Whether it's Bush or Obama, if he is not your president, then you are not my countryman

Congratulations, Mr. President.  I voted for the other guy, but I wish you well — and if you had to win, I’m deeply relieved that Florida doesn’t matter this time.

Once again, you’ve inherited a mess from your predecessor.  This time, you won’t be able to get as much mileage from blaming him.  One of the beauties of our two-party system is that eventually, both parties end up sharing the responsibility for every major issue.

Unlike some of your critics, I don’t think your re-election is a disaster.  Even though you’ll continue to be the most powerful person in the world, you are not powerful enough to inflict serious long-term damage on America.  We survived Nixon’s thuggery, Carter’s ineptitude and Clinton’s reckless sexual predation, and we’ll survive Obamacare and anything else you may throw at us.

To me, Obamacare was the most important reason to defeat you.  The day before the election, Christopher DeMuth described the stakes as he saw them:

On Tuesday, Americans will go to the polls to choose whether or not to nationalize their health-care system. …

If President Barack Obama is re-elected, ObamaCare’s controls over doctors, hospitals, pharmaceutical firms and other providers of medical care will be tightened, and the operations of private insurance companies will be progressively restricted. Everyone involved will know where the process is going—to a single-payer system or one with a few chosen insurers subject to national public-utility controls—and will negotiate the best possible accommodations to it. Within a few years, a new political equilibrium will be in place, making the system irreversible and subject to only marginal adjustment.

The Heritage Foundation has a helpful Obamacare tax chart -- click for more details

Well, maybe.  I sure wish we had elected a Republican president and enough Republican senators to overturn Obamacare altogether, but we did not.  However, opposition to socialized healthcare is not going to go away. When the tax increases start kicking in a few weeks from now, you may find that your predecessor has bequeathed you a healthcare system so deeply unpopular that you may not be able to enforce party discipline to protect it.

I’m also not overly worried about continuing to entrust you with our national security — although again, I would have preferred the other guy as commander-in-chief.  Despite the ridiculous Nobel Peace Prize, you’ve steered well clear of the moral bankruptcy of pacifism.  To your credit, you green-lighted the risky takedown of Osama bin Laden, rather than taking the safer route of a Predator missile — and you’ve used those Predators to take out thousands of enemy combatants.  You retained Bush’s defense secretary and his strategy for Iraq, and mimicked his surge in Afghanistan.

Heck, you even started a totally unnecessary war in Libya, where we had no national interests at stake.  I don’t want to encourage unnecessary wars, but at least this one got rid of a very bad man, and up until Benghazi it seemed to be turning out all right.  Your administration’s inattention to a deteriorating situation cost four brave men their lives in Benghazi.  But at the risk of sounding flip, all presidents make mistakes that get brave people killed.

If America never uses its military strength, then all that money spent on defense truly is wasted.  On balance I think your Libya adventure was probably unwise, but I like my presidents to have a bias toward action in the face of evil people.  When, not if, the war with Iran enters its kinetic phase, I’m confident now (as I was not in 2008) that you will not preemptively surrender.  And despite your occasionally shoddy treatment of our ally Israel, I have no doubt which side you’ll take.  Even during the crucible of the final weeks of the campaign, you’ve already started laying the ground work for war, through joint exercises with Israel and by condoning Israel’s attack on a weapons plant in Sudan.

You have a tough job ahead of you, Mr. President.  So did your predecessor.  However wrong-headed some of your policies may be, I believe you to be a good and decent family man, a person of substance, and a person dedicated to doing what you believe is right for America. I can’t find the link now, but to paraphrase another voice on the right: The fact that our political system has given us a choice of two such candidates is a testament to the enduring strength of America.

Good luck, Mr. President, and may God watch over you and those you serve.

Which presidential candidate gets an electoral boost from the Supreme Court’s Obamacare decision?

