Laws Are For The Little People

Once upon a time (Oct. 20, 2010), Princess Megan McArdle decided to exhibit a twinge of regret.

So having finally closed on the house, we're living in what is euphemistically known as a "mixed" neighborhood, where poor black residents who have lived there for a generation or more exist somewhat uncomfortably side-by-side with more affluent whites who are drawn to the relatively cheap rents and lovely Victorian housing stock. The tensions thus built up are played out in many places, notably local politics, where a recent attempt by a local cafe to get a liquor license triggered many of the arguments that we heard after Adrian Fenty's loss in the mayoral race.

Yesterday, I rode the bus for the first time from the stop near my house, and ended up chatting with a lifelong neighborhood resident who has just moved to Arizona, and was back visiting family. We talked about the vagaries of the city bus system, and then after a pause, he said, "You know, you may have heard us talking about you people, how we don't want you here. A lot of people are saying you all are taking the city from us. Way I feel is, you don't own a city." He paused and looked around the admittedly somewhat seedy street corner. "Besides, look what we did with it. We had it for forty years, and look what we did with it!"

As related here, the blogosphere collectively coughed bullshit! in response. McArdle went on (and on and on) to say that while it was regrettable that the black middle class was pushed or moved further from the city's center, it was either her or them.

I didn't know quite what to say. It's true that for a variety of historical reasons--most prominently, the 1968 riots that devastated large swathes of historically black DC--our neighborhood has more in the way of abandoned buildings than retail. And I'm hardly going to endorse the gang violence about which he presently discoursed at length. But the reason we moved into our neighborhood is that we want to live in a place that's affordable, and economically and racially mixed. We don't want to take the city from them; we just want to live there too. Perhaps I should have said that.

Oh, I'm quite sure that there are white people who are impatiently waiting for all the black residents to be forced out (except for the affluent ones), just as a few neighborhood old timers have been known to throw bottles at hipsters. But at least in my hearing, that has been far from a majority sentiment, on either side. It seems as if there ought to be some way to make it work.

But then, I am largely in agreement with a perceptive essay by Benjamin Schwartz that appeared in our pages a few months ago, arguing that the neighborhood I want to live in doesn't exist--or at least not for long:

[snipped quote]

When I say I'm in agreement, I mean empirically, not philosophically. I watched the process in the mixed-income neighborhood I grew up in, which was liberally dotted with housing projects, old tenements, and lots and lots of stores that served poor people. Eventually, only the housing projects were left, marooned on little islands amid a tidal wave of affluence that had even swept the residents out of the seventh-floor walk-ups built when Victoria was still on the British throne. There was virtually nowhere for the residents of the housing projects to shop or eat, as all the markets and restaurants had at least doubled in (real) price and changed their mix of goods to cater to investment bankers, not single mothers making $28,000 a year. The financial crisis temporarily halted the process, leaving some lower-income retail on Amsterdam Avenue. But I'm sure that as Wall Street gets its groove back, that too will go.

I have no idea how you could stop this process. To keep our neighborhoods the way Jacobs and I liked them would involve massive coercion not just of real estate owners, but of merchants, food vendors . . . everyone in the network of service providers that supports a neighborhood. The more people like me who move into my current neighborhood, the more services the neighborhood will attract--and those, in turn, will bring further waves of gentrifiers who will use their higher incomes to drive up rents, home prices, and the assessed values upon which property taxes are based.

I want the services, but I don't want this to price out all the people who already live there. Unfortunately, it's a package deal.

As proof of her desire to retain some of the more modest characteristics of her new neighborhood, McArdle is now irate that a "gastropub," a gourmet bar and restaurant, is unable to open its doors close enough to her so she can walk home after becoming inebriated.

The residents of my neighborhood have been very excited to watch construction progress being made on Shaw's Tavern, a gastropub located at the intersection of Florida Avenue NW and 6th street. There aren't a lot of sit-down dining options in the area--a couple of Thai places, a bar and a bar/coffee shop, and one kebab place with great kebabs but glacial service and no atmosphere. Don't get me wrong--residents are grateful for even this small number, given that it is approximately 400% more places to eat than we had a few years ago. But we are still eager for a restaurant where you can sit down and order a drink and a full meal, all at one time.

The funny part is that as soon as McArdle has children she will become irate that she is surrounded by neighborhood bars, with their traffic, street urination and noisy fights, loud music, and ear-piercing shrieking constant laughter, as their liquored-up denzions indulge in their God-given right to drink in public.

Then Shaw's Tavern opened, and the excitement fizzled. There was a hold up on the liquor license, due to two charity events that the tavern had held prior to securing their liquor license. Apparently, they had failed to get the special one-day liquor license that DC requires for people without a permanent license to serve booze; allegedly, the manager (now fired) forged documents to get liquor distributors to provide him with booze. At first, the delay was only supposed to be for a week; then we were told that the restaurant wouldn't be serving booze until at least September 15th, when the Alcoholic Beverage Regulation Administration meets again.

Well, that was stupid, as well as dishonest. They couldn't bother to get a liquor license, a fundamental requirement for a bar? It's like not getting a building permit for remodeling or a dba. It's a major, major error. And then committing fraud to cover up the bad decision just reveals the lack of judgement and morals of the pub's owners and staff. They could have bought some time and covered their asses by getting the one-day permit but wouldn't even do that. But instead of taking into account the actions of the owner(s) and the law of consequences, McArdle's knee jerks and kicks the nearest government office.

Unfortunately, there are few dry Baptists living in the Bloomingdale/Eckington/Ledroit triangle; most people who want a meal, want to be able to get a drink to go with it. On Friday, Shaw's announced via Facebook that they would be shutting down until they get their liquor license:

Shaw's Tavern is closing its doors from Saturday 27th of August. We could not survive without a liquor license. We will re -open when we are allowed to serve alcohol. To all of our 936 plus loyal fans and 30 dedicated employees, we thank you for your amazing support and understanding.

Unfortunately, this may well be a death sentence. Despite the lack of competition on the fine-dining front, the restaurant was at best operating at 60% capacity most days. The longer this stretches out, the less likely it is that they'll be able to reopen: the chef will have to get another job, the servers will go elsewhere. As Matt Yglesias notes, in DC

There's plenty of demand for bars and restaurants. There's plenty of space where bars and restaurants could open. There are plenty of people who need jobs. What's more, there are plenty of people who could use the increased social services that higher tax revenue would provide. Instead, we're doing this. Not just one restaurant shut down, but a sign to would-be entrepreneurs everywhere that their potential investments are much riskier than a superficial read of market conditions would suggest.

Damn you regulations, that won't permit people to serve alcohol to the public without following strict rules! How are entrepreneurs supposed to entrepreneur if they are required to follow silly rules? Or laws and regulations aimed at maintaining a safe environment for the neighborhood's residents? Surely McArdle would be thrilled if noise regulations vanished? Traffic laws? Or maybe just the rules that happened to inconvenience her at any given moment. She can keep the noise and traffic laws since they benefit her but jettison the alcohol laws since they momentarily inconvenience her.

When a number of us lamented the shutdown on Twitter, we were met with people saying, in effect, that ABRA had to send a strong signal about following the rules. I don't condone forging documents, if this indeed occurred. But I don't see why ABRA has to send this particular signal about following the rules--or what terrible harms would follow if they didn't.

Now, you must admit that McArdle is just being fair here. If she didn't care that mortgage companies and banks were forging documents, why should she care if one little old restaurant was forging documents?

A couple of commenters mention that the government (meaning Americans) want liquor laws to prevent underage drinking. They must not realize that the Pensylvania Liquor Board had the nerve to implement underage drinking laws when McArdle wanted to drink while underage and arrested and fined her, putting her through multiple inconviences. To make matters worse, McArdle ignored some of the provisions of her release and never sent in the paperwork regarding the suspension of her (then hypothetical) driver's license, and so had to clear up the matter years later.

At the age of nineteen, way back in 1992, I purchased a beer in a Philadelphia bar.

No, I hear you cry, it cannot be true! I know, readers. You are hurt. You are shocked. You never thought I could be capable of such depravity. Well, frankly, I didn't either. Little did I suspect when I bundled off to the University of Pennsylvania in the fall of 1990 that I had stumbled into a den of iniquity where underaged drinking sometimes took place.

I cannot excuse it. I allowed myself to be led astray. Yes, one sultry July evening, I allowed myself to be persuaded--by a malefactor or malefactors who shall remain nameless--to enter one Murphy's Tavern on 45th and Spruce and purchase, to quench my thirst, a Rolling Rock.

Not that! Nay, never that! Believe me, your wailing and gnashing of teeth wounds me as deeply as it wounds you. In my defense, I can only say that I had no idea PBR was going to win the hipster coolness wars.

