Is It "Unfair" To Let Detroit Collapse

Leave it to a conservative. In comments, CWD raises the question of whether it's fair to allow domestic auto makers to fail given the gargantuan financial industry bailout. Oh, I kid CWD. He actually argues, quite correctly, "I've pretty much always been opposed to the idea that we have to do something stupid and wasteful again just because it wouldn't be 'fair' not to do so".

Certain ideologues who favored the financial industry bail-out, while opposing an auto industry bailout, are engaged in some interesting contortions to avoid admitting their hypocrisy. Charles Krauthammer tells us that one's okay but not the other, because the financial industry is a "utility" - directly analogous to the electrical company. Except the government is not regulating the financial industry in the manner that it regulates utilities - is that something Krauthammer wants? Nor was it ever likely that the entire economy would shut down absent a bailout of the financial industry. It's not clear what would have happened, and fear has played a big role in the size of the bailout and the inadequacy of oversight. And I don't recall the federal government rushing in to save California from brownouts and rolling blackouts back in the glory days of Enron, or rushing in to update the electrical grid after the 2003 blackout.

David Brooks is more poetic in his explanation of the difference,

This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

Well, no. In the same sense that Brooks contends that keeping the big three from collapsing would retard "creative destruction", so does the choice to prop up large financial institutions instead of letting them fail, or letting them be carved up and sold off in smaller pieces. There's no sense in arguing the glory of "creative destruction" if you're going to simultaneously exempt from its forces the institutions that supposedly drive it. Also, isn't "creative destruction" about more than destruction - what does Brooks propose will be created in the place of the destroyed automobile industry? (One wonders, also, why Brooks isn't spending any time describing how his employer might avoid "creative destruction", beyond suggesting that it should get a bailout if Detroit is rescued.)

In an interesting series of posts at the Atlantic, Megan McArdle takes on the question of fairness, asking in some earnestness if an auto industry bailout means that the government should also bail out companies like Kodak. But that's a slippery slope argument, already implicated by the financial industry bailout. If we can draw a line before bailing out the auto industry, we can draw a line afterward. McArdle correctly argues that the bailout is unlikely to change "business as usual" at a domestic auto company or the UAW. True, but that's not a distinction from the bailout of the financial industry, which is now preparing to shower its workers with generous bonuses and pay dividends to shareholders courtesy of the U.S. taxpayer.

There are also fundamental differences between allowing a company like Kodak to fail because it didn't sufficiently anticipate and respond to the rise of digital technologies and its effect on the sales of photo chemicals, and allowing the auto industry to fail. Sorry, Kodak, but you represent a much smaller, less vital part of our economy. And unlike a context where a dinosaur is allowed to dwindle or die because it didn't respond to the market calling for a different product, this is a failure in competition between companies offering similar products. Suggestions to the contrary aside, assuming for example that GM fails, a post-collapse consumer is going to buy a roughly equivalent car from one of the remaining auto makers.

Hype green technologies all you want, but the consumer's choice is more likely to be driven by gas prices than by the availability of hybrid or flex fuel technologies, and the Japanese auto companies sell trucks and SUV's with gas engines in order to meet that demand. If the big three fail, cars will continue to be made, but the profits from those sales will flow to foreign companies and the instinct of those companies, faced with economies like the one we're in, will likely be to shutter U.S. plants ahead of those situated in the countries where they are based. High tech jobs in the auto fields will filter out of the U.S., so we need to ask ourselves whether those are the jobs we want to lose? (And that's before considering the jobs and businesses that would collapse across the country in the event of an auto industry collapse. No matter how much you hate unions, it's insane to be hoping for the death of the Big Three.)

I'm less concerned about an unlikely future where this leads to our bailing out Kodak, than I am of GM coming back in thee years, or maybe three months, begging for more cash - can we offer this bail-out without doing exactly what Henry Paulson and GW are doing with the metastatic financial industry bailout?

McArdle is correct in suggesting that any bailout should return a net gain to society, and that it is not clear that the current proposal would do so. Would bankruptcy? The fallout from bankruptcy for GM itself may be worse, but what if you instead used that bailout money to soften those consequences, or held it in reserve to potentially help a stripped-down, post-bankruptcy GM? I'm not big on the Thomas Friedman model of trying to force the Big Three to reinvent their vehicle line-up in his preferred image. The priority needs to be on creating viable companies, not on forcing them to incorporate technologies into their fleets that will either require massive government subsidies or price their vehicles far above competing models.

The WSJ proposal that if we're bailing out the auto industry to the tune of $25 billion or more, existing shareholders should be wiped out, seems to be on the mark. If we prefer a bail-out to bankruptcy, make it "bankruptcy lite" - a more efficient, industry focused version of bankruptcy, but with pretty much the same goals in mind. Not long-term stewardship, micromanagement, or redesigning vehicle fleets by committee. If you want to impose green reforms, do them legislatively and impose them on all new vehicles, so that the "new GM" can compete on equal ground. Perhaps more importantly, it isn't clear that an auto manufacture could survive bankruptcy - that they could maintain the cash flow necessary to stay in operation if they're unable to obtain and maintain enormous lines of credit. A specially legislated "bankruptcy lite" might bring about the benefits of bankruptcy without killing the company or impairing its ability to sell cars.