On balance, I think Obama gains a slight advantage — or at least, I think it would have been worse for him if his signature achievement had been overturned as unconstitutional.  The potential downside for Obama is that voting him out of office now becomes the only way to have any hope of overturning the legislation.  But how potent a factor will opposition to Obamacare really be?  It was pretty potent in the 2010 midterm elections, in the immediate wake of the outrageous shenanigans (remember “deem-and-pass” and the “Cornhusker Kickback“?) employed to pass a bill opposed by a majority of Americans without a single Republican vote in Congress.  Now, however, Obamacare has momentum on its side — hey, it’s constitutional!

What does the decision mean for the credibility and reputation of the Supreme Court?

It’s probably a net positive, at least in the long run.  Most people (including me) expected yet another 5-4 decision along ideological lines.  (The mother of all 5-4 decisions, of course, was Bush v. Gore, where many felt the split was nakedly political.)  Instead, the GOP-appointed Chief Justice joined the four liberal justices in upholding Obamacare.  I wish the decision had gone the other way, but conservatives can take some solace in the fact that Roberts’ ruling limits the expansion of the Commerce Clause.

Did Chief Justice Roberts make a political or an apolitical decision?

Depends on whom you ask, of course.  The Chief Justice’s ruling cited precedent requiring that “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.”  So one can argue that the ruling is the opposite of judicial activism, paying deference to the legislative and executive branches.  On the other hand, “Mr Roberts rather straightforwardly legislated from the bench by offering and affirming a construction of Obamacare which the administration itself rejected.”

Will Obamacare be reversed if the GOP wins big in November?

Yes.  It’s mathematically possible, but highly unlikely, that the Republicans will end up with a filibuster-proof 60-vote majority.  But a simple majority may be enough, because under the Senate’s arcane “reconciliation” process, votes on tax matters require only 51 votes to pass.

And Obamacare, of course, is a tax.  The Chief Justice of the Supreme Court made it official.

(Second in a series of posts interpreting momentous issues through the prism of the presidential election.)

The only vote that matters

At first glance, the answer seems obvious.  If the Supreme Court overturns Obama’s signature legislative “achievement,” surely that hurts Obama and helps his opponent.

But what about the fact that most Americans — 56% to 39% in a recent poll — want the legislation to go away?

James Carville today bravely argued that an overturn “will be the best thing that ever happen to the Democratic party because health care costs are gonna escalate unbelievably… and then the Republican Party will own the health care system for the foreseeable future.”  He also said, twice, “I honestly believe this, this is not spin,” leading Alana Goodman to headline her Commentary blog post, “Dems Spinning Possible Health Care Loss.” Ross Douthat has a rather unlikely theory about how an overturn could help Obama: “setting a clear limit on liberalism’s ability to micromanage Americans’ private decisions might make voters feel more comfortable voting to re-elect their micromanager-in-chief.”  Not Douthat’s best effort.

Goodman also points to a potential silver lining for Republicans the verdict goes the other way:  “if ObamaCare is upheld, the only way for Americans to get rid of the unpopular law may be to vote Republican – but it’s a stretch to say that would be the best possible scenario for the GOP.”

We’ll never know, because it seems clear that the law will be overturned.  The only vote that has ever been in doubt is that of Justice Anthony Kennedy, and I think we can discern his opinion from his remarks from the bench: “But the reason, the reason this is concerning, is because it requires the individual to do an affirmative act… and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in the very fundamental way.”  Why yes… yes it does!

In addition to all this, I think an overturn will help Romney by neutralizing his biggest handicap as the nominee:  the fact that he signed a healthcare bill in Massachusetts that also included an individual mandate.  If the Supreme Court lets the law stand, Romney is going to have to spend a lot of time making fairly subtle distinctions between Obamacare and Romneycare.  There’s the federalism argument: it’s one thing for a state to mandate something, quite another for the federal government to do so.  But anybody who cares about federalism is already a Republican anyway.

