Is the US about to experience a minor revolution?

Janet Daley in the Sunday Telegraph thinks the mid-term elections might just mean that.

"It was widely known in Europe that the American Left hated George Bush (and even more, Dick Cheney) because of his military adventurism. What was less understood was that the Right disliked him almost as much for selling the pass over government spending, bailing out the banks, and failing to keep faith with the fundamental Republican principle of containing the power of central government. So the Republicans are, if anything, as much in revolt against the establishment within their own party as they are against the Democrats. " 

The sheer simple ignorance of many to think this is simply another swing away from the Democrats to the Republicans.  It is something rather different..

 
"One of the more electorally far-reaching effects of this is that Republicanism could become the home once again of a plausible political and economic programme, rather than simply an outpost for those who seem to reject many of the features of modern life. The gun-toters and gay-bashers and pro-lifers may have jumped aboard the bandwagon, and Sarah Palin may be frantically attaching herself to the parade, but this is not their show: the Tea Party protests began (as their name suggests) as a campaign against high taxation and the illegitimate intrusiveness of federal powers. That is what they are still about"

Quite right.  It is not something to fear, it will not match either Bush era, and could be far more useful than the Reagan Administration in shrinking the state.

Obama doesn't know what to do with it.  So he is playing the game of saying it is a repeat of the Bush years on offer.  He is so wrong.  The Tea Party is not about more government, it is about less.  It isn't about trusting politicians to effect change, but about getting politicians out of the way.  The problem Obama has (and most Democrats) is that this simply does not compute - their brains don't understand that they are the problem, their politics and their solutions are not what is wanted.   That what people want is government to stop picking winners, stop supporting losers, to stop increasing the Federal debt and to pay less tax.  They actually do believe people should reap the rewards of their efforts, and bear the consequences of their losses, and that people are inherently benevolent and will look after each other without the state.

If Obama faces both the House and the Senate, controlled by individuals who believe this, then his philosophy will face complete gridlock.   The big question that will remain is who can the Republicans pick to stand for the Presidency?

The left panic over the Tea Party

Daniel Hannan once again writes brilliantly in the Daily Telegraph summarising much of the media coverage of the Tea Party in the past year or so.   It went through the phases of:

- Ignoring the Tea Party as irrelevant;

- Smearing Tea Party members as uneducated redneck country hicks (don't ever say those on the left are liberal and treat everyone as equal);

- Laughing at how the Tea Party was going to make the Republicans extremist and unelectable; and now

- Warning that Tea Party members are stupid and are being conned by a "big corporation" (successful large businesses are evil) conspiracy to take over and run their lives.

He points out at today's Guardian article by leftwing armageddonist George Monbiot (remember him? The same man who preached self immolation saying "It is a campaign not for abundance but for austerity. It is a campaign not for more freedom but for less. Strangest of all, it is a campaign not just against other people, but against ourselves") who says the Tea Party is an exercise in "false consciousness".

Really George?  Yes, believe it or not, he believes that specific billionaires and major companies are driving the agenda, which includes "big government", and duping millions of Americans in the process.  Such stupid little people, don't know when they are being conned.  Good job there is an elite in the media and academia, as well as well intentioned and incorruptible leftwing politicians to look after their interests.

Quite why "billionaires and big business", which has been spending money on politics for a very long time is now suddenly being successful isn't clear, except that Monbiot treats the language of free markets, small government and fiscal austerity as being "the same" as what the Bush Administration and previous Republican Administrations did.   All of which is demonstrably false.

Monbiot's demon is that businesses seek to make money at the expense of their customers, employees and the places they locate.   That businesses destroy and that their wealth creation is a zero sum game, which also involves destruction and theft from others.  It is the scapegoat that Monbiot applies to the world, and so he links the corrupt and statist actions of some businesses (which continue in the form of constant pleadings for subsidies and protectionism by some), to the agenda of the Tea Party, and does so by dismissing freedom, free markets and less government as taking from the poor, and about power moving from government ("good") to companies ("bad).   

The implication goes further than that, as Hannan explains, because it embraces the idea that democracy is fundamentally flawed.  That the average person doesn't know what is good for them, and so votes against her interests because of "false consciousness".  This is where the term "Democratic People's Republic" has relevance.

The core philosophical basis for all of the Marxist-Leninist totalitarian dictatorships of the 20th century (and the few that remain) is that the interests of the people are served only by a single political party that ostensibly represents their interests and acts on their behalf.  That party is an expression of the "general will", and so any who go against the party are acting not only against the interests of the "people" and "society", but themselves.  This is why many in those regimes were treated, not as political prisoners, but psychiatric patients.   It was literally considered insane to go against a party that had everyone's best interests at heart.  In an environment where truth was manufactured and controlled (because of the risk that inconvenient truths would empower those who wish to exploit and manipulate the people, and so be against their interests), it turned everything upside down.

This is what Monbiot is claiming from the Tea Party, that millions of "ordinary people" (unlike he, who knows best) are being fooled and tricked against their best interests by evil people whose only intent is not to do what they say, but to use government to enrich themselves.  

Quite what he would want to do about it, when Tea Party members themselves agree with the objectives of the Tea Party, when they want fiscal responsibility, free markets and less government, and vote accordingly, is unclear.   

Following on from that, worshippers of big government, ever increasing public debt and higher taxes have formed the "Coffee Party" as a lame attempt to raise support for their side.  One only needs to read that the Coffee Party believes "that the federal government is not the enemy of the people, but the expression of our collective will" to notice that the connections between the Coffee Party's philosophy and that of Marxism are rather clear.  There is, of course, no such thing as a collective brain, and so what this really means is not that millions of people's wills are expressed through government (in fact the free market), but that a few hundred politicians vote for the policies they espouse and bind everyone else in the process.   If a majority want to take more money from a minority, or give more of someone else's money to a minority, or regulate a minority, then they can.  Without constitutional limits on this to protect fundamental individual rights, the risks are clear that government can become a tyranny of the majority.   

