Freedom Line Blog

The Daily Caller profiles a new book, Population Decline and the Remaking of Great Power Politics, that explains why aging and shrinking populations in China, Japan, and Europe will dramatically alter American foreign policy.

Some of the book’s findings are startling:

• By the end of this decade India will surpass China as the most populous nation.

• Japan will lose 1 million people a year by 2060, contracting from 127 million to less than 87 million.

• Europe’s expensive social welfare model and aging populations will increasingly spur governments to scale back military spending in order to fund burgeoning entitlement program.

• Even though America’s current rate of replacing itself gives it a demographic advantage, unless serious reforms are instituted to entitlement spending, it too will continue to cut military expenditures to pay for rapidly expanding benefits for the elderly.

India surpassing China means that democracy – not a communist-controlled autocracy – will be the government adopted by the most populous country on Earth.  It may also encourage the United States and India to forge a closer strategic partnership around shared values to check China’s ambitions.

And of course, we’ve already seen how the European model of heavy on services, light on defense is making the region – though not a few individual countries – increasingly irrelevant when it comes to making the world safe.

In his budgets, President Barack Obama has chosen to increase spending on entitlements and gut defense, arguing like a European that multilateral institutions such as the United Nations and NATO can accomplish more than any one nation.

Paul Ryan highlighted this danger in his latest budget proposal, “The Path to Prosperity: A Blueprint for American Renewal.”  In it, he faults President Obama for cutting $500 billion from the Defense Department instead of making the changes needed to entitlements so that Americans can be protected both at home and abroad.

Americans need not accept decline through badly prioritized budgets.  Instead, using innovative entitlement reforms like the ones in Ryan’s Path to Prosperity, we can have sustainable entitlement programs and a robust defense.

We’ve got the people.  Now we need to implement the right policies.

So ubiquitous is coverage of presidential candidates in this 24-hour news cycle era — and so pervasive is the numbness that results — that it’s easy to lose sight of some truly bizarre developments in this year’s election cycle; developments that have seen their novelty rusted away by saturation coverage.

Among them: the signature achievement in the political career of Mitt Romney, the almost certain Republican nominee for president (especially with Rick Santorum leaving the race today), is so deeply unpalatable to conservatives that it even divides his advisers. Consider this, from Politico:

Two of the five members of [Mitt] Romney’s recently announced Health Care Policy Advisory Group have a record of opposition to his Massachusetts health care reform plan.

Paul Howard, a senior fellow at the Manhattan Institute and a new addition to Romney’s advisory team, wrote in late 2010 that Romney’s plan has resulted in a dramatic increase in insurance costs for small businesses.

He also said it’s “no secret” that the state plan was the “template” for President Barack Obama’s federal health care law.

Scott Atlas, a senior fellow at the Hoover Institution and another new Romney health adviser, was sharply critical of Romney’s health plans in 2007 while Atlas was supporting New York Mayor Rudy Giuliani’s presidential campaign.

“Mitt Romney’s legacy is the creation of a multibillion dollar government health bureaucracy that punishes employers and insists middle income individuals either purchase health insurance or pay for their own health care,” Atlas told reporters. “The former is a mandate, the latter is a tax and neither one is free market.”

Lest the point be oversold, we should note that past Republican nominees have accessorized their necks with similar albatrosses. John McCain, for instance, was the co-author of a federal campaign finance law loathed by conservatives because it is inimical to political free speech. But there’s still a slight difference: Romney’s policy liability deals with one of the defining issues of the election he’ll be running in — and it also happened to be the intellectual predicate for his opponent’s crowning legislative achievement.

Virtually all the energy that has animated the conservative movement over the last three years — energy best exemplified by the Tea Party — has come in reaction to Obamacare and the government overreach it represents. Now the Republican Party will march into electoral battle behind the progenitor of that intrusion. We live in strange times.

It’s been said by some supporters of President Barack Obama’s $787 billion stimulus spending spree that we can’t really know if it failed because we can’t ‘re-run’ the last three years to see if something else might have worked.

But according to economist John Lott, we don’t have to.

In a wide-ranging interview with The Daily Caller about his new book, , Lott compares the different approaches by the liberals in Debacle: Obama’s War on Jobs and Growth and What We can Do Now to Regain Our Future the Obama White House and the conservatives running Canada’s government.  The results aren’t pretty.

How do we know the stimulus package made the economic situation worse?

