Friday 12 April 2013

The Headhunters' Guide to the Sequester

In our pick of last week's political media, we chose this article from The Huffington Post as one of our favourites of the week. In it, the writers present 100 alarming effects of the sequester in the US. Sequestration is something you hear a lot about in the US at the moment. But what is it? Well, for the benefit of readers who don't quite get it (and for our non-US readers who just love knowledge for its own sake), here's our explanation of what the sequester is and why it matters.

In short, it's a series of across-the-board cuts.

Now for the in long version.

To keep some kind of lid on the national debt, there is a legislative limit on how much debt the US is allowed to amass. Upon reaching it, the US would have to default on anything it owes. Of course, the US keeps racking up more and more debt, so this ceiling is actually increased fairly often.

In 2011, it went and hit the debt ceiling. The Budget Control Act of that year was passed in an attempt to deal with it. It extended the debt ceiling a bit, and established a committee to come up with a plan for deficit reduction (proper name: Joint Select Committee on Deficit Reduction, fun name: Supercommittee). The committee failed to reach agreement, with the Democrats wanting tax increases included and the Republicans wanting to include tax cuts.

In the case that the Supercommittee couldn't come to an agreement, the Act mandated some across-the-board cuts. Sure enough they couldn't agree, and so here's the cuts and it's these that they call the sequester.

And boy, will those cuts hurt! I mean, look at that HuffPo article! They've found 100 things that will be seriously affected! These cuts must be vast, right?

Well, it's all explained by this handy chart:




That yawning chasm between the blue and red lines is the difference due to the sequester. It's actually a cut in the rate of spending increase over the next 8 years. Which means, spending will continue to rise, just by less than it would have. And how much less will it rise by? 6%. So these deep, horrible cuts mean that spending will rise by 94% of what it otherwise would have. Painful, huh?

There's a school of thought that thinks President Obama is making the cuts as painful as possible to turn people against the idea of cutting ever again. Why would he do that? Well, it's the Republicans who shout the most about wanting spending reined in, and if these cuts hurt and it's the GOP who advocates cutting, the hope is people will keep voting for Democrats to spend them into oblivion.

But as well as that, Obama just loves to spend. The US national debt was $10.5trillion when he came into office. Nearly $5trillion of that was due to George W Bush, who you'll know is the cause of all past, current and future economic woes. You'll know that if you've ever listened to a Democrat on the economy, anyway.

But Bush raised the debt by $5trillion over 8 years and Obama has managed $6trillion in 4 years. Now that some cuts have to happen, Obama needs to make his vastly increased spending look necessary. For example, there'll be no more tours of the White House for the public, and that's something they'll immediately notice. Does this seem to you like they've gone through the budget line by line and cut out every bit of waste? It's only a little over 4 years ago that Bush left office, and he was only spending roughly $4.5trillion a year on average. Obama's average yearly spend isn't far shy of $6trillion. An average increase in spending of a third and the first thing he can find to cut is White House tours?

Worse still, news of how they should pretend that these are serious cuts took a while to reach Vice President Joe "comedy" Biden. He picked the worst possible time to pop off on holiday at the height of sequestration fever, and it was then revealed an earlier trip to London had cost $459,000 for one night's hotel stay.

The spending by politicians is an insignificant drop in the ocean when it comes to national budgets, but then so are the news-grabbing items like White House tours. In the UK, the MPs' expenses scandal had added clout because it followed the economic crisis and preceded a general election when both major parties promised big cuts. Obama eventually decided to take a 5% pay cut a week ago, though that symbolic $20,000 is dwarfed by Biden's one night hotel stay.

Look, the sequester is slight. Never mind a 6% reduction in the rate of spending growth, the federal budget would have to suffer an immediate 20% cut now just to equal what it was when George W Bush left office. Take a look again at that HuffPo article. They were overstretching themselves trying to find 100 different things considering how minor some of them actually are. And even then, look at all the mights and mays in there.

If the argument for responsible spending is lost now due to the propaganda war over these minor cuts, can it ever be won? We should all dread the consequences if it can't be.

By Jonathan Headington

Tuesday 9 April 2013

The Headhunters' Pick of the Political Web This Week (w/e Apr. 6, 2013)

In our pick of the past week, our favourite articles cover welfare, immigration and Cultural Marxism, the US sequestration and the rescue of a trapped sheep. Articles are listed chronologically. This was originally going to be posted yesterday, but was postponed due to the death of Lady Thatcher (who we'll no doubt cover extensively in the future).

 

1. Polly Toynbee - The Guardian: Benefit cuts: Monday will be the day that defines this government

This article was in fact posted on the Thursday of the week before, but very much set the tone for what was to come. Political dicussion in the UK was dominated by the changes in welfare by the coalition government.

