Thursday, January 29, 2015

"Another Birthday!"

Sydney M. Williams
January 29, 2015
                                                                A Note from Old Lyme

“Another Birthday!”

“How old would you be if you didn’t know how old you are?”
                                                                                                                                Satchel Paige (1906-1982)

“It takes a long time to become young.”
                                                                                                                                Pablo Picasso (1881-1973)

In two days I turn 74. ‘My God,’ some will say. ‘I had no idea he was such a child. He seemed so old.’ Others will say, ‘The old goat really is old. He seemed so immature.’

On commencing one’s 75th year, one can be excused for thinking of mortality, but healthily not morbidly. We know that everything alive will die; and we can be excused for feeling that this is not our time.  There is a wisp of truth to the old saying, ‘One is as old as one feels.’ Lewis Carroll had “old Father William” stand on his head and then, at the end of the poem, threaten the youth: “Be off, or I’ll kick you down-stairs.” In contrast, T.S. Eliot advised readers: “…be careful of Old Deuteronomy.” There is wisdom in Satchel Paige’s observation, quoted above: Does knowing our age influence who we are? Is my birth certificate accurate? I assume it is, but I have no memory of being born. Perhaps I will not be turning 74? Do I care? No. It’s as good a day as any.

Picasso had it right too: It does take a long time to become young. As children, we said whatever was on our minds. The same is true when we are older. Age provides freedoms, especially of expression; though perhaps less of the physical variety. We are less mindful (but hopefully still respectful) of what others think; so more apt to speak as we please. A few weeks ago in the New York Times, Anne Karpf, a British journalist and sociologist, wrote “…our sense of what’s important grows with age. We experience life more intensely than before, whatever our physical limitations, because we know it won’t last forever” – a sobering, but compelling thought. 

A mid-seventy’s birthday is an opportunity to consider how different various cultures treat the aged. The price of medicine translates into a high – some, like Dr Ezekiel Emanuel who feels that 75 is a good age to die, might say exorbitant – cost of keeping the elderly alive. Jared Diamond, UCLA professor and author of Guns, Germs and Steel and who writes on the subject of aging, gave a lecture a few years ago: “Honor or Abandon: Why Does Treatment of the Elderly Vary so Widely Among Human Societies?” Japan celebrates “Respect for the Aged Day.” Other societies do not. Some of what he noted may have been true, but was a little creepy. Natural selection, he said, meant that there had been times and circumstances, starvation, for example, and particularly among nomadic tribes, when it was deemed right for children to abandon or kill their parents – not an outcome I particularly desire! But Professor Diamond’s principal point was that Eastern cultures place greater value on family and the elderly than do Western ones, with the latter’s tendency to celebrate youth and self-reliance. Improved medical care and better living standards means that we are all living longer. As societies we are aging, which will have consequences. Affordability will be one of them.

Not surprisingly, as it would give me but a year or so to live, I disagree with Dr. Emanuel. I suspect that if he enters his 75th year in good health, he might revise his opinions and perhaps decide that 80 or 85 might be a better age to call it quits. While I disagree with the concept of Dr. Emanuel’s targeting a specific age, I do not want to live as a vegetable, or be so impaired I cannot perform the simplest tasks. I don’t want to be carried by one of my sons, as Aeneas did his father, Anchises. But I would rather any decision be made by my family, not the state.

Mental gymnastics are as important as their physical kin, in holding back aging, but the process cannot be stopped. As an old southern expression has it: “Ain’t time a wrecker!” It is, and despite the allegation by Ponce de León, there are no ‘Fountains of Youth;’ there are only face lifts, Botox and the like, all of which are obvious to even the casual observer. The march of time is inexorable. Stopping the aging process is as futile as turning back the tide, as Canute discovered. So, we are best off to get on with it and enjoy ourselves.

Those among us fortunate to have grandchildren derive an invaluable, secondary benefit as we age. When we were new parents, our children looked upon us as the font of all knowledge. Soon enough, realism replaced credulity, as our fallibilities surfaced and became too obvious to ignore.  With grandchildren, we get a second shot. These are sensations normally available only to those the media worships – Democrat Presidents, movie stars, athletes, rock stars, etc. However, like belief in Santa Claus or the Tooth Fairy, we know that this adulation will, too, pass. In the meantime, such adoration provides for wonderful moments of confidence building. While the limits to our knowledge will soon be exploited by our fast-learning grandchildren, there is, if I may be so bold, something more lasting in the wisdom we have accumulated and can offer. Professor Jared concluded his lecture: “So, if you want to get advice on complicated problems, ask someone who is 70; don’t ask someone who is twenty-five.”

Sitting at my computer, I note that I am sixteen years older than was my father when he died and only five years younger than my mother when she slipped her harness. But I emerge from that self-induced funk and look out at the snow accumulating in the fields, sense the cold of the ground underneath, but derive comfort from the knowledge that beneath that frozen soil lives the promise of spring and the resurrection of life.

The most important thing to realize, as birthdays appear with what seems increasing frequency, is how lucky we are to be here in the first place. When one considers the happenstance of our parents and their parents meeting (going back thousands of generations) and the billions of spent sperms and unfertilized eggs that are wasted, the odds against being born are billions and billions to one. So, life must be rejoiced and part of life is getting older. We should not rue that fact. I do not feel as did T.S. Eliot’s J. Alfred Prufrock; though I admit to losing height:

“I grow old…I grow old…
I shall wear the bottoms of my trousers rolled.”

We should celebrate life, no matter our age. We are indeed lucky to be here and I am even more fortunate to have a family I love, to be healthy and to be having another birthday. I hope for many more.

Monday, January 26, 2015

“FNM & FRE – It’s like Déjà Vu All Over Again”

                     Sydney M. Williams

Thought of the Day
“FNM & FRE – It’s like Déjà Vu All Over Again”
January 26, 2015

The FCIC (Financial Crisis Inquiry Commission), the Commission of which Representative Phil Angelides (D-CA) was chairman, reached nine main conclusions as to the cause of the near credit collapse in 2008, not one of which cited the role played by Congress, prior Administrations, or Fannie Mae (FNM) and Freddie Mac (FRE). The Commission was comprised of ten people, five Senators and five Representatives. Six were appointed by Democrats and four by Republicans. It was like having the fox investigate the stealing of chickens.

