From WSJ; November 4, 2009

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Obama and the Liberal Paradigm

The sheep are quite capable of looking out for themselves. Someone tell the Democrats.

By JOHN STEELE GORDON

Valerie Jarrett, senior adviser to President Barack Obama, recently explained the White House war on Fox News as an example of "speaking truth to power." Much of the American political world collapsed in laughter, pointing out that her boss was president of the United States, the most powerful man on earth. His every word is news around the world. Fox News is a cable channel rarely watched by more than a few million people at a time. How could she have so blithely said something completely out-of-sync with reality?

Simple: She's a liberal.

As a liberal she carries around in her head the liberal paradigm of how the world works and what needs to be done to make it work better. There's nothing wrong with that. We all use paradigms to make sense of what we see around us and couldn't get along without them. Unfortunately, the basic liberal paradigm hasn't shifted in a hundred years, while the world we live in has changed utterly since the late 19th century, when modern liberalism was born.

What is that paradigm? The basic premise is that the population is divided into three groups. By far the largest group consists of ordinary people. They are good, God fearing and hard working. But they are also often ignorant of their true self-interest ("What's the matter with Kansas?") and thus easily misled. They are also politically weak and thus need to be protected from the second group, which is politically strong.

The second group, far smaller, are the affluent, successful businessmen, corporate executives and financiers. Capitalists in other words. They are the establishment and it is the establishment that, by definition, runs the country. They are, in the liberal paradigm, smart, ruthless and totally self-interested. They care only about personal gain.

And then there is the third group, those few, those happy few, that band of brothers, the educated and enlightened liberals, who understand what is really going on and want to help the members of the first group to live a better and more satisfying life. Unlike the establishment, which supposedly cares only for itself, liberals supposedly care for society as a whole and have no personal self-interest.

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Martin Kozlowski

Thus the liberal paradigm divides the American body politic into sheep, wolves, and would-be shepherds. The shepherds must defeat the efforts of the wolves.

This paradigm, while never wholly accurate and, of course, always self-serving (as political philosophies tend to be), had a basis in reality in the late 19th century. Then, industrial capitalism was being born and the rules needed to ensure that it worked for all, not just the capitalists, were only beginning to evolve.

A few lived at an incredible level of affluence, such as can be seen in the summer "cottages" in Newport, R.I., and had disproportionate influence with government. In 1900 one-third of the Senate were millionaires at a time when a million dollars made you very, very rich. But millions of Americans lived in abject poverty, toiling long, dangerous hours as industrial workers or as sharecroppers in the impoverished South. These millions were indeed ignorant and weak.

Even as late as 1937, Franklin Delano Roosevelt, in his great second inaugural address, could quite accurately note the fact that he could "see one-third of a nation ill-housed, ill-clad, ill-nourished."

But by that time, liberals had stormed—and taken—the citadel of power. Between 1896 and 1932, the Republicans had been the majority party in this country and the conservatism of that day the ruling doctrine. Then, in 1932, Democrats swept into control of both Congress and the White House. They were now the establishment, as liberalism became the dominant American political philosophy, a status it kept for more than 40 years.

A liberal revolution from the top began as the New Deal created a safety net for American families and reformed the banking and financial systems by greatly enlarging the government and what it regulated. At the end of World War II, college education became far more affordable, thanks to the GI Bill and other measures. The GI Bill also fostered home ownership, which for the first time became the norm among nonfarm families, giving them significant wealth. The sheep were becoming capitalists too.

Between 1947 and the mid-1960s, the civil-rights movement overturned centuries of racial discrimination and greatly narrowed the gap between American claims of liberty and equality and American reality.

By the 1970s, the percentage of Americans living in poverty had been greatly reduced and those still below the poverty line were receiving assistance such as food stamps, housing assistance, and refundable tax credits that lifted most of them above the line. Race was no longer a barrier to accomplishment. The majority of American families now lived at a level of affluence and financial security known only to a few in the early 20th century.

