Belmont Club

It Could be Worse

Even those who couldn’t afford turkey — or have never even heard about the holiday — had a lot to be thankful for this Thanksgiving. On average people round the world are far richer today than they were a few decades ago. The Cato Institute notes, “child mortality, poverty, and violence are declining, while life expectancy, incomes, and education are increasing. And that’s not all!”

But as someone should have said, “eternal paranoia is the price of progress”. None of that advancement happened ‘just because’. It happened because people worked at it. Individuals have been hard at inventing new things, curing old diseases, creating pioneering industries. They don’t ask for much. All they count on government to do is make sure the world doesn’t blow up and to create a stable legal environment.

For government doesn’t really build things; civilians do that. To paraphrase Auden government “makes nothing happen: it survives”. Occasionally it allows something unusual to happen. The combination of low oil prices and high defense budgets collapsed the Soviet Union during the Reagan era. Now we’ll get to see what combining low oil prices and falling defense budgets will do. A symposium at Harvard noted that falling oil prices are beggaring Russia.

If history is any guide, Vladimir Putin’s iron grip on Russia could be threatened by the lowest oil prices in a decade. It also partly explains his increasingly belligerent stance toward the West.

Crude oil and natural gas prices have been central to Russian prosperity for decades. As they fluctuated, so did the country’s fortunes. And they have led Russia to outward aggression before and could again.

For every dollar off the price of a barrel of oil, the Russian government loses $1.7 billion in annual revenue. The Russian government accrues about half of its revenue from the oil and gas economy. If prices remain at their current level, Moscow would bring in almost $50 billion less revenue in 2015. Subtract another $10 billion to $15 billion due to the renegotiation of gas contracts and that’s a major hit to a revenue budget of around $400 billion, and a government that is depending on $100-a-barrel oil to meet its 2015 budget deficit goals. …

In the last few months, Moscow has started cutting public services to the bone, slashing health and education expenditures and some basic allowances for the poor. Meanwhile, the rapid downfall of the ruble is dramatically reducing the spending power of most Russian citizens and threatens to push up inflation very soon.

Today NATO commanders are worried that Russia might respond by expanding around the Black Sea, which would be as problematic as having pressure without a pressure cooker. OPEC’s decision to keep pumping means the pressure on the ruble will keep increasing.  But with any luck, dropping oil prices will not only undermine Russia but also kill the US shale oil industry, a two-fer. Bradley Olson and Rebecca Penty of Bloomberg write:

The refusal of Saudi Arabia and its OPEC allies to curb crude oil output in the face of plummeting prices has set the energy world on a painful course that will leave the weakest behind, from governments to U.S. wildcatters. …

“We’re in a very nerve-wracking environment right now and will be for probably the next couple of years,” Jamie Webster, senior director for global crude markets at IHS said today in a phone interview. “This is a different game. This isn’t just about additional barrels, this is about barrels that are going to keep coming and keep coming.”

So does the White House finally have a Grand Strategy in low oil and low military budgets, or is the administration’s Grand Strategy simply a desire to have no strategy at all?

The Pundits have noted the job of Secretary of Defense has no obvious takers. “Michèle Flournoy, widely seen as the front-runner to replace Chuck Hagel as the next secretary of defense, abruptly took herself out of the running for the job Tuesday, complicating what will be one of the most important personnel decisions of President Barack Obama’s second term.” Flournoy would have been the first female SecDef, but she’s apparently not interested.

Brendan McGarry at DOD Buzz writes: Is White House Micromanagement Scaring Off Likely Defense Secretaries? In other words, ‘who wants to be the next Chuck Hagel?’

Flournoy isn’t the only potential nominee who waved off interest in the position. Sen. Jack Reed, a Democrat from Rhode Island, recently elected to another six-year term, “has made it very clear that he does not wish to be considered for the secretary of defense or any other cabinet position,” his spokesman, Chip Unruh, told the Providence Journal newspaper.

Adams can relate. “If I were any candidate, I’d have to think seriously about whether I want to do that job,” he said.

Deputy Defense Secretary Bob Work and his predecessor, Ashton Carter, are rumored to be among the few candidates left with the credentials Obama appears to want.

Micromanagement is sometimes a symptom of having no overarching idea, manifested as “making it up as you go along”; in following the last whispered advice. Such a foreign policy would not be implausible in an administration which prioritized domestic power-seeking over all else. Professor Glenn Reynolds argues that an unconscious power struggle is taking place within the Democratic Party between “the urban-black wing” and the “white gentry-liberal wing of the Democratic Party”.

