‐ Invading Congo? He really is turning us into Belgium after all.
‐ The Cain mutiny against establishment politics rolls on. Cain is a charmer, and he is right to buck against a press that fancies itself a political gatekeeper: e.g., “When they ask me who’s the president of Ubeki-beki-beki-beki-stan-stan I’m going to say, ‘You know, I don’t know. Do you know?’” It’s not the zap answers to cover momentary lapses that alarm, so much as the sense that Cain’s lapses are subcontinental in scope. Immigration has been an inflamed issue for over 20 years, abortion for almost 40. Yet Cain can say the first plank of his immigration platform is building an electrified fence on the Mexican border, then say “that was a joke,” then say “I’m not walking away from that.” He can also say that regulating abortion “is not the government’s role,” then say that he is “100 percent pro-life.” Mutinies can be fun, but they need a foundation in substance if they are to succeed.
‐ Rick Perry thinks taxpayers should be able to choose whether they want to pay under the current system or under a new 20 percent flat tax. The optional nature of the proposal avoids the most potent political objection to a flat tax: that it raises taxes on many people. But it also surrenders the advantages of simplicity and low compliance costs that are a flat tax’s chief selling points. And it means that the new hybrid tax code would raise a lot less money than the current system, thus making spending cuts all the more imperative. Perry has proposed some serious ones, such as raising the retirement age for Social Security and possibly Medicare. But they’re not enough. Perry, or some other conservative, should go back to the drawing board.
‐ With a proposal that is one part jobs plan and one part energy plan, Perry also proposes to liberalize and revitalize the American energy sector, opening up oil and gas production in areas where American producers are either shut out or heavily restricted: the Gulf of Mexico, the Florida coast, and Alaska, among others. Perry’s plan entails the approval of the Keystone XL pipeline and the relaxation of regulations hindering production throughout the United States. He estimates that U.S. oil and gas production could be expanded by some 9.3 million barrels of oil and 22.4 billion cubic feet of natural gas per day, creating more than 1 million new energy-industry jobs by 2030. While those projections are optimistic, the Perry plan would be well worth pursuing if it did not create a single new job — because jobs are a means, not an end; the goal of public policy should be to make the nation wealthier and its economy more productive, not to micromanage industries. A country producing 9.3 million new barrels of oil and billions of new cubic feet of additional natural gas per day is a wealthier nation and a more productive one.
‐ When Perry angrily told Mitt Romney, in the October 18 presidential debate, that “you lose all of your standing, from my perspective, because you hired illegals in your home and you knew about it for a year,” it felt like a flashback to 2007. In a debate back then, Romney accused former New York mayor Rudy Giuliani of presiding over a “sanctuary city,” and the mayor shot back that Romney lived in a “sanctuary mansion.” Now: If paying a company that hires illegal immigrants disqualifies a person from the Republican nomination, then let every candidate who has ever eaten in a restaurant withdraw now, since the odds are good that some busboy or cook is there without papers. But perhaps the most significant aspect of Romney’s defense against Perry is how he characterized his own reaction: “I’m running for office, for Pete’s sake, I can’t have illegals.” Of course, it is embarrassing for an outgoing governor and presidential candidate to “have illegals.” But, for Pete’s sake, it’s also wrong.
‐ For all the talk of austerity in the news, there’s none to be seen in the real world: Federal spending is up about 5 percent for the year, with the government on track to spend at least $120 billion more this year than it did last year. State and local spending is up even more than that. Government salaries continue to increase, even as wages stagnate and decline in the private sector — i.e., in the real economy, which creates the wealth off of which the bureaucratic class feeds. This is precisely the inverse of the formula for prosperity, and the national economy is being hollowed out as capital is channeled away from productive enterprises and into political projects, many of them of scant value. Meanwhile, legitimate public services — from border patrols to local police and fire departments — are shortchanged, while grandiose boondoggles such as Solyndra and pet projects such as cowboy-poetry festivals receive remarkably generous infusions of taxpayers’ dollars. Austerity may be too much to hope for, but is prudence?
