The Republican Hopefuls’ Big Ideas, Part I: Rick Perry’s Economic Plan

On Tuesday Governor Rick Perry published his detailed economic plan, partly a response to Governor Romney’s 160-page plan (which will be the subject of a later entry), partly a response to Herman Cain’s much-vaunted but ill-conceived “9-9-9” tax plan, partly an overdue answer to a 2-month-old call for less sitting on his Texas record and more policy detail.  Though Governor Perry’s economic plan comes in at just 24 pages, he now has offered far more policy commitments than Mr. Cain, whom we have for weeks breathlessly been told is a 1st-tier candidate.  Most of the proposals seen herein come from old Republican wish lists, though they admittedly have never been seen in this exact combination before and have already won him endorsements from Steve Forbes and the implication of a future endorsement from the Club for Growth.

The priorities specified in Governor Perry’s economic plan place him in-line with the agenda of the House Republican Caucus; his plans for reform of the Federal Government place him to the right of Governor Romney but not radically-so.  Some of his proposals, such as a Balanced-Budget Amendment to the Constitution, sound nice but would have a perverse effect on Federal budget priorities and the economy during a recession; in any case its passage by 2/3 of Congress or of the States and by 3/4 of the States in any event is implausible.  Repeal of President Obama’s Health Care Reform is also implausible given that Republicans cannot hope to win a super-majority in the Senate in 2012 and some measures in the bill are certain to prove popular by full implementation in 2014; however, by executive orders and budget cuts with what may be a fully-Republican Congress, a President Perry could drastically reduce Federal spending, dismantle parts of the 2010 Health Care Reform, refuse to fund or enforce the Dodd-Frank financial reform, and completely block-grant both the Department of Education and Medicaid to the States.  He has proposed “all of the above” reforms to make Social Security solvent, and amusingly, nothing in particular to fix Medicare.  If you’re still reading, let’s dive right in.

Rick Perry’s Economic Plan:

Institute an optional 20% flat Federal income tax.  All American wage-earners could simply opt to remain under the current graduated income tax structure with its myriad deductions, or switch to a simple 20% income tax with a few (but hefty) deductions.  Perry’s otherwise flat income tax would maintain the deductions for charitable giving, mortgage interest, and State and local taxes.  An interesting wrinkle: Those who switched to the 20% flat tax wouldn’t face taxation of their Social Security checks, a bizarre and regressive practice that began in 1983 when President Reagan and Congressional Democrats worked-out a compromise to address a far-greater solvency crisis Social Security faced at that time.

In an obvious swipe at Godfather’s Pizza executive and fellow Republican presidential hopeful Herman Cain’s “9-9-9” tax proposal, Perry insisted that he would not support a Federal sales tax or a value-added tax, arguing (as a recent study has shown with the Cain proposal) that a tax on the sale of consumer goods would result in disproportional higher taxes on the poor, who have to put a much larger share of their income towards purchases than the wealthy do.

Eliminate taxes on dividends and long-term capital gains.  This measure would largely benefit the rich, particularly the rich employed in the financial sector whom are often compensated with stock rather than a salary due to the much lower capital gains tax rate.  (Hence Warren Buffet’s recent indignant observation that he is taxed at a lower rate than his secretary.)  It would of course also eliminate taxation on middle- and, where applicable, working-class investment as well, which would make it a bit easier for those with middling incomes to make money while encouraging investment; this would also be the sort of reform needed to prepare for adding personal investment accounts to Social Security, a long-sought prize for the Republicans.  This measure favors the investor class (Read: the rich whom are compensated through stock), and abets the institution of investment accounts through Social Security; I would think, as The Economist recently argued, a more-prudent reform would be the elimination of corporate income taxes rather than capital gains taxes.  This would remove incentives for corporations to “offshore” their profits in foreign tax havens or to outsource so many jobs to avoid domestic operating costs; let the investors pay the taxes from their dividends much as they would from labor income, and let corporations make their siting and investment decisions knowing they will face no taxes from the Federal Government.

Eliminate the Federal Estate Tax.  Here Governor Perry’s economic plan invokes an old Conservative grievance narrative:

“…The estate tax is paid by the recipients of an inheritance and is due within 9 months of a decedent’s death.  If the heirs do not have sufficient cash, personal property and business assets must be sold to pay the tax.  In the case of family business owners and farmers, the tax often exceeds the ability of the family to pay.  These heirs are consequently forced to sell part, if not all, of their enterprise in order to pay the tax.  Eliminating the death tax is necessary to protect family businesses, farms and jobs.”  That sounds reasonable…but why eliminate the estate tax for all who are eligible?  Why not identify business assets or simply raise the threshold at which the estate tax will apply?  Why don’t Republican advocates of estate tax repeal ever distinguish the plight of the Rockefellers from that of Ma and Pa down on the farm?

Eliminate corporate tax loopholes while lowering the corporate income tax rate from (the nominal) 35% to 20%.  While the “other Governors” have called for lowering the corporate tax rate to 25%, Governor Perry’s economic plan argues that most US competitor countries in the developed world have de facto corporate income tax rates of 20%, leading him to propose the same rate here.

Eliminate taxation of overseas corporate profits.  I know Governor Perry wouldn’t want to describe this proposal this way, but this is what he is proposing.  Current talk of a corporate income tax holiday for overseas profits got you feeling at all resentful?  Perry proposes never taxing the repatriation of corporations’ overseas profits again.  He calls this a conversion from a “worldwide system” of corporate taxation to a “territorial system,” and argues that US corporations would stop stashing cash assets in overseas tax havens and bring the money back home, facilitating the hiring of new workers.  That wasn’t what happened in 2004, when the last corporate profit repatriation tax holiday was followed by significant net layoffs by the US companies repatriating the most money.  This particular proposal just sounds like it would make it easier for corporations to outsource jobs.  Now as then, repatriated profits could simply be passed on to shareholders; the corporations would have no intrinsic reason to hire more workers here since they can simply establish their physical plant in whichever country has the lowest overhead and easiest access to resources or labor, knowing they will only be taxed on profits once–in that business-friendly country.

Freeze new proposals for Federal regulations, unless the President deems their institution to be routine or essential to national security.

Audit all Federal regulations instituted since the beginning of 2008 to determine cost, efficacy and the extent of perverse consequences.  Perry proposes repealing regulations that fail all 3 tests, reforming regulations that fail 1 or 2 of them, and maintaining those that pass all 3.  With any such sweeping or complex reform proposal, more may be riding on the implementation than on the idea itself (which certainly sounds reasonable).

Include a 7-year sunset clause in all new Federal regulations, requiring Congressional study for their renewal.  This sounds impractical, even burdensome, given the speed at which Perry’s plan notes Federal regulations have been written in the past.

Create a searchable online public database for the entire 165,000 pages of the Code of Federal Regulations.  Now, this sounds like a very good idea.

