Getting elected to a new political position of power is kind of like getting a new car. It comes with lots of bells and whistles that you didn't have before, it can take you to faraway places never imagined, and when nobody's looking you do donuts in the parking lot. There are lots of those new opportunities for political leaders both at home and abroad, and even the French find it fun to screw with things every now and again. Newly-elected président de la République française Nicolas Paul Stéphane Sarközy de Nagy-Bocsa* has leaped headfirst into foreign policy and international relations with all the tact and diplomacy of Chris Farley doing a cannonball in the Hyatt's indoor pool.

Nicky Sixx Names recently visited China, and managed to accomplish the following:
A) Secure $30 billion worth of business in aerospace and defense from China;
B) Scolded China for undervaluing the yuan, violating human rights, limiting free speech and press, imposing the death penalty, poor product safety (such as lead paint in children's toys), causing global warming, supporting Iran, and not waiting 30 minutes after eating before swimming.

Now, here's how international relations works, for those of you who are either total incompetents or newly-elected Presidents of nations with horrible food:
1) No matter how undervalued the yuan may be (and it is; I've written extensively on this subject), you cannot get $30b worth of business and then complain that the rates were unfair. It looks tacky.
2) China is not a rapid-change culture. Its people are not rapid-change people. You can no more go into China and declare it to be a human rights wasteland expecting it to change than you can negotiate with the force of gravity. Doing what Sarkozy did can only end up pissing off China, because he wasn't subtle; as the AP article notes, Sarkozy had the "frankness that has become the hallmark of his young presidency" when he said point-blank: "China needs to accelerate the appreciation of the yuan against the euro."

Vice Premier Wu Yi, speaking for the official state media (all media in China is controlled by the government), said with the usual Chinese reservation: "I am extremely dissatisfied." In Sarkozy-speak, this translates to: "Say that again, I dare you!"

I'm not entirely sure what Sarkozy hoped to accomplish. I am pleased that he's addressing the pertinent issues related to China's place as a responsible member of the world community. But, he's doing it in such a manner that even the French might be offended (though offending the French has never been a difficult task, though not one usually done by their own President, more often by ours). I entirely support the conversation with China about human rights, particularly their rather trigger-happy execution of the death penalty (no pun intended) and their stringent restrictions on free speech.

As an aside, if you'd like to see how Google has kowtowed to China's free speech restrictions, try this little test: go to Google, and do an Image Search for "Tiananmen Square". Now go to Google China (google.cn) and do the same image search. In Google US, the major images are of the tanks from the infamous protest. In Google China, at the request of the Chinese government, all images of the protest, the tanks, and the violence have been deleted, and are replaced by happy images of buildings and the 2008 Beijing Olympics.

That's Google! Furthering censorship and currently trading at $673/share!

Disclaimer: this site is powered by Blogger, owned by Google. Now you don't know what the hell to think, do ya? But really, what isn't owned by Google these days?

But I digress...

My hope is that as Sarkozy settles into his role as President of a hugely powerful and influential nation-state and member of the European Union, his "frankness" will become subdued in the interest of diplomacy. Not that honesty and forthrightness are not to be valued, but they are to be measured with tact and subtlety. And if that doesn't happen ... well, it will make for great Abbott & Costello routines.

*That is his real full name. I am not making that up.

Labels: China, EU, International Relations

Fred Thompson has become the first major Presidential candidate to actually provide a detailed plan for solving a specific problem; in this case, Social Security.

First, let me say kudos, and it's high time we have somebody talking about an issue in concrete detail, instead of the abstract (or namby-pamby, whichever you prefer) method of arguing which candidate is more patriotic. I'm also pleased that somebody is willing to talk about Social Security. There is a serious and very realistic fear that Social Security and Medicare will not be touched until they explode simply because most elderly people (A) feel grossly entitled to them; (B) do not understand the specific problems they pose; but (C) vote like the dickens.

