August 12, 2012

Posted by orrinj at 7:51 PM


In Upheaval for Egypt, Morsi Forces Out Military Chiefs (KAREEM FAHIM, August 12, 2012, NY Times)

President Mohamed Morsi of Egypt forced the retirement on Sunday of his powerful defense minister, the army chief of staff and several senior generals, in a stunning purge that seemed for the moment to reclaim for civilian leaders much of the political power the Egyptian military had seized since the fall of Hosni Mubarak last year.

Mr. Morsi also nullified a constitutional declaration, issued by the military before he was elected, that eviscerated the powers of the presidency and arrogated to the military the right to enact laws. [...]

The changes were part of the continuing fallout from the killings of 16 Egyptian soldiers one week ago in the Sinai Peninsula, which deeply embarrassed the military and exposed shocking intelligence failures. In the aftermath of the attack, Mr. Morsi moved swiftly to assert his newfound authority, firing his intelligence chief and the governor of Northern Sinai Governorate, and replacing several other top security officials.

Posted by orrinj at 11:51 AM


"OUR CHURCHILLIAN MOMENT" (Paul Ryan, The Claremont Institute, Claremont, CA, Remarks as Prepared for Delivery , November 12, 2011)

Today, we face a new threat - a gathering storm, whose primary manifestation is the shadow of our ever-growing national debt.

This shadow hangs over businesses and workers, who face a struggling economy and the rising probability of greater turmoil ahead given our dire fiscal situation.

This shadow hangs over seniors, who wonder whether Washington is making empty promises to them about their retirement security.

And it hangs over parents, who wonder if they will be the first generation in American history to leave their children with fewer opportunities and a less prosperous nation than the one they inherited.

We hear rumblings of this storm coming from Europe - we hear the chanting of angry protesters, the shattering of glass, and the shouts of lawmakers as fistfights break out in European parliaments.

And the rumblings are getting louder here every day, because instead of learning from Europe's mistakes, we are repeating them.

Europe is learning the hard way what happens when you suddenly run out of road to kick the can down. And now its citizens are paying the consequences of decades of empty promises.

Churchill himself put it this way: "There are two ways in which a gigantic debt may be spread over new decades and future generations."

The right way, he said, would be "to make the utmost provision for amortization which prudence allows."

The wrong way, he said, would be "to aggravate the burden of debt by fresh borrowing, to live from hand to mouth and from year to year, and to exclaim with Louis the Fourteenth, 'After me, the deluge.'"

I don't need to tell you which path we're on. It's not too late to do this the right way - to get back on the right path. But there are two components to getting this right.

The first is to follow Churchill's advice: Prudently restrain government spending, while avoiding the kind of tax hikes that would stifle economic growth.

The second is to follow Churchill's actions: To lead by telling people the truth; to realize that we are not the first to face these kinds of challenges; and to meet our challenges as our forefathers met theirs, with determination and faith in the righteousness of our cause.

Posted by orrinj at 11:46 AM


5 keys to understanding Paul Ryan (Jake Sherman and John Bresnahan, August 12, 2012, Politico)

The continual theme of Ryan's legislative career has been a willingness to accept risks that would make more conventional politicians blanch. His budget proposals have widely been considered politically rash for the Republican Party -- pollsters, aides and commentators have told him that both publicly and privately.

When Republicans were in the minority, his attitude seemed to be that his party leadership be damned. He was determined to forth his proposals regardless of how few people signed on with him. GOP leaders sometimes responded in kind, distancing themselves from Ryan. He cheerfully shrugged his shoulders and kept moving.

But Ryan is not a full-time maverick, a reality that has been made clear since Republicans took back the House in the 2010 midterm elections. When House GOP leaders Boehner and Eric Cantor tell members they need to stand firm to party-line votes, Ryan is right there. And when leaders have tried to squeeze budget deals through the House -- even deals with which Ryan could find plenty of nits to pick -- he's kept his reservations to himself.

It is a combination of ideological advocacy and step-in-line loyalty that Romney, who is himself just getting to know Ryan, apparently found quite attractive.

Rather than get bogged down in the details of his own budget, he needs to answer every attack with one line: "I've told you exactly where I'd make cuts, where do your automatic $1.2 trillion in cuts come from?"  

Posted by orrinj at 11:37 AM


Jewish groups vet VP pick Ryan through fiscal lens (RON KAMPEAS, August 12, 2012, Times of Israel)

The National Jewish Democratic Council said Ryan does "not reflect Jewish community values."

David Harris, the NJDC president, said in a statement that "Ryan's signature budget plan drew the profound concern and even ire of many in the American Jewish community because of its plans to end Medicare as we know it, slash vital social safety net programs, and increase the burden on seniors, the middle class, and the poor."

And here we thought Ron Wyden was Jewish...

Posted by orrinj at 10:10 AM


Romney's Stunning, Terrible Choice of Ryan for VP (Michael Tomasky Aug 11, 2012, Daily Beast)

So he'll get some good press, and he'll generate great enthusiasm among conservative intellectuals. But the introduction of him to the American people will inevitably involve some other things, too. It will involve explanations from the media that he is the GOP's archconservative theoretician. It will involve explaining who Ayn Rand is. It will involve going into detail on his budget, and in particular his plans for Medicare.

...Democrats will now pivot to budget minutiae and objectivism?  Well, that is what comes of having no record to run on.  

Posted by orrinj at 9:13 AM


Dave Camp: Is Tax Reform Politically Possible? : He may be the last optimist in Washington, but the House Ways and Means chairman says the need for faster economic growth and some cultivated bipartisanship can fix the tax code. (STEPHEN MOORE, 8/11/12, WSJ)

The model Mr. Camp has in mind happened 26 years ago, the last time Congress had the fortitude to look under the hood of the tax code and clean the engine. The Tax Reform Act of 1986 was negotiated by the Reagan administration, Democratic Rep. Dan Rostenkowski and Republican Sen. Bob Packwood. It was one of the true bipartisan triumphs of modern times, passing with 97 Senate votes, including those of current Senate Democratic leaders Harry Reid and Charles Schumer.

The 1986 tax reform eliminated most special-interest deductions and loopholes, lowering the top income-tax rate to 28% from 50%. Harvard economist Dale Jorgenson says the gains to economic growth from the lower rates and the simplified code increased GDP by more than $1 trillion, and that a similar reform now could increase national wealth over the long term by $7 trillion in net present value.

But in the 1990s and 2000s Congress began tinkering again, a lot of the junk removed from the code "has been put right back in," and tax rates started rising. Mr. Camp's calculates that "we've made 5,000 changes to the tax code just in the last 10 years." He says the whole system is so complicated that even the corporate lobbyists who form long lines outside his office seeking tax favors "are now telling me, 'Please fix the code. Give us less paperwork and a 25% rate and we'll gladly give up our loopholes.'"

Although he likes the flat tax that Steve Forbes popularized 16 years ago, his draft plan calls for two rates--10% for most Americans and 25% on six-figure earners and above. To ensure that tax reform gets a fair hearing, he says Republicans plan to create a "fast-track" authority so that the compromise doesn't get bogged down in committees and is assured an up or down vote on the House floor.

"We're not competitive on taxes anymore, especially in terms of international tax," he says. "We've got the highest corporate rate in the world, and we're the only country left with a world-wide system of taxation. We need to be on the cutting edge of tax and economic policy in the world so that we're the center of innovation, effort, growth, jobs."

...why would you tax income if you want people to make money?

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Posted by orrinj at 9:10 AM


Sleep Your Way to the Top: How Sleep Equals Success : A growing number of research studies suggest that sleep may be the secret to performing at your highest level, writes David K. Randall. Everyone from the military to athletes are starting to get serious about  (David K. Randall, 8/11/12, Daily Beast)

After struggling for almost a minute in a November debate to come up with the third federal agency he'd eliminate should he win the Oval Office, Texas Gov. Rick Perry finally admitted he couldn't remember.

While his campaign quickly tried to limit the damage, there had been earlier signs that Gov. Perry was in trouble that had little to do with his campaign war chest, his policies, or his personal charisma. Instead, they had everything to do with his pillow.

"We had a tired puppy," one of Perry's Republican allies told The New York Times after the governor had performed poorly in a string of earlier debates. Aides tried to rework his schedule in order for Governor Perry to get more hours of slumber, but it apparently wasn't enough before that November night.

For most of us, it's easy to see the stumble as nothing more than a memorable gaffe. Yet Governor Perry's moment of forgetfulness should also serve as the sum of all fears for anyone who sees sleep as something that can be put off or overlooked without painful consequences. When a person lies down to sleep at night, the brain undergoes a process that is crucial to learning, memory, and performance in ways that scientists are only now beginning to understand. Though the exact mechanisms of the brain remain unclear, studies have suggested that time spent dozing has helped research subjects solve puzzles faster, pick up new skills with better results, and think more quickly on their feet.

Why does sleep help turn us into more competent versions of ourselves? Part of the answer is the simple fact that chronic sleep deprivation, which for most of us means routinely getting six or less hours of sleep each night, essentially makes us feel and act like we're drunk.

Posted by orrinj at 8:56 AM


Ryan's Charge Up Entitlement Hill : The GOP's fiscal leader explains why House Republicans will vote to reform Medicare and why the public is ready to listen. (PAUL GIGOT,  February 19, 2011, WSJ)

Senate Democrats like Chuck Schumer issue almost daily press releases attacking Mr. Ryan, Paul Krugman is obsessed and demeaning, and even President Obama can't stop mentioning him. Only this week, the president justified his own failure to tackle entitlements in his dud of a 2012 budget by saying that "the chairman of the House Republican budgeteers didn't sign on" to the final report of Mr. Obama's deficit commission.

What are they all so afraid of?

"Did he really say that?" asks Mr. Ryan about the president, sitting in his House office this week after another day of the hearings he now runs as chairman of the House Budget Committee. "I'm actually flattered." Perhaps they're worried, he says, "because we put out more than just bromides and platitudes. We put out specifics."

He certainly has done that, most famously with his "Road Map" that is the full monty of conservative tax and entitlement reform. Mr. Ryan knows it won't pass, not even in the current GOP House, but he drew it up in 2009 to start a debate and show that a future of limited government was still possible. He adds that he opposed the Obama deficit commission report because it failed to do anything serious about health-care entitlements, and he proposed an alternative that the commission rejected. Mr. Obama has never proposed his alternative.

Has the president ever called him to talk? "Never once," he says, notwithstanding Mr. Obama's many public statements that he wants "aggressive" conversations with Republicans, especially Mr. Ryan. "He keeps saying that," says the Wisconsin native, but "they don't talk to us. It just doesn't really happen. I don't know what else to say."

So goes the reality of today's Washington, especially after Mr. Obama dropped his budget this week that does almost nothing about everything. To call it a punt is unfair to the game of football. That abdication makes Mr. Ryan, by dint of his expertise and his influence with other Republicans, the most important fiscal voice in Washington. As supply-siders used to say--and Mr. Ryan came of political age as a protege of Jack Kemp--Mr. Ryan is now the man on the margin. He says he's determined not to waste the opportunity, notwithstanding the huge political risks.

All this time spent wondering how Mr. Romney decided on Paul Ryan, when all you have to do is look at the polling:

Next, how important a priority should each of the following issues be for the next president -- extremely important, very important, somewhat important, or not that important. How about -- [RANDOM ORDER]? July 2012 results

MORE: Democracy Corps' House Battleground: Is Medi-Scare Working? (Topline Translator, 8/07/12)

[I]n its analysis, Democracy Corps declares, "Ryan budget barely gets popular support" (pg. 35). What they choose to ignore is that the question they are referencing shows support for the Ryan budget at 52 37% -- a +15% margin.


POLLSTER: Greenberg Quinlan Rosner Research for Democracy Corps

DATE: Conducted 7/21-26/2012; Released 8/1/2012

SAMPLE: Sampled 1,000 Likely 2012 Voters in 54 Republican-held Battleground Districts; MoE ± 3.1%


@ToplineReport Democracy Corps' House Battleground: Is Medi-Scare Working? #tcot

Posted by orrinj at 8:50 AM


Two Prisms for Looking at China's Problems (TYLER COWEN, August 11, 2012, NY Times)

The Austrian perspective introduces some scarier considerations. China has been investing 40 percent to 50 percent of its national income. But it is hard to invest so much money wisely, particularly in an environment of economic favoritism. And this rate of investment is artificially high to begin with.

Beijing is often accused of manipulating the value of its currency, the renminbi, to subsidize its manufacturing. The government also funnels domestic savings into the national banking system and grants subsidies to politically favored businesses, and it seems obsessed with building infrastructure. All of this tips the economy in very particular directions.

The Austrian approach raises the possibility that there is no way for China to make good on enough of its oversubsidized investments. At first, they create lots of jobs and revenue, but as the business cycle proceeds, new marginal investments become less valuable and more prone to allocation by corruption. The giddy booms of earlier times wear off, and suddenly not every decision seems wise. The combination can lead to an economic crackup -- not because aggregate demand is too low, but because the economy has been producing the wrong mix of goods and services.

TO keep its investments in business, the Chinese government will almost certainly continue to use political means, like propping up ailing companies with credit from state-owned banks. But whether or not those companies survive, the investments themselves have been wasteful, and that will eventually damage the economy. In the Austrian perspective, the government has less ability to set things right than in Keynesian theories.

Furthermore, it is becoming harder to stimulate the Chinese economy effectively. The flow of funds out of China has accelerated recently, and the trend may continue as the government liberalizes capital markets and as Chinese businesses become more international and learn how to game the system. Again, reflecting a core theme of Austrian economics, market forces are overturning or refusing to validate the state-preferred pattern of investments.

Not only are such maladaptations disastrous in themselves, but the demographic implosion that accompanied the PRC's dead ends can't be fixed by Keynes nor the Austrians.
Posted by orrinj at 8:47 AM


LESSONS FROM SWEDEN IN ASSEMBLING A RECOVERY (David Smith, 8/12/12, Sunday Times of London)

Though Sweden's latest GDP figures were a surprise, and have resulted in a hurried upward revision of 2012 growth forecasts, they were no flash in the pan.

After slumping 5% in 2009, Sweden's economy surged 5.8% in 2010 and 4% last year. Britain shrunk a little less in 2009, 4%, but grew only 1.8% in 2010 and 0.8% last year. Leaving aside the vagaries of the data, the maths suggest any growth this year will be difficult. Sweden's economy is well above pre-crisis levels of GDP, while Britain's is more than 4% below it.

What is Sweden's secret? It helps to have had a banking crisis in the past. The Swedish crisis of the early 1990s was used as a template in the wider crisis of 2008-9.

Bust banks were nationalised and assets sold off. Taxpayer funds were injected at considerable cost. The banks were later privatized and, on some measures, at no overall cost to government of the rescue.

The episode did not make Sweden immune to the crisis in 2008-9, as the GDP figures show. But, unlike in Britain, there has been no prolonged banking hangover.

Posted by orrinj at 8:36 AM


Romney shakes the race with pick of Ryan (Dan Balz, August 11, 2012, Washington Post)

Ryan's addition to the ticket shows that Romney is prepared to run a more robust campaign with a sharper message built around tax and spending cuts, deficit reduction and entitlement reform. That is exactly what a growing chorus of Republicans, nervous about the direction of the Romney campaign, has been urging.

A Romney-Ryan ticket will help to clarify the choices for voters in November. Rarely have the two parties presented such a stark contrast in visions as now appears to be the case. Those competing visions could produce, after a summer of often small-minded tactics, the kind of big debate about the country's future that both Obama and Romney have said this campaign should be about.

Except that, as Mr. Obama's acceptance of Simpson-Bowles and willingness to enact a grand compromise with John Boehner demonstrate, there is no contrast in vision, only some quibbling over details. Indeed, Mr. Obama has already signed into law $1.2 trillion in automatic budget cuts via sequestration, including cuts to Medicare.  

Posted by orrinj at 8:33 AM


A Romney win just got scarier  (ANDREW LEONARD, 8/12/12, Salon)

You know who the real winners are? Wonks! Back in 2008, wonks had a field day comparing the merits of Obama's (no mandate) and Hillary Clinton's (yes mandate) healthcare plans. But ever since Romney secured the Republican nomination, it's been a wonk nightmare. There's no there there in his policy proposals, no numbers to crunch, no planks in his platform. But now we've got the Ryan plan to crank on. We've got details! Sure, they might be details that poll horribly when explained to the average voter, but they invite serious engagement nonetheless. Get used to it -- because we're all going to be getting up to speed on the cost-benefit analysis of Medicare vouchers lickety-split.

And just as all the wonks knew that health care reform would require mandates, so too do they know that the future of the Welfare State is vouchers.

Posted by orrinj at 8:29 AM


Fellow Dems beware: Ryan offers solutions : Like them or not, he's proposed specific answers to major problems (Rick Jasculca, August 12, 2012, Chicago Tribune)

With all of the bizarre twists and turns of the campaign, it sometimes is difficult to remember that the state of the U.S. economy remains the number one issue for voters. Likewise, the staggering budget deficit continues to be a significant and substantive piece of the economic puzzle.

Only two actual deficit reduction plans have been put on the table -- the bipartisan and much acclaimed Simpson-Bowles Commission plan and the Paul Ryan budget plan.

While I like much if not all of Simpson-Bowles, I have serious concerns about many key elements of the Ryan budget. That said, nobody's plan is going to get adopted whole hog, even if you could find more than a handful of folks actually willing to tackle the challenge.

In Ryan, Romney has selected a smart, thoughtful, capable, handsome and articulate guy -- also a great family man -- who has actually done something on this issue we all call vital to our national interest.

Just because I and other Democrats think the Ryan plan is flawed (I'm always concerned with solutions based strictly on numbers rather than also factoring in human consequences, intended or not), the reality is that Romney now has a running mate who actually proposed a specific and comprehensive solution to one of our most sweeping national problems. And he's an attractive candidate.

No one ever read the Contract with America, but its existence made the GOP seem a serious alternative.

Posted by orrinj at 8:23 AM


We'll miss Bashar Assad when he's gone (Marvin Zonis, August 12, 2012, Chicago Tribune)

This miserable autocrat who kills his own people and bombs his own cities and has done so since March 2011 will fall. When? Who knows? Not today. Not tomorrow. But his fall will come. Then we will wish Bashar Assad were back.

We will wish he were back because the institutions of Syria, largely built by Hafez Assad, Bashar's father, will collapse along with the Assad regime.

Syria will become an anarchist's paradise. With no central state, the militias now fighting the regime will fight each other, seeking to control territory, expand their bases and control the center.

The most likely winners will be the Islamists.