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  • Editor

    The Omnibus

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  • Editor

    The Omnibus

    • The Fed, financial regulation, and Too Big to Fail – The New York Times listens in on a conversation with Kevin Warsh, Distinguished Visiting Fellow and former Fed Governor.
    • The Fed, its dual mandate, and long-term economic policy – Peter Schiff sits down with the incomparable Allan Meltzer.
    • The Fed, rules v. discretion, and some thoughts on economic policy after the election – John Taylor at EconTalk with Russ Roberts.

     

     

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  • Terry Anderson

    The Sport of Kings

    I am planning a trip to Spain to archery hunt for Spanish ibex, a magnificent wild goat. The hunt will cost several thousand dollars, not counting the money for airfare, hotels, and food. I’m wondering, however, if I should still go or cancel the trip and follow the lead of Spain’s King Juan Carlos by recanting my sin of hunting.

    King Juan Carlos recently went on safari to Botswana where he allegedly hunted elephant. While there he broke his hip and returned home for treatment. Spanish newspapers reported the story including a picture from a previous hunt showing the king standing in front of a dead elephant with a rifle.

    The story sparked outrage from citizens who feel the king abdicated his responsibility by enjoying himself on safari while his subjects suffered under the Spain’s worsening financial crisis. Socialist Party leader, Tomas Gomez, said the king should choose between his “public responsibilities or an abdication.”

    In response the king appeared on television as he left a Madrid hospital saying, “I’m very sorry, I made a mistake. It won’t happen again.”

    The outrage goes beyond the economy to the environment. The king is the honorary president of the Spanish branch of WWF, one of the world’s largest environmental groups. Because of his hunting escapade, members have gathered 65,000 signatures on a petition calling for Juan Carlos to resign his honorary presidency.

    Click here to read more.

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  • Bill Whalen

    Will Indiana Discharge Its Lugar?

    There are two ways to explain why some veterans of Congress find themselves in unexpectedly deep trouble come voting time.

    One theory: political Darwinism.

    Like natural selection and the thinning of the herd, the candidate is long in the tooth and a step slower – and slow to react to a younger, more cunning predator challenger.

    Another theory: political climate change.

    Like a shift in temperature, the electorate undergoes a shift in thinking – about Washington and the officeholder’s relevance. Not a thinning of the herd – more like an anti-incumbent, herd mentality.

    Keep this mind if, a week from now, Republicans in Indiana kick Sen. Richard Lugar to the curb in the state’s May 8 primary.

    Click here to read more.

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  • Editor

    The Omnibus

    • Dateline Stanford, California — John Batchelor and co-host Mary Kissel of the WSJ are taping The John Batchelor Show from Stanford’s campus all week. Listen to the line up of Hoover fellows when the shows air or catch them later on podcast. Richard Epstein, Bruce Thornton, Victor Davis Hanson, Kori Schake, Terry Anderson, David Davenport, Tammy Frisby, Fouad Ajami, and Henry Nau. It’s a Hooverpalooza.
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  • Bill Whalen

    Seoul Searching

    Earlier this week, I took a lengthy flight from California to discuss a problem for which there are no quick fixes: civility, or a lack thereof, in American society.

    As a participant at the 2012 Asan Plenum in Seoul, I had the honor of sharing a panel with fellow Hooverites David Brady and Tod Lindberg on the state of social polarization in the U.S.

    I’ll leave it to my colleagues to express their thoughts on this topic – they’re far more eloquent in their words than anything I could paraphrase.

    As for my contribution to the panel, I chose to focus on civility in U.S. politics – which seemed appropriate, given the editorial space devoted in recent months to the anticipated long and ugly campaign Americans can soon expect.

    A few thoughts:

    In my opinion, there’s a decided roughness around the edges in American society – decay in decency and decorum. Symptoms of the disease: people littering their bodies with graffiti, overt vulgarities, and society’s choice to lionize those who lead their lives with a decided lack of dignity (on that latter point, I’m on Jon Hamm’s side).

    One can see this on display in, off all places, San Francisco – ironically, a city forever congratulating itself for its supposed tolerance.

    Click here to read more.

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  • Editor

    The Omnibus

    Question of the day: Is it still a “sister blog” if the blogger is male?

     

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  • Tammy Frisby

    In the days leading up to Tax Day 2012, CNN/ORC polled Americans about their opinions about the U.S. tax system. Over the last week, the press has highlighted that 68% of respondents agreed with the statement that “the present tax system benefits the rich and is unfair to ordinary working men and women.”