But, Fred, I'm afraid that in proposing concrete reforms, you leave yourself open to specific rebuttals.

Thompson's plan contains three parts:
1) Indexing Social Security to inflation instead of wages
2) Allowing for "add-on" personal savings accounts in addition to Social Security
3) Mandating a Social Security Trust Fund

First, let it be known that even Thompson himself admits his plan only delays the problems of the Social Security program; it does not fix the program itself. In other words, passing his reforms would only be a temporary fix, and at some point we will find ourselves back in this same position, only it would be later instead of sooner.

Currently, Social Security is indexed to wages, meaning that the rate at which Social Security benefits increase is proportional to the increase in wages. Wages rise faster than inflation -- logically, if wages rose at the same rate as inflation, no one would ever get a pay increase in real dollar terms. And of course if wages rose slower than inflation it would be equivalent to a real dollar pay decrease.

Regardless, Thompson wants to change the way benefits are figured to reflect inflation, which rises slower. He claims this will delay the immediate burden posed by Social Security, and mathematically he's correct; however, when comparing wage indexing to inflation indexing, the real-dollar equivalent is simply a benefit decrease over time. You can come up with whatever name you want for it, but ultimately you're decreasing benefits for future Social Security payees. This will not go over well, let me guarantee.

Too many senior citizens use Social Security not only as a primary but a sole income for retirement. It was never intended to be used as such, and that is the main reason this problem is not simpler to solve. With Americans having been guaranteed Social Security their entire career, and having paid taxes for current retiree's benefits, everyone feels entitled to their Social Security check. But that amount was meant to supplement, not supplant, retirement income. But, be that as it may, that's the situation we find ourselves in. Now, what are we to do about it?

Decreasing future seniors' benefits will not solve the problem, and will only create more poverity-stricken senior citizens, especially as the cost of healthcare and prescription drugs continues to rise in the face of decreasing Social Security income.

On the second part of his plan, the addition of a retirement savings account apart from Social Security, let me say that the benefits will not be substantial. First, if the account is voluntary, you cannot decrease Social Security benefits for retirees with a large savings account. This means that the savings accounts do not address the solvency issues present with the system itself. Secondly, the taxes for Social Security already represent a huge portion of an employee's paycheck, and most will be remiss to allow the government to take more of that pie. And why should they? Anyone wanting a retirement savings account to provide retirement income already has one -- you can get them readily in the private sector. And I bet private sector 401(K)s or IRAs will offer much better returns than government-run investments. The risk may be higher in the short term for a private sector investment, but retirement investing is typically done in the long term, and spreading your investment over a period of 20 years or more makes the risk differential negligible.

Lastly, mandating an Al Gore-ish "lockbox" for Social Security is perhaps the most profoundly stupid idea in the history of the debate, save perhaps the original program itself, Ponzi scheme that it is. The government can't save money the way you and I save money; if the government were to put money "away" it would effectively take that money out of circulation. Taking a large amount of money out of circulation would cause outrageous deflation, and the value of the dollar would skyrocket, leaving wages to plummet and massive unemployment. You wouldn't be able to buy money with diamonds. Further, if the government at any point ever dumped that money -- wholly or in part -- back into circulation by paying it out to retirees, there would be outrageous inflation to the point that the retirees might actually have less real dollars than before the government paid them. The value of the dollar would crash like an elevator with a slashed cable, and the money that you before couldn't purchase with diamonds would be worth less than the paper it was printed on.

Point being, the government can't actually put money in a "trust fund" the way you and I can because it prints the money. So it would have to spend it. The way the Thompson plan (and in the interest of fairness, all similar plans I've seen) spends Social Security money put in a lockbox is by investing it. That's right, thanks to the government's help we have established an extra step in the investing process we talked about before with Roth IRAs. Instead of us taking our paycheck to our broker and having him put the money in an IRA, we send our money to the government, who sets up an agency, hires a staff, buys some computers and phones, erects a building, and then forwards our check on to that same broker who invests it in that same IRA. The only difference is that you have given up control of your money to the government -- in the private sector, you can cash in your IRA at any point you wish for any reason. I highly doubt the government would let you cash in your Social Security trust fund balance if the mood struck you.

