Discovery News

Amity Shlaes has a perspicacious article on the 1930s Depression in The Washington Post, along with some advice for President-Elect Obama. Don't keep experimenting; it confuse and frightens investors. "Rebuild" the Securities Exchange Commission and bring the capital gains tax down to five percent.

Senior Fellow Hance Haney entertains the useful contrarian suggestion that in some spheres, such as technology, less government regulation is needed--maybe to the extent of abolition.

Abolishing the FCC stands little chance in the Obama Administration. But worthy ideas require a long road to implementation, and that one might as well start now.

One of the few Catholics who would appreciate the quotation above--from John Bunyan's Pilgrim's Progress--was Richard John Neuhaus. He was a small "c" catholic Catholic (as well as a definite "big C", too), a Christian, like C. S. Lewis, who loved all Christians--indeed, all orthodox believers--and tried to draw them closer.

In recent days word got out that he was dying. If you were a friend of "theocons" that news was "all over the Internet." In a way I don't recall witnessing before, a huge family of believers was letting one another know. People were pondering their loss and wondering whether he was irreplaceable. My view is that, yes, Richard John Neuhaus' place is irreplaceable.

Neuhaus was to orthodox Christians what Bill Buckley was to political conservatives, a lodestar of civilization, the repositor of tradition, the judge, the person who selflessly defended the code of intellectual integrity. His columns were like dinner with a virtuous but amusing and well-educated friend. You learned so much. You were so inspired. You had such a good time. It is a source of grief that his work is not going to continue.

Fine tributes will be offered. I personally thank him for his sponsorship of the group Catholics and Evangelicals Together and his broad understanding that the crisis of our culture is more serious than long attenuated denominational strife. It has to do with the question of whether truth can be apprehended at all. Richard John Neuhaus' affirmation resounded, "Yes!"

That is one reason the trumpets have sounded on the Other Side.

My colleague David Klinghoffer, an orthodox Jew, has this assessment:

"There is a lot to be said on the passing of Father Richard John Neuhaus, dean of the theoconservatives, of whom I count myself one. The phrase he is most associated with, which has to do with giving religion a place “in the public square,” has become a cliché. Yet clichéd phrases can still refer to profoundly important ideas. The idea that faith has a role to play in public discussions of public issues, notably in politics, did not seem obvious at all when Fr. Neuhaus wrote his controversial 1984 book The Naked Public Square. It’s an idea that still has legions of enemies, including among some political conservatives, even as it continues to guide those of us who followed the lead of this brilliant, principled, immensely influential Catholic priest and intellectual.

"His many friends and admirers will remember different things about him. Speaking for myself, he was both an inspiration and an irritant — one that sometimes inspired by irritating — a story I told in my first book, The Lord Will Gather Me In. I knew him from New York, when I was an editor at National Review, and he and I had a couple of intense disputatious and personal conversations about Judaism and Christianity that had a definite impact on my spiritual future, if not the one he intended.

"What readers need to know, and what they probably won’t read elsewhere, is that Fr. Neuhaus was among the few prominent conservative intellectuals who, when it came to the Darwin debate, really “got it.” In his journal First Things he published articles by ID writers like Stephen Meyer and Phillip Johnson on subjects where other conservative journals still fear to tread.

"At the Discovery Institute we’ll certainly not forget one of his last written comments, in the December 2008 issue of FT, from his popular blog-style commentary section. It was a typically incisive item on an upcoming “scientific” conference at the Vatican whose organizers have managed to define “science” in such a way that…Well, read it for yourself:

'…[O]ne watches with keen interest the planning for a March conference in Rome sponsored by the Pontifical Council for Culture, the Gregorian University, and the University of Notre Dame. The conference is to mark the 150th anniversary of the publication of Charles Darwin’s The Origin of Species, and it has been announced that proponents of “creationism and intelligent design” will not be invited. The lumping together of creationism and intelligent design is telling. They are quite distinct enterprises; the former is typically in defense of a literal reading of Genesis while the latter is a scientifically based theory of purpose or teleology in natural development. Fr. Marc Leclerc, a Jesuit philosophy professor at the Gregorian, explained that the organizers “wanted to create a conference that was strictly scientific” in order to discuss, as Catholic News Service puts it, “rational philosophy and theology along with the latest scientific discoveries.” Fr. Leclerc said that arguments “that cannot be critically defined as being science or philosophy or theology did not seem feasible to include in a dialogue at this level.” The report continues: “Archbishop Gianfranco Ravasi, president of the Pontifical Council for Culture, said the other extreme of the evolution debate--proponents of an overly scientific conception of evolution and natural selection--also were not invited.” So let’s see now: The conference is strictly scientific. In that case, there would seem to be no reason for the Church to be sponsoring it, since there are numerous other institutions that attend to the strictly scientific. Then we are told the conference will also include philosophers and theologians, but only those who are rational--meaning, presumably, those who do not raise critical questions about the strictly scientific. We are told it will exclude scientific ideologues who reject what philosophers and theologians have to say about creation, history, teleology, and human nature and will also exclude scientists who, on the basis of scientific evidence, contend, as the Catholic Church contends, for design and purpose in nature. The organizers seem to think they are being even-handed, but it is all quite confusing. One would not like to think that the purpose of the March conference is to secure for the Catholic Church a clean bill of health from [those] who condemn any deviation from scientistic ideology as anti-intellectualism.'"

There are going to be many tributes to Fr. Richard John Neuhaus, as I wrote some hours ago, but one of the most interesting is suggested by the National Review blog; namely, an article on dying by Fr Neuhaus himself, published nine years ago in First Things and describing his near-death seven years before that. For a Christian it is a compelling report and a solace. It also evokes Fr. Neuhaus in a profoundly intimate way.

President Bush in his final press conference

Less than two weeks before President Bush leaves office, the leading Iraqi blog, Iraq the Model--a light of fair and accurate reporting from inside Iraq ever since the fall of Saddam--describes the difference between the Iraq where a reporter's shoes were thrown at Bush and the Iraqi reality that is the actual Bush legacy. Who can deny the huge institutional progress? Only Sadrites and head in the sand Leftists in the West.

The corruption of language continues to debase public rhetoric. The issue is euthanasia, but it could be many others. The cultural Left thinks it can prevail largely by transforming the meaning of words. We have been warned about this for a very long time. The trouble is, there are few whistle-blowers in the media. Licia Corbella of the Calgary Herald is a commendable exception.

Is it possible that the profoundly knowledgeable Fr. Richard John Neuhaus was a high school drop-out? George Weigel, who not only knew him better than almost anyone and was instrumental in his spiritual journal as well as his professional development, seems to say so in Newsweek. I googled it tonight because I figured that George would have better insights on Fr. Neuhaus than anyone else.

Brian Wesbury is one of the best economists around and his column with Robert Stein is tops. So it is with encouragement that I read the new column in Forbes that the U.S. economy may be turning around. The key indicators are improved productivity and the dividends from lower prices (especially oil) that are acting faster and more efficiently than any federal stimulus program, past or prospective.

I support a public works stimulus program in the present environment that builds long term infrastructure --boost American economic competitiveness--getting products to market through better roads and rail connections, for example. We need that anyhow. But now the idea has gotten out of hand. It is hard to see the value of the hundreds of billions now being discussed for education, government worker salaries--and who knows what "shovel-ready" boondoggles that normally couldn't pass legislative or executive scrutiny.

Take government salaries in the states and localities. These have ballooned in the past two decades of prosperity, far outstripping the economy itself. Paring them back has to happen sometime. Some states, indeed, were beginning to run ruinous deficits even in the good times. So, institutionalizing waste in places like California now just seems a bad use of taxpayer money.

The worst of it is that the inflation let loose by poorly inspected trillion dollar spending "stimuli" will come back in due course in the form of one of the most insidious taxes that government can levy on ordinary people: inflation.

