November 2002 Archives

Rocky Democratic road
By Robert Novak
November 28, 2002

WASHINGTON -- Two architects of the last decade's Clinton political ascendancy are privately predicting "losses of historic proportion" in 2004 if the Democratic Party "moves left" after this year's defeats. Their prescription includes medicine that may make party activists gag: closing "the cultural gap" on abortion and guns.

Al From, founder and CEO of the Democratic Leadership Council (DLC), and Clinton White House policy chief Bruce Reed, currently the DLC president, have prepared a draft "memorandum to our fellow Democrats" marked "confidential." The paper, "The Road Ahead," advises, "stop pretending that we can win a majority simply by energizing our base." The Democratic base, they say, is way too small.

Pilgrims Respond to Incentives and Give Thanks: Caroline Baum

(Commentary. Caroline Baum is a columnist for Bloomberg News and host of "No Nonsense'' on Bloomberg Radio. The opinions expressed are her own.)

New York, Nov. 27 (Bloomberg) -- It is the tradition of this columnist every year at this time to tell the story of Thanksgiving. For source material, I am grateful to the accounts of William Bradford, the first governor of the Plymouth Bay Colony (Bradford's History "Of Plimoth Plantation'').

Most Americans think of Thanksgiving as a time to gather with family and friends and celebrate with a huge feast. If they have any idea of the origin of this national holiday, declared each year by presidential proclamation, it's probably confined to the idea that the Pilgrims were grateful for a good harvest in their new land and set aside a day to give thanks.

What they don't know is that things weren't always so good for the Pilgrims, who came to the New World from England to escape religious persecution. Their first winters after they landed at Plymouth Rock in 1620 and established the Plymouth Bay Colony were harsh. The weather was lousy and crop yields were poor. Half the Pilgrims died or returned to England.

Happy Thanksgiving!

Here is some of the latest from R21:

The Good Times Are Now

Over the last 100 years, almost every measure of material human welfare has shown wondrous gains for Americans, says Stephen Moore -- and the human condition improved more than in the previous 10,000 years.

Consider, for instance:

o As recently as 50 to 100 years ago, the leading causes of death were typhoid, smallpox, tuberculosis, diphtheria and diarrhea -- and polio crippled and killed hundreds of thousands of children and infants as recently as the 1930s.

o Half of all medical treatments in use today were invented in the last 25 years -- and prior to 1900, you had only a 50-50 chance of benefiting from a trip to the doctor.

o Historically, the average global per capita income throughout the ages was a bit more than $200 a year in today's dollars.

Even the "fabulous 50s" that many Americans remember fondly don't stack up to today.

o A child in the 1950s had 2 to 3 times the chance of dying as a child today.

o There were no effective treatments for cancer or heart disease.

o The average poor family today has more modern conveniences in the home than the average middle-income family in 1950.

Furthermore, these material improvements are open to more people than ever before. In the 1950s, the average black had half the income of the average white, compared to 70 percent today, and one-third of the elderly were destitute.

Source: Stephen Moore (Cato Institute), "Be Thankful: Americans Are Living in the Good Ol' Days," Investor's Business Daily.

For more on Living Standards http://www.ncpa.org/iss/eco/

In case you haven't seen it, some heart-warming, unabashed American patriotism--apparently from abroad--floating around on email...

A fascinating and cutting edge report on Nanotechnology and Regulatory Policy. Worth reading.

The Pentagon's Total Information Awareness Project: Americans Under the Microscope?
Issue #45
November 26, 2002

by Clyde Wayne Crews Jr.

The Pentagon assures us we have nothing to fear from its new Total Information Awareness (TIA) counterterrorism project, a colossal effort to assemble and "mine" massive databases of our credit-card purchases, car rentals, airline tickets, official records, and the like. The aim is to monitor the public's whereabouts, movements, and transactions to glean suspicious patterns that indicate terrorist planning and other shenanigans. Well, we shouldn't always trust the assurance of the Pentagon.

The Fourth Amendment to the Constitution, which safeguards us against unreasonable searches, forbids a total surveillance society if that's where this project's directors intend to go.

It may be appropriate for the government to make use of readily available public information. Yet even here, it's important to remember that such information, whether driver's license, Social Security, or tax information, is mandated by numerous agencies for specific purposes—not general law enforcement—and should not be routinely combined for such purposes without a specific court order.

