Barron's Ranks the Candidates

In the new Barron's, the cover story ranks the leading candidates by party and since the article is titled "The Mitt and Bill Show" guess who won:

Democrat Bill Richardson, the garrulous governor of New Mexico, has bloviated himself from near the front of his party's field to the back. Yet Romney would be the best Republican candidate for stocks, bonds and the economy, and Richardson, hands down, would be the best Democrat.


Those are among the findings of a Barron's analysis of the nine major candidates from the two parties. We based our judgments on the candidates' responses to a detailed questionnaire on taxes, spending, health care, energy and other issues. We also considered their records as governors, senators and holders of other offices. Romney, formerly governor of Massachusetts and once a top private-equity investor, garnered 3.8 points out of a possible 4, edging out Republican rival Rudolph Giuliani, with 3.7. John McCain was third, with 3.5. a On the Democratic side, Richardson scored a 3.0, handily topping the field. Perhaps surprisingly, Barack Obama, finished second, with 2.0. Despite his strong support from the party's traditional base, he displayed more free-market thinking than Hillary Clinton, who scored 1.8. He showed a healthy skepticism for big government in his approaches to both health care and energy....

In arriving at the scores, we consistently favored market-driven points of view.... While our points of view may sound more Republican than Democratic, our guiding principle is the power of markets. We are aware that the stock market often does best with a Democrat in the White House. From the beginning of the 20th century, the Dow Jones industrials have climbed an average of 7.19% a year when Democrats were president, versus 4% under Republicans, according to Ned Davis Research. Bonds, on the other hand, have done better under Republicans.

We don't know if history is set to repeat itself. But right now, the Republicans are clearly exhibiting more market-friendly tendencies.

The article seems to go out of the way to be fair and explores the big topics in some depth for each candidate. It really is interesting enough to deserve a full read.

Note & HT: MarketWatch provided the free link to the Barron's story.And MarketWatch remains my favorite source for financial news and I keep it up whenever I'm online. I even liked when it was CBS MarketWatch but it is even better as a Dow Jones product.

Obama on Religion

Michael Gerson in today's Washington Post had a great opening to a rather bland column about Senator Obama's attempt to address religiosity, the Democrat Party and Obama's own positioning in "The Gospel of Obama":

When British author Hilaire Belloc ran for Parliament in 1906, his speech on religion and politics, given to a packed public meeting, went as follows: "Gentlemen, I am a Catholic. As far as possible, I go to Mass every day. This is a rosary. As far as possible, I kneel down and tell these beadsevery day. If you reject me on account of my religion, I shall thank God that he has spared me the indignity of being your representative."

Just a great quote.

TNR on Dem's Debate

Michael Crowley from The New Republic's blog The Plank on last night's Democrat Presidential debate:

I found myself thinking that Hillary Clinton is on track to be the next president, and that Barack Obama is always slightly unsatisfying in the shadow of his amazing 2004 Democratic convention speech. There were some decently substantive conversations, and lots of "we need" to do this and "we must" do that--but virtually nothing new or surprising was said. One of the few things that sticks with me, in fact, was Mike Gravel's very interesting outrage over racial disparities in the war on drugs--and how little interest the other candidates had in siding with him.

By the way, in a first ever, I agree with Mike Gravel (what?) on this one observation of his regarding racial disparities in drug convictions and I would add income to that situation also.

College Rankings

According to Robert Samuelson "Universities Teach Lesson in Cynicism" by refusing to participate in US News & World Report's college rankings:

...[P]residents of 46 liberal arts colleges have said they will refuse to participate in part of the U.S. News annual survey. The list includes such well-known schools as Barnard and Kenyon. The presidents say the rankings are "misleading" and "do not serve well the interests of prospective
students."

Superficially, this seems a sensible blow against the increasingly frenzied, stress-ridden college admissions process. It isn't.

...First, where students go matters much less than popular wisdom holds.

...Second, the cutthroat competition to get into elite schools is as much among parents as the students.

...Third, the U.S. News rankings actually relieve the stress slightly by enlarging the pool of "elite" schools. Everyone knows that Williams (rank: 1) and Swarthmore (3) are top liberal arts colleges. But the first 10 also include Carleton College (6) in Minnesota, Pomona College (7) in California and Davidson College (10) in North Carolina. The use of semi-objective standards dilutes raw snobbery.

