Of Politics and Oil - WSJ.com

The Washington panic, and the realities of the Gulf Coast spill.

This oil spill is a reminder—unpleasant for a public raised on fabulous technological advancement, and for an Administration engaged in taking over U.S. health-care and Wall Street—that government is not the Wizard of Oz able to solve every problem.

This Obama finger-pointing has, if anything, backfired politically. The oil spill was an opportunity for Mr. Obama—who campaigned as someone who likes to wrap his mind around "complex" problems—to remind the country that energy exploration and engineering are not error-free disciplines. The U.S. oil industry has a remarkable safety record, even as it has moved into deeper and deeper water to provide the U.S. with affordable oil. But no industry is accident free, and Mr. Obama could have served the public better by explaining the technical challenges of fixing this deep water leak. His decision to pound on BP for not performing immediate miracles has instead fed the public's expectations that this is like plugging a hole in a swimming pool.

Republicans have also done the nation no favors in their political rush to turn this oil spill into Mr. Obama's "Katrina." In an attempt to tie the disaster to the Administration, they've targeted the Minerals Management Service, suggesting agency bureaucrats weren't tough enough on Big Oil.

Never mind that there is zero evidence so far that this blowout resulted from lax regulation or shoddy practices. Never mind, too, that the GOP is targeting one of the few federal agencies that happens to believe in more domestic energy production.

We suppose it is too much to expect today's political class to withhold its game of panic and blame until industry plugs the leak and we learn what really happened and why. But the American people, watching this spectacle while the disaster unfolds, are being given one more reason to doubt the capacities and candor of its political leaders.

Incentives vs. Government Waste - WSJ.com

What if bureaucrats could benefit financially from finding cost savings?

Why are profit-seeking corporations so much more efficient and innovative than bureaucracies? A significant part of the answer to that question lies in the fact that bureaucracies are often hamstrung by legislation, and amending legislation is always a cumbersome and politics-ridden process. But another significant part of the answer lies in the phrase "profit-seeking."

Corporations exist only to create wealth. The more they create, the more their stockholders and employees prosper. Thus it's a corporate manager's job to look for ways to increase profits. More, their personal success depends on doing so. For the employees who come up with the really bright ideas prosper even more than their fellow workers, being rewarded with raises, bonuses and promotions.

But there are only three basic ways to increase profits: raise prices, cut costs or innovate. Raising prices is easy. Just cross out $19.95 and write in $22.95. Unfortunately, in a competitive economy, raising prices is going to cost you market share and is thus self-defeating. So corporate employees have no choice but to pursue the far more difficult second and third options, searching for ways to make the same product cheaper or to create a better product at the same cost. They do this hard work because they are highly incentivized by self-interest to do so.

Bureaucrats, alas, are not. In fact, they are highly disincentivized to increase efficiency and to innovate. In business a penny saved is a penny earned, the savings flowing directly to the all-important bottom line. But in a bureaucracy, a penny saved is a penny likely to be cut from next year's budget. And prestige in a bureaucracy comes not from profit but from the size of one's budget. So even accidental savings are likely to be suppressed with make-work.

[Bureaucrats] can certainly find new ways of doing their jobs that are cheaper and better than the old ways, especially if they are handsomely rewarded for doing so.

Self-interest is an immensely powerful force in human affairs—the very engine behind capitalism's success. Harnessing it to save money and increase innovation in a bureaucracy, just as the Royal Navy harnessed it to capture enemy ships, would be the biggest innovation of all and save the government billions.

The Bankrupting of America - WSJ.com

 

Mortimer Zuckerman: The Bankrupting of America - WSJ.com*

 

The American public feels it is drowning in red ink. It is dismayed and even outraged at the burgeoning national deficits, unbalanced state and local budgets, and accounting that often masks the extent of indebtedness. There is a mounting sense that taxpayers are being taken for an expensive ride by public-sector unions. The extraordinary benefits the unions have secured for their members are going to be harder and harder to pay.

It is galling for private-sector workers to see so many public-sector workers thriving because of the power their unions exercise. Take California. Investigative journalist Steve Malanga points out in the City Journal that California's schoolteachers are the nation's highest paid; its prison guards can make six-figure salaries; many state workers retire at 55 with pensions that are higher than the base pay they got most of their working lives.

What we suffer is a ruinously expensive collaboration between elected officials and unionized state and local workers, purchased with taxpayer money. "Scratch my back and I'll scratch yours."

