Steve Moore
9/29/2010

Blame Congress, not presidents Bush or Obama, for our perilous fiscal situation, says Moore. A strong case can be made that the people most responsible for the gigantic deficits we face today are the House and Senate Majority Leaders Pelosi and Reid. Congress controls the purse strings. When Pelosi and Reid rose to their present jobs in January 2007, the deficit was $161 billion. It had been on a downward trajectory from $413 billion in 2004. Three years later, the Pelosi-Reid Congress had added $1.2 trillion to the deficit. Of course, Bush sponsored or signed many of these deficit-raising bills, such as the bank bailouts and effective tax rebates of 2008. But the Democratic Congress passed them.

Moore is senior economics writer for The Wall Street Journal editorial page.

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Holman W. Jenkins, Jr.
9/29/2010

Inflicted on us relentlessly since the 1970s, the most mischievous and misleading trope in American politics is the idea that our energy supplies are in danger, that foreigners are out to get us, that a crisis is upon us. The endless invocation of an alleged energy crisis is used to sell deep-water drilling because it’s used to sell everything, writes Jenkins. We seem to get all the oil we want at a price we’re willing to pay. For three decades our economy enjoyed one of its greatest boom periods ever–a boom that ended, ironically, not because of oil shortages but because of overspending on giant houses far from town by people happily conditioned by the ubiquity and affordability of their energy supplies. Yet by properly pricing the risks of a deep-water blowout, we’re likely to get much safer drilling.

Jenkins writes Business World for the Journal.

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Andy Kessler
9/28/2010

The financial industry has certainly seen slow periods of stock and bond trading and sparse banking before, especially after the dot-com bust. But banks made up for it by inventing high-margin products like collateralized debt obligations, says Kessler. Now it’s hard to imagine mortgage-backed derivatives will add much to Wall Street’s bottom line for many years. There are too many traders, bankers, and salesmen to support the new level of business. Rising interest rates will be the cure for what ails the US economy by driving the dollar higher, commodities back toward their extraction values, and encouraging commitments of capital based on market mechanisms, not the wishes of the government and the Federal Reserve. But that will not be good news for Wall Street, which doesn’t thrive in a rising interest-rate environment.

Kessler, a former hedge fund manager, is the author most recently of “Grumby” (Vigilante, 2010).

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Michael Gerson
9/28/2010

The liberal establishment claims it is anti-Washington, weary of a city that betrays its idealistic aspirations. Yet this same establishment is expanding the role of the very government it claims to dislike, turning to the supposedly-hated Washington for answers to multiple social issues. Demonizing Washington eliminates the need for the administration to explain itself and make concessions, and the American people are sensing contempt from those in leadership who see government as superior to the people. Both conservatives and liberals engage in ironic inconsistencies, but ultimately, insulting the American people is not a fruitful political strategy.

Gerson writes about politics, global health and development, religion and foreign policy.

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David Brooks
9/28/2010

Brooks looks back on what good government looked like in California, where from 1911 to the 1960s its governors were pro-market and pro-business progressive reformers. In addition to their accomplishments in education, business, and public works, they focused on the middle class to build prosperity. But the model is abandoned, and Brooks says California is now in crisis. He cites declines in infrastructure spending and the interests of the coastal affluent trumping those of the inland middle class, to name a few. The solution is a return to the pro-market progressivism that built modern California with a focus on supporting immigrant entrepreneurs, averting state bankruptcy, and unleashing the state’s industrial and agricultural base.

Brooks is a New York Times columnist.

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Anatole Kaletsky
9/27/2010

Asian nations are interested in American politics because Asian leaders believe that the era of American hegemony is ending and polarized politics symbolizes its inability to adapt to global capitalism after the financial crisis. Kaletsky says Chinese economic policy is now serving as a model for other Asian countries. Japan recently chose to follow China in its currency valuation at the cost of irritating America. Instead of obsessing over China’s currency manipulation, America must understand that the rules of global capitalism have been changed for good since Lehman Brothers collapsed. The market is not always right. Sometimes it can be trusted and sometimes government intervention in needed. Kaletsky looks at other world market models and says if we continue to opt for nostalgia and ideology when it comes to economics, “the new model of capitalism will probably be made in China, like so much else in the world these days.”

Kaletsky, the chief economist of a Hong Kong-based investment advisory firm, is the author of “Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis.”

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Rufus Phillips
9/27/2010

The administration should be in no doubt that unless corruption in Afghanistan is curbed at the national and local level, we are going to lose the war. Association with the CIA has given some Afghan officials a sense of impunity, which threatens Gen. Petraeus’s hearts-and-minds effort. Fighting corruption doesn’t mean publicly shaming Karzai or dramatically arresting his top officials. Backroom persuasion and pressure by Gen. Petraeus and Karl Eikenberry, the US ambassador, would be more effective.

Phillips is the author of “Why Vietnam Matters: An Eyewitness Account of Lessons Not Learned” (Naval Institute Press, 2008).

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Edward Lazear
9/27/2010

Limiting spending increases to inflation minus 1% would balance the budget in less than a decade, writes Lazear. The inflation-minus-one rule would allow us to grow our way out of our fiscal problems without taxing a higher proportion of GDP. Eventually the deficit would vanish and with taxes remaining at historic levels, there would be no impediment to economic growth. Calling for a rigid rule may seem wishful thinking, but the alternative is a dangerous false choice between high deficits and high taxes. Failing to take a stand now, Lazear argues, will condemn subsequent generations to lower living standards and fewer opportunities.

Lazear, chairman of the President’s Council of Economic Advisers from 2006-2009, is a professor at Stanford University’s Graduate School of Business and a Hoover Institution fellow.

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Gail Collins
9/23/2010

The Senate failed to override a Republican filibuster of a defense authorization bill based on elements of procedure, which Collins says sets a new record for dysfunction. As a result, now it has failed to pay the Army. Collins notes that procedural arguments will make people crazy, and those who claim to be voting on the basis of procedure are “fibbing, delusional, or crazy” when it comes to their real motives.

Collins is a New York Times columnist.

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