#page#‐ In order to pass Obamacare, the Democrats got the Congressional Budget Office to say that it would reduce the deficit. More than half of the savings came from a portion of the bill called the “CLASS Act,” a new entitlement to long-term care. CBO found that it was a net money-raiser for the government over the short run because it started collecting taxes before it started paying out benefits. Former senator Judd Gregg (R., N.H.) managed to pass an amendment saying that the government would have to find the entitlement actuarially sound to launch it. The Obama administration has finally admitted that it cannot. Liberals say that this story is a testament to — wait for it — the administration’s conscientiousness and the overall law’s wisdom. The theory appears to be that you pass a law under false pretenses in order to find out what’s not in it. Republicans should move to formally repeal the CLASS Act, get new estimates of the law’s cost — and hold hearings to let the administration tell the full story of just how diligent it has been.
‐ If Occupy Wall Street speaks for the 99 percent, does that include Kanye West? The rapper, who showed up at Filthland in Lower Manhattan to show a little solidarity, drives a $300,000 Maybach. Don’t you? Other celebrities making an appearance have included leftists (Michael Moore, Susan Sarandon), airhead scene-tourists (Mike Myers, Katy Perry), and the dead (Pete Seeger). Meanwhile one celebrity who earned his fame the hard way will not be coming. Lech Walesa, one of the heroes of the late 20th century, originally expressed sympathy for Occupy Wall Street on vaguely social-democratic grounds: “We need . . . less money for money’s sake.” But when Polish-American contacts told him about the anarchy, confusion, and Communism that reign at Zuccotti Park, Walesa backed off. The difference between Solidarity and solidarity, Hollywood-style
‐ The levelers at Zuccotti Park are encountering some real-world political dilemmas that involve, of all things, property rights. One faction evidently thinks that objecting to bankers’ hogging the nation’s wealth gives them license to bogart OWS’s supply of whatever they need, including money and food; others are willing to accept the concept of private property as long as it’s theirs. This is just one of many internal disputes that the Occupiers have faced over finances, logistics, security, sanitation, and so forth. With all the time and effort the OWS organizers have put into developing self-governance, some commentators say they are just like the founding fathers, except that they bathe even less often. But consider: They are protected by an outside police force, provided by a government they mock; after exhausting the wealth given them by earlier generations, they are now taking money from one another; and notwithstanding a proliferation of consensus-seeking boards and committees, they can put forth no unified message, which has led to talk of splitting up. In other words, instead of revolutionary America, the Occupy movement resembles today’s European Union.
‐ On the long list of things in which our nation’s people will always show a profound lack of interest, a Joe Biden presidential candidacy lies somewhere between single-payer health care and a shot-by-shot remake of Glitter. First of all, in 2016, Biden will be 74. The two times he did run for president, in 1988 and 2008, his support peaked in the single digits, and in the latter year, as the Democratic vice-presidential candidate, he arguably lost a debate to Sarah Palin. He is considered a foreign-policy oracle only in Delaware and the U.S. Senate. And where will he possibly find Biden’s Biden — a vice-presidential choice so ludicrous that nobody could contemplate removing the president from office? Nonetheless, when asked by CNN whether he would consider a run for president in 2016, he replied, “I’m not closing anything. . . . I’ll make up my mind on that later.” Was this an early signal to potential backers? Mere hyperbole? Or just another example of the vice president’s random-walk conversational style?
‐ Speaking of the vice president, he recently remarked that the alternative to passing the Democrats’ latest public-sector-bailout bill is an epidemic of rape and murder. He said nothing about frogs or locusts, but give him time, America, give him time
#page#After the Downgrade
It is old news that the Standard & Poor’s rating agency downgraded the United States’ foreign-credit rating from the coveted AAA to the less impressive AA+ on August 5. To date, much of the political discussion has focused on the blame game, with Republicans pointing accusing fingers at the Obama White House’s nest of Keynesians. But as Republicans look ahead to the possibility that they might actually defeat Obama, they will inevitably seek ways to recover the exalted AAA status. If history is any guide, repairing the damage done to the U.S. bond rating will be a long, hard slog.
Membership in the AAA club is highly exclusive and carries with it the likelihood that a nation can borrow money at the lowest interest rate available for any nation. Of the 126 sovereign governments that S&P currently rates, only a handful have ever held the highest rating. As of September 30, only 18 countries, or 14 percent, continue to have a AAA rating: Australia, Austria, Canada, Denmark, Finland, France, Hong Kong, Germany, Guernsey, Isle of Man, Liechtenstein, Luxembourg, Netherlands, Norway, Singapore, Sweden, Switzerland, and the United Kingdom. Ten of these have had a AAA rating throughout their ratings histories.
