doing their job. John Edwards didn’t allow the campaign to impugn his favorable/unfavorable numbers (let alone his hair) – how did that work out for him?

Overall I look at the race, and yes, this was always going to be a difficult slog for the GOP – even more so with the financial crisis popping up. The media is highly biased, and there are a dearth of energetic leaders in the GOP with the proper “credentials” to step into the VP role without issue. John McCain took a chance on Sarah Palin, and despite all of the twists and turns, he’s still hanging on as a contender. I don’t think he accomplishes that with a “problem” choice.

There are other examples of this on the more “liberal” side of the divide – bio-diesel reactors that enable an individual to make their own fuel from waste oil. Start-up companies looking into algae farms to turn deserts into bio-fuel stations. Small farmers growing local foods and raising livestock that are sold direct to consumers. All of these give me faith in the future of the country, as they represent a quintessentially American approach – if you don’t think the government is doing the right thing or is standing in your way, just go around it.

While I may not agree with all of the ends, I believe that this is absolutely the direction we need to be taken going forward. All too often, conservatives focus on “the issues” or “the narrative” in arguing against government action. I think this is a strategic error by conservatives. As an example, we may not agree on the importance of global warming going forward, but rather than focusing on the “science” of the issue we should be making the point that government action is not desirable because government is incompetent. We deride the faux praise for “speaking truth to power” in a country with First Amendment guarantees, and yet one of the more common slogans of the 60’s could easily become a new rallying cry for conservatives – “Power to the People”.

Why does so much lobbyist and special interest money come to Washington? Is it because of the character and wisdom of our elected leaders? No. It is because of the power that Washington has bestowed upon itself; the power that we have let them wield with all too little opposition. People view the graft, corruption, cronyism, and money coming into DC as the problem – a case of the “establishment” corrupting those “fighting for us”. This is exactly backwards. Conservatives should be making the point repeatedly that the money and the corruption are mere symptoms – the problem is the power itself. Money follows power. Power corrupts.

Neither of these requires advanced education to grasp – the 2007 federal budget works out to $5.1 billion dollars per Senator or Representative. How many people would you trust to effectively handle a $5.1 billion dollar spending account responsibly? How many politicians would you trust with the same? We need to hammer home the point that this is not about trusting the “wrong” party or moving towards the “wrong” goals, but a far simpler matter – we should not trust anyone with this level of responsibility or control over our lives, regardless of party or intention. We need to diffuse the power for our own good – returning power to the states and the people so that “the issues” are dealt with close to home, and so that individuals have as much ability to influence the process as possible. Adjusting a health insurance policy should NOT require an act of Congress! Making a dirty joke should not be a federal crime!

For all this cash, how effective has government been in the current crisis? What’s the last example of a quick, clean, and efficient government intervention? When the lights were elsewhere, when’s the last time your legislators made the right call when it went against their re-election prospects? Bonus question – have the government’s “management” of the economy and public “safety net” programs made more or less likely the excessive debt loads that are exacerbating the current crisis?

Conservatives need to re-direct their efforts and their fights. Certainly, we would like to win this election and future elections, but we should not depend on it. Any system that is only stable when the “right” party wins is not a stable system. We should not be content to leave dangerous levers that need not be there in government hands because we trust those currently manning the levers. We need to fight to remove power from the federal sphere and return it to the states and to the individual, the better to guarantee that there are a wider range of hands at the wheel, and that any individual failure has a smaller area of impact. If we had fifty separate Fannie/Freddie pairs run by states, what are the chances that all would fail simultaneously? How likely would it be that any individual failures would bring down the system?

Federalism can be a winning issue if we’re willing to push it – not just the states rights position for abortion and topics where this would be a net positive for conservatives, but across the board. Power from Washington, power to the people. If “universal health care” is so important to liberals, let the “blue states” implement the system, and levy the taxes to do so. If New Hampshire wishes to become a libertarian paradise, more power to them. Should California wish to prove out “alternative energy” and move beyond oil, let them pave the way, but on their own dollar.

Let us return the power and responsibility of government to the states, a level where individuals can make a significant difference, where government policy is once again responsive to citizen activists. Breaking the power monopoly forces “special interest” groups and lobbyists to run 50 individual campaigns instead of one federal one, granting greater power and responsibility to citizens than the current system. Reserve to the federal government only those functions that cannot be reasonably delegated to the states, and question those functions regularly.

This is not the easy “we’ll give you everything and have someone else pay for it” of the liberal elite, but now more than ever it can bee seen that no single system can do it all. The government would do well to take a page from computing in reliability and redundancy – the more separate and independent mechanisms you have, the more likely you are to be isolated against specific faults or incidents. Would entitlements be the problem they are if they were separately determined by 50 states instead of one federal government? If the federal government restricted monetary policy to maintaining a stable currency value and trusted the states with the “economic management” would we be in the same situation?