    So have the message of Occupy Wall Street and the President’s calls for the rich to pay their “fair share” caused more Americans than ever before to be disgruntled with the U.S. tax system?

    To answer this question, we can look at the latest poll compared to earlier surveys of Americans’ opinions about the U.S. tax system. It turns out that the same question asked by CNN/ORC this week has been asked nine other times over the last forty years by major polling firms. The two most recent previous polls were conducted in by CNN (with Time/Yankelovich Partners). The seven earlier surveys were all run by other reputable polling firms like Harris, ABC News/Washington Post, and Yankelovich Partners.

    How does the latest poll compare?

    Click here to read more.

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  • Tom Church

    Yesterday’s Wall Street Journal op-ed by Peter Diamond and Emmanuel Saez received quite a reaction. Diamond and Saez advocate raising the top marginal tax rates on the rich to between 50-70%. Their recommendation is based on a 2011 paper they published in the Journal of Economic Perspectives (PDF) where they advocated 1) Raising marginal tax rates on the very rich, 2) Subsidizing earnings (phasing out at a high rate) for low earners, and 3) Taxing capital. Their paper was widely discussed when it was published, and it is serving as a justification for many on the left to raise taxes on high-income earners. It’s their first recommendation that I would like to address.

    There are several key limitations with the authors’ methodology used to conclude that raising marginal tax rates is optimal social policy. Two I’ll mention here are the dynamic effects of raising marginal tax rates in the medium and long term, and the volatility that comes with higher rates on a small portion of the population.

    First, and this is the most important issue with the paper, Profs. Diamond and Saez are unable to produce estimates of the effect higher marginal tax rates have on economic growth or tax revenues in the medium or long term. (I’d note that Scott Sumner highlighted the following excerpt months ago. Still, it should be front and center of the criticism of their recommendation.) From their paper:

    It is conceivable that a more progressive tax system could reduce incentives to accumulate human capital in the first place. The logic of the equity-efficiency trade-off would still carry through, but the elasticity e should reflect not only short-run labor supply responses but also long-run responses through education and career choices. While there is a sizable multiperiod optimal tax literature using life-cycle models and generating insights, we unfortunately have little compelling empirical evidence to assess whether taxes affect earnings through those long-run channels.

    Translated: We don’t know what will happen in a few years as a result of this change.

    Click here to read more.

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  • Editor

    The Omnibus

    Interview Edition

    • Read John Taylor on “Fiscal Follies, Monetary Mischief” (and the prospect of QE3) in Barrons.
    • Watch Fouad Ajami’s assessment of the mission in Syria on CNN’s Anderson Cooper 360.
    • Listen to Tammy Frisby talk about Romney’s potential picks for VP on America Now with Andy Dean (guest hosted by Bryan Suits) – interview begins at 19:02.
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  • Editor

    The Omnibus

    • Tired of all the dog talk? Senior Fellow James Ceaser with a refreshingly thoughtful assessment of the personal dimension of the presidential race in a Weekly Standard cover story.
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  • Kori Schake

    Sarkozy’s Troubles

    France held the first round of its presidential elections over the weekend, and it spells real trouble for President Sarkozy — and German Chancellor Merckel.  Sarkozy took only 27% of the vote, bested by the socialist party candidate, Francois Hollande.  The far left candidate pulled in 11% and can be relied on to offer that to Hollande.  The far right took 18%, but their leader shows no inclination to back Sarkozy.  Absent an April Surprise, it’s difficult to see how Sarkozy gets reelected on May 6th.

    Hollande, the socialist, has run a campaign critical of Sarkozy’s divisiveness, and of the EU approach to its financial crisis.  He got a boost early on from German Chancellor Merckel endorsing Sarkozy — French voters prefer the image of a smart French rider astride a strong German horse to that of a bossy teuton meddling in French elections.  Hollande campaigned vigorously on his opposition to the “Merkozy”

    In an effort to stave off Eurozone collapse, Chancellor Merckel has intimidated other European leaders into an austerity first strategy.  It is now reaching its political limits of acceptability not only in the political periphery of Greece, Spain, Portugal and Italy, but also in the bedrock of the Eurozone.  The honeymoon is over for technocratic governments in Greece and Italy; both are threatened by elections to overturn austerity.   Spain failed to meet its budget cuts and the newly elected government is facing a public backlash.  Even the Netherlands is likely to call elections after their government failed to agree on needed spending cuts.

    Click here to read more.

