I have no way of verifying how many French parents actually are as described, but this is an interesting insight into some common parenting differences.
WSJ.com - Why French Parents Are Superior
While Americans fret over modern parenthood, the French are raising happy, well-behaved children without all the anxiety. Pamela Druckerman on the Gallic secrets for avoiding tantrums, teaching patience and saying 'non' with authority.
Another two-fer day. While I totally agree with the first article’s assessment that Gingrich’s tax plan is better than Romney’s, I also agree with the second article that Mitt could finish off Newt by borrowing a few bold conservative agenda items.
WSJ.com - Opinion: Why Gingrich's Tax Plan Beats Romney's
Jobs and wealth are created by those who are taxed, not by those who do the taxing. Government, by its very nature, doesn't create resources but redistributes resources. To minimize the damages taxes cause the economy, the best way for government to raise revenue is a broad-based, low-rate flat tax that provides people and businesses with the fewest incentives to avoid or otherwise not report taxable income, and the least number of places where they can escape taxation. On these counts it doesn't get any better than Mr. Gingrich's optional 15% flat tax for individuals and his 12.5% flat tax for business. Each of these taxes has been tried and tested and found to be enormously successful.
Fairness in taxation means that people and businesses in like circumstances have similar tax burdens. A flat tax, whether on business or individuals, achieves fairness in spades. A person who makes 10 times as much as another person should pay 10 times more in taxes.
In 2012, those least capable of navigating complex government-created economic environments find themselves in their worst economic circumstances in generations. And the reason minority, lesser-educated and younger members of our society are struggling so greatly is not because we have too few redistributionist, class-warfare policies but because we have too many. Overtaxing people who work and overpaying people not to work has its consequences.
When it comes to economic efficiency, nothing holds a candle to a low-rate, simple flat tax.
WSJ.com - Opinion: How Mitt Can Finish Off Newt
The most constructive way for Mr. Romney to kill off his rivals while bringing the party together is simple: Steal their best ideas. Mr. Gingrich has done precisely that with Ron Paul by calling for a commission to study the gold standard. Mr. Romney could easily do the same, echoing Mr. Paul's call for an honest dollar or adopting Mr. Gingrich's flat tax.
In the end, the arguments for Mr. Romney come down to this: He has executive experience in both business and government, he's got the most money and the best organization, and he's electable. They are good points. Still, they add up to one argument by résumé and two from process.
Those of us who believed that a primary fight would toughen Mr. Romney up have little to show for it. Far from sharpening his proposals to reach out to a GOP electorate hungry for a candidate with a bold conservative agenda, Mr. Romney has limited his new toughness to increasingly negative attacks on Mr. Gingrich's character.
Today’s article has nothing to do with politics (I know, you’re surprised), but I found it very interesting. I’m glad I have a few more years before I have my first teenager.
WSJ.com - What's Wrong With the Teenage Mind?
The crucial new idea is that there are two different neural and psychological systems that interact to turn children into adults. Over the past two centuries, and even more over the past generation, the developmental timing of these two systems has changed. That, in turn, has profoundly changed adolescence and produced new kinds of adolescent woe. The big question for anyone who deals with young people today is how we can go about bringing these cogs of the teenage mind into sync once again.
***
In the past, to become a good gatherer or hunter, cook or caregiver, you would actually practice gathering, hunting, cooking and taking care of children all through middle childhood and early adolescence—tuning up just the prefrontal wiring you'd need as an adult. But you'd do all that under expert adult supervision and in the protected world of childhood, where the impact of your inevitable failures would be blunted. When the motivational juice of puberty arrived, you'd be ready to go after the real rewards, in the world outside, with new intensity and exuberance, but you'd also have the skill and control to do it effectively and reasonably safely.
In contemporary life, the relationship between these two systems has changed dramatically. Puberty arrives earlier, and the motivational system kicks in earlier too.
At the same time, contemporary children have very little experience with the kinds of tasks that they'll have to perform as grown-ups. Children have increasingly little chance to practice even basic skills like cooking and caregiving. Contemporary adolescents and pre-adolescents often don't do much of anything except go to school. Even the paper route and the baby-sitting job have largely disappeared.
The experience of trying to achieve a real goal in real time in the real world is increasingly delayed, and the growth of the control system depends on just those experiences. The pediatrician and developmental psychologist Ronald Dahl at the University of California, Berkeley, has a good metaphor for the result: Today's adolescents develop an accelerator a long time before they can steer and brake.