Clearly those who embrace tax and bigger government are panicking.  Panicking that their self-deluded belief that things can only get better if only they could spend other people's money where it would "do good", prohibit things that are "bad" and promote things that are "good", is no longer being supported.  Panicking that a lot of Americans are seeing the Federal deficit and debt and asking the reasonable question "when does this have to be paid, who pays it".

Panicking that Americans don't want corporate bailouts, don't want politicians using the government to pay minority interests other people's money, and that they actually truly do believe that the free market offers the best opportunities for economic growth, prosperity and the right to live one's life as one sees fit.

Why Obama's health reforms are quite wrong

If you simply read and listen to many in the mainstream media talk about this story, you might ask whether any of them bothered to critically review the legislation passed by the Congress and signed by Obama on healthcare.

In the simple, binary world of so many the impression is given that health care in the US is a "privately owned fully commercial free market system where people are left to die on the streets unable to pay for ambulances or lying in hospitals not being treated because they can't pay".

This is a bold faced lie on multiple levels. How many say that half of all US healthcare is funded by government through Medicare and Medicaid, which provide healthcare for the elderly and poor families respectively? How many say that the budget for Medicare is 20% of the federal budget, with Medicaid being half that again?

How many say that the health market in the US is heavily regulated, with hospitals required to treat accident and emergency patients regardless of ability of pay? How many say that some states restrict the market to protect some health providers, so there isn't free and open competition across the country? How many talk about the burden that precedents to allow ridiculous tort law claims imposes upon the health sector? (In the last case the Republicans do, because high profile Democrats include tort lawyers).

The failure in the US is not about universality. As Libertarianz Leader Dr. Richard McGrath (himself a health professional) states:

"When the figure touted was 47 million uninsured, the breakdown was like this:

18 million earned over $50k (half of this group earn over $75k) and chose not to insure themselves;
13 million were illegal aliens;
8 million were under age 18 and had public cover available if poor;
leaving 8 million uninsured (3% of the population), many of whom were 18-20 year olds at low risk of medical problems."

So the REAL figure of those without insurance is far less than is bandied about by the press. The big issue in the US is cost, and the biggest source of cost inflation has been the public sector. Who says that? The Congressional Budget Office notes:

"total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and 19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary"

In other words, the GOVERNMENT side of US healthcare (which is largely ignored) is growing exponentially. The legislation signed by Obama doesn't touch this at all.

The Cato Institute solution is wiser. Its proposals are:
- Eliminate tax incentives for employer bought health insurance and apply them to individually bought health insurance. This means people have a vested interest in buying health insurance that meets their needs, and puts pressure on such insurance to not provide excessive cover;
- Eliminate restrictions that prohibit people buying health insurance from providers in other states, this is an unnecessary restriction on competition;
- Eliminate state specified minimum requirements for health insurance that in some cases include cover for procedures many would not wish (e.g. in vitro fertilisation) (indeed allowing interstate competition would produce strong incentives on states to do this);
- Licensing and regulation of what medical practitioners can do, and standards for licensing should be shifted towards industry driven accredited standards.

For example, it makes sense to be able to insure against accident or disease that is not predictable. Not to insure against self injury, or the consequences of heavy drug or alcohol consumption. No bigger incentive towards healthier lifestyles would exist than for people to notice that if they smoked, they might not get any health cover for respiratory diseases.

The Obama health reforms tinker with health insurance to make it compulsory for everyone to have health insurance, and to subsidise those who can't afford it. It does not address the cost escalation in the heavily regulated market, but especially does not address cost escalation in the US's own socialised health care - Medicaid and Medicare.

Expect future years to have healthcare remain a major issue in the US, because Obama is, for now, printing money and borrowing it, to pay for his grand plans. Living for now, letting future generations bear the cost - a curious metaphor for how so many of those living at the bottom treat their own lives.

Oh and while you consider that, it is worth noting that both the UK and New Zealand are rare among developed countries in not having an insurance based model for healthcare. The result of that is a continued growth in concern about significant groups of people who live unhealthy lifestyles, and a desire to tell them what to do in order that governments ration spending on diseases of lifestyle.

A better approach is for people to pay themselves, buy insurance and face higher premiums or the inability to get insurance because no one will sell it to them if they are eating, drinking, smoking and idling themselves into chronic conditions.

However, socialists prefer to treat such people as children, and for you to pay when they don't listen.

Democrats don't understand the Tea Party

Now I've seen it all, arch statist in the US Congress, Nancy Pelosi is claiming to share some of the views of the "Tea Partiers".

"that's why I've fought the special interest, whether it's on energy, whether it's on health insurance, whether it's on pharmaceuticals and the rest" she said according to the Daily Telegraph

So apparently it IS having an impact, when a party which has made the careers of hundreds of vested interest supporting, pro-protectionist, pro-subsidy, pro-government intervention politicians thinks it has to listen. In fact, the Democrats have such a disgusting filthy tradition of corrupting politics in the US that they deserve nothing but contempt, and of course many Republicans are little different.

So much which is great about the United States has been corrupted by the relentless growth of government, fueled in part by the ambitions of the vile little thieves in both houses of congress, constantly demanding other people's money for their pet projects, pet industries and pet lobbyists, and demanding protection and regulation to mollycoddle industries, unions, government agencies and the like.

Nancy Pelosi has always been part of the problem, opposing moves towards balanced budgets, supporting the endless expansion of Medicare and Medicaid and the welfare state.

What's important is that the Tea Party movement has struck a chord, with millions who are sick of politicians thinking they are spending their money, and thinking they can keep doing it.

What it lacks is a single individual to rally behind politically and to take the message consistently forward.

US turns back on UK over Falklands

The Falkland Islands have a mixed history of differing claims to sovereignty. The French first established a colony there in 1764, the British established one on another part of the islands in 1765. France and Spain were in Alliance, so France handed over its colony to Spain in 1767. This effectively put it under the same colonial administration as Argentina.