Public unions organize voting campaigns for politicians who, on election, repay their benefactors by approving salaries and benefits for the public sector, irrespective of whether they are sustainable. And what is happening in California is happening in slower motion in the rest of the country.

The lopsided subsidies for pension and health costs are a large part of the fiscal crises at the state and local levels. The subsequent squeeze on education and infrastructure investment is undermining the very programs that have made it possible for our economy to grow.

City government was developed to serve its citizens. Today the citizenry is working in large part to serve the government. It is always hard to shrink government spending. It is particularly difficult when public-sector unions have such a unique lever of pressure.

We have to escape this cycle or it will crush us.

 

 

 

 

Can Dirt Do a Little Good? - WSJ.com

 

Can Dirt Do a Little Good? - WSJ.com

 

According to the "hygiene hypothesis," first proposed in 1989, exposure to a variety of bacteria, viruses and parasitic worms early in life helps prime a child's immune system, much like sensory experiences program his brain. Without such early instruction, the immune system may go haywire and overreact with allergies to foods, pollen and pet dander or turn on the body's own tissue, setting off autoimmune disorders.

Many of these microorganisms evolved symbiotically with humans over millions of years—the so-called "old friends" theory. But where they've been eradicated, a key part of human development has been thrown off.

Many experts advise common sense. "We don't want to say to children, 'OK, play by the dirty river bank and catch whatever you can,' " says Dr. Weinstock. "But we can say there's nothing wrong with kids playing in the dirt. They don't have to live in total sanitation, and they won't die from eating something off the floor. It's probably more healthy than not."

 

 

 

The We're-Not-Europe Party - WSJ.com

 

Dan Henninger: The We're-Not-Europe Party - WSJ.com

 

For Americans, this has been a two-week cram course in what not to be if you hope to have a vibrant future. What was once an unfocused criticism of Mr. Obama and the Democrats, that they are nudging America toward a European-style social-market economy, came to awful life in the panicked, stricken faces of Europe's leadership…

The state of Europe can be summed up in one word: stagnation… Stagnation isn't death. Economies don't die. Greece proves that. They slow down. Europe's low growth rates allow its populations to pretend that real, productive work is being done somewhere by someone. But new jobs are created slowly, if at all. Younger workers lose heart.  Economic stagnation is a kind of purgatory.

Barack Obama would never say it is his intention to make the U.S. go stagnant by suppressing wealth creation in return for a Faustian deal on social equity. But his health system required an astonishing array of new taxes on growth industries. He is raising taxes on incomes, dividends, capital gains and interest. His energy reform requires massive taxes. His government revels in "keeping a boot on the neck" of a struggling private firm. Wall Street's business is being criminalized.

Economic stagnation arrives like a slow poison. Look at the floundering United Kingdom, whose failed prime minister, Gordon Brown, said on leaving, "I tried to make the country fairer." Maybe there's a more important goal.

A We're-Not-Europe Party would promise the American people to avoid and oppose any policy that makes us more like them and less like us.

 

 

Welfare Wagons - WSJ.com

 

Holman Jenkins: Welfare Wagons - WSJ.com

 

Even if you believe saving gasoline is a holy cause, subsidizing electric cars simply is not a substitute for politicians finding the courage to jack up gas prices. Think about it this way: You can double the fuel efficiency of any car by putting a second person in it. You can increase its fuel efficiency to infinity by refraining from frivolous trips.

These are the incentives that flow from a higher gas price. Exactly the opposite incentives flow from mandatory investment in higher-mileage vehicles. You paid a lot for a car that costs very little to operate—so why not operate it? Why bother to car pool? Why not drive across town for a jar of mayonnaise?

Tax handouts for electric vehicles are emblematic of an alarmingly childish refusal to take account of circumstances. The U.S. government is deeply in debt. In people and nations with their backs to the wall, one looks for signs of rationality. Running up more debt to subsidize electric runabouts for suburbanites is not such a sign.

 

 

 

Blame Obama. Why Not? - WSJ.com

I really liked the picture of Uncle Sam as Jabba the Hut. 

 

Dan Henninger: Blame Obama. Why Not? - WSJ.com

 

The left and the media knee-capped the Bush presidency for not making Hurricane Katrina go away fast enough. So now, like a village feud in ancient Sicily, the right and its media are knee-capping the Obama presidency for not making the Gulf's spilled oil go away fast enough. Boo hoo.