While consuming my one (1) beer, I was apprehended by agents of the Pennsylvania Liquor Control Board. They called my parents, fined me, and made me attend a class on the horrors of underaged drinking (did you realize that drinking can lead to uncontrollable vomiting?) It was during that class, with the errors of my ways now readily apparent, that I made a pledge to myself to quit underaged drinking with all due speed. And on January 29th, 1994, I honored that pledge.

The government paid no attention at all to McArdle's wants and needs. They just got in her way! Don't they know that rules are for other people? That underage drinking is bad when other people do it but it's just fine when Ivy League students do it? That punishments are for other people who do bad things, not for nice, white, college students who went to expensive prep schools?

Now for the painless segue from idiotic bureaucratic snafu to moral: this just goes to show why ironclad bureaucratic rules are such a bad idea. The federal law is meant to protect dangerous drivers whose licenses have been suspended from getting a license in another state--an excellent program. It is not, or so I mote, intended to allow the Commonwealth of Pennsylvania to suspend my license for an underaged drinking conviction that took place 16 years ago. Indeed, I don't think that even the Commonwealth of Pennsylvania law was intended to do something so moronic--it isn't as if I deliberately (or even accidentally) failed to comply; I simply didn't have a driver's license for them to confiscate. Since I didn't get one until I was well over the legal drinking age, I'm pretty sure that a moment's consideration would lead any reasonable bureaucrat to dismiss this idiocy.

But of course, we don't have reasonable bureaucrats. We have rules. Rules that Must Be Followed No Matter What. Neither Pennsylvania nor DC can, apparently, do anything at all to prevent the Wheels of Justice from punishing me for a long-past transgression that did not even involve a motor vehicle.

Damn you again, rules! Any reasonable person would have let a important person of quality like McArdle off with a wink and a nod, like in the good old days. Now everyone is supposed to follow the rules, even the upper class! And it's all the fault of those stupid, useless liquor laws.

Punishing a restaurant owner for a liquor license violation with an open-ended maybe-we'll-give-you-a-license-maybe-we-won't delay is equivalent to giving someone the death penalty for a parking violation. Moreover, it punishes the neighbors and the employees right along with the owner.

There should be special rules for Friends Of McArdle, thank you very much.

I've seen commenters and others suggesting that if they would forge liquor license paperwork, they might fake the health inspection data or other information. But does this really follow? The regulation in question is, not to put too fine a point on it, anti-competitive BS.

Note the Randian dog-whistle, from the woman formerly named Jane Galt who in no way, shape or form is a Randian.

We wanted to get a friend to bartend for our wedding in order to save money (and have a friend bartend our wedding!), but doing so would have required us to get a one-day liquor license, as well as to buy the liquor from an authorized DC liquor distributor. The cost of the license and the expensive DC booze would have ultimately cost us as much, or more, than using a caterer--which I've no doubt is exactly the point. This is pretty clearly rent seeking designed to protect caterers and local liquor distributors from competition, not a service to the citizens of DC, who might otherwise be served out-of-state poison at weddings.

You will not be surprised to see that McArdle changes the goalposts on this story when confronted with facts, or that her facts are wrong. From the comments:

Robert Rutledge 21 hours ago
Are you kidding? Look, I'm a Truxton Circle resident who was really looking forward to Shaw's -- and a liquor rep who was really looking forward to selling to them -- but these accusations are not insignificant. Regardless of how you feel about regulation in general, forging an ABRA license shows a HUGE lack of integrity and foresight. Not only were they putting themselves in danger here (which is now obvious), but the distributors they fleeced could also have been in deep trouble, even though they did their due diligence.
I find their claim that this was ALL Steve May's doing to be highly dubious, and am not shedding a tear for the owner. Incidentally, he closed the place down on Friday with no warning to the staff, five minutes before service, and the chef quit in protest.

Oh, and incidentally, a one-day ABRA permit is like a hundred bucks, and DC distributor prices are WELL below retail, or what a caterer is likely to charge you. If you actually put the effort in, it can actually be a good deal cheaper to cater one's own event.

McMegan 17 hours ago in reply to Robert Rutledge
When I looked into it, it was more like $500-700, and I would have needed to hire at least a couple of pourers to help my friend since we had more than 100 guests. When we ran the numbers, it would have cost the same or more. We gave up and went with an all-inclusive venue. I know when you're running a business, saving $500 may seem trivial, but it was big money for us--which is presumably why the fee is so high, to prevent people from cheaping out.

And while the distributor prices here may be cheaper than retail, they were not cheaper than the prices that we could have gotten by getting our friend to bring liquor from a cheaper state. Which is what we would have done, except that DC's licensing regime prevented us from doing so. I'm sure this is great for DC liquor distributors, but it's pretty hard to argue that DC residents need to be protected from dangerous out-of-state hooch.

RobertVonRankeGraves 14 hours ago in reply to McMegan
As ever, Megan, you lie like a carpet remnant.

The fee for a class F beer and wine event license is laid out in DC Regulations 23-208.12: $130/day.
The fee for a class G beer wine and spirits license is also there: $300/day.

Considering the potentially large cost externalities of public alcohol consumption, including law enforcement expenses and personal injury and property damages in tort, a little fee as a practical bar to casual beer blasts seems like a good idea to limit social costs from excessive alcohol consumption and to ensure that event planners take the consequences of alcohol consumption seriously.

McMegan 2 hours ago in reply to RobertVonRankeGraves
Yes, but I had to get the license through a caterer in order to get the caterer to work with me, and they charged $500-700. Perhaps I could have threatened them with legal action, but I don't really want someone preparing my food under threat of lawsuit.
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Or McArdle could have put the free market to work and found a caterer who would accept the arrangement, but she chose to not do so.

In my humble opinion, in fact, all liquor licensing is useless; it mainly functions as either backdoor zoning control, or as a way for existing bar owners to protect themselves from competition. But this rule is particularly egregious.

No, it isn't. You forge liquor permits, you lose liquor permits.

If you find out that someone you know parks illegally in their alley, do you really think that it's a short step to murdering their neighbors?

She does love her non-sequiturs.

Health regulations have an obvious rationale that liquor licensing lacks, and there are also clear financial downsides to violating them openly (customers do not like seeing vermin running around your restaurant, or eating spoiled food.) They're also vulnerable to detection on visual inspection: expired packaged goods or rat droppings will be seen by inspectors. Obviously, most restaurants do violate health regulations in small ways, and some do so flagrantly.

Actually, most don't. I waitressed for years and every restaurant was a stickler regarding health regulations. They had no desire to get shut down and end up on the local nightly news. The wait staff and kitchen staff all cleaned their areas daily and a cleaning company came in to handle the heavy or specialized work.

But I'm not sure how closely that's correlated to . . . soft opening with unlicensed charity gigs, even with dodgy paperwork.

Once again, fraud=dodgy paperwork. Her sense of morality and legality leave a lot to be desired.

At any rate, the manager who allegedly did these things has been fired, and the owners have already lost a lot of money. This seems like adequate punishment. It's hard for me to believe that ABRA needs to kill viable establishments in an area that badly needs them, in order to save us from the scourge of . . . unlicensed cocktail parties. It seems widely out of proportion to the potential harm.

So what if the owners were incompetent and dishonest? McArdle wants a gastropub and she wants it now, goddammit! A commenter remonstrates McArdle:

The people opening the bar in your neighborhood presumably knew all of this and still went ahead with the investment. The fact that they had so much riding on this license makes their failure to properly supervise this 'rogue' manager all the more astonishing. A competent businessperson would have familiarized themselves with the reality of the regulatory environment, recognized the high stakes of this license, and made sure that they did absolutely everything in their power to secure it. This was indeed a life or death situation, but the owners seem to have mistaken it for a parking ticket dispute.

It's not like the board made an arbitrary or surprising ruling here: "we don't like your face, so you can't do business in DC." And It's not like the tavern did everything right but forgot to dot the "i" on a form or something. Maybe other restaurants are denied their license for bogus reasons. But that's not the case here. If the forgery thing is true, they flagrantly broke a law directly related to their liquor license application (!). How should the board have responded to the forgery of their own documents? There's no way any responsible regulator could approve a license immediately after that. So the tavern had to fire the manager and wait until the next meeting (or should the board scheduled a special session to expedite this errant restaurant's request?). If you want to help reform the liquor license process, you should describe an example where a business was denied a license for a more arbitrary or corrupt reason. If, as you say, there are stories of gross incompetence or unexplained delays (or bribes) then tell those. That will generate momentum for reform more than the story of a business that genuinely screwed up.