Spain attacked the British colony bringing the two countries on the brink of war, which was settled by Spain capitulating and letting the British settlement be re-established. However, Britain abandoned the Falklands in 1776 leaving it all to Spain (although also leaving a plaque asserting British sovereignty). Spain similarly abandoned the islands in 1811, also leaving a plaque. From this point on for some years, the Falklands ended up being under no effective control, but being a harbour for various fishing, whaling and other vessels.

Argentina gained independence in 1816, and in 1820 had sailed to the islands and asserted sovereignty over them. Between then and 1833, merchant Luis Vernet sought permission to settle there from both the Argentines and the British. He received assurances, and the Argentines appointed him Governor in 1829, to British (and US) protest. However, by 1833 Britain had re-established itself on the islands and ordered the Argentines to leave, which they did. A British colony was established and has remained relatively undisturbed, notwithstanding the more recent Falklands War.

Argentina claims it was first, as it inherited the French then Spanish settlements, and was forcibly ejected from the Falklands. The UK claims that it has a parallel claim, that the Spanish abandoned the Falklands (like the British did), and there was no indigenous or Spanish/Argentine colony established before the British colony. Moreover most of the current population opposes Argentine sovereignty.

In essence, for all of the debate the population of the Falklands do not want to be governed from Buenos Aires. Arising from this are claims to exploit the Exclusive Economic Zone around the Falklands for energy exploration. The beleagured Argentine government is seeking to distract attention from its own economic mismanagement by confronting the UK over this.

The Obama Administration's response? Neutrality.

According to the Times ""The Obama Administration “is trying to split the difference as much as it can because it knows that coming round to the British position would again create a lot of ill will in the region"

The leftwing Argentine government, beleagured by high inflation, is challenging British attempts to take advantage of the UK EEZ as it surrounds the Falklands.

Argentina's claim will no doubt have the backing of the cabal of socialists that now run many Latin American countries, none of whom give a damn that most Falkland Islanders want to remain British.

The bigger point is that the "special relationship" is over. The Obama Administration is reverting to the form REJECTED by Ronald Reagan, the realpolitik preferred by the State Department.

Who will know if John McCain would have done the same, would George Bush have just thumbed his nose at Britain given its close support in Afghanistan and Iraq?

One thing IS sure, from the DVD set gifted to Gordon Brown to this, there can be no question that the Obama Administration doesn't think the UK deserves consideration beyond that of just another friendly country - like Argentina, France or South Africa.

Did China test Obama?

The recent typical furore about US sales of weapons to Taiwan should have been par for the course, but this time it provoked a particularly angry threat of outrage from Beijing.

Why?

Well for starters China sees itself as bigger, more powerful and more important on the international stage than it has ever been. Having eclipsed Japan as the world's second biggest economy, it now is flexing its power more openly. In part this is due to domestic nationalism, as can be seen by the large numbers of Chinese online willing to defend their authoritarian government, not out of love for the government per se, but out of nationalism. China is, after all, a country of considerable national chauvinism.

However, China also knows the nature of US-Chinese relations since the Taiwan Relations Act in 1979 in the US made it national policy to supply arms to Taiwan. So why now?

My view is that it is a test of the Obama Administration. The dove like instincts of the Administration are simply being tested to see if there is a change from the Bush Administration.

China's wildest dream would have been for Obama to halt the supply of arms to Taiwan or delay it. Either would have been a disaster for Taiwan, and caused a panic on the stockmarkets and among the population there.

What was done is that a package negotiated by the Bush Administration has been allowed to proceed with one major change - no submarines. Taiwan had been promised submarines by the Bush Administration, and instead will receive Black Hawk helicopters, not exactly a substitute.

Taiwan has long sought new generation F-16s, to supplement those sold under the previous Bush Administration, but these were denied also.

So the Obama Administration has not followed business as usual, rather a watering down of business as usual. It passed the "test" as China showed its outrage by cutting military ties with the US, and threatening commercial sanctions on US companies supplying Taiwan. Most of those firms will not be concerned since they do not supply China in any case, but Boeing's role in the Chinese airline sector is substantial. That is where China could inflict some pain, although Airbus would be well aware of this and price accordingly to reap the rewards of any symbolic smarting inflicted upon Boeing.

China will hope that it can scare the Obama Administration into withdrawing more from providing Taiwan military assistance, for that is what it can hope for. China has no serious plans to invade Taiwan, for it knows such maneouvres would cost it dearly in foreign investment, trade access and international relations with more than a few neighbours. However, it keeps the threat of force to "reunite the motherland" there to keep Taiwan "in its place", and it is useful for nationalist rabble-rousing in the event of the need for a distraction.

Nevertheless, Taiwan (or more legally correct the "Republic of China" government temporarily exiled in Taiwan) deserves US support to defend itself. It is today a vibrant and open liberal democracy, with the rule of law, free speech and individual freedoms widely respected. It has changed a lot since the days of Chiang Kai Shek's authoritarian rule. Beijing will continue to treat its renegade province as such as long as the Communist Party holds a monopoly on power, for now it is up to the US to continue to provide sufficient support for Taiwan's free democratic government to deter attack from the mainland.

Diet - Obama style

President Obama is going to freeze government spending for three years.

Wow, attention grabbing, looks like he's going to be tough on the growth of government and ensure better spending.

Well, not until you read the fine print. He's exempting:
Social security (20%)
Welfare (16%)
Medicare and Medicaid (21%) (oh but it's all private in America say the left!)
Veteran's affairs (1.5%)
Homeland Security (1.2%)
and about another 1% of spending.

Beyond that he can't cut around 5% which is debt servicing.

So about two-thirds of federal spending is untouched, and even his grand diet on spending will only slow down the growth of the deficit. So it will get fatter, a little bit slower. Because whatever cuts happen, they are more than offset by the burgeoning growth in these other areas and Obama's grand plans to invest waste money on pork barrel projects, and expanding healthcare.