Are we supposed to say that the criticism of Mr. Obama is unfair? Sorry. The permanent smackdown that is now U.S. politics has devolved into a zero-sum proposition whenever anything bad happens in American life—an oil spill, a terrorist bomb in Times Square, a financial meltdown, a mining disaster.

It works like this: If you occupy a position of leadership or responsibility in public or private life… you will get blamed for days on end, no matter what the facts are.

For the longest time, whenever a disaster such as Katrina or this oil spill hit, people have expected the government to step up and move heaven and earth to help. With a big mess, you need big authority to clear a path. The assumption beneath this expectation is that government, if it really wants to, can do just about anything.

In fact, after about 100 years of chowing down responsibilities, Uncle has inflated into something as big, powerful and sloppy as Jabba the Hut, a fat guy who can barely move.

 

 

Elena Kagan and the 'Hollow Charade' - WSJ.com

 

Neomi Rao: Elena Kagan and the 'Hollow Charade' - WSJ.com

 

I think Americans can understand that judges draw on a variety of tools in interpreting the law, and that these tools differ for judges based on their constitutional values.

For example, when a statute is unclear, Justice Antonin Scalia might press harder on the language of the law, look at the context of specific words, and generally seek to understand what the written law means. He seeks to limit his own discretion, in part because the Constitution gives Congress, not the courts, the power to enact laws.

By contrast, Justice Stephen Breyer might focus on the purposes of the law and look to sources outside of the Constitution—including foreign law—to come to a decision. He may consider the outcome that makes the most sense to him because he considers judges to be a part of the democratic process. These are fundamentally different ways of dealing with difficult cases and they reflect two distinct attitudes about the proper role of a judge.

Ms. Kagan and those preparing her face a simple, political problem: "progressive" views of judging are difficult to defend. It may be why no recent nominee has tried. The simple statement that "judges should interpret the law, and not make it" resonates with Americans in a way that "judges should figure out the best answer" does not.

The reality may be more complicated than either of these formulas, but an attitude that emphasizes the rule of law has more appeal not merely because of its simplicity but because it captures the idea that judges are not policy makers. It emphasizes that judges should interpret the language of the law and try, as best they can, not to impose their own personal views of justice or the good when deciding cases.

 

 

 

What Cards Don't Say on Mother's Day - WSJ.com

To Mom. 

 

Amy Henry: What Cards Don't Say on Mother's Day - WSJ.com*

 

So while I hope that my daughter has every choice in life, I also hope that she has the chance to be a mother. And perhaps my task now is to make sure that when she is, no one can make her feel ashamed or diminished by making that choice. I hope to teach her that baking Barbie cakes and reading "Harold and the Purple Crayon" and sitting on her child's bed listening to stories about his day even though her back feels like someone went at her with a two-by-four—are, inconsequential as they seem at first blush, the very warp and woof of a mother's life.

 

But, how exactly do I convey to her that whether or not a mother's seemingly inconsequential, menial tasks 'fulfill' her, nurturing children is innately good and just might surprise her fulfill-o-meter? How can I help her resist the need for affirmation from a culture that will probably never give it to her—and to embrace motherhood not as a second-class citizen, but with the kind of femininity that is paradoxically as strong as nails, as soft as a kiss?

 

I'm not sure. But someday, when the thumbscrews of mothering start to tighten on her, one thing I will do is remind her that despite her momentary exhaustion or discouragement, mothering remains a profoundly worthwhile undertaking, one that Chesterton calls nothing less extraordinary than "the mystery of the making of men."

 

 

 

The Greek Economy Explained - WSJ.com

I still don't get the riots.  Don't they realize they are just making their situation worse?  Gee, our country is broke, so let's go destroy and disrupt. 

 

The Greek Economy Explained - WSJ.com

 

The Greeks are giving the world a good taste of their modern politics. Periclean democracy, meet Athenian mob rule: Tens of thousands are rampaging through the capital and other large cities this week in protest against €30 billion in austerity measures needed to secure the €110 billion bailout for the bankrupt country.

The nationwide strike—led by government-employee unions, which threaten further disruptions after parliament yesterday approved the rescue package—was a timely show for Greece's prospective rescuers in Germany and at the International Monetary Fund. The medicine for Greece's deficit and debt woes won't go down easily in Athens.

In terms of overall ease of doing business, Greece comes in 109 out of 183 countries around the world. It is dead last among the 27 members of the European Union as well as the advanced economies in the OECD. You have to go up 30 slots to find the next worst EU performer, Italy.