Reform Social Security in line with Conservative principles.  Rick Perry has a plan for Social Security–and it’s a bunch of stuff we’ve seen before, mostly proposed by Republicans.  In keeping with his alarmist talk about Social Security, his economic plan characterizes the most-popular Federal program as “broken,” noting that “If no changes are made to the system, benefits will immediately be slashed by 23 percent in 2036 when the program officially runs out of money to fund promised benefits.”  This is actually a less-serious fiscal crisis than the one Social Security faced in 1983 when President Reagan and a Democratic Congress reformed the program to maintain its solvency without resorting to radical experiments such as diverting the program’s payroll tax proceeds into personal investment accounts.  Perry’s economic plan notes the most-basic problem facing both Social Security and Medicare: As life expectancies increase and birthrates stabilize, a larger proportion of our country’s population will be elderly than in the workforce, gradually forcing a smaller pool of workers to pay the payroll taxes going to a larger pool of program beneficiaries.  Interestingly, Governor Perry has embraced 1 idea by former Vice President Al Gore–a “lockbox” prohibiting the use of Social Security’s payroll tax proceeds to fund other parts of the Federal Budget.  As is typical of reform proposals for Medicare and Social Security, Perry proposes to leave the current benefit schedule intact for those 55-years-old and older.  For those currently in the workforce or younger, they “deserve the opportunity to have ownership of their Social Security contributions, to seek a market rate of return if they so choose, and to leave their retirement savings to their dependents when they die.”  I assume Governor Perry is simply proposing personal investment accounts for Social Security–the same thing George W. Bush proposed in 2005; but if he is proposing letting Americans claim their own payroll tax proceeds for investment in the stock market, that is something else entirely.  Social Security is a redistributive program; current payroll tax proceeds are collected in aggregate to aggregate to be divided among current senior citizens.  Perry’s proposal reads like it’s suggesting individualizing Social Security by an individuals’ payroll tax proceeds.  If that is actually what he’s proposing, that would make Social Security more-regressive.  Payroll taxes deduct 6.2% of the first $108,600 of an American’s income (and 6.2% from an employer for the value of the salary he or she pays out); now Governor Perry has (unless this is a case of confusing writing) proposed encouraging those most-inclined to invest (i.e., the affluent and educated) to pull their contribution out of Social Security.  This should actually give Social Security a brush with another solvency problem, and it would give the poor who chose to avail themselves of this opportunity very little to invest.  I think Governor Perry isn’t that foolish, and this is merely a poorly-worded section of the plan; otherwise, it will fail under scrutiny, and deservedly so.  Perry also proposes raising the collection age for Social Security from the current 67.  What would it rise to, 69 (Mitt Romney)? 70 (The Economist)?  This is another well-known proposal for constraining Social Security and Medicare benefits, less-radical and more-predictable in its fiscal impact than the creation of private investment accounts.  Perry proposes progressive indexing–an idea Governor Romney has previously proposed as a means of constraining Social Security and Medicare expenses.  This would reduce the cost-of-living adjustments by which Social Security benefits are increased over time so that rich beneficiaries get a benefit that is indexed to general inflation, middle class beneficiaries would get a benefit calculated partly on the basis of inflation adjustments and partly by the traditional wage adjustment, and poor beneficiaries would get a benefit indexed to increase along with wages solely. (Perry’s plan estimates that wages typically grow more than 1% faster than inflation annually, suggesting that Social Security benefits have gradually become more-generous with time relative to the overall cost of living.)  Governor Perry also proposes a plan–one introduced by Mr. Cain during the debates and which Governor Romney has actually previously attacked Governor Perry for advancing–that would allow State employees to follow the Galveston model.  (Galveston, Texas withdrew its public employees from Federalized Social Security in 1981 and invested all of its payroll tax collection into a market-based pension plan; the rate of return for Galveston’s separate Social Security system for its public employees is higher, including a life insurance policy, and the plan is currently projected to be solvent.)  In conclusion, Governor Perry does have a plan for Social Security…and it is to do everything that Vice President Gore, President George W. Bush, Governor Romney, and Mr. Cain wanted to do.

Block-grant Medicaid out to the States to reform as they please; do…uh, something with Medicare.  Governor Perry also has a Medicaid plan: punt Medicaid to the States “using the 1996 welfare reform law as a model,” splitting the program into block grants and letting States expand–or contract–eligibility as they wish.  Some States will probably expand benefits; others will contract them, thus expanding some of the holes in health care, already probably the most gap-ridden component of our social safety net.  Governor Perry suggests that greater efficiency, better fit and greater program accountability will result from returning Medicaid funding without guidelines to the States; however, his discussion of Medicaid also suggests that its central sustainability problem is simply that too many people are on Medicaid.  The Liberal Ironist would be interested to know what a President Perry would propose to do for those removed from the Medicaid rolls in the interest of program solvency–namely, the newly-uninsured.  But that would be the “punt:” Considering that he is the proud Governor of a State where 1 in 4 residents are uninsured, his answer would probably be that life is tough and that activists should focus their efforts on the States, the “laboratories of democracy.”  But a punt is a plan. and a Republican President and Congress elected in 2012 would unabashedly get the Federal Government out of the business of providing health care coverage for those of working age, period.

For Medicare, the fastest-growing and most-unsustainable of all Federal programs–Social Security’s long-term solvency outlook is positively simple compared to Medicare’s–the bold-talking Texas Governor proposes…talking about solutions.  Really, his circumspection on this issue is quite funny considering the big push he makes on some other issues here.  Governor Perry’s plan mentions the options of raising the eligibility age, progressive indexing of benefits, and either merging the cash value of Medicare benefits into Social Security–an idea proposed by a Conservative economist back in 2005–or else Paul Ryan’s (here unnamed) proposal to replace Medicare’s defined-benefits for health care with vouchers for the elderly to buy health insurance.  Again, this is a awful idea, probably the most-harmful proposal in Congressman Ryan’s budget proposal from last spring.  Congressman Ryan touted proposing a sustainable (though not balanced) budget by forcing senior citizens into a notorious health insurance market.  Medicare’s vouchers in the Ryan plan would be indexed to general inflation, not inflation in the cost of health care; the Congressional Budget Office calculated that by 2030–just 8 years after Ryan proposed the conversion of Medicare into vouchers–Medicare would cover only about 32% of the typical 65-year-old’s health care expenses in contrast to the current 75%.  This would mean the gutting of the program and would ultimately require some kind of frenzied legislative fix at a later date.  It would be fiscally sustainable but neither politically- nor morally-sustainable.  Republicans were incensed by the oft-repeated suggestion that Congressman Ryan had proposed pushing grandma off a cliff; since those 55 and older would be exempt from these changes, it would be fairer to say Congressman Ryan had proposed pushing mom and dad off a cliff at some point in the future.