More than ever, we need the laboratory of democracy that has served our federal republic so well in the past – the ability for each state to chart a different way, and for each state to look at the others to evaluate their course. A single power center is always unstable – monopolies fail, monarchs and emperors are overthrown. Corporations have not merely a CEO, but a board and shareholders who possess a measure of power and control. Modern governments use checks and balances to distribute power among different branches and ministries.

Leaving a single federal government with as much power as ours has, regardless of the party or individuals in charge, is a fundamental risk that we do not need to take. Let us learn from the internet – go small, go local, and wherever possible enable people to work together to work around interruptions and problems in the system. Let us distribute the responsibility so that no one group or party has the power to create these problems in the first place. Get government out of the way, remove the power to keep them from initiating the next crisis, and let the American people get to work fixing the mess they created.

What I worry about far more are the looming disasters with our mandatory entitlement spending. Our “entitlements” are pitching over – individual Medicare “trust funds” are starting to be depleted, and the remaining Medicare and Social Security positive balances are starting to narrow. That is, even those funds that still see a surplus are seeing a shrinking surplus in the very near future. As a result, the “extra” cash the government has been using for their pet projects will soon fall off.

And what do our candidates think of this? One wants to cut spending, but will have no power to usefully reform these programs given the makeup of Congress. The other wants close to a trillion in new spending (plus the pork fat to grease the skids in a friendly congress), and thinks we can “tweak” the tax code to find it. He wants to mandate oil independence and create 5 million “green jobs”, which would add $6000 in energy costs per household. It’s a fair cop that earmarks are a relative drop in the bucket here, but to say that earmarks are small potatoes, so let’s go spend another trillion? Get real!

Making matters worse, we have an incompetent Congress and a party that’s going to claim “we just need to tax the rich a little more – we owe it to the OSADI recipients, as they’re just getting back what they paid in”. No Congress, you took their money and created a bunch of little programs to keep them happy and stupid with it, and dropped an IOU into the “trust fund”. Now the bill is coming due, and “taxing the rich” will just ensure that they restructure their payout to minimize the new tax liability, or relocate overseas.

If government programs were instead corporate programs, those involved would be thrown in jail for running a ponzi scheme, those paying in would lose their investment, and the whole mess would be liquidated. But of course we couldn’t do that for Social Security recipients, as they had no choice, since Congress refused to give them one. We have presidential candidates that are ignoring the issue, a Congress that couldn’t even take the hard look at the problem when Bush was pressing for it, preferring the “pay no attention to the man behind the curtain” approach. Are we going to look back on this rescue attempt and say “ah, if only we could fix today’s troubles with a mere trillion dollars?”

On the Business Tax

“Sending $4 billion to the oil companies” – I suppose you could claim that not taking money from the oil companies in the first place is “sending them money”, but let’s not argue semantics too much. Leaving the oil companies more of their money results in more oil exploration and thus more oil and gasoline supply, as well as more alternate energy research. Taking the money from them leads to expansions in programs such as “low-cost housing” that not only failed, but brought down Wall Street in the process. Which sounds like the better option?

“Closing Tax Loopholes” – You say you’d like to close the tax loopholes, effectively increasing the business tax. Inevitably, large companies are going to look for more concessions in the form of tax breaks or co-development funds when locating jobs within the US. How will this not shift the overall tax burden from large corporations on to small businesses?

On Green Issues

You’ve made the claim that you’ll direct us to oil independence in 10 years, and create ~5 million jobs in the process. If one assumes that the cost to hire one worker for one year (including unemployment, payroll taxes, benefits, and other costs) is $120,000, then this oil independence plan has a net yearly cost of 600 billion dollars, or about $6000 per household in the US. Do you not expect an increase in energy costs equal to 13% of the median household income to have a direct impact on the working class?

On Profit and Progress

Many in your party disparage “profit”, and view “government-run” as a positive change. You have previously mentioned the Chinese spacewalk, and our need to remain competitive in the space program. If we look to the past, we see that private, profit-driven enterprise brought us from the wright flyer and the Model-T to the 707 and the Corvette in about 40 years. The government-run space program went from moon landings 240,000 miles from earth to shuttle flights 250 miles from earth. Cost per launch decreased from ~2.4 billion for an Apollo launch to $500 million per shuttle launch. In contrast, one giga-FLOP of computing power at the time of the Apollo program would have cost about 1 trillion dollars, whereas the same amount of computing power today costs about 20 cents. Why do you believe that getting government involved in running major industries will make anything cheaper or more efficient?

(Enough for tonight … but more likely to come)