Michael Kennedy

Union Rule

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The situation in Madison Wisconsin has been so well covered by Ann Althouse on her blog, that I have not felt it necessary to mention it. Yesterday, the situation began to change. This is what union rule would look like:

The state Senators had passed the limited budget bill that included only the collective bargaining provisions. The Democrats had blocked the fiscal portions of the bill by fleeing the state two weeks ago. Walker has had this option since they left but he and Majority Leader FitzGerald, were negotiating with the Democrats in hopes the standoff could be ended. The negotiations (not reported by the MSM, of course) broke down when it became apparent that the Democrats are nationalizing this controversy. Walker then encouraged the Senate Republicans to go ahead with Plan B. They did and the law was signed by Walker yesterday.

Why has this issue been so inflammatory? There are even leftist academics who are advocating serious violence.

My prediction: 10 years from now public higher education, at least in many states, will have ceased to exist. 20 years from now state governments will realize that they still own the buildings and property on their former state university campuses and start charging us rent to use them. 25 years from now citizens will complain that they can’t afford to send their children to college–any college. But by then the peasant class will be so firmly established that it won’t really matter.

Welcome to the 19th century.

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Maybe I was hasty about Egypt

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Two weeks ago, I posted a pessimistic piece about Egypt post Mubarak. Now, Austin Bay has posted a pretty optimistic piece that may be better informed than mine. I hope so.

My fear was stated here:

“One of the most publicized figures outside Egypt in this story the last few weeks is a Google executive who is Egyptian.

One of the western media’s favorite Egyptian rebels is Google executive Wael Ghonim. No surprise there: if you had to choose among radical clerics like al-Qaradawi, hooligans like those who assaulted Lara Logan, and a suave, Westernized Google exec, whom would you want to interview? Ghonim was present on Friday and intended to address the crowd, but he was barred from the platform by al-Qaradawi’s security. He left the stage in distress, “his face hidden by an Egyptian flag.” Is Ghonim Egypt’s Kerensky? Well, at least Kerensky got to rule for a while.”

I went on to say:

Ghonim is one more proof, as if we needed any more, that brilliance in another field is no guarantee of common sense in politics, especially revolutionary politics. We are now about to move to the next stage, which in the French Revolution ended with the Terror. In Iran, it still goes on.

Austin Bay has the advantage of two more weeks of observation of the rapidly evolving situation. He quotes Haaretz, a rather left wing Israeli newspaper that is more hopeful. Hope is not a policy but Israelis are far more interested in the situation in Egypt than we are. They have to be as they share a border.

The revolution in Egypt is far from over. The popular uprising may have succeeded in ousting president Hosni Mubarak and most of his top associates, but the young people who led the protests at Tahrir Square are certainly not resting on their laurels.

Tens of thousands returned to the square on Friday, this time demanding to shut down the internal security authority, Amn al-Dawla. By yesterday, dozens of young people had already taken over the headquarters of the organization, notorious for terrorizing Egyptian citizens under Mubarak’s rule. The takeover was prompted by fears that organization officials were destroying evidence of their involvement in torture and other human rights violations.

This may be good news but I keep going back to the French Revolution, which set the standards for all revolutions to come.

Until the election, both Israeli and international observers agree Mohamed Hussein Tantawi, chairman of the Supreme Council of the Armed Forces, remains the key authority in Cairo. The mission facing Tantawi and his generals is to take Egypt safely through a transition period that will culminate with the establishment of civilian and democratic rule. The army is maneuvering between the establishment it knows well and the street, a new and not yet entirely familiar player.

The Army is the best hope for Egypt, as it has been for Turkey. A key factor in our failure to do better in Afghanistan is the fact that a crude and stupid Congressional reaction to the news that Pakistan had a nuclear bomb was to cut off all contact between Pakistan’s army and ours. That was nearly fatal as there are few ties between Pakistani officers and the US army, which are usually established as junior officers. These contacts were abolished by a Congress that knows little about foreign relations, especially those not published in the New York Times.

If we finally have to leave Afghanistan under unsatisfactory conditions, much of the failure should be attributed to Congress and its crude attempts to manage US policy it knows little about.

The following is good news, if true.

