8.23.2005

KUDLOW PREACHES THE GOSPEL OF MARKETS

From my favorite tv economist - Larry Kudlow

"Permit me to take a contrarian view on the oil price shock. I say three cheers for higher energy prices. Why? Because I believe in markets. When the price of something goes up, demand falls off (call it conservation) and supply increases (call it new production). We're seeing a tectonic shift.

As Dan Yergin has advised us, energy supplies in the next few years will explode. Now the public is even favoring nuclear power. And the government is stepping out of the way by giving FERC the authority to override localities who oppose nuclear power, liquefied natural gas or other forms of energy.

Meanwhile the impact on the economy has been negligible, at least so far. And the Fed has prevented oil inflation from spreading to the rest of the economy. So much so that I think they should quit raising rates while they're ahead.

Meanwhile the spread of global capitalism to places like China, India, eastern Europe and elsewhere (which is a very good thing for world prosperity) is the main cause of the spike in energy.

So supply will rise exponentially in the years ahead, demand will slow a bit and we'll all live happily ever after. The moral of this story: markets work if you let them."

WSJ ED PAGE ON TAIWAN

Taiwan Fiddles
August 24, 2005

Taiwan spends a small fortune lobbying Washington so the U.S. will ride to its rescue in case of a Chinese attack. Yet more than four years after the U.S. offered a package of advanced defense weapons, politicians in Taipei still haven't decided to buy them. This isn't helping Taiwan's cause in Washington.

In April 2001, the Bush administration reversed the Clinton policy and offered Patriot anti-missile batteries, anti-submarine aircraft and diesel submarines. It did so at some diplomatic risk, since China has objected to the sale. But Taiwan clearly needs a stronger deterrent given China's military buildup, which includes more missiles targeting the island and aggressive submarine activity. China passed an anti-secession law in March, mandating force if Taiwan rejects "peaceful reunification."

But legislators in Taiwan have blocked any purchase plan proposed by President Chen Shui-bian. Some opposition politicians have even accused the U.S. of using the arms sales as a pretext to pursue a hidden agenda of demonizing China. Lien Chan, until last week chairman of the main opposition party, has argued the country can't afford the $15 billion price tag. But this doesn't wash for an island with per-capita income of $13,000 a year.

Mr. Lien, as it happens, was given red-carpet treatment during a high-profile visit to Beijing in April. A month later, he rebuffed a plea from 33 U.S. Congressmen to end his party's obstruction of the bill now before Taiwan's legislature and approve special funding for the arms purchases. Mr. Lien instead blamed President Chen for waiting three years before submitting the funding request in June 2004. Opposition parties, which run the legislature, have used procedural tactics to block the funding bill at least 26 times.

The good news is that the recent Pentagon report on China's military has put opponents on the defensive by highlighting how Taiwan risks "being quickly overwhelmed" by Beijing's rapidly modernizing forces. And Mr. Lien has been succeeded as KMT chairman by Taipei Mayor Ma Ying-jeou, who seems to understand the urgency of the arms purchases.

The problem is that while Taiwan dawdles, China keeps modernizing its military. The 2001 U.S. offer, while still useful, may require upgrading if Taiwan truly wants the capability to hold off an invading force long enough to allow the U.S. to intervene. Given Taiwan's half-hearted response to the current arms offer, there's little point in considering a fresh one now. But if Taiwan wants the U.S. to risk its blood and treasure in the event of an attack, paying for an adequate defense would seem to be a minimum prerequisite.

8.19.2005

WSJ ED PAGE ON CHINA

The Wall Street Journal Editorial page gets it right 98% of the time. However, when it comes to China and illegal aliens, they're slightly off the mark. Today, they have an editorial about China. While I see that and jump for joy, they see it and look to help them out of it... ehh, nobody's perfect.

China Does Carternomics
August 19, 2005; Page A12

We don't know if the Chinese have suddenly appointed Jimmy Carter as their energy czar, or whether it just seems that way. The two- and three-hour long gas lines now stretching down city blocks in many provinces in China are certainly an unwelcome reminder of the 1970s when U.S. policies caused a similar energy panic.

So let's think of this as a teaching moment. In China today, many of the same Carter-era policy prescriptions for high energy prices have incited the unprecedented gas lines. The government has imposed price controls on oil and gas in an effort to fight inflation, just as the U.S. did back then, and in the last few weeks it has even resurrected another Carter-era gem, a "windfall petroleum profits tax" on oil and gas producers. Perhaps Chinese President Hu Jintao will soon deliver a televised speech to the nation wearing a cardigan.

By holding domestic prices to about $10 a barrel below the world price, according to the International Energy Agency, Chinese oil firms have discovered they can make more money selling energy abroad than at home, thus lengthening the gas lines.

Gasoline shortages in recent days have become so severe that Hong Kong's South China Morning Post reports that the waiting lines have infuriated "everyone from taxi drivers to farmers across the country, and could threaten social stability." Two other Asian nations, Indonesia and the Philippines, have also been toying with oil price controls and gasoline rationing -- so they might want to watch and learn from the Chinese mistake.

Price controls that are set below the market price always exacerbate shortages, because the artificially low price causes demand to rise and supply to fall. With the price no longer permitted to equilibrate supply and demand, consumers wind up paying not with dollars, but worse, through waiting lines and lost hours in the day. That's what beleaguered Russians learned many times over when they waited in grocery lines for price-controlled bread and chicken and chocolates during the Soviet era.

And it is what enraged Americans learned when parked in gas service station lines at 7 a.m. during the 1970s, which, since it included both the Nixon and Carter years, was arguably the worst period for U.S. economic policy during the last century, Herbert Hoover excluded. A windfall profits tax only discourages increases in supply by disincentivizing further production. High profits are precisely the desirable signal that a market sends to firms to find and produce more oil and gas.

The good news for the Chinese is that they can look to history for a way out. When Ronald Reagan became President in 1981, two of his first official acts were to immediately repeal all Carter-era oil and gas price controls and to repeal the oil windfall profits tax. Oil prices soon rose to their natural market level, and through the invisible hand of the market, production rose, consumption fell and prices began a steady decade-long decline. The U.S. energy "crisis" was over

8.15.2005

FORBES PENS OP-ED FOR WSJ

One Simple Rate

By STEVE FORBES
August 15, 2005; Page A12


A major domestic battle looms this fall, when tax reform -- a centerpiece of the president's bold domestic agenda -- will finally be on the table. The President's Advisory Panel on Federal Tax Reform is expected to release its findings by the end of September. After the political shellacking the White House took on Social Security, the administration will be strongly tempted to take a conciliatory path that supports only superficial reforms, essentially preserving the status quo of our hideous income tax code.

Such a course would have perilous consequences, economically and politically. In fact, the administration has an opportunity here to boldly retake the initiative, to recover lost political support and thrust an already decent economy into high gear and, at the same time, make America better able to meet intensifying competition from China, India and others. How? By junking the entire federal income tax code and starting over with a flat tax. A growing number of countries are doing this -- and so should we.

The current system is beyond redemption, a beast whose complexity, confusion and outright unfairness have corrupted our economy and society. Americans waste more than $200 billion and over six billion hours each year filling out tax forms. They engage in all kinds of useless economic activity intended to take advantage of the code's complicated maze of deductions and to reduce taxes -- from deducting donations of old socks to making unwanted investments. The waste of brainpower -- at a time of increasing global competition -- is incalculable.

The code corrupts our system of government by encouraging the crassest political conduct and by creating a massive, intrusive federal bureaucracy. One-sixth of the private-sector employees in Washington are employed by the lobbying industry. One-half of their efforts are directed at wrangling changes in the tax code. Few people realize that our health-care system, with its runaway costs, is, in fact, the ultimate product of the tax-code distortion in our economy. And last, but most definitely not least, we simply pay too much in tax. When you take into account all the taxes, fees and tolls paid to the government, the typical American pays somewhere around half or more of his income in taxes. Why do we the people accept this?

My flat tax plan has one simple rate, on the federal level: 17% on personal income; and 17% on corporate profits. There would be generous exemptions for individuals: $13,200 for each adult; $4,000 for each child or dependent and a refundable tax credit of $1,000 per child age 16 or younger. A family of four would pay no federal income tax on its first $46,165 of income. Exemptions for a family of six -- mom, dad, four kids -- would be $65,930. No anti-risktaking capital gains levy; the capital gains tax would go to 0%. The abusive Alternative Minimum (really maximum) Tax would be abolished. No more death tax: You'd leave the world unmolested by the IRS. No taxation without respiration!

Corporate profits would be taxed at a rate of 17%. Companies could expense all investments at once: no more depreciation schedules. If these instant write-offs produce a loss, that can be carried forward to use against future profits for as many years as necessary to use it up. And businesses would be taxed only on income made in the U.S.

The economic boom the flat tax would unleash would be stupendous, ushering in a long-term, non-inflationary expansion of historic proportions. The current expansion would pale in comparison. Once again, we would be the clear global leader in high-tech and medical innovations -- unlike today, when our lead, thanks in no small part to the tax code, is now under increasing assault.

How would a flat tax do this? What so many "experts" can't grasp is that taxes are not only a means of raising revenue for governments but also a price and a burden. The tax you pay on income is the price you pay for working; the tax on profits is the price you pay for being successful, and the levy on capital gains is the price you pay for taking risks that work out. When you lower the price of good things, such as productive work, success and risktaking, you get more of them. The flat tax does that dramatically.