Something that seems to get lost in the noise, particularly the anti-union, "those workers get paid too much" noise, is that it's not only the labor cost differential that makes it hard for the Big Three to profitably sell smaller, cheaper cars. Take a look at vehicle sales in recent years. If domestic auto makers could avoid the discounting they have to offer to make their "comparable" cars competitive with cars from companies like Toyota or Honda, this would be much less of an issue. Instead, the labor cost differential is magnified by the need to offer discounts and incentives to people who are prepared to pay close to MSRP for a "comparable" quality vehicle.

Some painful truths. It isn't clear at this point that a financial industry-style bailout (no strings attached, here are billions to spend on whatever you think is best) would do more for the auto industry than forestall their collapse by a period of months or maybe years. It does not appear that, left to their own devices, the domestic auto manufacturers will get it together to manufacture vehicles that compete in terms of quality, design, or economy (in what I personally regard as an inevitable return to high gas prices) before they again hit a financial wall. But it isn't clear that any bailout, bankruptcy, or "bankruptcy lite" will turn them into viable companies - the context is created for that possibility, but these are sick giants with a corporate culture that has largely fought, tooth and nail, against the type of evolution that is required. Their progress over the past few years gives some hope, but it's only a modest beginning.

But doing nothing, if it leads to the collapse of one or more of these companies, will almost certainly deepen and prolong our recession while effectively ceding a big money, high tech manufacturing industry to foreign companies. So all said, at this point I would argue for "bankruptcy lite", for any of the Big Three that feels it cannot otherwise survive, and otherwise let market forces prevail.

McCain's Campaign Failed, Because....

The right hand didn't know what the right hand was doing?

Take it from Charles Krauthammer: Sarah Palin was a huge mistake.

Palin was a mistake ("near suicidal," I wrote on the day of her selection) because she completely undercut McCain's principal case against Obama: his inexperience and unreadiness to lead. And her nomination not only intellectually undermined the readiness argument. It also changed the election dynamic by shifting attention, for days on end, to Palin's preparedness, fitness and experience -- and away from Obama's.

McCain thought he could steal from Obama the "change" issue by running a Two Mavericks campaign. A fool's errand from the very beginning. It defied logic for the incumbent-party candidate to try to take "change" away from the opposition. Election Day exit polls bore that out with a vengeance. Voters seeking the "change candidate" went 89 to 9 for Obama.

No, take it from Pat Buchanan: Sarah Palin is our hero and savior, and perhaps the second coming of, er, Reagan?

Yet by Sept. 10, McCain, thanks to Sarah Palin, whose selection had proven a sensation, had come from eight points behind to take the lead, and Joe Biden was wailing that maybe Hillary would have been a better choice for Obama.

I disagree with both of them, to some degree. Krauthammer exaggerates the import of Palin, and continues to overestimate the "he lacks experience" theme that by the time McCain chose Palin no longer seemed to be resonating with the public. Look at the polls before and after the convention/Palin bubble - McCain was losing on the experience argument. That's not to say it isn't a good argument or a relevant issue, but McCain's campaign apparently recognized that if they didn't introduce a "game changer" they were going to lose. McCain's choice of Palin left conservative elites like Krauthammer tied up in knots, but she was red meat to Pat Buchanan. Palin energized the religious right and helped McCain ensure their turn-out, and provided him with the ability to launch scurrilous attacks on Obama by proxy. In the weeks leading up to the election did you see Obama's support increase? No, it held steady while McCain's support increased - wavering Republicans returned to the fold.

But Palin turned out to be something well short of a net positive. Her lack of experience wasn't so much the issue as her poor performance. That, coupled with the economic crisis, hurt McCain, because it suggested that he lacked judgment. Krauthammer implies that McCain's post-convention/Palin bounce reflected a permanent advantage,

Then Lehman collapsed, and the financial system went off a cliff.

This was not just a meltdown but a panic. For an agonizing few days, there was a collapse of faith in the entire financial system - a run on banks, panicky money-market withdrawals, flights to safety, the impulse to hide one's savings under a mattress.

This did not just have the obvious effect of turning people against the incumbent party, however great or tenuous its responsibility for the crisis. It had the more profound effect of making people seek shelter in government.

Seriously? So Krauthammer is bucking the trend among right-wing pundits and is arguing that the election result gives Obama not only a mandate for massive change, but a mandate to impose socialism? He doesn't like Sarah Palin, but he's clearly been sipping her Kool-Aid. Odd as it seems to say this, for a more rational perspective (albeit one that doesn't survive past the end of the paragraph) let's turn back to Buchanan:

Then came the collapse of Lehman Brothers, the bailout of AIG, McCain’s assertion that the economy was fundamentally sound, and his panicked return to Washington to assist Bush and Hank Paulson push through a wildly unpopular bank bailout - using 700 billion in tax dollars to buy up rubbish paper the idiot bankers had put on their books.