Certainly the causes cited by Mr. Angelides played a role. Regulatory supervision was lax, as were corporate governance and risk management assessments. Homeowners took on more debt than was prudent, and investors bought mortgage securities without paying adequate attention to the risks they entailed. There was little transparency and government was ill prepared for the crisis. There was a breakdown in business ethics (assuming they ever existed), as well as in mortgage-lending standards. Over-the-counter derivatives played a part, and credit rating agencies – with ratings paid for by the seller – were disingenuous. Buoyant markets and sunny days led to an aversion to skepticism.

The findings were endorsed by all six Democrats, with no Republican in agreement. The conclusions, which were announced four years ago this month and which included a 27-page dissent from three of the Republicans on the Commission and an abbreviation of the fourth Republican Peter Wallinson’s more pointed dissent, were published that year. The New York Review of Books practically glowed, calling it “the definitive history of this period,” a questionable assessment, at best. Mr. Wallinson, now with the American Enterprise Institute, just released his version in book form: Hidden in Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why it Could Happen Again.

What the Commission’s conclusions ignored was the role played by government. For decades, politicians had been anxious to increase the percentage of households who were homeowners, which had been stuck at 64%. The Community Reinvestment Act of 1977 was designed to encourage (some might use a stronger word) commercial and savings banks to help meet the needs of all the constituents in their neighborhoods and communities – to reduce or eliminate the practice of discrimination, what was known as redlining. In other words, banks were asked to take on more risk, but without the ability to price it into their products. In 1992, Congress passed a law requiring GSEs (Government Sponsored Enterprises) to purchase 30% of mortgages granted to low and moderate income homebuyers. The Department of Housing and Urban Development (HUD) later adjusted the percentage up to 56 percent. Mr. Bush, as we all remember, touted the benefits of homeownership – certainly a worthy goal, but one that comes with risk, a factor ignored by those trying to influence both behavior and lending practices.

In retrospect, it was unsurprising that Congress decided to act before the Angelides Commission made its report. The 2000+ page Dodd-Frank Wall Street Reform and Consumer Protection Act, ironically named after its two proponents, Senator Christopher Dodd (D-CT) and Representative Barney Frank (D-MA) who had done more than most to encourage the GSEs to take on more risk, was passed in July 2010, pretty much along Party lines and six months before the Commission made its report. “A crisis is a terrible thing to waste,” had advised Presidential advisor Emanuel Rahm shortly after Mr. Obama took office. Certainly, Mr. Dodd and Mr. Frank did not want anyone looking too closely at their relationships with the managements of Fannie Mae and Freddie Mac while they were still in office. Deciding that discretion to be the better part of valor, both chose not to stay in Washington – Chris Dodd leaving in 2010 and Barney Frank in 2012.

Despite claims from Congress and the Administration that Dodd-Frank, and its off-shoot the Consumer Protection Bureau, has made the world safer, the problem of “banks too big to fail” has made the system riskier. According to Forbes, the five largest U.S. banks control 44% of the industry’s $15.3 trillion in assets, up from 40% in 2007, and less than 10% in 1990. Glass-Steagall, the Act that had separated commercial banks from investment banks in 1933, was repealed in 1999 under the Gramm-Leach-Bliley Act during the Clinton Administration. No effort was made by the FCIC to revive Glass-Steagall, which would have been resisted by banks to whom size matters, but which would have been a sensible means of reducing risk.

In September 2009 Edward DeMarco was named acting director of the Federal Housing Finance Agency (FHFA), which has oversight over FNM and FRE. Mr. DeMarco, a career bureaucrat, assumed his job would be to help reform housing policy. However, when Mr. DeMarco began reining in the two GSEs, which had been bailed out with $188 billion in taxpayer funds in 2008, he ran up against private-sector businesses with vested interests in keeping the agencies viable and with those who in Congress and the White House who believed government’s role in mortgage insurance should persist. Mr. DeMarco left a year ago, and was replaced with the more compliant Mel Watt, a former Democrat Representative from North Carolina. In a speech last November to the American Enterprise Institute, Mr. DeMarco (now a Senior Fellow at the Milken Institute) applauded government’s role in aspects of the mortgage market, but criticized the fact that FNM and FRE had “enriched shareholders and managers, distorted capital markets, inflated house prices and threatened taxpayers.” As he rhetorically asked Mary Kissel in an interview in the Wall Street Journal last July: “Is providing leverage or loosening the underwriting standards to provide credit to households with little down payments and poor track records of managing credit really helping that family, or is it setting that family up for increased risk of failure?”

With Mr. DeMarco’s departure, adult supervision left the FHFA. In December, Fannie Mae and Freddie Mac, instead of being unwound, allowing for private insurance companies to assume risks now borne by taxpayers, announced that they would again promote homeownership. With an implicit guaranty from the U.S. government, they will purchase mortgages even where the down payment is as low as 3%, suggesting a 4% decline in the value of the home will place the borrower underwater. They did set criteria, however: The loans must be fixed rate; the buyers must be first-time buyers, have a FICO score of 620 (which places them in the fourth quintile – a poor credit risk), and the buyer must purchase mortgage insurance.

There is little question that the lessons of 2008 have not been learned, and that is the reason why this episode reminds us of the wisdom of Yogi Berra: “It’s like déjà vu all over again.”

Friday, January 23, 2015

"Fool Me Once..."

                                                                                                                                  Sydney M. Williams

Thought of the Day
“Fool Me Once…”
January 23, 2015

The President was “defiant” wrote the New York Times; “defiantly liberal,” claimed the Financial Times. “It was an ungracious speech,” editorialized the latter. Despite setting a record, since becoming President, for the greatest number of Party-seat losses in the post-War period (14 Senate seats, 69 House seats and 913 seats in state legislatures), the President was unapologetic. With constant usage of the pronoun “I”, and with quoting himself, his ego was on full display.