 

 

 

A Fannie Mae Political Reckoning - WSJ.com

 

A Fannie Mae Political Reckoning - WSJ.com

 

One sign that the White House financial reform is less potent than its advertising claims is that it doesn't even attempt to reform the two companies at the heart of the housing mania and panic, Fannie Mae and Freddie Mac. So we're glad to see that yesterday GOP Senators John McCain, Richard Shelby and Judd Gregg introduced a Fan and Fred reform amendment that will let Democrats show if they're serious about reducing reckless lending and taxpayer risk.

From the 2008 meltdown through 2020, the toxic twins will cost taxpayers close to $380 billion, according to the Congressional Budget Office's cautious estimate…. Moreover, these taxpayer losses understate the financial destruction wrought by Fan and Fred. By concealing how much they were gambling on risky subprime and Alt-A mortgages, the companies sent bogus signals on the size of these markets and distorted decision-making throughout the system.

In short, the McCain amendment precisely targets the problems that caused the mortgage crisis: If the housing giants are no longer subsidized, they will become small enough to fail. That means they will stop lending money to people who cannot afford to pay them back, and in turn they will stop endangering taxpayers.

This is a genuine anti-bailout vote, and you would think Democrats would be more than happy to go along given their claims that they want to stop bailouts. Yet Republicans aren't even sure that Majority Leader Harry Reid will allow a vote on the McCain measure lest Democrats get pressure from the White House to oppose it. They would then reveal that their reform is less about reducing risk than about giving the political class more control over the financial status quo.

 

 

Arizona's Immigration Mistake - WSJ.com

 

Clarence W. Dupnik: Arizona's Immigration Mistake - WSJ.com

 

My deputies have referred more illegal immigrants to Border Patrol and Immigration and Customs Enforcement than any other state or local law enforcement agency in Arizona. But this new law will pass the burden of immigration enforcement to my county department. This is a responsibility I do not have the resources to implement.

There is a horrible problem with illegal immigration in this country, and it affects the citizens of Pima County every single day. Because of our proximity to the border, our county population demographic is heavily Hispanic (both legal and illegal). That means we must interact with witnesses and victims of crime in their times of need, regardless of their immigration status. Though this legislation states that inquiry into a person's immigration status is not required if it will hinder an investigation, that's not enough to quell the very real fears of the immigrant community.

Law enforcement did not ask for and does not need this new tool. What we do need is assistance from the federal government in the form of effective strategies to secure the border. Additionally, the federal government must take up this issue in the form of comprehensive immigration reform policy. If any good is to come from this firestorm, it is that our legislators will finally recognize that a problem exists and that they are the only ones with the authority to address it.

 

 

 

The Insurance Mandate in Peril - WSJ.com

Do my liberal friends support Congress really having this much power?  Would they like a future conservative Congress to mandate every American buy a gun under similar constitutional logic?

 

Randy E. Barnett: The Insurance Mandate in Peril - WSJ.com

 

The Patient Protection and Affordable Care Act (aka ObamaCare) includes what it calls an "individual responsibility requirement" that all persons buy health insurance from a private company. Congress justified this mandate under its power to regulate commerce among the several states…

In this way, the statute speciously tries to convert inactivity into the "activity" of making a "decision." By this reasoning, your "decision" not to take a job, not to sell your house, or not to buy a Chevrolet is an "activity that is commercial and economic in nature" that can be mandated by Congress.

It is true that the Supreme Court has interpreted the Commerce Clause broadly enough to reach wholly intrastate economic "activity" that substantially affects interstate commerce. But the Court has never upheld a requirement that individuals who are doing nothing must engage in economic activity by entering into a contractual relationship with a private company. Such a claim of power is literally unprecedented.

 

 

 

On Presidential Rhetoric - WSJ.com

 

On Presidential Rhetoric - WSJ.com

 

President Obama came to office promising an era of political comity, but even he has had to concede that his first 15 months in office haven't lived up to his campaign hope of transcending partisan divisions. While it takes two to tangle, we think the hyper-polarization owes more than a little to Mr. Obama's own rhetorical habits. More than any President in memory, Mr. Obama has a tendency to vilify his opponents in personal terms and assail their arguments as dishonest, illegitimate or motivated by bad faith.