Here’s an article I overlooked a few weeks ago, but discovered yesterday. I remember watching the Fab Five back in the early 90’s and it’s great to see Jalen Rose involved in such a great project in Detroit.
WSJ.com - Opinion: From the Fab Five to the Three Rs
Mr. Rose plans to start with this freshman class and add a new grade each year until there are some 500 kids in grades 9-12. "This is college prep. We expect 90% to 100% to go on to college"—no mean feat when many students are entering ninth grade with only fourth-grade levels of reading and math proficiency.
… he saw many promising high-schoolers who had earned straight-As but couldn't score higher than a 14 out of 36 on the ACT. "What were they teaching these kids? There are just so many poor-perform ing schools here, and there are so many kids in our city that want to do the right thing, and families that want to put their kids in a quality school. But they can't."
His school also doesn't have tenure for teachers. "I hate tenure. Tenure allows teachers to put their feet up on the desk and possibly have a job forever. That's why I got turned on to charter schools. It's a business model. Every employee and every teacher will be monitored by performance."
Kids too: "We have a code of conduct here. If they act up, they're suspended. They come back with a better attitude."
He also wants to influence parents—empowering them to demand better schools for their kids. The rigid system of school boards telling families where their kids have to go to school perpetuates poverty and a sense of entrapment, he says: "Forty-seven percent of Detroit area parents are functionally illiterate. So that puts their kids at a real handicap. Say my mom is one of those 47%. That doesn't mean that I shouldn't have a fair opportunity for a quality public education. But since my mom is functionally illiterate and we grew up on the west side of Detroit, I'm forced to go to this school that has been a poor-performing school for 30 years."
"There should be parental choice," he says clearly. "Schools should be open. If it's a public education, and the school in your district is poor-performing, you s hould be able to put your student or kid wherever you want."
Choice could be relatively easily implemented, he says. "I'm a taxpaying citizen, right? So if I'm paying $4,000 worth of taxes and I don't want my kid to go to this school, why can't they give me my $4,000 and allow me to pick where I want to put my kids?"
Mr. Rose wants to end this injustice by starting small, with 120 students, and then scaling up—but it won't be easy.
WSJ.com - Opinion: The War on Political Free Speech
Two years ago the Supreme Court upheld the right of an incorporated nonprofit organization to d istribute, air and advertise a turgid documentary about Hillary Clinton called, appropriately enough, "Hillary: The Movie." From this seemingly innocuous and obvious First Amendment decision has sprung a campaign of disinformation and alarmism rarely seen in American politics.
Super PACs have become the latest villain du jour of the anti-speech crowd, which plays off the general public distaste for the political rancor that surfaces every election year. Critics including Mr. Sanders say that Super PACs don't disclose their donors and rely on "secret" money. This is simply not true. Super PACs, like the traditional political action committees that have existed for decades, disclose all expenditures and all donors over $200.
There are organizations that spend on politics but don't disclose their donors: traditional nonprofits such as the NAACP, the NRA and Public Citizen. These groups have never had to disclose their donors—and the Supreme Court, over 50 years ago, upheld their right to keep supporters anonymous. But reformers intentionally seek to blur the lines between these traditional groups and Super PACs in order to whip up criticism of Citizens United.
The goal of this misinformation is clear. Reformers, who sit mainly on the political left, and their Democratic Party allies hope to silence voices that they perceive to be hostile to their political interests.
Two years after Citizens United, Amer ican democracy seems as robust as ever. This may be what its critics fear most—a vibrant debate that they cannot control and fear they will lose.
WSJ.com - Opinion: Bain Capital Saved America
We are of course putting forth "Bain Capital" as not merely the Romney private-equity house but as the stand-in for the period of American economic history that ran from 1980 to 1989. Back then it was called the Greed Decade, with asset-stripping barbarians at the gate. Virtually everything about this popular stereotype is wrong. Properly understood, the 1980s, including Bain, were the remarkable years when an ever-resilient America found a way to save itself from becoming what Europe is now—a global has-been.
Read through S&P's justification for last week's downgrades of nine European countries. Along with the expected dumping on those countries' fiscal profligacy, one finds as well a blunt recognition of Europe's moribund "fundamentals," meaning their ability to produce "strong and consistent" economic growth.