Experience demonstrates time and time again -- the Harding-Coolidge tax cuts of the 1920s, the Kennedy cuts of the '60s, the Reagan cuts of the '80s and the Bush reductions of 2003 -- that lower tax rates lead to more economic activity, which leads to more government revenue. Fiscal Associates of Alexandria, Va., an economic consulting firm, did an analysis of the flat tax. Its findings: between 2005 and 2015, the Forbes Flat Tax Plan would generate $56 billion more in new government revenue than the current income tax. More important, an estimated $6 trillion in additional assets would be created, an immense boost to our nation's balance sheet. This study also predicts that that flat tax would lead to nearly 3.5 million new jobs by 2011 -- jobs that otherwise would not exist.

To avoid puerile and divisive debate about who would gain and who would lose, my flat tax is designed to be a tax cut for all. Because some people will only focus on what they lose in the way of deductions under the flat tax -- ignoring the fact that their income tax payments would go down -- my plan gives you a choice: When the flat tax is implemented, you can file your postcard return under this new, simple system, or continue to file your tax returns, with all of their mind-numbing complexity, under the old system. See for yourself which is better. I think most would conclude that the flat tax is best.

Other countries are getting the message, even if we have yet to. Hong Kong has successfully had a variation of the flat tax for 60 years. Lithuania, Latvia and Estonia enacted flat taxes in the '90s that have been hugely successful. Russia put in a flat tax four years ago, and revenues have more than doubled in real terms. Ukraine, Slovakia, Romania, Georgia and Serbia have also successfully enacted flat taxes. How ironic that one-time Communist nations have been reaping the benefits of a flat tax before that bastion of free enterprise, the U.S.

President Bush should understand that trying to tinker with the tax beast won't work. In 1986, Ronald Reagan simplified the tax code somewhat: A number of tax shelters were eliminated and the number of tax brackets were cut to two: 28% and 15%. But the code remained intact. No sooner was the ink of Reagan's signature dry than Washington politicians slid back into their bad, old habits. Since his day, the federal income tax code has been amended 14,000 times. The tax system today is 60% larger than it was after the Reagan reforms. The flat tax's very simplicity makes such backsliding difficult: Any change would trigger a national debate. For insurance, the Forbes Flat Tax also contains a supermajority provision -- taxes can't be raised unless approved by a 60% vote in both the House and Senate. Few tax boosts in recent decades have surmounted such a barrier. The usual objections to the flat tax don't hold up. The flat tax will help housing -- personal incomes would go up and interest rates would go down -- and boost charitable giving. Experience demonstrates that when people earn more they give more.

* * *
What about a national retail sales tax? The most prominent plan encompassing this idea proposes a sales tax of 30% to replace the income tax and payroll tax. This 30% tax poses many challenges, among them repealing the 16th Amendment, which allows Washington to impose the income tax -- a lengthy, onerous process. Otherwise, we would likely end up with both an income tax and a sales tax.

The national sales tax would dramatically raise prices of many goods and services. Imagine a couple buying a new house costing, say, $200,000, coughing up an extra $60,000 in sales taxes. A new dedicated bureaucracy would be necessary to collect the tax and to disburse rebates (which the plan's advocates propose) from Uncle Sam to tens of millions of Americans every month to repay them for a portion of the sales tax they pay on food and clothing. Under the circumstances, the flat tax seems the best alternative to the current abomination.

That's why George Bush should pull a Ronald Reagan -- he should demand that Congress destroy this hideous tax system, the way Reagan demanded that Mikhail Gorbachev tear down the Berlin Wall. Should the president make such a plea, the American people would surprise the Washington cynics and give him a grateful, full-throated cry of support.

Mr. Forbes, editor in chief of Forbes Magazine and president & CEO of Forbes Inc., is the author of "Flat Tax Revolution: Using a Postcard to Abolish the IRS" (Regnery, 2005).

8.14.2005

The moral case for reform

John Kurzweil is editor of California Political Review.
Posted: August 8, 2005


Peter Schweizer, in his book Reagan’s War, says Ronald Reagan’s guiding insight was that for all its bluster and destructiveness, communism was not a tower of strength to be feared, but a quivering mass of weakness ripe for defeat. Reagan knew its very reliance on lies and violence betrayed its weakness, and so was able to proceed against it with a confidence in final victory shared by few other men.

Visits to websites run by a major opponent of the state’s November reform initiatives — the Service Employees International Union (SEIU) — conveyed a similar impression of weakness, and reminded me of a comment from Albert Speer’s Inside the Third Reich:

It remains one of the oddities of this war that Hitler demanded far less from his people than Churchill and Roosevelt did from their respective nations. The discrepancy between the total mobilization of labor forces in democratic England and the casual treatment of this question in authoritarian Germany is proof of the regime’s anxiety not to risk any shift in the popular mood .... Whereas Churchill promised his people only blood, sweat, and tears, all we heard during the various phases and various crises of the war was Hitler’s slogan: “The final victory is certain.” This was a confession of political weakness. It betrayed great concern over a loss of popularity that might develop into an insurrectionary mood.


This, of course, is the weakness of materialism: by definition unable to draw upon the virtually limitless reservoirs of strength in the human spirit, it must make do with the shallowest of appeals, those of worldly self- interest and the tawdry emotions that accompany it — anger at one’s enemies, real or perceived; festering resentment over life’s difficulties and disappointments; continuous fear of “running out” of life’s necessities; shallow lust after the appearances of personal success — and envy for anyone who seems to have found it — but without the seriousness of purpose that motivates genuine striving for greatness. As Midge Decter says of left-wing feminists in another part of this issue, they appeared on the scene “militant, angry, and in the grip of a curious but lethal combination of galloping self-pity and driving ambition.”

No doubt I will be accused of saying California’s labor unions are run by Nazis and communists. No, I am not saying that. I do say the role those controlling California’s public employee unions have chosen to play in this election betrays weakness, showing the same signs of weakness — reliance on empty slogans and stimulation of low emotions — that tyrannies do.

In “Winning Big, Going Global,” for instance, a short pep talk signed by SEIU President Andrew L. Stern at http://www.seiu.org/who/2003_annual_report/ stern_letter.cfm, Stern asks: “Who could have imagined that this union of working people who often feel individually powerless could become recognized by public officials and corporate executives as one of the most powerful organizations in the country?” (emphasis added)

I know this is standard liberal rhetoric, but why should that excuse it? Where, after all, is this load of stuffing coming from? Stern makes 21st century America sound like feudal England, with peasants and serfs and lords of the manor. In worldly terms — the terms Mr. Stern is concerned with here — the American middle class workers that make up his union are among the most “powerful” people ever to walk the earth. They dispose of income qualifying them as rich in almost any society in other parts of the world today and anywhere at all throughout history up to the most recent past. They have fewer worries about disease, accidental injury, war, famine, crime, poverty, ignorance, repression, racism — you name it — even boredom, than at least nine-tenths of all the men who ever lived. They enjoy technological advancements and the freedom of choice they bring that make the greatest holders of wealth and power of past ages (and still much of the world today) paupers by comparison. And as for California government employees specifically, almost no one can match, much less beat, the pay/benefit/retirement packages they enjoy, thanks to SEIU’s and other unions’ lavish political donations to grateful Democrats who return the favor by agreeing to every demand for more that state government receives from the very same unions.

But still they feel “powerless”? Perhaps it is merely convenient for Mr. Stern to encourage them to feel that way, or else they might begin to doubt the necessity of supporting his bureaucratic union structure and vast left-wing political operations with their involuntarily paid dues.

Here’s a standard articulation of the political issues California faces, presented by SEIU’s Sacramento-based Local 1000 on its website: “Public workers, teachers, firefighters, nurses, police, and the people from our communities who desperately need our services stood up May 25 to protest Gov. Arnold Schwarzenegger’s $70 million special election and his cruel budget cuts.” And here are some lines from a new TV spot union bosses are airing: “Off camera announcer: ‘Papers report the governor has a secret plan to create a “phenomenon of anger” against teachers and other public workers, blaming them for what’s wrong with California.’” This slam reportedly comes from an LA Times article that quoted Schwarzenegger media adviser Don Sipple in a conference call with supporters in which, presumably, Mr. Sipple made the major gaffe of suggesting voters be invited to consider the motivations and tactics of the state spending lobby. He should have remembered that no one supports budget- busting state spending except “people who desperately need our [union] services” and that only Republicans may be called “cruel.”

The key issues on this ballot are, one, ending the self-interested drawing of legislative and congressional district lines to insure the Parties that hold a district never need worry about losing it and, two, requiring union political machines to receive permission from public employees before taking their money for politics. Where is the left’s consideration of the serious issues of democratic government here raised? Where is its honest dealing with the ancillary issues arising from the phenomenon not of anger, but of taxpayers — virtually all the people — sacrificing for the comfort of the pampered few who work in state government?

Where is the honest analysis — in the interests of those “who desperately need our services” — of the actual efficacy of state programs? Accountability is not only unknown in Sacramento, it is considered a vile topic raised only by people of low motives and corrupt nature. We have “entitlements” to social welfare programs and “baseline budgeting” that begins with last year’s spending as the absolute floor on which to build this year’s increases — but no accountability. A few year’s ago, a newspaper reported that legislative hearings uncovered the truth that no one, literally not anyone, knows how the budget for California’s vast prison system is spent. The money — billions of dollars — goes, but we can’t say where, or couldn’t, at least as of the date of those hearings. I would be grateful to any reader who can show me the state has done anything substantial to change things.

In CPR’s most recent issue, Ray Haynes (“A terrible thing to waste,” May/June) cataloged the decade-long crusade propelled mainly by teachers union honchos to head off the setting of academic standards for state public school instruction and of all testing to determine the quality of their teaching along with any talk of merit awards to encourage good teachers. Accountability, in a word, would not be established. The people “who desperately need our services,” not to mention that they also pay the bills, would not be permitted to learn how well their schools are teaching the kids who actually do desperately need to learn. Listen to the voice of the unions, talking either to their own members or to the people of the state. All you hear are demands for more money, never any calls for accountability.