State and local executives have opted for a deep bored tunnel slightly upland from Seattle's waterfront as a replacement for the crumbling, earthquake-threatened elevated freeway, the Alaska Way Viaduct. It will carry through-traffic on Route 99 that runs the length of the West Coast not far from the newer Interstate 5, while a waterfront boulevard will handle the downtown Seattle traffic. (Matt Rosenberg of the Cascadia Center of Discovery Institute rounds up the remarkably large number of stories here.)

There is still much controversy ahead, but this is a big step and should help mobilize federal support. For 16 years the Cascadia Center of Discovery Institute has promoted a tunnel replacement for the Alaska Way Viaduct as part of an over-all transportation program for the region.

But crucial in building support for the current hybrid tunnel/surface proposal was the leadership shown in the past year by a large committee of transportation, waterfront and environmental stakeholders--from the Chamber of Commerce to organized labor to Allied Arts.

It also has been persuasive to elected leaders that outside transportation experts have been able to demonstrate the technological strides that tunneling has made in the past decade or so and the cost reductions that this progress entails.

Seattle is famous for endless "process" politics, but it is just possible that the great bulk of the populace will insist on getting this truly enlightened plan enacted. The rest of the country--especially those cities with aging elevated freeways that are under-utilizing valuable urban space--may follow developments in Seattle with keen interest.

It mostly escaped notice in the U.S., but not north of the border, that Barack Obama plans to make Canada the destination of his first foreign visit as President. Don't smirk, it's a good decision.

Canada today is again one of our closest allies, as well as our respected neighbor and our largest trading partner. Last Monday, on the 47 member U.N. Human Rights Council, Canada alone voted against a resolution that pinned blame for the current conflict in Gaza on Israel and effectively exonerated Hamas. (The U.S. is not a member of the Council.) On this issue the new Liberal Party leader, Michael Ignatieff, is more or less in accord with the government of Conservative Prime Minister Stephen Harper. Canadian candor and unity about the facts of the Gaza situation will help the U.S. as we all try to secure a peace in the region.

Likewise, Canada is seriously engaged in the allied coalition in Afghanistan. Again, our neighbor plays a constructive international role. Canada needs us in the world and, truly, we need Canada.

So, overall, U.S.-Canadian relations are good on most topics and it would be wise for a new president to show that he wants to keep them that way. But there also are worrisome issues we share--and some differences between the two countries--that pose further reasons for close consultations now.

The number one concern is the North American Free Trade Agreement and trade relations in general. During the primary campaigns Sen. Obama awkwardly pandered to protectionism and promised to reopen NAFTA. It would be pleasing if he used his trip to Ottawa to assure the Canadians that he does not really intend to do anything so unwise (or so unhelpful to American interests, as it happens). In Transition period talks with Mexican President Felipe Calderon the American President-Elect used the term "upgrade" to describe his hopes for NAFTA. A very slippery term, "upgrade", but potentially benign.

North America's economy has benefited from NAFTA and would be damaged greatly by weakening the treaty or even proposing to amend it to any great degree. So now is a good time to make clear that such action is not contemplated.

Secondary issues that also influence trade include delays at border crossings and the somewhat differing views of border security problems. Those can be ironed out, but they need to be dealt with by government heads at some point.

Another economy-related issue is energy. Canadians think they are even "greener" than Americans, so President Obama will enjoy that part of his trip. However, Canada wants to develop its oil sands fields in Alberta and needs the U.S. to show appreciation, rather than apprehension, over the potential there. Similarly, Canada will prosper and the U.S. will gain still further independence from Middle Eastern energy reliance if the two nations expedite development of natural gas.

In other words, the economy is the number one topic of interest in both countries right now, and that makes a visit by the new president to our number one economic partner totally appropriate.

