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June 25, 2009

24 Hour Storm Warning - The House is about to Punish the Economy

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Recent data (recent in geological terms) show a warming trend in the last century.


This Friday, tomorrow, the House of Representatives is scheduled to vote on a complex regulatory regime that will punish all US industries that generate carbon dioxide (CO2), in other words, 99% of all manufacturing and transportation.  The net effect would be a dramatic escalation of prices at the consumer level, a huge increase in the costs of doing business in America (but NOT Chinese or Indian or other Third World businesses) and such a drag on the fragile US economy that the current recession will be deepened and prolonged as a result.


"I think we will hold the environmentalists," Waxman said. "This is a good environmental bill because it achieves the reductions in carbon emission that we must accomplish in order to avert the dangers from greenhouse gas emissions and global warming. I think the environmentalists will see this bill overall as a major win."

“Democratic staff are expected to release legislative text today on the agriculture compromises, as well as a number of other items that had still gone unresolved, including tax and trade provisions requested by the House Ways and Means Committee. Waxman said all of the new language would be folded into a manager's amendment before the floor debate.”

6-24-09 New York Times: http://www.nytimes.com/cwire/2009/06/24/24climatewire-house-dems-improve-climate-bills-chances-for-17335.html


House members are being pushed to do this because a putative consensus of scientists holds that industrial CO2 emissions are the primary cause of the recent global warming.  The timing is outrageous. (1) We are in the worst economic decline since 1982 – and this measure, if it is implemented, would drive recession into depression. (2) The world is experiencing a ten year pause in global warming.


CO2 is not a toxic poison or pollutant.  Without it, all vegetation would die – and so would we -- CO2 is part of the oxygen production cycle. 


My article early 2008 article summarizing the conflicted science on these questions is still pertinent.  Here is the link: http://jaygaskill.com/StGoreAndTheIceAge.pdf .


The data that the warming trend has been in remission for several years is corroborated by current climate data.  An excellent source is a brilliant data analyst who posts detailed charts at: http://digitaldiatribes.wordpress.com/ .  To get the flavor of this intellectually honest source (rare in the current milieu) here is one ‘pull quote’:


“Another interesting trend line I keep track of asks the question “How far back can we go to see a non-warming trend?” This is, by design, an exercise in cherry-picking. But it serves a purpose. Obviously, the further back we can go, the higher the probability that the flat line actually means something. It’s valid to suggest that such periods can occur during warming trends. But it’s also valid to suggest that a long period could indicate an end to current warming. More likely, since we know that the long-term trend from surface measures – over 150+ years – indicates some warming, we can see this as an example of another part of the natural cycle taking place. It would be foolish to take the current non-warming trend and suggest that there will never be warming again. It seems every bit as foolish to be projecting runaway warming over the next Century in the midst of 12 years where no warming has occurred. My own analysis here, here, and here leads me to believe that cooling is on the way. But in each of those analyses, it recognizes cyclicality, and this cooling will once again be replaced by warming. And it has nothing to do with people, carbon dioxide, or plastic bags.


If you want to keep track of the conventional wisdom on the topic, here are the pertinent links:












But here is the bottom line:  Warming has abated for now.  We are in a deep and DANGEROUS a recession.  The Chinese and Indian economies are producing more CO2 than we are, and they will not stop any time soon.  The “benefits” of US unilateral action are marginal at best.  THERE IS NO EMERGENCY. 


Hundreds of job-creating projects have been held up for the preparation an evaluation of an E.I. R. (Environmental Impact Report).  We need an Economic Impact Report on this one.  The House Leaders are pushing now because they know that, on sober reflection, the measures would be delayed then defeated.   



June 15, 2009

Profile in Courage or Holocaust by Default - Open Letter to Rahm Emanuel

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Will it be a Profile in Courage or a Holocaust by Default?

MONDAY, June 15, 2009

[A note to my readers – If you can, please bring this to the attention of the White House staff.]


An open letter From---

Jay B. Gaskill

Attorney at Law

Alameda, CA 94501


To ---

White House Chief of Staff

Rahm Emanuel


Dear Mr. Emanuel:


Since you have access to the intelligence information, I’ll get right to the point.  The Iranian regime plans to use its nuclear weapons capabilities in an ethic cleansing program aimed at the Jewish inhabitants of Israel.  The “liberals” in the regime will be willing to accept ethnic cleansing via forced ex-migration under threat of a nuclear holocaust.  The hardliners are willing to actively incinerate 75% of the Jewish population and accept the collateral damage. 