Romney’s stronger argument is the fact that Obamacare was foisted on an unwilling public without a single Republican vote, whereas Romneycare had bipartisan support.  This argument actually gets bolstered by an overturn.  “Remember how they passed this legislation? Votes in the middle of the night on a 2,700-page bill that wasn’t even fully collated yet? Remember deem-and-pass?  Americans knew that was wrong, and they promptly swept a lot of Democrats out of office.  Now the Supreme Court has thrown it out, and all that remains is to give a new president an opportunity to reach across the aisle and find healthcare solutions that Americans can support.”

Advantage: Romney.

Separated...

... at birth?

When I was in high school, one of my favorite gag lines was, “I’m a reformed Druid — we worship bushes.”  I thought this was hilarious.  More than that, after saying it enough times, I went through the next quarter century honestly believing I had made it up. (According to the spoilsport Internet, it dates at least back to a M*A*S*H episode in 1973 — a year I remember as “10th grade” — and probably to the whimsical founding of the Reformed Druids of North America in 1963.)

Some time ago I started talking about my concern that Mitt Romney might be the Republican equivalent of John Kerry.  Here’s how I described it in my December 12 endorsement of Romney:

The saying is, “you can’t beat somebody with nobody” — and any sitting president is a somebody.  Romney’s not exactly charismatic or inspirational, and the risk is that he becomes the Republican analog to John Kerry.  Lots of people voted against George Bush in 2004, but hardly anybody voted for Kerry.

I don’t remember hearing that analogy offered previously by anyone else, but I’m wary of claiming authorship.  A search for “Is Mitt Romney the Republican John Kerry?” — including the quotation marks in the search — yields more than 7,500 results.  But the vast majority of them turn out to be other sites referring to a post by that name on Daily Kos.  And the Kos reference is more than a full month later than mine.

The Kos post is by someone who hides behind the screen name Zackpunk, and as you would expect, it is highly tendentious:

Both Romney and Kerry have a political issue that makes them unpopular with their own base. For Kerry it was his vote for the war in Iraq (or the authorization for Bush to wage said war). Hardcore progressives were loathe to forgive him on that. Romney’s scarlet letter is the healthcare mandate he enacted as governor for Massachusetts. Trying to help the sick is an unforgivable offense for today’s GOP.

Really, Zackpunk? Do you really think Republican opposition to Obamacare is driven by animosity toward sick people?

But whatev, let’s turn our attention back to me.  Those 7,500 Google hits collapse down to a mere two screens of results, followed by “we have omitted some entries very similar to the 18 already displayed.” Of those 18, only one appears to predate the Kos reference.  It also predates mine: It’s from a group blog I had not previously encountered called Exchange Coffee House.  In a post titled “Is Mitt Romney the Republican’s John Kerry?“, Roland Hulme offered a much more balanced post than Zackpunk, adhering to the blogosphere’s typical inverse relationship between thoughtfulness and web traffic.

[P]oor old Mitt makes the worst possible candidate precisely because of the reason he’s been chosen – his mediocrity.

The GOP are planning to run a middle-of-the-road Republican based on nothing more substantial than the slogan: “He’s not Barack.” The problem is, Romney has a track record of so-called “statism” that rivals Obama’s own! …

For example, he invented the “Obamacare” health care reform that the Republicans now expect him to criticize and discredit. Romney’s political advisers even met with Obama to help draft the bill!

If Romney ultimately takes the candidacy for 2012, Obama will get his second term in office

The post is dated October 18, 2011, which trumps me by two months.  I think I first started talking about the analogy earlier than that, but I can’t prove it.  (Note to self: get off your fetish about research, just start posting stuff as it pops into your head.)

Hulme certainly has correctly identified Romney’s heaviest baggage.  “Romneycare” (a misnomer) makes it much more complicated to take advantage of the wildly unpopular Obamacare.  Complicated, but not impossible.  While Romney signed legislation with a constitutionally questionable individual mandate, the Massachusetts version was a bipartisan effort — not a single-party cramdown advanced in 1 a.m. votes and “deem and pass” maneuvers in a desperate race to get the bill signed before enough people realized just how bad it was.

