Conservatives clashed sharply over which nominee, establishment candidate Mike Castle or Tea Partier Christine O’Donnell, would be a better choice to run for Joe Biden’s vacated Senate seat. Those backing Castle noted that he had won a dozen statewide races and was a surefire winner, whose presence deterred Beau Biden, the First State’s Attorney-General and son of VP Joe, from running for his father’s long-held seat.  Castle supporters cited his House votes against the Obama stimulus and health care bills, plus his support for extending in full the Bush tax cuts; they also derided O’Donnell’s cipher resume and apparent inability to manage her personal finances.  Those behind O’Donnell stressed the need to shake up the establishment, assailed Castle’s support for the cap & trade bill, and warned that established incumbents were vulnerable in a year that has seen unprecedented levels of public disgust with career politicians.

How can Tea Party & establishment concerns best be reconciled for future races?  One idea, advanced by Castle supporters, is to apply the so-called Buckley Rule, named after the great conservative revivalist figure: vote for the most electable conservative.  Tea Partiers argue that while the Buckley Rule holds in normal times, these are extraordinary times that call for rejecting establishment candidates who seem more electable.  They point to several huge upset races in which favored establishment types lost.

But Tea Partiers are wrong to think prudence should be tossed aside completely in these times.  I propose a modification of the Buckley Rule to fit today’s times, based upon a middle ground: Back the best plausible conservative candidate with a reasonable shot of winning.

“Modified Buckley” would hold that where a conservative candidate of reasonable quality has a somewhat lesser chance of winning than an establishment type, it is worth the risk to back the more conservative one, though judged less likely to win, so as to press hard for incumbent replacement by candidates not tied to old ways of practicing politics.  But given a conservative candidate of dubious quality and thus far less likely to win, settle for the establishment favorite to improve chances of the GOP gaining control of the legislative agenda.

If O’Donnell wins this may appear moot for the time being.  But if as seems likely she loses, and if the balance in the Senate is 50-50 after November 2 with VP Joe Biden presiding and providing the tiebreaking vote in the Senate, Tea Partiers will pay dearly over the next two years for pursuit of ideological purity at all costs.  Controlling the Senate agenda means setting legislative priorities, such as bringing repeal of ObamaCare to the Senate floor and demanding changes to the New START Treaty before allowing a floor vote; it means using hearings to spotlight, for example, Kathleen Sebelius’s heavy-handed blackmail of insurers to shut up or else face the government’s wrath; it means being able to block far left-wing Supreme Court nominees from confirmation.

In other words, in selecting the best candidates in 2012, go for a touchdown on 4^th & 5 instead of settling for a field goal; but do not throw 70-yard Hail Mary passes.

John C. Wohlstetter is a senior fellow at the Discovery Institute, author of The Long War Ahead and the Short War Upon Us, and founder of the issues blog Letter From the Capitol^SM.

Financial Reform: Can Markets Survive the Chris & Barney Show?

I hardly have time to read the 1,500-page financial reform bill, let alone, given how such monsters are crafted, could I understand it.  But I do understand why everyone should be scared when it becomes law….

Here’s why: The Chairmen of the Senate & House committees writing the bill were two prime reasons for the financial collapse.  Retiring Senator Chris Dodd (D-CT) protected sub-prime mortgage lenders like his pal Angelo Mozillo–who arranged sweetheart mortgage loans for Dodd–from prosecution, so enraging his constituents that they deserted him and thus forced him into retirement.  As for Barney Frank (D-MA), he ferociously protected America’s financial Fric & Frac, Fannie Mae & Freddie Mac, as they leveraged themselves at 75:1 shoveling out bad mortgage loans (Wall Street firms were leveraged only 30:1 to 40:1); Frank even accused those seeking to rein in Fannie & Freddie of endangering markets by telling what turned out to be the truth.

Neither Dodd nor Frank as repented since the collapse.  Like the 18th century French Bourbons, they have “learned nothing and forgotten nothing.”  Yet their colleagues entrusted them with captaining the writing the most important financial reform bill in decades–perhaps, since the Great Depression.  As for the 56 Democrats & 3 Republicans who voted for the bill, let alone the two Democrats who voted against it for not being even more onerous, they exemplify the kind of insular club mentality that enrages more & more voters.

I support financial reform, but not a bill written by those guilty as buccaneers in Wall Street–complicit with them and taking their campaign cash by the carload in multiple election cycles.

Bottom Line.  If you want the likes of Chris & Barney to write your financial reform rules, remind me not to get on a plane piloted by someone who flies planes as well as Chris & Barney regulate markets.

John C. Wohlstetter is the founder and editor of the blog “Letter from the Capitol,” and author of the book The Long War Ahead and the Short War Upon Us.  He is a senior fellow at Discovery Institute.  Wohlstetter has been a frequent guest on numerous nationally syndicated radio shows including Dennis Miller, Jerry Doyle and G. Gordon Liddy.  He is a regular contributor to the Fenton Report.