Here is a suggestion, Carlton University recently convened a study on U.S.-Canadian relations that delves into myriad areas of mutual interest in a fresh and constructive manner. It would be an excellent follow-up for the Obama trip to Canada if the Carlton agenda could form the official basis for a bi-national, multi-party working group to help advise a second Obama visit to Canada, or at least a reciprocal visit by the Canadian P.M. In other words, when it comes to U.S.-Canada relations, let's get some lasting decisions formed, not just some good feelings.

The Great Depression was not like what we are experiencing now. You didn't have "Help Wanted" signs in windows of restaurants as you do now. People were "desperate for work" and would "take anything." A government job was prized because, while the pay might get cut, it was "steady." You admired the man of "grit" and "moxy" and "gumption", the one who "knows his onions," and could find work, and you despised the "leaner" or "moocher". You had pity for the hobos who came to the back door asking to do chores for a meal. "Mister, Do You Think I Could Sleep in Your Barn?" was a song of the time, along with (of course), "Brother, Can You Spare a Dime?"

But you cut off complainers with, "Yeah, things are tough all over." And you joked about Herbert Hoover's promise that good times "are just around the corner," ("so," as the song said, "let's have another cup of coffee and let's have another piece of pie").

When liquidity dried up, "hard boiled" bankers "wouldn't lend you money unless you didn't need it," so people turned to "cash only" exchanges, and then barter. Kids wore hand me downs, mothers darned socks.

Playwrights and communists presented people's troubles as political tragedies, but ordinary folks wanted escapism at the picture shows, not high drama. That, indeed, is the message of Preston Sturgis' late Depression motion picture romp, Sullivan's Travels.

Generational theory suggests that when an age cohort dies out--as the generation of those who were adults at the start of the Depression has nearly died out now--the new crowd starts to make the same mistakes over again. For those of us whose parents were around to experience the Depression, the knowledge of it comes second-hand or from books like Amity Shlaes' fine current work, The Forgotten Man.

It was a modern era, nonetheless. Television had been invented, there there was no TV broadcast system yet. People "listened in to the radio". Cars were common, but the first freeways were still in the future. "Auto touring" was something the well-off enjoyed. In the early years of the Depression, no business was spared, except perhaps bootlegging under Prohibition, but eventually Hollywood and automobiles revived, and government employments boomed. Not much else. As we all know, the Second World War pulled us out of the Depression at last.

What caused it? Hoover and FDR failed to supply liquidity, for one thing (Milton Friedman was to blame much of the economy's ills on it) both engaged in major fiscal stimulus--that was the main theme of the New Deal, after all. Some new banking and stock market regulations were warranted, but there was a tendency under Roosevelt to try to scapegoat the "economic royalists" for the nation's ills, and that frightened Main Street as well as Wall Street. Even a man as great as the former Treasury Secretary, Andrew Mellon (who later gave us the original art collection and the building for The National Galley on the Washington, D.C. Mall) was assailed and sued. People under attack generally don't make confident investors.

Regulations changed repeatedly, also adding to investor stress.

At the same time, tax rates were raised by both Hoover and Roosevelt, another huge mistake. Trade protectionism was adopted (by Hoover). These two blunders further fated the nation for a long, long slump.

The big fight over public versus private power was a waste of time, since the real need was to build the dams and get the power delivered at low cost. Government could have helped ease the way and the private sector could have delivered--just as is the case now with our neglected opportunity for nuclear power plants. Instead, the matter was turned into another stage for ideological drama.

Overall, the Great Depression of the 30s was not necessary. A cyclical downturn was turned into something far worse by government mistakes, and the resulting economic swamp became a world-wide breeding ground for totalitarian opportunists, from Nazis to Communists.

Now we face another cyclical slump, the product of living beyond our means as individuals and as a government that encouraged the tendency. Government policies helped provide incentives for reckless risk-taking, especially in home ownership.

Again we are dealing with a crisis. Government certainly has provided liquidity this time, but it hard to know the principles upon which financial bailouts have been proffered. Last spring's "stimulus" amounted to a big handout that had virtually no effect. The lesson is that monetary policy should be clearly understood and fiscal stimulus very limited.