Yes, it is very difficult to understand why McArdle is getting worked up over an unsuccessful restaurant, considering the circumstances. Yet another commenter:

cbar1980 21 hours ago
The author glosses over and omits some pretty salient points in order to fit the narrative she wants to believe. This establishment is one of two the same owner is trying to open within the same neighborhood, the other being an "Engine 12" restaurant. The other concept's construction has been shut down numerous times for failure to obtain building permits, and is embroiled in a similar liquor license ordeal - much of it their own making. In the case of Shaw's Tavern, they opened without a license, without a Certificate of Occupancy, forged their liquor license for both government inspectors and the wholesale companies. When caught red-handed, they then embarked on a PR campaign decrying the oppressive, anti-business slant of the DC government.

If they followed the rules which are in place for a reason, they'd probably have a license right now. The rules which the author finds so onerous, are the same ones that prohibit an illegal club from opening up next door to her in a residential neighborhood - legally speaking, what here upscale gastropub did is no different than such an operation. The owner of the business has demonstrated a track record for obviating the laws, and may not fit the suitability criterion for owning a liquor license(which honestly is not a high bar in DC).

The world needs ditchdiggers too, and just because someone wants to open a restaurant, doesn't mean their qualified - similarly, just because someone writes a blog, it doesn't mean that they're also well-informed.

RustBeltModerate 20 hours ago in reply to cbar1980
Written like a person who has never built anything or operated a business.

McMegan 18 hours ago in reply to cbar1980
Actually, no. The zoning regulations are what prevents an illegal pub from opening up next to me . . . but being a libertarian, I frown on the notion of illegal pubs.

Actually, not always. In this case, lack of a liquor license prevented an illegal pub from oopening next to her. McArdle seems to think that the restaurant just made an oopsie, but forgery is a deliberate decision and serious business. Why didn't the pub's owner just get the license?

McMegan 3 hours ago in reply to thomasrhys
In order to make it as a restaurant with no alchohol, you need to serve extremely cheap food that can be produced in volume. There are very few fine dining establishments that thrive without it--probably Kosher places get by with thin liquor sales (but their food is more expensive for the quality you get), and maybe places in Mormon areas. But in most places, above the level of cheap-and-cheerful fried-things-with-carbohydrates places, no booze, you lose.

Which makes that decision to ignore the liquor license a spectacularly bad business decision, and it is no surprise that the people who made it lost their restaurant.

Mysteries Of The Universe

People always have a reason for their actions; it might be trivial or deeply buried but it always exists. Perhaps their choice flatters the ego, hides a fault or mistakes, advances an agenda, eases anxiety, or merely gives a moment of pleasure. Whatever the motivation, people make choices and decisions based on needs, wants and fears. Illogical and self-harming actions are only inexplicable to those who do not know the individual's motivation.

Megan McArdle announces Alan Krueger appointment to the president's Council of Economic Advisers and gives him her tentative approval. In the past, McArdle has spoken out against almost everything Krueger has supported and it's a little difficult to understand why McArdle is making one of her rare diversions from the economic elite's dogma.

It's also no bad thing that we have a labor economist at the CEA right now, when our failure to create jobs for the standing army of the unemployed is by far our biggest problem. It's not that I think there's some magical program for re-employing everyone that has been hitherto overlooked because the CEA didn't have Alan Krueger on hand (I'm sure Austan Goolsbee could--and did--get him on the phone any time he wanted.) But on the margin, it matters that someone who has spent much of his career studying labor market outcomes will be dedicating the next few years to helping the president devise economic policy. When issues come up, his mind will naturally see the repercussion for jobs. And that's exactly the focus we should have right now.

Krueger is a labor economist, which automatically would put him on the wrong side of the indivisible line between labor (boo!) and capital (yay!) that McArdle has erected in her brain. She disliked the cash for clunkers program, which Kruegar worked on, and has spoken dismissively of supporters of increasing the minimum wage, saying they are confined to "movement think tanks" and "marginal academics." Kruger co-wrote a well-known study that showed increasing minimum wage did not increase unemployment.

We only have one or two small clues that might help us solve the riddle of the inner workings of McArdle's brain.

On other fronts, I think Krueger is an excellent choice. I've heard him speak in a number of off-the-record sessions, and I don't think that anyone is going to be mad at me for revealing that he was extremely impressive, with a grasp of labor market economics that seems to this non-economist both encyclopedic, and very nuanced. He's also very good at explaining those distinctions in a way that makes sense.

Perhaps McArdle merely parroted the thumbs-up that Tyler Cowen gave Krueger. Or maybe it's just that McArdle is a sucker for power, and if she has basked in the glow of an important person she is theirs forever. Austan Goolesbee is far too liberal for McArdle's acceptance under ordinary circumstances but she was a student of his and knowing that she has been that close to power is utterly intoxicating to her. One cocktail party convinced her that David Koch was a rilly great man who never could have done something so underhanded as to bankroll and organize the supposed grass-root tea parties.

We will probably find out the reason in due time, as McArdle's commenters take to the inadvertent bait like sharks to chum, irate that she would support an Obama hire when everyone knows that the best government is no government (at least in between hurricane recovery and relief efforts).

Going Galt

Because nothing says rugged libertarian individualism and pulling your own weight like standing in line for federal government giveaways.

Laws Are For The Weak

Megan McArdle is a work of art. Behold this post, in which she guesstimizes that the Obama Administration won't prosecute mortgage fraud because they need the good will of bankers to get them to accept industry reforms.

Via Outside the Beltway, I see that the administration is pressing New York's attorney general to drop its investigation into dodgy foreclosure practices and settle with the banks.

Dodgy? I think the word McArdle is avoiding is "fraudulent." But she always did refuse to admit any acts of fraud in the financial sector.

Doug Mataconis, who wrote the post, says "I'm sure the large amount of donations coming from the financial sector into the coffers of the Democratic National Committee and Obama For America have nothing to do with this pressure. I also believe the guy who tells me he has a bridge in Brooklyn to sell me."

Once again for your viewing pleasure, the top 20 donations to Obama's election campaign:

University of California $1,648,685
Goldman Sachs $1,013,091
Harvard University $864,654
Microsoft Corp $852,167
Google Inc $814,540
JPMorgan Chase & Co $808,799
Citigroup Inc $736,771
Time Warner $624,618
Sidley Austin LLP $600,298
Stanford University $595,716
National Amusements Inc $563,798
Wilmerhale Llp $550,168
Skadden, Arps et al $543,539
Columbia University $541,002
UBS AG $532,674
IBM Corp $532,372
General Electric $529,855
US Government $517,908
Morgan Stanley $512,232
Latham & Watkins $503,295

McArdle finds it hard to believe that a company that gave hundreds of thousands of dollars to support a friendly candidate actually wants that candidate to be friendly to them. No doubt USB and Citigroup and JP Morgan just like to give away money to people with nice smiles and get nothing in return.

Mataconis also wrote:

The Attorney General of New York has been on the receiving end of what seems like an unusual amount of pressure from Obama Administration officials to accept a settlement with mortgage lender rather than pursue the criminal fraud investigation that he opened several months ago [...].

Naturally McArdle does not quote that part.

I quite agree that the administration should not be intervening, but let me suggest a more charitable explanation, contained within today's edition of the New York Times: "U.S. May Back Refinance Plan for Mortgages". It looks like the administration has convened a working group to explore more aggressive options for dealing with underwater mortgages.

And so the small matter of fraudulent mortgages is swept away, the better to discuss how the taxpayer can best compensate the bankers and mortgage brokers for their fraud and theft.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today's lower interest rates, about 4 percent, according to two people briefed on the administration's discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers' mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

Administration officials said on Wednesday that they were weighing a range of proposals, including changes to its previous refinancing programs to increase the number of homeowners taking part. They are also working on a home rental program that would try to shore up housing prices by preventing hundreds of thousands of foreclosed homes from flooding the market. That program is further along -- the administration requested ideas for execution from the private sector earlier this month.

How much these proposals will actually accomplish seems rather questionable--I doubt lowering interest rates is going to do much to fix the housing market, given how highly correlated default seems to be with a) losing your job and b) the simple fact of being underwater. But leave those concerns aside. If the administration actually wants any of these programs to work, it is going to need the cooperation of the banks.

And no, I do not mean "because they can't move without the okay of their corporate paymasters". I mean that the administration is going to need some active cooperation from the banks that hold and service all these mortgages. Corporate and social reformers tend to get caught up in the notion that with a combination of steely will and brutal intolerance of misbehavior, you can simply force all those twerps in a misbehaving organization to do what you want: the only reason people don't, they believe, is that they have somehow been paid off, or brainwashed, by the twerps.

