The stunning decline of Barack Obama: 10 key reasons why the Obama presidency is in meltdown – Telegraph Blogs

The stunning decline of Barack Obama: 10 key reasons why the Obama presidency is in meltdown


By Nile Gardiner World Last updated: August 12th, 2010


The last few weeks have been a nightmare for President Obama, in a summer of discontent in the United States which has deeply unsettled the ruling liberal elites, so much so that even the Left has begun to turn against the White House. While the anti-establishment Tea Party movement has gained significant ground and is now a rising and powerful political force to be reckoned with, many of the president’s own supporters as well as independents are rapidly losing faith in Barack Obama, with open warfare breaking out between the White House and the left-wing of the Democratic Party. While conservatism in America grows stronger by the day, the forces of liberalism are growing increasingly weaker and divided.

Against this backdrop, the president’s approval ratings have been sliding dramatically all summer, with the latest Rasmussen Daily Presidential Tracking Poll of US voters dropping to minus 22 points, the lowest point so far for Barack Obama since taking office. While just 24 per cent of American voters strongly approve of the president’s job performance, almost twice that number, 46 per cent, strongly disapprove. According to Rasmussen, 65 per cent of voters believe the United States is going down the wrong track, including 70 per cent of independents.

The RealClearPolitics average of polls now has President Obama at over 50 per cent disapproval, a remarkably high figure for a president just 18 months into his first term. Strikingly, the latest USA Today/Gallup survey has the President on just 41 per cent approval, with 53 per cent disapproving.

Related link: The Obama presidency increasingly resembles a modern-day Ancien Régime

There are an array of reasons behind the stunning decline and political fall of President Obama, chief among them fears over the current state of the US economy, with widespread concern over high levels of unemployment, the unstable housing market, and above all the towering budget deficit. Americans are increasingly rejecting President Obama’s big government solutions to America’s economic woes, which many fear will lead to the United States sharing the same fate as Greece.

Growing disillusionment with the Obama administration’s handling of the economy as well as health care and immigration has gone hand in hand with mounting unhappiness with the President’s aloof and imperial style of leadership, and a growing perception that he is out of touch with ordinary Americans, especially at a time of significant economic pain. Barack Obama’s striking absence of natural leadership ability (and blatant lack of experience) has played a big part in undermining his credibility with the US public, with his lacklustre handling of the Gulf oil spill coming under particularly intense fire.

On the national security and foreign policy front, President Obama has not fared any better. His leadership on the war in Afghanistan has been confused and at times lacking in conviction, and seemingly dictated by domestic political priorities rather than military and strategic goals. His overall foreign policy has been an appalling mess, with his flawed strategy of engagement of hostile regimes spectacularly backfiring. And as for the War on Terror, his administration has not even acknowledged it is fighting one.

Can it get any worse for President Obama? Undoubtedly yes. Here are 10 key reasons why the Obama presidency is in serious trouble, and why its prospects are unlikely to improve between now and the November mid-terms.

1. The Obama presidency is out of touch with the American people

In a previous post I noted how the Obama presidency increasingly resembles a modern-day Ancien Régime, extravagant, decaying and out of touch with ordinary Americans. The First Lady’s ill-conceived trip to Spain at a time of widespread economic hardship was symbolic of a White House that barely gives a second thought to public opinion on many issues, and frequently projects a distinctly elitist image. The “let them eat cake” approach didn’t play well over two centuries ago, and it won’t succeed today.

2. Most Americans don’t have confidence in the president’s leadership

This deficit of trust in Obama’s leadership is central to his decline. According to a recent Washington Post/ABC News poll, “nearly six in ten voters say they lack faith in the president to make the right decisions for the country”, and two thirds “say they are disillusioned with or angry about the way the federal government is working.” The poll showed that a staggering 58 per cent of Americans say they do not have confidence in the president’s decision-making, with just 42 per cent saying they do.