What's so shameful about this campaign against the rankings is its anti-intellectualism. Much information is in some way incomplete or imperfect. The proper response to evidence that you dislike or dispute is to supplement it or discredit it with better evidence. The wrong response is to suppress it. And yet, that's the agenda of these college presidents.

By not cooperating with some or all of the U.S. News survey, they hope to sabotage the rankings. They say they'll provide superior information. But they want to control what parents and students see. This is soft censorship.

What their students will learn, if they're paying attention, is a life lesson in cynicism: how eminent authorities cloak their self-interest in high-sounding, deceptive rhetoric.

Full disclosure: This post is shamelessly driven by the fact my undergraduate degree in Economics is from Davidson College.

My Immigration Overview

First, let me briefly explain where I stand generally on "immigration" and discuss why I, like many others, have experiences and leanings that influence my position. I am against the current bill for many reasons but foremost is the obvious problem with the bill that the stated enforcement provisions are like wisps of smoke that will vanish in the air.

I do support real enforcement, and secure borders first then bills to specifically address the assimilation of existing illegal aliens and how better to control and allow necessary and favorable immigration to occur on an ongoing fair basis. I am not hung up necessarily on a fence but more border controls coupled with enforcement of proper hiring by business is a must and now. I also am in favor of ID cards, sadly including all Americans, to control our borders, our jobs, and our national security. I say sadly because it is against the nature of this country and the design of our founders but this isn't the wild old west anymore where we know who the bad guys (and girls) are nor do we live in a time where the very notion of suicide bombers seeking to kill hundreds of thousands of people is unimaginable.

I am sympathetic to illegal immigrants especially Hispanics because of two main experiences:

1) My oversight of manufacturing plants in Texas with a majority of Hispanic workers that were legal as far as we could determine as to paperwork and government reporting (although I doubt that all were legal and doubt that the government would report back a bad social security number) and the fact our Hispanic workers were tremendous employees, and

2) My experience in the Catholic Church where our new Hispanic neighbors and church goers were more enthusiastic, pious, willing to give and work for the good of the Church and often more commendable than we "native" Americans.

So I am very sympathetic and many would call me soft on immigration, and I am, but not to go so far as the current bill goes.

I have three articles that I recommend to everyone to read as of today. First is a piece in the WSJ by Pete Du Pont which explains better than I can my own feeling on this bill, entitled "Security First." Here is an excerpt:

America's illegal immigrant admission has accelerated over time. Congress and President Reagan granted amnesty to three million illegal aliens in 1986; and the current President Bush wants to legalize another 12 million now, which sends an arithmetic signal to other immigrants who want to slip into America that 20 years from now whoever is president will perhaps grant amnesty to 48 million illegal immigrants.

We do need to secure our borders, issue legal ID cards to immigrants, and admit people skilled in the jobs we need to fill. But experience shows that our government lacks the political will to enforce such an immigration policy. Georgia state employee Reagan W. Dean was recently quoted in the New York Times: "Maybe it is possible to secure the border. Maybe it is possible to establish an employee identification system. But I don't have any confidence it will be done."

Many Americans agree with him, so a serious and substantive bill that would restore the people's confidence is the Senate's task this week.

Next is a piece from the May 2007 edition of City Journal detailing some of the worrisome sociology behind the assimilation of immigrants. This is by John Leo and here is a touch of "Bowling with Our Own":

Harvard political scientist Robert Putnam, author of Bowling Alone, is very nervous about releasing his new research, and understandably so. His five-year study shows that immigration and ethnic diversity have a devastating short- and medium-term influence on the social capital, fabric of associations, trust, and neighborliness that create and sustain communities. He fears that his work on the surprisingly negative effects of diversity will become part of the immigration debate, even though he finds that in the long run, people do forge new communities and new ties.

Putnam’s study reveals that immigration and diversity not only reduce social capital between ethnic groups, but also within the groups themselves. Trust, even for members of one’s own race, is lower, altruism and community cooperation rarer, friendships fewer. The problem isn’t ethnic conflict or troubled racial relations, but withdrawal and isolation. Putnam writes: “In colloquial language, people living in ethnically diverse settings appear to ‘hunker down’—that is, to pull in like a turtle.”