The healthcare bill Romney signed is more of a liability in the GOP primary than it will be in the general election. And while Romney may be more of a “big-government Republican” than many conservatives would prefer, most of those conservatives will vote for him anyway, correctly reasoning that he’s well to the right of Obama.

I think Hulme is on shakier ground in saying Mitt’s “mediocrity” is the reason he’s been chosen.  (I’m posting this half an hour before the polls open in Florida, where I expect Romney’s inevitability to re-emerge.)  Romney, who can point to his background as a governor and a successful businessman, is bland, not mediocre.  That distinguishes him from Kerry, who was both.

Months ago it became clear that I was not going to fall in love with anybody in the Republican field.  Ronald Reagan wasn’t coming back.

Chris Christie produces echoes of the Great Communicator, but he never had any intention of running.

I tried to generate some enthusiasm for Tim Pawlenty, but I didn’t work hard at it because he showed no signs of getting any traction.

When Rick Perry belatedly got into the race, I took a hard look at him.  Too much of a social conservative for my taste, but that would help him with part of the Republican base, and I liked the fact that he had governed a very large state.  But he started chewing on his toes almost immediately, and ultimately it seemed almost like he didn’t even want the job.

I was sorry to see Herman Cain flame out, but I sure didn’t want him to get the nomination.  He would have complicated the Left’s phony “racism” gambit, but he clearly had given very little thought to foreign affairs — the most important arena for any president.

When Newt Gingrich debuted as the not-Romney flavor of the week, I was surprised — I thought his campaign blew up months ago.  (Or maybe years ago.)  I figured he would fade quickly, but he’s already held on at the head of the polls longer than I expected — and the Iowa caucuses are only three weeks away.

As one prominent Republican after another steps forward to remind us that Gingrich is a hothead, Ross Douthat explains why the former Speaker’s vaunted debating skills hold little promise of overcoming President Obama’s incumbancy advantage:

Gingrich might debate circles around Obama. He might implode spectacularly, making a hot mess of himself while the president keeps his famous cool. But either way, setting up a grand rhetorical showdown seems unlikely to supply a disillusioned country with what it’s looking for from Republicans in 2012.

Conservatives may want catharsis, but the rest of the public seems to mainly want reassurance. They already know Barack Obama isn’t the messiah he was once cracked up to be. What they don’t know is whether they can trust anyone else to do better.

Last year, when the President and his party were foisting Obamacare on an unwilling public, the conventional wisdom was that Romney couldn’t possibly win the Republican nomination because he had implemented something similar in Massachusetts.  That made sense to me, and Romneycare is part of the reason Republicans have been flirting with one not-Romney after another for months.

But if Romney wins the nomination, I think he’ll be able to differentiate himself from Obama on healthcare pretty easily. It’s one thing to launch an experiment in a single state with broad bipartisan support.  It’s quite another to annex one-sixth of the nation’s economy without a single Republican vote in either house of Congress.

The other Republican complaint about Romney is that he isn’t conservative enough. But that also means he has a better chance of defeating Obama in a center-right nation.

Is America ready for a president who adheres to a faith that is only slightly older and slightly more reputable than Scientology?  Only time will tell, but there are 15 Mormons currently in Congress, including Senate Majority Leader Harry Reid, and I don’t think the Democrats should bank on the religion issue.

The saying is, “you can’t beat somebody with nobody” — and any sitting president is a somebody.  Romney’s not exactly charismatic or inspirational, and the risk is that he becomes the Republican analog to John Kerry.  Lots of people voted against George Bush in 2004, but hardly anybody voted for Kerry.

But Romney has a strong record of executive leadership, both in business and government.  It’s his second trip through the crucible of a presidential campaign, so there presumably are no skeletons left in the closet.  He has the best chance of beating Obama, and the country literally can’t afford four more years of this administration.