Compare the U.S. and Canada. Their unemployment rates increased in lock step from August 2008 until six months later, in February 2009, when the stimulus was passed in the United States. During those six months, the U.S. unemployment rate rose by 2.1 percentage points, from 6.1 percent to 8.2 percent, and the Canadian rate grew by 1.9 percentage points, from 5.1 percent to 7 percent (using the BLS [Bureau of Labor Statistics] measure to make the Canadian measure of unemployment comparable to the U.S. rate). The graph that we have showing this is actually stunning.

Canada adopted a much smaller and quite different “stimulus” program that emphasized cutting tax rates and regulations and that produced dramatically smaller deficits. On a per-capita basis, Canada’s stimulus was about a third that of America’s, costing $979 per person compared to our $2,730. The conservative Canadian government chose not to introduce any big programs.

Obama, meanwhile, adopted big-ticket Keynesian programs, believing that government spending for its own sake creates wealth. But Democratic emphasis on “green” energy, government-approved investments and technology and higher salaries for public-school teachers merely moved money away from where Americans and companies would have otherwise spent it.

Obama’s stimulus also raised the effective marginal tax rates that some individuals face, discouraging work; Canada, by contrast, cut some marginal rates. Obama kept the corporate tax rate stuck at 35 percent, while Canadians cut their corresponding rate from 21 percent in 2007 to 16.5 percent this year — with a further cut to 15 percent planned for next year. By last year, Canada had the lowest overall tax rate on business investment of any major industrialized country.

Canada also didn’t run the huge stimulative deficits that we ran here in the U.S. They didn’t saddle their kids with a huge debt that they were going to have to pay off.

But if Obama’s program — including a massive 21 percent hike in spending from 2008 to 2011 and corresponding massive deficits — worked so well, why has our unemployment rate risen more since those policies were adopted than have the rates of the European Union, South America, Japan, Australia or New Zealand?

President Barack Obama’s controversial warning to the Supreme Court that a vote to overturn ObamaCare would be “unprecedented” is getting push-back from the federal judiciary.

During oral arguments on a different ObamaCare provision than those argued before the Supreme Court last week, Fifth Circuit Judge Jerry Smith asked a Department of Justice lawyer for clarification.  “Does the Department of Justice recognize that federal courts have the authority in appropriate circumstances to strike federal statutes because of one or more constitutional infirmities?”

To drive home the point, Judge Smith ordered DOJ to provide a written explanation of its views “no less than three pages, single spaced.”

The only problem with the homework assignment is that it wasn’t directed to the right person.  President Obama, that one-time constitutional law professor at the University of Chicago, should be the one sitting at the keyboard relearning first year law.

At least then he’d be aware that what’s truly unprecedented is his belief that federal courts are rubber stamps for his liberal agenda.

The Daily Caller makes hilarious use of Karl Rove’s analysis comparing the spending rates for the Bush and Obama reelection campaigns.

But there’s plenty of evidence that the campaign isn’t bringing in as much money as it wants.

For example, data from the campaign’s earlier quarterly reports to the Federal Election Commission show that Obama’s spending is growing faster than revenues.

“The Obama campaign’s high burn rate doesn’t come from large television buys, phone banks or mail programs that could be immediately stopped … [but] from huge fixed costs for a big staff and higher-than-expected fund-raising outlays,” according to a March 14 article by Karl Rove, chief political strategist for George W. Bush.

In the second quarter of 2011, Obama’s “campaign spent 25% of what it raised… while Mr. Bush’s campaign spent only 9% in the second quarter of 2003,” Rove said. Since then, the spending pace has accelerated, he said, pointing out that in January “the Obama campaign spent 158% of what it raised, while the Bush campaign spent 60% in January 2004.”

Also, his supporters initially predicted a $1 billion reelection fund, but campaign staffers are quick to deny that is a goal.

Rove argues that one reason the re-election campaign might be running lighter-than-expected on cash is that many of Obama’s 2008 supporters are not opening their checkbooks this time around.

Spending growing faster than revenues (158%!).  Huge fixed costs triggering obscene debt.  An unsustainable burn rate.  Grandiose predictions cratering on fiscal reality.  Contributors unwilling or unable to pony up more cash.

Whether it’s managing the federal government or his own campaign, Barack Obama is as unbalanced with money as he is with policy.

Last week, President Obama made the surprising announcement that Dartmouth University President Jim Yong Kim — a relatively obscure figure — was his nominee to become the next President of the World Bank, the international organization that works to spur economic development throughout the world. Thanks to some careful digging by the NYU Development Research Institute, we’re now learning a bit more about Jim’s views — and the details are a little startling. The Ivy League executive seems to think of economic growth as a zero-sum game — and one in which the developed world has been consistently sticking it to the little guys. A few excerpts from his writing:

… the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.