3. Obama fails to inspire

In contrast to the soaring rhetoric of his 2004 Convention speech in Boston which succeeded in impressing millions of television viewers at the time, America is no longer inspired by Barack Obama’s flat, monotonous and often dull presidential speeches and statements delivered via teleprompter. From his extraordinarily uninspiring Afghanistan speech at West Point to his flat State of the Union address, President Obama has failed to touch the heart of America. Even Jimmy Carter was more moving.

4. The United States is drowning in debt

The Congressional Budget Office Long-Term Budget Outlook offers a frightening picture of the scale of America’s national debt. Under its alternative fiscal scenario, the CBO projects that US debt could rise to 87 percent of GDP by 2020, 109 percent by 2025, and 185 percent in 2035. While much of Europe, led by Britain and Germany, are aggressively cutting their deficits, the Obama administration is actively growing America’s debt, and has no plan in place to avert a looming Greek-style financial crisis.

5. Obama’s Big Government message is falling flat

The relentless emphasis on bailouts and stimulus spending has done little to spur economic growth or create jobs, but has greatly advanced the power of the federal government in America. This is not an approach that is proving popular with the American public, and even most European governments have long ditched this tax and spend approach to saving their own economies.

6. Obama’s support for socialised health care is a huge political mistake

In an extraordinary act of political Harakiri, President Obama leant his full support to the hugely controversial, unpopular and divisive health care reform bill, with a monstrous price tag of $940 billion, whose repeal is now supported by 55 per cent of likely US voters. As I wrote at the time of its passing, the legislation is “a great leap forward by the United States towards a European-style vision of universal health care, which will only lead to soaring costs, higher taxes, and a surge in red tape for small businesses. This reckless legislation dramatically expands the power of the state over the lives of individuals, and could not be further from the vision of America’s founding fathers.”

7. Obama’s handling of the Gulf oil spill has been weak-kneed and indecisive

While much of the spilled oil in the Gulf has now been thankfully cleared up, the political damage for the White House will be long-lasting. Instead of showing real leadership on the matter by acing decisively and drawing upon offers of international support, the Obama administration settled on a more convenient strategy of relentlessly bashing an Anglo-American company while largely sitting on its hands. Significantly, a poll of Louisiana voters gave George W. Bush higher marks for his handling of the aftermath of Hurricane Katrina, with 62 percent disapproving of Obama’s performance on the Gulf oil spill.

8. US foreign policy is an embarrassing mess under the Obama administration

It is hard to think of a single foreign policy success for the Obama administration, but there have been plenty of missteps which have weakened American global power as well as the standing of the United States. The surrender to Moscow on Third Site missile defence, the failure to aggressively stand up to Iran’s nuclear programme, the decision to side with ousted Marxists in Honduras, the slap in the face for Great Britain over the Falklands, have all contributed to the image of a US administration completely out of its depth in international affairs. The Obama administration’s high risk strategy of appeasing America’s enemies while kicking traditional US allies has only succeeded in weakening the United States while strengthening her adversaries.

9. President Obama is muddled and confused on national security

From the wars in Afghanistan and Iraq to the War on Terror, President Obama’s leadership has often been muddled and confused. On Afghanistan he rightly sent tens of thousands of additional troops to the battlefield. At the same time however he bizarrely announced a timetable for the withdrawal of US forces beginning in July 2011, handing the initiative to the Taliban. On Iraq he has announced an end to combat operations and the withdrawal of all but 50,000 troops despite a recent upsurge in terrorist violence and political instability, and without the Iraqi military and police ready to take over. In addition he has ditched the concept of a War on Terror, replacing it with an Overseas Contingency Operation, hardly the right message to send in the midst of a long-war against Al-Qaeda.

