Last night, yet another kid — this time, he was 16 years old — was shot just a block from my house.

In the heart of Palin Land — which that night was inside Chaifetz Arena on the campus of St. Louis University, where Republicans held a huge watch party that Sarah Palin herself attended later that night — Hutchins and French found a re-energized conservative base.

The PubDef conservative commentator and former Matt Blunt chief of staff was among the first to say “hell no” to any bailout of Wall Street firms and their overreaching CEOs.

Watch Ed on his new show in Charter cable, CCIN Channel 3 and look for his next commentary here on PubDef very soon.

Is Bush a Closet Socialist?

You laugh, but fifty years ago my Republican Party would have accused this President Bush of being a socialist and trying to undermine the free market. 

Socialism by revolution certainly is the most dramatic, but Republicans have historically recognized that socialism by evolution, a gradual and inexorable expansion of government responsibility, was in some ways a greater danger.  Fear of creeping socialism was a primary reason that Republicans were so adamantly against government deficit spending.  Republicans recognized that perhaps the ONLY way to control the growth of government was to force voters to pay for it as they used it.  Decoupling government spending from taxes almost guaranteed that the amount of money government spends would grow, and thus the government’s intrusion into our economy and lives would grow as well. 

As importantly, budget deficits undermined belief in the free market.  Explicit in a budget deficit is the idea that the free market won’t grow and prosper on its own, that government intervention and control of supply and demand are necessary for the health of our economy.  Republicans were concerned that if voters came to accept the idea that the government needed to manipulate and control the economy to insure growth, then any shortcomings in the economy would lead to demand for government to do more.  Once this cycle was started, each swing in the business cycle would result in ever greater government spending, ever larger deficits and even greater intrusion into the economy.  Who knew where this might lead - would government eventually lose confidence on people’s ability to decide which agricultural products to buy, or to oversee their children’s education? 

And Republicans recognized that at some point, deficit spending would have to come to an end – our country would actually have to pay for all of the services being provided by our government.  Modern fiscal conservatives seem to have this fantasy that in this situation the government would largely collapse, unable to pay for everything it is doing.  Republicans who had lived through the Depression realized that in a democracy the answer is far more likely to be confiscatory tax policy – government would simply increase its tax rates on those who controlled the means of production to pay for the services government provided to those who didn’t.  Republicans worried that bankruptcy wouldn’t be the end of Big Government - it would be the practical end of private ownership of the means of production. 

Republicans also recognized that supporters of Socialism were more than willing to lie about what they were trying to accomplish, so sure were they of the rightness of their eventual goal.  Republicans were cautious to judge politicians by their policies, not their platitudes; the one thing that doesn’t lie is the math of government spending.

Math has many very harsh things to say about this President Bush.  He has doubled farm subsidies, greatly increased government involvement in education, has substantially increased government spending and is running the largest deficits in the history of our country.  He no longer even bothers to promise a balanced budget – his best case scenario plans on a permanent budget deficit.  Math says that this President Bush will go down in history as the Republican president who most increased the tax burden on U.S. citizens. 

So is Bush a closet socialist?  For all of his talk of the free market, does he actually believe that more government is the answer to almost every problem?  Unfortunately, it is hard for me to think of a problem he hasn’t suggested throwing money at yet.  Certainly our historical situation has changed, and we no longer worry about government seizing the means of production.  But it is still unsettling to realize that 50 years ago a whole host of prominent Republicans would have been calling the President “Red George” and accusing him of trying to sneak socialism into our government.

PubDef is changing. As the site approaches its 3rd anniversary, we’re going to be going in a… “new direction” very soon.

On October 1st, look for something new.

I know it was inevitable, but it’s still sad.  To placate the right wing of the Republican Party, John McCain has proposed a new corporate tax cut as a means of promoting growth.  After years of sanity, McCain is now paying lip service to the fantasy of Supply Side economics.

Proponents of Supply Side economics present it as a bit of a magic potion.  They argue that reducing taxes on businesses and the wealthy will increase the pool of capital for business investment and lessen the disincentive to taking risk, which results from high taxes.  The additional investment in building new factories and plants, in increasing supply, would result in an increase in demand as well – more jobs in factories, more small businesses supporting the workers, more wealth generated for everyone.  Supply Siders argue that this additional economic activity would also increase the government’s tax collection, making up for the revenue lost through the tax cut.  Yes, the Supply Siders believe that cutting taxes for the wealthy benefits everyone and pays for itself.

