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Saturday, February 28, 2004

HERE'S HOW THE GAME IS PLAYED    Dave Hogberg documents how Walmart got shaken down for political protection money. Learning the lessons of Microsoft.

Posted by Donald L. Luskin at 4:35 PM | link  

Recent comments about how we live in dangerous and chilling times (after 9/11) should be seen in perspective to 1968, when:
25000 American soldiers had been killed in 3 years of the Vietnam War.

The leading proponents for change (Martin Luther King and Robert F. Kennedy) were assassinated.

The Soviet Union was considered a nuclear threat that could wipe out the United States in a day.

Protesters against the war in Chicago during the Democratic National Convention were stopped with police-state tactics.

I have posted rare video tape footage of CBS News on April 4, the day Martin Luther King was assassinated, and ABC News coverage of the Democratic National Convention from Aug 28, 1968, the night of the largest riots, the fight over the Vietnam War plank (whether to change Democratic party plank to allow Vietnam the right to determine its own government and stop bombing the north) and Vice President Humphrey's nomination:

Posted by Donald L. Luskin at 4:24 PM | link  

CAN YOU CALL THE FBI FOR PURE MALICIOUS STUPIDITY?    Here's a letter typical of the hundreds I've received on my series of articles on Oracle's attempt to acquire PeopleSoft (1, 2, and 3).
After reading all of your articles regarding the proposed Oracle/Peoplesoft hostile takeover, I have to admit your prejudiced opinions in your most recent Smart Money article "Power to the PeopleSoft" have reached an all time high for rampant capitalist hysteria mongering.

Your selfishly pathetic complaint, that Peoplesoft's Craig Conway, & the Board members haven't let you or the "institutional investors" you "advise" get another overly extravagant capitol [sic (!)] gain, at the expense of existing investments over many years, made by Federal and State governmental agencies, (paid for with taxpayer funds) and the thousands of current business customers of Peoplesoft, or of the thousands of employees who would be dismissed, is sadly laughable.

You rolled the dice if you still hold the stock, just like in Las're a proverbial "leach" [sic] on our nation's society. You and other's like you, provide nothing but a speculative urge, to enrich yourselves at anyone's expense. If you don't like the stock......sell it....period! Take your lumps for your foolishly choosen position, and move on. Your disgusting greed is what is ruining this country!!!

Thank goodness for the Anti Trust division of the Department of JUSTICE.......for without them, who would be able to stop the "God" complexes of corporate used car salesmen, like Larry Ellison, from ruining even more businesses and livelihoods. The courts are presently overflowing with similar assorted "smart guys" like Ellison and you whose only motive in life is to "get more money", by any means, damn the consequences for anyone or our nation.

You are such a hopelessly indignant little man indeed, to cry over losing your presumptuously self righteous imaginary monetary gains. GROW UP!!!!

Posted by Donald L. Luskin at 12:11 PM | link  

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The New York Times reported yesterday that Enron is no longer the number one contributor to George W. Bush's campaign war-chest. Why?
Campaign finance experts say the change symbolizes a continuing shift in the president's financial support, moving away from his usual backers like oil and gas companies and toward financial-services companies that have become increasingly supportive.
I have to wonder how the anonymous "experts" that the Times always summons up would explain why Bob Hope is no longer entertaining at White House functions. Does that symbolize a continuing shift toward comedians with more of an "edge" in today's more sophisticated world?

Posted by Donald L. Luskin at 10:10 AM | link  

THE QUOTABLE RUMMY    Love him or hate him, you can't say he's just another mealy-mouthed bureaucrat.

Posted by Donald L. Luskin at 10:01 AM | link  

Friday, February 27, 2004

Larry Ellison is one of the richest men in the United States. But as an investor, I'm not jealous of the founder of Oracle. Let me tell you why.

I happen to live quite near him in a town in Silicon Valley, and almost every day I drive by the site of the astonishing new home he has spent the last several years building. On what is perhaps the most expensive residential acreage not just in California but in the world, he has built a 45-acre Japanese palace and installed himself as shogun.