“Repeal job-killing legislation.”  I’ve put this heading in scare quotes because here, as with Republican proposals for Medicare, beauty really is in the eye of the beholder.  Of course, 1st and foremost Governor Perry proposes repealing President Obama’s crowning accomplishment, his sweeping and aggressive March 2010 Health Care Reform.  Apparently the Texas Governor celebrates the “right” of his citizens to walk the Earth without health insurance, to be booted from their parents’ health insurance plans at age 26, and to be denied claims to coverage explicitly-granted by their health insurance policies because their insurer finds their condition to be “pre-existing”–an absurd grounds for denial considering the subjectivity that frequently attends this judgment.  (Governor Perry also asserts, as many Republicans strangely have in consternation, that President Obama’s Health Care Reform is bad because it cuts Medicare spending by $500 billion over the next decade.  Deep cuts to Medicare spending are a bad thing when the Democrats do it?  Talk about looking a gift horse in the mouth…)  The plan also calls for repealing the 2010 Dodd-Frank financial reform legislation, because…well, this depends on what you’re willing to take on faith.  Senator Chris Dodd (D-CT) and Congressman Barney Frank (D-MA) argue that by establishing criteria and protocols to determine when and how to bail-out large banks to prevent systemic risk to the credit market, the risk and cost of such bailouts will be greatly-reduced; Governor Perry argues herein that such bailouts are actually made more-likely and expensive.  Hmmm…Well, we do know that the Dodd-Frank financial reform is the only new legislative regulation of investment banking and hedge funds that we’ve had since the 2008 Financial Crash; it looks like Governor Perry has found the way to vilify Wall Street’s largest banks while doing their bidding.  Finally, Perry proposes repeal of Section 404 of the Sarbanes-Oxley Act, which requires publicly-traded companies to self-assess their own internal financial reporting procedures, as well as to provide an independent audit of their internal financial reporting.  This apparently imposes a great cost burden on the smallest publicly-traded corporations.  While criticizing Section 404’s “one-size-fits-all approach” to internal finances disclosure, Governor Perry proposes repealing rather than modifying it or offering exemptions to smaller corporations.

Balance the Federal Budget.  My God–We will never be free of any idea, however-stupid.  (You see?)  Yes, it is scary that the Federal Budget is posting $trillion-plus annually right now; it is also scary that serious Republican presidential candidates such as Mitt Romney and Rick Perry can propose cutting $100 billion in Federal program spending while also calling for balancing the Federal Budget while cutting taxes further.  Am I missing something?  Where are we supposed to get the other $1 trillion in budget cuts in the meantime?  Sure, this would be less of a problem if we could collect the income and corporate taxes attendant with normal levels of employment…but we’d still be posting deficits of hundreds of billions of dollars per year.  No serious presidential candidate has proposed cutting that much spending–indeed, no presidential candidate has even specified where $100 billion in Federal spending cuts will come from.  If Republicans don’t want Democrats to admonish them that they aren’t ready for that “adult conversation,” they shouldn’t base their campaigns on such blatantly self-contradictory budget proposals and then label themselves “straight-shooters” or “problem-solvers.”  I am forced to conclude, as Ezra Klein previously suspected of Congressional Republicans who passed the “Cap, Cut and Balance” Constitutional Amendment proposal, that they only voted for it because they knew they didn’t have the political clout to get it passed.  The alternative is to accept their veracity and to assume that they don’t grasp the difference between cutting $100 billion from the Federal Budget and cutting $1.1 trillion from the Federal Budget because they have “pledged” away their independent judgment to countenance any tax increase.  As part of his plan to balance the budget, Governor Perry proposes restricting overall Federal spending to 18% of GDP, which he roughly estimates as the average annual proportion of GDP to go to the Federal Government in tax revenue since 1960.  A balanced-budget amendment would be a very harmful imposition on our government in a recessionary context, as requiring the Federal Government to operate in the black during an economic contraction would require it to fire thousands of workers, eliminate services and maybe even raise taxes (“O cruel!  O you gods!”) precisely at the moment economic activity is most-constrained.  (That this might further undermine the economy acutely and unnecessarily seems not to have occurred to many advocates of a balanced Federal budget.)  Preemptively attacking the idea of raising any taxes as part of a budget-balancing measure, Governor Perry asserts that “some inside the Beltway have advocated a so-called ‘balanced’ approach that would raise taxes on middle class families who are already struggling to pay their bills,” without naming anyone who has said that.  President Obama hasn’t proposed raising taxes on the middle class, though in his pejorative use of the term “balanced” that is obviously the association he is aiming for.  The only current advocate of tax increases on the middle class who comes to mind is Herman Cain, whose much-advertised “9-9-9” tax plan would, according to the Tax Policy Center’s calculations, raise taxes on about 84% of Americans while generally cutting them for the rich.

Cut Federal domestic discretionary spending by $100 billion for fiscal year 2014.

Establish automatic government shutdown protection.  Governor Perry proposes automatically funding a following year’s Federal Budget at the same level as the previous year’s budget in the event that Congress and the President can’t reach an agreement on appropriations for the new fiscal year.  This measure would make the Federal Government shutdown-proof.  Interesting: Having proposed a presumed “fix” to our country’s current budgetary battles, a President Perry would want to dispose of our means of revisiting them.

Institute a permanent ban on earmarks.  “Bonne chance.”  Wait, I take that back: I actually just don’t want this to happen.

Confine Federal emergency spending to actual emergencies.  Governor Perry proposes eliminating the George W. Bush-era practice of treating normal and predictable appropriations, such as those yearly budget request for the Iraq War, as “supplemental appropriations” that were never counted towards Federal spending levels or annual deficits; if such spending had been counted as part of the normal budget it would have been clear to anyone that George W. Bush was 1 of the biggest spenders among US Presidents.  Apparently emergency appropriations would be allowed to exceed the Federal Government’s spending caps (which would mean the Federal Government would still borrow money on rare occasions), but these emergency appropriations would apparently be confined to disasters, war initiations and the like.

Establish pay-as-you-go budgeting to keep Federal spending in-line with the budget cap, and eliminate duplicative government programs or services when new government programs are created.

Freeze Federal civilian hiring and salary increases until the Federal budget is balanced.  Ouch.  Speaking of the perverse effects of “one-size-fits-all” and “top-down” policymaking, here Governor Perry just assumes away a potentially-immeasurable loss of talent to the Federal Government due to wage stagnation or the arbitrary elimination of Federal jobs that might be an asset.  Does Governor Perry seriously propose a freeze on Federal civilian hiring for the entire course of a 2-term presidency?

Last, and perhaps least…

No more bailouts.  While the Federal Government’s payments to banks through TARP was paid back with interest (thanks to Democratic Senators who passed compensation restrictions for accepting that money as a grant that the banks found intolerable), Governor Perry is sticking to a well-worn Republican story that the TARP money is a loss, arguing that taxpayers shouldn’t be fleeced again.  His economic plan asserts that alternatives to TARP were available to avert a severe credit crunch, though he does not discuss any of these alternative policies.  In any case, TARP–a huge success that turned an unfolding nightmare into a mere crisis, and ultimately paid for itself–has always been very-unpopular with the public for bailing-out those big, bad banks with taxpayer money.  Rick Perry doesn’t want to be on the wrong side of that one.  As a wise friend once said, “I am the leader of the people–and where they go, I will follow.”

Nabokov’s Despair: Monsters Do Exist

“If only (literary immortality) is at stake, then, indeed, Plato was wrong and Nabokov, Heidegger, and Derrida are right.  If you want to be remembered by future generations, go in for poetry rather than mathematics.  If you want your books to be read rather than respectfully shrouded in tooled leather, you should try to produce tingles rather than truth.  What we call common sense–the body of widely accepted truths–is, just as Heidegger and Nabokov thought, a collection of dead metaphors.  Truths are the skeletons which remain after the capacity to arouse the senses–to cause tingles–has been rubbed off by familiarity and long usage…So if, like Euclid’s or Newton’s or J. S. Mill’s, your metaphors are socially useful and become literalized, you will be honored in the abstract and forgotten in the particular.  You will have become a name and ceased to be a person.  But if, like Catullus, Baudelaire, Derrida, and Nabokov, your works (only, or also) produce tingles, you have a chance of surviving as more than a name.  You might be, like Landor and Donne, one of the people whom some future Yeats will hope to dine with, at journey’s end.”

