Insanity of higher CAFE standards

Here we are again, faced with another cramdown policy by the misguided but ever hard-charging President Obama . This time it’s raising fuel-economy standards. Instead of waiting until 2020 to increase the standards, now the President is saying 2016. I think he really wants all the car companies to go out of business. Now before you criticize me by saying I’m not a friend of the environment, let me say that I am a conservationist but at the same time I’m not in the business of making decisions rooted in untruth. Let’s take a look at what previous fuel standards have accomplished. Since 1975 we have had fuel efficiency standards, but they have done little to help reduce carbon emissions. In his book Spin Free Economics, Narmin Behravesh demonstrates the inefficiency of these standards. Here is an excerpt from his book:

“To begin with, they (fuel efficiency standards) don’t necessarily reduce total fuel consumption. In fact, more fuel efficient cars can, perversely, encourage more driving. Similarly, while the mpg per ton of cars has improved about 20 percent in the United States in the last two decades, average car weight has risen ( heavier vans and SUBs now account for half of all light-vehicle sales, compared with 20 percent in the 1980’s), so the mpg per vehicle has actually fallen about 10 percent.”

Wait a minute here; is Behravesh saying that fuel efficiency has decreased? That is exactly what he is saying. Is not the definition of insanity, doing the same thing over and over and expecting different results? So if the goal is to decrease carbon emissions would it not make sense to do something different instead of the same thing over and over?

I’m not writing to propose an alternative to the fuel standards, but to show the ineptness of the government’s policy. But perhaps a solution to not only this problem but many others would be that of a consumption tax. Talk about fairness, this eliminates the IRS and you only pay for what you use. But I digress. The point is, insanity is not good policy.

Is this the best we can do?

Much is being made of the Dick Cheney vs. Barack Obama "debate" now going on in the media over national security. The Wall Street Journal has it on the front page today, after Cheney and Obama gave dueling speeches yesterday -- Obama from the rotunda of the National Archives and Cheney from the American Enterprise Institute. As has been his consistent message, Obama again reiterated his view that the Bush administration had "gone off course" in using enhanced interrogation techniques and off-shore prisons, saying that he is seeking to restore "the power of our most fundamental values". The former Vice President, meanwhile is having none of it. Calling the Bush policies "legal, essential, justified, successful and the right thing to do", he again took on the administration's critics by pointing out that "After the most lethal and devastating terrorist attack ever, seven and a half years without a repeat is not a record to be rebuked or scorned, much less criminalized. It is a record to be continued until the danger has passed."

This is an exceedingly vital debate. President Obama has made decisions on the basis of politics that I believe are putting our nation at risk. He caved to the left in precipitously deciding to close Guantanamo without any alternative plan; now it turns out that many of the most hated Bush policies -- using military tribunals and indefinite detention -- will continue. Why? Because more than half of the remaining Guantanamo detainees are too dangerous to try in court or to release back into the civilized world. But where will they go once Guantanamo is closed? No one has a clue, because nobody in Congress wants these lethal prisoners in their backyard. In the halls of Congress, NIMBY is the rule -- unless, of course, it's pork.

The problem for those who think that Obama is on a dangerous path, however, is that it is Dick Cheney leading the charge. Where is the spokesperson for the opposition to this president who isn't past his prime and considered a cross between an "angry white man" and Darth Vader?

We know, of course, that John McCain -- the Republican candidate for president just a short 6 months ago who got more than 44 million votes in the election -- is of little help on this issue, having campaigned himself against enhanced interrogation and for the closing of Guantanamo. So he's been -- by necessity and by temperament -- silent in this debate. But where are the others? Are there any conservatives who have a future (as opposed to a past) in politics willing and able to stand up and say to the nation what it already suspects? That Obama's inexperience and desire to "make everyone happy" is putting us at risk? That his world view -- and thus his emerging foreign policy -- is dangerously naive?

You have to give Obama credit -- he certainly likes to talk as if he is reasoned and balanced in his approach, that he has command of the vital issues that face us as a nation. He is nothing if not outwardly confident. But this president doesn't deal well with specifics and facts. He's long relied on soaring rhetoric that sounds great but says nothing. Like many liberals, he makes statements of opinion as if they are fact, saying it in such a way that it seems beyond dispute -- but offering no evidence to back it up. As the WSJ recounts in its lead editorial today: The President went out of his way to insist that its existence "likely created more terrorists around the world than it ever detained," albeit without offering any evidence, and that it "has weakened American security," again based only on assertion. What is a plain fact is that in the seven-plus years that Gitmo has been in operation the American homeland has not been attacked.

It is also a plain fact -- and one the President acknowledged -- that many of the detainees previously released, often under intense pressure from Mr. Obama's anti-antiterror allies, have returned to careers as Taliban commanders and al Qaeda "emirs." The New York Times reported yesterday on an undisclosed Pentagon report that no fewer than one in seven detainees released from Gitmo have returned to jihad.

Mr. Obama called all of this a "mess" that he had inherited, but in truth the mess is of his own haphazard design. He's the one who announced the end of Guantanamo without any plan for what to do with, or where to put, KSM and other killers. Now he's found that his erstwhile allies in Congress and Europe want nothing to do with them. Tell us again why Gitmo should be closed?

