A Generation to be Proud of

I am not alone in proclaiming that the baby-boomer generation of which I am a proud member produced some of the best music of the century.

We haven't seen its like since.

I offer this as Exhibit One.

Frum on Desert and Random Fortune

David Frum offers an especially smart analysis of the mostly silly controversy over President Obama's "you didn't build that" comment.

He points out, correctly, that Obama was just restating something that had been said earlier (and better) by Elizabeth Warren.

However, although Frum concedes that many critics of Obama's speech may have distorted his meaning, he identifies another element in Obama's speech--fairly and accurately I think--that goes a long way towards explaining why some people are upset by what he said--not that what he said was untrue mind you, but unsettling nonetheless.

A Word on Volatility

What in the world has happened to the stock market?

When I first started about thinking about saving for retirement in my 30s, the standard line repeated over and over by investment counselors was that the stock market was the best choice because in the long run it provided about an 8% annual return, better than bonds or cash.

Consider this chart, which portrays S&P 500 performance since 1950.

As you can see, with minor deviations the 8% rule held until the mid 1990s. Then something crazy happened: extreme volatility. First, there was the "irrational exuberance" of the .com bubble and the inevitable crash. Then there was a rapid recovery until the 2008 financial crisis, which resulted in an even bigger crash. Since the 2008 meltdown, there was yet another rapid recovery until 2010. Since then, returns have been more modest, and we have yet to reach the 2007 peak.

Since the 1999 and 2007 peaks were both considerably above the 8% trend line, a correction was perhaps expected. The question is: Now that we are below the 8% trend line, what happens now?

If we are to resume the 8% annual rate of return, then the market should double in the next 10 years--a strong argument for investing in stocks. On the other hand, one can't help but feel like the old rules just don't apply any more.

Like Arthur Jensen in Network, I don't like volatility. I am sticking to bonds, which give a boring, but predictable rate of return considerably below 8%.

A Look Inside the Tea Party Soul

In the film The Princess Bride a bad guy named Vizzini (played marvelously by Wallace Shawn) repeatedly rejects several threats to his evil plan, claiming "that's inconceivable."
When, to Vizzini's amazement, each event actually occurs, Mandy Potinkin's Inigo Montoya observes that "You keep using that word. I don't think it means what you think it means."



I had a friendly political argument with a Tea Party follower the other day, and he seemed shocked when I pointed out that there was nothing in the U.S. Constitution to preclude the United States from adopting socialist policies per se, so long as the Congress and President endorsed them. I felt like Mandy Potinkin. Whenever I read a Tea Party tome I feel like Mandy Potinkin. They keep using the word "unconstitutional", but it really doesn't mean what they think it means.

Here's how it typically works. A Democratic politician enacts--or even just proposes--a policy the Tea Party member disagrees with and the Tea Party calls the policy "unconstitutional." Actually, it doesn't even have to be a policy the Tea Party disagrees with. Sometimes it is a policy they support, perhaps even actively promoted. It is only the nanosecond after it is endorsed by Barack Obama that it becomes "unconstitutional."

There are lots of examples of this, but a good place to start is Florida-based right-wing radio talk show host, Steve Bussey, who recently published bill of particulars against Barack Obama's multiple violations of individual liberty that believes warrant civil disobedience on a massive scale. Interestingly, breaking from the Tea Party practice, he doesn't actually use the word "unconstitutional", but it is clear that this is what he has in mind when he refers to the government being "abusive and injurious of our unalienable rights and Supreme Law of the Land" and how "President Obama’s crimes against Americans follow those of King George III."

He created a situation through Operation Fast and Furious to support his calls for unconstitutional gun control. 

The Obama administration has neither proposed or even suggested any new gun control legislation. A fortiriori, it has not called for any "unconstitutional gun control" measures. 

He has refused to enforce American immigration law and actually changed those laws– unconstitutionally legislated–by announcing he will issue work permits to illegal aliens.

I am not sure what this refers to. The only thing I can think of is the recent announcement that the Administration will no longer seek to deport children who entered the country illegally. This was a response to lack of Congressional action on the Dream Act, a bill that used to have wide bipartisan support, until the GOP decided to oppose virtually anything that Obama favors--including positions and legislation it once supported. The administration has wide discretion as to how to allocate prosecutorial resources and it is perfectly within it rights to do this. If this decision were unconstitutional, it is supported by other extra-constitutional, European socialists, such as Haley Barbour and Rick Perry. 

He has refused to enforce the Defense of Marriage Act and defend it in court as required by our Constitution as well a the voting rights act as in with the case of the New Black Panthers.

DOMA was widely thought to be unconstitutional when it was passed in 1996 because it seemed to violate the equal protection clause of the 14th amendment. Recently, the U.S. Court of Appeals for the 1st and 9th Circuit have both officially ruled it unconstitutional, and the Obama administration agrees with these rulings. It has requested expedited Supreme Court review and will not enforce the law in the interim. Not only is this policy NOT unconstitutional, it is prudent.

The New Black Panther incident involved the behavior of two knuckleheads--repudiated by the party of which they were members--at a Philadelphia polling station in 2008 engaged in what could be plausibly called voter intimidation. The Justice Department did not pursue the case aggressively simply because it was an isolated incident in a predominantly black neighborhood with no demonstrated effect. The incident was, as Abagail Thernstrom concluded, "very small potatoes."  Again, this is well within the prosecutorial discretion of the Justice Department. You can question its judgment. You can disagree with the decision. However, calling it "unconstitutional" is just silly. 

His Administration has been held in contempt of court for refusing to lift the Gulf of Mexico oil drilling ban following the BP oil spill.