–Richard Rorty, Contingency, Irony, and Solidarity, Chapter 7, “Nabokov on Cruelty”

The Liberal Ironist recently finished reading Despair, a gripping novel by Vladimir Nabokov.  A protagonist as utterly lacking in empathy or a capacity for self-assessment as Despair‘s Hermann is instructive by his very existence.  Reading a narration in Hermann’s voice, I was often reminded of the old saying “All things look yellow to a jaundiced eye.”  Hermann expresses almost no emotions besides an enervated sense that his surroundings yield some purpose for him that no one else can see, and simple contempt for others; his inability to see redeeming qualities in others and his lack of capacity for self-scrutiny are disturbing.

In Contingency, Irony, and Solidarity, the book in which Richard Rorty gave this blog its namesake, he writes perceptively of Vladimir Nabokov–a writer of brilliant style and justified arrogance–that his greatest fear was that his own experience of aesthetic ecstasy could deafen him to the needs of others, leaving him callous or even cruel even while he experienced childlike wonder:

“…Nabokov would desperately like artistic gifts to be sufficient for moral virtue, but he knows that there is no connection between the contingent and selective curiosity of the autonomous artist and his father’s philosophical project–the creation of a world in which tenderness and kindness are the human norm.  So he creates characters who are both ecstatic and cruel, noticing and heartless, poets who are only selectively curious, obsessives who are as sensitive as they are callous.  What he fears most is that one cannot have it both ways–that there is no synthesis of ecstasy and kindness.” (p-160)

Nabokov presents Despair not as a novel of his own writing but as Hermann’s memoir of the commission of a great crime.  (Hermann even depreciates Nabokov’s talents as a writer and expresses a lack of trust that the latter will allow him to take credit for his work.)  Either way, the book opens with the phrase “If I were not perfectly sure of my power to write and of my marvelous ability to express ideas with the utmost grace and vividness…”  Nothing in the pages that follow prompts us to doubt that this is true.  Nabokov (or Hermann) has a marvelous capacity to capture the incidental beauty of poetry while always writing in prose.  He crafts little images, anecdotes, asides, which give us strong impressions of people, of places, of fears…most of all, of our antihero Hermann himself.  The anecdotes or recollections he gives us always seem incomplete, yet somehow they convey something concrete.  As he continues in this meandering yet purposive way an “intelligent reader,” as Hermann himself calls him or her, may feel he has quite a clear picture of his guide in spite of the sometimes-fragmentary quality of this prose.  Poetry.

I can recall the 1st time I didn’t like something Hermann had said.  It was in Chapter One, as Hermann is startled to discover a vagabond who resembles him almost precisely–lying motionless in the grass during a long walk in the woods.  At first Hermann suspects the man is dead and stares at him with morbid fascination; he is then disappointed to see him quicken and inhale, for

“we had identical features, and that, in a state of perfect repose, this resemblance was strikingly evident, and what is death, if not a face at peace–its artistic perfection?  Life only marred my double; thus a breeze dims the bliss of Narcissus; thus, in the painter’s absence, there comes his pupil and by the superfluous flush of unbidden tints disfigures the portrait painted by the master.”

The principal question here, I think, is Who is this blissful Narcissus?  It is Hermann, who in spite of being an otherwise reflexively worldly man, is so fascinated by the idea of another man closely-resembling himself that he professes to believe (owing to some unutterable sentiment) that the vagabond must have been put into the World for a reason.  Immediately after this encounter Hermann insists to us on his powers of observation.

Hermann seeks to demonstrate these powers of observation with an audible contempt for the people whom are a part of his life, or at least should be: His wife is part-stooge and part-idiot, in his words about as efficient at mailing a letter as the nearest river.  While she loves and trusts him truly, he is her partner only in the crassest sense.  “…But probably the truth,” he admits without shame, “was that I loved her because she loved me.  To her I was the ideal man: brains, pluck.  And there was none dressed better…”  His wife’s beloved cousin, an unsuccessful artist, is in his book a freeloader, an alcoholic, a hypocrite and a dreadful painter–nothing more.  The family friend, Dr. Orlovius, is intelligent and friendly but unimaginative and inert.  The vagabond (whom Hermann almost mystically takes for his doppelgänger) is, in our narrator’s eyes, an uncomplicated bum who isn’t even alert except at the prospect of a handout.

Shall we take our narrator’s word for all this?  He is, after all, an unreliable narrator.  I don’t say this because (being a gifted but pompous prose writer) he is sometimes ambivalent as to how to tell us his story.  I don’t say it because he occasionally tells us things that aren’t true and then with a playful malevolence admits he has just fabricated something with equally-authoritative prose.  I don’t even call him an unreliable narrator because, at his most-human, he frankly admits that the faculty of memory is always partial in what it remembers; he is after all doing his best because what happened is important to him.

Hermann is an unreliable narrator because other characters or authorities reject his account of events: He always remembers his own part as brilliantly-perceptive and sure-footed, while the understandings and actions of others are generally stupid or corrupt.  The recollections and words of others–of which we have little the way Hermann either recalls or relates his story–are more-complicated than that.

As Rorty notes about Nabokov’s most-famous villains or antagonists, Hermann is marvelously, even beautifully observant–but only about idiosyncratic concerns or impressions.  There is something tragic about a man who is both sensitive-enough to swear to an eerie sense that he recognized a sign in a stretch of woods he had ostensibly never traveled to before in his life, yet so insensitive that he is accustomed to sorting the people he knows into those aiming to take advantage of him and those too stupid ever to do so.

I have already leveled the charge of narcissism against Hermann, but on this account he is probably also a solipsist.  He lets his own eerie perceptions dominate his grasp on reality.  A sleeping vagabond presents to him, corpse-like, his own face; a trip to the woods with his wife and cousin leads to an encounter with mundane objects that seem transported; a meeting with his doppelgänger in a small town is interrupted by introspection as he begins to suspect that the town itself is composed of various structures he knew from his life in pre-Bolshevik St. Petersburg.  And all the while Hermann remains assured of 3 talents which he seems to think make him autonomous from exigencies of circumstance and from the needs of other human beings–his powers of observation, his resources of literary expression, and his stroke of criminal genius.

In his chapter on Nabokov’s novels, Rorty concluded that “you cannot create a memorable character without thereby making a suggestion about how your reader should act.” (p-167)  Nabokov insists on the amorality of his novels, arguing they should be read as ambitious works of literary expression rather than as moral fables.  Rorty argues (and both on the strength of the evidence and my own inclination to this approach, I am inclined to agree) that Nabokov can’t really believe this however-consistently he protested it.  Why are his most-famous narrators so often not merely despicable, but despicable in the eyes of the author?  In his own foreword to the 2nd English translation, Nabokov says that “there is a green lane in Paradise where (Lolita narrator) Humbert is permitted to wander at dusk once a year; but Hell shall never parole Hermann.”  In saying this Nabokov of course presents us grades of evil, which tells us a few things about his moral philosophy; he is not indifferent to how many harsh judgments in thought or cruelties in deed we recognize in Hermann or how we would wrestle with the difficulty of consenting to narration by a protagonist who was such a refined moral abomination.