The “liberals” are not in control.


As you know, the Israeli government is currently debating the timing issue, i.e., how long dare they wait before attempting to mitigate the threat by bombing the known nuclear weapons infrastructure facilities and missile emplacements in Iran. 


You and they know that this effort may not succeed because the technical and logistical demands (well within US capabilities) are at the outer limits of the IDF’s reach.


You and they also know that any attack by the IDF on Iran will bring retaliation on Israel.  The estimates of the retaliatory casualties inflicted on the Israeli population are about 100,000, unless and until defenses are hardened, in which case the estimates fall to a “mere” 10,000 or so.  So the timing issue is complicated by intelligence uncertainties and defense preparedness logistics. 


All Americans need to understand the scale of the threat to the Israelis, as I’m sure you do.  The US population is about 305 million while Israel has only 7.5 m.  The multiplier is 40.666, which means that 100,000 dead Israelis is the equivalent of 4.666 million dead Americans, a “symbolic” holocaust to be sure and the cause for great rejoicing in Tehran.  What would be the scale of casualties in the event of nuclear missile attacks on Israel?  A true holocaust for sure: Jerusalem has .73 million inhabitants, Tel Aviv .38 m, Haifa .26 m, Rishon LeZion .22 m, and so on, all within missile range.


The reason that the Iranian regime will not back down is that the ruling clique see only two scenarios, and either scenario is glorious.  In the one where nuclear weapons are acquired by the Zion-hating mullahs, Iran becomes the world’s ethnic cleanser-in-chief and the untouchable terror-export bully. This would mark the beginning of a nightmare that would make the cold war standoff of the last century seem like a pleasant dream.  The scenario where Israel is provoked into a preventative air strike, followed by a punishing counterattack is equally glorious.  The Israelis are too civilized to inflict unnecessary civilian casualties, but the Iranian regime considers killing Israeli civilians a worthy goal.  The image of America, sitting idly by while its “evil” friend suffers a retaliatory “symbolic” holocaust, is the jihadist wet dream.   


As long as there is nothing much to fear from the USA, Iran’s rulers get to choose between win-win scenarios.  A decisive US strike, done without Israeli involvement, would be jeered by all of the chattering classes, but covertly cheered among key Arab leaders. 


When a poison snake invades the nursery, you have to kill it on the first try.  Half measures won’t work.  By now you should have been briefed about the scale of the effort required.  This is primarily an air and water mission with limited ground support.  The Iranian navy needs to be disabled in order to protect the Strait of Hormuz; Iranian air defenses must be degraded or destroyed, the Iranian air force decimated, Iran’s missile emplacements, factories and hiding places blown up. And Iran’s stocks of enriched fissile material must be destroyed and its reactors and weapons development facilities rendered unusable for the foreseeable future.  In a well planned, well executed operation US ground forces would consist of Special Forces teams inserted and extracted.  There are no guarantees and the bottom line is stark and simple:  In for a nickel, in for all.


Why do we need to do this?  After the dust settles, it will become clear that only the US military action that actually eliminated the Iranian nuclear program could have promoted long term regional peace (you are far too tough minded to get hung up on the seeming contradiction), because it limited the scope of retaliation and staked out a wider, no proliferation message.  It would be helpful if the administration could enlist some multi-national cover.  But whether undertaken alone or in concert with allies, US led effort is inherently less destabilizing than an attack on Iran by the Israeli Defense Forces.  A successful US destruction of the Iranian nuclear weapons program would send a bright-line message to all the other regimes in the world that are contemplating getting their own nuclear arsenal: It is just not worth it. 


The stakes are high: the prevention of the next holocaust, the preservation of the national honor, the first serious step in a real non-proliferation policy and the verdict of history. This would be a drastic step, to be sure, but one taken as it proves necessary and not a moment too late.  


Mr. Emanuel, your duty to the legacy of this presidency and your special relationship with him converge here and now.  This is one of those hinges of history moments that trumps the messy realm of domestic politics.  Where the fate of Israel is concerned, you are the first line conscience, the reality-check and truth teller.  And if the administration intends to fold...you are the whistle blower. 