10. Obama doesn’t believe in American greatness

Barack Obama has made it clear that he doesn’t believe in American exceptionalism, and has made apologising for his country into an art form. In a speech to the United Nations last September he stated that “no one nation can or should try to dominate another nation. No world order that elevates one nation or group of people over another will succeed. No balance of power among nations will hold.” It is difficult to see how a US president who holds these views and does not even accept America’s greatness in history can actually lead the world’s only superpower with force and conviction.

There is a distinctly Titanic-like feel to the Obama presidency and it’s not hard to see why. The most left-wing president in modern American history has tried to force a highly interventionist, government-driven agenda that runs counter to the principles of free enterprise, individual freedom, and limited government that have made the United States the greatest power in the world, and the freest nation on earth.

This, combined with weak leadership both at home and abroad against the backdrop of tremendous economic uncertainty in an increasingly dangerous world, has contributed to a spectacular political collapse for a president once thought to be invincible. America at its core remains a deeply conservative nation, which cherishes its traditions and founding principles. President Obama is increasingly out of step with the American people, by advancing policies that undermine the United States as a global power, while undercutting America’s deep-seated love for freedom.

American Thinker: Manufacturing Liberals

August 12, 2010
Manufacturing Liberals
By Larrey Anderson
Liberals are not insane, as many conservatives believe. Most liberals (I am not speaking here of the political or intellectual class) are ordinary human beings pursuing everyday human lives -- just like the rest of us. Here is a brief summary of why most liberals are liberal and what we can do to help at least some of them understand conservative thought:

1) Indoctrination, not education

Polls consistently find that over 70% of college professors identify themselves as liberal. The percentage of liberal faculty members is even higher if one removes responses from those teaching the "hard" sciences. In our prestigious universities, the figure approaches 90%. Both of these reported percentages are probably lower than the real figures [i].

The fact is that America's universities and colleges are no longer institutions that offer their students various political, social, and economic perspectives. There is no exploration of competing concepts, no real debate. Students are not taught how to think, but what to think. Our universities are indoctrination camps (and our public primary and secondary education systems are not much better) -- not campuses for learning and critical discussion.

Almost all of the students who emerge from these indoctrination camps have attended, for years, classes based upon moral, scientific, and epistemological relativism [ii]. Many of those students have never seriously considered, or even been exposed to, alternatives to the propaganda they receive during school. A person cannot change from position L to position C if that person doesn't know that position C is an alternative -- or if the student has been brainwashed into thinking that "C" stands for greed, racism, homophobia, etc.

Yet the hard truth is that conservatives far outnumber liberals in America. It is our fault that we have allowed our educational systems to become indoctrination camps run by the left.

2) Imagination, not intelligence (or possibility, not probability)

One of the most egregious errors that our educational systems dish out, and that the students ingest, is that the imagination is more important than the intellect (or, from a slightly different angle, that possibility is more important than probability). In The Passions of the Soul, Descartes contended that the passion of imagination should be used to employ newly discovered mathematical principles (essentially what is now the calculus) and the scientific method to rule the intellect [iii].

Today's intellectual elites agree with Descartes that the imagination (and, thus, the possible) is more important than reason (and the probable). For instance, a favorite philosopher of intellectual left, Friedrich Nietzsche, claimed, "Art is worth more than truth" [iv].

Here is an extreme (but typical) example of how far out of hand this thinking has gotten in our culture: Many programs that deal with absurd legends on the Discovery, History, and various "science" channels will close the episode by playing spooky music while the narrator says something like this:

Even though we still lack hard evidence, the search for Bigfoot goes on. [Narrator's sonorous voice becomes deadly serious.] Too many questions remain unanswered. And no one can deny that the existence of Sasquatch is ... [momentary pause during musical crescendo] ... possible. [End scary music. Roll credits.]


This approach is banal, but it keeps the viewers coming back to see the next production on Bigfoot that, once again, proves nothing. These programs demonstrate that in our popular culture, imagination is more important than rational thought and possibility is held higher than probability.