It's like the legal system doesn't even exist for McArdle. You pass a law, you enforce the law, the bank follows the law. Putting the reality of what is actually happening aside, saying that we must get the banks to agree to follow the law voluntarily is stupid and dishonest, but propaganda usually is stupid and dishonest. In McArdle's little world, liberals are busy-body reformers who just envy and therefore hate rich people, who are successful because they are moral and work very, very hard. Therefore, liberals are driven to punish the banking class with silly, harmful rules and regulations. The government should be willing to give something up in return if they want members of the financial industry to follow the law. For instance, they should give up implementing the law, which is hard and give the banks a sad.

This is why most corporate reorganizations, and social reforms, fail miserably. Not even Stalin or Pol Pot exercised this level of total control over the workers. There are all sorts of way that unwilling people will subvert your efforts.

That's not to say that reforms should be all carrot, no stick. Indeed, sometimes the way to deal with a tricky organizational problem is to fire all the workers. But even this doesn't work as well as you might think. I once spent some time talking to an in a turnaround situation whose solution to a deeply dysfunctional corporate culture at a firm that had been losing money for more than a decade was ultimately a mass firing that axed more than 90% of the staff. Eighteen months later, I asked him whether the old culture had died out, or re-established itself among the new workers.


"Honestly?" he said, "The culture won."


You need some level of buy in; if you don't have it, your reforms won't work unless you can actually fire everyone. And a "clear the decks" approach is not an option the administration has. They cannot fire the owners of these mortgages, nor do I think they'll have much luck forcing the owners to fire their servicers. If they want to do anything serious in the mortgage market, they're going to have to have the active cooperation of the banking industry.

Because Obama refused to prosecute banking and mortgage industry fraud, Missy Megan McArdle can flounce around proclaiming that homeowners will just have to suffer so the poor, innocent financial industry can get back to the hard work of running the world. (See Glenn Greenwald also.)

And that, in turn, means that they have to trade the industry something that they want . . . like a quick settlement in this foreclosure fraud investigation. I don't know that this is the particular quid-pro-quo that led to the administration's pressure. But after three years of covering their economic policymaking, I find it eminently more plausible than the idea that they're doing this because some banker made a well-timed phone call to David Axelrod.

She knows about the revolving door between Goldman, Sachs and other firms and the government and she knows the banks are getting richer while poverty is growing, but she finds it "implausible" that any quid pro quo exists between Wall Street and the White House. She is either hopelessly naive or a lying hack. Or a hopelessly naive lying hack, take your pick.

I frequently disagree with administration policy, but however much you question their priors or analysis, it's always operated within an admirably consistent technocratic framework. The technocratic wonks are shocked because they cannot believe that this is what technocracy actually looks like in the real world: it involves a lot of side-deals to get buy in from the affected parties.

Yes, the dreaded evil Obama Chicago Machine has no idea of side-deals.

That's not to say that I approve of making this deal. I don't. But this is the sort of devil's bargain we accepted when we got the government into the business of guaranteeing mortgages. The problem is not that politicians are making the kind of distasteful backroom agreements that politicians have ever made, and ever will. The problem is that we put the government in the position where these kinds of deals are necessary.

Blame Fannie and Freddie and the poor!

A lying, simpering, scolding hack tells us to ignore theft and ignore the rule of law, because the banks must be appeased. I should have become a conservative and cashed in by screwing over the poor.

Maybe we really do live in the best of all possible times. Was it ever easier to get rich by shovelling manure down the throats of willing dupes?

The War Against The Poor

The class war continues and the propaganda is flowing thick and fast. The elite have always been successful in pitting the middle class against the lower class but as the middle class shrinks and the lower class grows, propaganda aimed at undermining any sense of class solidarity is needed more than ever.

Something named David French, an avid repeater of all things wing-nutty, does his part at The Corner. Mr. French is the butler of a wealthy man suddenly tasked with raising three orphaned children. Oh, wait. That Mr. French actually did something of value. Our Mr. French is a lobbyist for The American Center For Law and Justice, Pat Robertson's Christian Sharia legal warriors. This man of God has a little message for those who might side with the poor.

The Sources of Poverty

August 24, 2011 12:27 P.M. By David French
Kathryn, thanks for linking to Rubio’s excellent speech. I completely agree with both of the Rubio quotes you highlighted. The free-enterprise system has lifted more people out of poverty than any government program, and yes, our “social problems create our poverty.” But there’s a tension inherent in these two points. It’s not precisely true that the free-enterprise system itself has lifted people out of poverty; it’s more true that the free-enterprise system has created opportunities that allow hard-working (or even moderately hard-working) individuals to succeed. But if you destroy the people’s industry and virtue, then all the economic liberty in the world won’t save them.

It is simply a fact that our social problems are increasingly connected to the depravity of the poor.

I thought the poor were closer to Christ? "Blessed are the poor in spirit, for theirs is the kingdom of Heaven." I guess not.

If an American works hard, completes their education, gets married, and stays married, then they will rarely — very rarely — be poor.

As long as nothing goes wrong before, during, or after your birth, you'll never be poor in the good ole USA. And there will always be a job available...somewhere.

At the same time, poverty is the handmaiden of illegitimacy, divorce, ignorance, and addiction. As we have poured money into welfare, we’ve done nothing to address the behaviors that lead to poverty while doing all we can to make that poverty more comfortable and sustainable.

Poverty is caused by moral failure. Therefore people who are not poor are moral, rich girls don't get knocked up, and professionals don't divorce and have addictions. Blame children for their parents' inability to take care of them. After all, the poor live in comfort, don't they?

Earlier this week, Walter Russell Mead highlighted disturbing research showing that the poor — far more than the rich — are disconnected from church and religion. While church attendance is dropping among all social classes, it’s falling off a cliff for the poorest and least-educated Americans. In other words, the deeper a person slides into poverty, the more they’re disconnected from the very values that can save them and their families.

For a second there I thought he was going to talk about churches that assist their poor parishioners. I should have known better; French will not praise Christian charity when he can call them immoral instead.

The bottom line is that we need more free enterprise, and we need more virtue. Sadly, the Great Society and the sexual revolution have deprived us of both.

Ten points off Slytherin for not mentioning Obama or socialism.

If you want the same message tailored for the high rent district, skip on over to Megan McArdle's little libertarian paradise on the Potomac. She devotes two posts to praising the dismantling of the welfare system as a somewhat qualified success. True, we still have an alarmingly increasing number of poor people, McArdle allows, but many fewer of them are receiving assistance, so one must take the good with the bad.

But I think that progressives ignore the possibility (indeed, what I take to be the near-certainty) that this is an inevitable tradeoff. If we provide benefits sufficiently generous to support people who are too screwed up to provide themselves with a very minimal living standard, we will also encourage people who aren't that screwed up to stay home rather than going to their tedious, low wage job. (Especially young people, who are not known for their patience or foresight). Despite a broader trend of more people having babies without first getting married, the rate of childbirth among unmarried mothers between the ages of 15-19--those whose children who are most at risk of poor life outcomes--declines noticeably post 1995. Though of course correlation is not causation, this at least suggests that welfare reform may have helped both mothers and children by encouraging young women to make better long-term choices about when to have babies.

Obviously, we'd really like to see those birth rates in the 15-17 group fall to zero, and steeper declines in the 18-19 age group. But even a modest decrease is good news. And it shows up in the child poverty figures, which was even more dramatic than the poverty rate in the 18-64 age group.

Since welfare dependency was a cycle, this will have lasting effects: all the women who delayed childbearing until they had some work experience and financial stability are more likely to have healthy kids who themselves are better able to cope, and to pass on those skills to their children.

McArdle doesn't come out and call the poor depraved sluts as Mr. French does, but that's why she makes the big bucks. She says it with moderation and charts, but she still says it all the same.

