Friday, September 25, 2009

Obama's greatest challenge

It's not now. Getting us out of recession is the easy part. Voters blame the recession on Bush, so Obama either gets credit for getting us out, or he ends up not getting blamed for failing to get us out. Not much downside for the President.

No, the real challenge for Obama is going to be the next wave of prosperity. How could that be a challenge, you ask? Because of our huge debt. During good times, it must come down to sustainable levels, or better yet, we should be running surpluses. But Obama's own forecasts call for the deficit to still be in the $600 billion range, or 4% of GDP, by 2019.

The upshot of that is that when we next go into recession, the government will crash. There will be no room for fiscal stimulus. There won't even be a way for the government to meet its current obligations. Let's do the math:

Obama's budget outlook assumes 8 good years between 2011 and 2019. That's some serious optimism, but let's go with it. Eight solid years of prosperity, and the best we can do is get the deficit down to 4% of GDP? According to his plans, the national debt would be somewhere between 85-95% of GDP. Pretty dangerous territory.

So what happens if we go into 2020 with that $600 billion deficit and a recession hits? Armageddon, basically. Normal recessions typically double budget deficits, so let's conservatively assume a $1.2 trillion deficit for 2020. But that's probably way too conservative. The President's tax plans rely excessively on the top 1%, whose income is more volatile and drops precipitously during recessions. So the deficit could easily reach $1.5 trillion. But wait! Medicare's out of money! Gotta shore that up. Call it $1.7 trillion. That's before stimulus and that one year tips us over 100% Debt-to-GDP.

So what's Obama's challenge? It's not good enough to slowly lower the deficit over the next few years. Once the recovery sticks and we are in boom times, Obama must aggressively cut spending. We must get to surplus by 2015, preferably sooner, or the next recession will be budgetary armegeddon.

As with global warming, the longer he waits to make the tough decisions, the more expensive those tough decisions will be. In 2012, he can make minor cuts to social programs and defense and reform entitlements. If he doesn't, then in 2020, his successor will have to basically end most of those entitlements and slash social spending to nothing. We'll be back in the 19th century as far as the role of the federal government is concerned. The progressive project will have failed spectacularly.

In 1933, Franklin Roosevelt saved capitalism from itself. In 2012, Barack Obama must save liberalism from itself

Sunday, September 20, 2009

Predicting the far future

No, not who is going to win the football games today, or who is going to be President in 2012. I'm talking way ahead, to 2100. And these are tough ones:

1) What views that are pretty much mainstream today will be considered barbaric in 2100? Obviously, when we look back at 1900 we think of racism, sexism, colonialism, totalitarianism(democracy was still a bit radical in most of the world in 1900), and religious prejudices(especially anti-semetism).

2) What views that are mainstream today will be seen as overly wishful and naive thinking? Most of the time we are taught in history classes about how barbaric and stupid our ancestors were, but humans are complex creatures. There was also a lot of idealism that turned out to be well, fuzzy-headed, naive, or downright stupid. Think of the peace movement in the 1920s between the wars, which culminated in the Kellogg-Briand pact, which outlawed war. yeah, that was a shining moment of realism right there. Or Marxism. Or the genuine idealism behind colonialism, which wasn't done JUST to exploit people, it was also to bring them the benefits of civilization. A lot of prominent progressives in the late 18th/early 19th century were pro-colonialism on those grounds. Or the temperance movement, which thought that society would be much better off if alcohol was outlawed. What naive things do we try to do today that future generations will look at us and think, "WOw, their intentions were good, but how did they ever imagine THAT would work?"

3) What from our popular culture of the late 20th/early 21st century(60s to the present) will stand the test of time and be considered essential classical art when the 22nd century dawns? Star Trek? Michael Jackson, the Beatles? Pac Man?

Here are the answers, in my opinion:

1) I think it's pretty obvious that we'll be over the anti-gay thing. We're already almost there. I also think that the idea of innate human superiority over animals will be considered just as barbaric as innate superiority of whites over blacks was. Not that humans aren't more intelligent than animals, of course we are. But is a human instrinsically "worth" more than an animal? 99% of you would probably say yes, but when you think about it, it's a belief based on the fact that you yourself are human, possibly backed up by religious dogma. I think our descendants will look back on that belief as being pretty barbaric, especially considering the horrors we inflict on animals, such as cosmetic testing or killing them to make coats. I think even meat will eventually be grown without killing an actual animal. Cloning technology and stem cell advances may make it possible to only grow parts of animals that don't think and feel. Like growing a chicken wing. Or maybe things will be like Star Trek and we'll just be able to replicate food out of the air.