The liberal revolution of the middle third of that century was, in short, one of the greatest—and most peaceful—political triumphs in history. And because of it, most of the sheep are now more than able to look out for themselves, having the means and education to do so. The wolves have been fitted for electric collars that largely keep them from straying into the wrong fold.

Now if only someone would tell the shepherds about their own success.

Ms. Jarrett still sees herself and her political allies as being on the outside, speaking truth to power, even when speaking from the Oval Office. The Congressional Black Caucus still routinely sees a pervasive racism, even though both the president of the United States and the chairman of the Republican National Committee are black. The rich are still looked upon by liberals as enemies of the poor and disadvantaged, even though Mr. Obama not only carried a majority of voters earning less than $50,000 but also a majority of those earning over $200,000. He did, in other words, as well among the wolves as he did among the sheep.

Not only does the liberal paradigm not even come close to agreeing with the social and economic reality on the ground today, worse, it has largely congealed into a political religion, especially in the nearly 30 years since Ronald Reagan shifted the nation's political center of gravity, just as FDR had done 48 years earlier. Since liberals care about the sheep, all who disagree with liberalism must not, making them morally inferior if not downright immoral. Thus the nastiness in American politics is largely on the left. Whatever you think of Sarah Palin, her treatment in the liberal press was ugliness personified.

The conservatives of today bear little resemblance to those of the 1930s that cartoonist Peter Arno immortalized heading down to Manhattan's Trans-Lux theater to hiss newsreels of FDR. They are instead abubble with ideas to reform aspects of American politics and economics that badly need reform, such as the tax and legal systems, and the impending entitlements crisis. They want to utilize the great power of markets to force efficiency, drive down costs, and drive up yields. But liberals refuse to engage those ideas, simply because they are not liberal ideas and must, therefore, be wrong if not the latest plot by the wolves to exploit the sheep.

But in a world where a majority of Americans work at white-collar jobs, have high-school and college degrees, own their own homes, and hold financial securities in their own right, the so-called wolves are now a majority. If liberals don't begin to take that fact into account in formulating policy, the Obama administration will not only be an unsuccessful liberal administration, it may well be the last liberal administration.

Mr. Gordon is the author of "Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt," out in a revised edition by Walker & Co. early next year.

A "Clunker" of A Plan

WSJ Op ED-- OCTOBER 4, 2009

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Remember "cash for clunkers," the program that subsidized Americans to the tune of nearly $3 billion to buy a new car and destroy an old one? Transportation Secretary Ray LaHood declared in August that, "This is the one stimulus program that seems to be working better than just about any other program."

If that's true, heaven help the other programs. Last week U.S. automakers reported that new car sales for September, the first month since the clunker program expired, sank by 25% from a year earlier. Sales at GM and Chrysler fell by 45% and 42%, respectively. Ford was down about 5%. Some 700,000 cars were sold in the summer under the program as buyers received up to $4,500 to buy a new car they would probably have purchased anyway, so all the program seems to have done is steal those sales from the future. Exactly as critics predicted.

Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best "the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day's gasoline use." Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.

The basic fallacy of cash for clunkers is that you can somehow create wealth by destroying existing assets that are still productive, in this case cars that still work. Under the program, auto dealers were required to destroy the car engines of trade-ins with a sodium silicate solution, then smash them and send them to the junk yard. As the journalist Henry Hazlitt wrote in his classic, "Economics in One Lesson," you can't raise living standards by breaking windows so some people can get jobs repairing them.

In the category of all-time dumb ideas, cash for clunkers rivals the New Deal brainstorm to slaughter pigs to raise pork prices. The people who really belong in the junk yard are the wizards in Washington who peddled this economic malarkey.

Dr. Plan for Lawyers

From WSJ; Sep 3, 2009:

By RICHARD B. RAFAL

Since we are moving toward socialism with ObamaCare, the time has come to do the same with other professions—especially lawyers. Physician committees can decide whether lawyers are necessary in any given situation.