Suppose America stood idly by hoping that Israel will once again “take care of it” for us: In that dark moment, this president would own the blood and ashes that would follow in the inevitable retaliation.  In that dark moment, we would no longer be the brave and noble country of FDR and JFK.  We would have become the country of Charles Lindbergh and Robert Lafollette.  And this president would be forever remembered as the leader who abandoned the “shining city on the hill” to the wolves. 


The next ten months are too critical to waste in denial or procrastination.  Action and preparation for action are called for, not excluding clever, hard-headed diplomacy.  But as a realist you know that diplomacy with fanatics and thugs is a charade unless it is a face-saving cover for intimidation.  I and others have made the case for sabotage, covert disruption and back-channel intimidation of the ruling clique in Iran. There needs to be below-the-radar pressure while diplomacy plays out on the surface.  Nothing less than credible intimidation can possibly change the course of the current Iran regime.


But I know negotiations well, as I know you do.  When the stakes are this high, there is no room for bluff, no tolerance for high rhetoric followed by vacillation and hesitation.  And the bottom line is the bottom line.  The USA cannot afford a Middle-East Korea, even if we never again bought a drop of their oil.  Moreover, the moral damage following a USA-enabled holocaust - whatever the fig-leaf pretense, would be irrevocable and devastating. 


History has called us to a shoulder a grave responsibility.  It will be up to this country, to this administration at this moment, to bell the cat.  As Hillel, the Elder admonished: If I am not for myself, who will be for me? If I am not for others, what am I? And if not now, when?


I’m writing you as a Truman democrat for whom the “What would Harry do?” question, is dispositive.  Nothing less than the right thing will do this time...whatever it takes.  



Jay B. Gaskill

Attorney at Law

June 12, 2009


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All contents, unless otherwise indicated are
Copyright © 2002, 2003, 2004, 2005, 2006, 2007, 2008 & 2009 by Jay B. Gaskill
Permission to publish, distribute or print all or part of this article (except for personal use) is needed. [Permission for use in group discussions is almost always routinely given.]
Please contact Jay B. Gaskill, attorney at law, via e mail at law@jaygaskill.com


DISCLAIMER: I am still among those who want our new president to succeed, especially in rescuing the economy from its deepening malaise.
WARNING: If you are among those so enthralled by Mr. Obama’s rhetorical gifts that your critical intelligence remains stuck in the ‘off’ position, READ NO FURTHER. 
The mounting evidence suggests to me that the president has already made a major, possibly catastrophic economic mistake.  The remaining question is whether he can correct course in time to contain the damage....


A downloadable version of this article, in pdf format, has been posted on The Policy Think Site: LINK:







Today in the New York Times, David Brooks FINALLY addresses the need for conservative fiscal restraint without cloying deference to the cohort that got us in the current mess. In “The Great Unwinding”, he makes this observation:


“Consumption as a share of G.D.P. stood at around 62 percent in the mid-1960s, and rose to about 73 percent by 2008. The baby boomers enjoyed an incredible spending binge. Meanwhile the Chinese, Japanese and European economies became reliant on the overextended U.S. consumer. It couldn’t last.


“The leverage wave crashed last fall. Facing the possibility of systemic collapse, the government stepped in and replaced private borrowing with public borrowing.”


Followed by this nugget:

“The members of the political class face a set of monumental tasks. First, they have to persuade a country to postpone gratification for the sake of rebuilding the country. This country hasn’t accepted sacrifice in 50 years.

“Second, political leaders will have to raise taxes and cut spending to get the federal fiscal house in order, and they will have to do it at a time when voters are already scaling back their lifestyles.

“Third, they will have to refrain from doing anything that might further damage America’s fiscal position, which is extremely fragile. That means not passing a health care reform package unless it is really and truly paid for.”






A note to David Brooks: I wouldn’t hold your breath on that last injunction.  Our president is so far unwilling to endorse a heath care plan that is “pay as you go’ for the simple reason that in the first 120 days of his administration, ALL OF THE MONEY WAS PRE-SPENT.