Finally, when do these people consider the larger, more generous concerns for the overall direction of our state or the long-term fate of its people? What is becoming of our freedom? How will it all be sustained? What will become of our children? — questions asked seriously only by men and women confident of the moral strength of their positions, people willing to pledge blood, tears, and sweat, knowing that the justice of their cause demands and justifies it. But weak people are too busy scrambling for survival, too hag-ridden by their own small dreams, by their “feelings of powerlessness,” by envy and anger, to consider these selfless questions.

The moral cause of this election is to break the cycle of despair afflicting California government. We can be free people: self-reliant, prepared to work hard, ready to endure disappointment, to persevere, to live. We need no Nanny State to protect us — it is, indeed, the state bureaucracy that is strangling us, depriving us of our confidence. The end of the gerrymander and of forced political contributions won’t leave us orphans; it will liberate us and make us strong, because the cause it serves is just.

Assemblyman Dennis Mountjoy Endorses Harry Scolinos



FROM THE DESK OF ASSEMBLYMAN DENNIS MOUNTJOY


For five years, I have had the honor of representing the 59th Assembly District. Due to term limits, my time in the State Assembly will come to an end next year.

For the last few months, I have reviewed the names of potential candidates who wish to succeed me in the Legislature. Between my father and myself, for almost thirty years, my family has proudly represented solid conservative values in the California Legislature. After taking a close look at the candidates, I am convinced that Harry Scolinos would be the best choice to continue representing those values and the people of the 59th Assembly District.

Harry Scolinos is an impressive man of faith who has a strong record of accomplishment and a proven ability to raise the funds needed to compete and win the 59th Assembly District.

Harry is committed to securing our borders and continuing the battle to stop the billions of dollars our state spends on illegal aliens every year. Harry is passionate about holding the line on taxes and he has the will power to stand up to the spending lobby in Sacramento.

As owner and CEO of US Fingerprinting, Harry is already working to make our world more secure by helping identify those who would endanger our safety and that of our children. In the State Assembly, Harry would continue his fight for a more secure California while also protecting our tax dollars from the liberal spending machine that drove our state to the verge of bankruptcy.

Harry is a decorated veteran who won a bronze star for his service in Vietnam. He has the kind of character and business background that we need in Sacramento.

Harry Scolinos is a quality conservative who shares our values on traditional family issues. He will stand up for the unborn and fight for the protection of marriage between a man and a woman.

I hope you will take the time to look at Harry’s candidacy and his stand on the issues and I am confident you will find him worthy of your support.

Sincerely,

DENNIS MOUNTJOY, Assemblyman
59th Assembly District

UPDATE Attorney General Race 2006

TO: FRIENDS AND SUPPORTERS OF CHUCK POOCHIGIAN

FROM: KEN KHACHIGIAN, CAMPAIGN STRATEGIST


A CAMPAIGN UPDATE


Campaign finance reports covering the past six months were made public last week. Because of committed friends and supporters like you, Chuck’s campaign slightly exceeded its goal of having $2 million in the bank in preparation for next year’s very challenging election.

Sure, that goal was ambitious, but with a general election campaign that could cost upwards of $12 million, we could not spare any effort in building a war chest. Due to hard work by Chuck, his campaign staff, and folks like you, we achieved the first critical benchmark in the campaign.

In fact, some of the reporters covering the race were surprised. The Oakland Tribune – in Jerry Brown’s backyard – conceded that Senator Poochigian “has shown he’s no slouch in the money department either.” Several papers noted that Chuck’s campaign actually raised more than Brown in the past six months. On the other hand, L.A. City Attorney, Rockard Delgadillo, also raised more than Brown in that period, making clear that he will be running an aggressive, well-funded campaign.

The good news is that Brown and Delgadillo have already begun to take pot shots at one another. Brown accused his opponent of being AWOL on last fall’s initiative to weaken the Three Strikes law, and Delgadillo claims Brown represents the past while he represents the future.

Delgadillo is very likely to bring up some of Brown’s liabilities like his proposal to make Jesse Jackson his vice-presidential running mate in 1992 or the fact that Brown hasn’t won a statewide general election in 27 years. And Brown will surely point out that Delgadillo’s knowledge of statewide issues is slim to none.

In the meantime, we have a continuing challenge – and that is to marshal our financial resources so that Chuck will be fully funded when the primary campaigns end. It is critically important that we move aggressively forward to meet the goal of having $6 million on hand when the general election begins. That will give Chuck enormous momentum towards victory next November.

Make no mistake, this will be a tough campaign. But we have the superior candidate, the more disciplined, skilled and motivated campaign team, and issues that resonate directly with voters who want a tough, fair, common sense Attorney General to enforce the law.

Do you wonder how you can help? Start by sending this memo to your entire email list or make copies to hand out. Ask all of your friends to go to our website, POOCHIGIAN4AG.COM to sign up as supporters and volunteers. We will need to double and re-double our efforts at building financial strength and grass roots support across California. Every contribution, no matter how small or large, will put Senator Poochigian that much closer to being California’s next Attorney General.

Thanks so much for your continued support and encouragement.

PIRRO VS. CLINTON: A REAL FIGHT FOR HILL

By DICK MORRIS

August 9, 2005 -- Westchester DA Jeanine Pirro is about to formally announce her candidacy for Senate from New York, which will pit her against Hillary in a battle royal. This is just the kind of fight that Sen. Clinton would have hoped to avoid.

While Hillary would have no problem dispatching an opponent like Nixon son-in-law Edward Cox or Yonkers Mayor John Spencer (the two other possible GOP contenders), Pirro presents a real problem.

Jeanine Pirro is pro-choice, pro-gun control, pro-affirmative action, pro-gay-civil unions and pro-immigration. And, of course, she's a woman.

In a sense, Hillary will have to end up running against someone who is quite like herself in her public positions: Except, of course, Pirro is a good old-fashioned anti-tax, anti-crime, tough-on-terror Republican from the suburbs.

Hillary would love to cloak her Senate re-election as a necessity in the face of a determined GOP effort to overturn Roe vs. Wade and to roll back the clock on gun controls. But against Pirro, she will be disarmed of all her best issues. She will have to run on her own record, which is limited at best.

Pirro, on the other hand, can point out that Hillary refuses to say that she will serve out her term if elected -- since we all know that the day the returns are in she will start her campaign for president. (Hillary has her own twist on the famous line of Gen. Sherman: "If elected, I refuse to serve").

The Quinnipiac Poll recently found that Hillary beat Pirro by more than 30 percentage points -- but in the same poll, 60 percent of the state's voters said that Mrs. Clinton should pledge to serve out her full term if she runs for the Senate.

Jeanine looks weak in the polls right now because she only has about a 30 percent level of real name recognition statewide. But the fact that about one Hillary voter in three says that Mrs. Clinton should promise not to run for president if she seeks re-election to the Senate is an indication that all will not be well for her as she seeks a second term.

If Hillary faced a right-wing opponent, voters would overlook her refusal to promise to serve if elected -- but with Pirro, they may come to feel that they have a choice. Recently, Pirro indicated, for example, that she would join the bi-partisan group of 14 senators who promised to save the Senate from destruction by pledging to support reasonable judicial nominees and to refrain from unreasonable filibusters.

And Pirro doesn't need to beat Hillary to wound her. If she finishes less than the 12 points behind Clinton that Rick Lazio managed in the 2000 election, it will be a victory of sorts. Hillary will have some explaining to do to tell why fewer New Yorkers wanted her to be re-elected than voted for her in the first place.

And, at some point, Mrs. Clinton may feel Pirro gaining on them and wonder if it is worth the battle.

It's worth remembering that Hillary did not want Bill to run for re-election for governor of Arkansas in 1990 as he contemplated a race for president in 1992. (Back then she had a better idea: She would run in his place!)

Hillary almost has a lock on the Democratic nomination in 2008 and can build up a massive financial and political lead over all possible rivals. But if she is engaged in a nip-and-tuck battle in New York to keep what she already has, she will have to divert $30 million or $40 million from her presidential race and spend her time in Rochester, rather than in Iowa.

If Pirro posts some early gains, particularly upstate, where it is cheap to do early advertising, Hillary and Bill may read the handwriting on the wall and she may pull out of the race.

8.04.2005

DELEGATION LOSES A SOLID YOKE




With a Caucus filled with the likes of David Dreier – the guy who never met an illegal alien he didn’t pander to, Jerry Lewis – who never found pork he didn’t like, and Bill Thomas – who’s never met a baby killer he didn’t try to run for office, the California Republican Congressional Delegation is already filled with lots of questionable characters. However, we’ve never needed to worry about what’s come out of the 48th – Chris Cox was as solid as they got.



However, Cox’s departure from Congress to the SEC leaves a gaping hole in the Delegation, and all indications are that rather than having a solid movement conservative filling the seat, Dreier, Lewis, and Thomas will instead get a new playmate.



The two main candidates for this seat are Senator John Campbell (worse) and former Assemblywoman Marilyn Brewer (worser). There is some hope that Minuteman Project PAC founder Jim Gilchrist will run, but as he’s registered American Independent, it remains to be seen how effective he can be as a candidate.



To keep up on this very important election, check up regularly at OC Blogand at the OC Courant.



Lastly, as Cox is leaving, his look back at his career in Congress is quite an interesting read. Enjoy…



The changes I've seen

I've watched the march of freedom in Washington and the world



By Chris Cox



This evening, my time in the House of Representatives will come to an end. I'm deeply grateful to the people of Orange County for the opportunity to have served you and our country in Congress since 1988.