At a town-hall meeting in Portsmouth, N.H., last month, our uninformed lawyer in chief suggested that we physicians would rather chop off a foot than manage diabetes since we would make more money doing surgery. Then President Obama compounded his attack by claiming a doctor's reimbursement is between "$30,000" and "$50,000" for such amputations! (Actually, such surgery costs only about $1,500.)

Physicians have never been so insulted. Because of these affronts, I will gladly volunteer for the important duty of controlling and regulating lawyers. Since most of what lawyers do is repetitive boilerplate or pushing paper, physicians would have no problem dictating what is appropriate for attorneys. We physicians know much more about legal practice than lawyers do about medicine.

Following are highlights of a proposed bill authorizing the dismantling of the current framework of law practice and instituting socialized legal care:

• Contingency fees will be discouraged, and eventually outlawed, over a five-year period. This will put legal rewards back into the pockets of the deserving—the public and the aggrieved parties. Slick lawyers taking their "cut" smacks of a bookie operation. Attorneys will be permitted to keep up to 3% in contingency cases, the remainder going into a pool for poor people.

• Legal "DRGs." Each potential legal situation will be assigned a relative value, and charges limited to this amount. Program participation and acceptance of this amount is mandatory, regardless of the number of hours spent on the matter. Government schedules of flat fees for each service, analogous to medicine's Diagnosis Related Groups (DRGs), will be issued. For example, any divorce will have a set fee of, say, $1,000, regardless of its simplicity or complexity. This will eliminate shady hourly billing. Niggling fees such as $2 per page photocopied or faxed would disappear. Who else nickels-and-dimes you while at the same time charging hundreds of dollars per hour? I'm surprised lawyers don't tack shipping and handling onto their bills.

• Legal "death panels." Over 75? You will not be entitled to legal care for any matter. Why waste money on those who are only going to die soon? We can decrease utilization, save money and unclog the courts simultaneously. Grandma, you're on your own.

• Ration legal care. One may need to wait months to consult an attorney. Despite a perceived legal need, physician review panels or government bureaucrats may deem advice unnecessary. Possibly one may not get representation before court dates or deadlines. But that' s tough: What do you want for "free"?

• Physician controlled legal review. This is potentially the most exciting reform, with doctors leading committees for determining the necessity of all legal procedures and the fairness of attorney fees. What a wonderful way for doctors to get even with the sharks attempting to eviscerate the practice of medicine.

• Discourage/eliminate specialization. Legal specialists with extra training and experience charge more money, contributing to increased costs of legal care, making it unaffordable for many. This reform will guarantee a selection of mediocre, unmotivated attorneys but should help slow rising legal costs. Big shot under indictment? Classified National Archives documents down your pants? Sitting president defending against impeachment? Have FBI agents found $90,000 in your freezer? Too bad. Under reform you too may have to go to the government legal shop for advice.

• Electronic legal records. We should enter the digital age and computerize and centralize legal records nationwide. All files must be in a standard, preferably inconvenient, format and must be available to government agencies. A single database of judgments, court records, client files, etc. will decrease legal expenses. Anyone with Internet access will be able to search the database, eliminating unjustifiable fees charged by law firms for supposedly proprietary information, while fostering transparency. It will enable consumers to dump their clunker attorneys and transfer records easily.

• Ban legal advertisements. Catchy phone numbers such as 1-800-LAWYERS would be seized by the government and repurposed for reporting unscrupulous attorneys.

• New government oversight. Government overhead to manage the legal system will include a cabinet secretary, commissioners, ombudsmen, auditors, assistants, czars and departments.

• Collect data about the supply of and demand for attorneys.Create a commission to study the diversity and geographic distribution of attorneys, with power to stipulate and enforce corrective actions to right imbalances. The more bureaucracy the better. One can never have too many eyes watching these sleazy sneaks.

• Lawyer Reduction Act (H.R. -3200). A self-explanatory bill that not only decreases the number of law students, but also arbitrarily removes 3,200 attorneys from practice each year. Textbook addition by subtraction.