You can't drive by it without thinking of an old joke: "What's the difference between God and Larry Ellison? God doesn't think he's Larry Ellison."

I couldn't begin to match the splendor of his home. But there's one thing I can do that Larry Ellison can't do. I can buy shares of PeopleSoft any time I want. After all, it's a public company. All I have to do is put in an order, and the same is true for you. Capitalism is a wonderful thing.

But not for Larry Ellison. When he wants to buy PeopleSoft and right now his company, Oracle, wants to buy the whole thing he has to go hat in hand to bureaucrats in Washington and Brussels and try to convince them that buying PeopleSoft won't make him a criminal.

That's right, this is another column about Oracle's attempted hostile takeover of PeopleSoft. Why? Because email continues to pour in from readers about my two previous columns on it (I'm Mad as Hell at PeopleSoft and We, the PeopleSoft). And because on Thursday the Department of Justice and the attorneys general of six states announced that they would block the acquisition on antitrust grounds.

Let's set aside the matter I reported in my earlier columns, that PeopleSoft Chief Executive Craig Conway has been lobbying the DOJ to block the deal, seizing the antitrust laws for use as his own personal weapon in a business rivalry. Let's set aside that shareholders like me are justifiably up in arms because Conway's apparently successful strategy will likely prevent us from selling to Oracle at the tender price of $26 nearly five bucks better than the current price. But before we set all that aside, let me just say as a shareholder: Thanks for nothing, Mr. Conway.

Beyond all that, there's a much larger issue at stake here. It's the issue of how antitrust law is going to be interpreted and enforced in this country, and what risk that might present for our economy.

To block an acquisition on antitrust grounds, the DOJ must assert (and possibly defend in court) that the acquisition will reduce competition and raise consumer prices in a particular product market. The narrower the definition of "market," the more likely the acquisition will be seen as anticompetitive.

Let me make an absurd example, just to drive home the point. Suppose that you own a company that competes with two other companies making red, button-down short-sleeved shirts. You want to achieve greater manufacturing efficiencies, so you decide to acquire one of your two competitors. You think maybe those efficiencies could even allow you to offer lower prices to your customers and help you make your red, button-down short-sleeved shirts a bigger and bigger factor in the clothing market.

But no, the DOJ tells you that you can't do it. It decided that there's no such thing as the clothing market. Instead, it decided that there's a separate and distinct market for red, button-down short-sleeved shirts, and it couldn't possibly allow competition in that market to dwindle to two from three (because its computer models say that fewer competitors in a market means higher prices, no matter what).

Sadly, this example isn't so absurd. Last year the DOJ blocked the acquisition of Dreyer's Grand Ice Cream by Nestle on the grounds that it would narrow competition to two from three in what it called "the market for super-premium ice cream." Did you even know there was such a market? Well, you do now. The two companies ended up doing their deal, but they had to agree to have the DOJ dictate to them all manner of product and distribution divestitures.

The DOJ is arguing just as Conway scripted them to that Oracle and PeopleSoft are two out of three competitors in the narrowly defined market for enterprise human-resources and financial software systems serving the very largest corporations and governments. The third one is the leader in the market, SAP. By including not only a description of the product but also a description of the particular kind of customer who currently uses it, it's like talking about the market for red, button-down short-sleeved shirts for blonde, left-handed piano players. Now that's a narrow market.

But wait. Surely the DOJ will take into account that the market is ever-changing, especially the market for technology-driven services. Surely it recognizes that even if the competitors dwindle to two, there's nothing stopping a new competitor from arising on the scene. In fact, Microsoft has made it clear that it intends to spend billions to compete in this very market.

Guess again. The New York Times reported Friday that R. Hewitt Pate, the newly installed assistant attorney general of antitrust, has stated that "the agency's lawyers did not consider the possibility of future competitors in making their decision."

That absurd confession by Pate may be the wedge Oracle needs to fight the DOJ in court, as the company announced Thursday that it'll do.

