On the US midterms

rally to restore sainty, i like tea and you're kind of ruining it[Image amoeck, via The 100 Best Signs At The Rally To Restore Sanity And/Or Fear]

On the eve of the inevitable catastrophe for the Democrats in the US midterm elections, Barack Obama is getting all sorts of advice about how to rebuild his party during the two years left to his first (and only?) term. The prize for the worst advice yet goes to veteran liberal columnist David Broder in the Washington Post,who suggested a couple of days ago that the best way for Obama to revive his presidency would be by….bombing Iran.

Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II. Here is where Obama is likely to prevail. With strong Republican support in Congress for challenging Iran’s ambition to become a nuclear power, he can spend much of 2011 and 2012 orchestrating a showdown with the mullahs. This will help him politically because the opposition party will be urging him on. And as tensions rise and we accelerate preparations for war, the economy will improve.

I am not suggesting, of course, that the president incite a war to get re-elected. But the nation will rally around Obama because Iran is the greatest threat to the world in the young century. If he can confront this threat and contain Iran’s nuclear ambitions, he will have made the world safer and may be regarded as one of the most successful presidents in history.

Right. Just what America needs, to incite another war in the Middle East. Unfortunately, Obama will not be around for the first fortnight to help to console and rally his shattered party. Just as Bill Clinton did in the wake of Clinton’s own 1994 midterm mauling, Obama will be winging off overseas immediately afterwards for a ten day trip to India and points in Asia – thus leaving the Republicans to manage the domestic aftermath in the media, and to set the agenda for the lame duck period of his first term. Way to go.

How bad are the results tomorrow likely to be? The Republicans will sweep the House and gain a 30-35 seat majority, while the Senate will end up virtually deadlocked given that at best, the Democrats will retain only a narrow 3-4 seat majority. Among the casualties tomorrow will be Russell Feingold of Wisconsin, the Senate’s most capable liberal voice – in 2004, many on the left had wanted him to contest the presidential election against George Bush, partly because he had been the only Senator to vote against the Patriot Act. Ron Johnson, the Republican ‘outsider’ destined to take Feingold’s place, has been satirized by The Onion in these terms

Here is what I know: Washington, D.C. is far away. Outer space is farther away. And Caesar salad is a kind of salad. What more do you need?

What we don’t need is Russ Feingold, who is a Democrat capable of conjugating verbs and composing thoughts in sentence form. I’ll be honest, I have absolutely no clue what I’ve been saying here this entire time. What is time? Where am I? Who are you? How do telescopes work, and why am I writing this right now? I don’t know, I don’t know, I don’t know.

Because I am an outsider and Russ Feingold is a man with dark hair.

Furthermore, overspending, the left-wing media, tax cuts, class warfare, Muslims, Obamacare, Nancy Pelosi, corporate giveaways, socialism, Nancy Pelosi. Washington, D.C.

The rise of the Tea Party and related anti-Washington sentiments will be heartening to the leaders of China, India and Brazil. Those rising economies know they have nothing to fear from the resurrection of the Republican right – if only because from the Reagan era onwards, the agenda of tax cutting and de-regulation has succeeded only in running up debt, and running down America’s infrastructure and competitiveness. And so the American decline continues.


Hobbit Footnote

In ten days time the film industry lobby group Spada is holding its annual conference, and the line-up for this conference item looks amusing :

Key Plenary Session: The Hobbit – What Really Happened? – Open to Non-Delegates

Chaired by Russell Brown, the panel will include Philippa Boyens (co-writer The Hobbit), SPADA’s CEO Penelope Borland and Executive Member Richard Fletcher.

Right. So that should be a wide ranging and broad spectrum effort. (Paul Holmes and John Barnett must have been too busy that morning.) An interesting aspect of the Hobbit aftermath has been the similarity in practice, of the stance towards production subsidies taken by the left and by the right. This editorial in the NZ Herald for instance, took the usual Flat Earth approach to subsidies and national planning that we’ve been hearing for the past 30 years:

The hyperbole surrounding The Hobbit insisted it was crucially important to the future of the local film industry and for this country’s image as a tourist destination. Both points are highly dubious….If the industry cannot stand the loss of them, it must be in a sickly state. It was surely over-egging matters to suggest all international film-makers would sidestep this country as a consequence.

Indeed, at some stage, the local film industry should, like virtually every other New Zealand enterprise, be able to survive without subsidies. The talent and skills of local film-makers, along with outstanding scenery, should be the attraction for Hollywood moguls.

Fantastic. You really can’t satirise this stuff. Safe to say, if we’d adopted that approach, Lord of the Rings would not have been shot here, the globally competitive Weta Digital FX shop would not exist and, if he was lucky, Peter Jackson would be an occasional employee of one or other Hollywood studio. Thousands of jobs and hundreds of millions of dollars would have been lost to the New Zealand economy.

In practice though, the left’s hostility to paying anything at all to Warners would have followed the same pattern – no subsidies to Warners, no major films made here, not much in the way of a skilled local industry – as the Herald’s approach. Unfortunately, pixies offering film projects for free do not exist in the real world. There is no free lunch when it comes to the global exchange between corporate self interest, and national self interest. Within the film industry, some progress has been made. We tried and then scrapped the truly damaging kind of subsidies – ie the sort of tax breaks that function mainly as tax avoidance vehicles – and settled on “after spend” rebates that ensure New Zealand receives the benefits in economic activity before we pay out. By definition, we achieve as much or more from such deals as Warners does. Yes, there is a cost involved in attracting this sort of business. It is delusional to think we can avoid paying any sort of tab, whatsoever.

Moreover, if we are to go down the route of public/private partnerships, we need to learn how to negotiate these sort of trade-offs. In the process, government needs to be transparent about the net benefits if any, of such deals. The Flat Earth approach of unilaterally slashing tariffs, selling assets and scrapping subsidies – while the rest of the world does little or nothing to follow suit – has failed. Yet I don’t think the left’s hostility to any form of negotiation and trade-off with multinationals is any less blinkered. It involves the same self-defeating path of virtue and belief that we can get something for nothing.

Key, it seems generally agreed, negotiated the Warners deal abysmally. He not only gave away New Zealand’s stance before he entered the bargaining room but also offered to limit how our labour laws will apply within the film industry. As a result, one of our few cutting edge industries has now been frozen within Victorian-era labour rules and conditions. That’s the real lesson of The Hobbit fiasco. We’ve shown the world that we haven’t a clue about how to drive a bargain, and can be relied on to be a patsy in any public/private partnership negotiations in future. Plus we have retained a 15% level of production subsidies that will maintain our trade disadvantage with the rest of the world – and virtually ensure only major film productions tied to Peter Jackson come here in future, The troglodytes on both the right and the left will probably welcome such an outcome.


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