Enthusiastically embracing the above legal changes can serve as a "teachable moment" and will go a long way toward giving the lawyers who run Congress a taste of their own medicine.

Dr. Rafal is a radiologist in New York City.

Higher Taxes for Middle Class

From WSJ (Aug 4th, 2009)

Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.

Asked about raising taxes on the middle class on Sunday on CBS’s “Face the Nation,” White House economist Larry Summers wouldn’t repeat Mr. Obama’s pre-election promise. “It is never a good idea to absolutely rule things out no matter what,” Mr. Summers said—except, apparently, when his boss is running for office. Meanwhile, on ABC’s “This Week,” Treasury Secretary Timothy Geithner also slid around Mr. Obama’s vow and said, “We have to bring these deficits down very dramatically. And that’s going to require some very hard choices.”

These aren’t even nondenial denials. The Obama advisers are laying the groundwork for taxing the middle class while claiming the deficit made them do it.

The liberal establishment is even further along in finally admitting that Mr. Obama wasn’t, er, telling the truth. A piece in the New York Times over the weekend declared in a headline that “the Rich Can’t Pay for Everything, Analysts Say.” And it quoted Leonard Burman, a veteran of the Clinton Treasury who now runs the Brookings Tax Policy Center, as saying that “This idea that everything new that government provides ought to be paid for by the top 5%, that’s a basically unstable way of governing.” They’re right, but where were they during the campaign?

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Associated Press

Treasury Secretary Timothy Geithner

In an editorial on February 26, “The 2% Illusion,” we wrote that the feds could take 100% of the taxable income of everyone in America earning more than $500,000 and still have raised only $1.3 trillion even in the boom year of 2006. The rich are fewer and less rich now, while the Obama budget is nearly $4 trillion.

Democrats already plan to repeal the Bush tax cuts, but that won’t raise enough money. So they’re proposing an income tax surcharge on “the wealthy,” but that won’t raise enough either. Democrats have no choice but to soak the middle class because only they have enough money to finance the liberal dream of yoking the middle class to cradle-to-grave government entitlements.

Democrats have already taxed the middle class by raising cigarette taxes to pay for the children’s health-care expansion. They’re also teeing up average earners with their cap-and-tax energy bill. Mr. Obama had hoped that cap-and-tax would raise some $646 billion over a decade, but Democrats in the House had to give most of that away in bribes to business to pass their bill. To finance ObamaCare, they’re also proposing another 10-percentage-point increase in the payroll tax on firms and individuals that don’t purchase health insurance. But this won’t raise enough money either.

So waiting in the wings is the biggest middle-class tax increase of them all: a European-style value added tax, or VAT. This tax would apply to every level of production or service, and it is beloved by politicians in Europe because it raises so much money so easily without voters noticing. Ezekiel Emanuel, a White House aide and brother of Chief of Staff Rahm Emanuel, has advocated a 10% VAT to finance national health care. Look for a VAT to be one of the prominent options when Mr. Obama’s tax reform commission issues its report later this year.

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

Google Sells Out

From BBC News:

Google censors itself for China

See Google China Leading internet company Google has said it will censor its search services in China in order to gain greater access to China's fast-growing market. Google has offered a Chinese-language version of its search engine for years but users have been frustrated by government blocks on the site. The company is setting up a new site - Google.cn - which it will censor itself to satisfy the authorities in Beijing. Google argued it would be more damaging to pull out of China altogether.  While removing search results is inconsistent with Google's mission, providing no information... is more inconsistent with our mission  Google statement Chinese results toe the line Critics warn the new version could restrict access to thousands of sensitive terms and web sites. Such topics are likely to include independence for Taiwan and the 1989 Tiananmen Square massacre. The Chinese government keeps a tight rein on the internet and what users can access. The BBC news site is inaccessible, while a search on Google.cn for the banned Falun Gong spiritual movement directs users to a string of condemnatory articles. Google's move in China comes less than a week after it resisted efforts by the US Department of Justice to make it disclose data on what people were searching for. Google has lost ground to Beijing-based web search company Baidu Google hopes its new address will make the search engine easier to use and quicker. Its e-mail, chat room and blogging services will not be available because of concerns the government could demand users' personal information. Google said it planned to notify users when access had been restricted on certain search terms. The company argues it can play a more useful role in China by participating than by boycotting it, despite the compromises involved. "While removing search results is inconsistent with Google's mission, providing no information (or a heavily degraded user experience that amounts to no information) is more inconsistent with our mission," a statement said. HAVE YOUR SAY  Google is a business, businesses tend to want to maximise profits  Rich C, Skye and Bonn Send us your comments Julian Pain, internet spokesman for campaign group Reporters Without Borders, said Google's decision to "collaborate" with the Chinese government was "a real shame". The number of internet search users in China is predicted to increase from about 100 million currently to 187 million in two years' time. A survey last August revealed Google was losing market share to Beijing-based rival Baidu.com. Last year, Yahoo was accused of supplying data to China that was used as evidence to jail a Chinese journalist for 10 years.

Health Reform Requires Lawsuit Reform

From the Wall Street Journal:

By PHILIP K. HOWARD

Containing health-care costs is impossible under the current legal structure. That fact has to be addressed if President Barack Obama is to create an affordable health-care system that is accessible to everyone.

Every incentive in the system now is to do more -- that's how doctors get paid and that's how doctors get protected from lawsuits. Billions of dollars are wasted in "defensive medicine." Bureaucracy built up over decades diverts resources from patient care to mindless compliance. Forms are everywhere.

The only path to affordable health care is a basic overhaul to realign incentives. The new ideas are out there -- for example, creating a reimbursement model that rewards effective care, and restoring trust in the reliability of justice by creating special health courts.

Overhaul, however, requires letting go of the old ways. Congress is perfectly willing to come up with new programs and introduce new taxes to pay for ever-rising health-care costs. But Congress seems unwilling to make hard choices.

Like a crash in slow motion, you can see Congress tumbling down toward the lowest common denominator -- a reform package that will do little to contain costs, but will offend the least number of special interests.

Studies have repeatedly demonstrated that the current ad hoc system of justice, with verdicts that vary widely from one jury to the next, has spawned a culture of legal fear and self protection. Studies also show that the system fails injured patients -- a claim takes an average of five years to resolve and nearly 60 cents out of every dollar spent in the malpractice system ends up going to lawyers or administrative costs.

That's why most of the important health-care constituencies, from the American Medical Association to AARP, favor creating pilot projects for special health courts. Mr. Obama has recently talked about the need "to explore a range of ideas about how to . . . scale back the excessive defensive medicine."

But one interest group hates the idea. You guessed which one. Sen. Mike Enzi (R., Wy.) discovered just how powerful the trial lawyers are when he proposed creating health court pilot projects. His proposal was only to permit experiments, not broad-scale tort reform, and it had been developed with Sen. Max Baucus (D., Mt.), chairman of the Finance Committee. But when Mr. Enzi offered this modest proposal, other members of the Senate Committee on Health, Education, Labor and Pensions killed the idea, declaring that the Constitution requires juries to be the ultimate decision maker in civil lawsuits.

That's not true. Special courts without juries are common in America and include courts for bankruptcy, tax disputes, workers compensation and more. America has a long history of using expert courts when there is a need for expertise and consistency. It's hard to imagine any area that needs consistent justice more than health care.

The senators weren't willing to discuss the merits of an expert court. The jury, as Sen. Sheldon Whitehouse (D., R.I.) put it, is "our protection against tyranny of the majority." But that's not true either, at least not for civil cases. In private lawsuits, juries have the limited role of deciding disputed issues of fact. "What is the object of the jury trial?," asked John Marshall in the debates over ratifying the Constitution. Marshall, the future chief justice of the U.S. Supreme Court, then answered his own question: "To inform the court of the facts." It is the judge who is tasked with drawing legal boundaries that determine who can sue for what. Those boundaries are precisely what's missing in deciding whether doctors have abided by accepted standards of care.