Atlas Shrugged: The Mocking Part 5

Chapter 6 The Non-Commercial

America has always been primarily concerned with the making of money. Many of the first settlers were part of a corporation which hoped to extract America's riches; if not gold and gems, then timber and tobacco and slaves. Mrs. Frances Trollope, mother of Anthony Trollope, wrote in her critique of America:

Nothing can exceed their activity and perseverance in all kinds of speculation, handicraft, and enterprise, which promises a profitable pecuniary result. I heard an Englishman, who had been long resident in America, declare that in following, in meeting, or in overtaking, in the street, on the road, or in the field, at the theatre, the coffee-house, or at home, he had never overheard Americans conversing without the word DOLLAR being pronounced between them. Such unity of purpose, such sympathy of feeling, can, I believe, be found nowhere else, except, perhaps, in an ants' nest. The result is exactly what might be anticipated. This sordid object, for ever before their eyes, must inevitably produce a sordid tone of mind, and, worse still, it produces a seared and blunted conscience on all questions of probity. I know not a more striking evidence of the low tone of morality which is generated by this universal pursuit of money, than the manner in which the New England States are described by Americans. All agree in saying that they present a spectacle of industry and prosperity delightful to behold, and this is the district and the population most constantly quoted as the finest specimen of their admirable country; yet I never met a single individual in any part of the Union who did not paint these New Englanders as sly, grinding, selfish, and tricking. The yankees (as the New Englanders are called) will avow these qualities themselves with a complacent smile, and boast that no people on the earth can match them at over reaching in a bargain. I have heard them unblushingly relate stories of their cronies and friends, which, if believed among us, would banish the heroes from the fellowship of honest men for ever; and all this is uttered with a simplicity which sometimes led me to doubt if the speakers knew what honour and honesty meant. Yet the Americans declare that "they are the most moral people upon earth." Again and again I have heard this asserted, not only in conversation, and by their writings, but even from the pulpit. Such broad assumption of superior virtue demands examination, and after four years of attentive and earnest observation and enquiry, my honest conviction is, that the standard of moral character in the United States is very greatly lower than in Europe. Of their religion, as it appears outwardly, I have had occasion to speak frequently; I pretend not to judge the heart, but, without any uncharitable presumption, I must take permission to say, that both Protestant England and Catholic France show an infinitely superior religious and moral aspect to mortal observation, both as to reverend decency of external observance, and as to the inward fruit of honest dealing between man and man.

America sold everything it could get its hands on. We cut down forests and dug up mountains. We killed passenger pigeons and buffaloes and whales. We built foundries and factories and mills and sold our products to the world. "The business of America is business," Calvin Coolidge famously said during the Roaring '20s. And now, centuries after the Massachusetts Bay Company reached our shores, the corporate class dominates all others. But our world is not the world of Any Rand, and in her world all businessmen and their labors are despised. Join us as Hank Reardon of Reardon Metal is forced by duty to attend his anniversary dinner, where the inferiority of the rest of the (sub)human race tears at his sensitive yet inviolable soul.

"You don't care for anything but business." He had heard it all his life, pronounced as a verdict of damnation. He had always known that business was regarded as some sort of secret, shameful cult, which one did not impose on innocent laymen, that people thought of it as of a ugly necessity, to be performed but never mentioned; that to talk shop was an offense against higher sensibilities; that just as one washed machine grease off one's hands before coming home, so one was supposed to wash the stain of business off one's mind before entering a drawing room. He had never held that creed, but he had accepted it as natural that his family should hold it. He took it for granted--wordlessly, in the manner of a feeling absorbed in childhood, left unquestioned and unnamed---that he had dedicated himself, like the martyr of some dark religion, to the service of a faith which was his passionate love, but which made him an outcast among men, whose sympathy he was not to expect.

The millionaire industrialist is a social outcast, just like Du Pont, Rockefeller, Astor, Vanderbilt, Schwab, and Mellon. It's something Reardon knows from his childhood, just like little Ayn Rand.

The great exception in her somewhat alienated childhood affections was her handsome father, Zinovy....Like Vasili, Zinovy was, for the most part, silent, but he was immensely proud of his accomplishments as a self-made businessman. He admired his eldest daughter's proud spirit and original, razor-sharp mind. An avid reader of Russian literature, he encouraged her efforts to write her first stories and, later, her drive to craft a fiction of ideas.

...

From the age of five or six, Ayn Rand took in everything in, including the ugly and nonsensical pieties and prejudices of neighbors and official spokesmen who treated Jews as, at best, second-class human beings. Often, their pretext for such treatment was that the Jew were the greedy entrepreneurs, rabid industrialists, and ruthless bankers who were spoiling Russia's "pure" Slavic traditions and fomenting labor unrest. In such circumstances, Rand's love for her self-made father was strongly roused. The result would be seen in her pro-individualistic, pro-industrial novels, which more than one commentator has also viewed as an impassioned defense of gifted, productive Jews.

Rand's mother, on the other hand, was socially ambitious and critical.

Though Rand made good use of [the advantages given her by her educated mother] as she grew older, she viewed her mother as hypocritical and shallow, an opinion not entirely borne out by the evidence. She once characterized Anna as an aspiring member of the St. Petersburg intelligentsia whose main interest in life was giving parties, and she suspected that Anna enjoyed books and plays less than she enjoyed the appearance of talking about them at her frequent gatherings of family and friends....Still, until the 1917 Revolution changed everything, Anna seems to have been an artistic social climber (though a remarkably intelligent and resourceful one, as we shall see) who wanted her daughters to rise in the city's Jewish social hierarchy--a project for which Ayn Rand was particularly unsuited.

...

[Rand] claimed not to care about being approved of or accepted by her family and pers. Since she generally wasn't accepted, the proud, intelligent child appears to have learned early to make a virtue of necessity. In her twenties and thirties, she would construct a universe of moral principles built largely on the scaffoldings of some of these defensive childhood virtues.

As he dresses for the party, Reardon ruminates on how he ignores his wife yet feels no guilt. He admits he does not and never did devote a moment of his time to her, that he has no idea what her interests are or who her friends are. His thoughts are always on his business and what he must do next, since Ubermensch purity demands he not soil his mind with trivial matters. The only important occupation in the world is running a business; every minute not spent running a business is agony and Reardon has pressing matters on his mind, such as the government's attempts to break up corporations with the Equalization of Opportunity Bill.

Reardon married Lillian because she seemed to worship him as much as he felt she ought to, but she instantly disappointed him by expecting him to actually acknowledge her existence.

It was the difficulty of the conquest that made him want Lillian. She seemed to be a woman who expected and deserved a pedestal; this made him want to drag her down to his bed. To drag her down, were the words in is mind; they gave him a dark pleasure, the sense of a victory worth winning.

When he joins his wife Lillian, Reardon is furious to see that she is wearing his gift of a Reardon metal bracelet with a profusion of diamonds, the better to show off the apparent cheapness of the revolutionary metal. Every word she utters, every gesture she makes to Reardon is portrayed by Rand as sly, cruel, vindictive, arrogant and immoral. Hell hath no fury like a little girl habitually found wanting by her unkind, critical mother.

Reardon suffers the cocktail chatter with undisguised disgust. All of Lillian's distinguished guests are ignorant, foolish, dogmatic, and ugly. Only the relatives of industrialists are given attractive features, morals and intelligence. Reardon stands around like a statue until his composure is broken by the unexpected appearance of our heroine, railroad magnate Dagny Taggart. Reardon is struck by the difference between Dagny the Ubermensch and Dagny the woman.

Seeing her in the suits she wore, one never thought of Dagny Taggart's body. The black dress seemed excessively revealing--because it was astonishing to discover that the lines of her shoulder were fragile and beautiful; and that the diamond band on the wrist of her naked arm gave her the most feminine of all aspects: the look of being chained.

Let us all pause to take a minute to say, What the hell? Surely that is some kind of inartful use of language, perhaps Rand meant wrapped in chains or a more metaphorical type of belonging.

Sadly, no.

The moment Dagny sees Reardon, she is reduced into a simpering little man-tease, doing her damndest to get him to throw her over his shoulder and have his superior way with her. She has all the subtlety of a sorority girl trained from birth to attract a man by alternately buttering him up and trash-talking anyone he ought to dislike. Like poor Caroline Bingly, who unsuccessfully attempted to snare Mr. Darcy by alternately insulting Elizabeth Bennett and praising her own small, elite circle, Dagny is driven to try to impress Reardon.

"Why have we left [this world] to fools," she asks Reardon plaintively. When he rebuffs her she is full of "desolate emptiness." She shrugs the disappointment off, mumbles a few words, and wanders off. She runs into Francisco D'Anconia, who also admires her bare shoulder.

She stood as she always did, straight and taut, her head lifted impatiently. It was the unfeminine pose of an executive. But her naked shoulder betrayed the fragility of the body under the black dress, and the pose make her most truly a woman. The proud strength became a challenge to someone's superior strength, and the fragility a reminder that the challenge could be broken.

There is no such thing as equality in Rand's world. You either break or are broken. There is no reciprocity, no sharing, no affection. Everyone is alone, always, and the only relationship that can exist between people is that of master and subordinate, exploiter and victim. It is incredible that such a philosophy could find acceptance, that such an attitude of cruelty, selfishness and violence could be considered just another philosophy or viewpoint by society. People should be too embarrassed to admit becoming devotees of Rand, out of fear that everyone will realize their secret, masturbatory fantasies of domination over beautiful women and evil men, while becoming the richest, most famous, most special person In All The Land.

Meanwhile, to prove to Reardon that she really loves him and that mean Lillian doesn't, Dagny demands to swap her diamond bracelet for Hank's pencil with his teeth marks on it Lillian's bracelet of Reardon metal. That'll show her who likes Reardon best! He rewards her doggy devotion the only way he knows how.

His eyes remained expressionless. Yet she was suddenly certain that she knew what he felt: he wanted to slap her face.