Presidents speak to all of America and they best build consensus through argument and persuasion—not by singling out political targets, cultivating resentment, questioning motives and mocking differences of principle or political philosophy. Mr. Obama's bellicosity is no more attractive than Sarah Palin's attempts to pit "the real America" against the big-city slickers. And his rhetorical method seems especially discordant coming from a President who still insists, in between these assaults, that he is striving mightily to change the negative tone of American politics.

If the President and his advisers are wondering why his approval ratings are falling even as the economy is recovering, they might look to his own divisive conduct and the contempt he too often shows for anyone who disagrees with him.

 

 

 

An Economy of Liars - WSJ.com

 

Gerald P. O'Driscoll: Why Government Regulation Fails - WSJ.com

 

Free markets depend on truth telling. Prices must reflect the valuations of consumers; interest rates must be reliable guides to entrepreneurs allocating capital across time; and a firm's accounts must reflect the true value of the business. Rather than truth telling, we are becoming an economy of liars. The cause is straightforward: crony capitalism.

Congressional committees overseeing industries succumb to the allure of campaign contributions, the solicitations of industry lobbyists, and the siren song of experts whose livelihood is beholden to the industry. The interests of industry and government become intertwined and it is regulation that binds those interests together. Business succeeds by getting along with politicians and regulators. And vice-versa through the revolving door.

We call that system not the free-market, but crony capitalism. It owes more to Benito Mussolini than to Adam Smith.

Nobel laureate Friedrich Hayek described the price system as an information-transmission mechanism. The interplay of producers and consumers establishes prices that reflect relative valuations of goods and services. Subsidies distort prices and lead to misallocation of resources. Prices no longer convey true values but distorted ones.

Distorted prices and interest rates no longer serve as accurate indicators of the relative importance of goods. Crony capitalism ensures the special access of protected firms and industries to capital. Businesses that stumble in the process of doing what is politically favored are bailed out. That leads to moral hazard and more bailouts in the future.

 

 

 

 

An Homage to Hummer - WSJ.com

Alternate titles I would have liked: 1) “Freedom to be stupid” 2) “Then They Came for the Pie”

Penn Jillette's Homage to Hummer - WSJ.com

Having a Hummer is stupid. It's stupid to waste that much gas. It's stupid to waste that much money on gas. It's stupid to parade your insecurities on public roads. Hummers are stupid looking. You don't need an attack vehicle for the Krispy Kreme drive through.

Hummers are stupid and wasteful and if they go away because no one wants to buy one, that'll be just a little sad. It's always a little sad to lose some stupid. I love people doing stupid things that I'd never do—different stupid things than all the stupid things I do. It reminds me that although all over the world we humans have so much in common, so much love, and need, and desire, and compassion and loneliness, some of us still want to do things that the rest of us think are bug-nutty. Some of us want to drive a Hummer, some of us want to eat sheep's heart, liver and lungs simmered in an animal's stomach for three hours, some us want to play poker with professionals and some of us want a Broadway musical based on the music of ABBA. I love people doing things I can't understand. It's heartbreaking to me when people stop doing things that I can't see any reason for them to be doing in the first place. I like people watching curling while eating pork rinds.

But if any part of the Hummer going belly-up are those government rules we're putting in on miles per gallon, or us taking over of GM, then I'm not just sad, I'm also angry. Lack of freedom can be measured directly by lack of stupid. Freedom means freedom to be stupid. We never need freedom to do the smart thing. You don't need any freedom to go with majority opinion. There was no freedom required to drive a Prius before the recall. We don't need freedom to recycle, reuse and reduce. We don't need freedom to listen to classic rock, classic classical, classic anything or Terry Gross. We exercise our freedom to its fullest when we are at our stupidest.

There's a lot of bad stupid around. Really bad stupid. But we can't stop the real horror by stopping just-plain-stupid stupid. We're not going to stop overseas wars by stopping people from driving big stupid cars. As long as we think that "nation building" is part of our destiny, no amount of independence from foreign oil is going to stop us from getting into meddling, expensive, immoral foreign wars. As long as we let terrorism fill us with terror, we're not going to get our nonstupid freedoms back. Our government declaring that we need alternative energy sources, and betting our money on who might get a smart idea, is not going to give smart people smart ideas. It's really easy to see stupid all around us, but I don't think we want to be too quick to stop it. We need to protect other people's stupid to save freedom for all of us.