So that inspired me to dream up a diet for people to lose weight the same way as President Obama proposes to bring government spending under control

Don't snack or eat high fat or high simple carbohydrate foods is how to announce it, but...

This does not apply to chocolate, fish and chips (and other deep fried food), pies, ice cream, pizza, burgers, cakes, biscuits, sugary drinks, beer, sweets and potato chips.

Call it the Obama diet, think of it as having diet Coke while you eat a double whopper burger with supersize fries at Burger King. After all, you could have had cheese with it.

(Hat tip: Not PC)

So what would Obama's proposal have prevented?

Nothing, in the UK in any case.

Allister Heath in City AM - the UK's only consistently pro-capitalist newspaper - says:

Barack Obama’s plan to ban banks with retail arms from those activities – endorsed by shadow chancellor George Osborne – would have done nothing to prevent the crisis; not a single bank that got into trouble since 2007 would have been saved had those rules been in place.

Why?

Northern Rock, HBOS, Bradford and Bingley and the Dunfermline did not engage in prop trading. They lent to people who couldn’t repay, assumed property prices wouldn’t fall, relied on money markets for funding rather than deposits, and purchased securitised sub-prime debt as a “safe” high-yielding investment, often tucked away in off balance sheet vehicles. They held too little quality, liquid capital as a buffer against losses.

So you see it's a mirage. What about RBS?

It was over-leveraged, bought vast amounts of sub-prime securities, lent willy-nilly to unsound borrowers and blew a fortune buying ABN Amro, suffering massive goodwill write-offs. RBS made every mistake in the banking book; it would have been doomed with or without Obama/Osborne.

The Tories are jumping on the bandwagon for political reasons. It makes them look like they aren't beholden to rich capitalists in the City of London, and helps attract the envy vote across the country. At the same time the British government, to its credit, is NOT jumping on the bandwagon. Gordon Brown, for all his faults, is smart enough to not frighten the sharemarkets even more by blundering into nodding in unison with Obama.

Funny though how those on the left who would decry the UK following in step with the US when it was Blair and Bush, now want Brown to follow Obama. Funny that it isn't about making your own decisions, but about making decisions they agree with.

A Guardian poll showed nearly 100% support for doing so, but then who reads the Guardian besides those who think the state should intervene in more, except when it comes to overthrowing nasty dictatorships in the Middle East. So of course it has articles saying "yes Obama", as does the Independent and even the Telegraph is conditionally supportive.

It is deeply unfortunate that many who understand the financial sector are typically without much knowledge of public policy or political philosophy. Indeed, the reverse is true with many political pundits, bureaucrats and journalists not understanding the financial sector.

In the meantime too many are prepared to blame anyone but themselves, and to find solutions that are about addressing symptoms not causes.

Obama's grab for populism

Commentators across much of the political spectrum have lauded President Obama's hardly coincidental announcement that he is going to regulate the US banking sector on a grand scale.

It came less than a day after voters in Massachusetts gave the Democrats, including Obama and indeed government a bloodied nose. This was largely due to the ham-fisted attempts by Obama, but most disturbingly by the indisputably corrupt forces in both the House and the Senate, to reform healthcare. Instead of taking a breath, Obama decided to go on the front foot and wage war against what has been portrayed as public enemy number one by the left - the banking sector.

The message was simple:

- The banking sector caused the recession (untrue);

- The government was forced to bail out the banking sector as a whole because of its own failings (mostly untrue)

- The banking sector is full of people who earned a lot of money doing the wrong things (partly untrue);

- Time to punish them all and stop it happening again.

What he didn't say was:

- The banking sector took risks because of the fiat money of the Federal Reserve effectively encouraging such behaviour;

- The Federal government through Fannie Mae and Freddie Mac funded a boom in housing investment including loaning to those who couldn't sustain the borrowing;

- Hundreds of thousands of Americans borrowed far too much money making foolish investment decisions;

- Bad banks could have been allowed to fail and it is time to have a fundamental review of the entire monetary system.

The crisis came about because loose money, combined with rules requiring a portion of lending to risky borrowers, saw a bubble of lousy investment in property. It was a bubble seen in many countries, and it has only partially burst. Had it fully burst there would have been hundreds of thousands of more mortgagee sales across the US, UK, Europe and elsewhere. It would have hurt those property owners, but it would have opened up enormous opportunities for many others to buy homes and engage in the sector.

No. Obama is completely uninterested in this. He is far more interested in gaining kudos from the popular masses for bashing bankers. He is "doing something" to divert attention from the Massachusetts result, whether it is right simply wont be understood by most in the media (who have little understanding of economics or finance), and 99% of the public.

So is he not justified, will his measures make a difference? Alastair Heath at City AM thinks not:

Was the financial crisis due to the fact that some banks own private equity firms? No.

Would Lehman have been saved by the restriction on size or any other of the proposals? No. Just one firm, Bear Stearns, a pure investment bank which would not therefore be covered by the new rules, was destroyed because of its ownership of a hedge fund which invested in sub-prime mortgages.

Would any of these rules have protected Northern Rock or HBOS? No.

Did the losses racked up by the state-sponsored Fannie Mae and Freddie Mac mortgage giants have anything to do with prop trading or hedge funds? No – and neither did the failure of Wachovia, Washington Mutual, Countrywide or the over 100 US banks and many others around that world that have gone bust.

In truth, banking losses were caused by bad property loans – and the purchase of this sub-prime debt by other banks and funds in the belief that they were safe. Wall Street was crippled because it was so leveraged and didn’t hold enough high quality, truly liquid capital. AIG insured packages of sub-prime debt through credit default swaps but didn’t set capital aside in case things went wrong.

Obama’s pseudo-remedies completely miss the point.