Ever since I realized that Michele Bachmann had no chance, I’ve told people that I’ll be voting for “whichever flawed candidate the Republicans nominate.”  Today I’m endorsing the flawed candidacy of Mitt Romney.

To enlarge the graphic, click on it, then click on it again

More than 30 months into the era of Obamanomics, the administration is still desperately seeking to blame all of the nation’s woes on George W. Bush. They’re getting less and less traction with that argument — Obama’s approval rating just hit a new low of 40%, according to Gallup’s tracking poll.

But Bush has been the go-to guy in Obama’s blame game since the beginning, and the administration keeps trying.  Megan McArdle, a consistently insightful economics columnist for the Atlantic, dissects a chart published by the White House this week that purports to show that of the $12.7 trillion added to the national debt over the past decade, $7 trillion is attributable to the Bush administration, with only $1.4 trillion attributable to Obamanomics.

[T]his graph attributes decisions made by Obama and an all-Democratic Congress–like doubling down in Afghanistan–to Bush, while taking responsibility for basically nothing except the stimulus.  When Obama extends the Bush tax cuts for the rich under pressure from Congressional Republicans, that disappears from his side of the ledger, because after all, he didn’t want to do it.  When Bush enacts Medicare Part D under pressure from Congressional Democrats, the full cost is charged against his presidency.  The list of such silliness goes on.  Our president seems set to coin another presidential motto: “The duck starts here.”

McArdle answers with charts of her own, showing that the deficit, which never reached more than about 3% of GDP during the eight years of the Bush administration, has ballooned to 10% of GDP after less than three years of the Obama administration.

Nor is it exactly obvious to look at the $2.4 trillion in additional debt incurred during Bush’s eight-year presidency, and say that he is nonetheless actually responsible for $7 trillion of our current debt load–and then turn to the $3.1 trillion of debt incurred during Barack Obama’s three-year presidency, and declare that his policies are actually responsible for only $1.4 trillion.

Obama needs a new scapegoat, and the administration has been fitting the House Republicans for that suit.  I worried three weeks ago that the Republicans — having forced Obama to concede that entitlement cuts are on the table — would hold out for no debt increase and get blamed for a government shutdown.

The GOP still could get blamed, of course — Newt Gingrich & Co. were blamed in 1994 even though Bill Clinton’s veto actually triggered the shutdown.  But now the House Republicans have voted not once but twice to raise the debt ceiling, overruling the Tea Partiers among them.

K-Lo describes the path forward from here:

So what does the new path look like? This tweaked Budget Control Act will pass the House. The Senate will strip out the BBA language. It will pass the Senate. When it goes back to the House, Boehner loses some of his caucus again, but Pelosi will have to get some of her members on board. If this is such a crisis moment, Democrats are the party in power. Boehner negotiated with his caucus and got an imperfect bill that the Democratic Senate could work with — with a statement of principles in it including the BBA. Then the Democrats, who do run Washington, after all, will have to step up to the plate.

Ball’s in your court, Harry Reid and Barack Obama, in other words.

The Senate already has tabled the Boehner bill, but pressure to accept one of the two House plans may rise over the weekend, leading to the scenario K-Lo describes.  Let’s hope so.  Then the election can go back to being about the phony stimulus and the wildly unpopular Obamacare.  Everybody knows who to blame for that.

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Because only one-third of the Senators face the voters in any given election, it was mathematically impossible for the Republicans to pick up enough seats in 2010 for a veto-proof majority that would allow them to overturn Obamacare altogether.  In the event, the GOP had to settle for a minority that increased enough to sustain a filibuster.

So now the strategy is to delay and defund the worst components of Obamacare whenever possible, while waiting for the courts and the election cycle to take care of the rest.