If not for Bain Capital and the other, bigger players who commenced a decade of leveraged buyouts and hostile takeovers in the 1980s, the odds are that the U.S.'s "fundamentals" would be similarly weak. Instead, the U.S. corporate sector remade itself during the Bain years.
In a comprehensive 2001 re-examination of the buyouts and takeovers of the 1980s, economists made clear that the results were far from the stereotype of zero-sum pillage revived last week by economic historian Newt Gingrich and un-Texan Gov. Rick Perry ("vulture capitalism"), and sure to be promoted in grainy, tear-soaked campaign ads by the Obama team.
"When large-scale hostile takeo vers appeared in the 1980s," Messrs. Holmstrom and Kaplan write, "many voiced the opinion that they were driven by investor greed; the robber barons of Wall Street had returned to raid innocent corporations. Today, it is widely accepted that the takeovers of the 1980s had a beneficial effect on the corporate sector and that efficiency gains, rather than redistributions from stakeholders to shareholders, explain why they appeared."
Singling out this or that Bain case study amid the jostling and bumping is pointless. This was a historic and necessary cleansing of the Augean stables of the American economy. It caused a positive revolution in U.S. management, financial analysis, incentives, governance and market-based discipline. It led directly to the 1990s boom years.
WSJ.com - Opinion: The Bain Capital Bonfire
We have our policy differences with Mr. Romney, but by any reasonable measure Bain Capital has been a net job and wealth creator. Founded in 1984 as an offshoot of the Bain consulting company, Bain Capital's business is a combination of private equity and venture capital. The latter means taking a flyer on start-ups that may or may not pan out, something that neither Mr. Gingrich nor Mr. Obama seem to find offensive when those investments are made by Silicon Valley firms in "clean energy."
One Bain investment during Mr. Romney's tenure was to back an entrepreneur who was convinced he could provide savings for small-business owners if they were willing to shop at a store instead of taking deliveries. Today, the Staples chain of business-supply stores employs 90,000 people.
Bain also backed a start-up called Bright Horizons that now manages child-care centers for more than 700 corporate clients around the world. Many other venture bets f ailed, but that's capitalism, which is supposed to be a profit and loss system.
The loss part is what seems to trouble the Gingrich-Perry-Obama critics, especially in Bain's private-equity business. Like some 2,300 other such U.S. equity firms, Bain looks to buy companies that are underperforming or undervalued and turn them around.
Far from "looting," this is a vital contribution to capitalism and corporate governance. One of the persistent gripes of the left is that too many CEOs make too much money even as their companies flounder. Private-equity firms target such companies or subsidiaries, replace their management, and try to unlock the underlying value in the enterprise.
Private equity helps to promote dynamic capitalism that creates wealth, rather than dinosaur capitalism of the kind that prevails in Europe and futilely tries to prevent failure. Sometimes this means closing parts of the company and laying off employees, but the overriding goal is to create value, not destroy it.
The larger political point is that Mr. Romney has a good story to tell if he is willing to elevate this ugly rumble into a debate over free enterprise and America's future. Mr. Romney needs to rise above the personal and base his claim to office on a defense of the system of free enterprise that has enriched America over the decades and is now under assault.
WSJ.com - Opinion: Capitalism and the Right to Rise
We talk about the right to free speech, the right to bear arms, the right to assembly. The right to rise doesn't seem like something we should have to protect.
But we do. We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.
That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing.
Increasingly, we have let our elected officials abridge our own economic freedoms through the annual passage of thousands of laws and their associated regulations. We see human tragedy and we demand a regulation to prevent it. We see an industry dying and we demand it be saved. Each time, we demand "Do something . . . anything."
We either can go down the road we are on, a road where the individual is allowed to succeed only so much before being punished with ruinous taxation, where commerce ignores government action at its own peril, and where the state decides how a massive share of the economy's resources should be spent.
Or we can return to the road we once knew and which has served us well: a road where individuals acting freely an d with little restraint are able to pursue fortune and prosperity as they see fit, a road where the government's role is not to shape the marketplace but to help prepare its citizens to prosper from it.
In short, we must choose between the straight line promised by the statists and the jagged line of economic freedom. The jagged line offers no guarantees but has a powerful record of delivering the most prosperity and the most opportunity to the most people.
Unfortunately, this type of example is all too common with a government that has far exceeded its proper bounds.