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  • Bill Whalen

    Recently, I authored a post on this site positing four reasons to be encouraged about Mitt Romney’s candidacy – (1) national polls showing a real horse race; (2) Romney offering a sensible big-picture message; (3) his campaign smartly exploiting opportunities; (4) the Obama economy hardly a hothouse of growth.

    In the spirit of “fair and balanced” (and because I can’t bring myself to write about the intricacies of Tuesday’s Delaware primary), here are four reasons why President Obama’s followers can keep the faith, the past week’s spate of bad headlines notwithstanding.

    To wit:

    1)  The House Always Usually Wins. If you want to lay down some money on the presidential election (we’re talking overseas gaming, as opposed to a down-payment on a federal appointment), here’s a betting line – Obama’s the favorite, Romney’s a 2-1 underdog. The White House isn’t a casino. That said, in presidential elections as in Vegas the odds are definitely with the house. Including this year’s contest, over the past century elected incumbent presidents (this rules out Coolidge, Truman, LBJ and Ford) have sought re-election a total of 14 times. Their record: 10 wins, 4 losses. But in three of those contests, the incumbent faced in intraparty challenger. The lone exception: Herbert Hoover, 1932. If Obama survives this fall, history will show his first break was avoiding a sideshow challenge from a liberal gadfly. This is not to suggest that Romney has a 1-in-14 chance of unseating Obama – the weak economy and a “leg thrill” gone missing make this a more competitive race. But it does suggest that matters could be far worse, as far as dissatisfied base and unhappy convention are concerned.

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  • Editor

    The Omnibus

    • “Savor that for a minute: the same Obama who held an outstretched hand to the evil and erratic leader of North Korea is now claiming special foreign policy prowess for adopting the policy he condemns in his predecessor.” More from Kori Schake on the Obama administration’s posturing on its policy toward North Korea over at Foreign Policy‘s Shadow Government.
    • Reason #437 why Congress deserves its 8% approval rating, courtesy of Keith Hennessey.
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    The Omnibus

    • Countries don’t like to bomb their best customers. Michael Boskin on the future of the India-Pakistan relationship in The Wall Street Journal.
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  • The Caravan

    Can the Afghan war be won?

    The Caravan project of the Working Group on Islamism and the International Order has put together a round table about the vital question of America’s options in Afghanistan.

    This is now America’s longest war, yet it has been so sparsely debated of late.  Can this war be won?  Have there been gains worthy of the sacrifices in blood and treasure incurred by the United States and its allies?  Or is it time to acknowledge that this war cannot be brought to any meaningful conclusion let alone a victorious one?

    Eight thinkers and scholars have taken part in this.  There is H.R. McMaster – brigadier general in the U.S. Army, until recently he served as Commander of Combined Joint Task Force Shafafiyat (Transparency) in Kabul, Afghanistan; Leon Wieseltier -Literary Editor of The New Republic; Ms. Clare Lockhart – co-founder and CEO of the Institute for State Effectiveness, she lived in Afghanistan for several years, contributing to the design of nationwide programs as adviser to the Afghan government; Joel Rayburn – Lieutenant Colonel in the U.S. Army and a senior military fellow at the National Defense University; Professor Tom Henriksen, Professor Russell Berman, Professor Charles Hill and Professor Fouad Ajami – senior fellows at The Hoover Institution.

    If you are interested in traveling to our previous destinations, be sure to visit the Caravan (or subscribe to the RSS feed) to survey our journey into the ordeal of Syria, now nearly a full year into a terrible struggle between a dictatorial regime and a rebellion determined to overthrow it, where we asked – ‘What Can Be Done?

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  • H.R. McMaster

    The Stakes

    The mass murder attacks against our own nation on September 11, 2001 and subsequent attacks on other nations including the U.K., Spain, and India, demonstrate clearly the importance of denying transnational terrorist organizations access to the resources, freedom of movement, safe havens, and ideological space they need to plan, organize, and conduct these attacks.  It is for this reason that the stakes in Afghanistan are high as we and our Afghan and international partners fight to deny Al-Qaeda and other transnational terrorist groups the ability to re-establish sanctuaries in Afghanistan.  And it is for this reason that we must continue efforts to convince the Pakistani government and military that it is in their interest to eliminate terrorist and insurgent safe havens in their territory.