Heath believes banks should have living wills and it should be made abundantly clear to banks and to depositors that governments wont bail them out again. Banks' creditors and debtors would need to learn to pay more attention to what is behind their assets. In other words, a deal needs to be struck whereby the state turns it back.

However, this cannot be while fiat money continues to be manufactured by central banks at interest rates barely above zero. What is happening right now is a new series of asset bubbles because of it, with property picking up again in London, share prices getting an unholy boost because bank deposits offer nothing, and the cycle starting once again.

It is most telling and disturbing that Conservative Shadow Chancellor George Osborne supports Obama's proposals. A man who hasn't a clue about the banking sector seeking to show his solidarity with the "common folk" when to get votes (when in fact he has never had a real job, and lives primarily off of vast inherited wealth). City Am notes that Obama's proposals would hurt RBS, now primarily taxpayer owned, showing Osborne's foolishness in speaking in such a kneejerk manner.

However, what's being cultivated is not solutions to problems that are primarily about how individuals react to incentives, but envy. Bankers are public enemy number one, and the foolishness of some, who were paid very well, is a fertile breeding ground for hatred of the whole sector.

It's a sector that bores most, that is largely not understood, and ignorance breeds suspicion. Be sure that few politicians will point out that both the Obama and the Bush Administrations (and Clinton before) all bear much responsibility for the monetary policy, and the investment regulatory environment that inspired and rewarded irrationality.

Sadly, what all of this shows is how incapable democracy is at handling complicated public policy. Politicians are mostly clueless, the media similarly so, those who do understand are often accused to seeking to protect vested interests, and most media seeks sales based on massaging public anger. Few will dare profile the average people who took out self certified 120% mortgages at the peak of the property boom and ask them why they took such risks, yet they too contributed to it all.

However, Obama dare not ever say that banks shouldn't be forced to lend to people who are a bad risk, nor that the Federal Reserve system be subject to a fundamental review. It's blame banks, whether they received taxpayer largesse or not, were foolish or not.

The main winners from this will be those countries that don't follow in line - I expect Zurich, Geneva, Hong Kong, Singapore and Shanghai will all be looking for opportunities to attract more of the financial sector from the West.

Massachusetts shrugged?

For Scott Brown, a Massachusetts lawyer and state senator - and Republican - to take the Senate seat of Massachusetts that was vacated when Ted Kennedy finally went into oblivion, is quite something. With 52% against the Democrat candidate Martha Coakley on 47%, it is a clear mandate.

You see in 2006 Ted Kennedy won the seat with a healthy 69% majority. For the Democrats to bleed almost a third of that support in such a short time will be a shock. However, what does it reflect on?

Did Brown campaign better than Coakley and was clearly the better candidate?

Probably yes, but not by THAT much. He travelled by pick up truck, painted himself as the outsider who was fiscally conservative and opposed to Obama's health reforms. Coakley by contrast seemed to assume she'd inherit the seat from Kennedy. His social views put him more in the middle of the Republican Party. He supports civil unions, but opposes gay marriage. She was far more socially "liberal", moreso than Obama. She wants US withdrawal from Afghanistan, supports heathcare reform, but has also been involved in a number of controversies as state attorney general. She played a negative campaign against Brown claiming he wanted hospitals to turn away rape victims, misconstruing his belief that religious hospitals can choose not to offer emergency contraception if they so wish. Coakley was close to trade unions, but they were clearly not decisive in Massachusetts.

However, whilst she wasn't much of a candidate, that shouldn't have meant she would get defeated on that alone. Surely Ted Kennedy personally wouldn't command an extra 20% of votes?

Was there a poor turnout, as Democrat supporters stayed home?

Apparently not. The total vote turnout in 2006 was 2,165, 490 votes. This time it is 2,249,026, a slight increase. It could be argued Republicans turned out this time because they knew they'd have a better chance, but then Ted Kennedy was a polarising figure. It is quite likely many Republicans would have wanted to vote against him on principle, even though the odds of removing him were not high.

Is this an endorsement for the Republican Party?

Well not really. After all, there is no effective Republican leadership at the moment. Mitch McConnell as Senate Minority Leader, and John Boehner as House Minority Leader are hardly household names. Sarah Palin remains one of the highest profile Republicans, but she wasn't seen (thankfully) on this campaign. The Republicans are a rallying point for opposition to the Obama Administration, but really that's about it. It is still a party pulled in different directions by evangelicals (who can't win an election), conservatives and small government liberals (in the classical liberal not US leftwing liberal) sense. Scott Brown is a blend of the last two.

Is this a rebuke of Barack Obama?

Perhaps a little. Obama won Massachusetts by 62% to 36% to McCain, so you'd think most of his supporters would vote for the woman he endorsed. Clearly not all is well with independent ly minded voters.

However, it's worth noting that neither Obama nor McCain won their party's primaries here. Hilary Clinton beat Obama 56% to 41% for the Democrat nomination. Mitt Romney beat McCain 51% to 41% for the Republican nomination. So Massachusetts is a little different from other states. It may well be that the Presidential elections reflected more disenchantment with McCain than Obama as second choice.

Obama's health care reforms have clearly rattled many voters. Given the vast majority of Americans have health care coverage, and see the looming budget deficits under the Obama Administration, there is some serious fear that they may have to pay more and get less because of it. Brown has campaigned clearly on the fact that a win for him would enable the Republicans to filibuster bills in the Senate, including health care. In other words, this very election means that Obama's health reforms will at least be delayed, at most could be seriously compromised. Brown campaigned that the Democrats wont consider tort reform to reduce healthcare costs because they are beholden to the legal fraternity, this perhaps struck a chord.

Furthermore, it has become increasingly clear that the grand promises of "change", and taking a different approach to government, have proven rather feeble. Yes, Bush is gone, but Obama has become beholden to the vast range of special interests and lobby groups that Democrats are in the pay of. It's just a change of personnel, not a change of technique. Pork barrel politics remain as much as they ever were. The hype has not met expectations. Obama is simply another politician.

