The Ethanol Illusion

Michael McElroy, a Professor of Environmental Science at Harvard University, focuses on the technical reasons that ethanol will not be the solution to our dependence on foreign oil in this month’s Harvard Magazine (“The Ethanol Illusion”). Nothing is exceptionally new in this article, but the person articulating it is new– he is a credible technical expert, and his incentives, as far as I can see, should be aligned in favor of ethanol. After all, how many Professors of Environmental Science DON’T want to save the world from environmental demise? Many, one might argue, would push for any kind of renewable energy over plain old fossil fuels. When someone who should be arguing in favor of a proposal, rather argues against it, that’s when I stand up and listen. For those who are more technically astute, he provides a deeper, technical explanation of the issue here.

More Advice on Iraq from Joe Klein

Joe Klein and I seem to think alike, at least in terms of our preferred method of offering policy advice. Klein offers ome strongly worded advice in last week’s Time magazine, “What Baker Should Tell Bush.” I broadly agree with Klein, who’s argument can be summarized as follows:

• Focus of U.S. policy in Iraq should move from democracy to stability
• The least worst option for restoring stability involves (1) an expansion of the Iraqi security forces, ideally under re-instated military leaders from the Baath Party and (2) working with partners we don’t typically like (e.g., Iran, Syria) to coordinate a regional stabilization campaign
• A combination of a threat to withdraw troops (by the way, made credible after the recent Democrat electoral sweep) and incentives such as plum positions of power should be used to draw enemies of Muqtada al-Sadr together to remove him from the political equation

Klein is spot on about identifying the problem (stability, not democracy) and elements of the solution. Unfortunately, intenrational politics is often a game of “saving face”, and the odds of this U.S. President working with Iran and Syria to ensure Iraqi stability are slim. Inviting the Baathists back, however, can be done in a way that saves face– hopefully, we’ll see this policy implemented in due course.

Barack Obama, Inc. – Cause for Both Hope and Concern

For those who get the chance, I highly recommend Ken Silverstein’s in-depth piece on Barack Obama in this month’s Harper’s (not available on-line, as far as I can tell). It’s a great article for many reasons, but first and foremost, is the fact that, despite Silverstein’s contention that Obama has turned into a “Washington machine,” the reader can’t help but get enthused about the positivity and hope Obama brings to the political scene. How can one not admire a man capable of uttering the following words (to a group of a thousand college students gathered in Washington, D.C.):

“[Ignore the voices who blame poverty on people who are] lazy or weak of spirit or [those who believe] innocent people being slaughtered and expelled from their homes halfway around the world are somebody else’s problem. [Ignore them] not because you have an obligation to those who are less fortunate than you, although I think you do have that obligation,… but primarily because you have that obligation to yourself. Because our individual salvation depends on collective salvation. It’s only when you hitch yourself up to something bigger than yourself that you realize your true potential.”

I love the last sentence because it perfectly captures the kind of optimism that is capable exciting Americans to action. And because I believe it, fundamentally.

This introduction belies the central thrust of Silverstein’s article, which is focused on the slow and steady transformation of Obama and his camp into a political machine geared towards capturing the Presidency. Many of the steps Obama has taken appear reasonable to the casual observer–for example, donations from entrenched business interests in the state are the bread and butter of all politicians. But Silverstein’s implications have prompted an entire debate between himself and the Obama camp.

For his part, Obama released a press release refuting many of the insinuations and claims in the Silverstein article, while Silverstein then took his own opportunity to reply to this refutation.

My question is: what’s the big deal? There’s nothing wrong with admitting that money fuels campaigns and therefore politics, and that, unfortunately, you sometimes have to compromise your principles in order to receive campaign contributions. To do otherwise is impractical. Therefore, the issue for voters everywhere is to what extent do we trust our politicians to compromise on the right issues (i.e., the ones we don’t care about) and to avoid compromise on the issues we do really care about. I would argue that it’s too early to tell with Obama, but his demonstrated commitment to (1) thinking through questions and issues before determining a position on them and (2) answering questions openly and honestly, even if he doesn’t know the answer, leads me to be inclined to trust the man, at least as much as one can trust a politician.

An Open to Letter to Democrats in the Wake of Their Electoral Victory

Dear Sirs and Madams,

Congratulations on your recent victory in both the House and Senate! America applauds you and celebrates the changing of the guard that your inauguration will herald. As we offered your counterparts in 1994, today we offer you the opportunity to paint a vision for the future of America, paving the way to electoral success in 2008 and access to the levers of power for many years to come.