We're all making bad choices all the time, and most of mine are way stupider than driving a Hummer. I love my freedom of stupid. I bumped into Adrien one time and had a great talk with him, we got along great. I know Carrot Top well enough to call him "Scott." I know that they're both a lot thinner than me. They're both in a lot better shape. They eat better than me, and they can do a lot more push-ups and sit-ups. They can run farther and faster than me. So, in the near future, with us all being involved in each other's health care, Adrien and Scott might make up for their wasted gas mileage paying for my high-blood-pressure meds. If we're all getting together to stop the stupidity of driving a Hummer, will we have to stop the stupidity of eating Krispy Kreme doughnuts and pie? Freedom is freedom to be stupid.

They came first for the Hummers.

Then they came for the pie.

'Spreading The Wealth' Isn't Fair - WSJ.com

 

Arthur C. Brooks: 'Spreading The Wealth' Isn't Fair - WSJ.com

 

The president wants to create what he calls "a sense of balance and fairness in our tax code," as he said on the campaign trail, and ensure that well-off Americans "pay their fair share." He famously defended his planned tax hikes to "Joe the Plumber" by saying, "I think when you spread the wealth around it's good for everybody."

If you think spreading money around by force seems like an odd definition of fairness, you're not alone.

Most Americans think tax rates are already unfairly high. A February 2009 Harris poll found that on average, Americans believe the maximum amount anyone should have to pay in total taxes is less than 16% of income.

Nor do Americans believe it is fair to expand the pool of people with no income tax liability at all.  66% of Americans agree with the statement that "Everyone should be required to pay some minimum amount of tax to help fund government." People understand that good citizenship means we all contribute in some way to the national project.

Nobody wants to sound anti-poor, so we too easily concede the notion of fairness to those who define it as redistribution and criticize redistribution only because it leads to economic inefficiency.

This is an error. There is nothing inherently fair about equalizing incomes. If the government penalizes you for working harder than somebody else, that is unfair. If you save your money but retire with the same pension as a free-spending neighbor, that is also unfair.

Real fairness, as most of us see it, does not mean bringing the top down. Yes, free markets tend to produce unequal incomes. We should not be ashamed of that. On the contrary, our system is the envy of the world and should be a source of pride. Generation after generation, it has rewarded hard work and good values, education and street smarts. It has offered the world's most disadvantaged not government redistribution but a chance to earn their success.

That is true fairness, American-style.

 

 

 

Reaganism, New Jersey Style - WSJ.com

 

William McGurn: Reaganism, New Jersey Style - WSJ.com

 

Mr. Christie knows he needs to put the hard choices before the state's citizens, and to speak to them as adults.

Budgets are serious business, but it's been a long time since anyone in New Jersey has been serious about the budget. This year, gross mismanagement and accumulated fictions have left state taxpayers a $10.7 billion gap on a total state budget of $29.3 billion. Mr. Christie's answer is simple: "a smaller government that lives within its means."

However quaint that may sound, when you have to cut nearly $11 billion in state spending to get there, you are going to get a lot of yelling and screaming. Most comes from the New Jersey Education Association, hollering that "the children" will be hurt by Mr. Christie's proposals for teachers to accept a one-year wage freeze and begin contributing something toward their health plans. What makes the battle interesting is the way Mr. Christie is throwing the old chestnuts back at his critics.

Here are a few examples, culled from his budget address, public meetings and radio appearances:

The children will be the ones to suffer from your education cuts. "The real question is, who's for the kids, and who's for their raises? This isn't about the kids. Let's dispense with that portion of the argument. Don't let them tell you that ever again while they are reaching into your pockets."

Budget cuts are unfair. "The special interests have already begun to scream their favorite word—which, coincidentally, is my 9-year-old son's favorite word when we are making him do something he knows is right but does not want to do—'unfair.' . . . One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits—a total of $3.8 million on a $120,000 investment. Is that fair?"

 

 

 

World Tariff Wars - WSJ.com

 

World Tariff Wars - WSJ.com

 

President Obama launched his National Export Initiative last month. Objective: Double exports in five years. Sounds good. Too bad some of our trading partners missed the memo.

Brazil, in the same week, announced a plan to impose new tariffs on 102 U.S. products. On some items, the tariffs will go as high as 100%. In all, it will affect about $1 billion a year in U.S. exports. Brazil also announced it's considering sanctions against U.S. intellectual property, including compulsory licensing in pharmaceuticals, music, chemicals and software.