Mr. Obama urged civility, yet he remained supercilious. When he said, “I have no more campaigns to run,” there was a smattering of Republican applause (allegedly derisive). Mr. Obama immediately rejoined:  “I know, because I won both of them.” This master of fundraising then criticized “constant fundraising.” When will we learn?
The President talks of the need to help the middle class, yet his policies have benefitted the wealthy and have negatively impacted lower and middle income families, especially African-Americans and Hispanics. Keep in mind, Mr. Obama has been President for six years. His Party has controlled the Senate during all those years, and the House for two. The median net worth of upper income families (families of four with median incomes of $132,000) is seven times that of middle income families (families of four with median incomes of $44,000), the widest spread in 30 years. The spread in net worth between the wealthy and the poorest, at seventy times is also the highest in 30 years. During Mr. Obama’s Presidency – from the trough of the recession – to the end of 2013, household net worth has risen just over 30%, according to data from the Federal Reserve, while President Obama’s net worth is up more than 400% – 438% according to International Business Times; more than that, according to Wikipedia. Who has been the winner?

While unemployment has declined, wages have been stagnant and labor force participation remains at the lowest level since the late 1970s. If the labor force participation were at the level it was when he took office, unemployment would be closer to 10 percent. For the first time in thirty-five years American businesses are closing faster than new ones are being created. Yet the President declaimed, off-script: “This is good news, people.” He went on: “The verdict is clear – middle class economies work…and those policies will continue to work as long as politics don’t get in the way.” Is democracy possible without politics? Just who have his policies benefitted? “Fool me once,” the old saying goes, “shame on you. Fool me twice, shame on me.”

The State of the Union has become Hollywoodish. It appeals to special interests. It is designed to generate applause. ‘States of the Union’ have become shout-outs to favored constituencies. They are not about serious policy. Mr. Obama’s speech on Tuesday was no different; though he is a gifted speaker, with unusually good writers. His was a litany of partisan wishes that will not be realized, and he vowed to make use of his veto. The speech had none of the graciousness of George Bush in 2007 when he congratulated Democrats on their victories in 2006.

Nevertheless, the State of the Union is august. It is performed in the well of the House and is heard around the world. It is characterized by pomp and circumstances, yet it symbolizes American democracy. It notes our differences, but shows our unity – that from diverse opinions a single government arose. Mr. Obama is not alone in using this podium to portray partisanship, while claiming to disabuse it. ‘States of the Unions’ have come to express fundamental differences between the Left and the Right. Mr. Obama claims his “Robin Hood” approach demarks the path to equality; those on the Right see it as the “Road to Serfdom.” When one panders to his disciples there is little that is conciliatory, other than the usual sanctimonious pablum of claiming the desire to work with “the other side.” Ideology rantings have replaced policy debates.

Most of what the President proposed had been floated earlier – universal childcare, guaranteed-paid seven days of sick leave, the strengthening of unions, ensuring lower mortgage premiums and higher minimum wages, the complete shutting down of GTMO, normalizing relations with Cuba, raising taxes on capital gains and dividends, sending a man to Mars and lowering the expense of community college to zero. (But the latter would eliminate 529 savings accounts used by twelve million families!) With a bone to unions, he urged Congress to pass legislation that would grant him “trade protection authority to protect American workers.” That I had not heard before. Believers in free trade may not be surprised, but should be fore-warned.

He touched all the hot spots of the Left – man-caused climate change, the excessive use of police force and the rights of gays and transgenders. He advocated for illegal immigrants. As regards Iran, he claimed, “We’ve halted the progress of its nuclear program” – a statement that caused Senator Robert Menendez (D-NJ) to later say the comment sounded “straight out of Tehran.” Nothing was said about the anti-Semitism that is rising in Europe, or of the heroism of the Israelis who are confronted daily with Islamic threats. No hashtags were forthcoming for the thousands of young girls gone missing in Nigeria. No amber lights were flashed about our fiscal fragility, a consequence of recklessly promised government health and retirement benefits. Nothing was said of the importance of family in fighting poverty and crime.

Monumental problems confront the country and the free world. We must navigate the treacherous waters between the Scylla of financial retirement promises to government workers and the Charybdis that higher taxes would have on disincentivizing the private sector. Christianity, like Judaism, is under attack in the Middle East and North Africa. Globally, Islamic terrorism menaces Western civilization, as has been seen recently in Ottawa, Sydney, Paris, Brussels and this past weekend in Israel. A system of de facto Apartheid exists in countries like France, with the failure of Muslims to integrate. Yet, the President refuses to refer to the current bout of terrorism that threatens the West as Islamic based. China is pursuing aggressive policies in the South and East China Seas, home to a third of world trade. Mr. Obama should heed George Orwell: “Sometimes the first duty of intelligent men is the restatement of the obvious.”

Listening to President Obama’s speech, one was reminded of Margeret Heffernan’s admonition in Willful Blindness: Why We Ignore the Obvious: “We could know, and should know, but don’t because it makes us feel better not to know.”

Thursday, January 15, 2015

"The High Price of the Welfare State"

                       Sydney M. Williams

Thought of the Day
“The High Price of the Welfare State”
January 15, 2015

Debt when used for constructive or necessary purposes is a positive. For individuals, equity-producing mortgage payments substitute for rent; student loans (within reason) permit greater earning power. Corporations borrow, as do governments when they invest in infrastructure and R&D. When the United States borrowed to defeat Fascism in the 1940s and Communism in the 1980s, it was money well spent. But borrowing money simply to live better today carries consequences for tomorrow. That is true for an individual, business or government.

The birth of our modern welfare state was made possible because our nation had become rich. Mandated spending, which includes Social Security, Medicare, Medicaid, CHIP, interest expense, etc., represents 60% of the Federal budget, versus 40 % in 1980. For the past few decades, Federal spending has averaged approximately 20.5% of GDP. Revenues depend upon economic conditions, but have averaged about 19% of GDP over the same time. Concomitantly, discretionary spending has declined as a percentage. The largest component of the latter is defense, at 19% of the budget. The defeat of the Soviet Union in the 1980s provided a “peace dividend,” but instead of reducing overall spending it was used to expand welfare. The GAO (Government Accounting Office) estimates that in the next twenty years, if we stay on the current track, mandatory spending will consume more than 100% of government revenues. The price of the welfare state, as presently constituted, means limited options for the American people.