I’ve repeatedly made the point that previous modern presidents (Reagan and Clinton come immediately to mind) did their best work when forced to deal with a non-compliant Congress, one controlled by the opposite party.  I believe that the current triumvirate - POTUS, House and Senate, all firmly in the control of a single party, will be this administration’s undoing.  Put differently, a strong push back by conservatives in both parties in November 2010, preceded by a growing wave of public support for restraint, may work to save Mr. Obama’s legacy.

LINK: http://www.rasmussenreports.com/public_content/business/taxes/june_2009/53_say_more_government_spending_hurts_the_economy
The wave has already begun.  The highly respected pollster, Scott Rasmussen, reported today that:


“Most voters (53%) believe increases in government spending hurt the economy, according to a new Rasmussen Reports national telephone survey.
While that result is unchanged from last month, it’s up five points from 48% in January.”
That’s one percentage point higher than Mr. Obama’s electoral win and it is a trend.

Let me coin a term here: “IP-Liberalism”. 

IPL is the discipline-eroding virus that has infected both parties. It is the reason that GOP leaders endorsed a budget-busting, not-means tested entitlement, the Medicare Drug Benefit, and that the democrats immediately and uncritically endorsed Mr. Bush’s banking system bailout and Mr. Obama’s pork-clotted Stimulus Package. 

We’re dealing now with the consequences of the quintessential a Boomer mindset, something that goes all the way back to the misguided child-rearing practices endorsed in the 1960’s by the now, almost-forgotten, Dr. Spock. 

Indulgent Parent Liberalism produces spoiled children, politicians unable to say NO and stick with it, undisciplined borrowing and HUGE fiscal deficits.  The current mess is the consequence of IP-Liberalism, the virus that weakens parental authority and has deprived both chambers of congress of adult supervision.  The country needs to jettison Dr. Spock in favor of Mr. Spock, the coolly rational science officer on the USS Enterprise.

Over the last several weeks, I’ve been addressing what I am calling a needed conservative renaissance, a coalition of Blue Dog democrats and fiscally sane republicans.  Recently I made this challenge:


There are the four rules for any freedom-friendly game-changing alternative that will actually work:

1. It must be a new game.
2. It must be better than the old game for the productive people and institutions that generate real goods and services.
3. The larger electorate must understand and agree to try the new game.
4. The sacrifices needed to change games must be realistic, but short term enough that the benefits of the new game become evident within three years or less.


I’ll return to that at the very end of this piece, and in more detail in a later posting.


This president’s lofty rhetoric still ascends to the skies, seeking a wider and wider audience, while the prospect of a robust recovery in the US economy is rapidly falling into the well of impossible dreams.


Mr. Obama was brought to power by the perfect storm of politics, the kind that sweeps through a political system like a tornado through fall leaves.  The shockingly abrupt collapse of the financial system was a decisive break in a conservative trending campaign.  Just before the crash, the Obama campaign was losing momentum and the McCain insurgency was gaining, in spite of the drag of the Bush legacy.

Republicans bolted out of the convention ready to win, and it showed in the polls. The week of September 8-14 McCain was ahead for the first time – but by only one point. Obama reclaimed a one-point lead the following week. Basically the race was tied going into the last six weeks of the campaign. Then on September 15, the 158-year-old investment banking firm of Lehman Brothers filed for bankruptcy protection, marking the largest bankruptcy in U.S. history. The bursting housing bubble had hit Wall Street. Other firms fell like dominoes, and the resulting “financial meltdown” dominated the front pages.


The momentum break was made even more dramatic by President Bush’s urgent appeal for a blank check in the amount of 800 billion dollars, John McCain’s mercurial fiscal about face and Mr. Obama’s strategic aplomb. 


In the end, a center-right country voted for a seemingly center-left candidate, a man whose earlier ties to the paleo-left of the revolutionary 60’s were conveniently forgotten in the glow of his unquestioned charisma.  His was a campaign founded on the Grand Gesture and driven by the contrast effect:  Just as a disgruntled lover tends to become uncritically infatuated with the opposite type, the American people were drawn to a man whose soaring eloquence and seeming humility contrasted vividly with the cocky mal-eloquence of the former Texas governor.  Forgotten, too, were the hockey-mom jibes of the Alaska governor about Mr. Obama’s over-the-top Hollywood stagecraft.  Governor Sarah Palin actually drew blood in her acceptance speech, which is why the press, egged on by the Obama campaign, drew blood in turn.  But all that became irrelevant when the crash became center stage and John McCain blew the opportunity to become the calm voice of fiscal sanity.


