Shall we shut down the government? Again?

As of this moment, Republicans and Democrats in Congress are at an impasse over the 2011 budget.   Budget hawks in the Republican party have insisted on cutting President Obama’s spending plan.  Democrats have agreed to some $30 billion in cuts, but that is not enough for a key segment of Republicans.  If a budget doesn’t pass, the government shuts down on Friday.  (Well, “essential services” won’t, but still. . . .)

You may recall another time when Republicans scored a big Congressional victory over an unpopular Democratic president.  They demanded that the budget be cut and stood firm and uncompromising on that principle.  The government shut down.  Whereupon the public reacted against the Republicans, President Clinton’s popularity shot up, and he won re-election.

Is this a repeat of history?  Are the Republicans over-reaching, again? Will this mean the re-election of Barack Obama?  Is there anything different this time?

And here is a deeper question:  Will the American public tolerate a tough, trimmed down budget?  With so many Americans beholden in some way on federal money–getting social security, medicare, farm subsidies, business subsidies, government contracts, job-creating pork, federal programs, college loans, etc., etc.–even though they express worry about the deficit in the abstract, will they turn against any Republican or conservative who threatens to defund popular programs?


Government shutdown: Potential furloughs for 800k federal workers, disruption of D.C. services – The Washington Post.

Problems with the food supply

Just in case you need something else to worry about, global food prices are skyrocketing (here not so much–yet), due to increased demand and shorter supplies:

Since last summer, several events — floods in Australia, blistering drought in Russia, the threat of a poor winter wheat crop in China — have compounded concerns about the food supply and pushed world prices to the highest levels measured since the U.N. Food and Agricultural Organization began calculating its index in 1990.

For decades, the world was often swimming in surplus food because farmers were so productive. But rising demand has caught up, and reserves have become so tight that global food markets are vulnerable to even minor shocks. Many analysts say that higher, more volatile prices may be here to stay.

The new dynamic reflects in part the rising demand for meat in developing countries such as China, which has almost single-handedly driven up prices for the soybeans it imports for animal meal, as well as the increasing use of corn for ethanol. Today, at least a third of the U.S. crop goes for making fuel. In addition, there is spreading concern that climate change may make weather less settled and more disruptive to growers.

“For the last 60 years, the simple story was agricultural productivity — great productivity gains, unabated,” said Joseph Glauber, chief economist at the U.S. Department of Agriculture. “But in the last five years, prices have lifted, and you see this real strong demand.”

Since last summer, the market price for corn to be delivered in May nearly doubled from $3.67 to $7.23 as of late last month, according to data compiled by Dan O’Brien, an agricultural economist at Kansas State University.

Grain reserves have dwindled. The latest USDA estimates, released Thursday, show U.S. reserves of corn and soybeans at historic lows, less than 5 percent of projected demand for the coming year. Typical reserves have been three or more times that amount, a chief reason why it does not take much to send prices skyrocketing.

via Higher food prices may be here to stay – The Washington Post.

Disaster and national debt

Japan’s and ours. . .

As Japan begins the complex and costly job of rebuilding the areas of the country that were destroyed, the task will be made more difficult by the government’s vast debt.

Japan has the highest level of debt relative to the size of its economy of any major industrial nation — 234 percent of gross domestic product this year, the International Monetary Fund estimates, compared with 99 percent for the United States. With the cost of rebuilding devastated areas expected to be in the hundreds of billions of dollars, that debt level is likely to grow in the years ahead.

There are lessons for the United States. Even when borrowing rates are low, as they are for the United States and Japan, running high budget deficits can leave a country with less flexibility to respond to a disaster or an economic setback.

“When you have as much debt as the Japanese have, you’re vulnerable to this kind of shock and can’t do much about it,” said Carmen Reinhart, a senior fellow at the Peterson Institute for International Economics whose research shows that financial crises frequently lead to high debt burdens, which in turn cause other problems.

Borrowing money to rebuild after a disaster is a productive use of debt, most economists say. It is likely to have a high economic payoff and is a one-time expense. But because of its already high debt levels, the Japanese government may be forced instead to raise taxes or cut other spending to pay for the reconstruction, further damaging Japan’s weak economy.

A third option for funding reconstruction would be for the Japanese government to sell off some of its foreign assets, such as U.S. Treasury bonds. In theory, Japan maintains those reserves so it is prepared for an economic emergency, which surely this is.

via Nikkei recovers 5.7%; U.S. stock futures fluctuate over nuclear crisis – The Washington Post.

Michigan considering suspension of democracy

Thanks to Kirk Anderson for putting me on to what is happening in Michigan, which is considering passing a bill that would allow the Governor’s office to replace elected local officials.

Kirk explains:  “There’s a bill working its way through the Michigan legislature that would give the governor authority to place “emergency managers” in financially troubled localities to help get their governments back on the fiscal track.  The thing is, these managers have the power to remove elected officials like country administrators and school board members, fire employees, cut benefits, slash services, merge districts, etc etc.  I think it might be an interesting discussion since it pits financial responsibility vs. local governance, both conservative principles.”  From the linked article:

A day after facing hundreds of rowdy, pro-union protesters that filled the state Capitol, the Senate voted on Wednesday to grant broad new powers to emergency managers who oversee financially struggling cities and schools, including the authority to void union contracts and remove elected officials.

