ScaifeNet because we can't let Soros have all the fun...

Because the number of Social Security and Medicare beneficiaries is growing much faster than the number of taxpayers, those entitlements are headed toward bankruptcy. Social Security trustees reported that permanent, escalating Social Security deficits will begin in 2015. Medicare trustees have said Medicare's situation is "much more severe."

Accordingly, Paul Ryan, a Republican congressman from Wisconsin, has proposed a comprehensive "Roadmap for America" that among other things would (1) enable people to channel a third of their payroll taxes into private retirement accounts that Congress could never raid; and (2) convert Medicare into a defined contribution program with health care vouchers, so consumers could shop competing providers. Ryan recommends across-the-board tax cuts to help energize the economy. There's much more in the plan, but this isn't the place for details.

Republican leaders are afraid to support Ryan's plan, because in the past they have been pounded by Democrats for recommending entitlement reforms. But just suppose Republican leaders did embrace Ryan's plan. What then? Democrats would attack the GOP as they have attacked Ryan. The more than 50 million Social Security and Medicare beneficiaries would flock to the Democrats. Republican support for the Ryan plan might be Obama's best shot at winning a second term in 2012.

For a while, Obama might rule like a king. He would continue to pursue his progressive dream of runaway spending, taxes, debt, regulations, bailouts and nationalizations. He might gain a Supreme Court majority that would trash constitutional limitations on government power, putting Democrats in a position to dominate the country for a long time. Admiring historians might hail Obama as a political genius, and he might feel flattered to be compared with the Mughals in India, the Safavids in Persia, the Mamluks in Egypt and the Mings in China, each of whom ruled for more than 200 years.

But there would be some complications. Obama would be under intense pressure to reward seniors who did so much to give him his 2012 victory, and he would make the entitlements even more generous than they already were. Entitlement spending would skyrocket and account for over 80 percent of federal spending, squeezing out other programs — even food stamps.

Obama would try to finance his runaway spending by raising taxes repeatedly like his hero FDR who tripled taxes during the Great Depression. But a funny thing is likely to happen: the number of tax returns would decline, starting with filings by millionaires. Initially, millionaires would try to reduce their tax liabilities by moving from high-tax states to low-tax states, but crushing federal tax burdens would lead to their mysterious disappearance. They might be part of the booming underground economy, or they might have retired early, or they might have relocated offshore or adopted some other tax-saving strategy. In any case, as taxes reach confiscatory levels, tax revenue would fall.

The Federal Reserve, which in 2010 began routinely creating new money out of thin air to fund federal budget deficits, would almost certainly pump ever larger quantities of money into the economy. Inflation would become front-page news, and people would scramble to keep up with it since pay tends to lag behind inflation. Obama, in an effort to show that he's "doing something" about inflation, would impose price controls, wage controls, profit controls, exchange controls, import controls, rationing and other restrictions.

These don't stop inflation, but they would throttle the economy, and unemployment would surge, perhaps over 25 percent. Obama wouldn't be able to avoid the bankruptcy of Social Security, Medicare and Medicaid as well as federal agencies that guarantee bank deposits, home loans, student loans, export loans and pensions. Obama might have to default on foreign loans and make humiliating concessions to the Chinese. Such a financial crisis would be likely to provoke chronic strikes and violence.

By this time, it would be clear that big spending Democrats as well as Republicans were intellectually bankrupt. Obama might be ridiculed as another Juan Perón, the spendthrift Argentine who ran his formerly rich and proud nation into the ground. Something like Ryan's much-reviled plan might be the only option for impoverished seniors. A few people might realize that everything would have been easier if it had been adopted before the economy was wrecked, but of course that was politically impossible.

So, President Obama believes that Republican leaders are "pushing to make privatizing Social Security a key part of their legislative agenda if they win a majority in Congress this fall."

To which one responds, "If only!"

There is no doubt that Social Security desperately needs reform. Social Security is already running a temporary deficit, and that deficit will turn permanent in just five years. In theory, the Social Security Trust Fund will pay benefits until 2037. That's not much comfort to today's 35-year-olds, who will face a 27 percent cut in benefits unless the program is reformed before they retire. But even that figure is misleading, because the trust fund contains no actual assets. The government bonds it holds are simply IOUs, a measure of how much money the government owes the system. It says nothing about where the government will get the $2.6 trillion to pay off those IOUs.

Even if Congress can find a way to redeem the bonds, the trust-fund surplus will be completely exhausted by 2037. At that point, Social Security will have to rely solely on revenue from the payroll tax — and that won't be sufficient to pay all the promised benefits. Overall, the amount the system has promised beyond what it can actually pay now totals $18.7 trillion.

Moreover, Social Security taxes are already so high, relative to benefits, that Social Security has simply become a bad deal for younger workers, providing a below-market rate of return. In fact, many young workers will end up paying more in taxes than they receive in benefits. And most important, workers have no ownership of their benefits. This means that they are left totally dependent on the goodwill of 535 politicians to determine what they'll receive in retirement.

Benefits are not inheritable, and the program is a barrier to wealth accumulation. Lower-income families, African-Americans, and working women suffer disproportionately.

But Republican leaders, battered by the failure of President Bush's reform initiative and years of Democratic demagoguery, show no signs of venturing back into this issue. In fact, the only senior Republican willing to support personal accounts these days appears to be Rep. Paul Ryan, who has included in his "roadmap" a plan to allow younger workers the option of investing slightly less than half of their Social Security taxes. However, it is telling that Ryan's roadmap has just 13 co-sponsors, none of whom are among the Republican leadership.

Given their large lead in current polls, it is perhaps understandable that Republicans don't want to risk offending voters, particularly seniors, by wading back into the Social Security thicket. But they are making a mistake.

From a purely political standpoint, if Republicans think that remaining silent on the issue will protect them from Democratic attacks, they are the stupid party indeed. The president's comments should serve clear notice that Democrats are not going to let a simple thing like Republicans' actual position to get in the way of a good political weapon. Senate Majority Leader Harry Reid has run television ads attacking his opponent, Sharron Angle, for wanting "to wipe the program out," even though she's made clear she wants to keep it. In Kentucky, Republican senatorial candidate Rand Paul is being criticized for remarks he made in favor of Social Security privatization — in 1998. There isn't any escape.

Even worse, as a matter of policy, by taking personal accounts off the table, Republicans may be boxing themselves into a very bad corner. There are, after all, only three options for Social Security reform: raise taxes, cut benefits, or switch to personal accounts. While benefit cuts are defensible economically, they are not likely to prove any more politically popular than personal accounts, probably less so. Democrats are already organizing to fight any reductions. And, if Republican opposition to the Medicare cuts under Obamacare is any indication, no one should expect an overabundance of courage in fighting to cut Social Security benefits.

Therefore, if Republicans are not willing to embrace personal accounts, they will be left with ... tax hikes, which has been the Democrats' goal all along.

One reason the Democrats have been so successful in expanding the government year after year is that they have the courage of their convictions. They lose on an issue time after time, but they keep coming back until they win. Take national health care: After Hillarycare went down to defeat in 1993, the Left didn't give up. And today we have Obamacare. Republicans lost on Social Security and curled up into a fetal position, begging for mercy.

Factcheck.org rates the president's statement that Republicans want to privatize Social Security as "mostly false." Before too long, we may come to wish that this time he had been telling the truth.