With Islamic Jihadism on the rise, there is little room for defense spending to increase, unless taxes go up or mandatory spending comes down. We could, of course, continue to borrow, but there is a limit to that. Federal debt, for the first time since World War II already equals 100% of annual GDP. Debt has thus far been affordable because of an accommodative Federal Reserve, but that game has limits. Over the near term the Fed can control short rates and influence longer rates, but in the end, money, like any commodity, is priced in the market place. When credit risk is perceived to exist, interest rates move higher. If rates today were at their twenty-year average, interest costs would consume about 12% of the federal budget rather than the 6% they currently do. While inflation is good for debtors (borrowers like to pay back with dollars worth less than those they borrowed), it is bad for creditors. It is also in the interest of the government to talk up the threat of deflation, as that encourages investments in bonds, which keep rates low.

The consequence is that we have fewer options at a time when Islamic extremists have become increasingly bolder. In fact, they have declared war on the West. They did so several years ago, long before the attacks on 9/11, but we either failed to understand what was happening, or simply chose to ignore the seriousness of their intent. Other than a brief flutter following 9/11, the West has played ostrich to their leopard. Appropriations in the Defense budget for Afghanistan and Iraq are still carried under the euphemism, “overseas contingency operations.”

The recent attack in Paris brought clarity – if one was needed! – to the evil that is Jihadist’s intentions. The hacking of CENTCOM’s twitter and YouTube accounts (Why would CENTCOM have twitter and YouTube accounts?) suggests the Islamists are becoming more sophisticated. To President Obama, war against Islamists terrorists is inconvenient because it questions his belief in multiculturalism and it thwarts his goal of “transforming America.” (In my opinion, the reason Mr. Obama did not join the “march for solidarity” in Paris was because it would have meant a tacit acceptance that the enemy are not simply terrorists who misuse the Muslim religion to justify their actions, but are actually Islamists who believe that nonbelievers should be killed.) Like it or not, we are in a war for civilization, and it is likely to last a long time.

Reasons for the West to declare war on Radical Islam were laid out by former Connecticut Senator Joseph Lieberman, in an op-ed in Tuesday’s Wall Street Journal. Theirs, Mr. Lieberman noted, is an ideological war whose aim is the destruction of the liberties that are fundamental to Western civilization – the rule of law, freedom of expression and freedom of religion. President Bush was more realistic about the enemy and more committed to its destruction than has been President Obama, but even he underestimated the Hydra-like ability of al Qaeda to re-appear in different and multiple forms – Islamic Jihad of Yemen, Boko Haram, ISIS, Hamas, Hezbollah, Al-Shabaab among others. We cannot shrink from a showdown with an ideology that is intolerant of tolerance.

The expansion of the welfare state has limited our options in other ways, not just defense. We see it in the crumbling of our infrastructure. Airports, highways, bridges, tunnels and schools are badly in need of repair. It is manifested in polls that suggest America’s best days are behind – that the next generation will not be able to live as well as the current one. We talk about the “greatest generation,” certainly an appellation well deserved, but it ignores those who answered the call of their government and fought the spread of Communism in Korea and Vietnam, and more recently fought Islamic terrorism in Iraq and Afghanistan. Greatness is not confined to just one generation. For two centuries, Americans have risen to face challenges asked of them. America thrives on the spirit of optimism and faith that made that possible. It must endure if the nation is to endure.

As a society, we need safety nets. We need them for those unable to care for themselves. We need them for the aged and the indigent. But compassion without proper funding is a lie, a political lie when the promise emanates from government. Our major entitlements are on a path to bankruptcy, which is unnecessary and wrong. Europe provides a preview. Its more exaggerated social welfare system has resulted in slow economic growth, a bloated bureaucracy, and apartheid-like “no-go” neighborhoods. Compassion should be without sunset provisions. But we must acknowledge that we cannot correct every wrong. We must be immunized against the seductive “Omelas” of Jeremy Bentham’s Utilitarianism, which promotes the concept of the greatest good for the greatest number, but is anti-democratic, as it risks harming or ignoring the endeavors of the few.

There is no easy way. No answer will be perfect. But we should be honest about the impediments of the course we are on. We could let government become an ever larger part of the economy, but that, too, bears a cost; it is, after all, the private sector that allows the economy to grow. The price we pay for the welfare state is unknown, but it is not free, it is high and it is constraining.

Monday, January 12, 2015

"Left versus Right"

                        Sydney M. Williams

Thought of the Day
“Left versus Right”
January 12, 2015

It is in how best to achieve the common goal of lifting the security and well being of all Americans in the most equitable way possible, while preserving the rights enumerated in the Declaration of Independence and embedded in our Constitution, which differentiates the Left from the Right. At their essence, those differences are elemental and clear. The Left wants to use government to give things to people; the Right wants to use government to make it easier for people to fend for themselves. The old Chinese adage about a man and a fish applies.

While you wouldn’t know it from the media and despite the polarization in Washington, the political spectrum in America is less of a barbell and more of a bell curve – a continuum; though we all know that those lumped at opposite ends have recently taken on additional weight. Nevertheless, to argue that only one party is interested in the poor and that the other is only interested in tax cuts for the rich detracts from the fundamental differences between the Left and the Right. Mainstream media, which are largely leftist in their opinions, help perpetuate Democrats’ propaganda that it is the ends not the means that separates the two political parties. If one’s news is limited to sound-bites and political ads, one will find themselves ignorantly drowned in a miasma of disinformation.