In the Weekly Standard, Noemie Emery does the best job I’ve seen of explaining how health care “reform” could continue to backfire on Obama and the Democrats.  I couldn’t improve on her headline, so I put it in quotes at the top of this post.  You really should read the whole thing, but of course you won’t, so here are some excerpts:

[S]eldom before has an administration governed so against the grain of public opinion, and when this occurs, there are costs. The costs are the loss of the House by a landslide of epic proportions and the implosion of support for the president’s party. The success is the passage of Obama-care, which liberals believed would change things forever. Congresses come and go, so they said, while a historic reform is forever: It would live on, they averred, while the results of the midterms would blow off quite quickly. But even before the Eastern District Court of Virginia blew a large hole in Obamacare in early December, finding its individual mandate unconstitutional, there were signs that this bargain was taking on water.

Because the historic GOP tsunami occurred in a Census year, Republicans will have significantly more influence over the gerrymandering process than they would have otherwise.

Added to this, Obama now faces hostile state governments in all the swing states he won two years ago, including Pennsylvania, Michigan, and Wisconsin, as well as Ohio, Virginia, and Florida. He has to win most of these, or else he’s a goner.

The GOP-dominated House undoubtedly will pass an outright repeal of all or most of Obamacare, which will never get to the Senate floor for a vote.  However,

The House will make life hard for the Democrats in the Senate, 23 of whom are up for reelection in 2012 [versus only 10 Republican senators-KP], and 13 of whom come from states in which Obamacare is extremely unpopular and which took a sharp turn to the right in the recent midterm elections. It will force them to vote over and over on health care, choosing between their constituents and their party and president, knowing their “aye” votes will find their way into commercials run by their GOP challengers, and their “nay” votes will enrage their own party’s base. When they voted “aye” for the first time (in December 2009) it was bad enough, but they had no way of knowing that the endgame would become quite so ugly, that the act itself would become quite so unpopular, or that Obama would become quite so unable to save them from voters’ hostility; now they know all of these things.

The sweeping nature of the Democrats’ health care “victory” will work against them.

Along with the lawsuits, and fights in the House and statehouses, there seems to exist a distinct possibility that the act may collapse of its weight. Assembled in haste​​—​one might say desperation​​—​and larded with deals to secure votes and backing, it is a 2,000-plus page assemblage of time bombs with varying fuse lengths that are starting to blow up in succession, causing large numbers of people inconvenience, or money, or both. … “Firms Feel Pain from Health Law” ran a recent article in the Wall Street Journal describing the problems faced by large and middle-sized businesses in trying to understand, much less to comply with, the act.

“There’s [an] administrative burden just to try and understand the 2,400 pages,” said one executive, describing the pain of spending so much time and money on things that aren’t helping their companies grow. Because of this, among other reasons, the bill continues to grow more unpopular, as six in ten people now favor repeal.

Looking ahead to 2012:

If a Republican is elected in 2012, then health care is history. If health care is the issue, Obama will lose. If all things are equal, and it is an issue, a loss is still likely. If the economy rebounds strongly, Obama will probably win. But if it doesn’t, and he loses because of this reason, then health care will have helped do him in. Businesses are sitting on loads of cash these days, reluctant to invest and add jobs until they know what will happen with regulations and taxes under this new health care dispensation, which may take effect, be radically altered in the states or by Congress, or be blown away by the courts.

To paraphrase King Pyrrhus, another such victory and the Democrats are undone.

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USA Today, an early pioneer of soundbite journalism in written form, is admirably concise in setting the stage for elections soon to come:

Obama will likely trumpet a new financial regulation bill — the biggest overhaul of the system since the Great Depression — as one of his major first-term accomplishments, along with health care and the stimulus plan.

Republicans will likely argue that all three bills threaten prospects for economic recovery.

Ya think?

ObamaCare is such a train wreck that Americans support repealing it by a 2-1 margin.  Don’t even get me started on the wasteful and dishonest Porkulus fiasco, which will continue to increase deficits for years after the “need” for financial stimulus has passed.