    Essential Elements of Success

    Afghan leaders now have an opportunity to consolidate security gains associated with Coalition reinforcements since 2009 and vast improvements in the size and capability of the Afghan Army and police. To do so, the Afghan government and the international community must cope with a range of criminalized adversaries, all of whom have thrived on the weakness of rule of law and are stakeholders in the weakness of critical state institutions. Ultimately, the Afghan government and security forces must be strong enough to control its territory, and contend with the regenerative capacity of the Taliban, and operate effectively against the nexus of insurgent groups, narcotics-trafficking organizations, and transnational criminal networks. Consolidating gains and strengthening the Afghan state requires a concerted effort by Afghan leaders and their international partners to reduce the threat of corruption and organized crime. Corruption is neither unique nor intrinsic to Afghan society.  The severity of the corruption problem today is the product, in large measure, of the damage that the last three decades of war–especially the conflicts from 1980-2001–inflicted on Afghan society and the country’s institutions.  Inadequate oversight over much of the vast international assistance that entered Afghanistan over the past ten years exacerbated the problem.

    Click here to read more.

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  • Leon Wieseltier

    The Other Side of the COIN

    The origins of a war do not always illuminate its outcome. The Iraq war began in what I now regard (but did not regard at the time, since I was persuaded that there were nuclear in the hands of a tyrant who had already used chemical weapons) as a scandal of misunderstanding and misjudgment, but Iraq is now the better for having begun its arduous experiment in self-government. The beginnings of the Afghan war, by contrast, seemed unimpeachable to me — the extirpation of Al Qaeda and the collateral blessing of the Taliban’s rout; but I lost faith in the Afghan war a few years ago. The reason was that I lost faith in Afghanistan, in its determination to transform itself into the sort of society that would no longer provide a basis in social and political reality for the Taliban and other theocratic enemies of decency and prosperity. After all, what makes the Taliban frightening is not its military power, but its social and cultural plausibility. Its sources of legitimacy have not been destroyed. The problem is that the task of delegitimating the Taliban is not a military one. To paraphrase Burke, the sword has done all that the sword can do. (Would one more “fighting season” really change the country?). We have decimated Al Qaeda, and our enemies now operate in Pakistan, Yemen, Somalia, and elsewhere. But we have not changed Afghanistan, at least not significantly enough to justify the further expense of American blood and money.

    Click here to read more.

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  • Clare Lockhart

    Next Generation Afghanistan

    Afghanistan has been at war, in one form or another, for more than thirty years. During this period, US policy has alternated between engagement and withdrawal, varying from support to the Mujahadeen in the 1980s, to support to the Northern Alliance to oust the Taliban in late 2001, to a combination of humanitarian assistance and counter-terrorism operations between 2002 and 2005, to a counter-insurgency campaign that was resourced in 2009, interspersed with periods of disengagement. Rather than oscillating between extremes, a policy that seeks to sustain the minimum conditions for regional stability would provide the best chance of achieving enduring security.

    To improve policies for civilian engagement whether in this region, or for transitions underway in Africa, the Middle East and other parts of Asia, requires a fresh look at the means of civic engagement. In Afghanistan, focus on the military objectives has not been matched by clear and consistent policies for economic, societal and political engagement with the country’s citizens. Where efforts to create enduring institutions have worked, the key has been to get policy decisions and internal and external partnerships right, often requiring minimal funding. By contrast, the misapplication of development fashions and doling out of huge contracts have often proven at best a distraction or at worst have empowered strong men and marginalized and alienated the population.

    Click here to read more.

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  • Joel Rayburn

    Observers rightly say that the Afghanistan campaign will not result in a sustainable outcome without a political strategy to accompany the military operations NATO is conducting.  In too many minds, however, formulating a political strategy has been equated to brokering a deal between the Karzai government and the leaders of the Taliban that returns the latter to some share of power.  For a variety of reasons, this kind of deal would hold even less popular legitimacy than the current political arrangement does.  The Taliban, after all, rarely poll in double-digits among Afghans, who remember their brutal rule too well, and the question of their return prompts near-universal opposition from Afghanistan’s Dari-speaking majority.  What political strategists probably should be formulating instead is a political process that affords all Afghans, not just the Taliban, the opportunity to compete fairly for political power, protected by the rule of law.  There are a handful of clear political objectives which, taken together, could add up to at least the kernel of such a process.

    First, a presidential transfer of power in 2014.  A favorite game among Afghanistan watchers is to place odds on whether President Hamid Karzai, whom the constitution requires to vacate his office in 2014, will actually go.  Yet go he must, for his staying on in power would signal the emergence of a virtual Popalzai monarchy, with Karzai as permanent head of state.  Furthermore, even had he been a perfect president, a dozen years would be quite enough, and Afghanistan badly needs the example of one governing team handing power peacefully to another.

    Click here to read more.

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