It was not necessary." he answered coldly, and walked on.

Now he's done it. Now he'll never get rid of her.

Your Highly Paid Professional Has Something To Say

Peanuts generator here.

Oh sweet Jesus.

Friday Girl Talk: Can a Professional Woman Go Curly?
By Megan McArdle

Last week, I went up to New York on business, and my mother persuaded me to get my hair cut at Devachan, a salon that specializes in curly hair. Devachan isn't so much a hair salon as a cult, whose bible is Curly Girl, the how-to book written by salon owner Lorraine Massey.

As the journalistic cliche goes, I went in a skeptic, and came out a believer. My hair felt amazing. My curls were bouncy, and lasted for days. It was hands down the best curly cut I've ever had.

Two hundred thousand dollars a year, more or less. $200,000 a year. That's four teacher salaries. You could pay someone to educate 600 students for that much money.

Or you could pay Megan McArdle $200,000 to reprint funny pictures and talk about her naturally curly hair.

Miracles

Number 5 in poverty! Go Texas!

Push has come to shove, and Megan McArdle is forced to tell the facts of life to her devoted followers. After a habitual swipe at a more famous blogger, McArdle gently attempts to deflate the expectations of the tea partiers hoping for another manly leader from Texas to take care of them.

The political-economy debate-du-jour is whether Texas under Rick Perry is a job-creating powerhouse, or a dystopian charnel house where low-skilled workers go to be chewed into spiritual mulch on an endless low-wage conveyor belt that only ever leads to another McJob.

It's not that she has a Manichean world view; she just likes to undermine her ideological enemies.

A post at the Political Math Blog does probably the best job of sorting out the competing claims. You really need to read the whole thing, but to pull out some of the more notable findings: Texas has created a lot of jobs, and its unemployment rate has risen largely because those jobs are attracting lots of people to move into the state. The jobs aren't particularly low-wage, and they aren't all in the energy sector. Democrats trying to push the line that the Texas economy isn't that great aren't going to get very far. It's pretty great (relative to the suckage in the rest of the country). That's why people are moving there.

Krugman and Democrats say that the Texas economy isn't great for some people. (From The Big Picture)

The question remains, however: can we really credit Perry? I'm skeptical, for a few reasons....

McArdle then distills what all the other bloggers are saying about the Texas economy; oil, mortgage regulation (which McArdle sniffs at and dismisses), and the relative lack of power allotted to Texas's governor.

I think that the Texan policies conservatives tout are probably contributing to growth, and not just in the form of beggar-thy-neighbor competition. Anyone who thinks that that's all there is to state-level tax policy needs to acquaint themselves with the concept of deadweight loss. Nor am I impressed with the much cited evidence that an unusually high percentage of Texans are uninsured: Hispanics and young workers are much more likely than other groups to lack insurance, and even most legal immigrants cannot qualify for Medicaid within five years of their arrival in this country, while with limited exceptions, illegal immigrants generally can't qualify at all (Obamacare doesn't much change this).

The airy dismissal of the fact that 22% of Texas's children have no health insurance is extremely distasteful, but one must give McArdle credit for repeating facts instead of nothing but invective. Pour encourager les autres, as McArdle always says.

Texas isn't really to my taste, but from the evidence of all the people voting with their feet, it seems to be a pretty good place to live.

Ah, not so fast. It's a place to get a job. If you are poor, it's not a good place to live. As Krugman pointed out in his article.

But though I think the state has a pretty good policy environment, that's the beginning of the story, not the end of it. There are a lot of reasons for Texan growth, and very few of them can be laid at the feet of the governor. For which we should really thank God. If states really could be boosted into the stratosphere, or driven into the ground, merely by changing the occupant of the governor's office, we'd have to live with the constant risk that our fellow voters would elect an idiot, and destroy our lives. Thankfully, the government isn't quite that powerful.

Yeah, god forbid we'd elect some moron--maybe even a "Texas" moron--who would destroy our lives.

Working

School starts Monday and I am very pressed for time. I will try to post by Friday.

Who's the Nuttiest Of Them All?

Via Digby, we see Bryan Fischer of the American Family Association, a man who puts the "ass" in "association," is worried about the conservative soul.

The big winner in last night’s GOP debate was Rick Perry. This is for the simple reason that no one else won. The race from this point forward is Rick Perry and the Eight Dwarfs.

Hobbits, dwarfs--why do conservatives hate Little Americans? More important, why does anyone think that Perry, a man barely noticeable in Texas, will take the nation by storm?

The exchange between Pawlenty and Bachmann was spirited, and there was nothing inappropriate about it. Politics ain’t beanbag, as Lincoln famously observed. It’s a contact sport, and part of what you must do in the primary season is distinguish yourself from your competitors. You have to throw some elbows to do that.

Pawlenty was hurt by the exchange, because he took a swing at a girl. No matter how much progress we think we’ve made on gender equality, there is still something deep inside us that says men should use their strength to protect women, not attack them, and Pawlenty put on the full-court press last night.

These are the same type of people who state that men will be overcome by sin and primitive urges and rape any woman not dressed from neck to ankle. If men have an overwhelming urge to protect women and children, they sure have a strange way of showing it sometimes.

But Ms. Bachmann chose to get into the ring, and can’t complain if punches are thrown, nor should anyone complain on her behalf. That’s one of the reasons to question whether it’s a good idea for women to get involved in the rough and tumble of politics. I hate to see a woman attacked like Bachmann was last night, but she made herself vulnerable to it by throwing her hat into the ring.

She wore a low-cut presidential aspiration so she deserved it.

What has been done to Sarah Palin and what is being done to Michele Bachmann - the grotesque beating they have taken from the hostiles on the left (I’m not talking about Pawlenty here) - is a travesty and a shameful embarrassment to any culture which claims to have an enlightened view of the treatment of women.

I thought it was the slut's own fault?

But this is what conservative women who enter politics are choosing to accept. It is not right, but it is inevitable, since too many on the left are consumed with bitterness and hatred toward conservatives in general and conservative women in particular. They are enslaved to a driving, brooding passion to destroy, and the more attractive the conservative woman is, the more it feeds their blood lust. As captives to this dark, driving vitriol, they can’t help themselves. It will take the power of God to set them free from their own bondage to this mindless anger and rage. This means that a woman must count the cost, as Jesus taught, before jumping into the fray.

"Hitlery" Clinton might disagree.

Part of the problem here is that when a women mixes it up in the political arena, and gets punched, she must punch back. The danger to the woman here is that every time she punches back, which she must do, she hardens a little bit of her soul and sacrifices a little bit of her femininity. I’m not sure that’s a good trade. But each woman needs to make that choice for herself. No one else can or should make that decision for her.

Evidently femininity means weakness and strong women are hard, instead of soft and yielding like they are supposed to be. At least Mr. Fischer is generous enough to give women permission to fight back, even if it will kill their soul to do so.

It does not occur to Fischer that some women enjoy rhetorical fighting, and if they are punched they will punch back twice as hard. Perhaps Fischer's opinion of their femininity will suffer, but that's just a risk we'll have to take.

Quick hits on the rest of the debate:

Romney came across as plastic. He completed his abject flip-flop on marriage, going from being the man who imposed same-sex marriage on America by executive fiat in 2004 to a man who now supports a federal marriage amendment to undo what he himself did in Massachusetts. He has a real credibility problem on social issues.

Who would have thought that a Mormon would not be Crazy For Jesus enough for the AFA. I can't wait until the fundamentalist Christians find out that Mormons don't believe in the Holy Trinity.

After accusing Romney of flip-flopping on health care, Fischer moves on to Ron Paul, whom he dismisses as being soft--or maybe he means feminine--on Islam, the religion of Jihad.

Paul did remind us that liberty comes from the Creator. But his understanding of liberty includes the liberty to snort cocaine, shoot up heroin, and indulge in prostitution and sodomy. That’s not liberty, that’s bondage. His views promote license, not liberty.

Oh, come on, Fischer, one man's Tree of Freedom is another man's cocaine binge.

Santorum was the strongest on the platform on the pro-life issue. He rightly would make no exceptions even for rape, since in America we don't punish a child for the sins of his father. He's absolutely correct.

These people can create a world-wide Caliphate conspiracy to cover every women in America in a black cotton tent yet they can't envision Muslim men raping nice conservative girls to force them to raise an army of secret Muslim-American Jihadists? Where is Mark Steyn when you need someone to whip up a nice batch of sexual hysteria?

Huntsman made himself a non-factor by admitting he has no economic plan on his website, which should have been his first order of business. He also indicated he’d be for amnesty once the border is secure, a position anathema to most conservatives. Romney repeated the canard that we are a “nation of immigrants.” We’re not. Eighty-five percent us were born here.