Right up to the point of the collapse, McCain was repeating the mantra, "The fundamentals of the economy are strong." Right up to the point of the collapse, his campaign was dispatching its proxies to savage Obama's economic proposals, to call Obama naive, and to ridicule comparisons between our present financial situation and the great depression. Reality intervened, and how did McCain respond? By trying to convince the people that when he said, "the fundamentals of the economy are strong" he actually meant, "American workers are strong", and then fumbling a suspension of his campaign such that he simultaneously looked manipulative, disingenuous and inept.

How did Palin then hurt him? Not by being inexperienced, and certainly not in her appeal to "the base", but by appearing to undecided voters as further evidence of bad judgment - like the supposed suspension of his campaign, the Palin choice appeared at best to be a cynical manipulation that, despite the McCain camp's spin, put campaign ahead of country. McCain's defense of his choices wasn't "straight talk", and it wasn't mavericky - it was sad and disappointing. He wedded himself to G.W. not so much by his voting record and policy choices, but by his refusal to concede even obvious mistakes and his insistence that his mistakes were in fact good choices.

I'll grant that he couldn't exactly say, "I regret my choice of Sarah Palin" - and it isn't clear that he should have regrets, given that Palin largely did her job by energizing evangelical voters and social conservatives - and perhaps he had dug himself too deep a hole with statements reflecting himself as out-of-touch with the economy, but he didn't have to demean himself or to try to advance lines that, simply put, are ridiculous. Nobody with an ounce of sense is going to believe that living near Russia translates into having foreign policy experience. And if you're going to claim that somebody "understands the energy issues better than anybody I know in Washington, D.C.," you had best make sure she's not going to turn around and stick her foot into her mouth. Repeatedly.

Buchanan believes that McCain could have won the election by acting more like Palin - attacking gay rights, advancing a rigid, pro-life agenda, attacking Obama as supposedly wanting to eliminate any restrictions on abortion, smearing Obama with tales of his association with Ayers and Wright, etc. - I don't think that would have worked, and in fact it might have hurt. There's a reason that the McCain campaign happily launched that brand of attack through Palin, while trying to keep McCain himself above the fray, and my guess is that it's because their internal polling suggested that those attacks would hurt him with swing voters (not to mention demolishing the public perception that he's not hostile to abortion rights). What better evidence of this than Krauthammer's horror at Palin and everything she represents?

I personally would argue that what hurt McCain the most with swing voters was his overt efforts to appeal to the Buchananite/evangelical wing of the Republican Party. You can still easily find people who lament that they weren't able to vote for the McCain who ran in 2000, and how they wished that guy had been in the race. That guy apparently concluded early on that he couldn't win his party's nomination without making serious concessions to religious and social conservatives, and apparently later concluded (probably correctly) that it was more important to "turn out the base" - have those reliably Republican voters come out and support him on election day - than to try to hold or win over the middle. Krauthammer writes,

McCain thought he could steal from Obama the "change" issue by running a Two Mavericks campaign. A fool's errand from the very beginning.

But he misses the point that the leading factor, and perhaps the only factor, that made McCain a serious contender in the race was the distance he had historically emphasized between his own positions and those of the Republican Party. Whether you believe that to be reality or myth, that McCain - the McCain of 2000 - could legitimately declare himself a candidate of change. The reminted McCain running in 2008 could not. And he lost.
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Update (via lies.com):

Krauthammer's Late To The Party

Months ago, Peggy Noonan lamented that it would be difficult to attack Barack Obama because many of the attacks on him would be construed as having racial overtones. Her column made it appear that she wished to use attacks with racial overtones, so I guess she was doubly vexed. But then the whole Rev. Wright thing blew up, and it appeared that her concerns were misplaced. And then, whodaguessedit, Obama pulled through.

Now, Charles Krauthammer is in one of his trademark tizzies because the McCain campaign didn't follow his advice of "Smear, smear, and smear some more." You know, Charles, some useful advice you could have given to McCain? "Don't underestimate Obama. Don't assume that you'll win just by showing up." Except, you know, underestimating Obama is Krauthammer's other theme.

Krauthammer's thesis, that McCain could win if only he would get down in the gutter and smear Obama, has two huge flaws: First, it would require McCain to abandon the public persona that he has carefully built over the last couple of decades, risking both that he would alienate his more moderate supporters and look desperate, and second, polling showed that the smear tactics employed by "independent" groups are not working. Does it need to be said? It's counterproductive to tarnish your own image through tactics that do not diminish your opponent's support. Further, as Krauthammer has to know, there has been a concerted effort made to attack Obama's character and associations through Sarah Palin, resulting in negative media attention and perhaps contributing to Palin's diminishing approval rating with independents.