We need a new telecom act. Let's face it, the 96 telecom act was predicated on a very different world of telecommunications than the one we have today. It also, as with nearly all legislation, suffered from a mess of special interests all demanding their pound of flesh, and so was similar to energy "deregulation" in California in its incoherence. But the final problem was that it was based on the underlying idea that while competition is good, the government had to create, prompt, and protect this competition. This is an unsuccessful mixing of free-market and big government ideas. Surely there is a case to be made that in cases where there is a technical, or natural, monopoly state intervention can be a legitimate course. The phone service of the 1950s may have been a candidate. But when there is not a monopoly situation it is a real mistake for the federal government to distort natural market forces in an attempt to micro-manage competitive forces. It's not needed and the unintended consequences make things worse.

There is no technical monopoly in telecommunications anymore (save perhaps the most rural of areas, which may have to be treated separately.) There are multiple networks (phone, cable, terrestrial and satellite wireless, etc.) that compete or have the POTENTIAL to compete (potential competition can be as good as real competition in holding competitors in check and protecting consumers.) The problem is that each of these are heavily regulated in numerous ways and so are constrained in their ability to respond to market forces. The details are too great to get into here, but the guiding principle of MY telecom bill would simply be that there is no longer a justification for the heavy regulation of telecommunications and the tight federal control and rule making on spectrum. These areas should be left for the market to address. And by the way, the REAL reason why these markets are so controlled is NOT that this is needed to protect the consumer. They are regulated because the various big business competitors have successfully lobbied the government to construct regulatory barriers to their existing/big and would-be entrepreneurial competitors.

File this in the "Oh, please" category. Excerpted from the New York Times...

Truckers Lift Roadblocks in France By ELAINE SCIOLINO

ARIS, Nov. 25 — It's beginning to look a lot like Christmas here, and it's not just the decorations. This is the season of the strike, and it sometimes seems as if just about everyone has walked off the job.

Truckers seeking more pay set up dozens of roadblocks with trucks and cars across the country today, but lifted them this evening. The truckers claim that their profits have plummeted because of tough competition and cheap labor from central Europe. Among other things, the truckers are demanding a 13th month of pay, a common practice that serves as a kind of bonus in Europe.

On Tuesday tens of thousands of public sector workers plan to take to the streets to defend public services and to express opposition to the government's move toward privatization.

Subway and bus workers, railroad conductors and air traffic controllers, meanwhile, will stay home on Tuesday to protest what they consider inadequate salaries and benefits. British Airways has already canceled more than 60 flights and much wider disruption of air travel is expected.

Not to be outdone, organizers for the telecommunications union said today that half of the 146,000 workers of France Telecom, may strike in front of the Finance Ministry on Tuesday to protest the call by the company's new management for job cuts and sales of assets to reduce its debt. ...

The main topic on the economic front will now be tax reform and tax cuts. Get ready for "tax cuts for the rich" demagoguery from the left. Of course, with the top 10% of taxpayers flipping 55% of the bill and the top 50% flipping 96%, and tax reform/reduction will surely benefit those who currently pay taxes (duh.) But there are three issues to be determined, and none of them necessarily dictate the others. First, there is how we are taxed (income, consumption, flat, VAT, sales tax, etc.), second how much we are taxed (what the various rates are), and who is taxed relatively speaking (how progressive the tax system is.) The left is already suspicious that the first two automatically mean reducing progressivity--and they are probably true that those driving reform in the first two areas also want reform in the third. Although I think there are big problems with an overly progressive tax system, because when half of the population pays little or no taxes they tend to vote as free-riders, not as responsible citizens, I would take two out of three--and I hope Bush can use these levers to make real improvements in our tax code.

But enough from me, this article from Robert Bartley, as usual, is a must read. Even if you disagree, you should know what the arguments are. Here's an excerpt:

Interesting ideas...

Is it time for a GeekPAC?
By Declan McCullagh
November 25, 2002, 4:00 AM PT

WASHINGTON--Geeks are beginning to realize they need to punish the
Luddites in Congress who are standing in the way of progress.

In a recent column, I suggested that the technology industry find a
way to reward its friends and, more importantly, punish its enemies.
Politicians have spent the past few years concocting increasingly
dangerous schemes, and targeting them for defeat in the next election
is one way to make them abandon their plans.

I didn't know it when I wrote that column, but there's good news to
report: Some efforts already are under way.

One plan is to resuscitate the dormant League for Programming Freedom
(LPF), which was founded in 1989 to oppose software patents. It's now
moribund, but the LPF may find a new life as a political action
committee opposing the disturbing expansions of copyright and patent
law.