WSJ.com - Opinion: The Cellulosic Ethanol Debacle
Years before the Obama Administration dumped $70 billion into solar and wind energy and battery operated cars, and long before anyone heard of Solyndra, President Bush launched his own version of a green energy revolution. The future he saw was biofuels. In addition to showering billions of dollars on corn ethanol, Mr. Bush assured the nation that by 2012 cars and trucks could be powered by cellulosic fuels from switch grass and other plant life.
Most important, the Nancy Pelosi Congress passed and Mr. Bush signed a law imposing mandates on oil companies to blend cellulosic fuel into conventional gasoline. This guaranteed producers a market. In 2010 the mandate was 100 million barrels, rising to 250 million in 2011 and 500 million in 2012. By the end of this decade the requirements leap to 10.5 billion gallons a year.
Despite the taxpayer enticements, this year cellulosic fuel production won't be 250 million or even 25 million gallons. Last year the Environmental Protection Agency, which has the authority to revise the mandates, quietly reduced the 2011 requirement by 243.4 million gallons to a mere 6.6 million. Some critics suggest that even much of that 6.6 million isn't true cellulosic fuel.
To recap: Congress subsidized a product that didn't exist, mandated its purchase though it still didn't exist, is punishing oil companies for not buying the product that doesn't exist, and is now doubling down on the subsidies in the hope that someday it might exist. We'd call this the march of folly, but that's unfair to fools.
WSJ.com - Opinion: The Millionaire Subsidy Elimination Act
On Tuesday, President Obama once again blamed the lack of progress on the budget deficit on Republicans' refusal to raise taxes on their fat-cat friends and donors—the much-maligned 1%. Yet the top 1% of earners already pay close to 40% of all federal income taxes, a share that is almost double what it was in the 1970s.
Raising tax rates on high incomes, as Mr. Obama proposes, would only cut the deficit by about 6%, even assuming—wrongly—that those higher taxes wouldn't slow the economy.
The much bigger fiscal drain from the wealthy is on the federal expenditure side of the budget ledger: tens of billions each year in grants, loans, subsidies, guarantees and benefits pocketed each year by wealthy Americans as individuals and firms. Any campaign to downsize big government will only succeed if the needed deep cuts in spending are deemed by voters as equitable. In an era of $1 trillion-plus deficits and a $15 trillion national debt, we would like to think that a national consensus could be reached to eliminate handouts to individuals and companies with net incomes above $1 million.
We've long argued that the GOP should lead the charge.
We propose a new law: Let's call it The Millionaire Subsidy Elimination Act. It would prohibit anyone with an annual income over $1 million from receiving any government benefits. There's a big advantage to cutting benefits to millionaires rather than raising their tax rates to 40% or 50%. Slashing expenditures would help grow the economy, while raising tax rates would hurt U.S. competitiveness and job creation.
Once again, Noonan nails it. I love so much about Newt, and I would love to see him debate Obama for hours on end, but he also makes me nervous for all the reasons listed in this article. I’ll support him 100% against O’bummer if he gets the nomination, but right now I’d still pull the lever for Romney.
WSJ.com - Opinion: Gingrich Is Inspiring—and Disturbing< /b>
That's the problem with Newt Gingrich: It's all true. It's part of the reason so many of those who know him are anxious about the thought of his becoming president. It's also why people are looking at him, thinking about him, considering him as president.
Ethically dubious? True. Intelligent and accomplished? True. Has he known breathtaking success and contributed to real reforms in government? Yes. Presided over disasters? Absolutely. Can he lead? Yes. Is he erratic and unreliable as a leader? Yes. Egomaniac al? True. Original and focused, harebrained and impulsive—all true.
What is striking is the extraordinary divide in opinion between those who know Gingrich and those who don't. Those who do are mostly not for him, and they were burning up the phone lines this week in Washington.
Those who've known and worked with Mitt Romney mostly seem to support him, but when they don't they don't say the reason is that his character and emotional soundness are off. Those who know Ron Paul and oppose him do so on the basis of his stands, they don't say his temperament forecloses the possibility of his presidency. But that's pretty much what a lot of those who've worked with Newt say.
There are many good things to say about Newt Gingrich. He is compelling and unique, and, as Margaret Thatcher once said, he has "tons of guts."
But this is a walk on the wild side.
WSJ.com - Opinion: A Short Econ Quiz for the Super Committee
Suppose that year after year, you spend more than you earn. You are worried that you've become fiscally irresponsible. Which of the following could be paths back to fiscal sanity for your household?
A) Spend less.
B) Earn more.
C) Stop at the ATM more often so you'll have more cash in your pocket.