…

Using Cuba as an example, Chapter Thirteen makes the case that when leaders prioritize social equity and the fundamental right of all citizens to health care, even economically strapped governments can achieve improved and more equitable health outcomes.

…

… [G]rowth – the market-led economic growth sought by governments, the growth in profits celebrated by businesses, and the growth in power and influence of transnational financial and corporate interests – often comes at the expense of the disenfranchised and vulnerable…  As the imperatives of growth at any cost increasingly determine economic and social policy and the behavior of global corporations, more people join the ranks of the poor and greater numbers suffer and die.

And if this isn’t bad enough, the final passage cited by the NYU group finds Jim quoting Noam Chomsky.

Dinesh D’Souza caught a lot of flak for positing in his book, “The Roots of Obama’s Rage,” that the president’s ideology could be traced largely to the Kenyan anti-colonialism of his father. While I think that D’Souza overstated the case rather severely, instances like this one remind us of the germ of truth to his argument.

Whether Obama is decrying a world where international negotiations were “just Roosevelt and Churchill sitting in a room with a brandy” or picking a new World Bank President who seems to find the very practice of capitalism predatory, there seems to be a consistent suspicion that someone somewhere is being victimized. Should Jim Yong Kim become the head of the World Bank, it will be the people of the developing world — caught in the downward economic spiral that always accompanies attempts at implementing “social justice” — who will be the victims.

It looks like Energy Secretary Steven Chu’s 2008 musings about manipulating gas prices so people would be forced to buy electric cars was bad politics and bad economics.  The statement was bad politics because it confirms that liberals like Chu are willing to distort energy prices – Keystone XL, anyone? – to serve the environmental left’s ideological agenda.  It turns out to be bad economics because consumers have several more options available than purchasing a Toyota Prius.

In a hyper-link-heavy post, Time reporter Brad Tuttle – who makes no reference to Chu – explains that as the national average for gasoline has risen to $4 a gallon, Americans are responding by buying small inexpensive fuel-powered cars like the Ford Fiesta (40 mpg) and Chevy Cruze (36 mpg); hanging onto old cars longer by delaying non-essential repairs; and in the case of the 21-34 age group, preferring ride-sharing and public transit to car purchases.

Of course, none of these Econ 101 responses to rising prices will convince Secretary Chu and President Barack Obama to stop meddling in the market.  The White House is pushing an increase in the tax incentive to buy hybrids like the Prius, Chevy Volt, and Nissan Leaf from $7,000 to $10,000.  But this incentive disproportionately benefits hybrid buyers.  As Troy has noted, Volt owners average $170,000 in annual income; not exactly the people needing tax incentives to help make car purchases.

Still, it’s nice to see that no matter how much the experts in Washington twist policy into an endless barrage of mandates and tax breaks, consumers in a (relatively) free market are able to make their own decisions.

In just a few days two presidential campaigns may have coined the slogans we’ll all be hearing ad nauseum this fall.

Last week, a top Mitt Romney advisor likened his boss to an Etch-a-Sketch, able to be shaken and reset while moving from the primaries to the general election.  Over the weekend, President Barack Obama told his Russian counterpart that “This is my last election.  After my election I have more flexibility.”

Each statement betrays a fundamental suspicion about each candidate.  Romney has no core principles.  Obama’s will emerge only after he’s insulated from facing voters again.  The comments feed the narrative that both men will say anything to get elected.

If Romney is the GOP nominee, Jennifer Rubin already has proposed talking points attacking the ‘more flexibility’ president. (E.g. “He says he’ll only raise taxes on the rich, but after the election he’ll have ‘more flexibility.'”)

We can also assume more comments like Vice President Joe Biden’s that Romney won’t be allowed to be all things to all people.

Unless Rick Santorum can turn his 22 point win in last Saturday’s Louisiana caucuses into a Wisconsin win tomorrow, we may be in for an Etch-a-Sketch vs. More Flexibility campaign.

Check out this video clip of President Barack Obama speaking to what looks and sounds like a campaign crowd in a community college outside Washington, D.C.

The problem is that federal officeholders – like the U.S. President – aren’t supposed to campaign on the taxpayers’ dime.  That’s why presidential campaigns like Obama for America exist.  The press picked up on this and asked White House Press Secretary Jay Carney to comment.  His response: “It’s a policy statement” to call Republicans who won’t subsidize alternative energy boondoggles like Solyndra “members of the flat-earth society.”