The only possible benefit to a government-run trust fund is that the Thompson plan has the government matching your contributions to the trust fund: "On the personal accounts, 2 percent of workers’ paychecks would automatically be entered. The government would give the employee $2.50 for every $1 contributed into the account, up to $1,000 per month or $12,000 per year. After that point, 50 cents would be matched to every $1. This money would be paid for by the current Social Security fund, Mr. Thompson said." (Alexovich, NY Times, 11/9/07)

Where are these matching funds coming from? The whole reason for reforming Social Security is because it's not solvent! You can't fix a deficit program by spending more money, any more than an obese person can lose weight by eating more food.

In 2002, the average monthly Social Security benefit check was $895. (US Census Bureau 12/11/03) I think we can safely assume it's increased since then; let's assume for the purposes of discussion that it's an even $1000 per month. Thompson's plan to include government matching of $1000 per month would DOUBLE the Social Security deficit.

There is no trust fund now. The money not spent in the form of benefits to current retirees is spent in other ways -- more than you'd like to know, that money is spent on government programs instead of invested as an actual hedge against baby boomer retirees overloading the system. The government can't save any extra Social Security funds, remember? All money the government takes in during a given year, whether from Social Security taxes, income taxes, or any other means has to be spent.

I'm glad that someone is talking about Social Security -- no matter how much the elderly will be enraged come Election Day, Social Security has to be fixed and the solution isn't going to be pretty. The entire system was designed to live on borrowed time, it's no accident that it ended up this way, and it's deplorable that so many people have not the foresight to have planned for their own retirement apart from government assistance. But now we're all in for a rude awakening, and while senior citizens may not appreciate having their checks decrease -- or disappear -- I certainly don't appreciate paying taxes into a system that I know will never benefit me in my life, or even send me as much as a dime.

Let's keep talking about it, and hopefully, one of these days, a serious candidate will propose the only serious solution.

Complete privatization.

Labels: Election 2008, General Politics, Social Security

This evening, I found myself watching C-SPAN's coverage of the Iowa Jefferson-Jackson dinner. There were two reasons for this: (1) KU had finished its utter destruction of Oklahoma State (KU being 10-0 now for the first time since 1899), and (2) the Democratic candidates for President were speaking. Normally, the Jefferson-Jackson dinners held across the country are just excuses for the modern Democrats to extoll their own virtues, complain about the President, and party like its the aforementioned 1899. However, on this night, Hillary, Obama, Edwards, and the Also-Rans took the stage to whip the beleaguered dinner-goers into a political frenzy of Jeffersonian proportions. At the end of the evening, emcee Nancy Pelosi (yes, you read that correctly) declared that Jefferson and Jackson would be proud of these candidates.

I think the Democratic Party needs a history lesson.

Thomas Jefferson was a fierce states-rights libertarian, something nowhere to be found in the modern Democratic party. His libertarian soul is heard in the Declaration of Independence, and he was infuriated when slight changes were made to his work. He butted heads with Alexander Hamilton over the financing of the Revolutionary War, with a belief so strongly in the rights of the state that he did not believe the national debt should be equally shared among the states.

He (anonymously) authored the Virginia Resolution which held that any powers exercised by the federal government but not specifically delegated to it by the Constitution were voidable by the states. Try getting Hillary Clinton to say that Kansas has the right not to participate in Social Security, or a national health care plan. You'd have more luck trying to light water on fire.

Jefferson the President was even more un-Democratic (using the term as it is held today by the Democratic political party). He pushed for smaller government, lower taxes, and to pay off the national debt. Modern Democrats would have a collective heart attack at the prospect of any one of those three, let alone them all together.