And now comes yet another 2,000-plus page bill, a financial services “reform” measure that does a lot of things — but fails to address the actual causes of the financial meltdown that began nearly two years ago and has us staggering still. Here’s blogger (and Nobel-prize-winning economist) Gary Becker on the bill’s shortcomings (H/T: Freakanomics):

One of the most serious omissions is that the bill essentially says nothing about Freddie Mac or Fannie Mae. [KP Note: !?!?!?!?] In 2008 these organizations were placed into conservatorship of the Federal Housing Finance Agency. During the run up to the crisis, Barney Frank and others in Congress encouraged Freddie and Fannie to absorb most of the subprime mortgages. In 2008 they held over half of all mortgages, and almost all the subprimes. They have absorbed even a larger fraction of the relatively few mortgages written after 2008. Freddie and Fannie deserve a considerable share of the blame for the crisis, but they continue to have strong political support. I would like to see both of them eventually dissolved, but that is unlikely to happen. Instead we are promised that they will be dealt with in future legislation, but I am skeptical that anything will be done to terminate either organization, or even improve their functioning.

Many proposals in the bill will have highly uncertain impacts on the economy. These include, among many other provisions, the requirement that originators of mortgages and other assets retain at least 5% of the assets they originate, that many derivatives go on organized exchanges (may be an improvement but far from certain), that hedge funds become more closely regulated, and that consumer be “protected” from their financial decisions.

Most of these and other changes in the bill are not based on a serious analysis of what contributed to the financial crisis, but rather are the result of political and emotional reactions to the crisis. Usually, such reactions do more harm than good. That is likely to be the fate of the great majority of the provisions of the Dodd-Frank bill.

In simple terms, the primary enabler of the financial meltdown was the fact that financial institutions had incentives to take huge risks, knowing that any catastrophe would be socialized by a government that would have no choice.  WSJ columnist Holman Jenkins today cites new academic research in arguing that the bill doesn’t change that:

What was obvious to common sense, the naked eye and the open ear is now systematically upheld in the research of finance professors. To wit, shareholders of large, publicly traded banks have a higher appetite for risk than is compatible with our regulatory system.

Down this path lies the beginning of wisdom on how we can live with banks, which alone among businesses have the potential to bring down entire economies. Too bad such wisdom is absent from the financial regulation bill now before Congress. …

Let us be realistic about one thing, since most of us aren’t running for office: “Bailout” has become a curse word in populist diction, but “too big to fail” isn’t going away just because regulators pretend next time they would fold their arms and let the system blow up.

The government will and should continue to come to the rescue in a panic. We need better incentives to avoid creating such situations in the first place. But that discipline won’t come from shareholders, who will happily create the next 100-to-1 leveraged financial institution if the potential rewards are great enough. Bank depositors and other leverage suppliers are the ones who must be mobilized to make the system safer.

“… banks, which alone among businesses have the potential to bring down entire economies.” There in a nutshell is why I favored the “bank bailout” (on which the taxpayers are making a profit, btw) while staunchly opposing the auto industry bailout.

Becker and Jenkins both describe an opportunity lost that actually would have led to a better alignment of risk and reward.  Jenkins is the better writer, let him tell it:

Perhaps the best idea, though, is to require financial firms to fund themselves partly with a special kind of debt that would automatically be converted to equity when a bank’s capital or liquidity are imperiled. These debtholders then would have an incentive to monitor not just the amount of leverage, but the quality of the risks a bank is pursuing.

Bingo.  But instead we get another mammoth bill, chock full of unintended consequences, that increases the size of government to no good end, while failing to fulfill its primary purpose.  Add to this the public anger over the gulf oil blowout — although I think on that count, criticism of Obama is unfair — and you can see why Peter Wehner says “it’s getting ugly for the Democrats.”