The Muslim Brotherhood, meanwhile, is seen as the opposition body most prepared for a general election, but the chances it will seize power are seen by Egyptians as slim. Most observers believe that the Brotherhood will assume a similar position to the ultra-Orthodox parties in Israel, influencing the government but not leading it.

Just keep remembering that the Kerensky government thought it had the Bolsheviks under control in 1917. Bay is still optimistic for another unusual reason.

The article argues that “the real power belongs to the young people [in Egypt] who managed to change political reality.” Media in Israel are missing “the generational shift taking place in Egypt and perhaps the entire Arab world.”

Sex, drugs, and rock and roll now that’s a universal language. Al Qaeda doesn’t rock and roll. A burka is not sexy. On the twitter-connected Arab street, these may be Al Qaeda’s fatal social flaws. I don’t know what Al Qaeda’s drug policy is (probably pro-hashish), but I know its alcohol policy. Hence one of the most important socio-cultural quips of the first decade of the 21st century: “Democracy, whiskey, sexy.”

But once again back to Haaretz, this time on the Muslim Brotherhood. Yes, it will be a factor but “the chances it will seize power are seen by Egyptians as slim. Most observers believe that the Brotherhood will assume a similar position to the ultra-Orthodox parties in Israel, influencing the government but not leading it.” Interesting analogy. Remember, the Muslim Brotherhood in Egypt is factionalized — but so are ultra-Orthodox Israeli parties.

We will see. I hope he is right. Unfortunately, Turkey is slipping into Islamist hands as the AKP party continues to arrest army officers on phony charges.

Here are Annie and her mother in an Istanbul restaurant. Everybody spoke English and were more than courteous.

I have tried to explain to my daughter Annie how the friendly Turks, who did so much to make her visit to Istanbul pleasant, want to arrest large numbers of Army officers, like the one who gave her a tour of the Scutari Barracks, a major Army headquarters.

This officer is a major, spoke English perfectly and gave her a tour.

I guess I will have to do a post on the history of Turkey for her. She certainly wouldn’t learn anything about it in college. She was 14 when those photos were taken. I wonder if the Turks would be as friendly now. I suspect they are because we were in Istanbul, the westernized and secular part of Turkey.

I hope Egypt will learn a lesson from Ataturk, who is still revered in Turkey, at least modern Turkey.

UPDATE: I am not at all surprised by this. If Gadafi can hold out in Tripoli, I could see Egypt carve off the eastern section as it has the largest Libyan oil fields and the lowest population. The Libyans might choose to be Egyptians if necessary.

Why this is life and death for the unions

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In reading about the Wisconsin stand-off, I ran across this thread at Newsbusters . The last comment is so important, it deserves a post, I think. I can’t verify this story but I have spent some time with union health plan administrators.

Would someone please note that Unions make the great lion’s share of their $ from negotiating “benefits”, not salaries… or collection of dues.

This is why the decoupling of the Salaries and Benefits is so important to Unions in Wisconsin. And why the Union’s have countered the way they have. They’ll give up Salary and Jobs for Teachers in a second, but they will fight to death for the Benefit negotiation position. In another life as an executive in CA, I used to do administration for two Teamster’s “Health and Welfare” benefit packages. Do your research, but you’ll find I’m correct about motivation of Unions. I also believe that the amount of money kept by Unions will be very interesting to both your viewers, and the tax payers of the US of A. The way it works is that the Unions negotiate with the “Employer” regarding how much money per member/per month they will need to support the benefit options required in Union contract. In the case of WI, they negotiate with each of the 77 counties. Then the Unions negotiate the terms of benefits with “providers”/Ins Co’s, etc. They make the lion’s share of their money off of what is called the “breakage” created by Employees choosing between plan options, and the administration of the programs.

Let me explain with an example: A Union begins by negotiating with the Employer/State. They’ll claim their buying leverage will afford Employer significant savings. They’ll end up with a 3-tiered cost structure which allows the Union a profit even with the highest benefit option available as Union already has a very good idea about what Providers will be charging. But it gets even more lucrative for Unions at this point. Let’s say high-end Blue Cross PPO coverage costs $400 for the Family tier. What a Union will do is require $425 from Employer, plus a loaded in admin fee, as a charge for all Families in the employer group. So far, so fair? But, the Union will also offer a few other plans for Employees to choose from. The Union will also have developed relationships with a few cheaper HMO plans, and lesser PPO benefit structure plans that charge, as an example, $325 and $375, respectively.