Climate Change: Tale of Three Computer Models

The Boeing 777 became the first plane designed entirely on computers.  It has flown for more than a decade; it is safe, reliable and comfortable.  Before passengers flew on the 777, test pilots flew it, and arduous stress tests supplemented those test flights.  Boeing’s computer models rested upon vast empirical knowledge of how a thin aluminum tube the length of a football field, hurtling through the atmosphere at high subsonic speeds at an altitude of up to eight miles, would respond to the stresses thereby encountered.  Boeing’s models used high-density uniform data–knowledge of how every point on the fuselage is affected–plus mathematical algorithms that mimic precisely the environment in which airliners operate.  Extensive empirical validation over time supplemented the data.

We found out last year that the financial models dreamed up by the wizards of Wall Street worked a lot better when asset values were rising than they did when asset values were falling.  They were based upon relatively recent data, and had been tested only over a brief period.  The resulting hyper-leveraged investing based upon presumed soundness of the financial models nearly crashed the global economy.  Fortunately for fliers, Boeing’s computer models work just as well when planes are descending as they do when planes are ascending.

So, the multi-trillion Climate Change Question is: Which computer models, those of Boeing or those of Wall Street, more closely resemble climate models?  When today’s models are plugged into yesterday’s climate data, they do not yield today’s climate.  Suppose test pilots flying the 777 had crashed: Would Boeing have rolled out the plane anyway?  Would airlines have purchased it?  Would passengers have boarded it?

Climate models lack dense, uniform data–much data is interpolated artificially by supercomputers, because raw empirical data is too sparse.  We still do not know how the global climate engine works, which is why scientists argue whether solar phenomena, the ocean currents, greenhouse gas emissions, etc. are the prime cause of the recent planetary warming (that stopped in 1998).  Because temperature extrapolations looking decades out are built upon each year’s calculation, errors in modeling will cumulate over time–that is, the errors will become more inaccurate as years pass.  As recently as twenty years ago, modelers–including the fabled James Hansen of NASA, Al Gore’s hotshot 1988 star witness–predicted far larger increases than they now estimate.  And a decade earlier, we were warned that a new Ice Age was imminent.

To the argument that we should play it safe and invest a few trillion just in case the climate modelers are right, that is classic bootstrapping.  I might accept it if we were talking small change, but not for trillions –especially at a time when the global economy is, and may well remain for some time, precarious.  I must add that the neo-McCarthyite anathematizing of climate skeptics as today’s Holocaust deniers doesn’t increase my confidence in their case.

Above all, remember philosopher Karl Popper’s definition of what makes science distinct from dogma: It is falsifiable, in light of subsequent discovery and empirical validation.  The debate, as such, is never fully over.  When Einstein gave us E = mc squared, he was a majority of one.  Most sole dissenters may be wrong, and we should follow proven models like Boeing’s 777 model until if and when experience reveals something better.  Consensus is not science.  Peer-reviewed climate models that do not, when plugged into earlier data, produce today’s climate are worthless; a non-peer-reviewed model that, when plugged into prior years’ data did produce today’s climate arguably would be worth more (though not enough to go forward without honest peer review–notably lacking in today’s climate debate universe).

Thus, Ronald Reagan used to say that there are three things one should never believe: “The check is in the mail!”  “Of course I will respect you in the morning!”  “Hi, I’m from the IRS and I am here to help you!”  Given the lack of empirical validation of climate models, perhaps we should add this one: “This computer model is, despite never having been empirically validated, completely reliable.”  We should instead heed the rule applied by Reagan regarding negotiating with the Soviet leaders: “Trust, but verify.”

John C. Wohlstetter is the founder of the issues blog “Letter >From The Capitol,” the author of “The Long War Ahead and the Short War Upon Us,” and a senior fellow at Discovery Institute.  John’s articles and commentary can be followed on Twitter: JohnWohlstetter”

What some are calling “the end of Camelot,” calls for added reflections not just on the person of Edward Kennedy, but on the Kennedy Clan’s dynastic run, and implications for the future of American life & politics.

French novelist Honore de Balzac is quoted, perhaps apocryphally, as having said that behind every great fortune lies a great crime.  Balzac’s statement came at a time when possibly it was a universal truth.  Early great fortunes were made by those linked closely with royalty, and thus favored by royal charter and gift.  Modern life has created private entrepreneurs whose fortunes clearly are not derived from crime–think Apple Computer titan Steven Jobs.