The terms “liberal” and “conservative” are misleading; other than to note that the Left tends to be “liberal” with other people’s money, while the Right tends to be “conservative” about values and rules of behavior. But the Right is liberal in the sense they are activists – they want to see individuals become more involved in their own affairs – less dependent on government, if you will; while the Left is conservative in that they would subsume the rights of the individual to the demands of the State and, in the case of public employees, to the dictates of the unions that represent them. Leftists are the one’s holding the hashtag, “Je suis Charlie,” while the Rightists are the ones permitting Ayaan Hirsi Ali to speak at Brandeis. The Right, in this case, is liberal; the Left reflects empathy for a cause that, unfortunately, will probably prove as ephemeral and do as much good as did the hashtag “Bring back our Girls” last spring.

The labels “Democrat” and “Republican,” have become cartoonish. They are definitionally imprecise and carry with them the baggage of mangled interpretations. Jeb Bush and Ted Cruz have about as much in common with one another as do Elizabeth Warren and Joe Manchin. Like a plurality of American voters, I am registered as Unaffiliated.

It is not that the Right does not believe in government; they do. They recognize that government is critical to the needy, the sick and the aged. They know that without government anarchy would prevail. They understand that a primary role of government is to keep its citizens safe; so they believe in a strong military, but subordinate to a civilian President. They believe in the separation of powers and the rule of law: laws written by legislators, implemented by the executive and adjudicated by courts. They believe in reasonable taxation and regulation, but what they hold most dear are the rights provided in the Bill of Rights. As readers of history, they worry about governments – particularly the executive branch – growing too powerful. They are concerned about the cronyism that is a natural outgrowth of business leaders and legislators. And they fret about activist judges who bend the Constitution to fit “modern times.”

The Left takes a more benign view toward government. (Who can forget “The Life of Julia?”) They are more Rousseauian and less Burkean than those on the Right. They emphasize the good government does; they claim government to be an impartial mediator in equalizing opportunities and outcomes. They see corruption more a consequence of a greedy private sector rather than a result of elected legislators trying to feather their nests. Too often, the Left fails to distinguish between legitimate compassion, which is often satisfied with private funds, and the imperiousness of government benevolence expressed as a re-play of the “White Man’s Burden.” Where the Right views government with agnosticism, the Left takes it on faith.

As stated at the start of this essay, most Americans’ politics fall near the midpoint of the spectrum, not on the fringes. Most of us are not extremists in our positions. We want the best education for our children. We want to be secure in our homes. We want our food, water and drugs to be safe; we want factories to adhere to safe practices. We take for granted so much that government does – the roads we drive on, the bridges we cross, the safety of planes, subways and trains we ride. But none of us think as much as we should about the costs. We all – but the Left more than the Right – tend to look upon government as a benevolent uncle who will be there when needed. The Left, more than the Right, seems to feel that funds for government welfare, for example, are inexhaustible. The Left tends not to look upon promises from political candidates in terms of options – that if we provide free community college education to those in need, where will we cut back, or how much more will taxes have to rise?

Despite my (at times) skepticism as to their motivations, I think that the Left actually believes that what they advocate is good for people and society – that redistribution does not foster dependency; that cradle-to-grave government care is to the benefit of the people, despite the risk of discouraging independence and thwarting ambition; that dependency has no long-term side affects. Aristotle, in “Nicomachean Ethics,” warned of the relationship between benefactors and beneficiaries – that benefactors seem to love those they have benefitted more than beneficiaries love their benefactors. It is more perfect to act than be acted upon – to give than be given. Government’s generosity can reflect a haughty view on the part of providers toward the aspirations and abilities of recipients – that those who are helped desire only to be fed and housed by government; that they are incapable of fending for themselves; that they need “big brother” to look after their needs. For this, they believe they should be loved. It is an attitude that is condescending, elitist and wrong.

Misguided policies that assume fairness can be legislated and that equality can be mandated have always resulted in less of both. They foretell less freedom and offer lower living standards for all; such policies lead to a slippery slope, the bottom of which is autocracy. The differences between the Left and the Right are worth pondering – that it is the means, the process if you will, that distinguishes one from the other. The Left is not evil; they are simply unwise.

Thursday, January 8, 2015

Islamophobia - Unfair or Understandable?"

     Sydney M. Williams

Thought of the Day
“Islamophobia – Unfair or Understandable?”
January 8, 2015

In a dozen incidents, four hundred and sixty-eight people died at the hands of Islamic terrorists in the month of December. The list does not include the discovery of a mass grave found in eastern Syria that contained the bodies of 230 tribesmen killed by ISIS. The attacks ranged from 140 killed at the Peshawar school attack in Pakistan, to the two who died in the Sydney, Australia hostage crisis. The scope of Islamic terrorism is global. The attacks in December occurred on every continent except South America and Antarctica. Like it or not, the civilized world is at war with militant Islamist extremists.

While Mr. Obama began his Presidency using euphemisms common to appeasers, he recently has been more circumspect. It has been several months since he has said that Al Qaeda was decimated. He still does not speak about a “war on terror” or even linked the words “terror” and “Islamic.” But there has been nothing recently about “overseas contingency operations.” His refusal to admit that the Fort Hood shooting – the worst Islamic-motivated attack on U.S. soil since 9/11 – was anything more than “workplace violence” remains an outrage to the men and women who were killed that day, to the military as a whole, and as an insult to the intelligence of Americans. It is an outrage because the families of the victims would be eligible for additional benefits if their husbands and fathers had been killed in an attack classified as “terrorist.” On the other hand, Major Malik Hasan remained on the Army’s taxpayer-funded payroll for three and a half years, collecting nearly $300,000, until his conviction in mid 2013. Mr. Obama’s silence on this issue is an insult, as all Americans know the meaning of “Allahu Akbar,” which Major Hasan shouted as he shot his victims.

A phobia is described as an exaggerated, usually inexplicable and illogical fear of a particular object or belief. By that definition no phobia should be welcome in civil societies. Even though Islamic extremists have been attacking western targets for decades, it wasn’t until 9/11 that Islamophobia became a concern. And even then, President Bush continuously reminded the American people that the war on terror was not a war on Muslims. He did so immediately after 9/11 when emotions were running high. Profiling was not allowed by airport screeners. President Obama went further. He traveled to Cairo in late spring 2009 to show solidarity with Muslims. He refused to intercede in Iran’s “Green” revolution in the summer of 2009; thereby condemning to death hundreds of dissidents who demonstrated for freedom. There are those on the Left who keep telling us that Islam is “a religion of peace and tolerance.”  It may be for many if not most Muslims, but the Islamic terrorists who kill invoke their God and shout: Allahu Akbar!