At an Open House, employees will choose what fits their needs and the Union is in line for the “breakage”. The left over breakage is then, to my experience, placed in a fund where only the Union has the checkbook. Cars, Vacations and Condo’s, oh my. The Union also makes a “commission” off of things like Pre Legal, Dental and Term Life. As another profit source, the Union also leans on the Administrator for favors I’d rather not list, but usually involving idiocy like buying thousands of dollars of “raffle tickets” and leasing cars for the Union’s Business Agents, not entirely above board. Of course, I am relating my experience, and what little I know of others who also did Union administration. I’d expect any simple research by an actual reporter would open up a Pandora’s box of Slush in the Badger State.

Very revealing comment. This is why “benefits” is such a life and death issue for the unions.

Another personal reminiscence of Reagan

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Dan’s has encouraged me to contribute this equally personal post. I was a college student when I cast my first vote for Nixon in 1960. This enraged my family as they were not only Democrats but distant cousins of the Kennedy family of Boston. My mother later claimed she had always been a Republican but I knew better. I had changed from the family affiliation after taking a course in economics. I’m not sure if what is taught today in basic economics in most colleges would have the same effect.

I was not a fan of Reagan, at first, as Governor. I still had some residual liberalism and he ran against the University of California at Berkley in his campaign. I was a medical student and well aware of the antics of many UC students and alleged students but it still annoyed me. I thought the U of California was above such criticism. The 1968 USC graduating class, sophomores when I was a senior, had a serious drug problem, a sign of the times but still frightening. As I was student body president, the Dean called me in to talk about it. From him I learned that about 22 of the 66 students in that class were using LSD. Some later never graduated or never finished internships. I gradually became more of a Reagan fan. I think it was maturity.

When Jimmy Carter was elected, I was in practice. My wife and I were taking our first trip to England. I remember being ashamed that Carter was president. I thought, “Well, he can’t be too bad. After all, he has been a businessman.” He was. He made the same mistake that Obama did. He let Congress and the Democratic majority have its head in legislation. The 1974 class of Democrats in Congress was the most leftist in history. Inflation took off. I knew doctor colleagues who were buying bags of quarters and dimes for their pension plans. Others had Swiss bank accounts with gold coins (It had only become legal to own gold under Ford). The Swiss charged negative interest of about 2% on those accounts. Two other friends, both doctors, opened a crystal shop in Laguna Beach and became the largest sellers of Lalique crystal in the world. The company brought them to France to honor them. Everybody was fleeing the dollar.

The conventional wisdom said Reagan was too conservative to ever be elected. The present rhetoric about Sarah Palin is similar to that about Reagan. He certainly was better qualified than she is but it didn’t matter. He was “an amiable dunce”(Clark Clifford) or he was a madman determined on a nuclear war. The Democrats who are trying to conflate Reagan and Obama would just as soon you didn’t remember that. I watched all the debates. I was shouting at the TV the night that Ford made his gaffe about Poland which elected Carter. I was worried about Reagan and how he would do. Here is where we all learned about his charm and his ability to slough off nasty comments by opponents. His skill with repartee and humor made him president. He looked like a reliable father figure and the attacks just bounced off. The only other president in my memory who was as immune to attack was Eisenhower but that was an earlier, pre-Nixon coup era. His “Great Communicator” title is often meant by Democrats as a slur, implying that was all he was. What I mean, and I think it is true, is that without that talent, he would not have been elected, as bad as Jimmy Carter was. That attacks on Reagan have been forgotten but they were harsh and had some resonance until the debates.

About the time Reagan was elected, I was able to purchase Treasury 5 year notes with a coupon rate of 16% and a real rate of 18%. My partner built a new custom house. The construction loan interest rate was 21%. Two neighbors built new custom homes on either side of him. When the houses were finished, the neighbors, both professionals, could not qualify for the permanent financing and the two houses went into foreclosure. That was 1979.