So why all the Ferguson hoopla? … It’s about the base. And it’s not about the Democratic Party’s base, but about certain leaders’ base within the Democratic Party. This may be best understood as an intra-party struggle. Obama is the champion of the urban-black wing of the party, and because of him that wing has been on top. But his star is fading, black voters are beginning to realize that they haven’t benefited economically, and the next Dem nominee — whether it’s Hillary Clinton, Jim Webb, or Elizabeth Warren — will be from the white gentry-liberal wing of the Democratic Party. The riots, the marches, the traffic-blocking are a way of telling them that the Sharpton wing is still a force to be reckoned with, and to improve its bargaining power between now and 2016. At least, that’s the only way this — not at all spontaneous — street theater makes sense.

The problem is that the Democratic Party will have trouble winning elections on the backs of an urban base alone. Josh Kraushaar of the National Journal writes that one the biggest pieces of underreported news is that Jim Webb is running for nomination in 2016. “The Curious Case of Jim Webb’s … long-shot presidential campaign says as much about the evolution of the Democratic party as it does about his qualifications.”

If Jim Webb announces he’s running for president and no one is there to hear it, does he make a sound? Yes, but primarily as a lesson in how dramatically the Democratic Party has changed during the Obama administration. …

In a Democratic Party that’s been shedding white working-class voters during the Obama era, leaders would be wise to pay closer attention to Webb’s views on economic and cultural issue—and consider co-opting some as their own. On paper, his resume is first-rate: decorated Vietnam War veteran, secretary of the Navy under President Reagan, swing-state Democratic senator, and an acclaimed author. At a time when economic anxiety is a defining feature of American politics, Webb’s record on the subject is as impressive as Elizabeth Warren’s. That he’s treated more like a fringe figure these days is a testament to how far his party has drifted from its roots.

Consider: There will be only five red-state Senate Democrats left in the next Congress if, as expected, Sen. Mary Landrieu is defeated in next month’s runoff. Even more striking, there will be only five House Democrats left representing districts that Mitt Romney carried in 2012. The once-influential Blue Dog Caucus of fiscally hawkish Democrats is all but extinct. Republicans now boast twice as many blue-state senators (10) and five times as many blue-district representatives (25) than their Democratic counterparts in red territory.

The implication is that the forgotten middle class is trying to remind a Democratic party that has moved farther to the Left than ever, that they and foreign policy still exist.  So please remember to forget scr*wing them for a while. Democratic Senator Chuck Schumer slipped a tu*d in the punchbowl when he publicly argued the party had forgotten the working man in favor of the welfare recipient and illegal alien and were suffering in the polls as a consequence.

After passing the stimulus, Democrats should have continued to propose middle-class oriented programs and built on the partial success of the stimulus. But unfortunately, Democrats blew the opportunity the American people gave them. We took their mandate and put all of our focus on the wrong problem — health care reform. Now the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed, but it was not the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs, not changes in health care.

This makes sense, considering 85% of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote. In 2010 only about 40% of those registered voting. So even if the uninsured kept with the rate, which they likely did not, we would still only be talking about only 5% of the electorate.

To aim a huge change in mandate at such a small percentage of the electorate made no political sense. So when Democrats focused on health care, the average middle-class person thought the Democrats are not paying enough attention to me. Again, our health care system was riddled with unfairness and inefficiency. It was a problem desperately in need of fixing. The changes that were made are and will continue to be positive changes, but we would have been better able to address it if Democrats had first proposed and passed bold programs aimed at a broader swath of the middle class.

Schumer’s health care policy analysis is pretty defective, but his political instinct is closer to the mark. It hurt partly because it hit home. The party has forgotten a big part of their constituency. Schumer might have added that the same attitude has been responsible for devaluing America’s traditional allies in favor of newer, trendier “partners for peace”.  The administration has been trying to shift its domestic and foreign policy coalitions, without too much success.

Perhaps the most psychologically descriptive guidance to come out of the administration’s PR shop were instructions on how to turn the Thanksgiving dinner table into an ideological battleground. “How To Talk To Your Tea Party Uncle About Obamacare This Thanksgiving”.

As your family gathers around the table this Thanksgiving, the conversation may get a little heated if your right-wing relatives bring up President Obama’s signature health law. The Affordable Care Act remains both unpopular and misunderstood among the American public — a combination that makes it likely fodder for holiday conflicts.

So, if your Tea Party uncle starts making wild assertions about the Affordable Care Act, here are some key points that will help keep your conversation on track.

The same overcontrolling, micromanaging, hectoring atmosphere that is said to poison the Defense Department would have been on full display in a field normally devoted to giblet gravy and cranberry sauce. One can’t help but think the little commissars are so busy building a new paradise in their minds they have so soon forgotten the poorer, more dangerous world their fathers vanquished. The world the Cato Institute is looking at in the rear-view mirror; the one without universal connectivity, quantum teleportation or GoPro cameras that was reality only yesterday.

For those with no memory of the past and no appreciation for the creativity of ordinary life, Thanksgiving Day is really Thanks For Nothing Day, Amerika.  It could be worse. It could have been a thousand other places they’ve dreamed of but never been. They’re going to miss it when it’s gone.


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