And last is a long piece from Commentary that I wish our Senators and our President had read and understood before embarking on this very poorly written and frankly bad immigration bill. The key point here is that we have two large immigration problems not one. The two problems are illegal immigration and legal immigration both of which are the result of a broken and unaddressed systems of our government on many levels. A brief cut form this excellent analysis from Yuval Levin, "Fixing Immigration":

Getting legal immigration right will be more complex than addressing the illegal inflow from Mexico. It is not a yes-or-no question but a matter of deciding how a nation of immigrants should regard those wishing to make America their home, and of translating that attitude into policy and practice at a dangerous moment in history. But if it is more complex, it is also more important. How we choose new immigrants, and how we help them to become , will determine whether we can remain what we are: a nation uniquely welcoming of outsiders yet also united around a set of ideas and ideals, a nation with a special place and purpose. That is another of the many ways in which immigration has been and can continue to be good for America.

I hope you read all three articles, form your own opinion, and influence your neighbors and legislators.

Steve Forbes on Protectionism

Here is Steve Forbes on Protectionism, and appropriate to the last post on Vietnam and Carter's foreign policy advisor, some on Carter's economic policies in, you guessed it, Forbes:

The current concern about inflation sadly confirms the staying power of bad ideas, in this case the notion that economic growth creates inflation. The Phillips curve, which posits that there is a tradeoff between inflation and unemployment, has long been discredited by events and academic research.

Since Ronald Reagan became President in 1981, for example, the U.S. has had a fantastic expansion, and inflation virtually disappeared until recently. Yet the media are full of stories and pundit head shaking that global capacity for producing goods could soon run out.

There is still astonishing confusion between price changes that reflect normal supply and demand and those that reflect monetary blunders. Moore's Law says that the real price of computing power decreases 50% every 18 months. That's productivity, not deflation. When prices for a hot rock concert soar, that's not inflation, it's demand. However, when the cost of living in the U.S. and elsewhere sharply rose in the 1970s, it was, as the late Milton Friedman never tired of pointing out, the result of excess money creation.

Central bankers finally began to grasp that inflation was indeed a monetary phenomenon, but the lesson still hasn't stuck. Investors need to realize that monetary misfires have political consequences, usually bad.

The 1970s led to a malaise in the U.S., which paved the way for Jimmy Carter's election as President. He gutted our military; undermined the shah of Iran, which led to the current hideous Iranian regime; and engendered a passivity that emboldened the Soviet Union to invade Afghanistan, which in turn fueled the rise of the Taliban and al Qaeda. Interest rates rocketed, and the stock market tanked. The only good to come out of that period of inflation was a push for the deregulation of our trucking, railroad and airline industries.

This inflation, thankfully, is very mild compared with the last one, but it could well lead to political mischief in the form of protectionism and higher taxes.

Iraq Exit Like Vietnam?

In the Washington Post, Michael Gerson in An Exit to Disaster has this:

In 1974, a weary Congress cut off funds for Cambodia and South Vietnam, leading to the swift fall of both allies. In his memoir, "Years of Renewal," Henry Kissinger tells the story of former Cambodian prime minister Sirik Matak, who refused to leave his country.

"I thank you very sincerely," Matak wrote in response, "for your offer to transport me towards freedom. I cannot, alas, leave in such a cowardly fashion. As for you, and in particular for your great country, I never believed for a moment that you would have this sentiment of abandoning a people which has chosen liberty. You have refused us your protection, and we can do nothing about it. You leave, and my wish is that you and your country will find happiness under this sky. But, mark it well, that if I shall die here on the spot and in my country that I love, it is no matter, because we are all born and must die. I have only committed this mistake of believing in you [the Americans]."

Eventually, between 1 million and 2 million Cambodians were murdered by theKhmer Rouge when "peace" came to Indochina. Matak, Kissinger recounts, was shot in the stomach and died three days later.

Sometimes peace for America can produce ghosts of its own.

Sometimes facts speak for themselves as above.

