All the cuddly overtures in the spirit of bipartisanship on the part of the new majority that permeated the immediate post-election period will dissolve before the swearing in of the 110th Congress. In fact, most of that talk is disingenuous in the first place, because bipartisanship in the current usage only means one thing—you must see things my way and move toward my position on the issue at hand. Give me a break! What we have in this country is a major case of what Tom Friedman calls “systematic misunderstanding”, which arises when your framework, or worldview, and the other person’s framework are so fundamentally at odds that the impasse cannot be resolved by providing more information or facts. Since the end of the Reagan era and the Cold War, this nation is essentially a 50/50 split politically and the stalemate will not be resolved in the next eighteen months, which is the length of time before the party conventions, the culmination of the nominating campaigns that have already begun. So it’s on to 2008, which will be the next watershed event and in my estimation will be the most defining election for this country since at least 1980 and possibly since 1932.

What President Bush should resolve to do now is, first, remember that for all the talk on the left about “mandate”, this election was not a repudiation of conservatism; to the contrary, there is abundant evidence that the results were as much punishment for the abandonment of conservative principles as anything else; second, he should establish the following objectives and resolve to “push the envelope” on them with the Democratic Congressional majority at every opportunity:

• Win the war
• Protect life
• Appoint strict constructionist judges
• Shrink government
• End Congressional “earmarks”
• Advance free trade
• Marketize health care and retirement finance
• Control the borders
• Expand the “opportunity society”

Third, he should make the principles that underlie these objectives clear to all and veto any bill that violates them.

Events and currents overwhelm, and much has happened since the last issue, so here’s a quick survey of a few that caught my attention:

The War: The Iraq Study Group report was nearly worthless as a strategy document, an embarrassment, but the situation on the ground there combined with the unfortunate condition of attitudes at home dictate bold and decisive moves. Let’s face it, there are only two choices: (1) commit the forces necessary to completely dominate the enemy in Iraq and prepare for a 10-year occupation, or (2) begin immediate withdrawal and abandon the country to a civil war that will likely be regional in scope and prepare to pick up the pieces and deal as a weakened superpower with the consequences of a Middle East dominated by a nuclear-armed Iran. And remember, regardless of the fate of the Bush Doctrine and no matter who is the next President, he or she will be the President of a nation at war.

The Duke Lacrosse Case: So the rape charges have been dropped. First question—what took so long? This case dissolved months ago. More important question—where is the outrage from Duke leadership that was so quick to pass judgment on the accused, from the Durham political and community leadership, from mainstream media other than Greta Van Susteren of Fox News, and from the North Carolina legal community that has surely known that this case has been a prosecutorial fraud almost from the outset? All of them should be ashamed at this travesty.

Milton Friedman, RIP: His former student, Thomas Sowell, called him “freedom man”, and his intellectual leadership on the principles of free people and free markets no doubt was the single greatest achievement in economics of the last century, rescuing public policy from the government-driven Keynesian ideology that had dominated since the Great Depression. A favorite quote, among many—“A society that puts equality ahead of freedom will end up with neither equality nor freedom.”

The Pope in Turkey: While we fight the war against Islamofacsism on the ground in the Middle East and on the home front, Pope Benedict XVI is doing his part to restore the moral clarity of the West while challenging the mainstream Muslim world to face up to its responsibilities for leadership on human rights. His November visit to Turkey was timely on both points. This is a man on a mission, not as charismatic as his predecessor, but every bit as grounded and committed, and with arguably a more difficult task on earth, but, as Tony Blankley has noted, he is not “naïve about either the nature of radical Islam or the secular humanism of late Western man”.

Civil Rights Victory in Michigan: A very bright spot in the November election was the victory in Michigan of an amendment to the state constitution banning racial preferences in public education, employment, and contracting, thereby negating a 2003 Supreme Court decision upholding those preferences in college admissions. The vote was a decisive 58-42, and is another big win for Ward Connerly to go with previous such wins in California and Washington, against substantially the entire Michigan political establishment and business community and despite being outspent by 8-1. He is doing great work here in restoring civil rights as properly understood in our Constitution.