President Obama is making things up out of whole cloth and peddling them as fact; he is tremendously vulnerable on these issues, because what he says doesn't pass the simple smell test. Why is it Dick Cheney -- a man whose career is over -- shooting the arrows at the president and his party over this?

Is this really the best we can do?

Presidential hectoring hurts economy

When Richard Nixon was in the process of damaging the American economy back in 1971 via wage and price controls, closing the gold window, etc., he used aggressive rhetoric to support his actions. I remember specifically his demonizing of financial "speculators". He virtually spat the word: Speculators! The epitome of evil, right? This week Obama was doing much the same thing to hedge fund managers and others, bullying them, calling for them to sacrifice, implying that they are unpatriotic, giving them the full load of overbearing denunciation. As if he had any clue what he was talking about.

Well, it turned out that the "speculators" were right and Nixon was wrong. And today, for the most part, the financial managers are right and Obama is wrong. When it comes to the economy, regardless of political party, the rule is: The politicians are always wrong. Regarding the economy, government has a reverse Midas touch: everything it touches turns to c**p. In recent years Congress touched the housing market via subprime loans, and we are now living with the result. Now the government is aggressively touching the financial markets in general, and the auto industry in particular. The results are predictable.

Republican leaders today, including the establishment wing of leaders on their "listening tour", tell us that the GOP must offer an affirmative alternative to Obama's massive taxing, spending and borrowing policies. They can't combat something with nothing, they say.

Wrong, wrong, wrong. The correct approach is to educate the voters to the truth, rather than to compete with Democrats in pandering to their ignorance. The truth is that the free market, if allowed to operate, will ruthlessly correct the financial imbalances more quickly and more thoroughly than any government programs will. Government interference will just prolong the disease and the pain, and will mess up the economy for years. That's what FDR did in the 1930's, and that's what Obama is doing now.

Government has a legitimate role in enforcing contracts and in prosecuting fraud, insider trading, and other criminal activity, and in enabling a level playing field. But politicians have no ability to manage anything at all. When government attempts to override the market and to manage the economy on a large scale, the resulting economic system is called fascism. I recommend reading all about this in Jonah Goldberg's recent book, "Liberal Fascism".

Here are two informative rebuttals to Obama's hectoring of financial managers and his damaging actions in the financial markets. There's this one by Bill Frezza at Real Clear Markets. And this one by Cliff Asness at Business Insider.

If economics bores you or you think you can't understand it, please give these two articles a shot. The authors make the issues quite clear.

Upside of economic woes

Every morning when pouring my cereal and opening up my newspaper, or rather, my web browser, my mood is shattered by the doom and gloom of the American economic system. Just a few months ago hope and change reigned supreme. Not so much these days. It looks like housing meltdowns, credit crises, and our patriotic duty to spend willy-nilly have put a little bump on the yellow-brick road to prosperity. Let’s not drown ourselves in our bowl of generic, shredded wheat just yet though. We might actually get some of that sought after change— but don’t call it a comeback. It won’t be the type of change Presidential campaigns are won and lost on. It will be the kind of change you find under your couch cushions. Maybe it is just that the Bank of America “Keep the Change” savings marketing campaign is working, or more realistically, that the American people have been scared into saving. Because in the face of all chaos happening to the financial markets, layoffs, and pay cuts, Americans are actually saving more. In fact today, the Personal Savings Rate is the highest it has been in 14 years.

Call me old fashioned, but saving money seems like the best way to deal with stagnant credit markets and irresponsible financial institutions. I know, it is trendy, and “new school” to be pro bailout; pro spending; and pro borrowing (so that you are able to spend more), but I’m an old school kind of guy.

Here are a few simple things to consider. If the savings deposits in banks are higher, banks have more money to invest and loan out. And if banks, on average, are loaning to people with bigger savings accounts than they were previously, they must generally be in a safer position. But this must be too simple to be true. After all, both former President Bush and current President Obama would disagree with such analysis. After 9/11 Bush told the American people the best thing they could do to help their country was to go shopping! And Obama’s priority has been to get the credit markets back on track as quickly as possible! What is the underlying message from both the former and sitting Commander-in-Chief? Spend now, spend more, spend again (and again)! And we thought that Democrats and Republicans couldn’t agree on anything.

From our political leaders to our next door neighbors, we are proud to be a credit card nation. That is to say, not only are we addicted to spending, but if Americans aren’t spending, the whole world feels it. As we’ve recently found out, spending at unsustainable levels and living far beyond our means causes a few problems. And now that the credit fairy has run out of gold pixie dust—and we can’t take a 2nd mortgage on our houses or get an equity line of credit—we have to cut back on our $8 cups of coffee, our designer sunglasses, and our favorite restaurants.