Krauthammer takes umbrage over this New York Times editorial, which dares to accuse the McCain-Palin team of "race-baiting and xenophobia". That editorial notes some of Palin's antics:

Ms. Palin, in particular, revels in the attack. Her campaign rallies have become spectacles of anger and insult. “This is not a man who sees America as you see it and how I see America,” Ms. Palin has taken to saying.

That line follows passages in Ms. Palin’s new stump speech in which she twists Mr. Obama’s ill-advised but fleeting and long-past association with William Ayers, founder of the Weather Underground and confessed bomber. By the time she’s done, she implies that Mr. Obama is right now a close friend of Mr. Ayers — and sympathetic to the violent overthrow of the government. The Democrat, she says, “sees America, it seems, as being so imperfect that he’s palling around with terrorists who would target their own country.”

Now perhaps the Times is reading too much into how some of the people at McCain-Palin rallies have responded to statements like that - "Kill him", "Terrorist", etc. - while Krauthammer is happy to divorce the campaign tactics from those responses. But how would he characterize those dishonest attacks? Or does he endorse them?

Krauthammer proceeds to attack Bob Herbert, pointing to Herbert's misinterpretation of some of the imagery in McCain's "celebrity" ad.

He took to TV to denounce McCain's exhumation of that most vile prejudice, pointing out McCain's gratuitous insertion in the ad of "two phallic symbols," the Washington Monument and the Leaning Tower of Pisa.

Except that Herbert was entirely delusional. There was no Washington Monument. There was no Leaning Tower.

The truth is a bit more amusing.

Herbert mistook the images flashed across the ad behind Obama as being of landmarks that were more familiar to him.

Krauthammer's apoplectic that people see racial overtones in "the Republican attack on ACORN". You know, the organization McCain lavished with praise a couple of years ago. Maybe Krauthammer is correct that this is political opportunism and the racial element is purely coincidental, but you don't have to be a genius to see how an attack on Acorn, particularly one replete with misrepresentations and distortions, is likely to be perceived.

What makes the charges against McCain especially revolting is that he has been scrupulous in eschewing the race card. He has gone far beyond what is right and necessary, refusing even to make an issue of Obama's deep, self-declared connection with the race-baiting Rev. Wright.

Here, Krauthammer is attempting to blow out of proportion and generalize the Times editorial's criticism of the tactics of the McCain-Palin campaign, and most notably of the tactics employed by Palin, as an unfair broadside against McCain. It seems too easy to point out that McCain has to know about, and should be held responsible for, the tactics of his vice presidential candidate. Otherwise, how could we not infer that he's so out of touch that he is completely incapable of governing a nation? But more to the point, Krauthammer is doing what he's accusing others of doing - taking an isolated comment, blowing it out of proportion, then suggesting that the exaggerated version he presents is typical of McCain's critics.

It is not. McCain's favorables have slipped, certainly, but that appears to relate to his performance in the debates, his simultaneous floundering and grandstanding on the fiscal crisis, and his (as far as independent voters are concerned) poor choice of a running mate. There's no evidence that he's being affected by racial issues, and there's reason to believe that his eschewing Krauthammer's chant of "Smear, baby, smear" has saved him from further erosion of his support.

Even at this point, Krauthammer can't bring himself to cut his losses. He has to accuse Obama of having played "the race card" against McCain. For this he resorts to the Obama comment that inspired some of McCain's campaign staffers to accuse Obama of "playing the race card", in what turned out to be a severe and premature overplaying of their own hand. Those poor tactics, still endorsed by Krauthammer, got media play, but their limited effect on poll numbers likely play a role in McCain's reluctance to again delve into race issues.

And Obama has shown no hesitation in [deploying the race card] to McCain. Weeks ago, in Springfield, Mo., and elsewhere, he warned darkly that George Bush and John McCain were going to try to frighten you by saying that, among other scary things, Obama has "a funny name" and "doesn't look like all those other presidents on those dollar bills."

That's all he has? Obama's joking about how he has a "funny name", even as McCain supporters continued and continue to make Obama/Osama comments, or emphasize that his middle name is Hussein? Or that he doesn't look like other presidents on the dollar bill? You mean, like this McCain web ad illustrated even before Obama made that comment? Obama's response to the "race card" nonsense was to point out that it was nonsense. Krauthammer's case against Obama here seems far weaker than the one he is attempting to refute against McCain. (And let's just say, some of McCain's backers aren't helping.)

All in all, I suspect Krauthammer's tantrum will play well with some factions on the far right, but will do nothing to help McCain with the voters he needs to win over. But that's no surprise - other than their mutual underestimation of Obama, one place McCain has demonstrated a great deal of sense is in consistently rejecting Krauthammer's notions of what it will take to win the race. The obstacle before McCain is not insurmountable, although I suspect it will quickly become so if Krauthammer takes the lead on his campaign.

Poor Maliki

So Maliki made the "mistake" of essentially agreeing with Obama on the withdrawal of U.S. combat forces from Iraq. Almost immediately we were told, "The translator got it wrong." Except it turns out that it was Maliki's own translator, and his translator didn't get it wrong. Then an effort was made to interject nuance into the endorsement. That didn't work out so well, either. So now what? Let's ask McCain backer and uberhawk Max Boot.