Is Hermann insane?  I would ask this question in earnestness to any other reader of Despair.  His confidence in his own talents, his inability to see good in others, the strange familiarity of objects and settings around him, as though he were surrounded not by likenesses but transcendentals…All of this suggests (though such is merely suggested) that Hermann’s peculiar narrow-minded evil is in fact a product of delusion.  Nabokov clearly feels some anxiety, as I quote Rorty observing above, that the blessings he loves the most–the power to make monumental-yet-private observations, and to express them, and to feel ecstasy when he expresses them–are available to evil people.  Indeed, the way he writes his abnormal narrators suggests that he grappled with a fear that his own literary art was antisocial.  But Nabokov’s angst at this recognition was a great source of creative inspiration for him; the expression of this ambivalence in granting his talents to cruel or evil characters may be both his story and his legacy.  Those opportunities for kindness or teaching moments which his characters overlook, the totally selfish nature of their private goals, and the potential (as with Hermann) for their schemes to spiral out of control even when so painstakingly-laid, should give any thoughtful reader pause.  I think it would be cowardly to discuss a book like Despair without addressing the existence of evil.  Evil is as real as anything.  You don’t have to believe in the supernatural to believe this: On my definition we are evil to the extent that we value the ideas in our head, whether philosophical or personal, more than human life.  As a good ironist, I will say that moral philosophy owes a greater debt to writers like Nabokov for setting small incidents of evil alongside great ones in his narratives than it does to a political theorist like John Rawls for writing A Theory of Justice.  We know that cold-blooded murder is evil, but what about seeing your unsuccessful-artist cousin as nothing more than a beggar?  What about not taking your wife seriously?  If the preceding poses no challenge to our values: What about never trusting anyone’s perspective other than your own?  What is at stake in those times when we perceive that our friends want our confidence, and we deny them?

Evil exists.  We risk it by both commission and omission–right there in the small stuff.

(The Intellectual Bankruptcy of) the Conservative Take on 2008

It should’ve been clear to us that the Tea Party movement had a very different interpretation of what happened on Wall Street than most of us did.  In principle their rallying cry is President Reagan’s old refrain, implausibly-applied: “Government is not the solution.  Government is the problem.”  Reflecting a cognitive interpretation of the same sentiment, Republican presidential hopeful Governor Mitt Romney said in August that “Career politicians got us into this mess”–meaning the 2008 Financial Crash and the Great Recession–“and they simply don’t know how to get us out.”

A Conservative friend recently posted a von Mises Institute opinion piece calling the animus of the left-wing “Occupy Wall Street” protest movement misplaced.  In Axel Kaiser’s view, it is Federal regulations that caused banks to invest and borrow perversely, not the freedom and agency of investment banks and hedge funds that expanded the credit market into a customer base with little collateral and uncertain prospects, offering them borrowed money.  This is a typical Conservative explanation for the Financial Crash, though it telling took the right a long time to get this story straight.  Those whom are interested should read Mr. Kaiser’s account–not because it is correct, but because we should not be insensible to or ambivalent about the organized group of radicals in our midst.  They blame generations-old institutions for the spectacular collapse of a barely-regulated Wall Street.  They uphold the problem–a mentality conducive to anarchy in our large and fast-moving financial sector–as the solution.  I want to challenge this argument at length; while it is expressed discreetly and eloquently, it is still a dangerous canard.  The history of our financial markets in the past decade is too important to be re-written by apologists.

Mr. Kaiser seems to be well-read and reasonable about a great many subjects; however, I didn’t feel that way about his economic theory or his moral philosophy.  Attacking what he considers a philosophical premise of contemporary Liberalism, he says that “the idea that the common good or the general interest is something different from the sum of all individual interests, and that government is a separate entity that through coercion can elevate society to a higher degree of moral perfection and happiness” is a falsehood.  I promptly begin to doubt his judgment.  Government is “a separate entity that through coercion leads society to a higher degree of moral perfection and happiness.”  This is not a position that necessarily enjoins socialism; it is the justification for a government’s possession of military and police force.  Does anyone deny that absolute defense of reason through coercive capacity which Thomas Hobbes describes in Leviathan?

“Whatsoever therefore is consequent to a time of war, where every man is enemy to every man, the same consequent to the time wherein men live without other security than what their own strength and their own invention shall furnish them withal. In such condition there is no place for industry, because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving and removing such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”

Having the same rationale in mind, the sociologist Max Weber later described the state as “a monopoly on the legitimate use of violence.”

The government which exercises military and police power in order to protect people’s lives and property is itself never “the sum of all individual interests,” and it is not and cannot be sanctioned in all its resource-consuming actions by unanimous consent of those over whom it wields power.  Again, the fact that the state’s sovereign capacity for violence elevates the general morality in deed and even thought is not an argument that enjoins socialism—though I will admit that I find the arguments distinguishing the right of the state to protect people from the harm of intentional criminality or from unintentional market or environmental effects to be circular and unconvincing precisely because I acknowledge that this is exactly what government does.

Kaiser has a much stronger argument than the one that rules-out government’s right to regulate our economic activity, and that is skepticism of the government’s capacity to regulate this activity efficiently and justly—that is, his invocation of “the diverse and irreducibly complex world of individual interests.”  But while this is a stronger argument it is also a more-flexible one; episodes of waste in resource-allocation by government or long periods of crude handling of an economic activity by government regulators may constitute an argument for cutting this program or reforming this regulation (or a parable about the limits of what regulations can achieve) but it neither de-legitimizes nor repudiates government regulation as such.

The article is at its analytical weakest in assessing the origins of the 2008 Financial Crash—which is, of course, its objective.  Fannie Mae was created back in 1938 as part of the New Deal, in order to promote and finance homeownership; Freddie Mac was created in 1970, essentially as an extension of Fannie Mae’s mortgage-financing operations.  “(W)elfare programs to make true the progressive “homeownership-society” dream in the United States created the structural conditions”—or so Kaiser argues.  This is a weak hypothesis; an argument that a 70-year-old government program is the sufficient culprit for a financial crisis which simply ignores the fact that the spiral of toxic debt played out in investment banks and hedge funds that had become far more-complex in their asset management, more risk-prone in their investments and more deeply-indebted than any government anywhere in just the decade preceding the crash fails on its own terms.

Former Wall Street Journal reporter Scott Patterson wrote probingly about this phenomenon of the conceit of Wall Street’s reigning specialists in his book The Quants.  (I reviewed this book–which I love–1 year ago on this blog.)  Wall Street’s hedge funds and investment banks had become dominated by computerized fast trades based on highly-abstract statistics and modeling.  They did this based not upon knowledge of actual market conditions or long-term investment in a company but on inductive bets that shares of certain companies were over- or underpriced.  These transactions were essentially unregulated, and they directed trillions of dollars of assets.  Malinvestment, yes, but are we sure this anomic crash is about interest rates?

Mr. Kaiser reveals a disinclination even to distinguish between the subcomponents of government power he finds to be illegitimate—namely, its capacity to create entitlements and its power to regulate the economy.  From what is intended as his climactic red meat: “…Because people do not understand that the source of the crisis was government, as Bastiat predicted, they now go on the streets demanding even more of what caused the problem in the first place: government. That is the paradox of the outraged.”  (One could argue that he is referring to those “Occupy Wall Street” protesters who have demanded maintenance or expansion of the welfare state and not to those who have called for tougher scrutiny of the financial sector, but if so I would still level the same charge of obtuseness in thinking on him for targeting for critique a movement without a coherent message and never bothering to define it.)