Jeane Kirkpatrick, RIP: One of the best recruiting jobs by Ronald Reagan was to lure her from the Democratic Party to serve as his U. N. Ambassador, from where she helped him transform the world. Her classic essay, “Dictatorships and Double Standards”, later converted into a book which I highly recommend, was the definitive treatment of the distinction between authoritarian and totalitarian regimes, and helped shape policy that made sense out of the choices we made to justify defending some of the former and opposing the latter in the late stages of the Cold War. Her thesis has been proven correct in every instance, and is playing out today in both Russia and Iraq. I had the great fortune to meet and spend some time with her in the 1980’s, and she was fascinating.

Speaking of Russia: “The debate is over. Russia is not a democracy.” So say Michael McFaul of Stanford and James Goldgeier of George Washington University. And yet President Bush hasn’t given up hope for Russia or Vladimir Putin. He has much more patience than is warranted. Clearly, autocratic control has been well re-established, and the recent trail of mysterious political assassinations is eerily reminiscent of the days of Stalin. Moreover, Russia is obviously at cross-purposes with U. S. interests in the Middle East and duplicitous in the extreme in her dealings there. Jeane Kirkpatrick was instructive here in her assertion that post-totalitarian societies (of which Russia is the best example) would be too dysfunctional, as a result of the attempt to create a new social order, to return to a normal civilization or democracy under the rule of law. One possible corrective might be the capital flight that is now underway. Milton Friedman taught us that capital goes where it is welcome and stays where it is well-treated, and currently neither condition is attractive in Russia, where foreign direct investment has steadily declined since 2003. So if nothing else works, the market may get Putin’s attention.

The NCAA on Defense: It will be very interesting to see what disposition is made of the pre-election request by Bill Thomas, then the Republican Chairman of the House Ways and Means Committee, to the National Collegiate Athletic Association, essentially asking a number of tough question revolving around how major college athletic programs further the purposes for which educational institutions are granted tax-exempt status for the billions of revenue that are generated by them. His questions echo the concerns of the Knight Commission, on which I have commented previously, that the commercialization of college sports is totally out of control. I happen to share many of these sentiments, although my alma mater happens to have the second largest athletic budget in the nation. I certainly don’t support unilateral disarmament, but I hope the NCAA response to Thomas’s letter gets the visibility it deserves.

John Bolton Departs the U. N.: Only one thing to say here—a political establishment that fires a John Bolton as U. N. Ambassador can’t be one that truly wants hard-nosed realism in representing America’s interests.

Borrowed Resolutions: Finally, I hope my friend John Andrews of BackboneAmerica, www.BackboneAmerica.net, won’t mind my borrowing the suggested resolutions for conservative leaders sent along with his New Year greeting, as follows: (1) be as devout as Washington in understanding America as a nation under God; (2) be as forceful as Lincoln in upholding the Declaration of Independence and the Constitution as the political religion of the nation; (3) be as implacable as Churchill in defending the great heritage of Western civilization and the English-speaking peoples; (4) be as resolute as Reagan in pursuing victory over the Islamofascist enemy in World War III until, in his words, “we win and they lose”; and (5) fight fiercely, cheerfully, and relentlessly for our convictions and against our enemies, with one focus each morning: “What can we do to them today?”. 

For quite some time, Tom Friedman of the New York Times has been harping about the enormous subsidies that we are providing to our Middle Eastern Islamofascist and other enemies in the form of exorbitant oil prices that finance their worldwide terror activities and the armaments that are killing Americans in Iraq, not to mention the intimidating tactics of anti-American regimes like Venezuela. He has coined the First Law of Petropolitics, which states that the price of oil and the pace of freedom always move in opposite directions. He is right, of course, about the problem. But his solutions—increased taxes, higher “extraction fees”, coerced oil conservation, etc.—are flawed.

A much better idea comes from Steve Forbes. He asks us to imagine the huge setback to our enemies if the price of oil were to return to the $25-30 per barrel range. What would be required to accomplish this? Return to the days of dollar linkage to gold. Forbes notes that, from the mid-1940’s to 1971, the price of oil barely fluctuated. Then came the inflationary 1960’s followed by the severance of the dollar’s formal tie to gold in 1971, which has been primarily responsible for the disruptive oil price volatility since then, exacerbated by inconsistent Federal Reserve money supply policy.

No less an authority than former Federal Reserve Chairman Alan Greenspan has pointed out to Grant’s Interest Rate Observer that American price levels registered little change between 1800 and 1929, and he seems to agree with the need for gold constraints when he remarked that “monetary policy, unleashed from gold convertibility (in 1933), had allowed a persistent over issuance of money.”