Is this a rejection of big government?

I'd like to think it is, of course, and it would seem, in part that this is what it is about. Evangelical Republicans may want to pay special attention, as it is NOT social issues that have motivated the change, but it is money.

The amounts of money the Obama Administration is looking to pour into subsidising compulsory health insurance are substantial. Indeed, the Obama Administration has shown virtually no real appetite for fiscal conservatism, with the so-called "stimulus" package often going into consumption and poorly planned projects.

American taxpayers see the bailouts, see the willingness to engage in all sorts of new government projects as an unwillingness to face up to the need to cut spending. In the US, there is a particular degree of wariness about how well government can spend your own money. This is something the Obama Administration doesn't even start to understand, and it is a movement that has been catalysed by the proposals on health care. Bear in mind that nothing in the health care package would cut the burgeoning costs of Medicare and Medicaid, both of which comprise half of all US health spending. Yes - the government's health care plans have poor cost control, so why wouldn't Americans fear state run health care?

Massachusetts interesting has a public health care plan run by the state, which effectively subsidises health insurance for those on low incomes and penalises, through the tax system, those who don't have health insurance schemes. It means 4.1% of people don't have health insurance, which represents those preferring to pay the tax penalty and those who are still unwilling to buy insurance with low incomes. So do the people of Massachusetts simply not want an additional federal healthcare plan, or is it simpler than that?

Conclusion

Coakley might not have been the best candidate for the Democrats, but she didn't lose because of that. Brown might have been quite a good candidate, but he didn't win just because of that. The election was a judgment on the growth of government by the Obama Administration, particular fear of what health care reforms could mean for individual health insurance schemes and for taxation.

Ed Rollins, former political director for Ronald Reagan said on CNN:

Mr. President, don't run away from or misinterpret Tuesday's results. Don't let the Chicago sycophants surrounding you in the White House tell you this defeat had nothing to do with you or your health care legislation or your style of governing. It did big time, and every poll said it did.

You have three more years before the next inaugural. It may be yours or it maybe someone else's. But don't let your team convince you that this loss was only about Martha Coakley being a lousy candidate. (She was.) But she was good enough to win the state attorney general's job three years ago with 73 percent of the vote. She was good enough to trounce three other candidates, including a sitting congressman to win the primary a few weeks ago.

By contrast, House of Representatives lead Marxist with a silver spoon Nancy Pelosi couldn't have lied better than what she said: "We heard, we will heed, we will move forward with their considerations in mind, but we will move forward".

No Nancy, you heard, you're ignoring. This year there are mid-term elections. After two years of Bill Clinton and Hilary trying to introduce more government healthcare, Americans voted in droves to turn both houses of Congress Republican. The Republicans are not consistently small government fiscal hawks, and they are by no means great believers in slashing the size of the state, but if Massachusetts is a sign of wider discontent, the mid-term elections could cauterise Obama's plans on health care and his budgetary ambitions over the next three years.

Berlin Wall Season: Not important enough to Obama

German newsmagazine Der Spiegel notes that US President Barack Obama shelved apparent plans to attend the 20th anniversary of the fall of the Berlin Wall, of which Toby Harnden at the Daily Telegraph said:

Perhaps Obama felt that celebrating the role of the United States in bringing down the wall would be a bit triumphalist and not quite in keeping with his wish to present America as a declining world power anxious to apologise for sundry historic misdeeds.

Hilary Clinton stood in his place, alongside Angela Merkel, Mikhail Gorbachev, Lech Walesa, Kofi Annan, Gordon Brown and Dmitri Medvedev.

Apparently the leader of the world's largest economy, strongest military power and free world throughout the Cold War didn't think it mattered enough.

Harnden notes Obama IS travelling to Norway to pick up the Nobel Peace Prize. Of course Obama has been to Berlin before. He did a campaign speech there before he was elected, which was seen as rather unusual given he was standing for election as President of the United States, not Germany, Europe or the world. Der Spiegel sarcastically referred to that speech as "People of the World - Look at Me". Noting that foreign press (as in non-American) were explicitly excluded from the press conference following that effort.

So on that note, and to follow Harnden's efforts, how about some words from some US Presidents who really did have an idea freedom...



(and though he called himself a doughnut accidentally) JFK was prescient and proud of what the US was standing for, back then.

Obama Administration does something small but good

CNN reports that the US Justice Department has told federal prosecutors to pursue drug traffickers but NOT patients and caregivers in the 14 states that have legalised medical marijuana.

"It will not be a priority to use federal resources to prosecute patients with serious illnesses or their caregivers who are complying with state laws on medical marijuana," said Attorney General Eric Holder.

Furthermore

The Justice Department guidance said it would not be a wise use of federal resources to go after "individuals with cancer or other serious illnesses who use marijuana as part of a recommended treatment regimen consistent with applicable state law."

Of course, indeed it is the only humane approach.

Besides recognising the competency of states in deciding this sort of thing, it is a slight lessening of the rabid war on drugs that every previous administration, for decades has fought unsuccessfully.

The states where medical marijuana use is legal are Alaska, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Mexico, Maryland, Oregon, Rhode Island, Vermont and Washington.

Let's be clear this is not legalisation, or decriminalisation, and drug users in those states wont be immune from Federal criminal action, but it does mean attention is withdrawn from a segment that simply comprises sick people using marijuana for relief. By what measure does the Federal Government have any right to interfere with this?

So dare I say it, a step for freedom from the Obama Administration.

Now for the leftwing nutjobs

We all know the seriously unhinged right wing nutjobs in the US, the ones obsessed about Barack Obama's place of birth. How about the same, but on the left.

This article from the Daily Telegraph shows how two complete lies against US talkback radio host, Rush Limbaugh, are now openly expressed in mainstream media as true, even though they have been proven to be false.