Today, Orange County's values are dominating the debate in Washington. It wasn't at all like that back in the 1980s, when I first came to Washington to work as a lawyer in the Reagan White House. But that's certainly when the trend started.



By 1989, when I was in the House of Representatives and President Reagan came to the House floor just before leaving office for a private valediction with our Republican members, all the pieces were in place: Where once the economy had suffered years of "stagflation," over-regulation and punitive taxation, now it was strong. And where once the Soviet Union had been on the march, waging proxy wars across the globe and threatening the world with nuclear annihilation, now it was in retreat.



At the Pope John Paul II Polish Center in Yorba Linda in 1988, I remember telling a gathering with great certitude that "Poland will be free in my lifetime." That turned out to be an excessively cautious prediction. The following year, as a newly minted representative in Congress, I served as a U.S. election observer in Poland. Solidarity swept the nation's first free elections - and the communists were swept out.



The march of freedom in our own hemisphere has been just as exhilarating. With a State Department delegation that included my friend and colleague from the White House and Congress, Rep. Dana Rohrabacher, I monitored the first post-civil war elections in El Salvador. We wore bullet-proof vests, and our hotel was blown up. Just this week, nearly two decades later, the Congress voted to approve a free trade agreement with Central America. Instead of guns and body armor, we're now sending computers and breakfast cereal.



Here at home, too, we have come to recognize that "as government expands, liberty contracts." One of my purposes in running for Congress was to eliminate waste and bureaucracy in government. Over the years, I've occasionally been able to take a nip here and a tuck there out of the federal behemoth. For example, we eliminated the oldest government regulatory agency, the Interstate Commerce Commission; and my closure of the wasteful National Helium Reserve was the third largest privatization in American history, yielding $2 billion for taxpayers.



But I am also leaving Congress with some unfinished business. I may have overestimated the time it would take for Eastern Europe to be free, but I confess that I also underestimated the time it would take for communism to fall in China. But if I've learned anything over my career in Congress, it is that we must never underestimate the power of freedom. While their governments may be repressive, people everywhere yearn to be free. And across the globe, the trend is toward free markets and free speech, and away from the statist ideologies of the past.



And finally, with 9/11, our focus has shifted to what we now call homeland security - an organized effort to share information in new ways, in order to stop terrorism before it happens. For the last three years, this has been my main calling. If we give up our freedom to suit the exigencies of the war on terror, we will give al-Qaida the victory. That must never happen.



To the wonderful people who for nine terms gave me the support that made it possible for me to serve our country: thank you. It has been a privilege to represent you.

5.14.2005

65% Solution


We here in California are no strangers to losing the PR battle over education. When Democrats are backed into a corner, they just focus the debate on education and come out swinging, connecting with shot after shot. It seems we might finally have the right stuff with which to counter.

Patrick Byrne, the founder of Overstock.com has proposed what he calls the “65% Solution.” The idea is pretty simple. Currently, across the country, only 61.5 cents for every dollar allocated to education makes it to the classroom. If we were to up that to 65%, we could put an extra $14 billion into education, enough to buy every student in the country a laptop computer.

Where’s the money being wasted, then? One word, “educrats.” These people are just like the bureaucrats that plague every governmental agency, but who just work in the world of academia.

If we can focus the debate of “bloated budgets” onto bureaucrats raking in 6-figures, we can easily demonstrate the seeming ease of finding another 3.5% to put into the classrooms, updating textbooks, modernizing classrooms, and giving teachers a raise.

Of course, the unions representing these educrats are going to scream bloody murder, but so what? If they’re left defending $60,000 salaries for toilet cleaners, and $80,000 to the assistant to the deputy superintendent, we’ll have carried the day!

George Will takes a look at this issue in the Jewish World Review, and the man himself, Patrick Byrnes makes the case at NRO.

4.25.2005

Big Labor's Secrets

April 25, 2005; Page A14

Among the endless piles of paper that make up Washington, a new stack has been rising in a corner of the Department of Labor. But these forms, known as LM-2 disclosure reports, are actually news, especially if you're a dues-paying union member.

The first George W. Bush Administration took a fresh look at the LM-2, which is supposed to reveal how unions spend member dues. The form had remained virtually unchanged since 1959, and today's union leaders were required to provide only the barest details. So in 2004 the Labor Department began to require expanded forms and, while the filing requirement doesn't officially kick in until this summer, a few early birds have started shipping their information.

Talk about eye-openers. Consider a LM-2 filed by a California local of the Communication Workers of America. While the union's spending is fairly routine, its dues base certainly isn't; 47% of its members are "agency fee payers." In plain English, these are members who, exercising their right under the Supreme Court's 1988 Beck decision, have withheld any dues that go to political or non-bargaining-related activity.

This suggests either that the members disagree with their leaders' agenda, or resent their forced enrollment in the union in the first place. It is especially notable because a vote of only 50% of a union's participants can oust the current leadership, or more drastically decertify the union altogether. Evidence of such disgruntlement in the ranks is exactly the sort of information that union chiefs would prefer to keep quiet.

The rank and file are also beginning to see a precise breakdown of how their money is spent. Prior to the new form, unions could lump millions into vague categories such as "overhead," or the ever-favorite "other disbursements." Unions must now account for dollars spent on anything from the grievance process to organizing to politics. This will help to keep leaders accountable and perhaps reduce such fraud as the officials of a Washington, D.C., teachers union who apparently bought mink coats and alligator shoes with dues money.

The forms will also shine a light on one of labor's darkest, dampest, corners: trusts. These affiliates are barely regulated slush funds into which unions funnel dues and then spend at will. The Detroit Free Press ran articles in 2001 detailing three such funds that the United Auto Workers ostensibly set up to finance worker training but in fact were also used by the top brass to sponsor Nascar racing, host political parties and underwrite trips to Palm Springs. Under the new rules, unions will have to account for this trust spending.

The AFL-CIO has branded the new rule "anti-union" but it's hard to see how. Unions exist to benefit their members, not their leaders. It's especially odd to see AFL-CIO chief John Sweeney, who stumps for greater corporate disclosure, demanding that labor chieftains be exempt from comparable transparency. As it is, the new disclosure rules apply only to the largest unions, those with annual receipts over $250,000 (about 5,000 of 30,000 unions).

None of this has stopped the AFL-CIO from attempting to block the regulation in court on grounds that Secretary of Labor Elaine Chao lacks the authority to order such disclosure; a panel of appellate judges will rule on the case soon. Assuming Ms. Chao prevails, unions will begin delivering their first required reckonings this summer.

URL for this article:
http://online.wsj.com/article/0,,SB111438772677015598,00.html

3.22.2005

Capitol Whispers

By Anthony York

What if?

Gov. Schwarzenegger has labeled 2005 the "year of reform." He says so in his speeches. The backdrops when he gives those speeches are dotted with "Year of Reform" logos. But as of this writing, 2005 seems to be the year of confusion and political uncertainty.

No longer is the debate in Sacramento about this year’s budget. It has devolved into a titanic political struggle between interests who support the governor, mostly business groups, and those who oppose him, namely the state’s largest labor unions. But after days of lucrative fundraising, and some bad headlines for the governor, questions about the special election — and whether the governor will actually call a November election — are more prevalent than ever.

Schwarzenegger himself has sent mixed messages about whether or not he is committed to a special election this year. He says he would rather see a compromise worked out in the Legislature on issues like changing the state’s political map-making process, education policy and changing the state’s pension system, even as he takes to the streets to rally support of ballot initiatives dealing with all three issues.

The confusion and uncertainty among the governor’s allies and foes alike is palpable. Just walk through the Capitol, and ask a random sample of people whether they think there is going to be a special election this year. You’re liable to get a majority of shoulder shrugs to go along with about an even number of Ayes and Nays, with Democrats and Republicans split among all three responses.

By flirting with a special election, the governor has set some colossal political forces in motion. First and foremost is the formidable campaign funding apparatus at his disposal. Led by the Citizens to Save California Committee and two committees under the governor’s personal control, Californians for Schwarzenegger and the California Recovery Team, the governor has already earned millions toward a final goal of at least $50 million.

Other contingency groups which may or may not be part of the direct package have also ginned up, including massive fundraising efforts by major drug companies. As our story on Page 1 of this newsletter notes, drug companies have already raised millions in support of three initiatives for the potential special election ballot, and they show no signs of slowing down.

On the other side, the service employees unions, the California Teachers Association and prison guards have ramped up their own fundraising and political operation. Many Democrats feel emboldened by the last week’s headlines. They feel that teachers, nurses and firefighters protesting the governor at every political stop are beginning to score political points, and help diminish the Schwarzenegger mystique.

Sacramento political types, being the impetuous Nervous Nellies that we are, have taken this week’s news as a sign that the governor may not want a special election after all.

It is times like this where a deep breath, and some perspective, become important. Are the governor’s protesters only scoring points among state political junkies inside the Business Loop, or is the real world beginning to take notice as well? Recent polls show that Democrats are beginning to sour on the governor, but he still enjoys the highest popularity rating of any politician in the state.

The governor is nothing if not unpredictable, and that’s what makes this special election drama so intriguing. With tales of back-stabbing, finger-pointing and discord among Democrats and Republicans alike, it begs the question: Is this all part of a masterful political chess game deliberately set into motion by the governor, or has the concept of a special election become a political Frankenstein on the verge of careening out of control?

Imagine for a moment that there is no special election. What if the governor and unions are able to come to agreement on some easy pension reform components — like putting an end to one-year pension spiking, and placing some curbs on disability benefits for people who continue to work? Imagine also they come to a deal on redistricting that puts it off until sometime after 2006, and a deal on education policy is also struck.