But only if you can understand what we want—and only if you take the time to realize that the 2006 election is not a mandate. It is a referendum on many issues and a personal referendum on George W. Bush, with whom many of us have grown disillusioned. So, we, the American people, thought we’d take this chance to clarify the meaning of our actions on polling day, both the messages we want you to receive, and those we’re a bit worried you may have received, even though we didn’t send them.

We Didn’t Ask for “Tax and Spend” Government

We didn’t ask for “Tax and Spend” Government in 2000 or 2004, but that’s what we got. So just because we voted against the party historically associated with fiscal conservatism, we’re not asking you for Guns and Butter. George W. Bush abandoned the fiscally conservative wing of the Republican Party, leaving few choices for any American in favor of a government that knows how to balance its checkbook.

We voted Democrat because we’re hoping that your years in exile have helped you understand that compassion and profligacy are not inextricably linked—witness Bill Clinton’s Welfare Reform, which showed that you can offer compassion without profligacy, or Bush’s Medicare Reform, which demonstrated the converse.

We Didn’t Ask for a Widespread Progressive Social Agenda

We voted for George W. Bush in the hope that his stated goal of bipartisanship would naturally temper the more extreme elements of his moral agenda. Instead, we have been treated to a steady diet of proposals from the Presidential pulpit which we deem distasteful not only because, despite what you may have heard, the majority of Americans are not evangelical Christians, but also because, regardless of our religious inclinations, we bristle at being told how to run our lives, especially our private lives.

While we’re hoping that your presence on Capitol Hill will temper some of the proposals that have scared us over the past six years, and perhaps introduce some new ones, we are not asking for a new wide-sweeping, progressive social agenda. Addressing a few of the most egregious items would suffice—for example, help bring back early-stage stem cell research and legalize gay marriage in some form or other (perhaps by giving states freedom to do what they please—they always seem to be more innovative anyway) .

We Don’t Need You to Bring Our Troops Home Immediately, but We Want a Credible Solution in Iraq

In no area of public policy is there a greater asymmetry of information than in the area of national defense. So, as much as we’d like not to, we have to trust you to recommend defense policies that make sense, one that maximizes the long-term security of our country while minimizing the short-term loss of American lives.

We all agree that the current Iraq policy isn’t getting us where we want to be. As more soldiers die in the short-term, we are hard-pressed to believe that we are securing the long-term future of America. A hopeless situation for any leader? We think not. We are a people committed to making progress, willing to accept short-term pain in exchange for long-term benefit, whether it be our perseverance in pushing towards America’s Westward frontier or the economic costs of winning the Cold War. But we need our leaders to paint a vision for us, one that acknowledges cold reality while mapping out a credible path to a future that is acceptable.

We won’t burden you with the details—after all, you know more about this than we do—but the key elements of an Iraq strategy seem to us to be as follows:

• Acknowledge that troops will need to remain in Iraq for the next ten years if Iraq is to avoid falling into a civil war
• Argue that maintaining troops in Iraq over the long term is in our national interest, due to the increasingly aggressive stance of Iran and Syria towards the U.S., and their tendency to fight “proxy” wars against the U.S.
• Commit to reducing troop numbers from their current levels to a steady-state level, but acknowledge that putting any firm timeline in place actually encourages terrorists to increase their efforts, as they of all people know that every deadline we miss strengthens their case and weakens ours
• Invite former Baathists back into the bureaucracy and police force
• Give our troops in Iraq the freedom to wage a “hearts and minds” campaign, designed to credibly meet local needs—only when Sunnis and Shias see the upside of American involvement in Iraq will terror subside

That should be enough to get you started. But when you announce your plans, learn the lesson never learned by Donald Rumsfeld—tell us why you want to do what you want to do.

We’re Nervous About Our Jobs, Our Homes, and Our Debt Burden

We’ve read enough about the rise of China and outsourcing to India to make us a nervous, but most of us who vote are also old enough to remember the same story about Japan in the 1980’s. We know there’s a housing bubble, and we’re nervous about what seems to be a crash materializing before our eyes. And we know that we’re in the hole, over-indebted and failing to save enough to secure our future, let alone the future of our children—that’s right, unlike the federal government, we know how to balance our checkbooks. We’d like your help in offering a way out. We don’t need you to protect us—from foreign competition or from our innate desire to own flat-screen TVs—but we want you to make the right choice as easy as possible.