Fanaticism is difficult to combat. Fanatics succeed by having mindless followers. Islamic extremists are fanatics. It is something those of us in the West find difficult to comprehend. Years ago, most Americans when asked willingly – perhaps not enthusiastically – served in the armed forces; but only a few nut jobs would put on a suicide vest. Japanese kamikaze pilots were either drugged or imbued with an extreme sense of patriotism. Nazis, who paraded German streets in the 1930s and early ‘40s, shouting “Heil Hitler,” were intoxicated with the hateful words of their leader. Such attitudes are not normal, but appear too often when emotion overrides reason. Horace famously wrote of the blind willingness to die for God or one’s country: “Dolce et decorum est pro patria mori.” British officers in World War I, emphasizing patriotism, sent hundreds of thousands of young men to their deaths in mad dashes from trenches across no-man’s-land in places like the Somme. The poet Wilfred Owen justifiably disparaged Horace’s word, as: “the old lie.” However, that is our enemy, even when it appears in militant form.

Islamophobia may not meet the standard of traditional civil behavior. In fact, it does not. We should judge people by the individual they are. But, skepticism is healthy and common sense suggests discretion. Unfortunately multiculturalism and political correctness, with their fear of offending, have made us more vulnerable. With Islamists having been responsible for 90% of recent terrorist attacks, is profiling a bad idea? We want the police to be alert. Should we at least not be wary? It is not just “white middle aged men” who have a phobia about Islamists; it is those who witnessed Islamic terrorist attacks in New York, London, Madrid, Sydney, Paris and elsewhere. It is those who understand the determination of militant Islamists. It is school girls in Nigeria, and school children in Pakistan. It is those who saw the Muslim Brotherhood retreat in Egypt when General Sisi ascended to power. So, while Islamophobia may not be fair, it is understandable. Its negative repercussions should not concern us. As a society, we have come a long ways in the past seventy-five years. Imprisoning a few hundred radicalized, battlefield-captured Islamists at Guantanamo, which has been a good thing, is not the same as sending thousands of innocent Japanese-Americans to internment camps, which was a mistake.

There is, among those on the left, a tendency to look upon all acts or terror as a manifestation of mental illness, or the consequence of a dysfunctional family. They superciliously accuse those who are overtly Islamophobic as being racist. The New York Times, in an editorial yesterday on “The Marches in Dresden,” captured that thinking when they wrote about the populist movement PEGIDA, an acronym for a group in Germany, Patriotic Europeans Against the Islamization of the West. They wrote of a “vaguely defined sense among many Europeans that their identities, destinies and livelihoods are being somehow threatened by people of different cultures, religions and color.” Really? Ask the people who work at the French satirical magazine “Charlie Hebdo” if there was anything vague or “somehow” threatening about the Islamists who yesterday shot dead twelve of their staff, while shouting that they were avenging the Prophet Mohammed.

Some 40% of British Muslims recently polled declared they would like to see their country be an Islamic state under Sharia law. That is a frightening revelation. The West cannot want a religion that substitutes theocratic control for political power. The rule of law and the rights of individuals are integral to our way of life. Political leaders, in the U.S. and in Europe, have bent over backwards to accommodate Muslims and have gone to great pains to explain that our fight is not with the religion of Islam. They have little to show for their niceties.

Who, then, is the realist? She who remains alert to potential danger; so therefore is considered Islamophobic, or he who is politically correct, so blithely turns the other cheek? All phobias may be wrong. But when we consider the reign of terror militant Islamic extremists have unleashed on the civilized world, Islamophobia is rational and understandable. 

Monday, January 5, 2015

"Anti-Semitism in Europe"

                    Sydney M. Williams

Thought of the Day
“Anti-Semitism in Europe
January 5, 2015

To paraphrase Jane Austen, it is a truth universally acknowledged that a people in economic straits will search for a scapegoat. With Europe – six years after the financial crisis – still mired in economic difficulties, the rise of extremism is a consequence of that behavior. And there is little question that the fringe that represents extremism is broadening.

Even though a dozen European countries have communist parties, it is telling that when one Googles ‘European extreme political parties,’ the only ones that show up are those on the right. It reflects the media bias, and that those on the left fear only right-wing autocracies. Conservatives, on the other hand, dislike ‘big’ government in any form; thus are concerned about totalitarianism no matter whether it emerges from the right or the left.

It was interesting that Germany’s Chancellor Angela Merkel, in a New Year’s Day speech, denounced Europe’s far-right parties, slamming the organizers of recent anti-Islam protests in Germany. She described them as having “hearts often full of prejudice, and even hate.” Her attack on right-wing populism was echoed by France’s François Hollande and Italy’s retiring president, the 89-year old Giorgio Napolitano. While xenophobia in any form is to be reviled, it is curious that all three ignored the anti-Semitism that has been emerging from, among other places, Europe’s elite (generally Leftist in their political philosophy), but perhaps most frightening, from Muslim communities – the fastest growing segment of Europe’s population. The speeches ignored left-wing populism, which are every bit as ubiquitous and virulent as that from the right. Evil knows no political bounds. If Hitler was Beelzebub, Stalin was Mephistopheles. It would appear that ignoring anti-Semitism is politically acceptable in Europe, while denouncing Islamophobia is politically correct.

Thomas Klau of the European Council on Foreign Relations explains the Left’s concern for the rise in right-wing extremism. He noted that “…as anti-Semitism was a unifying factor for far-right parties in the 1910s, ‘20s and ‘30s, Islamophobia has become the unifying factor in the early decades of the 21st Century.” That statement, as it stands, may be true, but it ignores the critical differences between the behavior of Jews, who have always lived within a country’s cultural norms and who obey its laws, and Islamic extremists who have vowed to destroy the western world’s way of life.