He was said to say "I mean, let’s face it, we didn’t have slavery in this country for over 100 years because it was a bad thing. Quite the opposite: slavery built the South. I’m not saying we should bring it back; I’m just saying it had its merits. For one thing, the streets were safer after dark." except there is no recording of this, no one can testify to hearing it, it is hearsay and damning it is.

Now Limbaugh can be entertaining, but he is a Christian conservative who openly rejects the separation of church and state, so my time for him is limited. However, such a smear is atrocious and should result in an enormous lawsuit. It is tantamount to the wished for falsehood of those on the left than anyone who is a Republican must really be racist, for only those on the left have good intentions and treat everyone as equal (except foreigners, the wealthy and everyone who indirectly loses due to affirmative action).

However, it's important to remember that mainstream US politics is at this level - a level of venal hatred for the other. It is tribalist, and abandons reason. Democrats and Republicans have little between them in terms of embracing small secular government, and wanting to reduce the role of the state. Both speak with forked tongues, but for now the Democrats are embarking on a socialist big government spending spree and regulatory binge. The Republicans will criticise it, and do not much better, with their own agenda of pork and protection (although John McCain had a good record opposing this). Nothing will fundamentally change. Obama has just been a change to the left, with little sign he is much more than a co-leader of the Congressional Democrats.

There is a gap in the US electorate, for a politician who embraces small government without embracing the finger pointing of the Christian evangelical right. If only.

Obama Nobel Peace Prize?

Yes, Reuters states Obama has won it.

For what? You might ask. Have tensions with Iran eased? Has he improved the situation in Iraq? Have the Taliban been defeated? Has North Korea agreed to stop calling for seas of blood in South Korea and Japan? Has Russia stopped seeking to dominate its neighbours? Has the risk of Islamist terrorism dramatically reduced? Has the Arab-Israeli conflict lessened? Has Sudan stopped oppressing the people of Darfur?

Well given the Nobel committee gave it to Al Gore two years ago, one can see the value of this prize deteriorating rapidly (although Martti Ahtisaari was deserving last year).

The list of all Nobel winners is here on Wikipedia.

Of those, surely the deserving ones are the likes of Mikhail Gorbachev, John Hume and David Trimble, Nelson Mandela and FW De Klerk, Sadat and Begin, Lech Walesa and Norman Borlaug (not an exhaustive list).

However, Barack Obama?

Surely, even his greatest enthusiasts would struggle to say anything substantive has been achieved in a matter of months.

UPDATE: Benedict Brogan at the Daily Telegraph is damning.

"President Obama remains the barely man of world politics, barely a senator now barely a president, yet in the land of the Euro-weenies (copyright PJ O’Rourke) the great and the good remain in his thrall. To reward him for a blank results sheet, to inflate him when he has no achievements to his name, makes a mockery of what, let’s face it, is an already fairly discredited process (remember Rigoberta Menchu in 1992? Ha!). That’s not the point. What this does is accelerate the elevation of President Obama to a comedy confection, which he does not deserve, and gives his critics yet another bat to whack him with."

Even the usually pro-Obama Guardian online poll is 2 to 1 against him winning it.

Change you can believe in: Tibet

Barack Obama on Tibet and the Dalai Lama before being President.

Barack Obama on how President Bush should have boycotted the Beijing Olympics opening ceremony in protest for human rights abuses in China, including Tibet

President Barack Obama cancels meeting with Dalai Lama, because US foreign policy interests are more important -which means getting Chinese support for action on Iran and North Korea.

Yep, awfully easily to play the moral high ground when you're not President isn't it?

Whoopi Goldberg's excuse for Polanski

Just when you thought you'd heard everything, Whoopi Goldberg, who one would think of as being a feminist and someone who would embrace protecting young people from violence says:

"I know it wasn't rape-rape. I think it was something else, but I don't believe it was rape-rape", according to the Daily Telegraph.

Hmm drugging then telling a minor to submit to having sex with him is what then? So when a 13yo girl doesn't struggle and fight, then it's what?

Oh that's right, it's the entertainment industry. You're special, you do so much for us, it's not so serious when one of you rapes a young girl right?

You pontificate about politics, judge so many other sectors, yet far too many of you give excuses for your friends to do violence to others.

The ONLY person with any right to say anything about this case is the victim, who happens to want it all to be left alone. That is the only mitigating factor as to how it is treated now.

Oh and she isn't the only one making excuses. Here is a petition (in French) signed by more than a few famous people, appeasing the man's forcible rape of a young girl.

What's wrong with US politics

David Walker, in The Wall Street Journal says:

"Members of Congress ensure they have gerrymandered seats where they pick the voters rather than the voters picking them and then they pass out money to special interests who then make sure they have so much money that no one can easily challenge them,"

"He notes that today the role of the federal government has grown such that last year less than 40% of it related to the key roles the Founders envisioned for it: defense, foreign policy, the courts and other basic functions. "What happened to the Founders' intent that all roles not expressly reserved to the federal government belong to the states, and ultimately the people?" he asks. "I'm pleased the recent town halls show people are waking up and realizing it's time to pay attention to first principles."

Who is he?

"He rose to be a partner and global managing director of Arthur Anderson, before being named assistant secretary of labor for pensions and benefits during the Reagan administration. Under the first President Bush, he served as a trustee for Social Security and Medicare, an experience that convinced him both programs are looming train wrecks that could bankrupt the country. In 1998 he was appointed by President Bill Clinton to head the GAO, where he spent the next decade issuing reports trying to stem waste, fraud and abuse in government. Despite many successes, he was able to make only limited progress in reforming Washington's tangled bookkeeping. When he arrived he was told the Pentagon was nearly a decade away from having a clean audit, or clear evidence that its financial statements were accurate. When he left in 2008, he was told the Pentagon was still a decade away from that goal. "If the federal government was a private corporation, its stock would plummet and shareholders would bring in new management and directors," he said as he retired from the GAO."

Oh and he hasn't noticed any change he can believe in since the election of Barack Obama.