Americans used to have a wise skepticism about nation building. As recently as the 1990s, conservatives, especially, opposed the Clinton administration's social-engineering projects in Haiti, Somalia, and the Balkans: They doubted that the U.S. military should, or could, become a tool for creating modern states where none existed. After 9/11, however, as the U.S. military drifted into nation-building operations in Afghanistan and Iraq, even previously skeptical observers found themselves endorsing the expanded missions. Today, support for Barack Obama's nation-building project in Afghanistan is widespread, even among conservatives.

Despite this new consensus, nation building remains expensive, unnecessary, and unwise. In a literal sense, nations, unlike cars or computers, aren't built: They develop organically. As Charles Tilly observed in his 1990 book Coercion, Capital, and European States, when the foundation of the modern nation-state was laid in Europe during the 16th and 17th centuries, it was a natural outgrowth of changes in military technology and resulted from the economic requirements of fielding a national army. It was the farthest thing imaginable from what goes today by the name of "nation building" — i.e., an external effort (usually by the United States) to create a viable national government where one does not currently exist. In general, such efforts have been undertaken amid political violence, as in the case of the Clinton administration's endeavors in the Balkans and today's efforts in the mountains and valleys of Afghanistan.

Many of today's nation-building proponents are soldiers — but they resemble the military and political leaders of the 17th century much less than they do the tweedy modernization theorists of the 1950s and 1960s. They advocate using the U.S. military and civilian bureaucracies to help govern places like Afghanistan, in the hope that the result will be greater U.S. national security. They favor a counterinsurgency effort that includes distributing economic aid, establishing schools, organizing modern military and police forces, adjudicating political disputes, uprooting corruption, and reforming judicial practices. As Gen. Stanley McChrystal promised before the recent Marja offensive: "We've got a government in a box, ready to roll in."

This is the kind of ambition the Clinton foreign policy displayed in the 1990s, and it met with understandable scorn from conservative foreign-policy intellectuals. John Bolton condemned Clinton's approach as reflecting an "instinct for the capillaries"; John Hillen, a scholar at the Heritage Foundation, urged the administration to make clear that "superpowers don't do windows." Their objections could be boiled down to two, both basically conservative: They believed that the U.S. should focus on its own national interest, which did not entail remaking other societies; and they viewed such projects as unlikely to succeed in any case, because particular cultures and traditions generate institutions, not the other way around.

What has changed about the first argument is that many conservatives now wonder whether nation building may be required for U.S. national security. On the second argument, some analysts believe that the U.S. intervention in the Balkans succeeded, and thus provides a template for future operations.

To begin with the second argument, a brief look at the Balkans suggests that the wariness some expressed at the time was well-founded. In the nearly 15 years since the Dayton Accord was signed, Bosnia has been the site of the largest state-building project on earth. On a per capita basis, the multinational project there has dwarfed even the post — World War II efforts in Germany and Japan. Tiny Kosovo received higher per capita expenditure. Yet, as political scientists Patrice McMahon and Jon Western warned in Foreign Affairs last year, Bosnia "now stands on the brink of collapse" — partly as a consequence of persistent ethnic cleavages and the inherent difficulty of state building. McMahon and Western — who support additional efforts in Bosnia to prevent a collapse — warn that Bosnia has gone from being "the poster child for international reconstruction efforts" to being a cautionary tale about the limits of even very well-funded and focused efforts at state building.

Similarly, in surveying conditions in Bosnia and Kosovo, Gordon Bardos of Columbia University recently concluded that "it is becoming increasingly difficult to argue that we have the intellectual, political, or financial wherewithal to transform the political cultures of other countries" at an acceptable cost. If Bosnia and Kosovo — European countries less rugged than Afghanistan, and with, respectively, one-sixth and one-twelfth of its population — represent the case for optimism in Afghanistan, then the case for gloom is strong.

Some might point to the U.S.-supported counterinsurgency efforts in El Salvador and Colombia as models to be emulated in Afghanistan. However, in both cases, it was not large-scale, U.S.-boots-on-the-ground state-building operations that succeeded, but violent, enemy-centric tactics accompanied by American financial and logistical support to sitting governments. As Benjamin Schwarz, who analyzed U.S. efforts in El Salvador for the Defense Department, has made clear, the two strategically decisive events in the counterinsurgency there were the cumulative effects of indiscriminate killing by death squads supporting the government in the early 1980s, and the collapse of the insurgency's patron, the Soviet Union. Similarly, in Colombia, the game-changer was the government's focus on improving the army's officer corps and deploying a better-trained and better-armed army against the insurgents. There is little parallel between this and the nation building under way in Afghanistan.

The larger disconnect is on the question of whether nation building is necessary for U.S. national security. A decade ago, the mainstream consensus on the imprudence of nation building was reflected in the foreign-policy views of George W. Bush. During the 2000 campaign, Bush openly questioned the wisdom of such undertakings, and his foreign-policy adviser, Condoleezza Rice, memorably declared that the Bush administration wouldn't have "the 82nd Airborne escorting kids to kindergarten."

But Bush and Rice, along with many others, changed their minds in the wake of the 9/11 attacks. They succumbed to the tempting liberal argument that illiberal politics was the "root cause" of terrorism, and argued that using the U.S. military to spread political reform would enhance American security. This line of thinking yielded the two nation-building projects in Iraq and Afghanistan. The mission in Iraq is scheduled to end next year, but the country's medium-term prospects remain very much in doubt, and the U.S. has paid a high price in blood and treasure to achieve even the shaky equilibrium that exists today. In Afghanistan, despite the recent policy review and after nearly nine years of fighting, there remains no clear strategic end state in sight.

There was such an end state available in October 2001. What was needed in Afghanistan was not counterinsurgency and nation building, but a violent response to the terrorist attacks. However, as the U.S. routed the Taliban in Afghanistan and trained its sights on Iraq, it became clear that the problem Defense Secretary Donald Rumsfeld had identified in Afghanistan — that there were no good targets — was true for the overall War on Terror. In December 2001, immediately after the successful overthrow of the Taliban (a feat accomplished with no more than a few hundred U.S. personnel on the ground), Charles Krauthammer published an article titled "We Don't Peacekeep," in which he argued that while U.S. military forces "fight the wars[,] our friends should patrol the peace." The Bush White House apparently disagreed, defining U.S. objectives in Afghanistan and Iraq expansively to include the establishment of viable, modern democracies, growing economies, and equitable judicial systems.

But what had changed? Why was it unwise for the Clinton administration to seek to remake nations, but wise for the Bush and, later, Obama administrations to seek to do the same? The response comes that Washington has national-security interests in Central Asia, whereas there were no such security interests at stake in the missions of the 1990s. It is undeniable that we have important interests in Afghanistan, but it is also true that an ambitious state-building project there is unnecessary, and unlikely to protect those interests at a justifiable cost. If the Obama administration is to be believed, the al-Qaeda presence in Afghanistan is fewer than 100 men, and its presence in the Pakistani tribal areas "more than 300." This is a threat we can deal with in the same way we deal with the al-Qaeda threat in Yemen, Somalia, or elsewhere: intelligence cooperation (where available), special-operations forces, and drone strikes.

Consider the following counterfactual: If everything in Afghanistan were the same today, except the U.S. did not have a large military footprint there, would anyone propose deploying 100,000 servicemen and -women to build the Afghans a government? We should doubt whether the government-building project is likely to succeed. There is little precedent for successful state building on this scale; and there are especially strong centrifugal forces in Afghanistan, including rampant illiteracy, the country's position as a plaything of regional powers (India and Pakistan), powerful identity politics, and a xenophobic culture. Unfortunately, the evidence suggests that Afghanistan simply is not far enough along in the historical processes that produced national states in the past.