Our national history began the moment Fischer's mother pushed him out of the womb.

Huntsman also argued that he as governor has the best record in the field on jobs. He loses that argument once Perry gets in the race tomorrow.

Bottom line: the race is Rick Perry’s to lose.

Rick Perry has the frightened-doe look of a man with two dozen pairs of red high-heeled shoes, size 13, hidden deep in his closet. He might very well be a model conservative candidate but his hell-bent chase to be the Craziest In The Land makes him the evil Queen, not one of the Seven Dwarfs.

Games

I am tired today so I leave you with this:

Beauty Is In The Eye Of The Beholder

How the media sees Michele Bachmann:

Michele Malkin feels victimized:

Rep. Bachmann is unabashedly conservative, willing to take both parties’ leaders to task, passionate about her work, popular with grass-roots activists on the Right, committed to reining in the size, scope, and power of government, and yes, expressive. For all this, she must be destroyed.

No doubt the editors and photog will deny doing anything to make Bachmann look bad.

But here’s what GOP Rep. Michele Bachmann looks like in a straight photo.

But that's not how the tea baggers see Michele Bachmann. This is how the tea baggers see Michele Bachmann:

They see what they want to see, hear what they want to hear. Reason and logic are useless.

Kudlow's Komedy Kapers

Crossposted at Angry Bear.

Larry Kudlow is worried that Obama is ruining the economy.

Larry Kudlow
August 5, 2011 4:30 P.M.

More Obama Spending Won’t Do It
And stocks know it.

There he goes again.

Because quoting Reagan is cool.

Out on the campaign trail, President Obama is proposing more federal spending as his answer to sluggish growth and jobs. That won’t do it, Mr. President.

Yes, when the private sector doesn't provide jobs, don't look to the government to provide jobs. That just won't do it, Obama. That just...won't....do!

He wants more infrastructure spending, undoubtedly in the form of an infrastructure bank. That’s a terrible idea. It’s borrowed from Latin America, where bloated and corrupt bureaucratic construction agencies have helped bankrupt any number of countries in the past.

It's also borrowed from Roosevelt, but we all know how he secretly created the Depression by spending money.

He wants to lengthen 99-week unemployment insurance, although numerous studies have shown that continuous unemployment benefits are associated with higher unemployment.

I want to bronze that comment and turn it into an ashtray. Numerous studies have show that UI is associated with high unemployment! Obviously, the only solution is to stop handing out UI, and then we'll have no more unemployment.

And he wants to extend the temporary payroll tax credit, which is not a permanent reduction in marginal tax rates, has no incentive effect, has not worked so far, and is really a form of federal spending — not real tax relief.

How the rich suffer so from their high taxes.

Earlier this week, when he signed the debt-ceiling bill, the president ranted on about the need to raise tax rates on successful earners, investors, and small businesses. He’s trying to bring back tax hikes as part of the phase-two special committee seeking additional deficit reduction, even though his own party rebuffed him on this in the late stages of the debt talks. All this is a prescription to grow government, not the economy.

Reagan actually raised taxes when it was necessary while Obama is just talking about raising taxes, but as we all know, the Reagan years were a bit of a blur for Kudlow.

What the economy needs, Mr. President, is a strong dose of new incentives, with pro-growth tax reform that flattens marginal rates and broadens the base for individuals and businesses. This includes moving to territorial taxation that ends the double tax on foreign earnings of U.S. companies. Plus, we desperately need a complete moratorium on federal regulations. As Sen. Barrasso recently noted, the government put out 379 new rules on business in July alone, amounting to $9.5 billion in additional costs.

Because US companies pay far, far too much in taxes. Just ask the Center On Budget and Policy Priorities (CBPP).

The U.S. corporate tax burden is smaller than average for developed countries.[1] Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent.

Nevertheless, some have argued that U.S. corporate tax rates unduly burden U.S. companies by pointing to the country’s top statutory tax rate, which is 35 percent. For example, a recent Wall Street Journal editorial calling for corporate tax cuts noted that this is the second highest top statutory tax rate among developed countries.[2] While true, this gives the false impression that the corporate tax burden is greater here than in other developed countries. Because the U.S. tax code offers so many deductions, credits, and other mechanisms by which corporations can reduce their taxes, the actual percentage of profits that U.S. corporations pay in taxes — or what analysts refer to as their effective tax rate — is not high, compared to other developed countries.

Because the average U.S. corporate tax burden is low, many economists believe a revenue-neutral corporate tax reform that reduces statutory corporate tax rates, while broadening the tax base by eliminating costly tax breaks, could improve economic efficiency and likely benefit the U.S. economy.

Kudlow:

None of these pro-growth reforms are in sight. So the stock market is going through a nasty 10 percent correction over fears of another recession (and European debt default).

That’s definitely not a recession reading.

Yes, you read that right. Kudlow says we are not in a recession. From an earlier post:

No Recession
Strong profits, easy money, and Tea Party gains argue against it.

Stocks and bond yields are sinking as Wall Street disses the debt deal and instead focuses on a likely double-dip recession.

Everyone is gloomy. But is this pessimism getting a little overbaked?

Granted, the economy is sputtering, with less than 1 percent growth in the first half of the year. But if there is a recession in the cards, it will be the first time one occurs when the yield curve is steeply positive (an ultra-easy Fed) and corporate profits are strong.

And since we do have ultra-easy money and strong profits, I don’t believe we’re heading into a recession. Nor do I believe stocks will continue to swoon.

The principal reason for the sub-par first-half economy is the rise of inflation, which severely damaged real incomes and consumer spending. We experienced a mini oil shock, which has dampened the whole economy. Actually, it’s worth remembering that oil shocks and inverted yield curves, along with falling profits, are the most important leading indicators of recessions. We don’t have this right now.

Back to the present:

But at least we got some good news on jobs. The July jobs report came in stronger than expected. It’s not great. But at least nonfarm payrolls increased 117,000 — as the prior two months were revised upward by 56,000 — while private payrolls gained 154,000.

That’s definitely not a recession reading. But neither is it a strong performance. If the economy were really rebounding, we would be creating 300,000 new jobs a month.

In the report, the unemployment rate slipped to 9.1 percent from 9.2 percent. But that’s mostly because nearly 200,000 workers left the civilian labor force. Another negative is the household employment survey, which fell 38,000 in July after dropping nearly half a million in June. That survey measures job creation among small owner-operated businesses or the lack thereof.

Yet when looking at the new jobs report, along with reasonable gains in chain-store sales and car sales, plus the ISM Purchasing Managers reports (which stayed above the 50 percent line), I repeat my thought that we are not headed for a double-dip recession.

The US New and World Report begs to differ.

According to the latest figures, the U.S. economy created 117,000 new jobs, causing the unemployment rate to drop slightly, from 9.2 percent in June to 9.1 percent in July. But, as Jeff Cox writes over at CNBC, "there is far more than meets the eye" to this bit of economic good news, which is certainly nothing to cheer about.

The U.S. Bureau of Labor Statistics breakdown says there were 139,296,000 people working in July, compared to 139,334,000 the month before, or a drop of 38,000. That's because, as a number of labor economists point out, the disparity is the result of something the government calls "discouraged workers"—people who don't have jobs but were not looking for work during the reporting period."

This is where the numbers showed a really big spike—up from 982,000 to 1.119 million, a difference of 137,000 or a 14 percent increase. These folks are generally not included in the government's various job measures," Cox wrote, adding that if you count those people as part of the workforce, the job creation and drop in unemployment disappear.

Other signs of continued weakness in the recovery include that the percentage of long-term unemployed remained unchanged in July and that the labor force participation rate has continued its downward trend since the beginning of the recession, dropping 0.2 percentage point to 63.9 percent in July. This is, the Congressional Joint Economic Committee reports, "the lowest labor participation rate in the United States since January 1984." [See a collection of political cartoons on the economy.]

Addressing the weak numbers, the White House continues to point fingers almost everywhere except at itself—which is where the blame belongs. President Barack Obama, who, along with congressional Democratic leaders, promised that unemployment would not exceed 8 percent as long as the stimulus package was approved, has yet to explain how he could have been so tragically wrong.

The great thing about being a conservative is that no matter what it happening, it proves that their economic theories are correct. Kudlow:

Over two years of so-called economic recovery, growth has averaged about 2.5 percent. It fell to less than 1 percent in the first half of this year, largely from a commodity-price shock that included oil-, gasoline-, and food-price spikes. That price shock resulted mainly from the Fed’s QE2 depreciation of the dollar — a big mistake. It eroded real consumer incomes and spending.

Let's ask Economicst Online what it thinks about the dollar.