"But!" modern liberals are quick to exclaim, "Jefferson was responsible for the separation of church and state." Technically, this is not true. Jefferson was responsible for the phrase "separation of church and state" but the concept of disestablishmentarianism started in Europe, and by the time of colonial America, there was already a freedom of religion. However, Jefferson did write that he wanted to establish a "wall of separation between church and state" -- this didn't meant that there was to be no church within a state, as seems to be the interpretation of modern day. Jefferson's pronouncement was in a January 1, 1802 letter to the Danbury Baptist Association of Connecticut, because they were concerned the Congregationalists were to become the official church. That can't happen, was what Jefferson reassured them. The entire letter is available here.

The case for Andrew Jackson is no better. Andy was the hero of the battle of New Orleans, where the Americans soundly trounced the invading British to culiminate the War of 1812. (Actually, the signing of the Treaty of Ghent two weeks prior on Christmas Eve 1814 actually ended the war, but the news of the treaty signing did not cross the pond from Belgium to America until after the Battle of New Orleans had already been fought, and won.) Who was the last war hero Democratic President?

Bill Clinton (1993-2001) Never served in the military.
Jimmy Carter (1977-1981) Attended the US Naval Academy in physics and served on submarines doing scientific analysis for seven years; was not in combat and did not command any troops.
Lyndon B Johnson (1963-1969) As a member of the Naval Reserves, he spent the first part of WWII inspecting shipyard facilities in Texas. He was later awarded the Silver Star when the B-26 he was flying on turned around and went back to base before being attacked or reaching its objective.
John F Kennedy (1961-63) Actually saw combat in WWII when his boat, the PT-109 was rammed by a Japanese destroyer. When asked later by a reporter how he became a "war hero," Kennedy famously responded: "It was involuntary. They sank my boat."
Harry Truman (1945-1953) Commanded troops and rose to the rank of Colonel in the National Guard, seeing combat and commanding Battery D, 129th Field Artillery, 60th Brigade, 35th Infantry Division in the Vosges Mountains of eastern France.

So in short, you'd have to go back more than 60 years to find a Democratic president who (A) served in the military; (B) saw military combat; and (C) commanded troops. Though not even all that technically classifies a person as a "war hero."

I don't think Andrew Jackson would be impressed.

As an aside, during that 60 year time frame, the Republicans saw the following war heroes:
Dwight D Eisenhower (1953-1961) Five Star General in the United States Army, Supreme Allied Commander of Allied Forces in Europe during WWII, and the very first Supreme Commander of NATO. Largely responsible for the successful liberation of France and Germany from Hitler's grasp in WWII.
George Bush (1989-1993) Fighter pilot during WWII; according to the Naval Historical Center: "On 2 September 1944, Bush piloted one of four aircraft from VT-51 that attacked the Japanese installations on Chi Chi Jima. ... During their attack, four TBM Avengers from VT-51 encountered intense antiaircraft fire. While starting the attack, Bush's aircraft was hit and his engine caught on fire. He completed his attack and released the bombs over his target scoring several damaging hits. With his engine on fire, Bush flew several miles from the island ... For this action, Bush received the Distinguished Flying Cross."

But I digress...

Jackson does hold the distinction of being the only President to ever completely pay off the national debt, the one and only time in our nation's history that feat has been accomplished. Further, Jackson was opposed to the kind of nationalization of programs that even most conservatives today will grant is necessary: the national bank. He believed it concentrated to great a power in the hands of a few at the federal level, and he revoked the bank's charter. He also signed the Indian Removal Act which -- this will be a shocker, given its ambiguous name -- removed Indians from the land Americans wanted.

Jacksonian democracy was characterized by a strict, literal interpretation of the Constitution (I do believe Ruth Bader Ginsburg would engage in serious tut-tuttery if Jackson was around) and laissez-faire economics (second notice to Mrs Clinton).

There are many, many more reasons as to why the modern Democrats don't get to claim the posterity of Jefferson and Jackson, but I'll stop here for tonight. Its just too bad the Democratic Presidential candidates aren't talking about all that.