The good news for Americans is that our security does not hinge on the emergence of an Afghan state. The U.S. retains the ability to prevent a Taliban takeover without a large-scale, boots-on-the-ground presence in the country. As for al-Qaeda, an extensive analysis by Columbia University counterinsurgency expert Austin Long suggests that fewer than 20,000 U.S. troops would be sufficient to deal with its forces in Afghanistan.

That modest investment, aimed at an achievable goal, would leave us room to reexamine some of the assumptions that have been embedded in U.S. thinking over the past decade, beginning with George W. Bush's expansive interpretation of America's aims in the "long war." Sounding distinctly Wilsonian, Bush declared in his 2003 State of the Union address that "our calling, as a blessed country, is to make the world better." His Second Inaugural raised the stakes even higher, setting an "ultimate goal of ending tyranny in our world." This Progressive streak in Bush's thought helps us understand some of the continuity we see in his successor: President Obama's foreign-affairs rhetoric is less lofty than President Bush's, but the two are in basic agreement on America's mission. Obama tells us that "extremely poor societies and weak states provide optimal breeding grounds for disease, terrorism, and conflict." He, too, wants to engage in nation building to solve those problems, and argues that America must "invest in building capable, democratic states that can establish healthy and educated communities, develop markets and generate wealth."

The problem with the nation-building impulse remains what it was in the past: This project is rooted in deeply flawed ideas about man's ability to reshape society, and exhibits the very type of "fatal conceit" that Friedrich von Hayek scorned long ago. It is incoherent to believe that the same government that can produce neither jobs nor well-educated children at home can build viable states in foreign lands with unfamiliar languages, customs, and cultures. To oppose such projects at home while supporting them abroad defies the laws of economics and basic common sense.

It is a peculiar act of hubris to try to build a nation. After all, as Edmund Burke wrote, a nation is "not an idea only of local extent, and individual momentary aggregation, but it is an idea of continuity, which extends in time as well as in numbers, and in space. And this is a choice not of one day, or one set of people, not a tumultuary or giddy choice; it is a deliberate election of ages and generations." Echoing Burke, George Will argued in 2006 that "when you hear the phrase 'nation building,' remember, it is as preposterous as the phrase 'orchid building.' Nations are not built from Tinker Toys and erector sets. They are complicated, organic growths, just as orchids are. And they are not built, either."

Not in Afghanistan; not anywhere.

How will ObamaCare affect a small business owner who's married with two kids?

For one thing, he and his business will pay higher health premiums beginning this year.

He and his employees will have to purchase unlimited lifetime coverage and unlimited annual coverage (this requirement phases in between now and 2014). The Obama administration estimates that these mandates alone could increase premiums for some businesses by 7 percent.

He and his employees will have to purchase coverage for dependent children without any waiting periods for pre-existing conditions. Another mandate will require them to purchase coverage for dependents up to age 26. One private estimate puts the cost of this "slacker" mandate an average of 2 percent, but our small-business owner's premiums may rise even more. Perversely, the cost may force him to drop dependent coverage entirely.

If his health plan loses its "grandfathered" status — as most small businesses will — he and his workers will have to purchase 100-percent coverage for a long list of preventive services. The administration estimates this mandate will increase premiums on average by 1.5 percent, but private estimates are in the range of 3-4 percent.

The Obama administration also acknowledges there is "tremendous," "substantial," and "considerable" uncertainty about these mandates' costs. That is, they may be higher than the administration says.

These mandates are a double-whammy for our small-business owner. He already faces some of the highest premiums out there. Yet he also provides some of the least comprehensive health plans. So his premiums will rise more than larger employers' premiums will.

According to HHS, these added costs will likely push him to switch health plans, and he will likely switch to a plan that complies with the mandates, but places tight restrictions on accessing care.

If he offers his workers a health savings account (HSA), medical savings account (MSA), flexible spending account (FSA), or health reimbursement arrangement (HRA), its employees will lose the ability to purchase over-the-counter drugs tax-free. If they make non-medical withdrawals from their HSA or MSA, the penalty will double from 10 percent to 20 percent.

If his small business is a tanning salon, it is already paying a new 10-percent tax on its sales.

The Obama administration is quick to note that beginning in 2010, one third of small businesses may be able to get a tax credit that covers up to 35 percent of their health-benefits. But that credit is not a long-term solution to rising costs; it disappears after 6 years, and often sooner. It will also discourage hiring, because hiring too many workers will reduce or eliminate the credit.

By 2013, all businesses will have to fill out an IRS Form 1099 every time they purchase more than $600 worth of stuff from a vendor. If our small-business owner owns a trucking company, he will have to ask gas stations for their tax ID numbers. If the gas stations don't cooperate, he will have to withhold money (i.e., send it to the IRS) for gas expenses. This will be the biggest nightmare in the bill for small businesses. Ironically, it will also hit many doctors, journalists, and others who supported ObamaCare, but run their own small business on the side.

If our small-business owner and his wife make over $250,000, they'll pay the new, higher Medicare "payroll" tax of 3.8 percent, starting in 2013. (It's currently 2.9 percent).

But it's 2014 where things really get messy. That's when the government will require everyone to purchase even more yet-unspecified types of coverage, which will cause premiums to rise even more.

If our small-business owner has 50 or more employees — or fewer full-time employees and lots of part-timers — he faces the prospect of tens of thousands of dollars in penalties under ObamaCare's employer mandate if he does not provide "adequate" coverage to his workers.

The worst part is that these penalties will be triggered by factors that are unpredictable, unobservable, and totally beyond the control of our small-business owner. He could get hit with those penalties simply because a worker's spouse loses or changes jobs. Or if a worker's spouse moves out or dies. Or if an employee's parents move in.

This creates so much uncertainty that a small-business owner with 55 employees may have to fire six of them just to eliminate that potential liability.

But if he splits his 60-employee small business into two 25-employee businesses, then the federal government — maybe the IRS — will start snooping around to determine whether he did so for legitimate business reasons or just to avoid the mandate.

No matter the size of his firm, if he or his workers earn around $30,000 to $100,000 and get coverage through one of the new health insurance exchanges, their implicit marginal tax rates will jump from around 30-40 percent all the way up to 60-75 percent!

In many cases, if his employees get a raise or work more hours, ObamaCare will leave them with less take-home pay, because the higher earnings will cause them to lose thousands of dollars in subsidies. Their implicit marginal tax rate will exceed 100 percent!

Our small-business owner is paying all these costs now — and so are his workers, and the unemployed.

ObamaCare has created enormous uncertainty. Our small-business owner doesn't have any idea what ObamaCare's mandates will cost him in 2011, 2012, 2013, or 2014. Or what additional benefits he will have to provide. Or what kind of insurance options will be available by then. All he knows is that these things will cost him more — possibly a lot more — and that he's going to be spending lots of time and money, for the foreseeable future, on tax accountants and attorneys.

And he's going to be much less likely to take on new commitments like expanding or hiring new workers.

By 2012, our national debt will be larger than the entire U.S. economy, according to the International Monetary Fund. So what's on the front burner in Washington these days? Zoning issues in lower Manhattan!

Is it OK to put a Muslim community center close to Ground Zero? I don't know, but local authorities don't seem to mind.

That should settle it, but what Sarah Palin calls the "9/11 mosque" has somehow become a headline-grabbing controversy.

On Friday, President Obama insisted that Muslims have the "same right to practice their religion as anyone else" and can build a mosque near the former World Trade Center site. House minority leader John Boehner, R-Ohio, found the president's comments "deeply troubling." Newt Gingrich accused him of "pandering to radical Islam." (Are there a lot of votes there?)

All this posturing is getting tiresome. The "mosque" controversy isn't about property rights or religious freedom. It's a bogus issue seized by the GOP establishment to distract the rank-and-file from the party's reluctance to shrink government.

From all the caterwauling, you'd think the Park51 group planned to fashion a mock Kaaba out of trade center ashes and mount it atop the wreckage. But you can't see Ground Zero from the Park51 site — it's separated by two canyonlike city blocks, occupying the former site of a Burlington Coat Factory. "Hallowed ground," indeed.

The plans include building a large mosque — and a 500-seat theater, swimming pool and food court — which makes calling it a "mosque" just slightly more accurate than calling a YMCA a "church."

Republicans pose as the party of decentralization, yet here they are reversing Tip O'Neill's dictum, insisting that "all politics is national."

There's plenty of hypocrisy to go around, though. It's insulting to hear New York City Mayor Mike Bloomberg, who has persecuted bar owners for the crime of displaying ashtrays, wax rhapsodic about private property.

Apparently, if you want to pray to Mecca, your rights are sacrosanct, but if you'd like a cigarette at the bar after a hard day's work, then head on out to the stoop, peasant.

And while Obama pats himself on the back for defending religious freedom and private property, it's not clear who he's arguing with. The mainstream Right has renounced "using the machinery of government to stop this project," as National Review's editors put it.

You don't need to buy amateur theologian George W. Bush's line that Islam is "a religion of peace" to recognize that the Park51 controversy is a red herring. With Muslims making up 0.8 percent of the U.S. population, dhimmitude seems a more remote threat than national bankruptcy.

In a recent (pre-campaign?) appearance in Des Moines, Iowa, Newt Gingrich denounced Obama's "secular socialist machine," but, when asked, he declined to specify federal programs he would cut.

You see, cutting government is hard, and often unpopular. No surprise, then, that Boehner would rather play urban planner than embrace Wisconsin Republican Rep. Paul Ryan's "road map" for shrinking middle-class entitlements.

Faced with difficult choices, the alleged party of small government always retreats to the lazy politics of Kulturkampf. Hey, that guy's a "card-carrying member" of the ACLU! Ask me about my flag-burning amendment!

John Cornyn, R-Texas, head of GOP efforts to take back the Senate this fall, plans to make the Park51 "mosque" a major campaign issue. It's all too typical: Feed the rubes conservative identity politics, and, with luck, they'll be too distracted to notice you've grafted a Republican "K Street Project" atop the same old edifice of Big Government.

The establishment Right wants to play the Tea Party movement for suckers. It remains to be seen whether they'll play along.

In voting to spend $10 billion to save school teachers' jobs last week, Congress bailed out government employees who have fatter paychecks and pensions than those doing the same kind of work in the private sector. The money came on top of hundreds of billions of dollars in government-employee bailouts that preceded it, and it won't be the last such bailout, either.

According to the U.S. Bureau of Labor Statistics, government employees make more money than private-sector workers in 83 percent of comparable occupations. These include broadcast technicians, budget analysts, chemists, civil engineers, information-systems managers, cooks, crane operators, dental assistants, economists, electrical engineers, financial analysts, graphic designers, janitors, landscape architects, laundry workers, librarians, machinists, mechanical engineers, office clerks, public-relations managers, recreation workers, registered nurses, secretaries, sheet-metal workers, statisticians, and surveyors.

Hourly pay for employees of state and local governments — which employ the bulk of government workers — is an average of 20 percent to 40 percent higher than wages in the private sector.

The latest poster boy for government greed is Robert Rizzo, who was the city manager of Bell, Calif., a working-class town southeast of Los Angeles with a population of about 36,000. Rizzo was paid a sweetheart salary of $787,637 a year. His total annual compensation was reported to be $1.5 million, including 20 weeks of paid vacation. And he was also entitled to an annual pension of $600,000.

Rizzo wasn't the only Bell official who hit the jackpot. Assistant City Manager Angela Spaccia reportedly enjoyed $845,000 a year in total compensation, while Police Chief Randy Adams got $770,000. Moreover, Bell City Council members pocketed almost $100,000 a year each for their part-time elected positions. (Rizzo, Spaccia, and Adams resigned a few weeks ago, after the Los Angeles Times detailed their excesses.)

In general, government employees tend to enjoy gold-plated benefits in addition to their generous salaries, according to the Bureau of Labor Statistics. Eighty-eight percent of state and local government employees have access to employer-provided health insurance, compared with 71 percent of private-sector employees. And government employees pay about half as much of their health-insurance premiums (11 percent) as do private-sector employees (20 percent).

Furthermore, while only 65 percent of private-sector workers have access to employer-provided retirement benefits, 90 percent of state and local government employees do. Government pension plans are so generous with taxpayers' money that they account for much of the financial trouble afflicting state and local governments.

Incredibly, although government employees are often better off than their counterparts in the private sector, politicians have forced taxpayers to guarantee their ability to continue living in the style they have become accustomed to.

Taxpayers are on the hook for both their own losses and those of government-employee pension funds, estimated at $1 trillion. Moreover, when inflation decreases the purchasing power of government employees' retirement benefits, taxpayers are required to hand over more money in the form of "cost-of-living adjustments" — even though nobody guarantees the pension plans or purchasing power of taxpayers. And President Obama's runaway spending has overwhelmingly served to protect the jobs of government employees and other unionized workers, despite the fact that millions of other taxpayers have lost their jobs.

Forcing taxpayers to guarantee the jobs, pensions, and purchasing power of people who are already better off than they are is not only inequitable; it also insulates government employees from the consequences of excessive government spending. This leaves government workers with no incentive to restrain spending.

Taxpayers should be liberated from the burden of supporting this privileged class. There should be no more bloated government payrolls with excessive pay and benefits packages. And there should be no more money spent to protect government jobs and pensions at the expense of taxpayers who are already hard-pressed to take care of themselves and their families.

The Obama Administration's Conference on the Future of Housing Finance convened last week. Cato scholars say the key is simple: fix Fannie Mae and Freddie Mac, the giant mortgage-holders at the center of the housing market tempest. Writes Mark A. Calabria, who attended the summit: "The era of politicians winking and nodding about the 'private' status of Fannie Mae and Freddie Mac should be no more. Any subsidies should be on-budget, as well as accurately and fairly estimated."

• "How Mortgage Market Should Be Fixed" by Mark A. Calabria
• "Say Goodbye to Fannie and Freddie" by William Poole
• "Foreclosure Prevention: Is The Home Affordable Modification Program Preserving Homeownership?" Testimony by Mark A. Calabria

Finally, some good news: Last week, it was reported that the sea turtles in the Gulf of Mexico seem to have weathered the oil spill without much problem. But they are still unnecessarily endangered because of adults who, like juveniles, have a hard time understanding the consequences of their actions. During the past several months, we have seen much of the political class in Washington increasingly act like juveniles, making the rest of us suffer. But first, let's go back to the turtle.

Why are sea turtles endangered, while chickens and cows are not? The answer, quite simply, is that chickens and cows are privately owned and turtles are not — thus they suffer from the tragedy of the commons. When things are owned in common — socialism — no person takes responsibility for protecting the property, and thus it most often ends up being neglected or even destroyed — hence the fate of the sea turtle.

Sea turtles like to lay their eggs on nice beaches in tropical areas — the very same places where people like to live and vacation. This is a battle for space that the sea turtle is bound to lose, despite the best efforts of environmentalist do-gooders to keep people from having a good time and enjoying beaches. The better solution is to farm turtles similar to the way we farm chickens and cows, while also requiring the release of some turtles in order to replenish the wild stocks. Virtually every part of the turtle is useful — tasty lean meat for turtle soup, shells for jewelry, etc. If people were allowed to farm them, there would be many millions more turtles.

Back in the 1960s, Sir Antony Fisher, who was both a major chicken producer in the United Kingdom and a very fine self-taught economist, said that the solution to the endangered turtle problem was to raise turtles in farms and turn some back into the oceans at about age 5, when most could easily protect themselves from predators. He built the first commercial turtle farm in Cayman to prove his concept — a win-win-win idea — more wild turtles, while, at the same time, giving the world good, nutritious food and increasing job opportunities in poor tropical countries. But the environmental community in the United States and elsewhere lobbied governments to ban international trade in turtle projects, thus dooming the commercial viability of the Cayman and other turtle farms — except as tourist attractions. The result is that the poor turtle is still — and always will be — endangered because environmentalists and their political lackeys react emotionally instead of thinking clearly about realistic solutions.

The bad news is that the economy is not growing or creating jobs as the juveniles who control Washington predicted. Most clear-thinking adults, even without formal training in economics, can understand that if the government greatly increases regulations on business (not justified by serious cost-benefit analysis) and increases taxes on labor and capital, the cost of doing business will rise; hence, businesses will have to hire fewer workers. Obviously, these basic concepts have eluded a majority of the members of Congress and many in the administration because this is precisely what they have been doing.

When reporting on a government action, newscasters often have to say, "I am not making this up." Bloomberg just reported that the Federal Housing Administration (FHA) has agreed to insure a mortgage "that enables buyers to make a down payment of as little as 3.5 percent in a building where apartments are listed from $820,000 to $3 million." Did we not just have a housing bubble and financial meltdown that was caused, in part, by government encouraging people with too little money to buy more housing than they could afford? And what sort of mental process takes place in a "mind" that thinks it is a good idea for some hard-working family in Peoria with an income of $50,000 a year to be guaranteeing (i.e., subsidizing) a mortgage so that some New Yorker can live in a $3 million apartment? This is precisely what the FHA program will do.

Recently, a chairman of a substantial European bank explained to me why he can no longer take American clients or invest in the United States. Under some of the new U.S. laws and regulations that were designed to get a few billion more dollars for the IRS, those who run foreign banks and have U.S. "tax persons" (citizens and green card holders, etc.) as clients can be held liable both civilly and criminally for not reporting them to the IRS. But, in an age when millions of people have multiple passports and citizenships, there is no way any banker can know with certainty who is and who is not an American "tax person." As a result, the United States is in the process of driving away, perhaps, trillions of dollars in needed foreign investment and millions of U.S. jobs because a majority of those in Congress are unable to see the very costly consequences of their juvenile actions.

But don't despair. There is good news. It seems that Rep. Maxine Waters and Rep. Charles B. Rangel are being charged with violating the rule that prohibits any federal employee from "discriminating unfairly by dispensing special favors or privileges to anyone, whether for remuneration or not." Hmmm: Is this not what much of today's Washington is all about? Do we have enough jail space?

A policy of low interest rates is a textbook response of monetary authorities to the economic weakness brought on by deficient aggregate demand. The policy is justified by pointing to various ways in which money can promote economic activity — including by stimulating investment, discouraging savings, encouraging consumption spending, and allowing individuals to lower their debt burdens by refinancing existing debt. While these effects are theoretically plausible, this textbook policy does not apply to our present situation.

First, our lingering crisis and economic weakness was brought on not by a Keynesian failure of effective demand, but by a Hayekian asset boom and bust. Second, the textbook case for low interest rates treats the policy as one of benefits without costs. No such policy exists.

The housing boom and bust was a classic asset bubble, such as occurred frequently in the 18th and 19th centuries. Easy money working through cheap credit made long-term investments appear more valuable than would otherwise have been the case.

In most cases, investment booms drive industries with sound fundamentals. When the cheap credit keeps flowing, however, fundamentals are forgotten and the process evolves into a mania (to use the old-fashioned term). What cannot be sustained will not be, so the boom ends in a crisis.

In these scenarios, the collapse of demand is a consequence — not the cause — of the bust. Policies to address crises must get cause and effect right.

When housing prices peaked and then turned down, there were repercussions throughout the financial system and then the broader economy. Mortgage-related securities soured, hitting the balance sheets of the institutions that had purchased them. As that became known, the prices of the securities of these institutions (mainly but not exclusively financial) fell. Credit dried up and the economy tanked. A general rout in the stock market ensued.

The financial panic and ensuing great recession was a classic balance-sheet recession. As balance sheets shrank in value, demand collapsed. There was a liquidity crisis as well, centered around Lehman's collapse, but the driving force was collapsing balance sheets, impaired capital values and, for many, insolvencies.

The declines in home values, investor portfolios and 401(k) plans, and the uncertainties surrounding retirement plans, have all had a big impact. The solution lies in restoring balance sheets. For financial firms, that means raising capital. For consumers and businesses alike, that means saving more of their reduced incomes.

Yet public policy has focused almost exclusively on stimulating spending without much regard to why spending, especially consumption, has flagged. Until balance sheets (corporate and household) are restored, increased spending cannot be sustained.

Temporary spending and tax breaks are always dubious, and especially so now when the rational motivation is to save more and consume less. One-off tax credits for homes, for example, merely borrowed sales from the future. These fiscal programs predictably depressed rather than augmented future consumption.

What is in short supply is not liquidity, but savings. The Fed can supply the former but not the latter. Both fiscal and monetary polices need to shift their focus. The Fed has done the heavy lifting and responded more than adequately to liquidity issues. Now there is little further it can do that is beneficial.

Its move toward Japan-style quantitative easing is a misstep. And historically low interest rates — about which the Bank of International Settlements, the bank for central banks, sounded a warning in its 2009/2010 annual report — will inevitably distort economic activity, as they did during the housing boom. Low interest rates slow the process of restoring balance sheets by keeping asset prices artificially inflated. They also penalize saving, thus prolonging the process of rebuilding balance sheets.

In the fiscal realm, policy must be reoriented from stimulating consumption to encouraging productive investment (not renewed financial speculation). That means no income-tax increases or costly new mandates. In particular, the Bush tax cuts should not be allowed to expire. No matter how the administration spins it, their expiration would entail a large increase in marginal tax rates in the midst of economic weakness. That would further impede savings and capital accumulation, discouraging firms from expanding and hiring workers. Treasury Secretary Tim Geithner is proposing to repeat the mistake of Herbert Hoover, who persuaded Congress to raise taxes in 1932.

Markets are resilient, but their recovery can be impeded by bad policies. At present, both monetary and fiscal policies are on the wrong track.

For those of us striving towards a free society, a basic tenet is a respect for mutual agreements between consenting adults. In the absence of fraud or actual physical harm to either persons or property, adults should have their contracts respected by the state and not rewritten upon political whim. So the question is: is the current system of executive compensation fraudulent or does it impose physical harm on others?

Let us start with the harm. An argument often heard for limiting executive compensation is that it drove the financial crisis, which clearly harmed all of us. The best that can be said is that the evidence is mixed. The most compelling evidence is probably that presented by Rüdiger Fahlenbrach and René Stulz, who conclude from their empirical investigation that "there is no evidence that banks with CEOs whose incentives were better aligned with the interests of their shareholders performed better during the crisis and some evidence that these banks actually performed worse". Professors Fahlenbrach and Stulz also go on to demonstrate that bank CEOs, particularly those of failing institutions, suffered extremely large wealth losses. Of course, the interests of shareholders may not coincide with those of the general public.

In the presence of a government guarantee (implicit or explicit), the interests of both shareholders and management may be to "bet the farm". Given the widespread government guarantees of risk-taking in the financial sector, perverse pay schemes are to be expected. Which, then, is the more important driver here? The moral hazard created by government guarantees or the perverse incentive schemes that result? Limiting compensation schemes in exchange for an explicit guarantee is one thing; limiting them when there is no guarantee is quite different. Eliminating these government guarantees should be the preferred approach, rather than creating intrusive regulatory schemes that seek to control moral hazard, especially when those regulatory schemes have at best a mixed record, if not one of outright failure.

One possibility is that executive compensation arrangements do represent harm to a company's shareholders, given that such arrangements are negotiated between management and the board of directors. The massive literature on the separation of ownership and control need not be repeated here. It is sufficient to say that this possibility has merit. In this case, however, excess compensation, if truly present, is a symptom rather than the disease — and it would be more effective to address the disease. For instance, considerably more could be done to improve the market for corporate control. Eliminating the many obstacles, often pushed by government at the urging of management, to contesting the control of a company would be more effective than just targeting compensation. Subjecting management to a greater possibility of hostile takeovers, for one, would do much to realign the incentives of management with shareholders.

While I do not believe that a price being viewed as "excess" constitutes legitimate grounds, on its own, for government intervention, it is worth asking if, in general, the executive compensation of American publicly traded companies is indeed "excess". Recent growth in pay could simply reflect the efficient outcome of market processes. Carola Frydman and Raven Saks, for example, compare compensation growth with the growth in the stockmarket, based upon S&P companies. Their results show that since the 1970s, growth in pay has closely followed that of the stockmarket. Growth in pay has also tracked growth in firm size. As companies have become larger, and thus more complex and difficult to run, pay has increased accordingly. Given that larger firms can have significant, if not systemic, impacts on the economy if they are mismanaged (think Fannie Mae or GM), then paying considerably more for qualified management would seem common sense.

We should also be wary of the unintended consequences of government directing the executive compensation process. When Congress passed, and President Bill Clinton signed, a bill limiting the tax deductibility of compensation to $1m, except for performance-based pay, it helped shifted compensation towards options-based pay. Congress went so far, in the case of Fannie Mae and Freddie Mac, as to require, in statute, that their executive officers be paid a substantial portion of their pay based upon the "performance" of the companies. The track record of politicians in the area of executive compensation is hardly a good one. This should not be surprising, as the optimal compensation scheme is probably unknowable ex ante, and can be derived only by trial and error, a process generally unsuited for government.

A recurring reaction by politicians to the recent financial crisis has been to deflect attention away from the actual drivers of the crisis and instead focus on convenient targets. Executive compensation is just another example of that distraction. Given how badly politicians and bureaucrats have mismanaged our financial system — not to mention our fiscal situation — they are the last ones who should be tinkering with executive compensation.

Many Americans may not remember, if they ever knew, that toward the end of the Bush administration, FBI Director Robert Mueller and Attorney General Michael Muka sey so greatly expanded the "Guidelines for Domestic FBI Operations" that now, in Barack Obama's presidency, we have essentially returned to the reign of J. Edgar Hoover, who was convinced that a citizen's right to a private life and to his or her own thoughts could be ignored for national security.

The FBI, with no objection from President Obama, can conduct a "threat assessment" — an investigation — on any of us without a judicial warrant or any articulable suspicion of criminal activity. During J. Edgar Hoover's time, there was much public protest and reporting on his erasing of our Fourth Amendment's "right of the people to be secure ... against unreasonable searches and seizures."

Because of my reporting on Hoover's shelving of the Constitution, two FBI agents knocked on my door. Since they did not have a subpoena, I told them they would have to first see my lawyers at the ACLU, at the time a few blocks up the street from where I lived. They left and I never heard from them again, but later found I had an FBI file consisting mainly of newspaper clips of my reporting.

Now, however, even though these new FBI guidelines also permit its agents to take into account race and ethnicity in their "threat assessment," there is no commotion among the citizenry about being under increasingly pervasive surveillance since 9/11. And although Mueller, FBI director since September 2001, had little more than two years left in his 10-year tenure when Obama took office, Mueller is to remain securely in place.

Startlingly, although of very limited interest to the press, when Director Mueller was testifying on July 28 before the Senate Judiciary Committee, he actually told Illinois Democrat Sen. Dick Durbin that before any FBI surveillance can take place, there must be some suspicion of wrongdoing. Somebody in the FBI must have whispered a correction to him because later, he sent Durbin a note saying he had misspoken. He has also said wrongly that race never is a factor in a "threat assessment."

Well, he's so busy looking after our national security, this FBI director, like the much noisier J. Edgar Hoover, has never been a stickler about his agents' concern for the Bill of Rights.

For example, on July 28, the AP's Pete Yost reported that, the day before, the ACLU asked "FBI field offices in 29 states and Washington, D.C, to turn over records related to the bureau's collection of data on race and ethnicity." And, not at all surprisingly, "the FBI is still refusing to make public portions of the guide that deal with sending agents or informants into houses of worship and political gatherings."

If you go to political gatherings, are you going to be tracked just for being there, let alone for what you say? Like J. Edgar Hoover, Mueller isn't going to tell you which political gatherings are on his list — nor will Obama tell him to. And during his confirmation hearing, Obama's Attorney General Eric Holder said:

"The guidelines are necessary because the FBI is changing its mission, going from a pure investigative agency to one that deals with national security." That these limitless guidelines are kept from any judge's scrutiny didn't bother our attorney general or his boss.

But Holder did assure us that he would "see how these guidelines work in operation." I'm still waiting, Mr. Attorney General.

The year before he was nominated, I heard Holder, during a speech before the Constitution Project in Washington, as he condemned President George W. Bush, saying: "I never thought that I would see that a president would act in direct defiance of federal law by authorizing warrantless [National Security Agency] surveillance of American citizens."

Yet here is our chief law enforcement officer endorsing President Obama's approval of unbounded warrantless surveillance under "Guidelines for Domestic FBI Operations" — along with Obama's hearty support of the now much more expanded warrantless NSA surveillance of American citizens under the 2008 FISA Amendments Act, which then-Sen. Obama pledged he would filibuster, and then signed as president.

Moving into positions of power does indeed often corrupt previously cherished principles. Consider former congressman and Bill Clinton's White House chief of staff, Leon Panetta. Before becoming part of this current administration, Panetta wrote: "How did we transform from champions of human dignity and individual rights into a nation of armchair torturers? One word: fear. Then what's wrong with a little waterboarding? The simple answer is the rule of law."

And where is Panetta today? He is President Obama's director of the CIA. He has continued CIA "renditions" that used to send terrorism suspects to countries known for torture. Why is he continuing renditions? He won't say. That's classified. He does say that he rejects punishment of any CIA agents involved in what a then inspector general of the CIA found to be torture. They, Panetta emphasized, were following orders that lawfully, at the time, came from on high. Orders under our rule of law?

Next week: President Obama and Robert Mueller are insisting that the FBI get more warrantless surveillance powers to look into your electronic "communication transactional" Internet records in national security investigations. Like maybe all the websites you visit, or with whom you and your computer socialize on the web.

Why worry if you have nothing you want to hide? Don't you trust your government? It's not as if J. Edgar Hoover were still in the FBI's Washington headquarters named after him — but aren't his successors keeping faith with him? I doubt that many voters in the midterm elections will be asking that question. Many of us don't have the time to look into our history. We find out what's going on now through blogs and cable TV shows we agree with. Will the FBI eventually want to know which ones?

When last we heard from Senate Majority Leader Harry Reid, he was proclaiming that there was no need to reform Social Security because the program "is on solid ground for decades to come."

Well, apparently that's true — if by "decades" Reid, D-Nev., meant "five years."

Social Security's trustees this month finally released their long-delayed report on the system's finances. According to the trustees, who include President Barack Obama's secretaries of Labor and Treasury, Social Security is actually running a cash-flow deficit today, spending more money on benefits than it takes in through taxes. Most of that deficit has been caused by the recent economic downturn and, hopefully, will be only temporary.

But regardless of how the economy performs in the next few years, the trustees warn that by 2015, just five years from now, Social Security will again start to run deficits — and this time they will be permanent. That's a year sooner than predicted in last year's report.

While, in theory, the Social Security Trust Fund will be able to pay benefits until 2037, the same as in last year's report, that figure is misleading because the trust fund contains no actual assets. The government bonds it holds are simply a form of IOU, a measure of how much money the government owes the system, $2.6 trillion, according to the report.

Of course, no one is saying that the government will default on its obligations, but one might ask where the government will get the money to pay back that $2.6 trillion. It's not as though the government has it laying around. To say that Social Security is fine because the Treasury will find a way to pay its debts is like saying you have plenty of money for your mortgage — as long as you don't eat.

Even if Congress can find a way to redeem the bonds, the trust fund surplus will be completely exhausted by 2037. At that point, Social Security will have to rely solely on revenue from the payroll tax — and that won't be sufficient to pay all promised benefits. Overall, the amount the system has promised beyond what it can actually pay now totals $18.7 trillion.

Not surprisingly, Reid and others have suggested that all of this could be fixed with a simple tax increase. They have suggested, for instance, taking the cap off the amount of income subject to the Social Security payroll tax. This would be the largest tax increase in U.S. history, and would give this country a higher marginal tax rate than, say, Sweden. And it wouldn't come close to fixing Social security's financial shortfall.

In fact, even if you took the cap off completely, without giving anyone additional benefits in exchange for the higher taxes, you would extend the date at which Social Security begins to run a deficit by seven years — to 2022. That's not much gain for all that pain.

To actually "save" Social Security would require a 50 percent hike in the payroll tax, from 12.4 percent to at least 18 percent, or the equivalent in other taxes. That's a big tax hike.

And all this says nothing about Social Security's other problems. Social Security taxes are already so high, relative to benefits, that Social Security has simply become a bad deal for younger workers, providing a low, below-market rate of return. Many young workers will end up paying more in taxes than they receive in benefits. They will actually lose money under the program.

And, most importantly, under the current system, workers do not actually own their Social Security benefits. They are left totally dependent on the goodwill of the 535 politicians in Congress to determine what they'll receive in retirement. Benefits are not inheritable, and the program is a barrier to wealth accumulation.

Politicians like Reid can no longer be allowed to duck this vital issue. The trustees' report makes it clear that Social Security is not "on solid ground." Social Security must be reformed, sooner rather than later.

Government officials and apologists for America's wars are furious at Bradley Manning. The ruddy-cheeked Army private, now in solitary confinement in Quantico, Virigina, allegedly released classified army documents to WikiLeaks, the controversial whistleblower protection website. Manning appears to be the source of the video WikiLeaks released under the name "Collateral Murder," which shows a U.S. Army helicopter crew killing more than a dozen civilians with a mounted machine gun. Manning is also suspected to be a source of WikiLeaks' "Afghan War Diaries," the massive trove of classified files detailing routine military operations in Afghanistan. The series of New York Times stories based on the files paints a grim picture of a mission hampered by endemic disorganization, double-dealing allies, and frequently deadly error.

Rep. Mike Rogers, a Republican from Michigan, has called for Manning's execution on grounds of treason. Washington Post columnist Marc Thiessen, the former Bush speech writer who rose to prominence through his aggressive defense of state-sanctioned torture, has called WikiLeaks a "criminal syndicate" — stopping just short of demanding the invasion of Iceland for the robust legal protections it affords organizations like WikiLeaks and its founder Julian Assange. Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, said that Assange might already have on his hands "the blood of some young soldier or that of an Afghan family."

This idea — that Manning and WikiLeaks have imperiled Afghani informants or American troops — is now the leading charge against them. "We know for a fact that people will likely be killed because of this information being disclosed," Rep. Rogers said.

Rogers did not provide evidence for his "fact," but one fact beyond dispute in our wars in Iraq and Afghanistan is this: they have killed people by the thousands. In fact, the two wars combined have produced well more than 100,000 corpses. If putting people in harm's way is a damning criticism of Manning, then what are we to make of those who have cheered on, voted for, and managed America's wars? Is all this killing justified or not? Is there a legitimate aim that will somehow redeem all this death? These questions are the backdrop against which we judge the deeds of Bradley Manning and the efforts of WikiLeaks.

The bloody events portrayed in the WikiLeaks' "Collateral Murder" video seem gratuitously malign. It is no consolation to know that the victims were riddled with bullets in accordance with military protocol. (Again, for what?) Consequently, it takes no great empathy to understand Manning's desire to expose such savage, pointless destruction of human life, or his desire to distance himself from it.

"I don't believe in good guys versus bad guys anymore," Private Manning confessed in an instant message chat with Adrian Lamo, the ex-hacker who turned him in. "I mean, we're better in some respects," he clarified. "[W]e're much more subtle... use a lot more words and legal techniques to legitimize everything. It's better than disappearing in the middle of the night. But just because something is more subtle, doesn't make it right."

Manning's disillusionment may strike unfaltering patriots as the germ of his betrayal. But lazy love of country blinds us to the possibility of our country's wrongdoing. What's more, it blinds us to the possibility that Manning's softening of partiality, his recoil from slaughter, is the morally right response to what he had seen. It is hard to sense our own complicity in injustice, especially when the victims of injustice appear remote. But Manning saw that he was an adjunct to injustice and senseless death, and was moved to risk his freedom, possibly his life, to do something about it. After telling the duplicitous Lamo that he had forwarded 260,000 State Department cables to WikiLeaks, Manning explained his aim: "Hopefully worldwide discussion, debates, and reforms," he wrote. "[I] want people to see the truth, regardless of who they are, because without information, you cannot make informed decisions as a public." Though he has soured on the state, Manning evidently remains an idealist animated by the possibly naïve hope that a democratic public that has seen what he has seen will feel moved, as he was moved, to do something about it.

Glenn Greenwald argues that WikiLeaks has generated so much animosity because "they breached the Absolute Wall of Secrecy behind which our Government, and its private National Security and Surveillance State partners, operate."

This is a big part of the story, but not the only part. Private Manning and WikiLeaks have also created the possibility that millions of Americans will now come face to face with the same ugly truths that led Manning to conclude that he had obligations to humanity weightier than an oath to the state. The wars in Iraq and Afghanistan have left Americans with blood on our hands, and on our wallets — a truth most of us prefer to avoid. Unfiltered facts and uncensored video about what has been done on our behalf, on our dime, are "dangerous" precisely because they lead to mortifying moral clarity when it is face-saving obfuscation that we crave. Secrets sold by a grasping turncoat would not threaten America's wars. It is Manning's idealistic exercise of conscience, and the faint possibility that we are as good as he thinks we are, that has agitated the lords of war.

Eating with the Enemy: How I Waged Peace With North Korea from My BBQ Shack in Hackensack
By Robert Egan with Kurt Pitzer
St. Martin's Press, $25.99 386 pages

Dealing with North Korea is one of Washington's most disagreeable tasks. The country is isolated; its political system is opaque; its government is truculent. The United States does not maintain diplomatic relations with the so-called Democratic People's Republic of Korea. Because of Pyongyang, Northeast Asia is one of the world's most dangerous regions.

Establishing normal relations with North Korea might not bring regional peace. However, such contacts would yield some insights into an otherwise closed society. With American diplomats unwilling to engage in diplomacy, a working-class restaurateur in New Jersey stepped into the void.

Bobby Egan (with the assistance of writer Kurt Pitzer) tells the curiously engaging tale of how he became friends with members of the North Korean U.N. delegation and ended up visiting North Korea. Mr. Egan is an unlikely international ambassador. A high school dropout who abused drugs and committed petty crimes, he eventually righted his life and established a BBQ joint called Cubby's. He met some Vietnamese diplomats and got involved in the issue of left-behind POWs.

The relationship between Mr. Egan and the North Koreans zigged and zagged. The latter apparently believed that Mr. Egan was an intelligence officer. The DPRK mission staff used him to help with practical issues, such as buying gifts for North Korean dignitaries. But Mr. Egan also had his own agenda. For instance, he decided that the North needed public exposure, so he cadged free tickets to take his newfound friends to New Jersey Nets and New York Giants games.

No surprise, the FBI took an interest in his activities. He worked with them as a quasi-informant, even helping collect DNA samples for some bizarre purpose. Nevertheless, his relationship with the feds always was difficult. For instance, they were horrified at the thought that he would take a North Korean hunting, as if an armed DPRK diplomat would wreak havoc upon a helpless America.

Over time, he developed a close friendship with Han Song-ryol, counselor and then U.N. ambassador. It's an improbably madcap story. After Mr. Egan hires a limousine for game night, his wife reasonably points out:"Why can't they pay for it themselves? If they can afford a nuclear program, they can afford a limo."

The North Koreans invited him to Pyongyang in 1994. He stayed at the same hotel and visited many of the same spots that I did when I went two years before. But he was given a Kim Il-sung button, a major honor denied me (the North Koreans were upset at my evident disdain for the ubiquitous "icons" of the Kims).They also stuck him with sodium pentothal, or "truth serum," in an attempt to find out who he really worked for. (Thankfully, I avoided this process).

Mr. Egan's most interesting activities were his attempts to play informal ambassador, resolving disputes between the DPRK and United States. He seems shocked that "the Clinton Administration didn't want me to be part of the conversation about North Korea." He appears befuddled that U.S. officials were unimpressed by Pyongyang's offer to help hunt down Osama bin Laden. Unfortunately, Mr. Egan's abundant moral fervor was not matched by geopolitical understanding.

There's a good policy argument for opening diplomatic relations with and eliminating economic sanctions against North Korea. But it is a case that must take into account the nature of the DPRK regime.

There may be none worse on earth. A half-million or more people perished in a famine in the late 1990s. The regime remains a Stalinist police state. None of its neighbors, including China, favors a North Korea with an abundant nuclear arsenal and continent-spanning missiles.

Mr. Egan ignores the reality of the regime with which he is dealing, even though he acknowledges that his North Korean friend, Ambassador Han, went through some form of re-education after returning home for the first time. Mr. Egan's individual relationships with North Korean officials cannot overcome the larger political issues with North Korea.

Nevertheless, Mr. Egan thinks he played a major role in the release of a U.S. helicopter pilot shot down over North Korea, the participation of North Korea in the 1996 Olympics and the provision of private food aid to the North. He even worries that by toasting the DPRK's nuclear test with North Korean diplomats that he was "responsible for encouraging [Ambassador] Han to move forward" with nuclear weapons. The idea that "Dear Leader" Kim Jong-il made decisions in Pyongyang about his nation's nuclear program based on the opinion of a New Jersey restaurateur is rather charming, but it is easy to mistake causation for correlation.

Perhaps Mr. Egan's craziest adventure was his trip to the DPRK with a Pennsylvania state senator to bring home the U.S.S. Pueblo, the intelligence ship seized by North Korea in 1968. The crew was eventually released, but the ship remains a tourist attraction highlighting the evils of American imperialism.

A decision to return the ship could only come from the Dear Leader, and the North would do so only in return for a substantial concession. After all, the Pueblo is Pyongyang's most important symbol of American humiliation. Mr. Egan's belief that the North Korean regime would hand the ship over to a couple of American unknowns exhibits blinding naivete.

After Mr. Egan and his companion showed up in Pyongyang, they only got to visit the Pueblo as tourists — after paying the normal admission fee! "I fumed all the way back to New York," he writes, and for a time he refused to talk to Mr. Han, who, he decided, "was just like any other commie. They were all alike — a one-way street." Mr. Egan eventually got over his disappointment, and the book ends with Mr. Han returning to Pyongyang.

Mr. Egan feels good about his accomplishments, as well he should. The most important message of Eating with the Enemy is not that average citizens can easily surmount international political barriers. They cannot. But private people can reach beyond international politics to form enduring human relationships. As did Bobby Egan.

The gay marriage debate gained renewed intensity last week when a federal judge struck down California's Proposition 8 ban on gay marriage. Supporters of gay marriage hailed the decision as a crucial blow for civil rights; opponents assailed it as an assault on fundamental moral and religious values.

Oddly, both sides agreed on one thing: that government should define and "supply" marriage.

But it is the government's role in marriage that's at the heart of the problem.

Marriage means two things in modern society.

Religious marriage is a custom, ceremony or rite that some couples wish to pursue. Religious marriage is not the subject of the legal controversy; no one is proposing that governments bar religions from supplying religious marriage to same-sex couples.

Civil marriage is a legal institution created by governments. It is, in essence, just a bundle of contracts involving the marrying couple, their children and others. A marrying couple gets legal rights and responsibilities about division of property, inheritance, guardianship of children and other issues. The government enforces this bundle of rights and responsibilities.

The question is, does the government need to specify a particular bundle of contracts, enforce this bundle and call it "marriage"?

The answer is no.

If government exits the marriage business, both same-sex and opposite-sex couples would be free to enter private contracts, picking and choosing which ones to sign. Do they plan to have kids? Sign the guardianship contract. Do they need to protect inheritances? Add in that contract. Do they want the whole bundle? No problem.

The result would be that opposite-sex couples and same-sex couples would have the same opportunity to live together, write wills, have biological or adopted children, and so on. Nothing in the law would make any distinction based on the gender or sexual preferences.

The government could still accomplish its legitimate aims in this area by defining default rules for each component. It could, for example, specify that the biological mother is a child's only legal parent unless the mother voluntarily gives up that status. This rule might also impose that the biological father is responsible for some percentage of child support. (Governments already have such rules because many children are born outside of wedlock.)

Of course, couples who wished to be married could still head off to the church or synagogue. This wouldn't have any legal implications, it would simply be a private arrangement between the couples and the religious institution performing the ceremony.

Neither supporters nor opponents of gay marriage are likely to endorse the privatization of marriage. That's because both sides want government policy to validate their own views of what constitutes a "legitimate" family.

But the best path for achieving equal treatment of same-sex and opposite-sex marriage — the goal of those who support gay marriage — is to remove government provision of opposite-sex marriage, rather than extending it to same-sex marriage.

In this arena, as in many others, the way to fix bad policies is by getting rid of them, not by expanding them.