Talking about savings isn’t very sexy, but it is essential to economic recovery and personal financial well being. China, a chief foreign investor in the United States, has cited the relative low savings levels of Americans coupled with our excessive spending habit as dangerous to long-term sustainability. That’s right. China is tutoring us in fiscal discipline. And it should be common knowledge by now that Americans are near the bottom of the list in personal savings levels compared to other developed nations. Bailouts and policies making it much easier to get credit look good at first glance; but it seems like what we are really talking about is giving the American people two new rights: the right to spend unabashedly, and the right to maintain an inflated, unaffordable quality of life. Not to mention the right of financial institutions to make poor decisions and still live to loan another day.

Our spend-a-lot policies are sending a clear message to our children, our adults, and our major companies: “spend as much as you want, and if you run out, don’t worry, the government has got you covered.”

Washingtonian wisdom these days seems to be that we are going to spend our way out of these dark economic times—but in actuality we are once again using credit cards. Don’t worry though, congress and the Administration won’t have to pay back these loans, our prosperous future generations will. As if economic growth and prosperity is guaranteed ad infinitum. But what do I know about all of this murky, economic mumbo jumbo? I am just a twenty-something year old kid. While I don’t know much, I am sure about one thing: my friends and I will be the people paying off this debt. So we had better save up now.

If the economic rollercoaster is causing Americans to save more, I say bring it on! Savings must become part of the plan to overhaul out-of-control government expenditures and excessive personal spending—so that we can actually protect the potential for prosperity of our next generation. We need to reopen a policy debate about effective and responsible savings policies that help ensure economic stability and opportunity for American people today and tomorrow.

And best of all, when you save for yourself, you get to keep the change.

Brian Calle is the President of the Young Executives of America (YEA), a member of Gen-Next, a Fellow at the Claremont Institute, and a Distinguished Speaker and the Milton Friedman Foundation School Choice Speakers Bureau.

Too cute by half

George W. Bush had his share of flaws as president, but one of his abiding strengths was his clarity on the most important issues of the day. He was never a good communicator, but you always knew where he stood. He was resolute on protecting America and was willing to put his popularity in the cross hairs of his opponents to do so. He opposed stem-cell research because he is pro-life, and was adamant against the use of tax-payer monies to fund abortions. The Bush clarity was maddening to the left, but was a source of comfort for many in the country who knew that they didn't have to guess on a daily basis where the president stood. Contrast that with Barack Obama, and you are struck by the difference. As during the campaign, Obama still seeks to be all things to all people, trying to split the middle in lawyer-like fashion in order to make everyone happy. His statements on many issues have been muddled and confused, because he is apparently interested in being able to argue both sides with equal conviction. It makes for a fine lawyer. But does it make for a good president?

Daniel Henninger has an interesting take on it today in an opinion piece entitled "Harry, I have a gift". Here's an excerpt:

Early in the campaign, in January 2007, a New York Times reporter wrote a story about Mr. Obama's time as president of the Harvard Law Review. It was there, the reporter noted, "he first became a political sensation."

Here's why: "Mr. Obama cast himself as an eager listener, sometimes giving warring classmates the impression that he agreed with all of them at once." Also: "People had a way of hearing what they wanted in Mr. Obama's words."

Harvard Law Prof. Charles Ogletree told how Mr. Obama spoke on one contentious issue at the law school, and each side thought he was endorsing their view. Mr. Ogletree said: "Everyone was nodding, Oh, he agrees with me."

The reason I have never forgotten this article is its last sentence, in which Al Gore's former chief of staff Ron Klain, also of Harvard Law, reflects on the Obama sensation: "The interesting caveat is that is a style of leadership more effective running a law review than running a country."

Senate Majority Leader Harry Reid, in a book out next week, tells of congratulating freshman Sen. Obama on a phenomenal speech. Without a hint of conceit, Mr. Obama replied, "Harry, I have a gift."

He does. We know from tradition, though, that when the gods bestow magic on mortals, the gift can also imperil its possessor. The first hint of potential peril in Mr. Obama's gift arrived last week with the confusion over where the president stood on the terrorist interrogation memos and prosecution of former Bush officials. Here, as 19 years ago, many on both sides of a contentious issue who heard him speak thought Mr. Obama agreed with them.

Henninger goes on to discuss the confusion over the interrogation memos and the potential prosecutions of the memo-writers, when Rahm Emanuel said decisively "no" to prosecutions and the President said "well, maybe". The President was, as is his want, trying to give grist to the left in his public statement, while his staff later took great pains to clarify that he "wants to move on" from this chapter and isn't really interested in a prolonged "witch hunt", etc. It was splitting the difference in a way that Obama likes -- saying enough to appease his base but not so much that he can be pinned down to any clear position. It's Obama's way to use his "gift" to obfuscate and confuse, to distract people from his real intentions. He did it brilliantly during his campaign, where he appeared to be a moderate post-partisan politician who wanted to "change" Washington. The reality as we now know is quite different: a highly partisan pol who doesn't seem strong enough to stand up to the most partisan groups in the Democratic Party.

There is a very real danger when the gift for gab become a substitute for clear thought and concise communication. Perhaps the president's teleprompter has too much sway in this administration, taking the president on verbal forays that are too cute by half. It is bad enough when it confuses the American public. It is worse when it confuses our enemies into believing that we are weak and willing to compromise on even the most vital of national security issues.

I'd take clarity over the gift, any day.