Fareed Zakaria of Newsweek International and CNN is a bright man and an insightful commentator.  In this 2:26 video, he does as good a job as I’ve seen of describing the ridiculous spectacle that the gulf oil disaster has become — from President Obama’s demeaning efforts to appear sufficiently angry, to the temporary neglect  of other pressing issues where the president’s personal involvement might actually be helpful.  (Hat tip: Glen Gill)

But Zakaria blames this on the news media, and I think that gets it backwards.  Yes, the media has been milking the drama for everything it’s worth (Day 60!) — but that’s what the media does.  It’s up to Obama to keep the media tail from wagging the presidential dog.  I would much rather see Obama leave the oil crisis in the hands of the experts and stick to his scheduled visit with Asian allies — instead of blowing them off for the second time.

Sometimes a president has to rise above public opinion and do what’s right.  George Bush showed how to do that by insisting on the surge in Iraq in the face of intense public pressure — and it worked so well that his successor, who campaigned on a platform of surrender at all costs, had little choice but to stay the course.

I guess you could argue that Obama showed similar fortitude by sticking with the immensely unpopular health care “reform” legislation.  But I’d call that rising above public opinion to do what’s wrong.

Note to Congress:  Avoid passing bizarrely complicated, economy-transforming legislation that you have not read, especially in the face of overwhelming public opposition.  In The Weekly Standard, Jeffrey H. Anderson describes the “steady stream of revelations of previously undiscovered horrors buried in the bowels of ObamaCare”:

Since passage, reports have revealed that ObamaCare would cost over $1 trillion by any standard, according to the Congressional Budget Office (CBO), not “merely” $940 billion as previously reported (while its total costs in its real first decade, 2014 to 2023, would continue to be well over $2 trillion); that ObamaCare has prompted major corporations to discuss dropping their employer-provided health-care plans; that businesses would have to file 1099s not only for every person to whom they pay $600 in wages but for every vendor with whom they do $600 in business, thereby imposing a paperwork nightmare and incentivizing companies to avoid doing business with a myriad of small firms rather than a handful of big ones; that ObamaCare would create 159 new federal agencies, offices, or programs; that the Obama administration’s Medicare Chief Actuary says ObamaCare would raise U.S. health costs by $311 billion in relation to current law and would shift about 14 million people off of employer-provided insurance — and some of them onto Medicaid; that ObamaCare’s would discourage employment, as — for example — hiring a 25th worker would cost a business $5,600 in addition to wages and benefits; that ObamaCare would impose a severe marriage penalty, offering additional subsidies as high as $10,425 a year if couples merely avoid marriage; that a lone provision in ObamaCare, which would penalize employers if their employees spend more than 9.5 percent of their household income on insurance premiums, would cut the net income of businesses like White Castle by more than half; that even though ObamaCare was supposed to get people out of emergency rooms and into doctors’ offices, those who build emergency rooms say the effect will be just the opposite and that they are gearing up for increased business; that doctors shortages are looming and would be accentuated by ObamaCare, both because more people would seek care (otherwise, what would the $2 trillion be buying?) and because fewer people would likely enter a demanding profession that would now promise greater restrictions and lower pay; and that President Obama’s nominee to head Medicare and Medicaid under ObamaCare is an open advocate of the British National Health Services’ NICE (National Institute of Clinical Excellence) and its methods of rationing care.

Opposition to ObamaCare has grown sharply with all of the revelations: “Americans now favor repeal by a margin of almost 2-to-1, with 63 percent favoring repeal and just 32 percent opposing it,” according to a Rasmussen poll cited in the same article.

But repeal is a tough row to hoe.  There’s little doubt that a Democratic bloodbath in November will dramatically alter the balance of power in Washington — but Obama will still be president, and still have veto power.  Even if the Republicans win every single Senate race throughout the country (not gonna happen), there will be enough Democratic Senators to sustain a veto.  Although I expect Harry Reid’s successor as Democratic leader will have a harder time enforcing party loyalty.

True repeal will probably have to wait until after the 2012 presidential election, unless the Supreme Court steps in to rule Obamacare unconstitutional.  (Hm… I wonder if my former colleague Elena Kagan would have to recuse herself?)  In the meantime, look for the next Congress to find creative ways to deny funding and delay implementation of key provisions.