Labels: Democrats, History

As has been duly noted by both pundits and the press, the 2008 Presidential election cycle has begun earlier and become intense faster than any other election in the history of this country. With Bush a lame duck and Cheney steadfastly remaining out of the race, there is no clear successor. Indeed, the only person running who has resided in the White House before in any capacity is Hillary Clinton (now there's a scary thought).

The mantra of the masses at this point seems to be that starting a year early is too early to care. In November 2003, the 2004 Democratic Presidential Candidate was almost assuredly either Wesley Clark or Howard Dean.

Fortunately (or, for some perhaps, unfortunately) we're Americans, and we have some sort of duty to care about politics. This is an opportune time, because the races are heated enough that we're seeing actual clash between candidates of the same party on their positions, but the races are early enough that the candidates are not yet "refined" -- if you're lucky, the truth about what they really believe may actually slip out. How terrible!

Such a gaffe occurred for the aforementioned Senator Clinton during the most recent Democratic debate. Blake Dvorak, writing for Real Clear Politics on 11/3/07, discusses what many viewers saw that night: "...the veil dropped ever so slightly and threatened to unravel months of public-image building" for the Clinton campaign.

The misstep has to do with Clinton's Kerry-ish doubletalk on the issue of driver's licenses for illegal immigrants (she was for it and then when called out on it, claimed to be against it). Immediately following the debate, the Clinton camp cried foul, that moderator Tim Russert wasn't playing nice, the other candidates were overtly ganging-up on Clinton.

Boo-hoo. That comes with the territory of being the party frontrunner. If you can't handle it, you definitely can't handle being President, where both parties gang up on you, and you have no allies anywhere.

Of course Clinton didn't address the actual point of the criticism, which was that she changes positions more than Glenn Quagmire. Thankfully, though, other candidates are not letting go, and are trying to hold Mrs. Clinton accountable for her actions. The Edwards camp released a "Clinton-on-Clinton" style video of all of her positions on certain issues that night: The Politics of Parsing. That's certainly a must-see.

The only other Democratic candidate to care about at this point is Barack Hussein Obama. He currently finds himself in second place in the race, despite his political inexperience (having only served one term in the Senate he is able to claim only slightly less actual elected experience than the 1.333 term Senator from Arkansas by way of New York). His politics have always been much like John Edwards -- positive and uplifting. Unfortunately, politics is a dirty game and he's learning that rather quickly. The transition is always hard from positive politics to character attacks.

Character attacks are a part of presidential politics, as they should be. The character of the man (I stress that gendered noun) we elect to lead our nation should be important in making our decision. Sure, a person can have great sense in politics, foreign policy, economics, and societal culture, but if we can't believe a word out of their mouths or think they'll sacrifice their principles to gain a little power, how can we elect them? (I'm speaking generally of course; I realize most politicians fit those two categories.)

The rest of the Democratic field is a group of also-rans. As for the Republicans, I have no idea what to make of either Sam Brownback's endorsement of John McCain (don't vote McCain) or, more strangely, Pat Robertson's endorsement of Rudy Guiliani (don't vote Guliani). There will be more of those two endorsement deals later, with added information about their signing bonuses and Nike commercial contracts.

The Republicans are faced with the possibility of splintering the party along lines of social issues. The leading candidate (Guliani) is liberal on social issues like abortion and homosexuality. There's debate as to who the #2 man is -- Mitt Romney (this country won't elect a Mormon president; end of discussion), Fred Thompson (man, his wife is hot), or John McCain (but no, seriously, don't vote McCain).

Right now I will say this: the next President is not among any of the aforementioned Republican candidates. I'm not saying one of those candidates doesn't get the nomination, I'm just saying they aren't going to be the next President.

You can quote me.

There will be vastly more discussion to come on the Election of 2008 and each of the individual candidates. Stay tuned.

Labels: Democrats, Election 2008, Republicans