Al Gore's movie An Inconvenient Truth is the prime example of (bad) art masquerading as the truth. The movie is filled with factual errors and outright lies. But these distortions count for little in a society where "art is worth more than truth." (Commence creepy music. Roll credits. Stay tuned [v]!)

In making real-life decisions, probability is much more important than possibility. It is possible that I might win the lottery if I buy a ticket. It is more than 99.999% probable that I will not. Life tutors us in this truth -- this is one of the reasons why people tend to become more conservative as they grow older.

Because of our educational system, most liberals are never taught this basic fact of life. It is part of our job to help our liberal friends understand the simple and crucial truth: Just because something is possible does not make it probable.

3) Sympathy, not empathy

Liberals tend to be sympathetic. But sympathy is not empathy. Sympathy is a product of the imagination. Empathy is a result of knowledge acquired through personal experience. Because liberals tend to be sympathetic rather than empathetic, they see other people from two distorted (and imaginary) points of view:

First, liberals tend to see those for whom they have sympathy as victims. This is a natural (though irrational) way of perceiving those who are less fortunate -- or have an unconventional lifestyle. If I have not had the experience of being poor, then I cannot understand the causes of any particular poor person's poverty. I can imagine some causes, pity those who are destitute, desire to act to end my imaginary causes, and quell my sympathetic feelings of guilt. Since sympathy comes from what I imagine to be true (not from what I know to be true), I could be wrong. My "cure" for poverty could be worse than the disease.

Second, liberals tend to view people as groups or causes -- not as individuals. Because sympathy is based in the imagination instead of on experience, the poor are not seen as distinctive human beings -- rather the poor are viewed as a class. The same is true of other categories like homosexuals, women, illegal immigrants, etc. Imaginative sympathy distracts us from seeing the other (any other) person as a unique human being.

Empathy develops as a person matures. It is a visceral and legitimate emotion. We empathize with the individual (not with a make-believe category of people). Empathy drives us to specifically address a problem in the life of someone who needs our help. And we address the problem knowing something about it.

Many liberals are empathetic. But most of them do not or, because of their education and ideology, cannot differentiate between sympathy and empathy. A man who was born in poverty and later becomes successful has some idea of when a particular needy individual requires practical advice or a loan -- rather than a gift of money. The successful man is able to use his accumulated knowledge and/or wealth to specifically address a poor person's problems. The empathetic person knows the difference between a handout and a hand up.

If liberals were consistent in their ideology, they would voluntarily give their extra income to the government. Liberals, who really believe government can eliminate poverty, manage health care, save peoples' houses, etc., should be putting their money where their sympathy is.

But overwhelmingly they don't. Deep down, some liberals get it. The extra ten bucks in a liberal's wallet is better-spent on a friend who needs gasoline to get to work than donated to the DOE's green energy programs. Another of our tasks as conservatives is to explain to our liberal acquaintances what some of them already understand: Sympathy is not empathy.

4) Control, not freedom

As I have discussed at length in a couple of other articles, liberals generally prefer an outside power (the government) to fix those difficulties in life that they cannot personally control. I have used the desire of liberals to establish universal health care -- but not universal lawn care -- as an example.

When we put these four principles together, we begin to see a familiar pattern. The mindset of ordinary liberals begins with indoctrination. The world is primarily viewed through the imagination. Liberals favor sympathy over empathy and embrace possibility rather than probability. Liberals long for a utopia, or perfect world, and believe that some greater power (the government) can solve problems outside of their personal control.

Notice how similar the liberal mindset is to the belief systems of the pious -- with a crucial difference: Members of the various religions accept the fact that many of their theological principles are based upon belief. Knowledgeable practitioners of most religious sects willingly admit that the acceptance of a particular dogma is, in the final analysis, a matter of faith. This is why the catechism and the various professions of many denominations feature the words "We [or "I"] believe ..."