Dean Anderson, who has been president of the LPF since 1993, says he's
planning to work with free software maven Richard Stallman to organize
a meeting in the next few weeks in the Cambridge, Mass., area. "We're
going to get some people together from the old LPF and decide how we
want to proceed," Anderson says. "What I'd like to do is get more
people together to develop a consensus on what the next mission should
be, especially if we're going to re-incorporate (as a PAC)."

In its heyday, the LPF focused on software patents and user interface
copyright, including the Lotus v. Borland lawsuit over the design of
the Lotus 1-2-3 spreadsheet. Software patents are as problematic for
today's programmers as they were a decade ago, but new threats such as
the Digital Millennium Copyright Act (DMCA) have since emerged.

[...]

But forget PACs. Probably the best model to follow is that adopted by
Steve Moore, who runs the Club for Growth, which punishes pro-tax
candidates and rewards those who favor lower taxes and limited
government. It raised about $9.3 million during the last two-year
election cycle, and spent about $7 million to influence races (the
rest went to salaries, rent and overhead expenses).

Moore's group is incorporated as a PAC, but to avoid spending limits,
it doesn't operate as one. Under federal law, PACs are permitted to
spend only $5,000 on each candidate in an election. Instead, Club for
Growth targets an important race, asks its members to write checks,
then bundles them together and sends them to the candidate.

[...]

... and into the fires of idiocy.

naked protesting women

It never ceases to amaze me how our peacenik Left, as personified by the soft and mellow liberals of Marin County, CA (Taliban Johnny Walker excepted), just doesn't get it when it comes to the sad reality of war, the perils of protecting and promoting freedom, and the realpolitik of foreign policy.

Of all the horrible things done to people around the world by terrible governments, the silly fools protest against the Bush administration and the possibly imminent war with Iraqi. No one rational likes or yearns for war, and to accuse the Bush administration of war mongering simply because of oil or because the Pentagon wants to test drive a few new killer toys is plain folly.

Where were these people when the Taliban was executing women in stadiums, when Sadam gassed the Kurds, when (insert African dictator of choice) slaughtered his own people? The Marin moral relativists say nothing about the gross injustices suffered abroad (who are we to judge, they quip?), then turn around and accuse their own country of blood lust.

Thomas W. Hazlett: Dotcom-opoly

Dotcom start-ups, powerful engines of profit, will dominate the world economy. Bricks-and- mortar enterprises are helpless to resist the emerging online monopolies.

The frontispiece for a Nasdaq technology conference at the Palo Alto Hyatt, March 10 2000? A match-cover blurb for an IT correspondence college? The premise for a new Fox TV sitcom, That 90s Show?

In fact, it is the operative policy presumption of the antitrust agencies of the Bush administration. Consider these recent cases:

More at FT.com...

Perspective: Say hello to Big Brother
By Declan McCullagh
November 18, 2002, 7:05 AM PT

WASHINGTON--Like it or not, the proposed Department of Homeland Security firmly establishes Washington's central role in computer and network security.

When approved by Congress, perhaps as early as Monday, the massive new bureaucracy will become--among other things--the nation's clearinghouse for developing plans to prevent electronic attacks, thwart them when they occur and release advisories to the public.

According to the version of the bill approved by the House last week, department analysts will have security clearances and work so closely with the CIA, FBI, National Security Agency and the Defense Intelligence Agency that they'll even share personnel.

The department will mash together five agencies that currently divvy up responsibility for "critical infrastructure protection." Those are the FBI's National Infrastructure Protection Center, the Defense Department's National Communications System, the Commerce Department's Critical Infrastructure Assurance Office, an Energy Department analysis center and the Federal Computer Incident Response Center.

More at News.com...

A must read: The National Security Strategy of the United States of America

Greenspan is not always crystal clear, but his recent comments on the Bush tax cut were relatively straight forward: since the tax cuts are already figured into the market, don't count on any additional stimulation from the planned for cuts as they are phased in. This does not mean that rolling back or canceling those rate cuts is a good thing, quite the opposite, nor that these cuts are helpful in the long term. Simple, eh? Look at how the media covered this issue (from MRC):

From the NCPA:

The case for energy deregulation remains strong despite the problems Californians faced with market restructuring, according to a recent study. Strict regulations are costly and negatively affect energy providers and consumers. While the actual cost of regulations has yet to be tallied, experts estimate that restrictive trade practices cost hundreds of millions a year.