Explanations for this cock-eyed behavior are difficult to comprehend. Christianity, which is under attack in many Muslim nations, had been the most important unifying, cultural component of European society. It is now in decline. Last weekend’s Wall Street Journal detailed the decline in church congregations over the past decade – 200 in England, 200 in Denmark, 515 in Germany. Roman Catholic leaders in the Netherlands predict that two-thirds of their churches will be out of commission in a decade. A similar story is forecast for their Protestant churches. On the other hand, as the author notes, Orthodox Judaism is holding steady, and Islam is growing rapidly.

European political pragmatists recognize that Muslims will be part of their future. They know that the world population of Muslims is more than 100 times that of Jews. These elitists understand that Turkey is a Muslim country, part of which is in Europe, and that the Middle East is a short distance away, as are the countries of North Africa. Immigrants travel reasonably easily between Muslim countries and Europe. European elites know that most Middle Eastern Muslims cannot abide the State of Israel, and have no love for the Jewish people. It is unsurprising that anti-Semitism has reared its head, but it is sad when someone of Ms. Merkel’s background and standing does not condemn the anti-Semitism of the political elite in Brussels, Paris and Berlin with the same passion she rightly castigates prejudice against innocent Muslims.

Hard times beget scapegoats. No one likes to look inward when it comes time to assign blame. Europe remains mired in economic mediocrity. Last month, the European Central Bank (ECB) cut its forecast for growth for 2015 to 1% from 1.6%. The size of government in their economies precludes tacking on much more debt; though it appears that the ECB will do some quantitative easing to artificially keep interest rates low. Austerity does not work, because it has been focused on debt repayment, rather than on tax cuts and regulatory reform needed to stimulate the private economy. The transition toward freer markets will not be easy, but the current path terminates in mutual assured destruction.

Man is a parasitic animal. He relies on others. While we perform our own specialties, be it driving a school bus or running a fortune 500 company, we depend upon others to do their jobs. You make bread; I will make candles. That dependency extends to government. Probably 90% of people take more from government than they give. The benefits extend from the schools our children attend, to the highways we drive on, to the moneys expended on defense; so that we may live freely and without fear. Those who are the most dependent have the least interest to change; the greater their numbers the less is the incentive to change. It is only a small number of high-earning taxpayers who pay in more than they take out. Since everyone’s vote counts the same – as it should – any extrication from this plight will be long…if it can ever be done.

Europe has other problems. Nationalism – a function of xenophobia, economic malaise, along with language, ancient enmities, heritage and culture – remains a core impediment to a unified Europe. Questions remain unanswered and unaddressed, at least in a serious manner. Why have some countries performed better economically than others? Why are some noted for their art, others for their music and still others for their entrepreneurship? Why are some more militaristic? Why did democracy and commerce flourish in England over the past two hundred years, but only come to Germany after devastating losses from two world wars? Why have eastern Europeans more quickly adopted capitalist ways than their better off western neighbors?

Like the fog in Carl Sandburg’s eponymous poem, anti-Semitism “comes on little cat feet.” It is insidious. This was true in 1920s and ‘30s Germany. It is discomforting but livable at the start; only time reveals its viciousness. Leaders in Berlin, Paris, Brussels, London, and throughout Europe must be wary of threats from Islamist extremists. But they must not fall victim to the anti-Semitism which has grown as a consequence of an expanding Muslim population (and the extremism of a few), and of economic difficulties, which are a result of a state trying to manage what is best left to the private sector. Political correctness, no matter its tempting appeals, should play no role in a state, nation or region. The stakes are too high.

Saturday, January 3, 2015

"The Month That Was - December 2014"

                Sydney M. Williams
                                                                                                                            January 3, 2015
The Month That Was
December 2014

In drear-nighted December,
   Too happy, happy tree,
Thy branches ne’er remember
   Their green felicity:
The north cannot undo them
With a sleety whistle through them;
Nor frozen thawings glue them
   From budding at the prime.
                                                                                                                In drear-nighted December
                                                                                                                John Keats (1795 – 1821)

Hope springs eternal, as Keats suggests in this winter poem; for the end of December sees the old year out and January 1st marks the beginning of the new one. However, for all the complaints we have, the situation in the U.S. is not bad. The U.S. economy rebounded in the second and third quarters, after a dismal first quarter. Unemployment is gradually declining and wages are finally rising. Oil prices fell 50% from their June-July highs. The stock market provided a Santa Claus rally to nullify even the most desperate Grinch. In the six days proceeding Christmas, the Dow Jones Averages tacked on 961.34 points, or 5.6 percent! And, Republicans took over the Senate and increased their majorities in the House and in state capitals. While President Obama has not been gelded, he is, at least, on a shorter leash. However, we must remember: past is not prelude.

Apart from markets and the economy, December was busy. Much that happened was reported as negative, but upon consideration and exposure turned out to be of gladder tidings. Some examples: Sony’s decision to not release “The Interview,” because of threats from North Korea, prompted an outcry led by President Obama that Americans are not to be intimidated, particularly by some tin-horn dictator who has kept his people impoverished and ignorant. Sony relented and the movie opened in a couple of hundred theaters and was streamlined into homes, becoming the most popular video on Google Play and You Tube Movies during Christmas week.

The anti-police demonstrations (i.e., “Hands up, don’t shoot”), largely manufactured by professional dissidents like Reverend Al Sharpton, obviously  played a role in the assassination of two New York police officers, and showed Mayor Bill de Blasio, when he blamed the media for his troubles, to be the hypocrite many have long suspected he is. His attempts to become a “friend” of the police have been met with deserved contempt, except by his apologists in the liberal media. They have not caused him to distance himself from Mr. Sharpton, America’s pre-eminent tax dodger who makes his income by stirring cauldrons of hatred. The situation has placed New York City Police Commissioner William Bratton in a difficult spot – fealty to the mayor versus loyalty to the men and women in blue he represents.

The UVA “rape” case, reported by Rolling Stone, turned out to be fraudulent, thereby exposing the fabricator of the charge, and making a mockery of the reporter and the magazine’s editors – another example of the Left forming conclusions before evidence is compiled.