Mr. Kaiser doesn’t do much better when he claims that “The dramatic rise in the price of raw materials and agricultural commodities since 2008 is basically the result of the inflation created by central banks.”  I don’t know how many serious economists would sustain this argument.  In spite of 2 rounds of “quantitative easing”—Dollar-creation by the Federal Reserve to promote currency flow through the economy—inflation is low by historic standards.  The rate of inflation has been much lower under Ben Bernanke than under any other Chairman of the Federal Reserve for over 30 years.  That’s a weirdly-basic fact for Kaiser to overlook when he seeks to attribute a cause for price increases in commodities.  That increased consumption by large developing nations such as China and India and political volatility in countries producing such commodities (such as the states of the Persian Gulf or the tragically-misnamed Democratic Republic of the Congo) could be the reason for the price increase actually seems not to have occurred to him.  While we’re speaking about ideologically-misplaced outrage, Mr. Kaiser is also circumspect about whether the price of commodities such as precious metals has been driven up by Monetarist Conservatives such as presidential candidate Ron Paul, who essentially exhort their followers to hoard gold, resulting in the obvious overpricing of those strategic metals.  The latest also-rans to join this Monetarist survivalism are probably going to lose money on account of their reactionary opinion-sources.

Mr. Kaiser’s criticism of the Federal Reserve’s role as “lender of last resort,” including its power to bail-out insolvent but strategic American banks, skirts the central question: If the Federal Government should allow insolvent banks of any size to go into bankruptcy “like any other enterprise in the real economy,” what happens to the cash assets of those who deposited money in that bank?  The Federal  Deposit Insurance Corporation currently insures the first $250,000 you deposit in a bank; if a bank is allowed to declare bankruptcy, should the FDIC simply pay-out as much as its rules permit for all depositors?  Where does that money come from?  Wasn’t the 2008 Wall Street bailout actually a more-just outcome than this would have been?  Or in the absence of the Federal Reserve—which predated it by 20 years—shall we dispose of the FDIC as well?  Should you as a depositor be every bit as responsible as the bank to which you entrust your cash if your assets are lost in a series of ill-conceived and unredeemable loans?  Kaiser seems to consider such questions beyond the scope of his article; considering his many strong claims, they are not.

Immediately following his objection to the Federal Reserve’s role as “lender of last resort” he adds that “In addition to this perverse incentive, banks work under a fractional-reserve system, which allows them to operate with very low capital reserves, so that their owners have little to lose if the bank goes broke.”  As a free-marketer, Mr. Kaiser presumably would overlook the regulatory response to this problem that I would consider most-intuitive—simply limit the amount of deposited or invested cash that the bank can lend-out again—and insist that banks be told they’re on their own.  Surely this would make them more-prudent investors of their depositors’ money!  The problem with this narrow fixation on the “perverse incentive” of the Federal Government’s protection of banks’ assets is that it is based on a strained but ultimately-unfalsifiable assumption: Protections against a worst-case scenario provided by the Federal Government make bank executives indifferent to the collapse of their lending schemes.  The strange claim that the loss of billions of dollars shouldn’t be sufficient incentive to lend depositors’ money prudently but the belief that they will at least remain in business suddenly makes them heedless to risk aside, the fact remains that the Federal Government didn’t save Lehman Brothers, which went very-much bankrupt.  Around the same time Merrill Lynch was bought-up by Bank of America at 61% less per-share than its value in September 2007, a year before the Crash; the previous March Bear Stearns had been bought-up by JP Morgan Chase, for just 7% of its per-share value from 2 days before, when the Federal Reserve pledged a $25 billion bailout.  How can all these Conservative opponents of the Federal Reserve seriously argue that all these bank executives and hedge fund managers were operating in a risk-free environment?  1^st of all, this would have been a totally-speculative conceit on the part of bank managers—one strangely absent from both exposition and criticism of our supposedly rock-solid financial sector before the massive Federal bailouts of 2008.  2^nd, the Federal Reserve couldn’t save Bear Stearns, and apparently didn’t think to save Lehman Brothers or Merrill Lynch.  If the regulators were so slow to bail-out Wall Street that some of its major financial institutions collapsed as crucial weeks slipped by, this strongly-suggests that the extent of collusion charged by Fed-skeptics is a fantasy.

Bear Stearns used money borrowed from a variety of sources and backed its investments with credit-default swaps—essentially paid insurance policies for other investors to cover their loans to subprime borrowers—resulting in a leverage-to-assets ratio of 35.5:1.  If the Federal Reserve Bank (95 years old in 2008) and the Fannie Mae/Freddie Mac complex (70 years old) were the primary catalyst of the events of 2007 and 2008, there is no explanation why the Crash shouldn’t have happened much sooner, pertaining to financing of some other sector of the economy.  But the size of hedge funds, their connection to investment banks, and the extremes of borrowing by banks both from vast foreign capital markets and through sophisticated “financial engineering” had only become dominant in the financial sector throughout the decade prior to the 2008 Financial Crash.  None of this can be blamed on government.

Mr. Kaiser’s moral sense is at low ebb when he subversively argues that income inequality is only a moral issue when the human actions that cause it are demonstrable:

“It has been argued that inflation and the lack of economic liberty are central causes of poverty and inequality. (Left-wing French public intellectual Stéphane) Hessel does not acknowledge this fact, declaring himself outraged by inequality in general. He says it is outrageous that in poor countries people live on less than two dollars a day. Two things have to be said in response to such claims. In the first place, there is a reason to be outraged only when inequality is the result of arbitrary confiscation, fraud of any sort, or bad economic policy. But when inequality is the result of freedom, there is no reason to be outraged at all, especially when everyone has enough. Only envious people can be outraged by the wealth some have legitimately gained…”

No, it is not the case that one must be envious to be outraged by extremes of wealth; it is enough to believe that poverty does graver harm to a given society than taxes.  Mr. Kaiser sidesteps the real issue: It is not that some people are very rich, but that some people are very poor.  That the true cause of the outrage Mr. Hessel expresses could elude him is remarkable; Kaiser even cites him objecting to poverty without mentioning wealth!  Dispossession due to arbitrary confiscation and bad economic policy are indeed ruinous and outrageous (though I can’t recall the last time I heard a Conservative speak out in favor of native claims settlement—a blind spot perhaps enabled by John Locke’s implication in his Second Treatise of Government that American Indians had no right to lands they hadn’t cleared for agriculture).  But fraud is equally-outrageous.  What is Kaiser’s opinion of Goldman Sachs’ $550 million fraud settlement?  Goldman Sachs settled a case in which they were charged with helping a hedge fund profit off of credit-default swaps for subprime mortgages that they expected to default, thus prompting the credit-default swap to be called-in.  Goldman Sachs designed these credit-default swaps which they expected (intended?) to be insolvent and sold them to investors; at the same time they were selling subprime mortgages to working-class people they had just made a bet would default on their loans!  The Federal Government had nothing to do with this; when trying the fit of the old Fed—Wall Street collusion yarn, note that Fannie Mae and Freddie Mac had staked their assets on the opposite “bet.”