Liberal thought parallels religious belief -- except liberals do not understand (or are loath to admit) that their thought processes are, in effect, grounded in faith.

Let's reconsider an example given above. Instead of offering a friend ten dollars for gasoline, the liberal gives his "friend" a lecture on the evils of carbon dioxide, tells his associate to walk or ride a bike the thirty miles to work, and (being consistent in approach) donates the ten dollars to the Department of Energy. The danger for liberals, and for the rest of us, should be obvious: by avoiding close scrutiny of their Weltanschauung, liberals are is getting perilously close to sliding past liberalism's religious orientation and into the nightmare of...the cult.

Larrey Anderson is a writer, philosopher, and submissions editor for American Thinker. He is the author of The Order of the Beloved and the memoir Underground. His next book, The Idea of the Family, will examine the role of procreation in human self-awareness.
[i] Professors in the hard sciences tend to be more conservative than those who teach the humanities or the "soft" sciences. If the polls did not include the professors from the small number of private universities (mostly Christian) where a majority of the faculty members are conservative, the percentage of liberals would be higher in these polls.

[ii] I have discussed the myth of relativism in another article and will not readdress the issue here.

[iii] In Descartes, the imagination is an expression of the free will and appears to be subordinated only to the highest passion: generosité (self-esteem). Notice that this connection -- between the free will and the imagination via self-esteem -- eventually leads to the intellectual narcissism that imbues modern thinking. For a full discussion of this decisive turn in modern philosophy, see Stanley Rosen's "A Central Ambiguity in Descartes" (Chapter 2 in Rosen's Ancients and Moderns, Yale University Press, 1989).

[iv] In fact, philosophy's latest invention, modal logic, was specifically constructed to deal with uncharted territories in traditional logic, like possibility (not probability, which is a branch within mathematics and used in statistics). I have seen "technical" papers in philosophical journals use modal logic to argue, in effect, that abortion is "moral" because the unborn baby might (or might not -- the arguments I have read are not very consistent) exist in a chimerical possible world. See sections 4-7 in Stanley Rosen's The Limits of Analysis (Basic Books, 1980) for an in-depth discussion of imagination, possible worlds, and modal logic. Brandeis professor Palle Yourgrau has done groundbreaking work in debunking the fabrication of "moral" arguments utilizing modal logic and set in possible worlds. E.g., "The Dead," in Journal of Philosophy, 84, #2, pp. 84-101.

[v] Employing overly generous percentages, I have shown elsewhere the probability is extraordinarily low that Gore's assertions are true. Gore's claims about global warming are possible -- much like the existence of Sasquatch is possible.

Colorado Senate Primary Results Analysis

Many in the Democrat Party are rejoicing, particularly those in the Obama Regime since their favorite, Michael Bennet, beat the Democrat challenger, Andrew Romanoff, yesterday 54%-46%. They shouldn't be too quick to rejoice, however, because on the other side Ken Buck beat Jane Norton, 51.6%-48.4%.

Democrats should beware of the numbers this year since both Republican candidates out polled the winner in the Democrat Primary despite the Democrats 4000+ voter advantage in registration. Bennet 183,521 votes, Romanoff 155,016 while Ken Buck got 209,967 and Jane Norton polled 197,143. even the Republican runner-up got more votes than either of the Dems. The Democrats were able to field 32% of their registered voters while the Republicans fielded 38.6% of theirs.

It is obvious from that, that the Republicans are motivated while the Democrats, well, not so much. The Republicans had a more than 68,000 vote advantage in Tuesday's Primary. Two things may have played a part in this. Republicans may have been truly motivated and/or independents declared as Republicans to vote for Republican candidates. Either way, Democrats are in trouble. They hold a slim advantage over the Republicans in registration but Independent voters hold a slim edge over the Democrats and the independent voter played a huge role in the 2008 election.