As can be seen in the nearby graph, only eleven countries have lost their membership in the AAA club since 1975. Five of them have never regained the top rating. More interesting for ratings optimists in the U.S. is the right side of the graph, which depicts a likely best case for the U.S. Shockingly, it has taken the remaining nations a minimum of ten years to persuade the rating agency once again to award them the highest possible rating. The average time between expulsion from the AAA club and reentry has been 13 years. The facts not charted are even more depressing. Of the successful comebacks, only Canada and Sweden recovered without additional downgrades in the intervening period.
Given the very slow progress visible in the U.S. on fiscal reform, many rightly fear that the more realistic best-case scenario in the U.S. is closer to the experience of the others. The picture there is ugly. Australia was downgraded further to a AA rating only four months after its first downgrade to AA+, and it took 16 years to retake the top spot. The rating of Denmark also fell to AA before beginning its long journey back to AAA: Eighteen years passed before it regained its AAA rating, the longest of any comeback so far. Finland’s rating was reduced even lower, to AA−, within a year of its first downgrade. But it managed to turn the situation around “relatively” quickly — it rejoined the AAA club within ten years, the apparent minimum for countries in this situation.
These statistics do not bode well for the U.S. A comparison with countries that, like the U.S., have lost the AAA rating but have not earned it back makes our future look even worse. Ireland, the last country that was downgraded before the U.S., has fallen to BBB+ since March 2009. Venezuela, which held a AAA rating for only five years, selectively defaulted in 2005 and is currently rated B+. New Zealand hasn’t regained a AAA rating in more than 28 years. Japan has recently fallen a step lower once again, to AA−, and so does not seem to be close to retaking AAA status.
This history suggests that the economic peril identified by S&P when it downgrades a nation is real. In a White House appearance on August 8, Obama voiced his disagreement: “Markets will rise and fall, but this is the United States of America. No matter what some agency may say, we’ve always been and always will be a triple-A country.” If Obama were right, then the U.S. could look forward to a speedy rating reversal. But a closer look at past downgrades suggests that even if a Republican captures the White House next year, the U.S. is unlikely to regain its AAA rating until after the new president’s second term is over.
#page#‐ President Obama has finally signed the trade agreements with South Korea, Colombia, and Panama. He and the Democrats in Congress have let these bills languish for almost five years, because of concerns about the loss of union jobs. Republicans had to agree to an extension of a program that compensates and retrains workers who lose their jobs to off-shoring. But even though he got what he wanted, President Obama has continued to downplay any commitment to free trade with our allies. He cancelled the Rose Garden ceremony in which he was supposed to sign the agreements, opting for a closed-door approval in the Oval Office. The president has finally signed a bill that will create tens of thousands of jobs and billions in trade without government spending — and is apparently ashamed of it.
‐ There has been some touchy tit for tat between Sen. Marco Rubio, the young Florida Republican, and the Washington Post. The Post accused him of fudging the facts of his family background: His website said his parents had come from Cuba following the Communist revolution. In reality, the Post noted, they had come in 1956, three years before Castro took over. Therefore, was the senator really a “son of exiles,” as he has always maintained? Rubio responded that his website had indeed been sloppy. But he hotly denied that he had meant to mislead anybody: His family returned to Cuba after the revolution, hoping to live there, but found this was impossible and came back to America. Whatever the specifics, said Rubio, he is definitely the son of exiles and immigrants. He further explained that, in telling his “story,” he had been “going off the oral history” of his family. Such histories can be a little messy, as we know. We should also know this: that the Communist dictatorship has shaped the psyche of Cubans and Cuban Americans for all these 50-plus years. Still, Rubio should be careful in every statement he makes. The media are not known for giving breaks to promising young conservatives.
‐ House minority leader Nancy Pelosi offered this measured assessment of her House colleagues who supported the Protect Life Act: “They will be voting to say that women can die on the floor and health-care providers do not have to intervene.” The bill, which passed the House by a vote of 251–172 on October 13, was designed to amend Obamacare by explicitly prohibiting the use of federal funds or tax credits to finance abortion and by allowing pro-life health-care providers to act on their consciences. President Obama pretends that an executive order he issued in March 2010 to give cover to pro-life Democrats whose votes he needed already accomplishes these goals, but opposes legislation that would actually make them enforceable. The bill is likely to stall in the Senate, making the scare tactics of Pelosi and the abortion lobby (NARAL dubbed the proposed law the “Let Women Die Bill”) as unnecessary as they are distasteful.