I was going to begin the next sentence (about Mr. Obama) with “to be fair,” but that just isn’t the appropriate test for someone who has actively sought the presidency for several years.  It would be like using that phrase to excuse a new pitcher, brought up from the minor leagues, who badly blows several games in a row.  As JFK reminded us, “Life is not fair.”


The new administration arrived in the middle of a crisis with a decisive victory, the wind at its back and a compliant congress.  The financial meltdown presented an extraordinary challenge and an opportunity of equal magnitude.   A large scale binge in private borrowing had overleveraged almost every part of the economic system, from families to Fortune 500 companies, from banks to brokerages.  Like all binges, this credit blowout came to an end as abruptly and catastrophically as the Bernie Madoff pyramid investing scam did. Overnight, the glut in too-easy credit became an ice age. 


Several factors had converged:


(1)   Post-911, low interest lending by the fed headed off a major post-attack recession, but that only postponed the eventual reckoning.


(2)   Political pressure continued to encourage risky mortgage loans to economically challenged borrowers, eventually leading to new forms of financial trickery and balance sheet puffing. The foreclosure time bomb had been set and armed.


(3)   A Faustian bargain between the high spending, high borrowing developed economies and the high production, high lending Chinese economy traded first world debt and eroded manufacturing capability for a massive influx of second world, under-priced goods. This sopped up the inflationary pressures from the USA’s money factory at the cost of a huge outsourcing of our manufacturing base and an eventual credit crash. 


None of this was unsustainable long term. 


Our story was replicated in greater or lesser ways throughout the first world economy.  The common thread was hugely overvalued real estate, forming the speculative bubble that undergirded the whole fragile business of trying to make something out of nothing. All bubbles break. The challenge to the incoming Obama administration was to contain the damage to the persons and institutions that had behaved imprudently and irresponsibly and to help those that were still strong to recover quickly and fill in the gaps left by the failures. This would have not only been more effective, it would have been far, far less expensive.  Not all banks were burdened by bad loans and phony assets.  Not all businesses were poorly run.  In general the market mechanisms of capitalism do a brilliant job of picking winners and losers, so long as they are allowed to operate rationally and without undue political interference.  Politicians are prone to prop up losers at the expense of everyone else. 


The sheer scale of the meltdown has so far exceeded the annual budgets of all levels of government that any attempt to bail out the failures was doomed from the outset.  At this early juncture, it is sadly apparent that the incoming administration simply doubled down on failure, squandering all of its assets and those of the next generation in a futile effort to stop a runaway train.  This was more than mere “wasted money.” It was a quixotic attempt to repair a private credit binge with a public credit binge.  In the attempt, POTUS has created a boulder-sized recovery roadblock.  As a result, those hoping for a prosperous end to this ‘recession’ might be waiting the arrival of a new administration. [See my footnotes below.]  Unless, external political forces persuade this president to change course, we can expect more oratory and grandiose gestures in an effort to sooth and distract us from the impending disaster. 



As Arthur Laffer, the economist who is credited with the Laffer Curve, writes in yesterday’s Wall Street Journal {LINK: http://online.wsj.com/article/SB124458888993599879.html}


“Here we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That's more than twice the size of the next largest deficit since World War II. And this projected deficit is the culmination of a year when the federal government, at taxpayers' expense, acquired enormous stakes in the banking, auto, mortgage, health-care and insurance industries.


“With the crisis, the ill-conceived government reactions, and the ensuing economic downturn, the unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.
“But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.”


And Tuesday, The New York Times, hardly a mouthpiece for the Obama opposition, ran a “yes, deficits are serious” piece that contained this:


“Obama advisers acknowledge as much. They say that changes to the system would probably have a big effect on health spending starting in five or 10 years. The national debt, however, will grow dangerously large much sooner. ...


“Your taxes will probably go up, and some government programs you favor will become less generous.”


“That is the legacy of our trillion-dollar deficits. Erasing them will be one of the great political issues of the coming decade.”