Now, too, instead of new protectionism, we should emphasize free trade. The rest of the world needs us as customers and we need them.

We should have tax rate cuts at the top margins--not out of any misguided love of the rich--but because businessmen and farmers and pensioners need to have incentives in this environment to takes educated risks--and in the process, create jobs.

It would be a great mistake to engage in class warfare through the medium of litigation. We do not need new laws like the Lilly Ledbetter Fair Pay Act that would encourage trial lawyers to sue businesses for real or imagined mistakes. The Paycheck Fairness Act, another liberal favorite, would force feminist "comparable work" policies that would distort market forces within companies and expose those companies to endless lawsuits over supposed discrimination going back decades. Making a recession into a source for adventurous lawsuits is like holding parade inspections of an army while it is on the battlefield fighting. It is a gift to the enemy, in this case the recession.

Then there is the "card check" bill of the AFL-CIO. All by itself it can help crush small businesses by forcing unions--without a vote of workers--onto struggling companies. Yet it has passed the House once and has nearly enough votes to prevent a filibuster in the Senate,. President-Elect Obama campaigned in favor of it.

Right now, the new Administration seems to mean well, but is rudderless on the big challenge facing it and all of us, the economy. Confusion, constantly changing signals and too much experimentation contributed to the length and depth of the Great Depression. One senses similar scary ambiguities in the present situation. There is much talk of growth, but repeated examples of subsidizing failure instead.

The culture may have changed since the 30s. We have "food banks" now rather than bread lines, but human nature has not changed. Neither, for the most part, has economics.

Some people think that the worst kind of government lawsuit is one in which office-holders, in pursuit of their duty, are accused of criminal malfeasance by political adversaries. In the 80s, Mark Helpern, the author and social observer, famously characterized it as "the criminalization of policy differences."

The New York Times' Paul Krugman, a sincere admirer of his own righteousness, is of a different frame of mind, at least when the targets are Republicans. His column ("Forgive and Forget?") in the Friday edition is number one on the paper's most-emailed list of articles, so there must be some resonance for his protest that President-Elect Obama has "no right" to foreclose such legal pursuit.

Krugman, and some in Congress, especially want the new president to open criminal investigations into the war in Iraq and the war on terrorism. He is furious about "illegal wiretapping" to find terrorists, even though the courts seem to be siding with the outgoing Bush Administration that certain telephone and cyber-spying is constitutional, and the incoming Obama Administration shows little interest in losing such options.

In Krugman's telling--and in the feverish hallucinations of the Left--the Bush years were unusually rife with scandals. But any comparison with previous Administrations shows otherwise. There have been a number of independent panels that showed that the Bush Administration did not intentionally mislead the nation about WMDs or encourage such fiascos as the Abu Graib cruelties. Almost all of the Bush scandals were about process questions (the Libby case, notoriously) or were simply manufactured by the likes of The Times for political effect and had no other significance whatever.

But, maybe there really should be a Federal case made of the way the U.S. responded to 9/11, conducted the war on terrorism and the specific war in Iraq. Let it all come out. But let all sides air their grievances and suspicions, not just the Torquemadas of The Times. Some of those grievances might be aimed at The New York Times itself, as it happens. Many would be aimed at liberals in Congress.

The new president seems more prudent about this topic than his constant-adviser, Paul Krugman. Actual responsibility has that effect sometimes.

Today's festivities were a cross between Queen Victoria's Diamond Jubilee and V-J Day, a glamorous and populous three day extravaganza that apparently cost $170 million and may even have been worth it. It also was rather imperial, wasn't it, even to the sense that the new president is exerting world leadership "again". If that made the "Little America" crowd squeamish, they have kept the groans to themselves.

Barack Obama now has an historic opportunity, for good or ill. Oddly, it is not properly an opportunity for grand gestures and revolutionary innovations. Those likely would collapse for lack of popular support--and lack of money. The opportunity is rather for pragmatism, for making the existing system work better. There are some signs, in rhetoric, but also in certain appointments (though not in others), that President Obama sees his mandate that way, too.