Much has been said lately about Maes chances with Tom Tancredo in the race. With a 68,000 vote advantage, Terrible Tom may not have the swing they think he does. 68,000 votes is just over 9% of the total cast. If that held then one could expect the race to be a dead heat between the two major candidates. Maybe he isn't Colorado's Ross Perot yet.

The national media is trying to make this out as a big victory for Obama but another look just doesn't justify it. There is a lot of anti-incumbent sentiment and Bennet, although never elected to anything, is an incumbent.

I noticed Martell Daniels, local Dem head, on TV tonight rationalizing that Maes has no executive experience and has never saved anything. I'll also bet that she didn't use the same "logic" when she cast her vote for Obama in 2008. What is good for the goose isn't good for the Donkey. And don't forget that Bennet has voted in lockstep with Harry Reid and even had to ask Chuckie Shumer how to vote on one major piece of legislation. He is more beholden to the eastern liberals than to his own constituency. He wouldn't even show his face on the western slope to talk with us.

Federal workers earning double their private counterparts - USATODAY.com

Federal workers earning double their private counterparts

PAY RATES



By Dennis Cauchon, USA TODAY
At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds.

Federal workers have been awarded bigger average pay and benefit increases than private employees for nine years in a row. The compensation gap between federal and private workers has doubled in the past decade.

Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available.

The federal compensation advantage has grown from $30,415 in 2000 to $61,998 last year.

Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years.

"The data are not useful for a direct public-private pay comparison," says Colleen Kelley, president of the National Treasury Employees Union.

Chris Edwards, a budget analyst at the libertarian Cato Institute, thinks otherwise. "Can't we now all agree that federal workers are overpaid and do something about it?" he asks.

Last week, President Obama ordered a freeze on bonuses for 2,900 political appointees. For the rest of the 2-million-person federal workforce, Obama asked for a 1.4% across-the-board pay hike in 2011, the smallest in more than a decade. Federal workers also would qualify for seniority pay hikes.

Congressional Republicans want to cancel the across-the-board increase in 2011, which would save $2.2 billion.

"Americans are fed up with public employee pay scales far exceeding that in the private sector," says Rep. Eric Cantor, R-Va., the second-ranking Republican in the House.

Sen. Ted Kaufman, D-Del., says a pay freeze would unfairly scapegoat federal workers without addressing real budget problems.

What the data show:

•Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

•Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

Is there NO shame ay all in the Obamas'?

Food for thought................maybe a little influence on how you vote in November and 2011!!!!!

Is there NO shame ay all in the Obamas'?

Some have said that the STIMULUS hasn't saved any jobs, but here is a case where at least one job was saved.
Take for instance Oregon State University Athletic Director Bob DeCarolis.

Now Mr. DeCarolis was considering firing their Basketball Coach.......Craig Robinson after an 8 -11 start (2-5) in the Pac 10 conference).
When word reached Washington DC , Undersecretary of Education Martha Kanter was dispatched to Corvallis with $17 million in stimulus money for the university.
Thankfully, Craig Robinson's job is safe for another year.

Now comes the interesting part of our story.
For those of you unfamiliar with Coach Robinson, he just so happens to be the brother in law of none other than our country's beloved President, NOW YOU'RE CATCHING ON.
That's right he is the brother of Michelle Obama!

But hey, can't we all come to the conclusion that Coach Robinson's job security
was all just a coincidence? I'm sure of it! Aren't You?

Thank Goodness For The Stimulus!!!

Do you plan on voting?

The state and business: Leviathan Inc | The Economist

Leviathan Inc
Governments seem to have forgotten that picking industrial winners nearly always fails

Aug 5th 2010

LISTEN carefully, and you may detect a giant sucking sound across the rich world. In the 1990s this was the sound protectionists in the United States thought (wrongly) would accompany jobs disappearing to Mexico as a result of a free-trade deal. This time, too, there are big worries about jobs and growth, but the source of the noise is different, and real enough: it comes from the tentacles of the state, reaching into more and more areas of business in an effort to get the economy moving. It is the sound of Leviathan Inc.