The controversial bills are expected to head to Gov. Rick Snyder’s desk for signature shortly, after the House and Senate, both controlled by Republicans, work out some language differences.

The Senate passed the main bill in the package by a 26-12 party-line vote, drawing an immediate rebuke from union leaders across the state, who called it an assault on collective bargaining rights. In the Macomb County delegation, Republican Sens. Jack Brandenburg of Harrison Township and Tory Rocca of Sterling Heights supported the measure, while Democratic Sen. Steve Bieda of Warren was opposed.

Brandenburg said several urban areas of the state, especially Detroit, are in “bad shape” and will need a state-appointed emergency financial manager, or EMF, who can impose strong medicine.

“He has to have the backbone, he has to have the power, to null and void a contract,” Brandenburg said.

The senator also rejected claims by Democrats that the bill will destroy Michigan’s long history of local control by allowing the EMF to remove top administrators and elected officials, put millage increases on the ballot, lay off employees, slash services, and merge the city or school district with a neighboring government entity. Brandenburg said the EMFs will be deployed in communities that need “financial martial law.”

“Local control? I’ll tell you what, I think that in a lot of these places there is no control,” he said.

via Michigan Senate passes emergency manager bills –

The unions are worried about losing collective bargaining rights?  What about citizens being worried about losing their voting rights?

I read this on the Ides of March, the day the Roman Republic–a free, constitutional, representative government that lasted 500 years–made its last futile effort to stay alive, slipping instead into an authoritarian absolutist  Empire.

The thing is, the jettisoning of the republic was for good reason. It had become corrupt, incompetent, and ineffective in dealing with the problems of Rome, including its financial problems.  Julius Caesar made himself into a dictator to address those problems.  He was very effective.  The people loved him for it.  And so were willing to give up all of their political freedoms.

Is this where we are headed?  Does political freedom just not work anymore, being unwilling to make hard and painful decisions?

Am I missing something?  Can anyone–preferably including people from Michigan–justify this on other than purely pragmatic grounds?

I am completely sympathetic to the comment on local control that in these cases of runaway spending “there is no local control.”  Can’t citizens be motivated to govern themselves, or is representative democracy hopeless and we had better find ourselves a Caesar who can get things done?

NFL labor dispute

One effect of Wisconsin governor Scott Walker’s successful effort to limit collective bargaining by the state employee’s union is that labor unions are once again in the national spotlight.  Unions consider this to be a good thing, after years of neglect, since much of the public seems to be taking their side.  And now a labor issue of even greater concern to the general public has emerged:  The National Football League is headed for a work stoppage.  After negotiations over a new contract fell apart, the players decertified their union, a tactic that allowed for court action, and the players essentially locked out the players.  Next year’s season is in jeopardy.  See  NFL talks collapse, shutdown of pro football expected – The Washington Post.

Unions for sweatshops, casualties of the industrial revolution paid subsistence wages, and other cases of the exploited proletariat are one thing.  It’s harder to be sympathetic to white collar unions and–what do we call them?–spandex collar unions, especially professional sports laborers who make untold millions and are in a dispute about how to share in additional billions.

Still, some may argue that the principles are the same?  Going from a 16-game season to an 18-game season would surely mean a greater chance for career-ending injuries.  Can’t millionaire athletes be exploited too?  Or is there a difference of kind as well as magnitude here?

And what would be the real effects of a work stoppage?  When the garbage collectors’ union goes on strike, the trash does not get picked up.  But who is hurt if professional athletes don’t go to work, other than themselves and the owners?  I have heard it said that “this only hurts the fans,” but I would contend that fans are not hurt at all, not really.  Missing a few hours of entertainment on Sunday afternoon will not hurt anyone.  Fans can always read a book, play video games, spend time with the family, or take a nap.

What do you think about all of this?

What would Jesus do about nationalizing the means of production?

Anthony Sacramone says, uh, no, taking on a claim in the Huffington Post:

This is what passes for deep thinking at the Huffington Post: an assistant professor of history insists that evangelicals must “hate” Jesus because they’re not socialists. Because Jesus was a socialist, you see.

Really? Jesus ran concentration camps? He murdered people who wore glasses because they were perceived to be intellectuals? He shot dissidents? He confiscated money he didn’t earn in order to fund a massive slave state? He denied the existence of God and claimed that religion was the opiate of the masses? He declaimed against those who wouldn’t arm totalitarian guerrillas? He insisted that personal responsibility for helping the poor should be pawned off on bureaucrats, who, of course, really really care about the poor? Because all that too is socialism, as even an assistant professor should know. . . .

In short: Jesus came to set men free. Socialism came to enslave them to Caesar.

You should read the rest of the rant, the point being that socialism has no right to the moral high ground that many people are giving it.

via Strange Herring | And other signs that the end is near.