‐ Rep. Jesse Jackson Jr. (D., Ill.) griped recently that congressional Republicans were holding up President Obama’s jobs bill. Getting historical, he invoked “Abraham Lincoln, who looked at states in rebellion and [made] a judgment that the government . . . still had an obligation to function.” Likewise, Jackson argued, “the Congress is in rebellion” (feel a jump, did you?) because it’s “determined, as Abraham Lincoln said, to wreck or ruin at all costs.” As a result, Jackson suggested that Obama follow the Great Emancipator’s example and unilaterally hire “15 million unemployed Americans at $40,000 a head.” Maybe their job should be trying to explain the Constitution to Representative Jackson.
‐ Could it be true that the Obama administration’s Environmental Protection Agency has scaled back its agenda of regulating by fiat? In recent months it has dumped proposed regulations on lead dust, smog, and power plants, and now it has added farm dust to the list: For the last year, the EPA has been planning to tighten regulation of “coarse particulate matter” in a way that targets rural areas, but that plan has now been dropped. The EPA, for its part, has decided to pretend it has no idea why anyone would even think that it planned to regulate farm dust — “EPA hopes that this action finally puts an end to the myth that the agency is planning to expand regulations of farm dust,” its press release stated, even though the agency spelled out the “mythical” plan in a 357-page policy assessment last year. The EPA’s shamelessness may know no bounds, but apparently its ability to force strict regulations on an unwitting public by ukase is limited.
#page#‐ Unnamed Iranian officials devised a plan to kill Adel al-Jubeir, the Saudi ambassador in Washington, by bombing the restaurant he likes to frequent. Many others might also have died. An Iranian-American car salesman, Manssor Arbabsiar, was to engage gangsters from a Mexican drug cartel to do the dirty work. The FBI took the lead in uncovering what was going on and arresting him. In a federal court, Arbabsiar has pleaded not guilty. Up in arms with outrage, Iran’s supreme leader, Ayatollah Ali Khamenei, accuses “hopeless Western policymakers” of creating Iranophobia by “repeating stupid and useless methods.” Iranian spokesmen unanimously object that the whole story is a fiction and some commentators are at least half persuaded, although others are convinced that something so improbable could not be invented but can only be true. President Obama says the facts speak for themselves and nobody would have made these allegations unless they could be supported. He has called for new and tougher sanctions. If Arbabsiar is found not guilty, or if no tougher sanctions are forthcoming, the ayatollah’s gibe about “hopeless Western policymakers” will seem an understatement.
‐ Colonel Qaddafi is dead. His successors look as if they will be more orthodox Islamists than he was: Mustafa Abdul Jalil, head of the Transitional National Council, has already banned interest on housing loans, in conformity with sharia economics. Countries may choose their own poison, so long as they do not export it in the form of terror. The manner of Qaddafi’s death does not augur well for the future. He was hunted and killed like a rat in a barn; the video of his end and the images of his corpse recall lynchings, pogroms, Jacobin mobs. Qaddafi in power was so flamboyant that there is a rough symmetry in his degradation. But civilized rebels would have given him a trial and a public accounting of his many crimes, as the Iraqis did with Saddam Hussein. In Libya blood called down blood, which heralds more blood to come.
‐ The Obama administration has used congressional authorization to deploy 100 special-operations advisers and support troops to central Africa, where they will aid the Ugandan military in tracking, capturing, and killing the leaders of the Lord’s Resistance Army. Over the past decade, the LRA, a cult of terror led by madman Joseph Kony, has committed unspeakable atrocities around the border between the Democratic Republic of Congo and South Sudan, and caused one of the continent’s worst humanitarian crises. The United States has non-trivial economic and security interests in east-central Africa, and should lend support to such allies as Uganda and South Sudan, but our involvement in anti-LRA operations should be limited to training. We don’t want a repeat of the Battle of Mogadishu — a fight from which we have to beat a humiliating retreat because the stakes are too small to make any bloodshed worth it.