The new president's repeated call for bi-partisanship is really an appeal to find a large majority upon which to make moderate reform inevitable. If he keeps at it, he'll find that majority, achieve a revival of the economy and probably do great good for his party. If he opts for change that punishes the productive sectors of the economy, creates disincentives for investment in new jobs, subsidizes failure and antagonizes the mores of most Americans, he may do some good for his party in the short term, but damage it and the country in the end.

For example, if President Obama forges a coalition to reduce energy consumption, including petroleum (and especially imported petroleum), increase domestic supply and alternative sources, and lower real prices for consumers, he will prevail. You can have conservation and abundance at the same time. But if he decides to force a draconian agenda of of privation and scarcity--not to mention high cost--on the country, he will go the way of Jimmy Carter.

It could go either way.

Meanwhile, in today's events The Great Republic, which is one of the most majestic and unique creations in all of history, was on splendid display. These are the rare events of representative democracy that stun the world in admiration. From its beginning, the United States (the nation of George Washington's sentiment that Mr. Obama so beautifully evoked) has sought to perform a spectacular paradox: to enoble Everyman. That America often succeeds in doing so was fully evident in the Capital these past days.

Disillusionment may, and probably will, follow. But whose heart could not swell with good will today?

For a supposedly unpopular leader, George W. Bush seemed very happy as he left Washington and as he arrived in his home state. "Nothing compares with Texas at sunset," he told a crowd meeting him in Midland. (Question: Who gets first dibs on 'Texas at Sunset' as a book title?)

The suddenly-former president had reasons to be happy, actually.

To start with, there was a public relations reason or two. In anticipation of his successor's advent, two television films were produced on the history of the White House that the Obamas will soon call home. But the films were made when the Bushes were still resident, of course, and that gave George and Laura the opportunity to present themselves to good account. They were articulate, avuncular and deeply enthusiastic about what the office, and the home, mean to them--and to America. These excellent films were run over and over the past few days and provided a pleasant accompaniment to the Obama celebrations.

Then, too, it was conspicuously clear to even the most crass media critic that the Bushes set a new high standard for Transition cooperation. That was another nice PR plus. Nobody tore out computer cables or hid office keys as some Clintonian staff did in 2000. Since the Obama crowd was strongly inclined to reciprocate the good intentions of the incumbents, everything went smoothly. "Gracious" was the apt word the new president applied to the outgoing president in his Inaugural address. A class act on both sides, I'd say, a credit to the nation and our system.

The surprising truth about the deepest motivations of people in Washington, as the one-time all-purpose official, Elliott Richardson, observed 30 years ago, is that most officials really most desire to remain useful and, therefore, relevant. Presidents and staff members who have ignored the advice of the people they replaced have made a prideful mistake. At times like this, the folks going out want to do one last service (if you'll give them the chance). It is possible that the Obama people may have been smart enough to oblige them.

The biggest reasons for the Bush smiles, however, may have been two policy victories of inestimable worth to the now-former president's reputation before History.

1) Israel has just trounced Hamas militarily in Gaza and possibly set the stage for successful negotiations, and, if not, produced a festering wound in Hamas' standing among the Palestinians. George Bush has been among the most pro-Israel of presidents and his backing indirectly helped enable this victory. Now that the fighting is over, at least for a while, Mr. Obama can follow up, stressing diplomacy and peace-making. But Bush helped give Israel the backing it needed when it counted. Whether he is given the credit yet doesn't really matter.