Joseph P. Kennedy Senior exemplified Balzac’s dictum.  The twin sources of his fortune were Prohibition-era bootlegging and Wall Street stock manipulation–FDR famously appointed the Kennedy patriarch to chair the newly-formed Securities & Exchange Commission because, it is rumored, he wanted a crook who knew how to catch other crooks in the same racket.  Later appointed Ambassador to the Court of St. James, Joe Sr. became an overt Nazi sympathizer.  According to a widely believed and likely true story, Joseph Kennedy Sr. via Frank Sinatra, enlisted the Mafia to fix the 1960 Illinois election to secure his second son, JFK, the Presidency in 1960.  Ironically, the Kennedy Clan coolly jettisoned Sinatra due to his mob connections.

The Kennedy Clan made vast charitable contributions, amplifying their wealth with the leverage given equally vast political power.  They combined, as it were, the benevolent charity of John Beresford Tipton of “The Millionaire” late-1950s TV series, with the less benevolent charity of Godfather Don Vito Corleone.  Tipton gave anticipating gratitude; Don Vito demanded absolute loyalty in return.  If a recipient crossed John Beresford Tipton his benefactor would be disappointed; crossing the Kennedy Clan entailed risking more than disappointment.  Thus the Kopechne family, parents of Mary Jo Kopechne the former campaign worker who died on Chappaquiddick Island, was silenced in return for accepting a monetary payment.

The many ways in which the Kennedy Clan wielded power brings to mind the famous aphorism of the English statesman Lord Acton, in its most commonly quoted form: “Power tends to corrupt; absolute power corrupts absolutely.”  To believe that such imperial power can be wielded solely for the public good is the myth that lies at the heart of Camelot–the myth of the virtuous knight who slays dragons and saves the kingdom, to rule his subjects benevolently and give happiness to all ever after.

Put simply, no fallible human being can be trusted with the vast power of Camelot–its patriarch or his descendants.  It is worth noting that the Queen of Camelot, Jacqueline Kennedy, kept her children as far away as possible from Camelot in her widow years.

John C. Wohlstetter is the founder of the issues blog “Letter From The Capitol,” the author of “The Long War Ahead and the Short War Upon Us,” and a senior fellow at Discovery Institute.  John’s articles and commentary can be followed on Twitter: JohnWohlstetter

In Federalist 57, James Madison discussed safeguards that would prevent the House of Representatives from oppressing the people who elected them.   One was that laws passed by the House would apply in full to Members of that body:

“I will add as a fifth circumstance in the situation of the House of Representatives, restraining them from oppressive measures, that they can make no law which will not have its full operation on themselves and their friends, as well as on the great mass of the society. This has always been deemed one of the strongest bonds by which human policy can connect the rulers and the people together.”

Madison explained that the connection between legislators and citizens is essential.  “It creates between them that communion of interests and sympathy of sentiments of which few governments have furnished examples; but without which every government degenerates into tyranny.”  Madison continued, “If this spirit shall ever be so far debased as to tolerate a law not obligatory on the Legislature as well as on the people, the people will be prepared to tolerate any thing but liberty.”

To alleviate public fears that the government healthcare plan would over time crowd out private plans by manipulating subsidies and eligibility, Republicans proposed a bill in each house of Congress to link the interests of Congress and voters in a Madisonian way.  They proposed that if health care reform includes a public option, Members of Congress should commit to a communion of interest and assume the same option in lieu of the gold-plated choice plan Congress now enjoys under the Federal Employees’ Health Benefits Plan (FEHBP).  By doing so, Congress would have “interest and sympathy” toward making the public option as attractive as FEHBP, in terms of choice and cost.

However, the House refuses to discuss the matter.  The Senate Health Committee voted 12-11 in favor, but in real world politics, such a provision will not survive a House-Senate conference, even if the Senate should pass it.

Madison assumed voters would call to account lawmakers wicked enough to enact preferential laws.  Were voters in fact aware of how much better the FEHBP is than most private plans, they might well let their lawmakers know that such preferential differences had better be closed.

But most voters have busy lives and do not spend a great deal of time following public policy issues, so for awareness to grow the message must spread through the media.

The positive note is that the public is paying increasing attention to health care and has growing concerns.  The failure of President Obama and the Democratic leadership to push a massive health care bill through Congress before the scheduled August 7 recess improves the chance that the public can learn about the unwillingness of many Members of Congress to re-link their health insurance interests with the parallel benefits of their constituents.

President Obama has called on bloggers to keep up pressure to pass a health care bill: “It is important just to keep the pressure on members of Congress because what happens is there is a default position of inertia here in Washington.”