Before screaming for a first strike on Brazil, bear in mind that what it did is an approved action under World Trade Organization rules. Brazil won the right to retaliate against U.S. exports because U.S. subsidies to cotton growers contravene the rules of the multilateral trading system. Because we are in "non-compliance," they get to engage in "retaliation." On Monday Brazil gave the U.S. a reprieve until April 22 on the new tariff implementation in the hopes that a negotiated compromise might be reached. If not, we will have an old fashioned trade war on our hands.

The destructive clash with Brazil is not an isolated case. WTO-approved retaliation to counteract U.S. trade violations is spreading. More than $3.4 billion of U.S. exports now face punishing retaliation tariffs.

It is possible that Brazil will back down, but the damage to U.S. leadership on free trade cannot be underestimated. The common thread linking these threats to U.S. export growth is America's current antitrade compulsions, typified by Congress's refusal to ratify free trade agreements with Colombia, Panama and South Korea. If Mr. Obama really wants to open new export markets, he doesn't need to slap the word "export" on new bureaucracies. He needs to honor U.S. commitments and explain the dangers of a creeping global protectionism.

 

 

 

Taking the Driver Out of the Car - WSJ.com

 

Randal O'Toole on Taking the Driver Out of the Car - WSJ.com

 

Driverless cars have so far remained the stuff of science fiction. Seventy years after Mr. Bel Geddes's promise, they are finally close to reality.

Consumers today can buy cars that steer themselves; accelerate and brake to maintain a safe driving distance from cars ahead; and detect and avoid collisions with other cars on all sides. Making them completely driverless will involve little more than a software upgrade.

Driverless vehicles offer huge advantages over current autos. Because computer reaction times are faster, driverless cars can safely operate more closely together, potentially tripling highway throughput. This will virtually eliminate congestion and reduce the need for new road construction.

Driverless cars and trucks will be safer. They will also be greener, first by significantly reducing congestion, and eventually because vehicles will be lighter in weight due to reduced collision risks.

Automobiles continue to maintain a huge cost advantage over passenger rail. Counting both subsidies and personal costs, Americans spend less than 25 cents a passenger mile on autos, nearly 60 cents a passenger mile on Amtrak, and more than 90 cents a passenger mile on urban transit. No wonder 85% of all our passenger travel is by automobile.

The call to spend hundreds of billions of dollars in subsidies to build the world's finest, 1930s-era transportation network would benefit the wealthy and those willing to live and work in expensive quarters near rail stations.

In contrast, the driverless scenario relies on new technology, not old; and will largely be self-funded by users rather than paid out of tax dollars. Most important, driverless vehicles will bring mobility to almost everyone.

 

 

 

Jaime Escalante Stood and Delivered. It's Our Turn. - WSJ.com

 

Andrew Coulson: Jaime Escalante Stood and Delivered. It's Our Turn. - WSJ.com

 

Jaime Escalante, the brilliant public school teacher immortalized in the 1988 film, "Stand and Deliver," died this week at the age of 79. With the help of a few dedicated colleagues at Garfield High in East Los Angeles, he shattered the myth that poor inner-city kids couldn't handle advanced math. At the peak of its success, Garfield produced more students who passed Advanced Placement calculus than Beverly Hills High.

In any other field, his methods would have been widely copied. Instead, Escalante's success was resented. And while the teachers union contract limited class sizes to 35, Escalante could not bring himself to turn students away, packing 50 or more into a room and still helping them to excel. This weakened the union's bargaining position, so it complained.

By 1990, Escalante was stripped of his chairmanship of the math department he'd painstakingly built up over a decade. Exasperated, he left in 1991, eventually returning to his native Bolivia. Garfield's math program went into a decline from which it has never recovered. The best tribute America can offer Jaime Escalante is to understand why our education system destroyed rather than amplified his success—and then fix it.

America not only needs more teachers like Jaime Escalante, it needs an education system that recognizes them and helps them to reach a mass audience. The tutoring sector is a proven model for doing so: Unleash the freedoms and incentives of the marketplace, so teachers like Escalante become the Steve jobs or Bill Gates of education, profiting from their exceptional ability to serve our children.

 

 

 

Finding Science in Acupuncture - WSJ.com

I’ve never had acupuncture, but I found this very interesting.  I’d be open to trying it if the need arose…

 

Finding Science in Acupuncture - WSJ.com

 

High-Tech Tools Show How Acupuncture Works in Treating Arthritis, Back Pain, Other Ills

 

Acupuncture has long baffled medical experts and no wonder: It holds that an invisible life force called qi (pronounced chee) travels up and down the body in 14 meridians. Illness and pain are due to blockages and imbalances in qi. Inserting thin needles into the body at precise points can unblock the meridians, practitioners believe, and treat everything from arthritis and asthma to anxiety, acne and infertility.