Do we all understand why C is a really bad answer? Good. Now let's try another one.
Suppose that year after year, your government spends more than it collects in taxes. You are worried that it's become fiscally irresponsible. Which of the following could be a path back to fiscal sanity for your government?
A) Spend less.
B) Collect more tax revenue.
Spending less—at least spending less on things you don't need—can be a first step toward sanity for a government just as it can for a household. So A is a pretty good answer. What about B?
As the deadline looms for the congressional super committee, there's seems to be a growing sense that tax revenue for the government is like income for the household. That's wrong. Raising taxes is nothing at all like earning income. Instead, it's a lot more like visiting the ATM.
The government's debt is the American people's debt. If we pay down that debt through higher taxes, we will, for the most part, pay those taxes by drawing down our savings. That's no more "responsible'' than drawing down those savings to finance overconsumption within the household.
The notion persists that an extra trillion in federal spending can be converted from "irr esponsible'' to "responsible'' as long as it's accompanied by an extra trillion in tax hikes. That's like saying a $500 haircut can be converted from "irresponsible'' to "responsible'' as long as you withdraw the $500 from your bank account. If the super committee loses sight of this fundamental truth, it is doomed to fail.
Wsj.com - Philip K. Howard: The Public-Union Albatross
The indictment of seven Long Island Rail Road workers for disability fraud last week cast a spotlight on a troubled government agency. Until recently, over 90% of LIRR workers retired with a disability—even those who worked desk jobs—adding about $36,000 to their annual pensions. The cost to New York taxpayers over the past decade was $300 million.
As one investigator put it, fraud of this kind "became a culture of sorts among the LIRR workers, who took to gathering in doctor's waiting rooms bragging to each [other] about their disabilities while simultaneously talking about their golf game." How could almost every employee think fraud was the right thing to do?
The LIRR disability epidemic is hardly unique—82% of senior California state troopers are "disabled" in thei r last year before retirement. Pension abuses are so common—for example, "spiking" pensions with excess overtime in the last year of employment—that they're taken for granted.
Collective-bargaining rights have made government virtually unmanageable. Promotions, reassignments and layoffs are dictated by rigid rules, without any opportunity for managerial judgment. In 2010, shortly after receiving an award as best first-year teacher in Wisconsin, Megan Sampson had to be let go under "last in, first out" provisions of the union contract.
America should ban political contributions by public unions, by constitutional amendment if necessary. Government is supposed to serve the public, not public employees.
WSJ.com - Opinion: The Corporate Welfare State
The Occupy Wall Street protesters aren't good at articulating what they want, but one of their demands is "end corporate welfare." Well, welcome aboard. Some of us have been fighting crony capitalism for decades, and it's good to have new allies if liberals have awakened to the dangers of the corporate welfare state.
Corporate welfare is the offer of special favors—cash grants, loans, guarantees, bailouts and special tax breaks—to specific industries or firms. The government doesn't track the overall cost of these programs, but in 2008 the Cato Institute made an attempt and came up with $92 billion for fiscal 2006, which is more than the U.S. government spends on homeland security.
That annual cost may have doubled to $200 billion in this new era of industry bailouts and subsidies. According to the House Budget Committee, the 2009 stimulus bill alone contained more than $80 billion in "clean energy" subsidies, and tens of billions more went for the auto bailout and cash for clunkers, as well as aid for the mortgage industry through programs to refinance or buy up toxic loans.
This industrial policy model of government as a financial partner with business can sound appealing, but the government's record in picking winners and losers has been dreadful.
***
As important as this economic damage is the corrosive effect that corporate welfare has on public trust in government. Americans understand that powerful government invariably favors the powerful, who have the means and access to massage Congress and the bureaucracy that average citizens do not. This really is aid to the 1% paid by the other 99%.
With American federal debt headed toward the worst European levels, this is an issue that should unite the tea party, the Occupy Wall Street protesters and Congressional deficit-cutters.
Peggy Noonan has a decent article about Paul Ryan and Obama’s campaign of class warfare (link below); however, I’m also including the link to Paul Ryan’s speech that Peggy discusses and I recommend reading that above the article. I think Ryan’s speech is an excellent exploration of some of our nation’s problems and a solid foundational explanation of a serious approach to solve these problems. Serious thinkers from any political side will benefit from carefully considering his speech.