There is some irony in the fact that Democrats, after years of deriding Iraqi Prime Minister Nouri al-Maliki as a hopeless bungler and conniving Shiite sectarian, are now treating as sacrosanct his suggestion that Iraq will be ready to assume responsibility for its own security by 2010.

Ah. So it must follow that Republicans view Nouri al-Maliki as a competent leader, supported by Shiites and Sunnis alike, right? Well... Maybe not.

• His public support for the U.S. is mixed: "[Maliki] has hardly been an unwavering friend of the United States - at least in public." (But thank goodness, he's two-faced: "To his credit, although he has postured as a fierce nationalist in public, Maliki has often accommodated American concerns in private.")

• He's skeptical of U.S. motives: "[He] has had to overcome deeply ingrained suspicions of the United States."

• He's incompetent on military issues and insulated from reality: "Maliki has no military experience and that he has been trapped in the Green Zone, relatively isolated from day-to-day life."

• He has poor judgment: "[H]e has been a consistent font of misguided predictions about how quickly U.S. forces could leave."

• He's ungrateful: "Maliki won't give U.S. troops their due"

  In the famous interview with Der Spiegel last weekend, he was asked why Iraq has become more peaceful. He mentioned "many factors," including "the political rapprochement we have managed to achieve," "the progress being made by our security forces," "the deep sense of abhorrence with which the population has reacted to the atrocities of al-Qaida and the militias," and "the economic recovery." No mention of the surge.

• He's unreliable: "Maliki's public utterances do not provide a reliable guide as to when it will be safe to pull out U.S. troops."

So... basically Boot seeks Maliki as an out-of-touch, hopeless bungler and two-faced opportunist, but not necessarily a "conniving Shiite sectarian"? I'm glad Boot set that record straight.

Oh yes, and Boot tells us that this statement is "ambiguous":

When asked in and interview with SPIEGEL when he thinks US troops should leave Iraq, Maliki responded "as soon as possible, as far as we are concerned." He then continued: "US presidential candidate Barack Obama talks about 16 months. That, we think, would be the right timeframe for a withdrawal, with the possibility of slight changes."

Wow. You can barely tell that Maliki is expressly endorsing withdrawal of combat forces "as soon as possible", on a schedule largely consistent with Obama's timeframe. Darn that ambiguity.

Incidentally, as others have noted, there's no inconsistency between observing that Maliki's dependence upon U.S. backing makes his endorsement of continued occupation questionable, while also observing that his willingness to stand up to the Bush Administration may be qualitatively different - he has a lot to lose by what the Bush Administration and McCain's backers plainly see as biting the hand that feeds him.
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Update: Charles Krauthammer offers a much more generous interpretation of Maliki's choices:

What is Maliki thinking? Clearly, he believes that the Iraq war is won. Al-Qaeda is defeated, the Sunni insurgency is in abeyance, the Shiite extremists are scattered and marginalized. There will, of course, be some continued level of violence, recurring challenges to the authority of the central government and perhaps even mini-Tet Offensives by both Shiite and Sunni terrorists trying to demoralize U.S. and Iraqi public opinion in the run-up to their respective elections. But in Maliki's view, the strategic threats to the unity of the state and to the viability of the new democratic government are over.

Maliki believes that his armed forces are strong enough to sustain the new Iraq with minimal U.S. help. He may be overconfident, as he has been repeatedly in estimating his army's capacities, most recently in launching a somewhat premature attack on militias in Basra that ultimately required U.S. and British support to succeed. And he is certainly more confident of his own capacities than is Gen. David Petraeus.

Another way to look at that is that Maliki believes he will be more free to cement his party and his religious sect's control over Iraq in the absence of U.S. combat forces than in their presence - something entirely consistent with the Sunni factions' concerns about U.S. troop withdrawal. Needless to say, Krauthammer carries on to present a rather churlish attack on the Democratic Party as being too "pliant" in willing to be something other than an autonomous occupying power prepared to stay in Iraq until we establish a "strategic relationship that would not only make the new Iraq a strong ally in the war on terror but would also provide the U.S. with the infrastructure and freedom of action to project American power regionally, as do U.S. forces in Germany, Japan and South Korea." In other words, Krauthammer believes we should occupy Iraq until they learn to like it.

The Charmas Friedhammer Gas Tax

For years, Thomas Friedman has endorsed substantial increases in the gax tax. Recently he took a different tack, suggesting a tax to the level of $4/gallon, something that is perhaps best described as a "windfall profits protection tax" or a "price control". Today, Charles Krauthammer claims, "That's my idea":

For 25 years and with utter futility (starting with "The Oil-Bust Panic," the New Republic, February 1983), I have been advocating the cure: a U.S. energy tax as a way to curtail consumption and keep the money at home. On this page in May 2004 (and again in November 2005), I called for "the government - through a tax - to establish a new floor for gasoline," by fully taxing any drop in price below a certain benchmark. The point was to suppress demand and to keep the savings (from any subsequent world price drop) at home in the U.S. Treasury rather than going abroad. At the time, oil was $41 a barrel. It is now $123.