Politicians are reviving the notion that intervening in individual industries and companies can drive growth and create jobs (see article). It is not just the usual suspects—although it is true that France, the land of Colbert, is busy taking stakes in toy manufacturers, video-sharing websites and fallen national champions. Elsewhere in Europe, from Berlin to Brussels, demand for industrial policy is back. Japan’s new government is responding to what it sees as the increasingly aggressive policies of foreign competitors by deepening the links between business and the state. In America Barack Obama, the effective owner of General Motors and a chunk of Wall Street, has turned his back on the laissez-faire approach of the past: a strategic-industries initiative is under way.

Although an understandable panic over economic growth in the rich world explains much of the state’s new meddling in business, other forces are at work as well. After the finance and property bubbles some influential companies—such as EADS and Rolls-Royce in the aerospace industry—are pressing for policies that support manufacturing. Bail-outs and billions of stimulus spending, however justified at the time, got government back into the habit of intervention. The case of Fannie Mae and Freddie Mac, America’s housing-finance giants, illustrates both the perils of state meddling (implicit state guarantees distorted the mortgage market with fatal consequences) and the difficulty of giving it up: having rescued the pair, the federal government lacks any plan to pull out.
Related items

* Innovation prizes: And the winner is…Aug 5th 2010
* Brazil's development bank: Nest egg or serpent's egg?Aug 5th 2010
* Face value: Li Shufu: China's lucky man bags VolvoAug 5th 2010
* The global revival of industrial policy: Picking winners, saving losersAug 5th 2010

And Western politicians cannot fail to be influenced by the success of emerging countries like Brazil, India and China, where a big role for the state in business seems to be working wonders. Nine of the world’s 30 largest listed firms are emerging-market companies that count the state as their dominant shareholder. In the 1980s, the last time industrial policy was in fashion, the West was in awe of Japan and its inexorable rise; now it is in awe of China and its state capitalism.


Déjà voodoo

Yet the overwhelming reason for China’s miracle is that the state released its stifling grip and opened the country to private enterprise and to the world. The likes of Li Shufu, who runs Geely, the car firm that has just bought Volvo (see article), are entrepreneurs, not bureaucrats. India’s wildly successful software and business-process-outsourcing industries blossomed not because of help from the government, but precisely because its Licence Raj did not understand these nascent fields well enough to choke them off. In Brazil, where it is often said that an activist industrial policy helps to explain why the economy has been thriving, a surging state-owned development bank, BNDES, is probably crowding out other sources of finance (see article). The likes of Petrobras (oil), Vale (mining) and Embraer (planes) were indeed created by the government. But they have all flourished because they were privatised, to a degree, and forced to compete with foreign firms in the 1990s. Part-privatisation and competition created in a short time what decades of industrial policy had failed to do.

In the rich world, meanwhile, the record shows, again and again, that industrial policy doesn’t work. The hall of infamy is filled with costly failures like Minitel (a dead-end French national communications network long since overtaken by the internet) and British Leyland (a nationalised car company). However many new justifications are invented for the government to pick winners, and coddle losers, it will remain a bad old idea. Thanks to globalisation and the rise of the information economy, new ideas move to market faster than ever before. No bureaucrat could have predicted the success of Nestlé’s Nespresso coffee-capsule system—just as none foresaw that utility vehicles, vacuum cleaners and tufted carpets (to cite examples noted by Charles Schultze, an American opponent of state planning) would have been some of America’s fastest-growing industries in the 1970s. Officials ignore the potential for innovation in consumer products or services and get seduced by the hype of voguish high-tech sectors.

The universal race to create green jobs is the latest example. Led by China and America, support for green tech is rapidly becoming one of the biggest industrial-policy efforts ever. Spain, blinded by visions of a solar future, subsidised the industry so lavishly that in 2008 the country accounted for two-fifths of the world’s new solar-power installations by wattage. This week it slashed its subsidies, but still has a bill of billions.