Here’s Paul Ryan’s recent speech [read or watch]:
Saving the American Idea: Rejecting Fear, Envy and the Politics of Division
http://budget.house.gov/News/DocumentSingle.aspx?DocumentID=266151
Here’s Noonan:
WSJ.com - Opinion: The Divider vs. the Thinker
Mr. Ryan receives much praise, but I don't think his role in the current moment has been fully recognized. He is doing something unique in national politics. He thinks. He studies. He reads. Then he comes forward to speak, calmly and at some length, about what he believes to be true. He defines a problem and offers solutions, often providing the intellectual and philosophical rationale behind them. Conservatives naturally like him—they agree with him—but liberals and journalists inclined to disagree with him take him seriously a nd treat him with respect.
WSJ.com - Opinion: And Baby Makes Seven Billion
Nothing brings out the inner Malthus like a newborn baby.
That's especially true when that baby is born to a mother somewhere in Africa or Asia. According to the United Nations Population Fund, some time this coming Monday, probably in India, the world will welcome its seven billionth person. Well, maybe welcome isn't exactly the right word.
At Columbia University's Earth Institute, Prof. Jeffrey Sachs tells CNN "the consequences for humanity could be grim." Earlier this year, a New York Times columnist declared "the earth is full," suggesting that a growing population means "we are eating into our future." And in West Virginia, the Charleston Gazette editorializes about a "human swarm" that is "overbreeding" in a way that "prosperous, well-educated families&q uot; from the developed world do not.
The smarter ones acknowledge that Malthus's ominous warnings about a growing population outstripping the food supply were not borne out in his day. The track record for these scares in our own day is not much better.
The truth is that the main flaw in Malthus is precisely his premise. Malthusian fears about population follow from the Malthusian view that human beings are primarily mouths to be fed rather than minds to be unlocked. In this reasoning, when a pig is born in China, the national wealth is thought to go up, but when a Chinese baby is born the national wealth goes down.
Behind this divide between those who worry about limits put on human exchange and those who worry about limits to growth are two very different views of the human person. The former believe that so long as people are free to trade and use their talents, the more the merrier. The latter treat people as a great mass of more or less interchangeable cogs, hence the worries about "sustainability" and "carrying capacity" and the like.
WSJ.com - Opinion: Avoiding Smoot-Hawley Redux
There's no question about it: China manipulates its currency. The value of the yuan is largely determined not by market forces but by a "managed float." Beijing sets a target range within which the yuan can be converted into U.S. dollars via markets in Hong Kong. Under most analyses of purchasing power parity, the yuan should probably be at a higher value relative to the dollar.
None of these statements are controversial. The real questions are: What does the managed float mean for America, and what should be done about it?
On the former, the managed float of the yuan means that U.S. imports from China are cheaper than they would otherwise be. It also means that China sits on large dollar reserves that get funneled back into U.S. financial assets (mainly Treasuries and mortgage-backed securities), putting downward pressure on U.S. interest rates.
In addition, it means that if the U.S. could produce the same goods and services at the same price as China, we would be at a comparative disadvantage. The reality, of course, is that the U.S. does not produce the same goods and services at the same price.
On the latter question—what should we do about this—the answer is: not start a trade war.
WSJ.com - Opinion: The Banker Baiters
White House financial czar Elizabeth Warren is off and running for Senate in Massachusetts, and her theme is t hat "the people on Wall Street broke this country." Meanwhile, Senator Dick Durbin this week urged customers to stage a run on Bank of America because it recently raised debit-card fees by $5 a month, President Obama piled on by telling regulators to punish BofA, and even Treasury Secretary Tim Geithner has joined the fun by vowing that America will "prevail" over the banks.
"Prevail"? Who is America's chief financial steward talking about here, the Taliban? What a turnaround: A couple of years ago Mr. Geithner was saying that Congress had to rescue the banks he was supervising at the New York Federal Reserve for the good of the economy, and now he's saying the same banks are enemies of the people.
Such are the vagaries of re-election politics when you don't have much else to run on. Lacking an agenda, much less an economic achievement, Democrats appear to have decided to campaign against Wall Street and the banks. Perhaps soon we'll see Ms. Warren and the President join the "Occupy Wall Street" protests in lower Manhattan. Maybe they can all march arm-in-arm on the New York Fed.
But how could they avoid protesting their own policies? The entire American financial system now operates under the rules they wrote in 2009 and 2010 when Democrats controlled both houses of Congress.