Forbes believes, and I agree, that a return to dollar-gold linkage would stabilize the dollar price relationship of oil to gold, moderate the disruptive oil price shocks to our economy, and severely curtail the capabilities of our enemies around the world.

“Americans want government to protect their current jobs and tell them where their next job, and their children’s jobs, will come from. But government is not good at that.”—Gene Sperling, former economic advisor to Bill Clinton.

Rich Karlgaard writes in Forbes Magazine that, for all the angst about the war in Iraq reflected in the election results last November, at the margin—the margin that gave the Democrats control of Congress—the winners were slow-growth independent populists. This view is gaining in currency. It’s a feeling that people want to slow things down and sort things out.

The above quote from Gene Sperling is a reflection on this sentiment, particularly as it applies to Schumpeter’s “creative destruction”, the concept that the dynamics of capitalism require a certain faith that the job destruction of today plants the seeds for the economic vitality and job creation of tomorrow. I heard these concerns at almost every stop around the state on our recent road show on education reform. People want to know where the jobs will be for these kids we are attempting to help graduate from high school with 21st century skills—skills for what? Sperling is correct—government is not good at giving people the comfort they want, and when it tries to be protective, it always causes distortions that make the situation worse.

Now enter what some have called the “Lou Dobbs wing of the Democratic Party” and the “new populism” of roll backs of the tax cuts for the rich, limits on executive compensation, various elements of intervention to diminish inequality in wealth creation, and the various “fair trade” proposals to limit the globalized impact of creative destruction. In addition to Congressional leadership on these themes by such as Barney Frank, they will be carried by Presidential hopefuls, most prominently John Edwards with his “two Americas” message. We’ll see if these messages truly resonate with the American people.

My sense is that they won’t, and that there is yet no real policy coherence to this demagoguery. But the noise will persist all the way through November 2008, and it would be nice if President Bush would get back on offense with his “ownership society” message to counter it. In a perceptive article in the Wall Street Journal, “Economics Is Not for Actuaries”, George Gilder suggests we remember Peter Drucker’s advice: “Don’t solve problems, pursue opportunities.” He further suggests that the key to future economic viability for our people is keeping the U. S. economy open to outside investors as our population ages and as the productive center of the global economy shifts toward Asia, and that “the only thing that matters is pursuing the opportunities of global economic growth”.

There have been a number of recent appeals to Texas policy makers from business-related groups such as the Governor’s Business Council and the Build Texas Program to overhaul the structure and enhance the accountability and funding of the State’s publicly assisted institutions of higher education. In addition, the leadership of the two flagship universities, UT-Austin and Texas A&M, have appealed to opinion leaders and policy makers to recognize their combined economic and research impact on the state and acknowledge their value-added in considering their respective appropriations.

All of these appeals are well taken, and Governor Rick Perry has now responded with his own policy recommendations to the Texas Legislature. There is a lot to like about his proposals, particularly the accountability measures that will require some type of “exit exam” for graduation and hold institutions responsible for the graduation rates of their students with incentive funding.

But there are at least three items of emphasis that seem to be missing. The first is illustrated by the advice offered to his successor by departing UT-Austin President Larry Faulkner in his State of the University Address in September 2005: “Your greatest challenge will be to work out a new, stable financial model for the long-term sustenance of the university. For decades, we have been drifting away from a model built on public higher education as a public good toward one that treats all higher education, even in the public sector, as a private benefit…..we are approaching a point of no return. Will the university be forced to become essentially private to sustain its quality?” I have my own thoughts about the public-private issue which I have previously expressed (August 2003, April 2005) but President Faulkner is implying the need for a long-term strategy for Texas higher education, one that has eluded us for many years too long. Maybe the recent appeals will prompt the necessary vision to come together, but I don’t see it in the Governor’s proposals.

Second, if higher education is to fully return to its role as a driver of the public good, this criterion should be defined in terms beyond simply economic impact. The American Council of Trustees and Alumni, in its 1998 booklet, “What Every Educated Person Should Know”, reminds us that the principle espoused by G. K. Chesterton, that “education is simply the soul of a society as it passes from one generation to another”, underscores a belief that a shared understanding, a shared knowledge, help unify and advance civilization and that, indeed, the American system of self-government is uniquely premised on the need for a citizenry so educated in order to sustain it. Regrettably, over the past several decades, there has been a breakdown in this commitment to a shared core of learning and understanding—of our culture, our ideas, our ideals, our history—in short, of the foundations of our civilization and how we can sustain them. There appear to be some initiatives underway directed toward the revival of a required core curriculum, and these should be greatly encouraged.