Last October, the World Health Organization’s (WHO) executive director Ian Smith claimed that the Ebola outbreak is “the most severe, acute health emergency in modern times.” He predicted, at the time, that Ebola could reach 10,000 cases a week by the first of December. Instead, the WHO reported 529 cases for that week. After spending the spring downplaying the effects of Ebola, the WHO ramped up its rhetoric. The disease remains serious, though – more than 7,800 people have died – but it does not appear to be the pandemic once feared.

“So,” as Victor Davis Hanson asked in a recent op-ed, “does lying for a supposed good cause bring with it immunity?” It did so for Elizabeth Warren, so why not for others?

No one at this point can predict the consequences of President Obama’s intent to establish normal relations with Cuba. But the timing seems odd, as Cuba’s two patrons – Russia and Venezuela – are under pressure because of lower oil prices. Cuba receives the imprimatur that comes with having diplomatic relations with the U.S. We get nothing, other than the ability to sell goods to an impoverished people. Worse, there is no hint that the people of Cuba will realize any more freedoms. One surmises that more favorable terms to the U.S. could have been negotiated.

Nor can anyone say for sure whether Jeb Bush’s decision to leave his corporate and not-for-profit boards and establish a committee to consider whether he should run for President will, in fact, result in his doing so, or cause him to make an early exit. (Personally, I hope he doesn’t run. I think he is a good man and qualified, but I don’t believe America should be about dynasties, whether the name is Kennedy, Clinton or Bush.)

The loss of Air Asia flight 8501 on December 26 into the Java Sea, killing all 162 aboard, recalled the still missing Malaysian Air flight 390, which disappeared on March 8 somewhere in the South Indian Ocean. It also brought back memories of Malaysian Air flight 17, shot down by Russian-trained Ukrainian partisans on July 17.

Elsewhere around the world, the Russian Ruble continued its descent toward Earth. It has lost about 45% of its value since last summer – a consequence of falling oil prices, the imposition of sanctions and an economy on life support. (The Ruble lost ten percent during two days in December!) Japanese Prime Minister Shinzō Abe was re-elected in a specially-called election. The Shanghai Index was up 20% in the month of December. The Nobel Peace Prize Committee finally got it right when they split the reward between Malala Yousafzai of Pakistan and Kailash Satyarthi of India. The Palestinians, still dominated by the terrorist organization Hamas, have said they will go to the UN to get satisfaction they claim they are not getting from the US.

Peace, however, was far from the minds of the Islamic terrorist organization Boko Haram, which kidnapped another two hundred girls and promptly killed thirty of them. When will western governments realize the wisdom of Gertrude Stein, when she wrote, in “Sacred Emily,” “a rose is a rose is a rose?” Islamic terrorism, by whatever name one calls it – Al Qaeda, ISIS, Boko Haram, Hamas, Hezbollah, the Taliban (the UN lists over one hundred such organizations) – is Islamic terrorism. They are not going away. The Pakistan branch of the Taliban killed 132 children in a military school in Peshawar and a “loan wolf” Islamist left three dead in Sydney, Australia.

Back at home, Diane Feinstein released her politically motivated “torture” report, which maligns the people who put their lives on the line that we may live safely. The partisan report diminishes the reputation Ms. Feinstein earned over twenty-two years in the U.S. Senate. Gas prices, which have been, ironically, in decline since the summer driving season, fell another ten cents in December. Republicans picked up one more Senate seat when Bill Cassidy defeated incumbent Mary Landrieu in Louisiana’s runoff election. Jonathon Gruber appeared before Congress and proved to be the sanctimonious jerk that videos showed him to be. His former political allies scattered like horses from a rattlesnake. Stupid is as stupid speaks.

The U.S. domestic economy continues to gain strength, with GDP rising 5.0% for the third quarter, following a 4.6% gain in the second quarter. Domestic employment continues to gain, though total employment, minus Texas, is below where it was when the recession began. But November data showed wages finally beginning to rise. The Financial Times reported that global merger activity rose to $3.3 trillion – pre-crisis levels. The Dow Jones traded over 18,000 for four days near month’s end, but closed under that level. Stocks were essentially flat for the month, but the S&P 500 was up 11.4% for the year. When dividends are included, the total return for the year bested long term annual returns by about 700 basis points. The VIX, a measure of volatility, rose 44% during the month. The Dollar was up 2.0% for the month against a basket of currencies, and up 12.5% for the year. Versus a basket of currencies, the Dollar is now above where it was in February 2009. Despite strong equity markets, spreads between High-yield bonds and investment-grade corporates, along with spreads between investment-grade corporates and the Ten-year, are at their highest level in two years. With “risk on,” the yield on the Ten-year Treasury declined another five basis points in December.

Like all months, December had its share of oddities: A guy jumped the White House fence and made it inside before he was nabbed. A Naked man was photographed on a New York subway. A Stuyvesant High School student was reported by a gullible reporter as having made $73 million trading stocks. The state of Montana instituted a dress code for legislators. Bill Cosby, once an American icon, was accused of sexually molesting dozens of women. And hunters in the suburban state of New Jersey killed 267 black bears during the six-day hunting season ending December 13th! America is still America.

Like most, I welcome the New Year – of course, we have no choice – and pray that common sense will come to Washington and peace to the World. I have, though, little expectation of either. When they are not doing harm, which unfortunately is most of the time, politicians at least provide a constant source of sick humor. As for the World, Cyber attacks may well be the new threat. North Korea was accused of hacking Sony. There is a strong possibility that it was the U.S., in retaliation, that shut down North Korea’s internet for ten hours.

Our daily lives – everything from the food we buy, the banking we do, to the energy we consume to power our cars and heat and cool our homes – depend upon the sanctity of computers. We are dependent on microchips and on the ability for our banks, electric grids and military to have impenetrable security systems. None, however, seem totally immune. It won’t necessarily take a plane used as a weapon, or a dirty bomb, to bring our civilization down. It could be done by a hacker working in Pyongyang, Tehran, Beijing, Moscow, Havana, or even a disgruntled American operating from anywhere. It is sobering to be so vulnerable.