In that scenario, the governor would run the risk of alienating many legislative Republicans, something he has shown a willingness to do in the past. But he would also pull the rug out from under the auxiliary interests, like drug companies, fiscal conservatives who want a real limit on state budget spending, and others who want to limit the political influence of labor unions. Could the governor simply put the genie back in the bottle?

Maybe, and maybe not.

On the other side, Democrats see this potential special election as an opportunity to damage the governor before his reelection in 2006. Imagine that he goes ahead with the proposals, and they’re all defeated at the polls. How do you still claim to be the people’s governor if the people have rejected your reform agenda? And what would such a defeat do to the governor’s reelection hopes? If that is the case, do they have an incentive to cut a deal with the governor?

Schwarzenegger is coming under increasing criticism for his record-breaking fundraising. Much of the money he has raised comes from interests who have business before the state Legislature. Many of those interests are pining for this special election, and are ponying up big bucks in hopes that the governor goes ahead.

But what if the governor banked all that cash, and decided not to go ahead with the election after all? He could cut a deal with Democrats, move back to the center by alienating his fellow Republicans, and many of the big business groups that have funded him up until now.

In such a scenario, Schwarzenegger would once again become the bipartisan dealmaker, and be perfectly positioned for 2006, allowing him to show the people of California that, while he took big bucks from big business, he truly is a politician that can’t be bought. Of course, he’d have all their money in the bank, ready to go for 2006. He’s already locked up the state party’s endorsement. Republicans have nowhere else to go.

That scenario is far-fetched, perhaps, and it would anger many of the governor’s closest political allies.

It would also be vintage Schwarzenegger.

3.03.2005

LA Mayor's Race: Hertzberg's Got the "Mo"



As we move to less than a week from the L.A. Mayor’s race, I figured it might be time to provide some brief insight on how this race is breaking down.

The big news here is that current Mayor Jim Hahn is struggling. While losing the Primary 4 years ago to Antonio Villaraigosa (30%-25%), only to come back and defeat him in the run-off, Hahn seems vulnerable to not even making it to the runoff this year.

The other big story in the race has been the surge of former Assembly Speaker Bob Hertzberg, who despite being a Democrat, is trying to reassemble the old Riordan coalition: Republicans, Westside voters, Valley voters, Senior citizens, whites and Jews. While just a month ago, he was only an “also-ran,” some risky early money being poured into a tv buy to air a great spot has propelled him into 2nd place according to the new LA Times poll, out this week.

Despite still being behind Antonio Villaraigosa by 3 points, Hertzberg has to be encouraged by these numbers.

Working for Hertzberg is the fact that despite being in 2nd place, he is still unknown to 41% of the voters (as opposed to Villaraigosa, whose name id is 88%). When the field is narrowed to two, that surely will change. If you were to balance out their respective name-id, Hertzberg would have a 7-point lead (31-24).

That aside, Hertzberg also is losing votes he’ll get back from Parks and Hahn among Republicans. Hahn greatly played to the Republicans in 2001 and has done a fair job on crime as Mayor, bringing in former NYC top-cop William Bratton as LA’s new Police Chief. Parks too is making a strong play for Republican votes, even hiring Republican consulting firm Blair/Biggs to handle his GOP outreach – touting his decent stances on business issues and his record as being tough on crime.

Not only do the numbers seem good for Hertzberg at this juncture, Villaraigosa’s numbers seem soft. Currently he enjoys a similar 3:1 favorable/unfavorable rating, with 88% name-id, and so for him to be at only 24% must be disheartening. That said, in all fairness, for the primary more Antonio voters are certain they’ll vote for him than any other candidate’s supporters. However, if you look inside the numbers at the 3:1 (66:22) favorable rating, a few things pop out.

Despite campaigning as a liberal, and having an extraordinarily liberal record as an Assemblyman and as a Councilman, Villaraigosa has a 43% approval rating among Republicans, a number that is sure to drop in the run-off. Additionally, he has an 80% approval among young voters (ie, those least likely to make it to the polls, especially in a low-turnout municipal race). While no one else is giving Villaraigosa much of a challenge for the votes of self-described “liberals,” he’ll have his work cut out for him to keep the votes of many Republicans.

Perhaps most damaging to Villaraigosa is the drop in support among Hispanic voters from his 2001 campaign against Hahn. In 2001, 62% of Latino voters supported Antonio, while just 45% do now. Even more interestingly, according to the LA Times poll of February 4, “Most voters in Los Angeles (83%) say having a mayor of their own ethnicity is relatively unimportant, including almost 7 in 10 who say it was not important at all.” This was evident in 2001 among black voters, as Hahn received 71% of the black vote. If Hertzberg is able to come close to adding any sizable chunk of this powerful minority to his vote totals, it could be lights out for Antonio.

Overall, Bob Hertzberg is very well positioned to make a strong shot at becoming the next Mayor of Los Angeles in the run-off. My only concern for him is whether he can get there. While the latest Times poll has him in 2nd, it is only by a single point – 21% for Hertzberg / 20% for Hahn. While that showed a 9-point bump for Hertzberg in the month of February and a 1-point drop for Hahn, that margin is well within the poll’s margin of error of +/- 4%. Additionally, if it is that close, Hahn is well positioned with his army of union employees operating his turnout machine, compared to what has seemed to me as a lackluster turnout effort for the Hertzberg campaign. So, while Hertz has most certainly got the “Mo” on his side, it wouldn’t shock me if Hahn were able to steal the primary and force a sequel to the 2001 campaign.

In less than a week, we’ll find out what happens. Stay Tuned.

2.17.2005

ARNOLD IS ALREADY SQUISHING


Big shock - Arnold's already backing away from his plans, that at least rhetorically had conservatives all excited. This is to be expected. Last year, his proposed budget was *in his mind* reasonable, and because of the legislative make-up, got yanked to the left. So, this year he throws out all sorts of red meat that makes conservatives scream, "he's one of us, look he's one of us!" NO HE'S NOT! This is just a bargaining point, so he can get back to his *reasonable* budget, nothing else. Arnold is still squishy.

Governor to ditch board cuts
He concedes his plan to eliminate 88 regulatory panels needs more work.
By Gary Delsohn -- Bee Capitol Bureau
Published 2:15 am PST Thursday, February 17, 2005

Abandoning one of his most far-reaching and controversial proposals since taking office, Gov. Arnold Schwarzenegger has decided to withdraw his plan to eliminate 88 regulatory and policy-setting boards and commissions, sources close to the governor said Wednesday.

In a letter the administration plans to deliver to the state's Little Hoover Commission today, Schwarzenegger concedes the proposal needs further review.

Members of the commission, which has held hearings on Schwarzenegger's proposal and plans to release a highly critical assessment at its meeting next Thursday, have already recommended that the government reorganization be scaled back substantially.

Included on Schwarzenegger's hit list were boards that license and regulate doctors and nurses, set rules for accountants, administer seismic safety regulations, promote recycling and oversee building contractors, architects and engineers.

Although Schwarzenegger still plans to proceed with a reorganization of the umbrella agency that runs California's prison and parole system, his about-face on the larger reorganization signals a big win for consumer activists, unions and Democrats.

Those critics and others have called his plan an executive branch "power grab" that would harm consumers without saving the state much money.

"My initial reaction is that this thing was so clearly political and poorly thought out that this is a tactical retreat from a battle that the governor would look like a fool if he pursued," said Richard Holober, executive director of the Consumer Federation of California.

"He's gotten the accounting industry mad at him, the dentists mad at him. He's gotten all kinds of groups mad at him that otherwise wouldn't have a beef with the governor."

Robert Fellmeth, executive director of the Center for Public Interest Law at the University of San Diego and another staunch critic of Schwarzenegger's initial proposal, applauded the reversal.

"It's a good sign," he said. "One of the things you have to do when you're a public official is, after something is vetted, reconsider and change your mind if it doesn't stand up to scrutiny. Not every idea is a good one."

Ashley Snee, a Schwarzenegger spokeswoman, said the Republican governor is looking forward to getting the Little Hoover Commission's report next week.

"We've had eight hearings. He's heard from members of his Cabinet. We await the recommendations from Little Hoover," Snee said.

Under state law, a government reorganization such as the one Schwarzenegger was proposing must go to the commission for review.

The governor could then submit the plan to the Legislature and it would become law unless the Senate or the Assembly rejects it within 60 days.

Sources close to the governor said Schwarzenegger decided to pull back because witnesses at last month's Little Hoover hearings - both Holober and Fellmeth testified - raised some valid concerns.

Critics in the hearings said abolishing such regulatory and licensing entities as the California Medical Board, the Board of Registered Nursing and the Board of Accountancy would make it harder for consumers to get grievances investigated.

The move would also compromise public safety and make government more secretive, they argued.

Many of the 88 boards and commissions slated for elimination would have been folded into the governor's State and Consumer Services Agency, which is run by a governor's Cabinet appointee. Boards and commissions also have members appointed by legislators and are subject to state open-meetings laws that wouldn't apply to regulatory functions of the agency.

Schwarzenegger's proposed government reorganization was one of the first agenda items he identified in his initial State of the State speech a year ago. The move almost immediately set off political sparks.

"Every governor proposes moving boxes around to reorganize government," Schwarzenegger said at the time. "I don't want to move boxes around; I want to blow them up."

State government, he added, was a "mastodon frozen in time and about as responsive."

He soon created the California Performance Review Commission, a panel of 275 state workers who spent more than six months reviewing California government and issued a 2,500-page document with more than 1,000 recommendations.

The CPR, as it came to be called, predicted savings of up to $32 billion over five years, but the Legislature's budget analyst put the potential benefit at less than half that amount. The administration later backed away from the projection.