If Oracle can't prevail, then PeopleSoft's shareholders can kiss Oracle's $9.4 billion deal goodbye. And the American companies PeopleSoft and Oracle can continue to play second and third fiddle to Germany's SAP, while the politicians babble about losing jobs to overseas competitors.

Just how much devastation are we going to let antitrust law wreck upon our economy? Does it take a genius to see that when the DOJ won its antitrust judgment against Microsoft, it just happened to be nearly the exact moment the Nasdaq topped out back in 2000? Is it too great a stretch to wonder whether WorldCom would've had to cook the books if the DOJ hadn't blocked its plans to merge with Sprint at about the same time?

So don't envy Larry Ellison as he sits in his private Japanese palace. For the rich really are different. They are far less free. You and I can buy PeopleSoft. Larry Ellison can't.

On the other hand, don't take too much comfort. Sure, we can buy PeopleSoft now. But thanks to the DOJ, we live in an economy being increasingly throttled by intrusive and capricious antitrust enforcement.

In fact, give the Department of Justice a couple of more years and maybe it'll figure out a reason why you and I can't buy PeopleSoft either. #include file="inset2.asp" -->

Posted by Donald L. Luskin at 3:22 PM | link  

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We're still investigating.

Posted by Donald L. Luskin at 2:37 PM | link  

A BI-PARTISAN CHORUS    Lying in Ponds adds its voice to the bipartisan chorus calling for the New York Times to reform its columnist corrections policy. Hat tip: The National Debate.

Posted by Donald L. Luskin at 9:26 AM | link  

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Krugman finally manages to say something on trade in today's column -- the one issue on which he arguably has any real expertise -- once the issue has broken out onto the covers of Time, Newsweek, The Economist and Business Week all in the same week. His commitment to free trade has been so strong historically that he's even forced to parenthetically criticize a Democrat here (Chuck Schumer, as it happens). But then, after reminding us of his great personal expertise as an economist in this area, he says he will spare us all the economists' arguments. In other words, he will not speak on the subject as an expert. Instead, he will speak on it as a political hack. So it all devolves quickly into an endorsement of John Kerry, a swipe at Bush, a call for Hillarycare and so on and so on... sigh.

Posted by Donald L. Luskin at 9:01 AM | link  


Posted by Donald L. Luskin at 3:09 AM | link  

Thursday, February 26, 2004

LOVE THOSE ROGUES    Friend David Duval sends this link to coverage of the Lou Dobbs Rogue Fund -- a collection of America's most evil capitalists (you know, "exporting American jobs" and all that stuff). You guessed it. The fund has had fabulous performance.

Posted by Donald L. Luskin at 7:47 AM | link  

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Should those of us who believe in economic freedom take heart when New York Times columnist Thomas Friedman defends outsourcing of white collar jobs to India on the grounds that it actually means good business for the US?
...when I came to the 24/7 Customer call center in Bangalore to observe hundreds of Indian young people doing service jobs via long distance answering the phones for U.S. firms, providing technical support for U.S. computer giants or selling credit cards for global banks I was prepared to denounce the whole thing. "How can it be good for America to have all these Indians doing our white-collar jobs?" I asked 24/7's founder, S. Nagarajan.

Well, he answered patiently, "look around this office." All the computers are from Compaq. The basic software is from Microsoft. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke, because when it comes to drinking water in India, people want a trusted brand. On top of all this, says Mr. Nagarajan, 90 percent of the shares in 24/7 are owned by U.S. investors. This explains why, although the U.S. has lost some service jobs to India, total exports from U.S. companies to India have grown from $2.5 billion in 1990 to $4.1 billion in 2002. What goes around comes around, and also benefits Americans.

Oh, I suppose he gets to the right answer. But it's based on the moral premise that a business practice should be permitted or forbidden based on someone's judgment about whether it helps America -- rather than on the first principle that the owner of capital should be able to deploy that capital to hire anyone he wants anywhere he wants for whatever reason. So it rings hollow when Friedman congratulates himself in the column's first paragraphs:
I've been in India for only a few days and I am already thinking about reincarnation. In my next life, I want to be a demagogue.

Yes, I want to be able to huff and puff about complex issues like outsourcing of jobs to India without any reference to reality.

Unfortunately, in this life, I'm stuck in the body of a reporter/columnist.

Which is all just a tricky way of saying that business activity should be regulated by smart people in positions of authority, and that Tom Friedman thinks he's the smartest guy in the room. He should decide. And fortunately, this time, his decision happens to coincident with free market. Next time maybe it won't be.

Update... An alert reader reminds me of Friedman's last column in which he sang in the demagogic anti-Bush chorus on this issue, saying "managing this phenomenon will require a public policy response something more serious than the Bush mantra of let the market sort it out." Apparently since Sunday the market has sorted it out.

Posted by Donald L. Luskin at 5:52 AM | link  


Posted by Donald L. Luskin at 2:40 AM | link  

Wednesday, February 25, 2004

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When Timesman David Cay Johnston wrote to berate me for showing insufficient respect for his new book on tax evasion, I quoted him saying
"...a number of conservative tax experts have praised it because it is even handed, based on solidly researched facts and is not ideological... I hope you read my book because every single reader I have heard from has spoken highly of my work."
Well, I will read it when he sends me the autographed copy I asked for. But in the meantime, reader Jim Glass has come up with the following quotations from a lengthy review of Johnson's book by Sheldon D. Pollack, J.D., Ph.D., University of Delaware, in a recent issue of Tax Notes (the professional journal often cited praisefully by Paul Krugman -- here, here and Let's just say that the reviewer's opinions of the book don't quite match the author's claims.
Perfectly Legal is "an important account of the IRS's declining state of health and its increasingly moribund capacity to enforce our tax laws... [with] solid investigative reports on a wide range of topics, expanding on what previously appeared in the Times .. the greatest contribution in Perfectly Legal [is] exposing the scandalous lack of resources given to the IRS..."

It also is "infuriatingly simplistic in its political assumptions" and a "populist tirade against the super rich."

" ...what is wrong with Perfectly Legal? Basically, the problem lies in Johnston's distinct and loaded ideological perspective, which rests on the dubious premise that the tax system is designed to 'subsidize' the super rich and 'cheat' the ordinary citizen/taxpayer.

"'[O]ur tax system now levies the poor, the middle class and even the upper middle class to subsidize the rich.' We hear this over and over throughout the book. Those who already believe this stuff out of deep-rooted ideological conviction will love to hear it repeated in the book. ...The rest of us get a bit tired."...

"Johnston simplistically portrays the tax system as designed for one purpose: 'subsidizing' the rich"... but this obviously is contracted by plain facts.

"The top 50 percent of taxpayers shoulder 96 percent of the burden of the individual income tax, while the bottom 50 percent contributes virtually nothing to the Treasury ... 4 percent of the individual income tax isn't enough to fund the government for a week...

"Even a 12 percent reduction in the top tax rate (from 39.6 percent to 35 percent) does not amount to a subsidy. There is no positive cash flow in favor of the rich on account of the federal income tax. ....

"[T]he tax system may not redistribute wealth much as Johnston wants. But that hardly means the tax code is rigged to take money out of the pockets of the middle class and give it to the wealthy."

So Johnston thinks not taking enough *from* the rich is giving a subsidy *to* them. Moreover, the basic premise of the book -- expressed in its title -- just isn't backed by what's reported in it. "One last complaint with Johnston's book: Its title is misleading. Few if any of the scams recounted in Perfectly Legal are legal, let alone 'perfectly legal.' "...most of the abuses described in Johnston's book are not just questionable or aggressive applications of current law, but outright illegal scams! The problem isn't so much that the system was rigged, but that existing laws are not rigorously enforced. There is virtually nothing that is 'perfectly legal' in the bogus claims of the tax protesters or the confidential tax opinions sold with the COBRA tax shelter and other similar schemes [that Johnston complains about].

"That confusion over what's legal and what's not extends to a tax avoidance scheme that Johnston condemns as a scam simply because it benefits corporations. Johnston despises the corporate inversion that recently made headlines and raised the ire of Congress, but he doesn't seem to know exactly what's wrong with it.

" Johnston sees the inversion as just another corporate rip-off -- even worse, an 'unpatriotic' rip-off that can save some big multinational corporations millions of dollars in taxes.

"But there is nothing unpatriotic, let alone illegal, about a multinational business reorganizing its corporate structure so as to minimize its worldwide taxes, even if it means Treasury ends up collecting less revenue ... Legality is the issue, and it's a perfectly legal transaction under the tax code.

"Of course, there is great potential for abuse and tax evasion after the corporate inversion, as the new U.S. subsidiary ...attempts to bail out U.S. taxable income [to] the Cayman Islands or Bermuda. But that is NOT perfectly legal, and the IRS expends considerable effort in policing abusive transfer pricing practices...."

"Whether Johnston realizes it or not ...his greatest contribution" is reporting the fact that the IRS lacks the resources it needs to adequately police such situations -- not his political analysis at to the reasons why.

Posted by Donald L. Luskin at 10:08 PM | link  

TEST YOUR REGIONAL DIALECT    It's fun, and it's free. Thanks to Ken Prevo.

Posted by Donald L. Luskin at 9:53 PM | link  

THESE TIMES GUYS ARE SO THIN SKINNED (2)    Waxman has a stalker!

Posted by Donald L. Luskin at 9:49 PM | link  

KRUGMAN MAKES THE ONION    Now he's really hit the big time. Thanks to several readers who pointed this out.

Posted by Donald L. Luskin at 9:44 PM | link  


Posted by Donald L. Luskin at 10:14 AM | link  

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They love to dish it out, but they sure can't take it. Look what David Cay Johnston wrote about my National Review Online column's mention of his book (which he told me he discovered on Nexis, no doubt while indulging in the delightful narcissism of searching for references to his famous self). First, here's what I wrote about him (it's hardly even about him, actually -- it's about the way Paul Krugman cited him).
Krugman claims that the drop in federal revenues "probably reflects an epidemic of tax avoidance and evasion" by "wealthy people who don't feel like paying taxes." Krugman's evidence for this? None, really, except to recommend that readers buy a book on the subject by his Times colleague David Cay Johnston. Operators are standing by.
Here's Johnston's note to me, in part (I'm editing to leave out several examples of tax evasion by "the rich" cited in his book):
1. I suppose Paul Krugman could be considered a colleague, but since he works for the Op-Ed page and I work in news and they are totally separate that seems a stretch.
For God's sake... Johnston continues:
2. My book PERFECTLY LEGAL, about which you wrote "operators are standing by" is on the bestseller lists -- and a number of conservative tax experts have praised it because it is even handed, based on solidly researched facts and is not ideological... When law enforcement fails to do its job that is usually a matter of grave concern. That you treated my book so flippantly reflects, I hope, your attempt at humor and not a cavalier attitude toward criminal conduct when it comes to taxes. I hope you read my book because every single reader I have heard from has spoken highly of my work.
Well, like I said: "operators are standing by." Even as he chides me for not praising his book in a column that isn't even about his book (for guys like him, it's always about me), he's trying to get me to read the damn thing. I told him that if he sent me a free autographed copy I would.

Posted by Donald L. Luskin at 12:16 AM | link  

Tuesday, February 24, 2004

IF ONLY IT WERE THIS SIMPLE...   A charmingly naive op-ed from Thomas Sowell in today's Journal. Sowell argues that economic fallacies dominate the public debate (true) and that economic truths lay moldering in textbooks unknown to the electorate (sort of true). What he doesn't mention is that those same textbooks include more lies than truths, and that public intellectuals like Paul Krugman are all too skilled at pulling the lies from the textbooks and credentialling them with their lofty origins. Sowell should confront the reality that the real conflict here isn't between ignorance and knowledge. It is between lies and truth. The public debate will always be dominated by fallacies -- the real question is whether it will be shaped by deliberate lies or deliberate truths.

Posted by Donald L. Luskin at 1:07 PM | link  

SO WHAT ARE WE WAITING FOR? break up the BBC? Next target: PBS.

Posted by Donald L. Luskin at 1:02 PM | link  


Posted by Donald L. Luskin at 1:01 PM | link  

WHAT WILL BRAD DELONG SAY?    Bloomberg's Caroline Baum quotes me defending trickle-down economics and quoting Ronald Reagan!

Posted by Donald L. Luskin at 9:14 AM | link  

Monday, February 23, 2004

NOTES FROM THE PC HOT-ZONE    From a reader who asked to have his name withheld:
Thank you for posting that exceptional story from City Journal about the "infectious PC movement." As a Phillips Academy Andover graduate ('99), I can verify the depiction of one of our school deans, Mr. Robert Edwards. Let me first say that Mr. Edwards is indeed a friendly, amiable chap who loves the school and enjoys impacting the student's lives. Unfortunately, the message he preaches is devastatingly divisive, as the article goes onto describe. I went to Andover from a small town in Pennsylvania, where my two closest friends are a Philippino immigrant, and a gentleman whose mother is from a west African country, and a white father. It was clearly obvious that my friends didn't look like me, but that was never an issue. We were three kids from a catholic school that had the same interests and developed a strong relationship. Each of us knew of our heritage, and did not need some "academic" dean to generalize about who came from what. It troubles me to think about the "education" and "awareness" that my friends may have been subjected to. 40 years ago we likely would not be so close. It angers me that people like Mr. Edwards are constantly try to divide America, rather then working toward a race-neutral country, where people will think of themselves as Americans above all else.

Posted by Donald L. Luskin at 4:18 PM | link  

AND WHO CARES?    Naomi Wolf -- the woman paid $15,000 a month by Al Gore's presidential campaign to teach him to dress like an "alpha male" -- has gone public after twenty years of blessed silence with the claim that she was "sexually encroached upon" by Yale professor Harold Bloom, who she says put his hand on her thigh. And she can't figure out why Yale officials aren't returning her calls now or taking her seriously. I couldn't bring myself to wade through the whole self-pitying, self-congratulating article. But it seemed that the matter of Yalie Bill Clinton and Monica Lewinsky was not mentioned. Thanks to reader Jill Olson for the link.

Posted by Donald L. Luskin at 1:12 PM | link  

CONGRATULATIONS TO AN OLD FRIEND    Dave Nadig is a dad for the second time... and the birth is blogged (all fifty hours of it!).

Posted by Donald L. Luskin at 12:29 PM | link  


Posted by Donald L. Luskin at 12:21 PM | link  

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...conservative ones, that is. Suddenly Salon is on the case, with William Safire's pro-war columns in the cross-hairs. Funny, but the names Krugman and Dowd don't seem to be mentioned.

Posted by Donald L. Luskin at 12:20 PM | link  

Sunday, February 22, 2004

ABSURD REICH    Reader Marc Segan notes,
Actually the Friedman prescription from Robert Reich is worse than you've explained -- it's internally self-contradictory isn't it? He's saying that we need MORE unionization in precisely those jobs that are NOT threatened by outsourcing? That's an ideologically driven non-sequiter.

Posted by Donald L. Luskin at 4:50 PM | link  

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Just got this in my inbox from an Army reservist serving in Baghdad:
I am writing from Saddam's old presidential palace in downtown Baghdad. Please withhold my name.

Concerning your comments on The New Yorker's coverage of the use of the terms "deserter" and "AWOL." As you are a regular contributor to National Review, I am sure you have seen the piece last week by Byron York. As a member of the Army Reserve, I understand immediately what the young Lieutenant Bush went through. For a "good year" in the Reserves or Guard, one needs to earn 35 retirement points in addition to the grant of 15 membership points every year. Those points can be earned by being a member of a unit that drills once per month and a 15-day Annual Training, for 39 days per year of duty.

However, positions are not always available in a unit for all skills or ranks. That was certainly the case as the Vietnam war wound down. Even today, many thousands of reservists, like me, are individual reservists. We can still earn "good years" and even advance in rank, as long as we do some duty at sometime, some where, in order to get an efficiency rating. I can only manage a few days of active service per year, and earn the rest of my points via correspondence courses. Any reservist of Guard member can earn the required 35 points in a single month or less per year. Lieutenant Bush did exactly that for his sixth year of good service in June and July 1973. As for the period May 72 to May 73, Lieutenant Bush once again earned his 50 points (15 points for membership, and then at least 35 for duty or courses), serving in five separate months, including 14 days in May 1973 before his fifth "retirement year" ended.

Such a pattern of service is so common in the Reserves and Guard that it doesn't even deserve comment. Unit members quite often miss unit drills due to business, family, health, or personal reasons. If such absences harm the unit or hamper the ability of a Reservist or Guardsman to demonstrate proficiency, then this will show up on the efficiency reports or in the discharge papers. Granted, the leftish intellectuals to whom the NEW YORKER sell their magazine, and who dominate the leadership of the Democrats are certainly more knowledgeable than the rest of us about draft dodgers and draft resisters. It is terribly obvious, though, that they know very little about the US military, including the reserve forces who have shouldered a good portion of the defense burden since 1990.

Of course, since Republicans cannot adequately present such information is telling about their political instincts and skills.

Posted by Donald L. Luskin at 4:43 PM | link  

JUST DESERTS    Nolan Garrity, the reader who pointed out the stark factual contradiction about the military meaning of "desertion" in The New Yorker, wrote to let me know that I erred. I said that the two contradictory articles appeared in two successive issues, when in fact they appeared in the same issue (February 16) just a few pages apart from each other. Thanks, Nolan. I will correct my original posting.

Posted by Donald L. Luskin at 4:31 PM | link  

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Thomas Friedman, the Times' supposedly most thoughtful columnist praises the long-run advantages of free trade and outsourcing as sources of economic growth and dynamism. But -- and in the Times there is always a but -- acknowledging that in the short run this could be a real bear, he invokes the innovation-killing liberal remedies of Robert Reich -- social insurance, unionization, and (of course) a new tax:
"The fundamental question we have to ask as a society is, what do we do about it?" notes Robert Reich, the former labor secretary and now Brandeis University professor. "For starters, we're going to have to get serious about some of the things we just gab about job training, life-long learning, wage insurance. And perhaps we need to welcome more unionization in the personal services area retail, hotel, restaurant and hospital jobs which cannot be moved overseas in order to stabilize their wages and health care benefits." Maybe, as a transition measure, adds Mr. Reich, companies shouldn't be allowed to deduct the full cost of outsourcing, creating a small tax that could be used to help people adjust.

Posted by Donald L. Luskin at 11:20 AM | link  

IF OKRENT DOES NOTHING ELSE...    ...but inspire this kind of outpouring of frank reader comment to the New York Times, his tenure will have been worth it. Check it out.

Posted by Donald L. Luskin at 11:13 AM | link  

DON'T THEY UNDERSTAND THE DIFFERENCE BETWEEN PUNDITRY AND REALITY?    From an op-ed in today's San Francisco Chronicle on the CIA:
If Bush had appointed an investigative commission headed by Valerie Plame (the outed CIA wife of Ambassador Joseph Wilson) and composed of such journalists as Seymour Hersh, Jim Fallows, Stephen Kinzer and Paul Krugman, its report would probably be worth reading. Short of that, I propose abolishing the agency and reducing our annual deficit by about $30 billion.

Posted by Donald L. Luskin at 11:11 AM | link  

THE PC MOVEMENT INFECTS PREP-SCHOOLS    A devastating diagnosis from City Journal. Must reading.

Posted by Donald L. Luskin at 12:03 AM | link