Sure, because (as with Friedman's version) no players in the market would notice that they could simply increase their profits to the amount of the tax, and all oil companies are based in the United States.

Krauthammer complains that instead of imposing his beloved price control, the federal government attempted various forms of regulation, such as CAFE standards, that he sees as having failed to achieve their goals. It's obviously not the case that Krauthammer opposes government meddling in the marketplace, as his tax proposals and price controls do just that. Perhaps he sees taxation as the best way for the government to mold individual behavior.

Krauthammer no longer sees price controls as sufficient - now he's incorporating Friedman's call for periodic, substantial increases in the gas tax:

Want to wean us off oil? Be open and honest. The British are paying $8 a gallon for petrol. Goldman Sachs is predicting we will be paying $6 by next year. Why have the extra $2 (above the current $4) go abroad? Have it go to the U.S. Treasury as a gasoline tax and be recycled back into lower payroll taxes.

Krauthammer believes that the price of oil on the world market is pegged to the U.S. gas tax, such that oil prices will stabilize if the U.S. imposes a $2/gallon gas tax? Really? And then by recycling the money back into the hands of consumers, they'll what? Buy televisions instead of filling up their cars? Or perhaps they'll notice that public transportation continues to be overwhelmed and underfunded and wonder why, despite their enormous common ground, Krauthammer parted with Friedman on the use of gas taxes to fund and expand public transportation.

Announce a schedule of gas tax hikes of 50 cents every six months for the next two years. And put a tax floor under $4 gasoline, so that as high gas prices transform the U.S. auto fleet, change driving habits and thus hugely reduce U.S. demand - and bring down world crude oil prices - the American consumer and the American economy reap all of the benefit.

Thank you Charmas Friedhammer. And once this fantasy comes true, and the public is "thanking" Congress for setting an effective price floor on gasoline at $6/gallon, demand for an overstretched public transportation system is way past its limits, and crude oil prices have continued to climb because (as it turns out) the price per barrel isn't defined exclusively by U.S. gasoline prices, what will Krauthammer say when his "conservative" peers are blasting President Obama (or, if McCain is elected, President Clinton) for for the weaknesses of his plan? That is to say, will Krauthammer join them or will he ignore them - I doubt he would even see a third potential approach.

And am I supposed to overlook Krauthammer's timing here? He didn't propose a $2 gallon gas tax back in 2001. Back then, he claims he "only" wanted a price control that would create windfall profits for gasoline refiners. He still doesn't favor providing states and local governments with the resources they need to upgrade and update their public transportation systems. People will still be stuck driving cars, because his policies don't involve the creation and expansion of alternatives. The poorest workers who are still stuck driving will be paying $75-$100/tank to fill up their cars, and we're supposed to believe that lower payroll taxes will put that back in their paychecks? Krauthammer has an amazing ability to make pretty much any idea regressive and retrograde.

Charles Krauthammer: Scientific Ignoramus

Sometimes when you read Krauthammer's dishonest arguments, you can't help but think that he's talking down to an audience that he knows will not engage in critical thinking when lapping up his screeds. And there's probably some of that in today's entry, but for the most part it appears that Krauthammer believes what he says. Which is remarkable, as he presumably completed at least undergraduate level science classes as part of the preparation for his medical school training. Speaking of global warming, Krauthammer says,

Predictions of catastrophe depend on models. Models depend on assumptions about complex planetary systems - from ocean currents to cloud formation - that no one fully understands. Which is why the models are inherently flawed and forever changing.

But Charles, they're changing because they're constantly being improved. And only a scientific ignoramus would contend that we cannot rely upon a scientific model, complex or otherwise, until it is established with absolute certainty.

The doomsday scenarios posit a cascade of events, each with a certain probability. The multiple improbability of their simultaneous occurrence renders all such predictions entirely speculative.

Now you're changing the subject. We were talking about scientific models, not doomsday scenarios.

Yet on the basis of this speculation, environmental activists, attended by compliant scientists and opportunistic politicians, are advocating radical economic and social regulation.

What a dishonest claim that is, Charles. You lump environmentalists, scientists and politicians into some sort of nebulous category of... what? Enemies of the state? And you declare that any effort to address carbon emissions and global warming constitutes "advocating radical economic and social regulation"? Let me guess - your preference is to do nothing while we wait for the 100% scientific certainty that only a scientific ignoramus would believe is possible?

"The largest threat to freedom, democracy, the market economy and prosperity," warns Czech President Vaclav Klaus, "is no longer socialism. It is, instead, the ambitious, arrogant, unscrupulous ideology of environmentalism."

Vaclav Klaus said it? Well, there. You've changed my mind. When a politician from a small foreign country says something, particularly if it can be reduced to a sound bite, obviously we should cast away science and our own political system and simply defer to the foreign leader's judgments. We shouldn't even ask their basis - we should simply defer. Boy, Charles, you sure know how to make good policy.