LINK: http://www.nytimes.com/2009/06/10/business/economy/10leonhardt.html?scp=1&sq=June%2010%20deficits&st=cse




If Mr. Obama pursues his lofty, orbital course, this is what we can expect.  Mr. Obama has already used his rhetorical gifts in Berlin and on the Al-Arabiya news channel to inspire Europeans and to assuage the Islamic world. 

lost in space
If his present course continues, he will try to recover popular acclaim by seeking ever larger oratorical platforms.  If the US economy actually tanks, his next major address will be delivered from the Hubble Space Telescope. 














Let me make four quick points here, notions that will be spelled out in my series about the “ReCon” movement (fostering “renaissance conservatives” in both parties).




The economy cannot endure continued bureaucratic strangling via a vast network of municipal, state and federal regulations that impose a crushing political burden on any new commercial venture.  Space limits do not allow elaboration. Ask Joe the plumber’s friends in your neighborhood.  If Mr. Obama is attracted to leadership on a grand scale, then I invite him to consider the story of Alexander of the Gordian Knot.




The economy can no longer endure the current legacy of mandated entitlements, let alone new ones.  Don’t even go there.  This includes carbon regulation and subsidized health care.  Sorry, but the cupboard is bare and the kids are hungry.




One cannot attempt to restrain private compensation without doing even more to cut the compensation of public officials and workers at all levels. 




Any tax increases must meet four criteria:
(a) FLAT & COMPREHENSIVE: They cannot differentially burden economic success.


(b) SPENDING CUT LINKED: They must be absolutely coupled with drastic, large scale spending cuts (absolute cuts, not mere reductions in growth) that exceed the dollar amount of any new taxes in both absolute and relative terms.


(c) SUNSET: They must be rigorously time limited in the same way that the Bush tax cuts were.


(d) DEBT PAYBACK LINKED:  No games allowed.  100% of the spending cuts and new taxes are used to pay down existing public indebtedness.





The fork in the road is obvious.  Take the center-right branch, Mr. President, before it’s too late....



June 08, 2009

Running Out of Political Oxygen

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→The Policy Think Site: http://www.jaygaskill.com
All contents, unless otherwise indicated are
Copyright © 2002, 2003, 2004, 2005, 2006, 2007, 2008 & 2009 by Jay B. Gaskill
Permission to publish, distribute or print all or part of this article (except for personal use) is needed. [Permission for use in group discussions is almost always routinely given.]
Please contact Jay B. Gaskill, attorney at law, via e mail at law@jaygaskill.com

As posted on The Policy Think Site in htm Format,




Money is the oxygen in our political terrarium.  And the political classes are running out of it.  To be sure, we’re not talking about private wealth here, but the funds that politicians are able to award to win our votes.


Within 10 months, the first symptoms of political anoxia will be apparent.  Politicians will begin gasping for air in public like beached sharks. {Right now, they are like emphysema patients, hiding their private O2 bottles and sneak-smoking in the bathroom.}  Panic will break out in the terrarium.  In due course, new taxes will be proposed.  Shortages of essential goods (gasoline, fuel oil, natural gas, meat, milk, grains, and vegetables) will begin to drive up consumer prices, while new government spending will become a symbolic trickle. 

“New” political strategies will be trotted out, but they will be tissue paper tuxedos made of the old, failed designs.  Instead of courting political favor based on “what we can do for you,” the appeal of the ruling classes will shift to “remember what we did for you” then, in desperation, “fear what the other party will do to you.”  If you think you’ve already heard those appeals, you are not hallucinating. The O2 has been running out of the terrarium for some time.  But now we are entering the acute stage.


When the O2 first began to run out, the government elites were forced to curry favors by regulatory favoritism.  This is fundamentally different game - and ultimately more dangerous – because free market economies tend to grow in spite of taxation, at least to a point.  So the Political classes can cut up a growing pie, as it were.  But the basket of freedoms that are curbed by a growing weed-network of rules, petty and otherwise, is a limited resource.  Regulatory favoritism is truly a zero sum game, one in which the number of government-offended voters grows faster than the number of government-favored voters.