And the O-Man wonders why Republicans don’t like him?

President Barack Obama may never tire of blaming his predecessor for every current economic problem, but a new study by the Heritage Foundation shows that when it comes to the cost of federal regulation, Obama is king.

The numbers don’t lie, Mr. President.  Job growth is anemic, the employment rate is stagnant, but your regulatory agenda continues to add billions of dollars in costs to the only real job creators – employers.  After three years of your policies imposing five times the costs of compliance than under the Bush regime it’s time for something radically different.

Politico explains why if Democrats win control of Congress in 2012 it won’t be with President Barack Obama’s help:

[Obama campaign leaders Jim] Messina and [David] Plouffe told the two Hill leaders that there would be no cash transfers to the Democratic Congressional Campaign Committee and Democratic Senatorial Campaign Committee from OFA or the DNC, at least not before Election Day, the sources said.

…

Hill Democrats won’t be seeing much of Obama at their own fundraisers this year, either. Obama has offered to do one money event each for the DCCC and DSCC. OFA officials suggested Vice President Joe Biden do two fundraisers for each campaign committee. Obama will instead send out an email and fundraising letter solicitations for both committees.

Nor, for that matter, have Obama or Biden committed to do events for individual Democratic lawmakers. That’s true even though 23 Democrat-held Senate seats are up for grabs in a competitive battle for control of that chamber. And no fundraisers have been scheduled yet for House and Senate Democrats with Cabinet officials, usually a staple of an election-year calendar for incumbent presidents looking to boost their party’s prospects.

No surprise here since the President is just a typical liberal: a spendthrift with other people’s money but a miser with his own.

Newsweek’s Robert Samuelson on what the MSM’s conventional wisdom may be missing with all its Obama-the-invincible chatter:

All in all, the conventional wisdom seems compelling. As a card-carrying member of the mainstream media — a group that creates and sustains the conventional wisdom — I’m inclined to accept it. And yet there’s one conspicuous gap in the-election-is-already-over story: the polls. While the Republicans have been destroying each other and embarrassing themselves, the polls for a general election should have shown a collapse in Republican support. They haven’t — at least so far.

Go to Real Clear Politics (www.realclearpolitics.com) for the latest figures. The average of the polls it follows shows (for the period from Feb. 10 to Feb. 29) Obama beating Romney by 4.6 percentage points (49 percent to 44.4 percent). Obama’s margin of victory over Santorum is slightly larger (49.3 percent to 44.2 percent).

…

So it’s a puzzle. Logic and most evidence suggest the election is over. But the polls seem to dissent. Could it be that the real story is that Obama’s not a shoo-in even when he should be?

Hans von Spakovsky of the Heritage Foundation makes a compelling argument in a Fox News op-ed that conservatives in Congress must adopt a more confrontational posture in resisting President Barack Obama’s unconstitutional, non-recess appointments to the National Labor Relations Board and the Consumer Financial Protection Bureau:

There is also no evidence that the House or Senate will take any of the other actions available, such as cutting the NLRB’s budget or passing legislation banning any federal funds from being used to enforce any orders or regulations issued by the Consumer Financial Protection Bureau until the president voids his unconstitutional appointments. The House needs to do more than just hold hearings to enforce its constitutional decision not to consent to a Senate recess.

As for the Senate, it operates almost entirely on “unanimous consent.”

Moreover:

It would take only one senator standing up for constitutional principles and the rule of law to get the ball rolling and shame his colleagues into joining him to fight the president’s tyrannical actions.

He could hold up all of the president’s nominations and bring the Senate to a standstill through quorum calls and continuous objections to unanimous consent motions.

Challenging the President’s lawless attempts to fill powerful regulatory agencies with liberal ideologues should be a no-brainer for any Republican in Congress.  That none of von Spakovsky’s straight-forward recommendations is gaining traction shows that some GOP Members of Congress haven’t learned the Tea Party lesson yet – either defend the Constitution early and often or get ready for a primary challenge.

About the only thing that Dr. Steven Chu, President Obama’s Secretary of Energy, deserves credit for these days is honesty. Testifying before Congress yesterday, Chu was asked by Republican Congressman Alan Nunnelee of Mississippi whether the Obama Administration’s energy goal is to reduce the cost of gasoline. Chu’s response, according to Politico:

“No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy,” Chu replied. “We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.”

… “We agree there is great suffering when the price of gasoline increases in the United States, and so we are very concerned about this,” said Chu, speaking to the House Appropriations energy and water subcommittee. “As I have repeatedly said, in the Department of Energy, what we’re trying to do is diversify our energy supply for transportation so that we have cost-effective means.”