High taxation could certainly keep companies and investors from taking risks; companies won’t bother trying to make more money if the government takes too large a share.  Yes, access to capital is certainly a consideration in any possible expansion - companies need to be able to finance their new factories at a reasonable cost.  However, there is nothing to suggest that either of these situations actually exist.  The growth rate under Clinton was higher than under Bush, even though the tax rate was higher; clearly people were still taking risks. Nor is there a shortage of capital; even with the recent credit crunch, the world is awash in capital.  More importantly, access to credit is a secondary factor in any consideration of adding capacity – the decision is instead based on the ability to sell the additional output.  Giving businesses access to slightly more capital won’t cause them to build new factories if they don’t think they can sell what they make.  Again, a comparison of the Clinton and Bush Administrations illustrates the point.  According to the Supply Siders, business investment and new business startups should have jumped up after the tax cuts.  They didn’t.  There was no appreciable increase in business investment during the Bush Administration, nor increase in jobs. The Bush Administration certainly doesn’t highlight the point, but the tax cuts led to more job growth in China than in the U.S.

This is not to say the Bush tax cuts didn’t create economic activity.  The wealthy, who received the bulk of the tax cuts, invested the money into private equity funds and hedge funds.  The private equity funds used this investment with very high levels of debt to buy existing companies. The hedge funds used the tax cut money, again leveraged with massive amounts of debt, to speculate on gas and oil and to purchase high-yield sub-prime mortgage bonds.  Unfortunately, it is hard to say if this economic activity was good for our country.  Many of the companies bought by the private equity funds then had to reduce employment, to help cover their interest costs.  While the sub-prime mortgage bubble did create jobs in the short run, all of these jobs are now disappearing and won’t be back for a long time.  Our country has built all the housing it will need for the next several years. 

Something else the Supply Siders got wrong was the ability of tax cuts to generate enough new activity and tax revenue to pay for themselves.  Instead, we will have added $4 trillion to the U.S. debt, if the money borrowed from Social Security is counted.  All of the money we had to borrow because of the tax cuts will still have to be repaid out of tax future revenues. The Bush tax cuts are in reality just tax deferments – future generations will have to pay more in taxes, even while getting less in government services.

McCain recognized the fallacies of Supply Side economics and the extreme danger of massive deficit spending - McCain actually voted against the Bush Tax cuts, earning him the hatred of Republican economic conservatives.  McCain actually had the nerve to point out that the emperor had no clothes. Now he is running for President.  Even if the Democrats continue with their self-immolation, McCain will still need support and turnout from the economics conservatives of the Republican Party.  He will need the Supply Siders to think that he is one of them.  It’s a shame otherwise sensible Republicans still have to pretend to believe the Supply Side fantasy.  It’s a shame that John McCain has decided he has to say something he really doesn’t believe, just to have a chance to win the Presidency.

I’ve reserved a room at the Hotel St. Marie in the French Quarter and can’t wait till my 2:00 check-in so I can finally take a shower — a nice, hot shower… Ahhhhh.

In the meantime, I’m on Bourbon Street drinking a 64oz vodka and tonic (I didn’t know it was that big when I ordered it).

With the exception of National Guardsmen and their rifles and Hummers on every other corner, life looks pretty normal here — well, normal for New Orleans, though not many people are partying in the French Quarter.

Most of the damage and power outages remain in northern Louisiana, like in St. Francisville, where the Missouri and Kansas National Guard helped clear fallen trees and distributed food, ice, water, and supplies to people.

Check back layer for video. Now that I’m back in the land of 3G Internet, I should be able to upload large files again.

Tonight we sleep in the auditorium of a local elementary school. There is no power, but the running water (cold as it may be) makes this a Holiday Inn Express compared to last night’s accomidations, which was literally nothing more than a chicken coop with a tin roof over our heads and not much more.

There is no electricity in St. Francisville. Outside it is so dark that, speaking to someone just two feet away from me, all there is is a voice.

The upside of the darkness is what it unveils above my head: stars like you can never see in St. Louis. I haven’t seen a sky like this since my summers with my Alabama cousins. It is a welcomed consolation for a very long day.

A broken fan belt forced me to make an unplanned hike near the Mississippi border. But it also allowed me to experience another natural beauty native to these parts — southern hospitality.

In the morning, subject to a sudden change in plans, I’ll be heading out early on a recon mission with a small crew led by someone familiar to many PubDef readers, Lt. Jim Avery — as in former State Rep. Jim Avery (R-Crestwood).

Check back layer for video. In fact, I’ve actually shot quite a bit of video over the past couple of days and as soon as I stay put in the same place for a few hours, I plan to edit and upload them (AT&T Wireless permitting).