How to keep the beast at bay

Not all such money is wasted, of course. The internet and the microwave oven came out of government-led research; the stranger stuff that governments do can prove surprisingly successful. A few governments, such as America’s and Israel’s, have contributed usefully to the early development of venture-capital networks. Some advocates of industrial policy argue that the government, like a pharmaceutical company or a seed-capital firm, should simply increase the number of its bets in order to raise its hit rate. But that is a cavalier way to behave with taxpayers’ money. And the public funds have an odd habit of flowing towards politically connected projects.

Fortunately, there are now some powerful constraints on governments’ ability to meddle. In an age of austerity they can ill afford to lavish money on extravagant industrial projects. And the European Union’s competition rules place some limits on the ability to do special favours for particular firms.

That points to the first of three ideas that should guide a more sensible approach to securing the jobs of the future. Straightforward steps to improve the environment for business—less red tape, more flexible labour markets, simpler tax and bankruptcy regimes—will be more effective than handouts to favoured firms or sectors. Europeans ought to be seeking to strengthen the rules of their single market rather than pushing to dilute them; a long-overdue single European patent process would be a good start. Competition will do far more for jobs than coddling.

Second, governments should invest in the infrastructure that supports innovation, from modernised electricity grids (a smarter way to help green energy) to basic research and university education. The current fashion for raising barriers to the inflows of talented researchers and entrepreneurs hardly helps. Third, rather than the failed policy of picking winners, governments should encourage winners to emerge by themselves, for example through the sort of incentive prizes that are growing increasingly popular (see article).

None of this excites politicians as much as donning hard hats and handing out cash in front of the cameras. But the rich world has a clear choice: learn from the mistakes of the past, or else watch Leviathan Inc grow into a true monster.

Fracking freak-out just another flash-in-the-media enviro scare campaign | Washington Examiner

Opinion
[Print] [Email] 
Fracking freak-out just another flash-in-the-media enviro scare campaign
By: Mark Tapscott
Editorial Page Editor
08/06/10 8:32 AM EDT

Leave it to somebody from an energy state like Oklahoma to say it straight concerning the growing screams among environmentalists and their buddies in government and the mainstream media for a ban on hydraulic fracturing AKA "fracking" of oil and natural gas wells.

Robert Anthony, chairman of the Oklahoma Corporation Commission, which oversees the energy industry in the Sooner State, has this to say in today's edition of The Daily Oklahoman about the growing anti-fracking hysteria on the Left:

"Simply put, hydraulic fracturing (HF) is an essential oil and gas production technique used for reservoir stimulation.

"Ironically, given the opposition in the name of the environment, HF is also used for environmentally friendly applications such as geologic storage of carbon, developing water wells and "green" geothermal energy and even cleaning up Superfund sites.

"Opponents portray hydraulic fracturing as some horrible practice that endangers our water supplies, polluting them with cancer-causing chemicals.

"In fact, 99 percent of the materials injected are water and sand.

"Other HF ingredients are no stronger than chemicals found around the house.

"Furthermore, the fracturing process takes place thousands of feet below treatable (meaning potentially drinkable) groundwater, with layers of rock in between.

"We've used HF for some 60 years in Oklahoma, and we have no confirmed cases where it is responsible for drinking water contamination — nor do any of the other natural gas-producing states."

You might think there would be nothing else left to say on this issue, as Anthony pretty much covers all the bases in the quotes above, but he goes on and adds further valuable analyses in a debate that is growing increasingly shrill on the anti-fracking side as the public learns more of the facts.

That's why Anthony's conclusion is so important. It has to do with Chicken Little and the back story therein. You can read it all here.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Fracking-freak-out-just-another-flash-in-the-media-enviro-scare-campaign-100110484.html#ixzz0vrcQfmwF