Acupuncture has long baffled medical experts and no wonder: It holds that an invisible life force called qi (pronounced chee) travels up and down the body in 14 meridians. Illness and pain are due to blockages and imbalances in qi. Inserting thin needles into the body at precise points can unblock the meridians, practitioners believe, and treat everything from arthritis and asthma to anxiety, acne and infertility.

 

 

Inside the Pelosi Sausage Factory - WSJ.com

The details of the backroom dealing described in this article cannot be easily summarized, but they are astounding.

 

Inside the Pelosi Sausage Factory - WSJ.com

 

Never before has the average American been treated to such a live-action view of the sordid politics necessary to push a deeply flawed bill to completion. It was dirty deals, open threats, broken promises and disregard for democracy that pulled ObamaCare to this point, and yesterday the same machinations pushed it across the finish line.

Perhaps the most remarkable Democratic accomplishment this week was to make the process of passing ObamaCare as politically toxic as the bill itself.

President Obama was elected by millions of Americans attracted to his promise to change Washington politics. These were voters furious with earmarks, insider deals and a lack of transparency. They were the many Americans who, even before this week, held Congress in historic low esteem. They'll remember this spectacle come November.

 

 

 

WSJ.com - A Setback for Educational Civil Rights

 

Father Theodore M. Hesburgh: A Setback for Educational Civil Rights

 

If Martin Luther King Jr. told me once, he told me a hundred times that the key to solving our country's race problem is plain as day: Find decent schools for our kids. So I was especially heartened to hear Education Secretary Arne Duncan repeatedly call education the "civil rights issue of our generation." Millions of our children—disproportionately poor and minority—remain trapped in failing public schools that condemn them to lives on the fringe of the American Dream.

For all these reasons, I was deeply disappointed when Sen. Richard Durbin (D., Ill.) successfully inserted a provision in last year's omnibus spending bill that ended one of the best efforts to give these struggling children the chance to attend a safe and decent school.

That effort is called the Opportunity Scholarship program. Since 2004 it has allowed thousands of children in Washington, D.C., to escape one of the worst public school systems in the nation by providing them with scholarships of up to $7,500.

Despite its successes, it is now closing down.

I know that some consider voucher programs such as the Opportunity Scholarships a right-wing affair. I do not accept that label. This program was passed with the bipartisan support of a Republican president and Democratic mayor. The children it serves are neither Republican nor Democrat, liberal or conservative. They are the future of our nation, and they deserve better from our nation's leaders.

I have devoted my life to equal opportunity for all Americans, regardless of skin color. I don't pretend that this one program is the answer to all the injustices in our education system. But it is hard to see why a program that has proved successful shouldn't have the support of our lawmakers. The end of Opportunity Scholarships represents more than the demise of a relatively small federal program. It will help write the end of more than a half-century of quality education at Catholic schools serving some of the most at-risk African-American children in the District.

I cannot believe that a Democratic administration will let this injustice stand.

 

Father Hesburgh is the former president of the University of Notre Dame.

 

WSJ.com - The President vs. Health-Care Reform

 

WSJ.com - Opinion: The President vs. Health-Care Reform

 

There's remarkable agreement among experts about the problem of skewed tax incentives.

Let us flip back to an epic series of Senate Finance hearings in 1992. They represented a remarkable meeting of minds across a broad swath of health-care wonks and economists that the original sin was the exclusion of employer-provided health insurance from taxable income—imposed carelessly by the IRS in 1943 so defense contractors could compete for workers without transgressing Roosevelt-era wage and price controls.

Everybody knows this turned "insurance" into something else. Call it prepaid health care, as Milton Friedman did. Call it a giant tax Laundromat for the nation's private health spending.

It became a massive subsidy to third-party payment, an incentive to channel every ache and pain through an "insurance" bureaucracy. It became an incentive for the most economically competent Americans—the secure, high-earning employees of corporate America—to overspend on health care, treating it as a free good.

What a surprise that the medical-industrial complex reorganized itself in light of this central driver. Nobody was looking for price tags so price tags disappeared, as did any competition on price, and any clarity on price versus value. Voilà.