The predictable consequences of those rules are starting to appear in the marketplace. The 2009 CARD Act made it more difficult for credit-card issuers to raise rates and charge fees. New Federal Reserve regulations limited overdraft charges. Then came the 2010 Dodd-Frank law, which included a provision authored by Mr. Durbin that cut the "swipe fees" that debit-card issuers can charge merchants like Wal-Mart to process transactions.
Don't ask what any of this has to do with preventing the next financial crisis. The new rules and laws achieved Washington's goal of cutting bank revenues, by more than $15 billion per year. But it costs money to provide checking services and electronic payment networks, and the political class is now stunned that banks would seek new ways to profitably serve customers.
This article is longer and a bit thicker than most I post, but I think it gets to the core of many of our left/right debates. Personally, I land on the side of maintaining personal freedoms while practicing and encouraging a moral life in all of us.
WSJ.com - America's Enduring Ideal
Only through a reshaping of our principles and a reordering of the American economy, Mr. Sachs believes, can we become "a mindful society." We must abandon a culture that is defined by hard work and the striving for upward mobility and an economy that has unleashed unparalleled prosperity. Hard work impedes leisure. Ambition is a vice. Economic growth hurts the planet.
Mr. Sachs is right to dislike the greed and vulgarity that can accompany bourgeois life. But he is wrong to attribute these phenomena to capitalism uniquely. Discord and imperfection arise from human nature. The question is how they can be contained and redirected. Capitalism, together with our moral traditions, has long offered a solution consistent with individual freedom.
The freedom and independence of the American population can best be guaranteed by allowing the people to govern themselves through their elected representatives; by keeping limits on the size of government; and by encouraging each of us to take responsibility for our own well-being. We can best be aided by our families, communities, churches and local institutions—and by the government only as a last resort.
For, ultimately, Mr. Sachs's quarrel is with our founding principles of equality and liberty. Underlying the arguments in "The Price of Civilization" is a contention that the Constitution is too conducive to freedom, that it endorses an economic system too friendly to growth and the satisfaction of appetite, that it creates political institutions too inattentive to our national character.
The Founders thought of America as exceptional, but Mr. Sachs thinks that this claim is a myth and that the country's present greatness a historical aberration. Our decline is, thankfully, inevitable, he says: "America will not again dominate the world economy or geopolitics as it did in the immediate aftermath of World War II. That was a special historical moment; we can be glad that economic progress throughout the world is rapidly creating a more balanced global economy and society."
It is through this prism of decline that we may better understand Mr. Sachs's calls for an overbearing government to take more earnings from you and make more decisions for you, as well as his instructions for hard-working Americans to restrain their ambitions and accept their current place in life. He seeks nothing less than to replace the vision of the Founders—the ideals of individual liberty that have enabled America to achieve the unrivaled social, material and spiritual flourishing of the past two and a quarter centuries—with one that relies almost solely on the wisdom and beneficence of an intrusive, unlimited government.
The dialogue between capitalism and its critics is an old one, and it will continue. But as citizens of a self-governing nation, Americans must choose from time to time between alternative visions for our future.
WSJ.com - Opinion: Elizabeth Warren and the Blessings of Government
Elizabeth Warren—Harvard Law School professor, former Obama consumer-prot ection czar, and now a candidate for Senate in Massachusetts—recently gave a revealing presentation of her views on justice and taxing the rich:
"There is nobody in this country who got rich on his own. Nobody," she said at a campaign event. "You built a factory out there—good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. . . . You built a factory and it turned into something terrific or a great idea—God bless, keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay it forward for the next kid who comes along."
There's much truth in Ms. Warren's statement. But if government stuck to what it does fairly well—roads, police, fire and the courts; enforcing contracts that help businesses interact with their customers and other businesses—the federal government wouldn't need to spend over $3.5 trillion a year, as it now does. And of course it's state and local governments—and not Washington—that primarily fund police, fire and education, so it's a bit strange to ask the rich to pay their fair share of federal income taxes because they enjoy police protection.
Much government spending supports activities that are ineffective or even harmful to the economy, often helping the politically powerful at the expense of the rest of us. Wouldn't it be great for the federal governm ent to stop federal export subsidies, propping up financial institutions, meddling in the education system, and trying to engineer the entire health system from the top down?
If the feds stopped all that, Ms. Warren would have a stronger point. We could all feel some gratitude for government's role in helping us live better lives. All of us, rich and poor, would look at government differently.
Posts
All Comments