The Administration was held in civil contempt by a Louisiana judge over a dispute about how to respond to the massive BP oil spill. The administration instituted a temporary ban on the deep water drilling in the Gulf. The ban was withdrawn in Oct. 2010 and deep water drilling in the gulf has now resumed at aggressive pace.

He has sued Arizona for passing a state law of a pressing nature to secure the peace and freedom of residents within that state.

Because of our Federalist system of government, legal disputes between the states and and the federal government are commonplace. Bizarrely, the Supreme Court largely sided with the Administration in this case striking down 3 of 4 of the provisions of the Arizona law, a turn of events that apparently passed Mr. Bussey by. It is unclear how anything about this dispute could lead one to conclude that the administration acted unconstitutionally.

He intentionally created a situation where in the State of Florida could not meet certain legal requirements and then sued the State of Florida for attempting to ensure the sanctity of the vote in that state.

This apparently refers to Florida governor Rick Scott's attempt to purge the state's voter roles of non-citizens. The Justice Department has argued that Scott's attempt violates the Voting Rights Act. Scott has asked for a DHS database that will help him identify non-citizens, and the DHS says that their database is not definitive and in any case will not grant the request until the Justice Department determines that Florida's effort is legal. This is much like the Arizona case above. It is a legal dispute between the Federal Government and the state of Florida. How, exactly, is this an instance of "unconstitutional" behavior?

He de facto dissolved Congress when he made unconstitutional “recess” appointments without the advice and consent of the Senate while the Senate was still in session and not in recess in clear violation of our Constitution.

The constitution allows the president to make appointments normally requiring confirmation by the Senate without Senate approval when the Senate is in recess--a recess appointment. In just the last 5 years (starting with Harry Reid during the Bush presidency) the leader of the opposition party in the Senate has attempted to prevent the president from making a recess appointment by keeping the Senate constantly in session by relying on "pro forma" sessions, which occur when the full Senate is out of session and no Senate business is being conducted. One or two senators stay in Washington and simply gavel in and out of session in a matter of seconds. This dispute hinges on what technically constitutes "being in session." Is simply saying you are session sufficient or must a session involve actually conducting Senate business?

This entire problem arose over the GOP's refusal to hold a vote on the confirmation of the head of the new Consumer Protection Bureau. Having lost the debate over the creation of the Bureau, part of the Dodd-Frank Financial Reform Act, the GOP sought to prevent its effective implementation by withholding consent for ANY proposed Bureau chairman. The Bureau was officially created by a law passed by the Congress and signed by the President. By abusing its duty to advise and consent through stonewalling any appointee regardless of qualifications, one could just as easily charge Senate Republicans with acting unconstitutionally. In any case, whatever else this dispute is, it is certainly NOT "clear." The Supreme Court will have to rule on the legitimacy of using pro forma sessions as a tactic to prevent the executive from making recess appointments before the legality of this dispute is resolved. 

He has used his EPA to enact regulations refused by Congress and the National Labor Relations Board to enact rules rejected by Congress. 

The GOP used to support Cap and Trade. In fact, in 2008 John McCain ran on it. However, once the Obama administration endorsed it the GOP abruptly changed course. So, Cap and Trade died in the Senate. The Supreme Court ruled in Massachusetts v. Environmental Protection Agency that the EPA was empowered to treat Co2 as a pollutant and subject it to regulation unless Congress forbade it. Congress did not. How, then, can it be unconstitutional for the EPA to pursue regulations of Co2 as a pollutant? 

The Obama czars have clearly gone beyond any advisors used by previous presidents and he has sent his EPA, IRS, Justice Department and others to sue private businesses and citizens, confiscate private lands and harass churches, private groups and organizations that oppose him.

This assertion is so vague and lacking specificity that it defies commentary. 

He has removed the United States Military from the congressional chain of command and used them in Libya in violation of the War Powers Act and his Secretary of Defense has advised Congress they will go to war upon UN, NATO or other authorization without notifying or seeking specific funding or resolutions from the United States Congress as has always been done by previous presidents even when they have disagreed with the War Powers Act.

Rachel Maddow has recently published a book on this historical trend, which she also disapproves of. Obama has done nothing that other modern presidents have done. Every president since Richard Nixon has claimed the War Powers Act is an unconstitutional infringement on the president's power as Commander in Chief, and the Supreme Court has not ruled on this. Although Bush 1 and 2 got Congressional approval for the Gulf War and the Iraq War, both asserted that they did not need it and would have gone ahead even absent any approval. In any case, comparing the Libyian action--where no US ground troops were employed, no U.S. casualties were incurred, and where our involvement was limited--to the Iraq or Gulf War, where tens of thousands of US troops were engaged in a massive land invasion and thousands were subsequently killed or wounded is more than a little ridiculous.

Furthermore, Reagan invaded Grenada and sent the Marines to Lebanon without obtaining prior Congressional approval. George H. W. Bush invaded Panama without prior Congressional approval. Were these presidents also acting "unconstitutionally?" Did Bussey say so at the time or enthusiastically support the policy? 

He is negotiating the Law of the Sea and Small Arms treaties and conspiring with the United Nations to place American sovereignty under foreign rule by default, implementing rules such as Cap and Trade and Agenda 21 pursuant to international rules without the assent of Congress or the People and, in fact, when some of the international rules have specifically been rejected by the representatives of the People.

The Law of the Sea and the Arms Trade Treaty both require a two-thirds vote in the Senate for ratification. Is it the Tea Party position that that it is unconstitutional even for the Administration to engage in negotiations over international treaties?

The mention of Cap and Trade is simply a repeat of the issue discussed above regarding EPA regulations.

Agenda 21 isn't even a treaty. It is a is a non-binding and voluntary action plan proposed by the UN regarding sustainable development. Since it has no force of law, even if agreed to (whatever that would mean), this issue is irrelevant.