If, like me, you're silly enough to occasionally watch the BBC, you'll know who Polly Toynbee is. She's the grande dame of left wing comment in the UK. On the one hand, she's a favourite figure of fun for those on the alleged right who can't reference her without mentioning that this champion of the poor has a villa in Tuscany, while on the other hand she's well loved by, er, the BBC.

There's a rather excellent and more detailed analysis of the woman herself here. I'll only add a recent memory of her that stands out for me: having caught her briefly on a show on the BBC News channel, she tried to justify public sector waste by saying no one ever talks about how the private sector is wasteful too. To back this up, she specified saying that no one ever talks about all the first class flights that people take in private sector. If you can see anything faulty or lacking in that argument, answers on a massive postcard.

In this article she takes the tone of a sort of Cassandra figure, wailing about the injustice of these cuts which she admits no one wll know about because no one reads The Guardian. She was quickly proven wrong though, and there was precious little else in the UK news. The other big news story of the week, a man who manslaughtered his six children in a fire, was linked to it. The relevant Secretary of State, Iain Duncan Smith, was challenged to live on £53 a week by someone who gets more than that.

The rights and wrongs of the cuts are something for a longer article. I know how I'd do things; some bits would be different, some the same. What is clear is that the system needs changing. Around a quarter of government spending is on welfare. I'm not ignorant of the fact that about 45% of this is in fact pensions and only about 4% is Jobseekers' Allowance, but the sums involved are still vast and reform should be considered across all areas, including to make sure no one's caught in a disincentive trap.

What is clear from the past week is that any suggestion of reform that involves reduced spending will be decried by the left, especially considering that the main party involved is the Tories. Toynbee's doom-laden article helpfully gives us something to measure her against though: if, a few years down the line, millions more aren't in poverty or destitution as a result of these cuts, we'll be able to assess her credibility accordingly.

 
 

2. Peter Hitchens - Mail on Sunday: How I am partly to blame for Mass Immigration

There's no point in skirting around it: Peter Hitchens is probably Headhunters Politics' pick for the greatest man on earth. Everyone who can currently call themselves a Headhunter not only admires him, but has also had the honour of meeting him. The reason and circumstances for that we'll be talking about another time, but for now let's stick to this great piece from last Sunday.

Hitchens may be unapologetically a conservative (tedious though it is to always point out, it's more necessary than ever to make note of the lower case 'c'), but he freely admits to and discusses having once been a revolutionary Marxist, and it means he can speak with clarity and accuracy about both areas of the political spectrum.

The most interesting aspect of this article isn't about immigration. Arguments about that ought to be practically intuitive, though there are still those who think any suggestion that there's a deleterious effect on either culture or the economy can only be based in prejudice.

The title of Hitchens' article may have a touch of the Spike Milligan 'Adolf Hitler - My Part in His Downfall' about it, but it's justified as it describes the mindset of a Cultural Marxist from someone who's actually been one. The idea of Cultural Marxism is surprisingly little known to many; in short, it's an attitude that seeks to undermine the established culture and institutions of a country by various means so that Marxism can move in and take over.

It doesn't declare itself, of course. It summons discord by speaking of how unjust various aspects are and shouts down those who disagree with pejorative terms ('racist' is a favourite when it comes to immigration and cultural issues, despite neither being related to race). Cultural Marxism also fits neatly with the innate attitude of youthful rebellion that characterises the young and, when it comes to politics, students. These days many are Cultural Marxists without knowing it; they just go around with their inflated sense of injustice, indignation and kneejerk impulse to call anyone who disagrees with them a racist or one of the fashionable and inaccurately named -phobias.

Of course, Marxism moving in to fill the void in an undermined and broken culture is now very unlikely. So what would fill the gaps instead? Search me...
 

 

3. Sam Stein and Amanda Terkel - Huffington Post: Sequestration Effects: Cuts Sting Communities Nationwide

And now a piece about the United States. Currently something called the sequester is going on and making the news. Readers from the UK may have heard of it but not know what it means. Readers from the US may be sick of hearing about it. Either way, I will apply my modest powers of prose to explain it in the least boring way I can.

This won't be a quick one. Let's just say, an article that claims 100 alarming results of spending cuts needs its subject covered in a bit more depth than usual for this weekly round-up, so a full post on the subject will follow here soon. Will the alarm be found to be justified? Spoiler alert: no.

 

4. Vince Soodin - The Sun: David Cameron performs ewe turn to save a sheep

And finally, in the immediate aftermath of Margaret Thatcher's death and the entirely predictable and tasteless reaction from people who kept going on about how they couldn't wait for her to die, here is a reminder that politicians are human even if we don't like them.

I don't like David Cameron, and could spend all day telling you why. But it's a reminder not to fall so completely in hate that we forget some politicians really are a little bit human. People do it whoever they agree and disagree with, and I'm as guilty as anyone. You try and ascribe motives of inherent badness, because how could anyone be so inhuman as to disagree with you?