We’re Nervous About Immigration

We don’t know why—sometimes we think illegal immigrants steal our jobs, sometimes we think they’re a security threat, and sometimes we’re a little jingoistic. It’s your job to educate us about the costs and benefits. Explain to us that taxes paid by illegal immigrants outweigh benefits received by them. Remind us that we were all immigrants once. Make us proud to be Americans again, and show us that we can demonstrate this pride by welcoming immigration generally, and skilled immigrants in particular. Clearly separate security policy from our policy on illegal immigration. And remember—we voted out the Congress who approved a wall along the border with Mexico.

Here’s a quick win—triple the number of H1B skilled worker visas. Most of us don’t know these folks who work in engineering labs and universities around the country, but we believe that intelligence and hard work are what make this country great, and allowing more H1B’s into the country reaffirms the fact that India and China can’t steal our jobs as long as they prefer living here to living there.

We’re Nervous About Our Entitlements

We read our AARP newsletters, we know that Social Security, Medicare, and Medicaid are heading for bankruptcy. That doesn’t mean we want our grandmothers to pay more for their pills, even if they can afford it. Part of the reason we voted for you is the memory of Al Gore’s “lockbox”—we believe Democrats value our entitlements first, and will sort out the economics later. You’re welcome to ride this memory into 2008. Or you can seize the initiative, capitalizing on the President’s failure to reform Social Security earlier in his term and the goodwill we hold towards Democrats as the tenders of government’s sacred contract to take care of its people.

If you get a chance (maybe after 2008?), consider stealing the Republican agenda, by creating a retirement system which automatically opts workers into a privatized savings plan, with subsidies for the poor and the elderly in the system. Over the long-term, we’re going to have to either privatize social security or tax ourselves to death, so why not seize the agenda now, privatizing on our own terms, rather than those dictated to us by external fiscal circumstances?

We’re Against Corruption

We’ve had enough hypocrisy from the Republicans, claiming to be a force for good while our representatives devolved into a whirlwind of moral turpitude. We like voting for self-fashioned outsiders—that’s the part of the reason we voted for you, having been outside the levers of power since 1994.

You can seize the moral high-ground by quickly proposing simple reform plans for Congressional lobbying, districting, and campaign finance. We understand that no solution is perfect, but we also understand that the system is broken—that’s why we didn’t see our Republican Representative for one and a half years. If we’re thinking too big, just start with one of those three reforms, and hold an all-hands-on-deck meeting with every new Democrat in Congress telling them the behavior you expect from them.

We Like Low Taxes, but We Like Consistent Tax Policy More

Do you remember when Brazil’s current President, Lula, was fighting for his first electoral victory? Neither do we, but the bond traders on Wall Street do. Brazil’s bond prices went ballistic over fears that Lula would undo years of fiscal responsibility and default on the Brazilian government’s debt to the International Monetary Fund.

If you think the reaction to Lula’s ascendancy was bad, imagine what will happen on Wall Street when you announce a sweeping roll-back of business-friendly tax policies instituted under Bush and his predecessors. Lack of tax clarity roils capital markets. Witness Canada, where a recent surprise announcement by the Labour Government of a decision to change the tax policy on dividends from trusts wiped out billions in stock market value within days and sent companies scrambling.

We know you’re going to change taxes. Just keep us updated on what you’re thinking, and try to limit the changes to one or two items (Unless, of course, you want to make the tax code simpler, and save us billions of dollars per year and many hours per person in tax-related costs—in that case, go nuts.) And please don’t tax our savings plans—we have enough trouble saving as it is.

Here’s an idea that’s far from a quick win, but we’d eventually come to grips with it—introduce a one-time, self-expiring (i.e., does not require Congressional review in order to expire) sales tax on all non-food items to fund the transition to privatized Social Security. Economists have already done much of the heavy lifting to design such a program. 

Thanks for taking the time to listen to us, especially after Election Day. Again, we’re eager to embrace you as the party of the future, and you are stepping into Congress during a unique period where a vacuum of good ideas has seized American politics. We hope you can fill it with something other than the dusty, old garbage that we’re used to.

All the best,

John Q. Public