‐ Tunisians have just been dipping their index fingers in ink, the moving little election ritual invented in Iraq. This vote is for an assembly that over the coming year will be drafting a constitution. Turnout was massive, and something like 4 million voters had their fingers inked. At the time of writing, polls indicate that the Islamist party Ennahda has the most seats. Its leader, the elderly Rachid al-Ghannouchi, likes to present himself as a moderate who will not insist on total fulfillment of sharia law: He would allow, for instance, women to keep rights granted under previous regimes. The more they have experience in Europe or elsewhere, the more Tunisians suspect that an Islamist government in practice would be reactionary. The Congress for the Republic party came second in many constituencies. Its leader, Moncef Marzouki — author of a bitter satire, Why the Arabs Will Go to Mars — has the reputation of being a secular left-winger, yet he declares himself open to joining a coalition with the Islamists. The Arab Spring looks more and more worrisome.
#page#‐ Sgt. Gilad Shalit returned to Israel after he was kidnapped by Hamas in a border raid that killed two of his comrades. For more than five years his captors dangled him before his family and the Israeli public as bait for a swap. Israel finally gave in, freeing 1,027 terrorists and collaborators. Israel, unlike Pyrrhus, will not be undone by this victory, nor yet by several of them, but the release of so many murderers ensures more murder to come. Shalit is a soldier whose life was, by definition, at risk. How many innocents will die as a result of his return? The United States had an interest in the deal, since one of the freed prisoners was reportedly involved in the 2002 bombing of a cafeteria at Hebrew University in Jerusalem that killed nine, including five Americans. Palestinian society will be further coarsened, if possible, by the return of hardened thugs and the enhanced prestige of their liberators.
‐ About 3 million in number, the Basques are strongly nationalist, and have a hard-core terrorist component known as ETA, much as the Irish have the IRA. ETA has long fought for independence, in the process committing atrocities that led to the death of 829 people. ETA leaders have been in the habit of directing their operations in Spain from safe houses in France, parts of which they claim for the Basque homeland. French security services have at last been cracking down on these terrorists. Seven hundred are in prison in France and Spain, and no more than 50 are estimated to be still operative. These surviving ETA leaders declare that they are ceasing armed struggle and instead appeal for dialogue to reach a democratic solution of the political impasse. ETA has issued several previous ceasefire declarations, however, and makes no mention now of decommissioning its arms. Good news is so rare in Spain these days that ETA is widely being given the benefit of the doubt.
‐ A heroine died in Cuba on October 14. She was Laura Pollán, founder of the Ladies in White, a human-rights group. The ladies are the loved ones of political prisoners or former political prisoners. They march silently through the streets, hold candlelight vigils, and so on. These activities are considered greatly threatening to the Communist dictatorship. The ladies have been physically attacked by state security and the mobs it unleashes. These women, clutching their flowers, have been incredibly brave. On September 24, Laura Pollán and others were attacked when they left Pollán’s home for Mass. Pollán’s subsequent death has democrats thinking that the dictatorship had a role in that death. Was she poisoned in some fashion? She died mysteriously, and the state immediately cremated her body. The democrats’ suspicions, unfortunately, are not unreasonable. In any event, there may well be a monument to Pollán in a free Cuba. Her tormenters, and those of an entire people, will be remembered with contempt and horror.
‐ Ten Tibetans have immolated themselves this year in China to protest the government’s restriction of Buddhist practices. Five have died. One cannot but sympathize; one must not condone suicide. A thousand or so years ago, the Tibetan yogi-poet Milarepa wrote: “I do not experience the initial suffering of partiality, of thinking that ‘this is my land and that place isn’t.’ I do not experience the intermediate suffering of yearning for my land. And I do not experience the final suffering of having to protect my land.” Exiled from his land, in Dharamsala, India, the Dalai Lama announced new procedures for choosing his successor, if there is to be one; he also has said the line may end with him. Their import is that the successor need not be a child. This change helps provide for strong Tibetan leadership after the current Dalai’s death. It also makes it harder for Beijing to indoctrinate and enthrone a rival. If that happens, it may not even matter, since the Communist attempt to destroy Tibetan religion has internationalized it instead.