Third, we need much more accountability for the role of our higher education institutions in the preparation of teachers for our K-12 public school system. There are islands of excellence here, but, generally speaking, the traditional colleges of education are in bad need of overhaul. Our organization, the Texas Institute for Education Reform, has developed detailed policy recommendations on how to accomplish this enhanced accountability, but it needs much more attention from state political leaders and the leaders of these institutions, and the best way to get this attention is through tying accreditation and state funding to the value-added to enhanced student achievement by their graduates.

Again, I applaud the Governor for these initiatives; on balance, they are a big step in the right direction, but we need much more.

It has been almost a year since we announced the founding of the Texas Institute for Education Reform, and I thought you might have interest in a progress report. In December, we completed our statewide road show, which consisted of presentations and other speaking engagements to opinion and community leaders in 22 cities, along with op/ed placement, media coverage, and editorial board interviews in almost all of them. In this process, we directly reached approximately 1,300 leaders with our message of the urgency of the next phase of K-12 education reform. With the valuable assistance of our Policy Advisory Board, we have recently completed our policy development, which encompasses eight high quality policy papers covering the elements of reform outlined in our mission statement. These papers will very soon be posted on our web site and published in print on a limited basis. Currently, as the legislative session progresses, we are conducting policy briefings on a regular basis for key elected officials in Austin that emphasize the recommendations in our policy papers. I would welcome inquiries on our work from Pilgrim subscribers and friends. For more information on our mission and our people, please visit TIER at www.texaseducationreform.org. 

Media critic Brent Bozell calls it the “celebrity asylum”, and that’s a pretty apt description, for in this society increasingly driven by various degrees of voyeurism, the constant 24/7 media obsession with stories on the likes of Anna Nicole Smith and Britney Spears feeds an audience obviously fixated on lifestyles and behavior the attraction to which borders on insanity. And, much worse for our future, the attention paid to these stories and the priority assigned to them by the all-encompassing popular culture is at best sending mixed messages to our youth. In fact, I wish all of it were required to be broadcast with a disclaimer, such as “the following celebrity update includes scenes from a lifestyle and life choices that represents potential hazards to physical and psychological health and are not recommended by this network or its sponsors” (good luck!).

In case any of us think we can observe all of this in detachment without feeling guilty or responsible, consider this comment from Bozell, which is dead on point: “The media cannibals who love chewing on [these celebrities], and watching their profits soar as a result, are refusing to reflect, even for a moment, on the damage done to the children who gather at the temple of celebrity worship. But we—a society that is not sufficiently ashamed of itself to denounce this cultural rot simply by walking away from it—we are the ultimate enablers.”

We can add to this not totally unrelated phenomenon the degree to which our elections, particularly at the Presidential level, are essentially celebrity-driven and have lost any semblance of serious debate about the future of this country. As a result, they are likewise covered in a superficial manner—who’s in, who’s out, who’s up, who’s down, who’s going “negative”, who’s responding, blah, blah, blah. Marshall McLuhan famously coined the term, “the medium is the message”, and, unfortunately, at an increasingly disturbing level we are making him into a brilliant prophet.

Recently I commented on one of my favorite thinkers, Peter Drucker, who died late last year. More recently, I read a review essay by Adrian Wooldridge on Drucker’s thought as described in a new book on his life and was struck by the following fact: 7 of the 10 companies that have seen the biggest growth in share value over the past five years did not exist twenty years ago! What more significant evidence of Joseph Schumpeter’s “creative destruction” is there? And what more evidence of the wisdom of Drucker’s opinion that the challenges facing companies now are more dramatic than anything seen in his lifetime? These points served to remind me of his most critical advice, which is that these new realities demand that institutions completely rethink everything. And by everything, he meant just that, but primarily a fierce focus on core competencies. My anecdotal reflection on how well American institutions “get it” and have accomplished this over the past couple of decades is fairly positive, at least in the private sector.