I following the administration closely, which had the Senate in Republican hands, but the House was dominated by Democrats and Tip O’Neill. Reagan’s most destructive enemy those first two years was Bob Dole, a true “root canal Republican.” He convinced himself that the Reagan tax cuts would lead to deficits “as far as the eye can see,” as Democrats put it. It was he, the Senate Majority Leader, who made the tax cuts effective only in 1982. As a result, the deep recession, brought on by Paul Volker’s battle with inflation, extended to the end of 1982 and cost the Republicans the Senate. Once the tax cuts became effective, the economy took off and it was clear sailing for a while, more than ten years and beyond to 2000.

Reagan’s era coincided with my becoming an adult. I wish we had someone like him now but we will not see his like again.

Afghanistan, Egypt and Obama

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I have previously posted my opinion that Afghanistan is not worth the cost. I stated my reasons why we should leave here and here and here. Nothing has changed there but a lot is happening elsewhere in the Middle East.

Egypt’s escalating tensions amount to the first real foreign crisis for the Obama administration that it did not inherit. The crisis serves as a test of Obama’s revamped White House operation. Daley, a former Commerce secretary in the Clinton administration, is now running a staff that is briefing Obama regularly on Egypt.

They have handled it badly. This is a very dangerous time for us. The Egyptian Army seems to be siding with the protesters. That may or may not last.

The left-wing Israeli newspaper Haaretz says that Egyptian army officers in Cairo’s central square have tossed aside their helmets and joined the crowd. “The Army and the people are one,” they chanted. MSNBC’s photoblog shows protesters jubilantly perched on M1A1 tanks. The real significance of these defections is that the army officers would not have done so had they not sensed which way the winds were blowing — in the Egyptian officer corps.

And even as Mubarak tottered, the Saudi king threw his unequivocal backing behind the aging dictator — not hedging like Obama — but the Iranians continued to back the Egyptian protesters. The Saudi exchange tumbled 6.44% on news of unrest from Cairo. Meanwhile, the Voice of America reports that Israel is “extremely concerned” that events in Egypt could mean the end of the peace treaty between the two countries. If Mubarak isn’t finished already, a lot of regional actors are calculating like he might be.

But Washington will not be hurried. The San Francisco Chronicle reports that President Obama will review his Middle Eastern policy after the unrest in Egypt subsides. The future, in whose spaces the administration believed its glories to lie, plans to review its past failures in the same expansive place. Yet time and oil wait for no one. Crude oil prices surged as the markets took the rapid developments in. U.S. Energy Secretary Steven Chu observed that any disruption to Middle East oil supplies “could actually bring real harm.”

Of course, Mr Chu should not worry as we have wind and solar to take up the slack. Actually, we get our oil from Canada and Mexico but the price of oil shifts with the world’s supply.

The present Obama commitment to Afghanistan is ironic since he promised to bring troops home but he has declared that Iraq was NOT necessary and Afghanistan is. This is slightly crazy. The Iraq invasion was an example of US power being applied in a critical location; right in the middle of the Middle East. Afghanistan is a remote tribal society reachable only through unreliable Pakistan. It has minimal effect on world events. We went there to punish the Taliban for harboring the people who attacked our country. Thousands of them have been killed. We have little of interest there now. We should have left last year.

With a Shi’ite dominated government in Iraq, Hezbollah in Lebanon, and a Muslim Brotherhood that may keep Egypt in neutral or tacitly accept Teheran’s leadership, how could things possibly get worse?

They can if Saudi Arabia starts to go. And what response can the U.S. offer? With U.S. combat power in landlocked Afghanistan and with the last U.S. combat forces having left Iraq in August 2010, the U.S. will have little on the ground but the State Department. “By October 2011, the US State Department will assume responsibility for training the Iraqi police and this task will largely be carried out by private contractors.” The bulk of American hard power will be locked up in secondary Southwest Asian theater, dependent on Pakistan to even reach the sea with their heavy equipment.

This is not where we want to be. The problem is that Obama and Hillary and the rest of this administration have no concept of strategy.