Conversely of course, people often try to ignore or rationalise the bad actions of politicians they do agree with. It's human nature to see the best in those we agree with and the contrary concomitant. It makes us more secure in our worldviews.

So there's David Cameron rescuing a sheep. I still think he's very wrong about an awful lot of things, but at least he clearly has a bit of character. Barack Obama rescuing a sheep, now that would be really conflicting for me.

 
By Jonathan Headington

Tuesday 2 April 2013

The Headhunters' Guide to North Korea

You've probably noticed that pesky North Korea's been in the news lately, with its young leader declaring a state of war on the South and even threatening to nuke the United States. But are you feeling a little shaky on the history of the Koreas? Chris Wright is here to get you up to speed and describe the lay of the land as he sees it.
 
'Whatever happened to crazy?' Chris Rock once wondered. In world leaders, it seems to have had its heyday; the Arab spring might have taken out a few, and in the west you have to go back a couple of hundred years to find a good old fashioned fits of lunacy sort of head of state. The good news for insanity fans though is that it seems to be alive and kicking in North Korea.

Yep, it looks like we're going to have to accept it, Kim Jong Un has a full blown case of the wackadoodles. I had high hopes for North Korea's new leader; educated in Europe, maybe he would more open to gentle reform and less inclined to present himself as one of the less believable James Bond villains. It's a hope he seems to have dashed in his declaration of 'a state of war' between his nation and South Korea; a rather odd pronouncement given that a state of war has actually been in effect for over sixty years. I guess it's nice to remind people now and again.

While currently (and hopefully going forward) the Korean War consists largely of soldiers glaring at each other over a painted line and the occasional rude gesticulation between leaders, there was a time when it was very much hot. As the Second World War came to a close, Winston Churchill put forward to his Western allies a proposal for the ominously entitled 'Operation Unthinkable'. It was a plan for an attack on the Soviet Union and could potentially have kickstarted a war yet more apocalyptic than the one that preceded it. The plan, thankfully, was dismissed, and in its place an ideological 'Cold War' developed between the communist nations, headed largely by the USSR and China, and the democracies under the leadership of the United States.

The origins of the Korean War arrived in the form of an unnatural divide of the country along the 38th parallel in 1945. The north fell under the Soviet and Chinese sphere of influence, while the South fell to the western allies, most notably the USA. Things tootled along then for about five years as tensions brewed and mounted and other verbs until the North launched an invasion of the south in 1950. The US and allies intervened and pushed the communists up and beyond the border until China, in turn, intervened to push the democrats (small d) back down again. Things to and fro-ed for some time until, after three years and millions of deaths, the border was back where it began at the 38th parallel. An armistice (ceasefire) was agreed but a surrender was never given nor a peace treaty ever signed, so the war, in name at least, continues to this day.

Since then, the two Koreas have followed vastly different paths. While the South has prospered into a modern, liberal democracy, the North has closed its borders and, under a totalitarian, communist regime, has become one of the poorest, harshest, most militarised nations on earth. A demilitarised zone was set up along the border, and for the sixty years since a regional cold war has been established, pocked by occasional bursts of rhetoric and violence. Rocket attacks from the North are not uncommon and sporadic naval clashes have threatened to set a spark to the tinder box once more, though as yet it has not reignited.

Over recent years, the North Korean nuclear weapons programme has stumbled and shuffled its way into becoming a legitimate threat to the region and has poured a vat of metaphoric liquid nitrogen upon relations between the countries. The recent statement by Kim Jong Un has ratcheted things up another couple of notches and the world must hold its breath to see what, if anything, comes of it. Personally, I think (and hope) the answer will be nothing.

Somewhere in the crazed halls of power of the North Korean government there must be an adviser with some semblance of common sense, who knows an attack on the South can only go one way. South Korea has a modern, well-equipped armed forces that wouldn't hesitate to respond with force to renewed acts of war and would likely triumph even if left alone. But they wouldn't be alone. The US and NATO would again come running and help push through the communist lines, and this time no aid would be coming North Korea's way. Though they give some lip service of support to their old ally, neither Russia nor China would intervene. Both have liberalised enough not to be drawn in to a Cold War era proxy war on the side of an aggressor. They might complain, they might block resolutions, but they would not lend true support, and the triumph of the South would be inevitable.

Deep down, even Kim Jong Un must know this and I think we'll find this to be just another speech to assuage the military elite and convince them of his dedication to a united, communist Korea, while enhancing his own credentials as a strong leader. All will go on as usual; the South will keep progressing and, with a bit of luck, perhaps the North will continue its baby steps toward opening up to the outside world. And Kim Jong Un will continue to be crazy.

 
By Chris Wright

(Image: AFP PHOTO / KCNA)