"He says his stimulus bill was sold as something it wasn't: "A number of people had agendas other than stimulus, and they shaped the package."

However, I guess since he's criticising the Obama Administration, he's racist, is that right ex.President Carter?

Racist critics?

A bomb has been dropped, with former President Jimmy Carter calling Obama's critics racist. He considers that some in the US don't think a black man should be President, no doubt he is right that some do, but to brand most of the criticism as being racist is a very cheap shot. A shot that will backfire, anger the opponents of Obama further, and do little to protect Obama from criticism. It will sadly give the Democrats a simple weapon to bash over the head of opponents - "you're criticising Obama? Oh it's racism."

A better insight would see that opponents of Obama fall into a range of camps, some of which have obvious philosophical and political opposition to his principles and policies, others who are part of a lunatic fringe. It is important to separate out those who use ridiculous hyperbole from those who have genuine concerns. So who does criticise Obama?

Liberal Republicans/libertarians: Obama has had a long political career of advancing more government intervention and spending, support protectionist and spending proposals in Congress and being a generally acknowledged left-wing Democrat. Anyone who believes in less government spending, less barriers to trade, lower taxes and more free market/individualist solutions is likely to oppose Obama. Racist? Anything but. Their rhetoric is likely to fear higher taxes, interference in individual health care plans and the like. However, they have had few friends standing for the White House in a while. I would be in this group obviously, as I believe Obama has some Marxist leanings, a some scepticism about capitalism and individual freedom. A nazi or a communist? No. This SHOULD form the base for opposition to Obama, but is only one part of it.

Mainstream Conservatives: Obama's fairly liberal position on social issues rankles with conservatives, and his belief in a new government health insurer raises some of the same concerns of liberal republicans/libertarians. However, they are also more likely to regard a leftwing Democrat as not being one of them, with different values. They form the Republican base, essentially more willing to believe critics than believe Obama, as they don't trust the Democratic Party. This base, occupied by many religious conservatives, are those who would typically vote Republican.

Hardline fringe conservatives: These are the one who are willing to believe the "birther" rhetoric, fear he is really a Muslim, and believe that he is a communist. This is truly the lunatic fringe wingnuts who are convinced he is willing to hand the USA over to Iran or some other Muslim state, and surrender. They are willing to accept conspiracy theories, and see the great fear as being Obama as a foreign Muslim spy who is "un American" because he is seen to be foreign born. Underlying racism probably contributes to a willingness to believe this. White supremacists, though tiny in number, will encourage this rhetoric.

So it is, naturally, more complicated than Carter says. I've been strongly opposed to Obama, not because of race - indeed his election was a positive sign about the state of racism in the US - but because of his policies. Discussion about his policies and philosophy have long been shrouded by the over enthusiasm for his ability to speak. The content of what he says has been secondary. He campaigned on change, but rarely mentioned what that was, with his own Senate record being one of following almost every leftwing Democrat to vote. None of that showed independent thinking or a willingness to be open minded, rather a basic level of partisanship.

The Obama hype has produced a backlash, from some it is a genuine opposition to a President who believes more government is good, for others it may shroud wider xenophobic and racial suspicions, but I suspect a good part of the opposition represents the dividing line in US politics between the liberal coasts and the conservative centre and south. A dividing line that those who benefit from it seek to emphasise, which exacerbates it. Attacks on George W. Bush and Sarah Palin have long been venal, sometimes I have agreed, but for those who peddle such attacks to claim attacks on Obama are racist is somewhat disingenuous. It is also unwise.

The Republican Party is going through a degree of philosophical discovery at the moment, as it is clear than the evangelical conservative wing is declining in popularity and influence. As that happens, it is the wingnut conservatives that are shouting the loudest, when they are the ones who will permanently deny the Republicans the White House. Republican need to win small government liberals on the coasts to rebuild a wider base. That is the biggest threat to the Democrats. However, branding both the wingnuts and the small government liberals as racist may well be the best thing Democrats can do to bolster Republicans. Many have good reason to be unhappy about Obama. Dismissing them out of hand and insulting them wins no friends.

A new low on Kennedy

Mary Jo Kopechne might have thought her death by drowning was "worth it", given the career of Ted Kennedy.

So says Melissa Lafsky in the Huffington Post.

Given she said "Disabled? Poor? A member of any minority group? Then chances are your life is at least somewhat better because of Ted Kennedy." Yes, you all owe him so much, because he wanted to take more of your taxes and regulate the world so people like you had a chance, because without the services of a wealthy morally bankrupt politician, your life wouldn't have been so good.

Is it not so disgustingly evil to think you might speak on behalf of a dead woman to say her death at the hands of a drunken lech was worth it because of what he did with his life?

Should Melissa now offer herself on the altar of some politician so she can be left to die somewhere and someone else speak on her behalf and say "never mind, she'll think it was worth it given what the guy who left her to die did with his life".

Daily Telegraph columns of the day

Janet Daley on the Kennedy legacy, the truth behind the higher profile Kennedy men that seemed to go largely ignored, how one could have a private life of intense shallowness, whilst opining the highest moral standards publicly. Political hypocrisy came of age, was known and ignored.

Philip Johnston on the failure to address welfare. Instead of tackling the problems of an underclass dependent on the welfare state, Labour tinkled "From 1999 onwards, the government – ie the Treasury – abolished family credit, introduced working families' tax credit, introduced the disabled person's tax credit, introduced a childcare tax credit, introduced an employment credit, abolished the married couple's tax allowance, introduced the children's tax credit, introduced a baby tax credit, abolished the working families' tax credit, abolished the disabled person's tax credit, abolished the children's tax credit, abolished the baby tax credit, introduced a child tax credit, abolished the employment credit and introduced a working tax credit" so that "five per cent of British men aged under 50 are still classified as ill or disabled – three times higher than in Germany".

Doesn't matter, people on welfare all vote Labour anyway don't they?