#page#‐ Ireland’s fiscal austerity is starting to hit home. First they cut the salaries of “nurses, professors and other public workers” (as the New York Times characteristically summarized); then they slashed infrastructure spending; and now, most draconian of all, the state will no longer pay for judges’ wigs. The posh perukes, which are made of white horsehair and cost $3,000 apiece, have been required in Irish courts since the 1660s but will now be optional. While money was the main reason, it’s probably no coincidence that the change was made at the behest of Ireland’s first female chief judge; a shock of white hair makes a man appear distinguished, sort of, but makes a woman just look frumpy. And while some Irish considered the practice an unwelcome holdover from English colonial days, we reject this wig interpretation of history. Instead it’s just one fewer charming anachronism left in a land that used to be full of them
‐ The recent Hollywood thriller Contagion concerns the worldwide spread of a lethal strain of flu. By way of publicizing the movie’s U.K. release, the distributors commissioned a study on people’s beliefs regarding health and well-being. Unsurprisingly, many old fallacies are still current. Large numbers of Britons believe that eating carrots improves night vision, that we lose most body heat through our heads, that stress will turn your hair gray, and so on. What caught everyone’s attention, however, was “man flu” — a type of sickness that causes males to lie on the sofa watching televised sports. One in five British women believes that this is a genuine medical condition. Far be it from us to disabuse them, or to suggest that American women might be less solicitous of their menfolk’s well-being, but, the respectable wire-service provenance of this report notwithstanding, we suspect that someone is having us on here.
‐ It’s a WikiLeaks cable covering one half of a diplomatic exchange, so take it with a grain of salt — but in 2009 President Obama apparently floated the idea of apologizing for the atomic bombing of Japan at Hiroshima. The cable, to Secretary of State Hillary Clinton, reported that a Japanese foreign-ministry official told the American ambassador that the idea of a Hiroshima visit and apology was a “‘non-starter.’ . . . Both governments must temper the public’s expectations on such issues.” What gives credibility to the idea that Obama had seriously proposed to apologize is that the president then was in full Nobel Peace Prize mode, he and his circle believing that his mere presence could defuse tensions, end conflicts, and bind up historic wounds. Happy golden bygone days! Even the Japanese thought this was too far, too fast. Next: a cable explaining that King Neptune and Davy Jones are happy with current sea levels.
‐ Since its introduction in 1959, the Barbie doll has generated an entire subculture of affection, collection, parody, grievance, and celebration. (Did you know that July 27 is National Barbie-in-a-Blender Day? Mark your calendar.) Barbie has inspired demonstrations (by feminists), lawsuits (mainly defensive by Mattel, Inc., the manufacturer), racial controversies (of course), and even outright proscription (Saudi Arabia). Here’s the latest storm in a doll-sized teacup: Tattooed Barbie. The manikin’s chest and neck are tattooed, her hair is dyed pink, and her accessories sport the logo of a real upmarket designer. Mattel advertises her as a “funky fashionista” who is “ready for fun in fashion-forward form.” Faced with protests from defenders of childhood, a company spokesman sniveled that Tattooed Barbie is targeted at adult doll collectors. Oh sure. No doubt the fall release date is just coincidence. At the time of writing, Tattooed Barbie is all sold out. We suspect she’ll be back in the stores in time for Christmas — you know, that season when you give gifts to all your adult doll-collector friends.
Mission Not Accomplished
While the Iranians pride themselves on playing chess while we play checkers, they could never have expected us to walk away from the board.
But that will be our next move in Iraq. President Obama announced that all of the roughly 40,000 U.S. troops in the country will leave by the end of the year. We are thus handing the Iranians a goal they have sought for years — to remove us from Iraq entirely so they can better influence the country for their ends.
The Obama administration is talking out of both sides of its mouth on Iraq. On one hand, it says the total withdrawal is the blessed advent of one of President Obama’s most cherished campaign promises. On the other, it says on background that the exit is all the Iraqis’ fault, that we wanted to maintain troops on the ground after 2011 but the Iraqis wouldn’t budge. It appears that the first factor played into the second: The administration’s lack of commitment to Iraq was the crucial backdrop to its poor handling of inherently difficult negotiations with the Iraqis.
To continue to maintain troops in Iraq after the expiration of the current deal, we needed the Iraqis to agree again to give our troops immunity from prosecution in Iraqi courts. This issue is obviously sensitive, and negotiations with the Iraqis over almost anything tend to drag out to the breaking point. A deal should nonetheless have been possible, given how many top Iraqi leaders say privately that they want to keep American forces in the country. With enough patience and ingenuity, the administration surely could have forged one.