Critics complained that the commission's work was done largely in secret, without input from some of the targeted boards and commissions but with direction from business interests objecting to what they say are regulatory excesses.

Schwarzenegger, while praising the commission's work in public, privately said it took on too much. In January, he called on the Legislature to implement just two aspects of the sweeping report - the prison system restructuring and the closing of boards and commissions.

Holober of the Consumer Federation said he is convinced that Schwarzenegger retreated in the face of criticism because he is already embroiled in controversy over his proposals to revamp education funding, overhaul employee pensions, redraw legislative districts and impose new spending controls.

"He doesn't want to get into all those fights over boards and commissions at the same time he's taking on a fight with organized labor, teachers, schoolchildren, retirees and others," he said. "I guess he's making a tactical retreat in hopes of restricting the numbers of enemies he has to make at one time."

1.16.2005

WHAT W WOULD SAY IF HE WEREN'T SUCH A "COMPASSIONATE" CONSERVATIVE



If only PJ O'Rourke were Bush's speechwriter

MY FELLOW AMERICANS, I had intended to reach out to all of you and bring a divided nation together. But I changed my mind. America isn't divided by political ethos or ethnic origin. America isn't divided by region or religion. America is divided by jerks. Who wants to bring a bunch of jerks together with the rest of us? Let them stew in Berkeley, Boston, and Ann Arbor.

The media say that I won the election on the strength of moral values. If the other fellow had become president, would the media have said that he won the election on the strength of immoral values? For once the media would have been right.

We are all sinners. But jerks revel in their sins. You can tell by their reaction to the Ten Commandments. Post those Ten Commandments in a courthouse or a statehouse, in a public school or a public park, and the jerks go crazy. Why is that? Christians believe in the Ten Commandments. So do Muslims. Jews, too, obviously. Show the Ten Commandments to Hindus, Buddhists, Confucians, or to people with just good will and common sense and nobody says, "Whoa! That's all wrong!"

But jerks take issue with every one of the Ten Commandments. Jerks are particularly offended by the first two Commandments. Of course people of faith, decent people, differ on interpretations of the first two Commandments. For example, we don't all agree about the meaning of "Thou shalt not make unto thee any graven image." However, we do all agree about "Thou shalt not bow down thyself to them" when them is Freud, Marx, and Dan Rather.

"Thou shalt not take the name of the Lord thy God in vain." How many times, over the last few months, have we heard, "Ohmigod, ohmigod, ohmigod, I can't believe George Bush won"?

"Remember the Sabbath day, to keep it holy." Let's be fair about this. We did see a lot of white, non-Hispanic Democrats in churches in 2004. But they were all running for president. And the churches were inner-city black churches. I happen to know that there are churches in the white, non-Hispanic suburbs where these Democrats live. Apparently jerks can't find them.

"Honor thy father and thy mother." Are telling lies about a bankrupt Social Security system and trying to block its privatization reform ways to do this?

"Thou shalt not kill." Why, in the opinion of jerks, is it wrong to kill a baby but all right to kill a baby that's so little he hasn't been born yet? And why do the same jerks who favor abortion oppose the death penalty? We can imagine people so full of loving kindness that they can accept neither the abortionist nor the executioner. We can even imagine people so cold-hearted that they embrace them both. But it takes a real jerk to argue in favor of killing perfect innocents and letting Terry Nichols live.

"Thou shalt not commit adultery." The jerks have begun praising marriage lately. But only if the bride and groom each have a beard.

"Thou shalt not steal." In 2004 the United States government spent $2,318,800,000,000. Thus every American benefited from $7,919.37 worth of federal services. Let me ask the jerks something. Say you're average jerks, a "blended family" of four. Did you pay $31,677.48 in taxes last year? If you didn't, you took things from other Americans. What did you give in return?

"Thou shalt not bear false witness against thy neighbor." Especially not in return for vast wealth, abundant prizes, and lavish praise from fellow jerks. I'm talking to you, Michael Moore.

And then there is the Tenth Commandment. "Thou shalt not covet thy neighbor's house, thou shalt not covet thy neighbor's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor anything that is thy neighbor's." The Ten Commandments are God's basic rules about how we should live--a brief list of sacred obligations and solemn moral precepts. The first nine Commandments concern theological principles and social law. But then, right at the end, is "Don't envy your buddy's cow." How did that make the top ten? What's it doing there? Why would God, with just ten things to tell Moses, choose as one of those things jealousy about the starter mansion with in-ground pool next door?

Yet think how important the Tenth Commandment is to a community, to a nation, indeed to a presidential election. If you want a mule, if you want a pot roast, if you want a cleaning lady, don't be a jerk and whine about what the people across the street have--go get your own.

The Tenth Commandment sends a message to all the jerks who want redistribution of wealth, higher taxes, more government programs, more government regulation, more government, less free enterprise, and less freedom. And the message is clear and concise: Go to hell.

1.11.2005

Senator in the shadows as his agenda moves ahead


By Daniel Weintraub -- Bee Columnist
Sunday, January 9, 2005


Amid all the hoopla that went along with Gov. Arnold Schwarzenegger's second State of the State speech, and all the talk of the governor's bold plan to attack some of the Capitol's most sacred cows, state Sen. Tom McClintock went almost unnoticed.

But as the recall election that ousted former Gov. Gray Davis finally seems to be bearing serious fruit, maybe this is a good time to give McClintock his due.

The steely economic conservative from the northern San Fernando Valley was present at the creation of the recall. One of his longtime aides - John Stoos - helped nurture the idea, his friend Ted Costa was the official sponsor, and McClintock himself attended the recall group's first press conference, before anyone was taking the thing seriously.

Then, as the campaign unfolded in the summer of 2003, McClintock entered the fray as a candidate for governor, offering a pointed, no-nonsense appraisal of the state's condition, and strong medicine to cure it.

As other Republicans dropped out of the race, clearing the way for actor Arnold Schwarzenegger, some urged McClintock to do the same. Political consultants and pundits warned that he was risking his political future by endangering Schwarzenegger's candidacy, but McClintock simply said he trusted the voters to decide whether he was a viable candidate, and not to waste their votes on him if he was not.

At the one and only debate featuring all the candidates, McClintock shined. More than once, he almost seemed to be offering Schwarzenegger a lifeline, and his novice opponent grabbed it, echoing the senator's comments. McClintock emerged as a sentimental favorite, with Republicans and Democrats both saying they admired his principled stands.

But principles or not, he lacked Schwarzenegger's movie-star credentials, and he could not budge the leader's numbers among a mass audience. McClintock faded down the stretch, finishing third behind Schwarzenegger and Democrat Cruz Bustamante, with 13 percent of the vote.

For the next year, McClintock watched from the Senate as Schwarzenegger learned the ropes in the Capitol, compromised with Democrats, avoided confrontation and, in the end, made little progress on the fundamental problems that bedeviled the state. The senator offered muted criticism when appropriate, support where he could.

Then, Wednesday night, suddenly everything changed. It was if the flashy governor were channeling his straight-laced colleague. Schwarzenegger's speech sounded almost as if McClintock had written it.

"Maybe I should have copyrighted some of my ideas," McClintock said with a laugh when I asked him later about the resemblance.

McClintock, some might remember, was one of only a handful of lawmakers to vote against a pension bill in 1999 that boosted state retirement benefits and paved the way for a wave of local pension increases that have threatened the financial solvency of some cities and counties. Three years later, McClintock was the only legislator to vote against a lavish new contract for the state's correctional officers, or prison guards. And all along he warned that the state's spending growth could not be sustained.

Now Schwarzenegger was saying that pension bloat, the guards union and other ills McClintock has spotlighted over the years were the heart of the state's problems. And with no apparent bitterness, McClintock endorsed the Schwarzenegger agenda.

Merit pay for excellent teachers? "I've always maintained that the public schools would work a lot better if we paid the best and the brightest more than the dullest and the laziest."

Pension reform? "It has to be done." McClintock voted for a similar plan almost 15 years ago that was undone by the 1999 bill he opposed. "Had it been left alone I doubt we would be facing the spiraling costs we are now."

Removing from legislators the power to draw their own political boundaries? "People with a direct stake in a decision should not be the ones making that decision. It's not fair to them, and they make lousy decisions."

Budget reform? McClintock might go further than the standby, across-the-board cuts Schwarzenegger has proposed, but he says the governor's plan will do the job. "It's a helluva lot better than what we have now," he said.

McClintock predicts that Schwarzenegger, if he stays the course, will prevail. But it won't be easy.

"I don't think he is doing this because he wants to, but because he has to," McClintock said of the governor. "He made it very clear that this is going to be a nasty fight and he's probably going to emerge from it less popular than when he went in. But it has to be done. Because these problems can't be ignored, and time has run out. That's what leadership is all about."

McClintock ought to know.

1.10.2005

IS ARNIE CHANGING HIS (LIBERAL) TUNE???






“You can judge a man by the quality of his enemies,” a wise political mentor of mine once told me – the theory being that an even better barometer of someone’s worth than if the good guy’s like him, is if the bad guys are after him…because if the bad guys are in hot pursuit, that means they’re really doing something right.

If judged by that and that alone – my tune about our fair Stalinist Governor might be changing a bit.

*****


Last week, Arnie delivered his State of the State address. I expected to hear a few nuggets of mild-conservatism out of his mouth, laced heavily with things so wacky they’d make Ted Kennedy blush.

Much to my surprise though, the Governator declared war on union-thuggery up and down the state. He pissed off the CSEA by announcing pension reform. He irritated the CCPOA by announcing reform of the prison system. He infuriated the CTA by using the two little magic words, “merit pay,” and announcing his distaste with the tenure system. He didn’t get any applause from a good number of Assembly and Senate Democrats by coming out in favor of a mid-decade redistricting plan, and while he verbally placaded them, he upset some tree huggers by talking about the need to build more power plants and transmission lines throughout the state.