The major failure in adopting this mindset has been with government at all levels, and especially those government institutions that deliver K-12 education. Note the following comments (unusually Drucker-like coming from an educator) by Joel Klein, New York City school chancellor, to a CEO summit on education: “Other than global security, I don’t think there’s a more important issue facing our nation—and I don’t think as a nation we’re remotely serious enough about the issue…there needs to be a profound shift……the whole educational system is run on the myth that we can figure out through a compliance-based model a way to manage ourselves to success…..if there was ever a set of dysfunctional incentives, it’s in public education…”. Drucker would be pleased, and we need more of this attitude, but I frankly don’t hear enough of our education or business leaders talking in these terms.

If the states are to serve as laboratory models with guidance on how to fix health care finance, there are already some models to avoid. One is in California, which is essentially proposing a plan to tax, spend, and regulate the state’s path to universal coverage, with an enormous additional subsidy from the Federal government. I’m sure there are many in the new Democratic majority in Washington including a few Presidential candidates, who welcome this leadership as a possible precursor to a national plan. It’s a recipe for disaster. A slightly better but still flawed plan is the one Massachusetts adopted early last year, which is too heavy on regulation and mandates, but does offer a way to equalize tax treatment of insurance premiums. In Texas, the lawsuit reform measures that cap non-economic medical malpractice damages have already improved the health insurance market, and the Texas Association of Business has some productive recommendations for Texas policy-makers that include expansion of consumer-directed health plans, increased information on cost and quality of plans, prohibition of so-called “balance billing”, reforms to physician referrals, and expansion of Medicaid managed care. In his State of the Union message, President Bush proposed a plan that has merit, particularly in ending the preferential tax treatment for employer-provided medical insurance that is a relic of the World War II wage and price control system. This, along with continued expansion of Health Savings Accounts, represents progress, but still isn’t bold enough.

For a bolder and better path, let’s listen to the late Milton Friedman in a Hoover Institution interview for the World Health Congress a year before his death. In answer to the question as to how he would reform the U. S. health care system, other than getting the government entirely out of the health care business, which he favored, he responded with two additional suggestions:

*Eliminate the tax exemption of employer-provided medical care insurance, because there is no reason to treat medical care differently from other essential goods, and businesses could then use the money to increase direct wages so that employees could then make their own health care insurance decisions.

*Nationalize the health insurance market by eliminating regulatory barriers to purchasing insurance across state lines, which are protectionist measures that are probably unconstitutional violations of the commerce clause.

“Congress faces a choice…..: Will we allow our actions to be driven by the changing conditions on the ground in Iraq or by the unchanging political and ideological positions long ago staked out in Washington? What ultimately matters more to us: the real fight over there, or the political fight over here?”—Joe Lieberman in the Wall Street Journal, 2-26-07.

“……there is a world beyond Pennsylvania Avenue that is watching and listening. What we say here is being heard in Baghdad by Iraqi moderates, trying to decide if the Americans will stand with them. We are being heard by our men and women in uniform, who will be interested to know whether we support the plan they have begun to carry out. We are being heard by the leaders of the thuggish regimes in Iran and Syria, and by Al Quaeda terrorists, eager for evidence that America’s will is breaking. And we are being heard across America by our constituents, who are wondering if their Congress is capable of serious action, not just hollow posturing.”—Joe Lieberman on the Senate floor, 2-5-07.

These excerpts are representative of a degree of statesmanship that has become exceedingly rare in our politics. As a result, Senator Lieberman has now worked himself into position as the last remaining Truman/Kennedy/Jackson Democrat, a position that is about as lonely as it gets in the current configuration of the Congressional leadership and the mainstream of the Democratic Party. But in the process he also has developed into the Arthur Vandenberg of the current foreign policy crisis. Sen. Vandenberg of Michigan was the Republican Chairman of the Senate Foreign Relations Committee (a position occupied today by Joe Biden) who, in 1947, despite the strong incentives and desire of his party to undermine President Truman in advance of the election of 1948, strongly supported Truman in his proposals for aid to Greece and Turkey, the Marshall Plan to salvage Europe, and the founding of NATO, which spearheaded the containment of Soviet Communism that lasted until its defeat in 1991. Clearly, Joe Biden could have been an Arthur Vandenberg and hasn’t chosen to be one, while Joe Lieberman already is.

Some observers have suggested that Lieberman’s position on the war in Iraq represents a bias that should be expected from one of his “tribe”, a deeply cynical view not worthy of the statesmanship on display here. And, incidentally, more to this point, I would ask: to what tribe do I belong?