Picto Diary - 18 August 2015 - Hoover Institution Jackson Retreat

Above: Victor Davis Hanson (file photo). Speaker Hoover Institution, Jackson, WY retreat, Teton Village, WY. 18 August 2015.

After Obama....

1. Obama is not popular. Four to five points in negative range. About where George W. Bush was at comparable time of his presidency. Successor cannot run on continuing Obama legacy.

2. No one has done more damage to the Democratic party than Obama. During his tenure Republicans have picked up 14 Senate seats, 60 house seats and have made significant gains in governorships and state legislatures. The 2016 election represents first chance to make real change in decades.

3. "White privilege" racial arguments made by Obama and allies have turned of many white Democrat voters. White vote still stands at 70% of voters. Obama "charisma" is not likely transferable to HRC.

4. Democrats claim to be the party of diversity, yet their presidential candidates are mostly white males. All are "of a certain age." Pub candidates are diversified racially, by sex, and by age. Marco Rubio is youngest candidate in decades.

5. Trump supporters are angry. They want the China Shop destroyed and don't care about the type of bull that does it. They are angry about the debt, lack of immigration law enforcement, and the erosion of their retirement savings. Trump takes absurdity and magnifies it.

6. Republicans are in a quandary: Trump can't win. They can't alienate Trump. They can't win if Trump mounts a third party candidacy.

7. 30% chance of HRC indictment. That being said, the server issue won't go away.

8. Sanders. 73 year old Socialist. Unelectable. "The McGovern Problem," redux.

9. The 2016 election is the most interesting political contest of our lives.

The next president must address....

Obamacare - All based on false premise... lower costs... you can keep your doctor. Not working. People not paying premiums... signers up thought it would be free. They don't understand co-pay and deductibles. The degree of non-compliance is staggering.

Immigration - Ultimately it seems that there is broad agreement on fact that borders must be enforced. "Illegals" can be legitimized by visa system. Enforcement should come through an employer system. 20% of illegal aliens have a felony record. All agree they would be sent back. A pathway to legal residency is not "amnesty."

Foreign Policy - Iran, Putin, Middle East, and China expansion... all worse under Obama. Obama "magnanimity" treated with contempt everywhere. The post Obama transition to normalcy will be a dangerous time... the restoration of American authority will be perilous.

Debt - Debt situation gives rise to boom/bust cycles. 0% interest debt service now... but, debt service will worsen as rates are increased. Most boomer American's are not in position to retire.

Race Relations - 60% say it is worse under Obama. Even the whites, who once said it was improving, now say its bad. Obama has fanned the flames: Ferguson, Travon, Baltimore, Skip Gates...

Other takeaways.....

Mitt worst Pub candidate in history.

Iran deal...Congress likely to vote it down... and Obama likely to implement through executive order anyway. Very dangerous

Russia a mess. Demographic implosion.

China. They can't square the circle of capitalism and autocracy.

Europe. Sclerotic economy... demographic decline.

US. Some hope. Universities are still great. Energy behind US economic comeback despite Obama doing everything he could to stop it. Core is still there, but it won't stay unless US can revive its traditional 3% growth rate. US needs a moral awakening. Its happened before: Rome 80 to 180 AD.


Victor Davis Hanson is the Martin and Illie Anderson Senior Fellow at the Hoover Institution, where he chairs the Working Group on the Role of Military History in Contemporary Conflict. he is also a professor of classics emeritus at California State University, Fresno. A classicist and expert on military history, he has written or edited twenty-three books, many of which have won awards. He is also a syndicated columnist for Tribune Media Services and a regular columnist for The National Review Online and PJ Media. He was awarded a National Humanities Medal in 2007 and a Bradley Prize for Outstanding Achievement in 2008.

Above: Edward P. Lazear. Hoover Institution Jackson Retreat, Teton Village, 18 August 2015.

The US economy is growing. But, it never "recovered" and has not reached its pre recession pace.

A European recession or slowed Chinese growth would have negative but modest impacts on the US economy.

Growing debt is perhaps the most important problem facing the US and other economies.

Most pressing government actions that can affect the economy:

Tax reform
Trade
Fed Policy
Immigration
Health Care
Regulation

Appreciating dollar has some, but limited, impact on trade and the economy (in part because we are not heavily reliant on trade).

Edward P. Lazear is the Morris Arnold and Nona Jean Cox Senior Fellow at the Hoover Institution, where he chairs the Conte Initiative on Immigration Reform. He is also the Jack Steele Parker Professor of Human Resources Management and Economics at the Stanford Graduate School of Business. His areas of expertise include labor economics, industrial relations, and microeconomics. From 2006 to 2009, he served as chairman of the President's Council of Economic Advisers. He is an elected fellow of the American Academy of Arts and Sciences, the Econometric Society, and the Society of Labor Economists.

Above: Kori Schake. Hoover Institution, Jackson Retreat. Teton Village 18 August 2015.

Can China Rise Peacefully?

Chinese leaders have made a bargain with their citizens. "You will have material improvement if you comply to our authoritarian rules."

This bargain has worked for the last forty years.

The Chinese government, by and large, is liked by the Chinese people.

People "accept" the high level of corruption endemic to Chinese politics.

Chinese foreign policy, driven by a "resentful nationalism," is popular with the Chinese.

But.... will Chinese accept the regime if the bargain fails? Should prosperity attenuate, will the people continue to support the government?

Historian Niall Ferguson says that only a free society can survive over time. Will China continue to be an exception?

There is strong evidence of the Chinese economy slowing. Move to float currency. Stock market has lost over $ 1 trillion in value. Chinese Central Bank has pumped money into the system. Stock trading suspended yesterday. Margin calls.

The government is bullying the market. Remember, the market value is still 75% above the value it was at the start of the year.

Other problems loom. Banking system. Local government corrupt. Nobody trusts government data. Is growth 7% as reported? It could be as little as 3%.

Western companies are falling out of love with China.

Chinese dream: "We are a society in which all rules are obeyed. Dream fraying.

Nightmare for Chinese leaders. People demand improvement in material lives but government can't deliver.

Public outrage at recent information black-out of the two massive explosions at Tianjin. Many people are looking for accountability. Who will take responsibility, they ask.

Foreign Policy.... Most Asian countries have "been OK" with the US order created in the region post WWII. They are not happy with Chinese expansionism in the Pacific. The Philippines is actually calling for a US return to its bases! Singapore the same.

Conclusion: The Chinese government is afraid of its own civil society. Authoritarianism can't be sustained. Free societies respond to the concerns of people.



Kori Schake is a research fellow at the Hoover Institution and a member of the Working Group on the Role of Military History in Contemporary Conflict. A specialist in national security strategy, effective use of force, and European politics, she has served in the US Department of State, at the National Security Council, and at the Pentagon. She has also served on the faculties of the Johns Hopkins School of Advanced International Studies, the University of Maryland's School of Public Affairs, the National Defense University, and the US Military Academy at West Point, where she held the Distinguished Chair of International Security Studies.

Above: Bill Whalen. Hoover Institution. Jackson Retreat. Teton Village. 18 August 2015.

Take Aways.

Whaaa????? Democrats the party of youth? All of their candidates are old and white. They all live in the Amtrack corridor. They cry for diversity, yet they are not diverse. In contrast the Pub candidates are younger, racially and geographically diversified.

HRC underwater now. Pub presidential election not electorally impossible as conventional wisdom holds. 270 votes needed to carry election. FL and OH going for the Pubs gives 285. Either VA (272) or CO and WA (270) also work.

Pubs traditionally came up with a nominee who had waited his turn. Reagan, Bush, Dole, McCain, and Romney. That pattern may change this time. There is chaos in the party as the establishment no longer has the control of the nominee as in prior elections.

Pubs are in search of the next Ronald Reagon. There has been a void since 2008.

There are now five Pub candidates with a plausible pathway to the nomination:

1. Jeb Bush - Running as the guy you can rely on. This is not a good sale. He's in the "polite" and not "play to win" camp. Not a movement conservative. He tries to take the edge off of conservatism.

2. Scott Walker - Has a patient reform plan to replace Obama Care. Son of a Baptist minister. Can speak in pastorale tone that resonates with many Conservatives. He's struggling right now. Did he peak too early?

3. John Kasich - Too New York Times? Wants to change what it means to be a conservative. Heir to Jack Kemp. Problem for Jeb. Doesn't play well to crowds. Big government in a "pointy way."

4. Marco Rubio - Young. 45. Youth a departure for Pub nominees. A Republican who can talk in a different way. Young family. He'll be hard to keep off the ticket.

5. Ted Cruz - Working the "SEC Primary" hard. He's thinking long term. Raising a lot of money.

TRUMP - Won't be on the ticket. He's 69. He's been on the scene for 30 years. Part statesman part showman. Comes from the "KingFish" Huey Long school. 1935 slogan. "Every Man a King!" Understands mass media. Feels and channels public resentment of Washington... like Buchanan, Wallace and Perot before him.

I don't write him off. There are five and one half months to go. A long time. There's a debate each month. A lot can happen.

Trumps challenge: Offer feasible solutions. So far he hasn't.

Winner must be authentic. The non-pols, Trump, Carly, and Dr. Carson all are authentic. Can't try to be someone else.

The one shows confidence in the future and conveys that with authenticity will win.

Responding to question from the audience, "Who do you believe that personal will be?"

Marco Rubio

Bill Whalen is a research fellow at the Hoover Institution. An expert on California and US politics and political campaigns, he writes frequently for leading publications including the New York Times, Wall Street Journal, Los Angeles Times, and Sacramento Bee. He also writes A Day at the Races, a campaign and elections blog available on the Hoover website. From 1994 to 1999 he was chief speechwriter and director of public affairs for then governor of California Pete Wilson. From 1985 to 1991, he was a political correspondent for Insight magazine in Washington, DC, where he was honored for his profiles and analyses of candidates, campaigns, Congress, and the White House.

Above: Jim Mattis. Hoover Institution Jackson Retreat. Teton Village. 18 August 2015.

Note taker (Mwah [sic]) fallible. Mistakes are his.

Takeaways.

The United States is on an unsustainable fiscal path. No empire... Hapsburg, Spanish, British etc. has advanced while indebted.

There is no evidence in history that a nation/empire/country can be indebted and still have a strong military.

The US has the most polarized electorate since 1865. There is more governing going on just about every place else other than the United States.

The two sides of American society have "declared war" on one another.

We are in "strategy free" mode. Whack a mole government.

We are scorned by our adversaries and we cause our friends worry.

Israel and Egypt - Never closer than today.

Russia - Putin knows he can break any rule. Nuclear aspect dangerous. Despite Russia's terrible economy, no reason to believe anything will change any time soon.

China - Wants a "tribute state."

Iraq - We "beat it down," subdued it... then, incredibly, we pulled out our troops... now the problem grows again. The Iraqis seek our help... but, we have limited our assistance to 2000 troops to train Iraqi military.

ISIS - Removing long established borders. Once a "Junior Varsity," now much stronger today than six months ago. ISIS attracting unprecedented number of new troops from western countries. The recruits are just cannon fodder. It will take "boots on the ground" to stem ISIS growth. "Technical solutions" don't work. ISIS won't go away. Man doesn't sell out his God. These people need to be subdued. Their propaganda engine needs to be discredited with a military victory. Lack of American leadership in the middle east demonstrates American impotence.

We have allies. Israel, Egypt, Jordan, Gulf States. They are waiting for our leadership. There must be a pragmatic side to our idealism. FDR made happy with Stalin.

With any new administration, Republican or Democrat, we will be in better shape than we are today.

Iran - This deal is going into effect, one way or the other. I didn't support it, but the best strategy now is to make sure that it works. The deal was written with the assumption that Iran will cheat. We must work with the deal and catch the cheating.

Going Forward...

1. Must deal with #1 threat: Debt.
2. Must re-energize alliances.
3. We must develop a position opposite political Islam.

Q and A takeaways

Turkey problematic...

China and Russia guaranteed to know what was on HRC's server.

There are good Muslims. I've never fought without good Muslim friends beside me.

White House has taken over national security policy from the State Department. The national security process is constipated.

Former Prime Minister of NATO: "Are the Americans still with us?"

We'll see more lashing out from the Russians.

Jim Mattis is the Davies Family Distinguished Visiting Fellow at the Hoover Institution. he is also a US Marine Corps four-star general who retired in 2013 after forty-two years of service. he commanded at multiple levels during his career, including serving from 2010 to 2013 as commander of the US Central Command. As such, he was responsible for military operations involving more than 200,000 US soldiers, sailors, airmen, marines, and members of the US Coast Guard in Afghanistan, Iraq, and eighteen other countries in the Middle East and south-central Asia. an expert on national security issues, with a focus on strategy, innovation, effective use of military force, and the Middle East, he is a member of Hoover's military history working group.

Above: Cartoon poster shown by Bill Whalen. Hoover Institution Jackson Retreat, Teton Village, WY. 18 August 2015.

Above: Archbishop, TIMDT, and Libby. Hoover Institution, Jackson Retreat. Teton Village, WY. 18 August 2015.

Above: The Archbishop and SunAmerica. Hoover Institution, Jackson Retreat. Teton Village, WY. 18 August 2015.

The Archbishop was my boss for 9 years in Asia Pacific while I worked for Citigroup.

Sun America was also with Citi for 15 years, though I didn't know him there at the time. We had dealings in the late 90's, however, when he was trustee for a trust used by NIPF, a Mesa, AZ based insurance premium finance company I headed (generally, NIPF was a misbegotten effort, but SunAmerica got out whole).

The Archbishop and Libby divide time between Naples, FL, Big Sky, MT and Ashville, NC.

SunAmerica divides time between Los Angeles, CA and Jackson, WY. He has two grown kids who he says he still loves despite the fact that they live in New York City.