If you really can judge someone by the quality of their enemies – well, Arnold’s looking better all the time.

*****


But that’s not it. In his speech, he “borrowed” text from some great conservative heroes, as well.

He “borrowed” language from Reagan, announcing that California’s fiscal crossroads was “a time for choosing,” echoing Reagan’s legendary Goldwater speech.

He “borrowed” language from Tom McClintock, making it clear that “we don’t have a revenue problem. We have a spending problem.”

This even brought someone, and I’m guessing it was Tom, to shout “Here! Here!” from the back of the Assembly chambers.

*****


Arnold’s speech was also a stroke in political savvy. Figuring presumably that some voters may be tiring of his broken-record pleas that if the Legislature won’t pass his bills, he’ll take them to the people, instead he turned that concept on its head. In announcing a Special Session of the Legislature, Arnold basically said that instead of taking his ideas to the people, if the Legislature (ie, the Democrats) fail to act on his ideas…THE PEOPLE will rise up to put those ideas on the ballot, and he’ll be there standing right beside them…cute imagery, smart politics. I’m sure Frommer and Perata were thrilled!

*****


After hearing his speech, it’s not like I’m saying Arnold is all of a sudden one of us. Far from it. Socially, he’s still a commie. But, if the saying is true and you can judge a man by the quality of his enemies, then I might be willing to move Arnold from the “Bolshevik” column to the “Jacobin” column…he’s getting better, day by day!

1.02.2005

Tomorrow's MUST READ: The WSJ Editorial Page


Tomorrow’s WSJ Editorial Page has two great pieces – an editorial on the immiediate impact Proposition 64 is having, and the other by the “Father of Supply-Side Economics,” Dr. Art Laffer on the unseen strength of the US economy.

Ive said before, and will never tire of saying that the WSJ Ed page is the one-stop shop for keeping abreast of politics, providing the most consistent source of quality opinions.

Not a bad start for a new year!


So Long to Shakedowns
January 3, 2005

What policy wonks call "tort reform" can sometimes seem to be a mere abstraction, but the difference it makes in the real world can be remarkable. Consider the experience of California, where an initiative voters passed on November 2 is already yielding benefits to consumers, businesses and the broader economy.

Much of California's tort problem stemmed from its Unfair Competition Law, enacted in the 1930s to curb allegedly unfair business practices. Over the years the law morphed into an income redistribution tool for lawyers, who filed shakedown lawsuits against companies for anything they claimed was unfair to consumers. Most crazy was that the law allowed any party to sue, regardless of whether the plaintiff had been directly affected.

Lawyers were actually able to file lawsuits "on behalf" of the entire citizenry of California, for example. Yet since there were very few genuine plaintiffs, average Californians never really stood to gain anything. The plaintiffs bar, however, could win huge legal fees ordered by judges who decided their cases. Many defendent businesses settled out of court to avoid the cost of going to trial. Consumers ultimately financed this extortion via higher prices for goods and services.

Californians put a stop to all this in the recent election, with 59% voting to amend the law. Citizens can still file lawsuits, only now the plaintiffs must show they personally suffered physical harm or property damage. Credit for this bit of sanity goes to the Civil Justice Association of California, a nonprofit group that's been urging change for nearly a decade, as well as to Governor Arnold Schwarzenegger, who gave vocal support to the initiative as part of his strategy to make California more hospitable to job creation.

And in only a few weeks the difference has been tangible. The trial bar is still waging a last-ditch battle to have the suits (potentially hundreds) filed before the election remain in court. But a number of judges have already decided the new law applies retroactively and are throwing out the sillier suits.

In the past few weeks alone, a judge dismissed a suit against Bayer for including certain products in its "One a Day" vitamin brand that called for more than one tablet a day. The suing lawyers admitted that their "plaintiff" had never bought or used any of the products in question. Another judge dismissed a lawsuit against AT&T filed by one Daniel Banales, in which he claimed the company charged a "hidden" fee when upgrading to a new phone. Mr. Banales was not an AT&T customer.

The disputed cases also offer a window into just how much cash lawyers were siphoning under the old law. A California appellate court will soon decide whether to dismiss a suit originally brought by such infamous tort lawyers as Bill Lerach against Black & Decker and Target, Wal-Mart and other retailers. Their crime? Selling Kwikset locks advertised as "Made in U.S.A." when the lock contained six screws made in Taiwan. The lower court awarded the sole "plaintiff" in the case costs plus legal fees -- or $3 million that went straight to the attorneys.

Our hope is that these courts and others abide by the will of the people, who made it clear in November they want a stop to all of this. Meanwhile, everyone can take satisfaction in knowing that future shakedowns have been outlawed. California businesses, taxpayers and consumers are the better for it.

* * * * * * *


Destination U.S.A.
By ARTHUR B. LAFFER
January 3, 2005


Just because the United States has its largest trade deficit ever doesn't mean that we're living beyond our means. Far from it. In fact, the characterization of the U.S. as a land of chronic overspenders, hellbent on selling themselves into global servitude doesn't make sense at all. And once the over-consumption model is put into question every policy remedy based on the presumption of squander looks pretty weak.

In an era of floating exchange rates the trade deficit (or more appropriately, the current account deficit) is one and the same as the capital surplus. The only way the U.S. can have a trade deficit amounting to 5.6% of GDP is if foreigners invest that amount of their capital in the U.S. It's a matter of simple accounting. But once you realize that the trade deficit is, in fact, the capital surplus you would clearly rather have capital lined up on our borders trying to get into our country than trying to get out. Growth countries, like growth companies, borrow money, and the U.S. is the only growth country of all the developed countries. As a result, we're a capital magnet.

Take a look around. Germany hasn't had a growth spurt since the 1960s when Ludwig Erhard was Bundeskanzler. France still has a mandated maximum workweek of 35 hours, a maximum income tax rate of 58%, a 1.8% annual wealth tax and government spending as a share of GDP greater than 50%. Finland, for goodness sakes, fines speeders a percentage of the speeder's income. Sweden, Denmark and Germany also fine speeders a percentage of their income, only with caps. Japan has had a stock market down by over 70% from its high in 1989 and both company and government unfunded liabilities in Japan are out of sight. Canada's economic policies are kooky and investments in Latin America, the Middle East, Russia, Southeast Asia and Africa are about as safe as running drunk blindfolded across the "I-5" freeway at rush hour.

So what's not to like about the U.S.? Whether you're an American or a foreigner the U.S. is the choice destination for capital. That's why we have such a large trade deficit.

The only way foreigners can guarantee a dollar cash flow to invest in the U.S. is if they sell more goods to the U.S. and buy less goods from the U.S. Our trade deficit is not a sign of a structural flaw in the fabric of the U.S. economy but is instead a stark reminder of our privileged status as the most pro-growth, free market, rule of law economy the world has ever known. Why on earth any American would want to change our policies to emulate foreign policies is beyond me.

China has realized the pre-eminence of the U.S. model and since 1979 has reduced the percentage of GDP flowing through its government from about 82% to today's level of about 30%. That is a supply-side tax cut par excellence. China also realizes that the U.S. has the best monetary policy ever. By fixing the value of its currency, the yuan, to the U.S. dollar, it has literally imported Alan Greenspan to China. Talk about outsourcing!

To guarantee the dollar value of the yuan requires that China hold over $500 billion of liquid dollar assets. China doesn't hold those dollars as a favor to us: it holds those dollars to benefit itself. One needs only glance at the financial disaster that ensued when former Argentine President Fernando De la Rúa broke the peso currency bond to the U.S. dollar to understand why China won't break its currency's link to the dollar. It's elementary, my dear Watson.

Now, within this framework of global capital mobility and U.S. pre-eminence there are significant variations in the relative capital attractiveness of the various nations of this world. When foreign economic policies improve, and the foreign attractiveness to capital increases as a result, the first impact is a weakening of the U.S. terms-of-trade (the real exchange rate) followed much later by a fall in the U.S. capital surplus, i.e., trade deficit.

As of late, foreign economic policies have improved. France is a lot better today than it was three years ago. And -- shock of shocks! -- Germany is even considering a real tax cut. Jean- Claude Trichet has shown himself to be a world-class governor of the European Central Bank, following on the heels of the incompetent Wim Duisenberg. Five new entrants to the EU -- Estonia, Latvia, Lithuania, Malta and Slovakia -- have low-rate flat taxes. Junichiro Koizumi of Japan is a lot better than the former prime minister, Yoshiro Mori. Investors on the margin should look more favorably to investments abroad.

But even changes in exchange rates have limits. The dollar under current circumstances can't go to zero or infinity. Without a corresponding rise in domestic dollar prices, U.S. goods and assets become relatively more attractive to foreigners and Americans alike when there is a fall in the foreign-exchange value of the dollar. Sooner or later the dollar would be such a bargain that there would be more buyers than sellers, therefore limiting the dollar's fall. Today, the dollar's value in the foreign exchanges fits nicely within its historical range.

On Jan. 1, 1999, the euro was born and was worth $1.17. In fact, if we look at the synthetic euro prior to 1999, the dollar's low was in 1992 when each euro could buy $1.47. The large dollar appreciation from 1992 to early 2002 saw the dollar peak at 83 cents per euro and our capital surplus (the trade deficit) go from less than 1% of GDP to almost 4% of GDP (and continue on to today's 5.6%). Well, the global economic environment is changing once again as are investors' perceptions of relative attractiveness.