And 2), most importantly, George W. Bush--who could have been many things, including the president who put Latin America back in the top priorities of American foreign policy, instead was handed on 9/11 of his first year in office the mandate to confront Islamist terrorism. He did so in Afghanistan and then--to his own political cost--in Iraq. Nearly everyone on the Left eventually rallied against him, especially the man who will follow him in office. Barack Obama might not even have prevailed in the Democratic primaries if he had not been more anti-Iraq War than any of his Democratic rivals. Yet--irony of ironies!--Bush's much-criticized military campaign was proving successful even as Obama's political campaign also was succeeding. Today, as Obama acknowledged forcefully from the Capitol steps, the task before us is to exit Iraq "responsibly" (do I hear an "Amen"?) so that Iraqis will chart their own course freely, while we finish the job facing us in Afghanistan. This is not the anticipated outcome that got the Obama volunteers and donors excited over the past year, and yet few of them seem to have grasped the ironic reality. Bush does, however. (see William McGurn in The Wall Street Journal)

Bush could have done so many things that he didn't, but he had to fight the war on terrorism. He did it. He became unpopular, almost a punching bag. He persevered, far braver and smarter than his critics even now will acknowledge. And he handled himself with unassuming dignity and grace.

He suspects that History will judge him favorably. And that surely is why he was smiling as he and Laura left for Crawford.

Readers will recall my enthusiasm for The Forgotten Man by Amity Shlaes, formerly of The Wall Street Journal, now of Bloomberg news. Here she brings her subject into tight contemporary and comparitive focus.

The multi-billion dollar bank bailout last fall supposedly would allow recapitalization by getting rid of toxic debt that was sinking banks forced by law to "mark to market" their non-performing loans--that is, show them on their books at their currently distressed valuations. Unfortunately, the mark-to-market rule still applies and is still causing havoc.

There have been proposals lately for a giant "bad" bank to assign all the bad loans, with government support, freeing the currently burdened institutions to go about their business. The "bad bank" idea apparently worked in Scandanavia.

Brian Westbury and Robert Stein have another idea, and it's interesting and hopeful. It would a huge feather in the new Administration's cap if Mr. Obama were to follow their advice.

Almost every new president announces on his first day that the is tightening the ethics requirements of public service, especially for people serving in the White House staff and the upper reaches of the federal departments. All this ever does is cause pain for honest, hard working people--all for a one day news story that the public promptly forgets. But Carter did it, Reagan did it, Bush 41, Clinton, Bush 43--they all struck the heroic pose.

President Obama, true to form, froze White House staff salaries on his first day. If he froze the salaries of everyone in government, that would matter because it actually would save some money. Putting a restriction on service for people inside the White House saves almost nothing and handicaps some of the most dedicated people one will encounter in any Administration. It amounts to mere political breast-beating, at best.

Then there are the new Obama strictures on employment of lobbyists (you are supposed to boo and hiss when the word lobbyist appears). "No lobbyists need apply," sounds great to a certain kind of ethics absolutist. But it is bogus. Lobbyists are no better worse than anyone else (including people who get paid to lobby for harsh ethics legislation) and sometimes they are uncommonly well-educated and knowledgeable about public policy.

Fortunately, the new Obama rules probably are temporary and will be nullified by repeated waivers. Even folks on the Left are onto the game.

The moral, I suppose, is that there should be a new federal regulation against fake posturing on ethics. Pecksniffian virtue is practically unethical itself.

If someone is sincere about ethics he will watch like a hawk the way these federal bailout and stimulus funds are being handed out by the billions.

Democrats are using the stimulus bill to go on a wild spending spree that otherwise would have been hard to sustain, even with large Congressional majorities. Funding proposals that ordinarily would take months to review were just waved through in the House of Representatives and now are in the Senate, where the President wants prompt action. It would be hard to spend nearly a trillion dollars without some of it doing good, but that should not be the standard of good fiscal stewardship.

The country's and world's problems are the result of a credit bubble, in turn the product of banking speculation and government demands for granting high risk mortgages. Therefore, you'd think that the biggest topic in Washington right now would be the creation of a "bad bank" to absorb the bad loans and free up the credit market.

You'd think that the second hottest topic would be a stimulus bill that would induce investors to put their capital at risk to create new enterprises and, therefore, new jobs. There may be several trillion private dollars sitting on the sidelines waiting for the right time to get back into the market and invest. Right now, the federal government is undermining investors' confidence, not building it up.