At the hearing, Mr. Whitehouse warned that "we take enormous risks as a country if we interfere with the institution of trial by jury." Actually, the enormous damage of unreliable justice is visible all around American society -- in playgrounds stripped of athletic equipment (contributing to the epidemic of obesity), in schools where disorder is the norm because of loss of teacher authority, and in a health-care system that squanders resources practicing unnecessary defensive medicine.

Fear is the tool not of leadership but of the status quo. It could hardly be easier to scare people into keeping programs and institutions the way they are. But that only delays the day of reckoning. Congress is mortgaging our children's future. Cost containment must be a goal. Protecting trial lawyers is not the solution.

Mr. Howard, a lawyer and author, is chairman of Common Good (www.commongood.org).

Governments Unintended Consequences

From WSJ; April 17, 2009

By KIMBERLEY A. STRASSEL

Alternative Fuel Folly

Every so often Washington throws out a controversy that brilliantly illustrates everything wrong with Washington. Consider the brewing outrage over "black liquor."

This is the tale of how a supposedly innocuous federal subsidy to encourage "alternative energy" has, in a few short years, ballooned into a huge taxpayer liability and a potential trade dispute, even as it has distorted markets and led to greater fossil-fuel use. Think of it as a harbinger of the unintended consequences that will accompany the Obama energy revolution.

Back in 2005, Congress passed a highway bill. In its wisdom, it created a subsidy that gave some entities a 50-cents-a-gallon tax credit for blending "alternative" fuels with traditional fossil fuels. The law restricted which businesses could apply and limited the credit to use of fuel in motor vehicles.

Not long after, some members of Congress got to wondering if they couldn't tweak this credit in a way that would benefit specific home-state industries. In 2007, Congress expanded the types of alternative fuels that counted for the credit, while also allowing "non-mobile" entities to apply. This meant that Alaskan fish-processing facilities, for instance, which run their boilers off fish oil, might now also claim the credit.

What Congress apparently didn't consider was every other industry that might qualify. Turns out the paper industry has long used something called the "kraft" process to make paper. One byproduct is a sludge called "black liquor," which the industry has used for decades to fuel its plants. Black liquor is cost-effective, makes plants nearly self-sufficient, and, most importantly (at least for this story), definitely falls under Congress's definition of an "alternative fuel."

All of which has allowed the paper industry to start collecting giant federal payments for doing nothing more than what it has done for decades. And in fairness, why not? If Congress is going to lard up the tax code with thousands of complex provisions designed to "encourage" behavior, it shouldn't be surprised when those already practicing said behavior line up for their reward, too.

In March, International Paper announced it had received $71 million from the feds for a one-month period last fall. The company is on track to claim as much as $1 billion in 2009. Verso took in nearly $30 million from the operation of just one mill in one quarter of last year. Other giants are gearing up to realize their own windfalls. Wall Street has gone wild, pushing paper-company stocks up dramatically in recent weeks.

Happy as industry is to have this new federal lifeline in the middle of a recession, it is the only one smiling. Foreign competitors are screaming that the subsidy is unfairly propping up the U.S. industry in tough times. They claim the U.S. industry is ramping up production simply to realize more tax money. Canadian forestry firms are already demanding their government file a trade complaint.

In order to qualify for the credit, alternative fuel must be mixed with a taxable one. (The government might want to encourage alternative fuels, but not to the extent that it loses its gas-tax revenue.) This means that to qualify, the paper industry must mix some diesel with its black liquor. This has sent environmentalists around the bend. They have accused the industry of burning fossil fuels that it didn't used to burn, simply to get the tax dollars. (The industry has not been clear on whether it is, in fact, using more diesel.)