In a terrarium ruled by regulatory favoritism, almost everyone eventually moves into the group that has been negatively affected by some regulatory scheme that favors another group.  Think, for example of the high achieving Asian families who were moved out of the affirmative-action line by other less qualified minorities; think of the small adults and children who are forced to sit in the back of the car, or face being threatened by mandatory air bags; think of the women, gays, elders and others who face  muggings unarmed every day - those whose ability to defend themselves is impaired by urban firearms laws; think of the millions and millions of people whose basic fuel and transportation needs are priced out of reach because of draconian ‘carbon’ and ‘fossil fuel’ supply restrictions; and don’t forget all the rest of us who suffer in a thousand small ways because of the political load placed on ordinary commerce by “well meaning” politicians who license, deny, delay and redirect us at every turn, just to please somebody else.


In a seriously anoxic political environment, the party-in-power can only hold on by consolidating a fierce hold on a working majority, counting on habitual loyalty grounded in apathy and misinformation.  The least educated, most easily manipulated voters are recruited; opposition is intimidated and blamed for the existing mess.  As dispiriting as this sort of game can be, it has a natural end in the anger of those who finally discover they were lied to.  We are in the end game, but it is promising and gravely dangerous in roughly equal proportions.  As the oxygen runs out, will there be a game-changing alternative, or one more barely sufficient readjustment?   


What happens next at this critical juncture depends on the presence or absence of a viable, widely supported game-changing alternative.  Even when the airlock blows, and air rushes out of the political terrarium in a mighty torrent, and all of the political fish are flopping about on the sand, the elites will try to manage the situation in a desperate bid to hold power. Their game-changing alternative could be very ugly The Hugo Chavez model comes to mind.


We didn’t arrive at this “cabin depressurization” crisis overnight.  Successions of democratic liberal congresses, abetted by a smaller cohort of passively of actively compliant republicans, have presided over a growing weed patch of interlocking dependencies, starting in the late 1930’s, ramped up in a marked acceleration during LBJ’s “Great Society” moment.  


The sheer scale of the fiscal/credit collapse of 08-09 is unique.  This is why the oxygen depletion metaphor is no exaggeration.


The crisis may resolve to two Great Alternatives and One Tipping Point.  One is a post Argentinean-style collapse reversion into authoritarianism, Hugo Chavez-USA.  The other is a Freedom Renaissance, founded in fiscal sanity and the liberation of the productive economy.


Peeling back the tangled layers of political control and production-punitive taxes to restart a politically overloaded free market system is possible, but just barely.  The task is analogous to one of those Sci-fi horror flicks.  Imagine the heroine is trapped in a giant spider-web over a yawning chasm.  Those who say, “It’s too late” just aren’t thinking.  The spider, ever hungry for more, is crawling out on the limb. Lady Liberty, though bound, is still alive.  She is rescued, somehow, or she dies.  It really is that starkly simple.


We freedom-friendly types have to think outside the web.  Here are the four rules for any freedom-friendly game-changing alternative that will actually work:


1. It must be a new game.
2. It must be better than the old game for the productive people and institutions that generate real goods and services.
3. The larger electorate must understand and agree to try the new game.
4. The sacrifices needed to change games must be realistic, but short term enough that the benefits of the new game become evident within three years or less.


Our President’s personal popularity is a lagging indicator of popular opinion, which already running strongly against costly bailouts and staggering deficits.  European voters are turning conservative.  We’ll soon see governments in England, Germany and France all to the right of our own. 


The first test of the American popular will take place in November 2010, when the entire House of Representatives and about 1/3 of the Senate are up for reelection.  For thos who want this president to be well remembered by history, take note:  Mr. Obama’s ultimate legacy depends on a conservative resurgence.  Both Reagan and Clinton, among other presidents, did some of their best work when forced to deal with a real opposition.


We are swiftly approaching a tipping point.  The left has a temporary, but fragile grip on power.  A freedom-friendly game changing alterative will eventually emerge, but its real-world implementation will require two things:  (1) The prevention of further irrevocable damage from the leftwing trinity (POTUS, Pelosi, Reid) that has made road kill of the opposition; (2) The formation of a new, bipartisan coalition. 


Can this be done?  That question hinges on political psychology:  When will an alliance of realistic, tough-minded GOP leaders and Blue Dog Democrats arise from the ashes?  When will the center-right rally to the cry, “Yes we can?”



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