Our commanders wanted to keep more than 20,000 troops in Iraq (the administration had bid this number down to several thousand, perhaps convincing Iraqi political players that cutting a politically painful deal on immunity would not have enough of a corresponding upside). Such a force would have enhanced our leverage in Baghdad, checked Iran’s already considerable influence, insured against a return of al-Qaeda, and helped keep a lid on Arab–Kurdish tensions in the north. Now, we will simply hope for the best.
Our pullout is a bonanza for Tehran. Its militias were already active in Iraq. It can now use Iraq for bases for its proxy forces to spread its tentacles in the rest of the Persian Gulf region. Independent ayatollahs in Iraq will have an incentive to keep their heads down. Political decisions of the Iranian-influenced Shiite bloc running the country are sure to begin to tilt more and more Iran’s way. Our diplomatic leverage will diminish.
The strategic ledger on the Iraq War is yet to be completed. We removed a hostile dictator who, as the sanctions regime against him inevitably eroded, would have again aggressively pursued a WMD program. But we badly mishandled the post-combat phase, and the country was ripped by an insurgency we could get a handle on only over several years and at a great cost in blood and treasure. In that fight, we dealt a grievous blow to al-Qaeda and established an inchoate democracy that may have helped spark the Arab Spring (itself an event whose final outcome we won’t know for years).
Despite his missteps, George W. Bush managed to see to it that his successor would need only to consolidate our gains. President Obama is careless enough to risk throwing them away, and shameless enough to call it success.
Bold, Brash, and Wrong
Herman Cain has at least momentarily risen in the polls, largely, it seems, as a result of his 9-9-9 plan for tax reform. It is a well-intentioned plan, but Cain’s response to criticism of it has been disconcerting. He has asserted that critics do not know what they are talking about, misstated key elements of his own plan, and revised it while pretending he has done no such thing. That he has to resort to such maneuvers may be a testament to his lack of political experience. It also highlights the weaknesses of the plan. Moving toward a consumption tax, as Cain’s plan would, is a worthy goal. But his plan’s peculiarities of design, substantive flaws, and political naïveté render it unworthy of conservative support.
Cain’s ultimate objective is a 30 percent national sales tax, but his interim plan is to replace the current income, payroll, and corporate tax codes with three new taxes. A 9 percent income tax would apply to a very different tax base: Capital income would go untaxed, but the exemptions that keep the basic cost of living from being taxed would disappear. A 9 percent value-added tax would be levied on corporations, although Cain calls it a “corporate income tax.” And consumers would pay a 9 percent retail-sales tax as well.
This tripartite scheme makes for a succinct slogan but has little else to recommend it. In particular Cain’s inability to choose between a sales tax and a VAT is puzzling. The two are very similar in their economic effects. The chief advantage of a sales tax over a VAT is that the latter is considered easier for governments to raise, because it is hidden. The chief advantage of a VAT over a sales tax is that it is easier to enforce without stimulating black markets. (Another is that it reduces the risk of taxing business-to-business purchases.) Opting for both as a transitional step means courting the danger of a VAT with none of its rewards: In the first stage, the government would get a new money machine, and in the second it would supposedly destroy that machine and opt for something hard to enforce.
Cain envisions his presidency as featuring a quick move to the 9-9-9 plan followed by an educational campaign about the virtues of the national sales tax. He will have to move fast, since he is counting on the massive economic boom he expects his plan to create to enable him to balance the budget in his first year. None of this sounds very achievable, but let’s indulge the candidate. Even if one believes, as we do, that the mortgage-interest deduction should be set on a path to extinction, does its immediate abolition in the midst of a weak housing market seem wise?
And while the plan promotes new savings, it attacks existing wealth. In particular, it is a plan likely to arouse the ire of retirees. They have paid income taxes their whole lives and would now have to pay additional sales taxes on their savings when they try to spend them. On balance, of course, retirees would continue to receive a large net transfer of funds from the federal government. But why fight them in a bad cause?
A better way to tax consumption would be to start with an income tax and then exempt the returns to capital. This approach may have less superficial appeal than the alleged simplicity of 9-9-9. But it would run none of the risks of a VAT, it would leave home values unaffected, and it would give seniors no reason for concern. And it could conceivably happen, unlike 9-9-9.