In other words, “We’re perfectly content to see oil prices shoot through the roof if it means all you knuckle-draggers will start driving Smart Cars.” Should we really be that surprised from the man who once told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,”? Chu’s intransigence represents a broader liberal pathology: an ideological allergy to economic growth.

After Tim’s excellent column explaining how President Barack Obama explicitly failed to live up to his promise to “cut the deficit we inherited by half by the end of my first term” the New York Times published today another damning indictment of America’s worst CEO.  In it, the Times faults the President for failing to exhibit any kind of leadership with the Bowles-Simpson deficit plan:

But the downsides for Mr. Obama have become clear. His partisan turn undercuts a central promise of his 2008 campaign, to rise above the rancor. And by neither embracing Bowles-Simpson nor explaining his objections and quickly offering an alternative, Mr. Obama arguably failed to show leadership on perhaps the country’s biggest problem. This month, in a New York Times/CBS News poll, 59 percent of Americans disapproved of his handling of the deficit.

Wherein Valerie Jarrett, perhaps the most consistently insipid of the White House courtiers, declares unemployment a form of stimulus:

Mitt Romney has at least one thing in common with every other member of the Republican presidential field: his worst enemy is Mitt Romney.

At a speech in Shelby Township, Michigan earlier today Romney’s answer to a question about the Simpson-Bowles fiscal commision ended up in this intellectual cul-de-sac:

If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy. So you have to, at the same time, create pro-growth tax policies.

Romney, of course, is correct about the broader question of tax policy, but his understanding of public spending makes him sound like a logical candidate to succeed Timothy Geithner as President Obama’s Secretary of the Treasury.

Federal spending doesn’t generate economic growth — all it does is repurpose money from the private sector. In some cases where government is performing essential functions, such as law enforcement or national defense, that’s a necessary sacrifice. In virtually all others — from green energy boondoggles to stimulus giveaways — it’s a net drain on the economy. And, as Milton Friedman would remind Romney, the rate of spending is the effective rate of taxation.

Over the past few weeks, a wide variety of conservative pundits have counseled Romney to more aggressively address his “authenticity” problem, showing the public a little more of his true personality. But as today’s little slip-up reveals, the only candidate less palatable to conservatives than the phony Romney is his authentic counterpart.

From John Stossel’s blog:

What would happen if you planned your family’s budget the way the politicians plan theirs? I showed people this chart:

Everyone agreed that this would be a ridiculous household budget.

But that’s the federal budget, if you just add 8 zeroes!

An editorial by Investor’s Business Daily highlights why the Obama campaign’s crowing about a nascent economic recovery is hiding the real pain American workers are feeling:

Even worse for an administration straining to make the case that it deserves to be around for another four years is the real unemployment rate. It’s not 8.3%, but closer to 15%, a figure that reflects those who “would like to work but have not searched for a job in the past four weeks as well as those who are working part time but would prefer full-time work,” says the CBO.

Another White House problem comes from this in the CBO report: “The share of unemployed people looking for work for more than six months — referred to as the long-term unemployed — topped 40% in December 2009 for the first time since 1948, when such data began to be collected; it has remained above that level ever since.”

Voters aren’t stupid.  If the eventual Republican nominee can make a compelling argument linking Obama’s policies to the decline in jobs, he’ll win.  If not, we’ll have nearly an entire decade of lost opportunities.

It’s been a bad week for Office of Management and Budget Director Jeff Zients, the man tasked with defending President Barack Obama’s 2013 budget proposal.

In testimony before the House Budget Committee Zients told Rep. Scott Garrett (R-NJ) that the penalty for not complying with ObamaCare’s mandate to buy health insurance is not a tax increase.  (Subscription wall.)  In response, Rep. Garrett said, “Okay.  I just want to be clear on that because that’s not the argument the Administration is making before the Supreme Court.”

Before the Senate Budget Committee Zients was even more out-of-touch.  Under questioning from Senator Jeff Sessions (R-AL), Zients claimed that Obama’s 2013 budget contained spending cuts – a distortion Sessions would not tolerate:

Mr. Zients, there are no spending cuts in this budget. This budget increases spending. Surely you know that. It increases taxes. So to say you cut $2.50 in spending for every dollar in tax increase is beyond the pale.

So too is the entire shell game about ‘deficit reduction’ when what liberals like Obama really mean is tax increases to pay for spending increases.  If the President won’t admit it at least his budget director will be made to.