Furthermore, what about poverty?  Kaiser writes as though his argument that circumstances of commission that create poverty are an outrage while circumstances of omission that impoverish people are not is self-evident; in actuality it is ideological and highly-contentious.  It is based on a primitive bias in our thinking—the “do no harm” fallacy.  This fallacy argues that bad results of human intervention or agency are more serious than those which are foreseeable but which only occur when humans fail to act.  This is an intuitive distinction; it is also sometimes a very callous and even an impractical one.  At its essence it amounts to arguing that a mugger who beats his mark badly and runs off with her money has committed an outrageous act while a passerby who witnesses the incident and does nothing to help the incapacitated victim afterwards or to report the incident has not “committed” an outrage because he is not obligated to help.  Kaiser makes the bizarre jump from Hessel’s professed outrage at poverty to the suggestion that such anger must be motivated by envy at the luxury of the rich.  From the time I was 1^st aware of it I never begrudged the rich their wealth—but when I encountered poverty, which is thick on the American landscape, I concluded that viable measures to reduce it had their own legitimacy and should always be a subject of political debate.  I’ve seen people who would probably die without government assistance; the idea that such government assistance is illegitimate because of abstract concepts is more morally-odious to me than envy.

What is most-unfortunate about this article is simply what it indicates about many Conservatives (in contrast to the simultaneously more-identifiable and more-diffuse term “Republican”): They have not taken the 2008 Financial Crash as an opportunity to learn anything.  This is tragic.  The issue isn’t that they are still Conservatives—say, that they haven’t embraced President Obama’s 2009 or proposed 2011 Stimuli or his 2010 Health Care Reform, or that they are not a party to the current Wall Street-bashing or even their increasingly-vocal contempt for the new Dodd-Frank financial regulations.  It’s that so many of them embrace the bizarre idea that their intellectual integrity requires them to believe, post-September 2008, only what they believed pre-September 2008.  If the goal really was intellectual stasis, then mission accomplished: Having believed that a government program to promote homeownership was illegitimate, they now find that it is responsible for the worst financial crash since the Great Depression!  Believing that a then-95-year-old institution that can influence the value of the US Dollar by fiat is somehow alien and unnatural, they find that its imposition of low interest rates must be the enabler of the malinvestments that led to an outbreak of foreclosures around our country and jeopardized the nation’s banks.  The fact that hedge funds controlled trillions of dollars in cash, were virtually unregulated, able to borrow billions of dollars worth of foreign currency from any other country in the World—whatever the local interest rates might be—and to (theoretically, at least) insure each others’ loans through credit-default swaps (thus making underwriting subprime borrowers’ debt very profitable in the short-term), are all unworthy of mention, in the author’s view.

I immediately want to acknowledge that the author maintains an even tone and even some level of sympathy for his political opposites; being able to attest to his emotional grounding, however, I find myself surprised and frustrated by his failure to elaborate on his charges about the importance of New Deal-era “structural conditions” to relatively-recent events.  In his fixation on an obviously-saturated and undisciplined “Occupy Wall Street” social movement rather than any actual arguments, whether lay or academic, that blame market finance for the Financial Crash and the Great Recession the author has failed to address the dominant narrative that would validate his claim that the protestors’ anger is misplaced.  Applying an ideological assumption to a new and surprising development—which, like the rest of us, none of their ilk had predicted in advance—is not thinking.  Whatever one’s commitments may be, ideology must become unfixed and permitted to drift with the absorption of new and incongruous phenomena for any thinking to be done.  Rote ideology-application falls somewhere between recitation of a speech or the application of a mnemonic device.

I have changed my mind about a few matters since 2008.  From an ideological perspective, I no longer think that promoting homeownership is a sound goal for the Federal Government—though I still believe it was historically.  I will frankly admit that I was no more aware of the instability of our financial system than most people before 2008; I prefer stricter regulation and oversight of Wall Street now because of the extreme intellectual conceits and risk acceptance of our supposedly-brilliant “financial engineers.”  The deficits we were running before fiscal year 2009 didn’t bother me; the deficits we are running now do.  The wealth inequality in our country before 2009 didn’t disturb me greatly; its abrupt increase since the Financial Crash has—enough so that I am a recent convert to the idea of raising taxes on the rich.

So: While we may be skeptical of the ramshackle “Occupy Wall Street” movement for blaming corporations for all our problems, rashly personalizing Wall Street’s errors and improprieties, for calling for cuts in military spending (Who is going to enforce the most-urgent UN mandates? China?), or for simply having no agenda at all, this doesn’t mean we should let rehearsed but unreflective Conservative activists change the subject.  While it has turned a massive profit over the past generation, the past 4 years or so have revealed that the “financial engineers” are not the masters of our complex and interdependent World but a volatile compound in it, both useful and combustible.  Conservatives elide the difference between anecdotes of bad government regulation and the very legitimacy of government regulation itself.  Lacking the inclination to consider compound solutions for the complex problems of interdependence, they imagine that “good” consumers, businessmen and investors can protect themselves from shocks caused by “bad” ones.

But in today’s politics it is not Conservatism that is philosophically-underdeveloped but Liberalism.  What we need now is not a renewed commitment to freedom”—the Tea Partiers and Congressman Ron Paul will gladly squeeze all the water out of that stone for us—but a compelling intellectual defense of the social safety net for an age of inflating benefits and diminished fiscal resources.  We also need a clearer concept of a properly-restrained financial sector.  On that note I’d like to quote Kaiser’s own closing:

“…If people get outraged for the wrong reasons, they will inevitably demand the wrong solutions, making the problem worse. It is especially irresponsible, in these times of social upheaval, to call for outrage and resistance without first a clear examination of what is wrong and how the problem should be approached. This is the role of intellectuals and opinion leaders…”

Why Recent Developments Make Me Expect Barack Obama to be a 1-Term President

5 developments in the past week have left me strongly-suspecting that Barack Obama will be a 1-term President.  None of them were within his control, and 4 of them were actually related incidents involving the Republican Presidential Primary.

1.) Texas Governor Rick Perry has fallen far in the Republican Primary polls, leaving Massachusetts Governor Mitt Romney once again well in the lead.  A Washington Post-ABC News poll released in the 1st week of October found that Governor Romney has again retaken a wide lead among Republicans as his party’s leading contender for President.  Romney had the support of about 25% of Republicans, with Governor Perry tying Godfather’s Pizza founder and political neophyte Herman Cain for 2nd place, each with 16% of the vote.  In early-September polling, Perry led the pack of Republican hopefuls at 29%, with Romney polling at 20%.  While Perry has lost roughly 1/2 of his support coming out of 3 relatively-weak debate performances, along with doubts about his lack of an economic plan for the country and Republican objections to his George W. Bush-like tolerant attitude towards illegal immigration, Romney commands nearly as much support among likely Republican primary voters as he did at his pre-Perry height in the polling, demonstrating that his candidacy has the most staying power among Republicans.

More-troubling for Democrats is the fact that Governor Romney has the most staying power in general election matchups against the President as well.  In RealClearPolitics’ aggregation of general election polls, the only 2 hypothetical Republican presidential candidates polling even with President Obama are Mitt Romney and “generic Republican.”  This has actually been true pretty-much throughout the Republican primary season.