There have been times in the past when the dollar depreciation of the magnitude we've experienced over the last two-plus years would have been a clear harbinger of much higher inflation and interest rates. But such is not the case today. It is true that products which are freely traded in global markets will experience dollar price increases relative to foreign prices by the percentage depreciation of the dollar. But to have these exchange-rate induced price increases lead to higher U.S. inflation would require the Fed to accommodate the higher inflation with faster monetary-base growth. The Fed has not accommodated any higher inflation and as a result markets do not anticipate higher inflation. Nor should they.

* * *

Back in the late 1960s and '70s, currency depreciation was associated with domestic monetary creation and a horrendous bout of global inflation. Then, as opposed to now, currency depreciation was directly responsible for inflation, high interest rates, and low growth. We even coined a new word for low growth and high inflation -- stagflation. Aren't you glad we've had an epiphany of Fed policies under the leadership of both Paul Volcker and Alan Greenspan?

The most natural, proper, and economically correct response of the foreign exchange markets is for the U.S. terms of trade to have declined and that's exactly what has happened. As far as I can tell, the decline in the dollar is about over; soon we will see the U.S. capital surplus falling back to more normal levels. When a global economic system works as well as ours does, we should just leave it alone.

12.28.2004

Eastern Europe...ya, They Like Freedom Too


There isn’t really a single pollster for whom I listen more closely to than Frank Luntz. When liberals talk about the vast right-wing conspiracy, and say the Republican Party is on the same page, in many ways they are correct – they mean the pages of just about anything Frank writes.

Like many, I’ve been watching as the husband of a former Reagan aide has gone through all the drama of being elected the new Ukrainian President. Today, in the LA Times, Frank Luntz – along with Demo pollster Doug Schoen – break down the electorate of the Ukraine.



Uncovering Ukraine's True Colors
The orange and the blue largely agree on where the nation should go.
By Douglas E. Schoen and Frank I. Luntz

December 28, 2004

In Ukraine, two colors took on a new significance over the last few months. Supporters of opposition presidential candidate Viktor Yushchenko — now the all-but-official president-elect — donned orange as the symbol of their pro- democracy campaign. Prime Minister Viktor Yanukovich and his team sported blue to signal their support for continuing on the path set by pro-Russia President Leonid Kuchma.

This has led to inevitable comparisons to the United States' own red and blue, Republican and Democratic, divide. Given that political differences in Ukraine run along regional lines, observers see the danger of Ukraine dividing into two or more countries.

Our consulting firms, representing a bipartisan partnership of Democratic and Republican pollsters, conducted a national exit poll during the rerun of the presidential runoff election on Sunday. On behalf of the Kiev-based television station ICTV, we interviewed more than 10,000 Ukrainians as they left polling stations across the country, and by 8 p.m. Kiev time, just as the polls closed, we knew that Yushchenko, the man in orange, had won definitively. Although the results aren't official, the votes that have been counted show a victory margin of nearly 10 points and — despite posturing on the part of Yanukovich — Ukraine appears to have succeeded in electing a new president and in running a fair election.

But what about the mix of orange and blue, the divide between Ukraine's western and eastern halves? The polling confirmed that some areas voted almost entirely for one candidate. In Donetsk, an eastern industrial province, more than 90% of voters cast their ballot for Yanukovich. Such results indicate that regional division remains a threat, but there is also reason for optimism.

In addition to our 10,000 exit interviews, we also interviewed 1,200 voters from Ukraine's four major provinces, representing the main regions of the country The provinces demonstrate the country's polarization. Just as Donetsk in the east voted 90% for Yanukovich, the western provinces of Kiev and Lviv voted approximately 90% for Yushchenko; Odessa in the south voted approximately 60% for Yanukovich. Even with nearly half of our sample for these interviews constituting blue voters, 81% overall said all sides should work together for consensus and cooperation to strengthen Ukraine after the vote.

In addition, 67% said they supported Ukraine working to integrate itself into the European Union and into Europe in general. This was one of the key differences between the candidates, with Yushchenko calling for stronger relations with Europe; this result shows there is less division in the country than the conventional wisdom would suggest.

In terms of the economy, there is virtually no disagreement: About 84% said they wanted a market-based economy. And perhaps most important, 93% said Ukraine should chart its own course and pursue its own interests in the world — not Russian or Western interests, but its own interests.

None of this is to say that uniting the country will be easy. Some blue voters clearly are not ready to lower their colors yet: About 53% of voters in Donetsk said they would support a referendum on secession from Ukraine (only 19% overall wanted such a referendum). These voters fear that their Russian language, their culture and their industrial economy will be put at risk in a new Ukraine.

Yushchenko, who over the last few weeks emphasized a "One Ukraine" theme, will have his work cut out for him in the east. Still, the same data that showed him to be the winner points the way to making "One Ukraine" a reality: Ukrainians are united in their weariness over divisive politics, generally eager for consensus and looking forward to a time when their country is integrated with Europe economically, but independent of both East and West politically. The presidential vote, this time around, sends a clear message: A united and democratic Ukraine is well within Yushchenko's grasp.

KUDLOW FOR CEC



Ok, yayaya, I’ve been gone for a while. Well, after the elections ended, the last thing I wanted to think about was the day-to-day, hustle-bustle of politics. But fear not, being the addict I am, things are back to system-normal, and while it might take me a little while to sort out some of the arguments floating around in my head, I’ll be doing so in the very near future...

First up though is Bush’ economic team. The second term seems set to be filled with the sort of things that make me salivate in anticipation – tort reform, social security reform, tax simplification. But, to use a football analogy, as the administration readies to employ the Run ‘n’ Shoot offense, they lack a quarterback with the arm strength to make all the throws.

If Bush is serious about making these free-market reforms, I’m sorry but John Snow isn’t the best guy to send to the Sunday morning talk shows and sell the administration policies. The Bush team woefully lacks anyone who can get the Wall Street-ers, let alone the American people behind these kind of ambitious policies.

However, the power brokers of the supply-side world have been coalescing around Larry Kudlow to take point on this mission. Larry obviously is known as a unabashed free-marketer, having cut his teeth in the Reagan White House, working with the likes of Dr. Art Laffer. Laffer, as a matter of fact, was on TV touting Larry for either the post of Chair of the Council of Economic Advisors, or to replace Greenspan in 2006.

I’m impatient, I’d like to see Bush give his nod Larry’s direction and get the ball rolling.

While lots of “I wish” ideas permanently stay in that arena of “if wishing made it so,” this one seems like it could possibly have legs. The latest issue of National Review has an editorial promoting Mr. Kudlow. Additionally, Steve Moore of the Club for Growth penned this piece for NRO...I think it makes the case very effectively...

President Bush has had a series of supremely talented economists advising him over the past four years, including Larry Lindsey and Glenn Hubbard, but he has never had a gifted communicator of the White House economic message. That deficiency caused Bush severe heartburn in both marketing his first-term domestic legislative priorities and in educating American voters about how those policies are working.

In the year before the November elections, for example, the economy soared — with low interest rates, low inflation, respectable job growth, increasing worker productivity, and a rapid rate of growth for the gross domestic product. Bush’s policies were working swimmingly, particularly the 2003 tax cut. Yet, the media portrayed economic conditions as if we were in a mini-depression with many voters buying into this pessimistic viewpoint. The chasm between economic reality and perception almost cost Bush the election.

All of this is to say that what George W. Bush needs an economic communicator — someone who is telegenic, charismatic, and credible. Of course, it goes without saying that this person must also be a gold-plated supply-sider who has an unshakable conviction that the Bush second-term agenda is right for the country. After all, the Bush administration has an incredibly audacious economic game plan: a tax overhaul, Social Security reform, expansion of free-trade agreements, tort reform, and budget control. If Bush can accomplish even half these priorities, he will leave behind a scintillating legacy of achievement.

For all these reasons, the open position of director of the National Economic Council should be filled by NR’s own financial wizard, Larry Kudlow. I recently joined up with a growing band of conservative leaders to try to make this appointment a reality.

This choice makes so much common sense, it’s amazing the White House hasn’t already pounced on it. Kudlow’s credentials to be the president’s chief economic spokesman and adviser are impeccable:

-Kudlow is regarded on Wall Street as one of the nation’s premier financial economists.

-He is TV savvy (obviously, given that he has his own show on CNBC).

-He is right in line with the Bush administration’s thinking on tax cuts, entitlement reform, trade, and monetary policy.

-He has advised President Bush and Vice President Cheney on economics over the years.

-He has a unique power of persuasion that can convert people in the media, in Congress, and on Main Street of the rightness of his and Bush’s positions.

-He has a national (even an international) following.

-He is highly regarded among Republicans and many Democrats in Congress.

Larry Kudlow has a pure Reaganite pedigree. He worked for the Gipper between 1981 and 1984 as the chief economist at the Office of Management and Budget. He has worked as senior economic strategist for some of the most prominent investment-banking firms on Wall Street, including two stints with Bear Stearns. He has had the fine sense to write a brilliant bi-weekly column for NRO and also writes frequently for National Review magazine.

It is well known that a number of years ago Kudlow had a near career-ending substance-abuse problem. It is also well known that he has had a blessed and remarkable recovery in his personal/spiritual life as well as his professional life. His only remaining vice is tobacco. (If the White House is a no-smoking zone, that, alas, may be a deal-killer.) Should his past problems be a disqualification? In this age of redemption, the answer surely is no. After all, President Bush, earlier in his life, struggled with his own substance-abuse demons, and he fully conquered them in admirable fashion.

My White House contacts tell me that for four years President Bush has been trying in vain to find for his administration a “Robert Rubin of the right.” Good news: He exists, and his name is Larry Kudlow. Appointing him would be a masterstroke by the White House and would win universal applause — particularly from his conservative friends. This would be President Bush’s most daring and exhilarating Cabinet selection.

What is he waiting for?