The President, a constitutional law professor, seems to have forgotten what the Framers of our Constitution regarded as the default position of the Senate.  Federalist 63, attributed to Madison  (but possibly Hamilton) clarified:

“Thus far I have considered the circumstances which point out the necessity of a well-constructed Senate only as they relate to the representatives of the people… To a people as little blinded by prejudice or corrupted by flattery as those whom I address, I shall not scruple to add, that such an institution may be sometimes necessary as a defense to the people against their own temporary errors and delusions. As the cool and deliberate sense of the community ought, in all governments, and actually will, in all free governments, ultimately prevail over the views of its rulers; so there are particular moments in public affairs when the people, stimulated by some irregular passion, or some illicit advantage, or misled by the artful misrepresentations of interested men, may call for measures which they themselves will afterwards be the most ready to lament and condemn.”

Federalist 63 closed with a poignant rhetorical question which can be applied to our healthcare debate: “In these critical moments, how salutary will be the interference of some temperate and respectable body of citizens, in order to check the misguided career, and to suspend the blow meditated by the people against themselves, until reason, justice, and truth can regain their authority over the public mind?”

Thus when trillions are engaged in a massive reform of one-sixth of the American economy, in an area that is vastly complex and vital to all of us, the “default position” for assessing how health care is delivered to all Americans is to follow the advice given in The Federalist Papers.

John C. Wohlstetter is the founder of the issues blog “Letter From The Capitol,” the author of “The Long War Ahead and the Short War Upon Us,” and a senior fellow at Discovery Institute.  John’s articles and commentary can be followed on Twitter: JohnWohlstetter

“Government Motors”: Death of the Private Corporation

On June 1, 2009 America’s most famous manufacturing corporation died–and along with it a great era of private corporate enterprise.

Founded in 1908, GM set the standard for auto manufacturers by employing more than 600,000 people, and in 1954 attained a historic 50-million cars sold worldwide. Valued at $93 per share as recently as late 1995, GM’s stock was trading under a dollar per share when the bankruptcy deal was announced. GM will be deleted from the Dow Jones Industrial Average, which it joined in 1925.

Peter Drucker, supreme managerial intellectual of the post-World War II generation, in his classic book Concept of the Corporation, profiled the company in 1946. Therein Drucker noted GM’s pivotal role in shaping the very idea of private enterprise in America; corporations like GM stimulated the rise of labor unions and big government.
Drucker wrote of government and GM’s role as to free enterprise:

“It [GM] does not exclude government regulation or government limitation of business; but it sees the function of government in setting the frame within which business is to be conducted rather than in running business enterprises”

Of labor unions and regulation, Drucker wrote:

“If we look upon the two other new social institutions of basic importance that have emerged in her society during the last half-century, the labor union and the administrative government agency, we see that they are nothing but social responses to the phenomenon of modern Big Business and of the corporation.”

The American government (taxpayers) will now own 60 percent of the “New GM,”
the Canadian government 17.5 percent, the United Auto Workers 12.5 percent and bondholders 10 percent. True, the administration says it wishes to exit the car business. Thus in announcing the GM bankruptcy deal on June 1, President Obama said:

“What we are not doing — what I have no interest in doing — is running GM.
GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality. They — and not the government — will call the shots and make the decisions about how to turn this company around. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions..In short, our goal is to get GM back on its feet, take a hands-off approach, and get out quickly.”

Among the “fundamental” decisions the government has already taken for GM
are: where to manufacture compact cars; substituting Green cars for guzzlers; and keeping GM’s corporate HQ in Detroit. Additionally, GM’s stock will have to soar 100-fold for the government to recoup its $50B investment. Which politician will vote to sell early, and tell bailout-fatigued voters their tax dollars have been lost?

GM was the quintessential industrial age manufacturing corporation of the 20th century. Its takeover by two governments symbolizes the end of an era, one in which private enterprise took pride of place in directing the commanding heights of the American economy. “Government Motors” will see to it that domestic workers displace foreign workers, union interests displace outside investor interests, worker pension fund coffers will be filled with money from taxpayers, and that regardless of the size of the government stake it will always be the senior partner. Even if the government stake falls from 60 to 6 percent, it will inevitably call the shots on crucial decisions. Government suzerainty over “the most fundamental corporate decisions” means political criteria will dominate economic criteria. There are lots of phrases to describe this state of affairs, but free market capitalism is not one of them. GM’s demise as a private entity symbolizes this fateful transition to a new domestic economic order in which Washington politicians are the ultimate private-economy CEOs.

John C. Wohlstetter is the founder of the issues blog “Letter From The Capitol,” the author of “The Long War Ahead and the Short War Upon Us,” and a senior fellow at Discovery Institute. John’s articles and commentary can be followed on Twitter: JohnWohlstetter”

John C. Wohlstetter is the founder of the issues blog “Letter From The
Capitol http://www.letterfromthecapitol.com,” the author of “The
Long War Ahead and the Short War Upon Us

and a senior fellow at
Discovery Institute

John’s articles and commentary can be followed on
Twitter: JohnWohlstetter http://twitter.com/JohnWohlstetter

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