The stimulus bill has many well-informed opponents and it is not popular with the public. Let's be clear, the Bush/Congressional compromise stimulus bill last fall also was largely misguided, especially the short-term "refunds" (including unearned refunds). Those checks dropped into the economy like rocks thrown in a pond; there were no ripples and nothing changed after they dropped. All that resulted was an increase in the federal deficit. So there is lots of blame to go around. But the refund checks having failed, now we face a far larger variation of the same mistake.

Some programs are worthy and will have real results in the economy, but the best examples of that are in the rather modest transportation programs. Others--I've heard 80 percent--won't even be felt for a year and a half or more. Much is just political teen agers joy-riding for Big Government, the Democrats ("I won.") having fun doing favors for such political constituencies as teachers unions and other government employees. Government workers may be worried, but they have suffered least so far.

The economic thinking for the new programs being "stimulated" is vapid. Why are we proposing in this economy to provide help with college loans to families whose bread-earners are still employed? When the need to revive the job machine, why the big effort to lower the cost of living for those already employed?

Of course, the people already employed are also the class of people who are going to pay for all the hoopla, the ordinary, hard-pressed taxpayers. The highest cost will be a debauched currency.

Even the specific recipients of the stimulus handouts should be skeptical. The help for college tuition, for example, is not really going to help parents much. It is going to help college and university administrations that are having a hard time meeting their budgets (as who isn't?) and who, once the bill is law, will promptly raise tuition to meet the availability of the new funding capacity of parents.

It is hard not to be entirely cynical about this bill. But let us acknowledge also a sincere impulse to take care of people through government. In a future blog I will address the motive force of a lot of big spending schemes; namely, the liberal desire to have the government take over the seemingly over-whelming problem of providing care for all the dependents in our population. With an aging baby boom, a big population of indigents (the homeless numbers grew even in boom times), the large numbers of physically handicapped, the mentally ill, the growing prison population, not to mention the children, how can all these people be cared for? The free market isn't up to it. Surely getting money out to people who are unable to care for themselves will help spur the economy, right?

But how is government going to be up to it, either, when the government is supported by the free market? How does Mr. Obama solve anything by redistributing the wealth when there is less and less wealth to redistribute? Before he gives it away, he might try to figure out how wealth is created in the first place.

Imagine that that a nominee of President George W. Bush to head the Department of Health and Human Services had failed--in several ways--to pay scores of thousands of dollars due in taxes, and had so failed over three years. How would then-Senator Tom Daschle have reacted?

Evidence is accumulating that the stimulus bill not only is a stinker, but also that more and more people know it.

We need 1) to clear out the bad debt. 2) We need a classic, short-term stimulus bill of relatively modest girth (350 billion) that emphasizes immediate public works. And 3) we need to induce people with money on the sidelines to invest it voluntarily to create new jobs.

We don't need to reward people who already have jobs, to pay off the education lobby, the government unions and the community organizers. That kind of thing soaks up available capital and damages the economy long term.

We also don't need legislation that is seen as punitive and rewards the trial bar; e.g., the new Lilly Ledbetter Act that the President made his first bill to sign and that will lead to more discrimination lawsuits, hardly the medicine the business world needs right now.

Money isn't infinite. You can confiscate everything people who have jobs make beyond basic living expenses and you still will not have enough government funds to cover all the dependent people in America (the poor elderly, the physically handicapped, the mentally ill, the prison population, the homeless and the children), let alone provide work for people now unemployed. Look at the mess California's over-generous politicos have gotten that state into.

People need to feel confident that if they take risks with their investment capital they won't be punished or attacked. They need to know (as in any capitalist economy) that the rules won't be changed suddenly. Right now they lack incentives to take risks again. Our economy needs to grow out of the current slump and the President needs to show that he understands this.

There are supposedly smart people on the new president's team, such as Volker, Summers and Geithner. Can they get through to him while there is time?