Put dollar depreciation in historical perspective

It's a brand new year. I thought I’d have some big-picture review of what’s going on in the world economy today. Here is my first piece on US dollar.
The graph below will scare you a lot…in fact, the dollar index fall from 115 in 2002 to mid 70s at the end of 2007, that equals a 33% drop.

Hmmm, a sharp drop, isn’t it? But wait a minute, have we witnessed the similar happened before? Let’s look at the following graph and have some historical perspective. From 1985 to 1989, the trade-weighted dollar index actually had a bigger fall, from 145 to 90, almost down 38%, and it fell even further until 1995.

Holy Dollar Depreciation, Batman! It fell even more under Reagan than it did during Obama!

Kudlow:

Lately, the dollar has stabilized and energy prices have come down quite a bit. That will reduce inflation and support better consumer spending. Businesses are already highly profitable and cash-rich. They are investing some of that, but not nearly enough to create sufficient new jobs. Who would, with all these Washington policies?

It's not lack of demand, it's politics!

Finally, the Fed remains ultra-easy with excess liquidity and a zero interest rate.

So it looks to me like we will return to the sub-par 2.5 percent growth trend rather than dip back into recession. However, at this pace, unemployment may hover around 9 percent right up to election time next year.

More spending won’t do it Mr. President. Tax and regulatory incentives will.

Cut taxes and regulations and watch the economy boom--for the very rich. Who are doing quite well now as it is.

Obedience For Dummies

Megan McArdle has an authoritarian dilemma. She is paid to propagandize for the banker class but the bankers have issued new, contradictory orders. The right is being told to stop fighting Obama's evil government and thereby lose the battle to force the left to publicly conform to the right's authority. Instead, the right must give Obama what he wants, a raise in the debt ceiling. It is what all sane people want, hence the bankers' concerns, but hard-core authoritarian followers are operating by their own standards of reality.

What is a Big Thinker to do? Most mouthpieces for the elite attempt to convince their followers that such capitulations are expressions of moral worth. They cast anyone who rebels against the elite as an outsider, as David Brooks does in this execrable post on the debt ceiling battle. The centrists are wise, the extremists are insane, and worse of all, the president is acting as if he is an authority, one of the grown-ups in the room, when he is really a child because he refuses to obey.

So Megan McArdle gets out her Fair-n-Balanced hat and tells her audience that they must obey their political leaders.

The deal does not go nearly far enough towards resolving our real fiscal problems: the growing burden of entitlements, and an inefficient tax system loaded with distortionary tax preferences. On the other hand, I don't think there was ever much chance that it was going to. Deficit reduction and fiscal reform are not going to occur overnight. It is going to be a series of painful confrontations and unpleasant choices. This is a decent start.

That said, while I'm basically pleased with the deal, I am not pleased by the way the GOP got us here. Holding the debt ceiling hostage has threatened our credit rating, and further eroded the already dangerously frayed institutional bonds that keep Washington running. I know, I know--you don't want Washington to keep running. But if history is any guide, the Democrats are going to eventually retaliate with something even more extreme--and then the very people saying they despise collegiality and business as usual will be found in my inbox and my comments section, moaning that this unprecedented breach of tradition is the End of Democracy. And I warn you now, I am apt to be very peeved with those people.

Your parents elite know what is good for you and will be angry if you disobey. But the children did not listen, and McArdle was forced to scold them for imagining that they knew better than their authority. Yes, she had frequently told them that the government would spend itself into extinction, but now they were supposed to ignore her earlier instructions and support raising the debt ceiling instead. Her audience is not willing to give up the emotional benefits of fighting the enemy. Wars are an endless extravaganza of conformity and nothing makes an authoritarian happier than the chance to bond with his fellow tribesman by vilifying someone outside the tribe.

Frustrated, McArdle once again addressed the recalcitrance of her followers who were refusing to follow.

One of the frustrating things about the debt ceiling debate has been dealing with the competing narratives spun by those supporting the various positions. It isn't that these narratives are necessarily wrong, but that the people offering them present them with the confidence of someone describing settled history, rather than one possible way (and often far from the most likely way) that events could play out.

Nobody can know anything--meaning only the elite know what is good for their followers.

A lot of conservatives describe a potential shutdown or default as if it were ripped straight from the pages of Atlas Shrugged. Their explanation of why we need to precipitate a crisis is that it's going to happen eventually, and so better now than later.

Silly, gullible, Atlas-Shrugged-reading conservatives who believed Jane Galt when she told them the government would collapse. Why won't they believe Megan McArdle when she says they must obey or the government will collapse?

The logic of this is dubious--

That's what we said.

we're all going to die eventually, but that doesn't mean I'm eager to hasten the day. As Dave Ramsey says, you don't declare bankruptcy until the bailiffs are at the door: as long as you haven't defaulted, you preserve the important option not to default.

But leave that aside. The problem is really with the larger narrative, in which there is no option but to slash spending, and readjust to a newer, much smaller government.

In this case, "narrative" seems to be defined as "what the elite tell me is true." McArdle says the tea partiers " getting swept away by the power of their narratives," instead of forgetting their old narrative to listen to her new narrative.

I happen to think that my plan--a decade long series of negotiations which will end up with higher taxes and lower spending, and hopefully a welfare state reconfigured to focus on the truly needy--is better than the status quo. But it seems much better than pointlessly shooting up the joint before you get thrown out.

Since "the center" is also defined by the elite, McArdle tells her audience that they all must find the center way, which just happens to collate perfectly with her elite propaganda.

Now, because this a Megan McArdle post, I must point out that the tea partiers are not the only ones getting swept away by the power of their narratives. The left are not, of course, taking their cues from Atlas Shrugged. Instead they appear to think that we are in a particularly gripping season finale of the West Wing, where steely counterbrinksmanship forces moderate Republicans in the House to join with the Democrats to enact a bill more to their liking.

Note the similarity in the base narrative to the Tea Party story: catastrophe has already happened (confidence in the US political system/our fiscal balance has already been destroyed), and the only thing that can avert total disaster is the courage to stand strong in the face of our nation's enemies. They're not risking our credit rating by throwing a tantrum rather than accept that they can't have what they want; they're saving the country from something even worse. We'll thank them later.

McArdle neatly invents a little narrative of her own right here; the first lie is that Democrats refused to accept a deal and the second is that they threatened to shut down the government. Democrats capitulated thoroughly, which coincidentally is just what they elite wanted them to do. But pointing this out would reveal that the center is actually far right, so McArdle lies instead. She throws in an accusation of sanctimony as well since corporate shills must constantly fight off accusations of callousness, which rankles because it is true.

And what happens if they're wrong, and the GOP is maybe a little mad that Democrats left them hanging out to dry? What if they don't cross the floor to make a deal on terms more favorable to the Democrats, but decide that as long as they're going down, the jerks who sold them out might as well go down with them? Or what if they decide the same thing that Krugman and Judis are trying to convince the Democrats of: that it would be better to shut the government down than sign a deal that utterly violates their beliefs about what's right for the country? In other words, what if the GOP old guard start acting like the freshmen and the progressive Democrats?

Another lie, an unbelievably obvious one. Progressive Democrats are not threatening to shut down the government if they are unable to prevent Republicans from shutting down the government. Krugman's thought are, unsurprisingly, far more complicated than McArdle tries to portray.

August 1, 2011, 11:01 am
What Would I Have Done?
That’s the question Obama’s kinda-sorta defenders keep asking; it’s supposed to be a conversation-stopper.

But the answer is clear: I would have made a statement declaring that giving in to this kind of blackmail would constitute a violation of my oath of office, and that my lawyers, on careful reflection, have determined that there are several legal options that allow me to ignore this extortionate demand.

Now, the Obama people say that this wasn’t actually an option. Well, I hate to say this, but I don’t believe them.

Think about the history here; think about all the misjudgments, all the reasons this administration has come up with not to act — not to act against the bankers, not to act on taxes, and down the line. Think of the colossal misjudgment over Republican intentions on debt. Why, at this point, should anyone trust these people when they say that they did all they could?

It’s much, much too late for Obama and co. to say “Trust us, we know what we’re doing.” My reservoir of trust is now completely drained. And I know I’m not alone.

McArdle:

Crickets again. That's not in the script. In the script, Martin Sheen gives a stirring speech, and shamed GOP freshmen join Benedictine monastaries [sic] in order to hide from an outraged public.

Yeah, that Krugman post sure was a rallying call to join together at Obama's side.

Maybe you find these narratives more plausible than I do--but no one who has been reading something besides his own side's press releases could possibly think that they were certain. And the risks are huge--far greater than the potential gains.

This isn't a novel. It's messy, unpleasant reality. But the activists on both sides do not seem to be living in the same world that I am.

Obey your authority or risk being tossed out of the tribe for refusing to publicly conform to their version of reality.