You know what? I could declare, "The largest threat to freedom, democracy, the market economy and prosperity is Charles Krauthammer." Just saying it doesn't make it true, does it? (Would it be true if Vaclav Klaus said it?)

If you doubt the arrogance, you haven't seen that Newsweek cover story that declared the global warming debate over.

Newsweek? Have you never heard of peer reviewed scientific journals? I mean, you may as well cite a Krauthammer column to tell us that the war on al-Qaeda and the Taliban was over in 100 days and all the critics have been proved wrong. It's mainstream media - and when it comes to selling extra copies, people take license - in your case, lots of it. But you know what? If you look in those peer reviewed journals, instead of relying exclusively on sound bites from politicians (as translated from the original Czech), you may find that Newsweek is a lot closer to reality than you are.

Consider: If Newton's laws of motion could, after 200 years of unfailing experimental and experiential confirmation, be overthrown, it requires religious fervor to believe that global warming - infinitely more untested, complex and speculative - is a closed issue.

Overthrown? You mean, Newtonian physics is no longer taught in high schools and colleges as a "close enough" approximation of how things work? When apples fall from trees, they now fall up? Your statement is as ignorant as arguing, "Now that we can measure things in microns, rulers and measuring tapes are useless." They're not. They get us pretty close to where we want to be, and often all the way to where we want to be. And when we need to be more precise, we can turn to more sophisticated tools (or, if you prefer, relativity).

Further, beyond you and Newsweek, nobody seems to be calling this a "closed issue". As you previously noted, the scientists you love to malign - people who, unlike you, know what they're talking about - are constantly striving to improve their models and increase the accuracy of their predictions. You may not like the fact that the science points in a particular direction, but if you have an honest bone in your body you should be able to admit that it's you who is approaching these issues in religious terms - even describing your own mindset ("agnostic") in religious terms - even though it's a scientific question.

But declaring it closed has its rewards. It not only dismisses skeptics as the running dogs of reaction, i.e., of Exxon, Cheney and now Klaus. By fiat, it also hugely re-empowers the intellectual left.

What discredited the naysayers on the issue of global warming? Oh yes... lying, and paying for pseudoscience in order to attack competent science. Sorry, Charles - your heroes have nobody to blame but themselves. And to the extent that the "left" is empowered by relying on sound science, and by the fact that your heroes of the "right" have been proved to be liars? C'mon. Those are crocodile tears you're shedding.

For a century, an ambitious, arrogant, unscrupulous knowledge class - social planners, scientists, intellectuals, experts and their left-wing political allies - arrogated to themselves the right to rule either in the name of the oppressed working class (communism) or, in its more benign form, by virtue of their superior expertise in achieving the highest social progress by means of state planning (socialism).

Two decades ago, however, socialism and communism died rudely, then were buried forever by the empirical demonstration of the superiority of market capitalism everywhere from Thatcher's England to Deng's China, where just the partial abolition of socialism lifted more people out of poverty more rapidly than ever in human history.

Just as the ash heap of history beckoned, the intellectual left was handed the ultimate salvation: environmentalism. Now the experts will regulate your life not in the name of the proletariat or Fabian socialism but - even better - in the name of Earth itself.

And now we delve into ad hominem? That didn't take long. Ah yes... the studious young people who pursue advanced degrees in science, and enter the lucrative fields of physics and climatology... They're all about amassing power and wealth for themselves. You caught 'em just in time - next week they were going to take over the country and make us all wear lab coats.

Environmentalists are Gaia's priests, instructing us in her proper service and casting out those who refuse to genuflect. (See Newsweek above.)

Ad hominem; straw man. Can't you do better?

And having proclaimed the ultimate commandment - carbon chastity - they are preparing the supporting canonical legislation that will tell you how much you can travel, what kind of light you will read by, and at what temperature you may set your bedroom thermostat.

Ad hominem; straw man. Nope, I guess you can't.

Only Monday, a British parliamentary committee proposed that every citizen be required to carry a carbon card that must be presented, under penalty of law, when buying gasoline, taking an airplane or using electricity. The card contains your yearly carbon ration to be drawn down with every purchase, every trip, every swipe.

There's no greater social power than the power to ration. And, other than rationing food, there is no greater instrument of social control than rationing energy, the currency of just about everything one does and uses in an advanced society.

So a parliamentary committee in a foreign nation proposed something that's nutty and unworkable in practice? But wait - this was a foreign government? Now I'm confused, because I thought you believed that if a foreign leader did or said something nutty and non-scientific we were supposed to immediately adopt it into our nation's norms of conduct to comport with that statement. Perhaps we only do that if the foreign leader doesn't speak English? And the danger posed by this carbon card is what? Let's look at what's happening in England:

The Government has, quite understandably, backed away with some horror from a new proposal by a committee of MPs to introduce a system of 'personal carbon credits' for every individual in Britain.

Charles, you're building a house of cards.