Finally, I think that economic liberty will be the big battleground throughout the 21st century. Liberals have successfully fought for freedom to do a lot of things. The 20th century certainly belonged to them when it comes to civil rights, free speech, rights of defendants, workers' rights, and sexual freedom. But they tend to hold restrictive views on economic rights. They've restricted property rights, imposed onerous taxes on us, made it hard to run a business(or start one), and have not been above fomenting class hatreds. The trend over the last few hundred years in almost every sphere of human life has been towards more freedom. I don't think economic rights will be any different. I think that our descendants in 2100 will look back at high taxes and restrictions on commerce as unacceptable infringements on human rights. That doesn't mean that there won't be any regulations, but business regulation will more resemble today's regulation of sexual practices, whereas today it more resembles 1950s-era regulations on sexual practices. All that is "icky" is regulated regardless of whether it actually harms anyone. In 2100, the only business regulations will be on things that actually harm people directly, rather than things that offend liberals primarily because they don't run a business or just don't like business owners.

2) Diversity will be one for sure. Multiculturalism and diversity are just absurd the way they are practiced now and almost anyone can see it, but yet we are still practicing it. In the future, even thinking about color or sex as part of a hiring process will be considered strange. But where there are legitimate cultural or genetic differences, our descendants won't hide from them anymore. And the idea that all cultures are inherently equal will be laughable. The way we think about race and culture today is a hangover from the negative ways we thought about those things fairly recently. Once that hangover is gone, people will start to see these things more lucidly and without the baggage that we carry today.

I also think that we're repeating the stupidities of the 1920s peace movement in many ways. There are many people who actually think that there will never be another great war between nations. I think that by 2100, we'll see one, possibly two, really disastrous wars. I do think that eventually war will no longer be a fact of our existence, but it hasn't happened yet and it probably won't have happened by 2100, either. The biggest mistake we are making in the West in regards to our views on war is thinking that we can wage a war by strict rules that the enemy doesn't have to follow. It's literally impossible for any Western nation to win a war these days decisively. I think that in 2100, people will see a difference between war and law. War is what happens precisely because the rule of law has failed. Trying to uphold rule of law in the middle of a war is nonsense. You fight to win and you do whatever it takes to win. What will be most laughed at in 2100 was this idea that even many modern military experts hold, that you win a war by winning the "hearts and minds" of the enemy population.

Finally, I think that what many idealistic futurists predict, a united world under a single government, won't happen. In fact, I think that in 2100 there may be as many as 1000 nations, or at least most nations will use a decentralized approach to governance. People are diverse. In different regions they have different values and different ideas of how things should be. It makes no sense to try to have a one-size-fits-all way of doing things directed from some central world authority.

3) Big action-packed blockbusters won't hold up, because they'll still be making them in 2100, except they'll be even better and they will probably be holographic. And interactive. So what's the Gone With the Wind of the late 20th/early 21st century? I don't know. Whenever I think of a movie with a really good plot that was made since 1970, I think about how dated it will appear. We have a romanticized view of our recent past in some ways, so that's why we still like old cinema. And we still like stuff from the 70s and 80s, because we grew up with it. But will any of this be interesting to the average person in 2100? I think they'll be interested in the early days of cinema just like us, but middle eras tend to get short shrift when it comes to art. Will Titanic still capture people's hearts, or do we like that just because the Titanic fascinates us now? Maybe people in 2100 will have forgotten about the Titanic. Alien movies like ET will probably seem silly, especially if we've made first contact by then, or even if we've merely found remains of an older alien civilization. Star Wars I don't expect to survive past 2040 as a cult phenomonon. Star Trek will probably have more staying power, but by 2100 might just be a well known curiosity of how the people of the 20th century viewed the future. Even now, I laugh at some things I see on Star Trek or ST: Next Generation because they sometimes talk about things just being discovered in their time that we take for granted now. So hell, I don't know when it comes to movies.

Music is easier. The Beatles of course will still be big in 2100, although I think more known for their early years than the psychedlic and "give peace a chance" later years, which will be seen more as period music. The earlier stuff will be considered timeless. I think that disco may actually be even more popular in 2100 than it is today because it was the first real dance club music. I figure people will still want to get together for some dancing in 2100, so dance music will still be big and disco was the first real dance music for the masses. So the Bee Gees may be bigger than the Beatles. Springsteen, Dylan, and the better rap music will probably also hold up. As much as I love heavy metal, little of it will probably survive to 2100. There will always be heavy music, but I don't think there will be much interest in the history of it, except for maybe Sabbath, Zeppelin, and maybe Metallica.