And then there's Congress, which is suddenly looking at billions more in red ink than expected. In 2007 it estimated a 15-month extension of the credit would cost taxpayers $333 million. It has since revised those numbers to take into account black liquor and is now figuring a one-year cost of more than $3 billion. Wall Street analysts are talking $6 billion. Senate Finance Committee bosses Max Baucus and Charles Grassley are reportedly aware of the issue, none too happy, and they are working to bar the paper industry from receiving the credit.

But this, in turn, has tossed up uncomfortable questions. The paper industry argues that if the government is going to be in the business of rewarding good behavior, it ought to do it equally. Is green policy only to be aimed at dirty or economically unviable actors? Is black liquor any less useful than ethanol or biodiesel, and if so why? If not, shouldn't Washington encourage its use? Isn't every green subsidy in fact the basis for a trade dispute? These are questions Congress has no interest in confronting, since it would expose the muddle that is its entire green-energy program.

All of this is highly amusing, if not surprising. Every government attempt to manage energy markets has resulted in similar disarray. Look at the havoc that came from the energy price controls, regulations and subsidies of the 1970s. Or look, more recently, at the ethanol fiasco, and the accompanying soaring food costs. Energy powers the economy. Mess with energy markets, and mess with everything else. When will Washington learn?

No More Cash to Buy Trinkets

FROM: The NY Daily News

Americans must give up the junk to get in better shape

Sunday, February 8th 2009, 8:05 PM

Last week, Democratic congressman Gary Ackerman vociferously attacked the Securities and Exchange Commission for being asleep at the wheel while Bernard Madoff continued a hustle that had been discovered a decade ago by a single investigator. From the other end, Wall Street bankers were chafed by the President's suggestion that companies getting bailout billions should have $500,000 salary caps for those at the top.

Well now, that takes a lot of gall. The fat cats seem to ask beneath outraged shock: Does the President realize what has happened to our money culture over the last couple of decades? Everybody aspires to being overpaid. It's now the American way.

We all know that some people hate professional sports because of the gargantuan salaries paid to grown men for playing the games of boys. But that is one of the basic rules of capitalism: Charge whatever the market will bear.

That is what those poor banking executives want the President to understand. Well, guess what? Obama understands quite well that the bear running wild on Wall Street was created by what has been called "casino capitalism." Bet all you want; just make sure you don't use your own money.

After all, few things are inexpensive any longer. A small box of popcorn can cost about $6 in a New York City movie theater. But people still buy the popcorn because they have been convinced by marketing that going to see a movie means having popcorn. It defines the experience.

Many thousands were put out of work in a Chinese province last year because Americans did not have the money to spend on ornamental Christmas trivia now made in China for the U.S. market. It seems that China and its Marxist capitalists are as caught up in the world economy as the regular capitalists.

A little greed and growing markets for easily produced insubstantial goods will lead to pictures of Karl Marx being printed on toilet paper and used more than a little gleefully.

It was also proof of the international monetary significance had by all of the junk thought absolutely necessary until times become so hard that the public only buys what it actually needs.

Look out! A public weaned from junk is a public dangerous to the junk business, which lucratively spans everything from Wall Street deals to French fries that can clog the arteries for a stroke.

The creation of mass taste for affordable things of high quality may well be the way of the future, but that is much more than a notion. As those wailing on Wall Street vulgarly prove with their anger at the President, the obstacles are finally ourselves and we, my fellow Americans, are the market forces where the changes must be made.

Those changes, if we make them, will not only reshape our nation but the world at large. Many goods and businesses cannot survive without the consumer support of Americans addicted to junk. On the way to actual economic health, many things will have to go. That is how cold it has gotten out here.

But if we cease compulsively overspending or supporting every means by which people are made to feel entitled to excessive salaries, will we, with the world falling down, recognize the new place created by an intimidating and enlightened frugality? With shopaholic anxiety no longer controlling our emotions, will we feel comfortable, finally, in ourselves?

When on the verge of a new way of living, it is never clear what the destination will turn out to be. The only thing that can be done is to pay attention as you move away from a culture of acceptably bad decisions.

Stop, look and listen very closely. But keep going.

crouch.stanley@gmail.com