So what does the global warming agnostic propose as an alternative? First, more research - untainted and reliable - to determine (a) whether the carbon footprint of man is or is not lost among the massive natural forces (from sunspot activity to ocean currents) that affect climate, and (b) if the human effect is indeed significant, whether the planetary climate system has the homeostatic mechanisms (like the feedback loops in the human body, for example) with which to compensate.

By "untainted and reliable" you mean what? Particularly given that you are completely ignorant of the existing research? As a scientific ignoramus you presumably mean, "I won't believe any science that doesn't comport to my existing world view" - and for you, that's consistent with your take on pretty much everything. You are preternaturally incapable of thinking beyond the narrow confines of your tiny, closed mind. You know nothing, but you pretend yourself capable of dictating to actual scientists the criteria they should use to evaluate the documented fact of global warming? And you dare to insult others as follownig an "ambitious, arrogant, unscrupulous ideology" or "talking through their hats"?

Second, reduce our carbon footprint in the interim by doing the doable, rather than the economically ruinous and socially destructive. The most obvious step is a major move to nuclear power, which to the atmosphere is the cleanest of the clean.

So wait - your entire argument is a straw man, concluding with your concession that we need to "reduce our carbon footprint"? You just want to provide a fig leaf to hide your pro-industry, anti-environmental stance - an excuse to harm the environment while hiding behind ignorant, dishonest demands for scientific certainty?

As for nuclear energy, have you never heard of solar energy? Geothermal energy? Hydroelectric energy? Wind energy? I'm a proponent of nuclear energy but that doesn't mean I'm going to pretend that no other carbon-friendly sources of energy exist. Is it that you weren't aware of these other sources of energy, or are you being dishonest?

But your would-be masters have foreseen this contingency. The Church of the Environment promulgates secondary dogmas as well. One of these is a strict nuclear taboo.

Oh, come on. You're going to pretend that the only reason that G.W. Bush couldn't pass a nuclear energy program in six years of ramming pro-energy industry legislation down our throats is that he and his fellow Republicans worship at "The Church of the Environment"?

Rather convenient, is it not? Take this major coal-substituting fix off the table, and we will be rationing all the more. Guess who does the rationing.

If you have it your way, either you or an incompetent Republican administration for which you cheerlead. Either way, the rest of us lose.

McCain's 100 Years War

Charles Krauthammer presents what he describes as A Rank Falsehood, protesting that John McCain will only keep troops in Iraq for a century or more if there is peace. Krauthammer focuses exclusively on McCain's caveat:

Make it a hundred. ... We’ve been in Japan for 60 years. We’ve been in South Korea for 50 years or so. That would be fine with me, as long as American, as long as Americans are not being injured or harmed or wounded or killed. It’s fine with me and I hope it would be fine with you if we maintained a presence in a very volatile part of the world where al Qaeda is training, recruiting and equipping and motivating people every single day.

Krauthammer suggests that as McCain did not commit to endless war where people are being killed, he can only be referencing a state of peace where "maintaining a U.S. military presence in Iraq would provide regional stability, as well as cement a long-term allied relationship with the most important Arab country in the region."

Here's the problem. There's no path from Point A to Point B. Let's grant McCain the benefit of the doubt, and assume that he truly only wants U.S. troops to remain indefinitely if Iraq becomes peaceful and stable, to protect it from possible attack from... Syria, Turkey, Saudi Arabia, Jordan, Kuwait, er, let's say Iran. You know, the Shiite nation next door to Iraq that has no contemporary history of aggressive warfare against its neighbors, and which sometimes seems to be on friendlier terms with the government of Iraq than we are. If that's truly what McCain is proposing he needs to answer two questions:

• How will we transform Iraq into the country we want it to be?
• How many years do we have to remain in Iraq before we may conclude that it's not possible?

The problem is, he has no answer for the first question. And there's every reason to believe that his answer to the second would still be "Make it a hundred."

Then there's the question of whether he even appreciates what our troops are doing in Iraq. It's not like Kuwait or North Korea, where the troop presence deters a potentially hostile neighbor. It's not like Japan, where military bases primarily serve to extend our global reach while also helping to secure the defense of a stable ally. It's not even what he pretends later in his answer, that Al Qaeda training camps have been set up all over Iraq and we have to stay indefinitely to prevent a massive Al Qaeda presence and resurgence. Before we invaded, Iraq did a very good job of that without our help, and by all accounts foreign fighters are a small part of our problem. (Well, at least in this context McCain's not arguing that the Al Qaeda training camps are in Iran.)

It's been almost three months since McCain made the statement. I have yet to hear him contend that he was misunderstood. I don't recall hearing him even try to answer the implicit question, which was not "How long do we stay in Iraq if everything comes up roses," but was, "How long do we stay in Iraq in the absence of political progress and national reconciliation, or in the hope that a stable, central government will emerge." Or to put it in McCain's terms, how long do we stay if Americans are "being injured or harmed or wounded or killed"? A cavil that "the surge is working" doesn't answer that question. Let's hear some concrete goals and benchmarks, and a specific number of years.