Experts project that the demand for energy will increase by 60 percent in the next 20 years. Basic market principles hold that if demand for energy increases while energy supplies stagnate, energy prices will skyrocket. Consumers should expect rising rates on heating and cooling unless restrictions on energy trade are eased.

On the other hand, case studies in the United States and Europe indicate that energy de-regulation spurs substantial economic growth.

Commentary from Henry Miller in the Los Angeles Times, November 4, 2002:

Drug Tests' Costly Side Effects
Pediatric trials only drive up prices.
By Henry I. Miller, MD

Antibiotics or a tube of prescription steroid cream used to cost a few bucks, but now the prices are soaring. A few examples of the cost of a week's supply of drugs: the antibiotic clarithromycin, $63; celecoxib, for arthritis, $85; and erythropoietin, for anemia, $218.

In large part, this is your tax dollars at work. Government regulation imposes, in effect, enormous taxes on drug development that are ultimately passed along to consumers. They also decrease innovation and the number of drugs that are developed.

Not often I agree with The Nation, but this post-mortem of the election is largely right (that is, correct). The shake-up in the Democratic Party will be fun to watch.

From the McKinsey Quarterly:

As bad as the crisis in the telecommunications industry may be, things may be about to get worse. That’s because Wi-Fi (wireless fidelity) Internet access—which is significantly cheaper than its DSL and cable modem alternatives and can be faster—is threatening the business models of cellular carriers, phone gear makers, and providers of high-speed DSL and cable data services.

The take-away
The key question for Wi-Fi is how the government will react to the new technology—either by helping to shelter companies whose revenues are threatened or by siding with consumers and letting the voice of the market be heard.

Congratulations on a stunning victory, one that is almost without precedent in the last 100 years by gaining seats in both houses during an off-year election. Your aggressive campaigning, Karl Rove’s strategies, and Bill Frist’s hard work are to be commended. In fact, the numbers don’t tell the whole story. The Democrats only managed to hold on to the New Jersey seat by cheating and the Republicans only managed to lose the Arkansas seat by, ahem, another kind of cheating. The Democrats’ big “win” last night was the narrow victory in the lesser-of-two-evils race for governor of California. The clear losers are Bill Clinton and Terry McCauliffe, who with predictable Clintonian ego and bravado decided to spend their resources on a personal vendetta, embarrassing you in Florida, rather than focusing on issues or allocating those resources where they could have been more effective. The other losers are all those Senate Democrats, with Daschle foremost, who had hopes of running against you in ’04. Surely now it will be a governor or your old friend Al who will have that distinction now. And of course, Dick Gephardt will say goodbye to his presidential aspirations and his leadership position in the house. The Democrats are at each other throats and the party is in turmoil.

What’s most stunning about this victory, however, is the message it sent. There is no doubt that your coattails, strengthened by your leadership after September 11, 2001, played a major role. Yet when polled, most Americans put the economy ahead of national security in terms of importance. The economy is still languid, and recession still plagues parts of the country—and Bill Clinton was right at least about this one thing: it’s the economy stupid. This was to be the Democrats’ ace in the whole. With a down economy and pervasive corporate corruption scandals, victory over the Presidential party—especially a party traditionally associated with big business—should have been at hand. Why was it not so? Many Democratic sympathizers in the media (if you will forgive the redundancy) lament that the Democrats didn’t go after the Republicans as hard as they should on the issues. But this is not credible as begs the fundamental question: what do the Democrats have to go after the Republicans with? In terms of scandal and corruption, the seeds of most of these problems were planted under Clinton—and after all, scandal is so Clintonian. And, unfortunately, both parties are equally guilty of close ties with the various offenders.

But most importantly, Democrats fundamentally do not have an ideological solution to a down economy. They are still the party of tax and spend, even though it is clear, now even to the American people, that this is now way to revive an economy. Their only recourse is to scare people about the risks of deficit spending and to deride tax cuts. But it was precisely this formula that Reagan used to banish stagflation and enable the parade of economic growth in the ‘90s that Clinton pretended to have lead. Democrats have no plan for reviving the economy and Americans understand that.

With this victory comes pressure: there are no more excuses of an obstructionist Senate. The Republicans, therefore, must revive the economy and soon in order to be successful in the next election. Here’s how to do it: the federal government must put the economy first, and the government second (the Democrats often use the “fiscal responsibility” argument to advocate the opposite.) So, Mr. President, I urge you to listen to the people and deliver the results that will propel you to victory in 2004. Here are ten steps to take: