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November 26, 2008


Expanding on this post and the Weekly Standard article it links to, here's a new list for your enjoyment, based on the famous phrase "Only Nixon could go to China". This refers to Tricky Dick's 1972 Presidential visit to Red China, a country which had heretofore been seen by Nixon's conservative supporters as the home of a mysterious faceless barbarian hoard and treacherous enemy.

The ChiComs fought us in Korea in the Fifties, and in Vietnam in the Sixties, and were seen as both rivals to and allies of the Commies in the USSR, depending on varying interests and appetites of their mad rulers. Of course, like the USSR, liberals loved the ChiComs, remaining willfully blind to the atrocities of Communism as practiced by Mao, Stalin and their successors.

Nixon, always the ballsy strategic macher, sent Kissinger to China to help open up normalized relations, primarily as a poke in the eye to Brezhnev, but also to help heal from the Viet Nam war. Because Dick was a well-known anti-commie, he could make this happen without being accused of being soft on communism, which would certainly have been the charge had either Hubert Humphrey or George McGovern won the White House and started talking with China.

So I will use the phrase "Only Obama Can..." to identify uniquely conservative issues or ideals that only Obama, as both a true-blue liberal and an African-American, could make happen.

The first one is easy:

Only Obama Can End Affirmative Action.

He's African-American. He's President, elected with a clear majority of all ethnicities and cohorts. Game Over. Affirmative action and all its forms and features - set-asides, quotas, targets, diversity, and so on - has done what its proponents said it was there to do - level the playing field for minorities, and compensate for historical discrimination.

There is now no area of interest, no part of government, no level of business or fame, that does not now have full free market, achievement-based representation of African Americans. Time for them to grow up, throw down the crutch of victimization, spit out the teat of Mother Government, and join the rest of America as unhyphenates.

On January 20, 2009, Obama will take the podium as President, and as part of his Inaugural Address, he should pledge to institute color-blind policies throughout his administration, and to work with Congress to abolish all other forms of ethnic segregation in all laws and regulations.

Odds of this actually happening: 50%

I think the odds are actually pretty good, depending on how greedy the race-baiters get. With Obama at the top, they will think it's open season for racial goodie-grabbing, featherbedding, and favoritism. Think Detroit, Chicago and New Orleans come to Washington, DC.

The more they threaten Obama's administration with scandal and mayhem (example A - the Community Reinvestment Act) the more he will want to keep them from building rival feifdoms and showing up on TV being frog-marched into the courthouse for tax fraud and embezzlement committed under Obama's banner. It was OK while Bush was in charge - it made him look bad no matter who it was that was being sleazy, and co-ethnics saw these shenanigans as simply gettin' their fair share back from The Man. Yes We Can!

Rahm Emmanuel will try to keep everybody in line, but he'll fail. Obama will have to get all Angry Father on everybody's ass "If you can't share, then nobody gets anything!"

Here's another easy one:

Only Obama Can Privatize Social Security and Health Care

Federal, state and union pensions and benefits are the elephant in the room of this financial crisis, as I have stated previously. These pensions and benefits packages amount to trillions in promises made by lawmakers and public administrators on behalf of the taxpayers to current and former employees. They are all based on the Wimpy philosphy - pay them something in the future for work performed today.

Actually, it is additional pay, on top of what these employees took home at the time they performed the work. The putative reasoning is to entice good workers to stay with the organization by promising that their future pay and benefits will increase, meaning that they will have more money after they retire.

This includes:
  • regular payments equal to a high fraction of their ending salaries for the rest of their lives (annuities),
  • medical insurance,
  • life insurance, and
  • other perqs, like purchasing clubs, employee discounts, travel and leisure discounts, etc.
All this was supposedly funded by deposits made on behalf of the employees. But legislators looking for dollars found it easy in boom times to reduce the number of dollars actually set aside, expecting that high returns from the stock market would make up the difference over time. This is the actuarial crap game played by all government budgeteers.

Well, all these bets have come up snake eyes. Between underfunding the pensions and over promising on benefits, government organizations of all sizes are finding they have laid out more markers than they can cover, and their current and projected bankrolls are no longer big enough to keep them in the game. For some, their entire current budgets are no longer enough to cover the deposits required to fund the promises they made. This means bankruptcy.

This same problem has crippled the Social Security system. Originally set up to cover a few thousand poor little old ladies and orphans, SS blossomed into a gargantuan Ponzi scheme, where politicians could promise the heavy-voting oldsters all kinds of future benefits without actually having to pay for them.

This worked for a long time because the demographics of the country made it easy to hide the true costs. Just a few dollars per paycheck from the tens of millions of baby boomers provided all kinds of cash for the few million qualifying greybeards. So much so that the politicians started using SS taxes for other spending. And when that wasn't enough, they started writing IOUs instead of depositing the money needed to cover future obligations.

All this was sold to the Boomers as a retirement savings and safety net program, providing them a guaranteed income once they retired, or if they became too disabled to work. So now that the Boomers are starting to cash in, and the demographics have turned around, there is not enough money to cover the IOUs.

Also, the financial meltdown has stripped off any camouflage left in the budget process, so there is no longer any way to further put off the day of reckoning. SS was known as the original third rail of politics, because to even talk about touching it was supposedly fatal. Now that the whole train has derailed, those worries are over.

Obama can fix all of this at one time. My plan is outlined in this post. In short, we cash out pro rata to their contributions everybody not already receiving benefits, closing all public pension systems and social security. You can take your proceeds as an annuity, or as tax deductions (up to a certain maximum per year) or as long maturity T-Bills or savings bonds. From that point forward, everyone is responsible for their own retirement savings.

Those currently receiving benefits will have them means-tested - i.e. wealthy (high net worth) people get less than poor people - and then benefits will be reduced to a level that can be covered by current SS taxes. As current beneficiaries die off, the SS taxes on everybody else will be reduced until the system closes out 30-40 years from now.

I would include in this process Medicare/Medicaid, and all government-funded health care.

Odds of this actually happening: 70%

Fantasy, you say? I don't think so. The only way to continue funding all this at anywhere near current levels would be to do what other socialist countries have done - let unemployment rise to 20% or higher, and take over key cash-producing commodity industries - petrochemicals, crops, mining, etc. Americans won't go for this.

I believe Obama will be blindsided and cornered by this crisis before his second term, forcing him to make choices based on reality. Like Bill Clinton with welfare, he'll have to sign on to conservative ideas and fix the problem if he hopes to be re-elected.

In the same way that the financial meltdown is (re) educating all Americans about the laws of finance and markets, the pension & health care funding meltdown will force everyone to face the music and fix the problem.

I believe this is a good thing. The sooner the better.

Posted by: JBD at 07:59 PM | No Comments | Add Comment
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