Incidentally, while ideological Conservatives have turned their hopes towards 1 Republican hopeful, then another, then another, always seemingly ending up disappointed either by their lack of strict commitment to Conservative principles or to a series of gaffes in the many Republican debates, Governor Romney has consistently retained support from roughly 20%-29% of the Republican electorate.  While this obviously isn’t a lock on the nomination, it has put him consistently at the head of the Republican pack, with only Governor Perry (and in the latest Conservative flirtation, maybe Mr. Cain) rising to his level in the polls.

2.) Mayor Sarah Palin isn’t running for President.  Sarah Palin, Mayor of Wasilla, Alaska and allegedly Governor of that State for a while, finally decisively declared last week that she is not running for President in 2012.  (Instead, she resolved to do what she does best–snipe selectively from the sidelines.)  Mayor Palin is a favorite of a certain subsets of the Tea Party movement–namely, those Tea Partiers with the most-developed sense of personal grievance and, inexplicably, some Conservative intellectuals who seem to be unable to see an obviously defective candidate for what she is.  When Palin showed up at the Iowa Straw Poll as a not-yet-declared candidate, some referred to her lingering, have-it-both-ways presence not as unprofessional but actually as “immature.”  An epithet-spewing narcissist who only talks in sound bytes, Mayor Palin’s presence in the Republican debates would have been a godsend for President Obama.  She wouldn’t have had a chance, as with time the seams have shown more and more plainly with Palin.  But her presence has a way of sapping serious discussion from the room, replacing policy and even politics with cosmetics.  Less time would be spent by the various Republican candidates elaborating on their own taxation, regulatory, and entitlement plans–or attacking President Obama–and more time would be spent discussing something provocative that Palin had said, or dwelling on her painfully obvious lack of knowledge.  This would have been a waking nightmare for the Republican establishment, a permanent insinuation by association that they aren’t serious and can’t discuss policy in detail.  Once the dust settled, Romney would probably still be the nominee, but he would’ve had fewer opportunities to demonstrate his abundant knowledge and eagerness to be President, and the general public would have received a heaping dose of the worst flavor of Republican populism.

3.) New Jersey Governor Chris Christie isn’t running for President.  Christie may be presidential material at some point; until then, he needs to focus on building a record as an administrator (and decide that this is really what he wants).  Christie decided this himself, and in a telling act of earnestness and humility ruled himself out of the Republican Presidential Primary.  Again, while a man whose entire political career to-date consists of his 2 years Governor of New Jersey would probably lose the Republican Presidential Primary to Mitt Romney, the fact that he seems to have the presence of mind and the Conservative credentials to be a viable Republican candidate means he could have slowed the nomination process down, again sowing confusion and muddying the waters for Governor Romney a bit.  Christie’s brash but likely-substantive criticism of Romney itself could have posed a challenge to Romney’s inside track, not just for the Republican nomination but in maintaining his very-presidential preference to campaign by the high road.

4.) Slovakia’s parliament vetoed the European Union’s latest bailout package for Greece.  Here is the only news item among these 5 that doesn’t involve the Republican Presidential Primary.  In fact, it involves macroeconomic conditions outside of the President’s control–a matter which could doom the Obama Presidency far more-decisively than any Republican candidacy or campaign.  On Tuesday a small party in the ruling coalition of the Slovak Parliament ruled against the Eurozone’s latest bailout package for heavily-indebted, depressed and riotous Greece.  This minority stakeholder in a government of one of the Eurozone’s smallest and newest members has precipitated the collapse of that country’s ruling parliamentary coalition, and may even have blocked the last chance to prevent a Greek default.  In any event whatever steps come next in the Eurozone’s effort to prop up its weakest governments and banks will be harder, either politically or financially, to effect.  If they fail, we might be facing a 2008-scale financial collapse in the World’s largest monetary system.  To face that now, 3 years after the 1st as our economic recovery has already stalled-out, would depress the trans-Atlantic trade, hurting both imports and exports, shuttering businesses putting yet-more people out of work.  This would have had nothing to do with President Obama, but it would totally obscure any good his policies have done in shoring up the economy.  As Ruth Marcus recently argued in the Washington Post, we should expect even independent voters who don’t blame President Obama for poor economic conditions to be more-sympathetic to a challenger who proposes different policies to deal with them.

5.) Governor Romney dominated the Republican Presidential Primary debate on Tuesday.  Tuesday was Governor Perry’s chance to redeem his weak showings in the 3 previous Republican presidential debates, and Mr. Cain’s chance to validate his contender status in the Republican Presidential Primary by demonstrating his ability to say something other than 9-9-9.  Neither of these moments materialized.  Relative to expectations, Governor Perry has proved to be inarticulate and defensive, prone to talking in terms so general that none of his opponents can be expected to disagree with him.  Mr. Cain, on the other hand, after embarrassing himself with several bigoted comments directed towards Muslims and a telling lack of awareness of the Middle East Peace Process, has been very-specific, but only in promoting his proposal for a 9% income tax, 9% corporate tax, and 9% sales tax as a replacement for the current highly-complex Federal tax code, and in talking-up private investment accounts through Social Security.  Instead of seeking to demonstrate himself as a serious presidential candidate who can address other issues, he actually attacked Governor Romney for having an economic plan that was complex.  (Governor Romney, in return, unabashedly defended the complexity of his economic plan, insisting that the United States’ economic problems were various and couldn’t be waved-away with a radical change in tax policy.)

Mitt Romney has truly blossomed as a presidential candidate since 2008, and has admirably outgrown the inauthentic populism that foreshadowed the party’s virtual collapse in 2008 while not allowing himself to be intimidated by the authentic populism of the anti-tax “Tea Party” movement that granted Republicans massive gains in the States and in the House of Representatives (but made the latter unwieldy for them).  He has consistently avoided Governor Perry’s talk of “treating (Federal Reserve Chairman Ben Bernanke) pretty ugly” or Newt Gingrich’s talk of jailing former Congressional colleagues Barney Frank (D-MA) and Chris Dodd (D-CT).  Instead, he focuses on issues such as the ongoing recession and prevailing high unemployment, or our large Federal deficits.  He seems almost to welcome attacks, both on the campaign trail and in debates, and he answers them extensively.  President Obama has understandably struggled to explain the economic stagnation and political turbulence of this period, and appears to have concluded that making deals with stubborn House Republicans simply isn’t worth the effort.  That it currently looks like he must confront a rehearsed and emboldened Governor Romney in the Presidential Debates a year from now is bad news for President Obama in itself.

To summarize: Though his victory in the primary nomination process isn’t assured, I no longer see how any other Republican presidential hopeful can realistically beat Governor Romney in the Republican Presidential Primary.  Governor Romney has the most-detailed economic plan of any of the Republican presidential hopefuls, and polls the strongest of all of them.  Likewise, with its several interconnected forms of stagnation and instability I see no reason to expect the economy to right itself significantly-enough so that President Obama will be able to take the credit for good economic stewardship.  Voters will either turn the President out in the belief that he has managed the economy poorly, or at least elect Governor Romney in the belief that the time has come to try a different President implementing a different set of economic policies.

So while I will give my vote to President Obama, I will put my money on Mitt Romney becoming the 45th President of the United States.  How’s that for Liberal irony?