The Obama administration made fundamental strategic mistakes, whose consequences are now unfolding. As I wrote in the Ten Ships, a post which referenced the Japanese Carrier fleet which made up the strategic center of gravity of the enemy during the Pacific War, the center of gravity in the present crisis was always the Middle East. President Obama, by going after the criminals who “attacked America on 9/11” from their staging base was doing the equivalent of bombing the nameless patch of ocean 200 miles North of Oahu from which Nagumo launched his raid. But he was not going after the enemy center of gravity itself.

For all of its defects the campaign in Iraq was at least in the right place: at the locus of oil, ideology and brutal regimes that are the Middle East. Ideally the campaign in Iraq would have a sent a wave of democratization through the area, undermined the attraction of radical Islam, provided a base from which to physically control oil if necessary. That the campaign failed to attain many of its objectives should not obscure the fact that its objectives were valid. It made far more strategic sense than fighting tribesmen in Afghanistan. Ideology, rogue regimes, energy are the three entities which have replaced the “ten ships” of 70 years ago. The means through which these three entities should be engaged ought to be the subject of reasoned debate, whether by military, economic or technological means. But the vital nature of these objectives ought not to be. Neutralize the intellectual appeal of radical Islam, topple the rogue regimes, and ease Western dependence on oil and you win the war. Yet their centrality, and even their existence is what the politicians constantly deny.

Events are unfolding, but they have not yet run their course; things are still continuing to cascade. If the unrest spreads to the point where the Suez and regional oil fall into anti-Western hands, the consequences would be incalculable. The scale of the left’s folly: their insistence on drilling moratoriums, opposition to nuclear power, support of negotiations with dictators at all costs, calls for unilateral disarmament, addiction to debt and their barely disguised virulent anti-Semitism should be too manifest to deny.

Leftism is making common cause with Islamic terrorism. Why ? I don’t really know. Some of it may be the caricature of Jews making money and being good at business. Some may simply be the extension of animosity to Israel extending to all Jews. The people behind Obama are not free of these sentiments. His Justice Department is filled with lawyers who defended terrorists at Guantanamo. Holder seems uninterested in voting rights cases if a black is the offender. He was even unwilling to say that Islamic terrorism was behind 9/11.

Because it will hit them where it hurts, in the lifestyle they somehow thought came from some permanent Western prosperity that was beyond the power of their fecklessness to destroy. It will be interesting to see if anyone can fill up their cars with carbon credits when the oil tankers stop coming or when black gold is marked at $500 a barrel. It is even possible that within a relatively short time the only government left friendly to Washington in the Middle East may be Iraq. There is some irony in that, but it is unlikely to be appreciated.

I would add a bit to this from one of my favorite essays on the topic. It compares Gorbachev to Obama.

Nor are the two men, themselves, remotely comparable in their backgrounds, or political outlook. Gorbachev, for instance, had come up from tractor driver, not through elite schools including Harvard Law; he lacked the narcissism that constantly seeks self-reflection through microphones and cameras, or the sense that everything is about him.

On the other hand, some interesting comparisons could be made between the thuggish party machine of Chicago, which raised Obama as its golden boy; and the thuggish party machine of Moscow, which presented Gorbachev as its most attractive face.

Both men have been praised for their wonderful temperaments, and their ability to remain unperturbed by approaching catastrophe. But again, the substance is different, for Gorbachev’s temperament was that of a survivor of many previous catastrophes.

Yet they do have one major thing in common, and that is the belief that, regardless of what the ruler does, the polity he rules must necessarily continue. This is perhaps the most essential, if seldom acknowledged, insight of the post-modern “liberal” mind: that if you take the pillars away, the roof will continue to hover in the air.

In another passage:

There is a corollary of this largely unspoken assumption: that no matter what you do to one part of a machine, the rest of the machine will continue to function normally.

A variant of this is the frequently expressed denial of the law of unintended consequences: the belief that, if the effect you intend is good, the actual effect must be similarly happy.

Very small children, the mad, and certain extinct primitive tribes, have shared in this belief system, but only the fully college-educated liberal has the vocabulary to make it sound plausible.

With an incredible rapidity, America’s status as the world’s pre-eminent superpower is now passing away. This is a function both of the nearly systematic abandonment of U.S. interests and allies overseas, with metastasizing debt and bureaucracy on the home front.

The turmoil in Egypt is a test that, I fear, Obama and his Secretary of State, will not pass.