On the other hand there's this:

Remember Zbigniew Brzezinski from the Carter years; well here is what he said at Duke this spring, from the Durham Herald-Sun:

Brzezinski said there's no reason to think a bloodbath would necessarily follow a U.S. withdrawal.

"We expected that the U.S. leaving Vietnam would result in massive killings and genocide and so forth, and collapse of the dominoes in Southeast Asia," he said. "It didn't happen. How certain are we of the horror scenarios that have been mentioned in what will take place in Iraq?"

Again, I am not making this quote up although it does strike me as unbelieveable. I suppose forgeting about losing millions of lives is something we would all like to forget

Top Domestic Concerns: Protectionism

I see many signs of protectionism creeping into current politics and public opinion. I regard protectionism as being close to the top of issues that are on my list of domestic concerns. My worry list goes something like this:

Anderson Top Ten Domestic Concerns

1. Global War on Terror / fear of reversion to pre-9/11 mindset and appeasement of declared enemies
2. Protectionism / bad tariff and trade policies reversing important gains, and total misunderstanding of trade deficits and rationale behind foreign holders of US Treasury instruments
3. Global Warming / fear of adopting bad and overly aggressive and expensive programs based on bad economic models, i.e., global warming trends are real, significance of economic impact way overstated
4. Energy Independence / need movement on issue from national security, environmental and economic perspectives to firmly and realistically reach independence with environmental sustainability factors
5. Deficits / not current deficits which are very much under control but looming Social Security and Medicare, Medicaid liabilities
6. Health Care / need market based universal coverage now with strategies to slow medical cost inflation
7. Taxes / fear of higher taxes slowing economic growth; fear of myths about income inequality and state of our economy; need to simplify and overhaul tax code
8. Education / need to move toward school choice and voucher system, improve accountability and transparency of results to consumers at all levels of education; emphasize basic US history and basic economics for all citizens
9. Broken Government Bureaucracy / bloated and poorly agencies are the norm, need accountability, ability to fire employees; need to regulate down power of government worker union for federal, state, and local workers particularly in federal agencies and schools; need line item veto
10. Immigration / enforce non-hiring of illegals by businesses, secure borders, national IDs, adopt realistic and needed immigration policies from all countries based on skills and less on families, only then assimilate and integrate existing aliens in fair manner

Issues that will not probably not adopt my solutions:

1. War on Drugs / Phase out WoD outside of the United States (just give aid to South American counties outstipulations about drugs) by legalizing possession of some drugs and regulating where feasible (particularly marijuana to liquor stores, etc.) and continue control other drugs with reasonable quantity limitations, and continue criminalization of some drugs; as products more available price goes to nothing and economics for gangs and organized crime disappears, money spent for enforcement goes to hugely increased, accessible, well funded, professional treatment programs resulting in lower prison populations
2. Revamp Legal System / Eliminate hate laws and return to equal justice under the law; eliminate affirmative action; concentrate on reducing minority inmates that make up majority of prison population; institute "drug court" concept; examine and fight disparity in sentences and punishment due to income, race, drug and alcohol addiction (need rehabilitation and programs to maintain employment where possible); make Sixth Amendment right to speedy trial a reality again
3. Voting Rights / Add constitutional amendment: 1) to require all citizens to pass same test of knowledge of US history and government as required of applicants for citizenship in order to acquire right to vote just as a driver's license is based upon required standards, and 2) that guarantees and stipulates enforcement that no applicant for the license and right to vote shall be denied due to race, handicap, or any disability other than inability to comprehend, location, or education (any basic classes provide free of charge and accessible to all.

Now back to protectionism which is what I had intended this post to be all about:

[Protectionism]...is likely to become an increasing concern for the market in the months ahead,'' says Jens Nordvig, an economist at Goldman Sachs Group Inc. in New York.

A poll for NBC News and the Wall Street Journal in March found only 28 percent of Americans viewed free trade deals as beneficial, compared with 46 percent who said they were harmful. When the same question was asked in December 1999, 39 percent were positive about free trade, 30 percent negative.

``We who believe in open economies are swimming against a strong protectionist tide these days,'' U.S. Treasury Secretary Henry Paulson said June 5.