Consider this headline from today's New York Times:

Coordinated Bombings Kill at Least 101 in Baghdad

Does that sound like a country that has achieved peace and understanding?  And we still have over 100,000 troops there.   Not to mention that since the Iraq surge, violence has escalated in Pakistan and Afghanistan.

Once we leave (if we leave), civil war seems almost inevitable.  This does not mean we should stay; that just delays the inevitable, and at a large, ongoing cost.  But we should not kid ourselves about what will happen once we are gone.

Yesterday I signed up my son up for driver's ed classes.  Under a recent revision of the laws in Massachusetts, parents must also attend two hours of classes, so I get to go as well.

Does this requirement accomplish anything?  Hard to see how.  Just two hours down the drain.

The trouble signs surrounding Lend America had been building for years. A top executive was convicted of mortgage fraud but still helped run the company. Home loans made by its headquarters were defaulting at an extremely high rate. Federal prosecutors alleged in a civil suit that the company falsified loan documents and committed fraud.

Yet despite these red flags, a little-known federal agency continued giving its blessing to Lend America, allowing it to do business in the name of the U.S. government. The Government National Mortgage Association, known as Ginnie Mae, authorized the firm to bundle its mortgages into securities and sell them to investors around the world -- all backed by U.S. taxpayer money.

Until last week, federal housing officials said that Lend America met requirements for participating in the program run by Ginnie Mae, an agency in the Department of Housing and Urban Development, and allowed the firm to sell more than $1 billion in mortgages via Ginnie Mae securities.

Read the whole story; it gets worse.  The root of the recent financial crisis, and the growing seed of the next one, is the U.S. obsession with subsidizing homeownership.

The esstate tax is currently scheduled to disappear entirely in 2010 and then return in 2011 at a rate above that currently in place.   The incentive created by this policy is to keep your rich but ailing grandmother alive for another month; then, make sure her docs pull the cord before midnight on December 31st, 2011.

The right fix to this idiocy, of course, is to eliminate the estate tax: it punishes savings, creates windfalls for estate lawyers and accountants, and raises little revenue.

This is not going to happen, however:

The House approved Thursday a measure making the current estate tax rate permanent, overcoming the objections of an unusual coalition of liberal and conservative critics.

The bill passed, 225 to 200, with 26 Democrats joining all Republicans present to vote no. It would make permanent the current estate tax rate of 45 percent, with an exemption of $3.5 million per individual.

The national battle over abortion, for decades firmly planted outside the Kansas clinic of Dr. George R. Tiller, has erupted here in suburban Omaha, where a longtime colleague has taken up the cause of late-term abortions.

Since Dr. Tiller was shot to death in May, his colleague, Dr. LeRoy H. Carhart, has hired two people who worked at Dr. Tiller’s clinic and has trained his own staff members in the technical intricacies of performing late-term abortions.

Dr. Carhart has also begun performing some abortions “past 24 weeks,” he said in an interview, and is prepared to perform them still later if they meet legal requirements and if he considers them medically necessary.

What should the dividing line be for legal, late-term abortion?  I do not have a good answer, but I offer a few thoughts.

1. The frequency of late-term abortions is likely to be low, even when legal, because so many people - including some doctors and nurses - oppose them.  For example,

The late-term abortions, coming after the earliest point when a fetus might survive outside the womb, are the most controversial, even among some who favor abortion rights. A few of Dr. Carhart’s employees quit when he told them of his plans to expand the clinic’s work.

2. It is easy to demonize late-term abortions as immoral, yet banning them can harm women who face serious health risks from carrying a baby to term.

3. A reasonable way to balance competing concerns is to leave the legality of late-term abortion (like abortion generally) to individual states.  A few will permit late-term abortions, but most will significantly restrict or outlaw.  This hodgepodge may not be "perfect," but no perfect solution exists.   Any federal involvement - for or against late term abortions - is likely to do more harm than good.

In the weeks leading up to the Copenhagen climate conference, countries from China to Singapore have pledged cuts to their greenhouse-gas emissions.

One question still lurks unanswered: Who is going to pay for it?

Short answer: no one.  So any agreements made in Copenhagen will pretend to cut emissions but will not impose any mechanism for achieving those cuts.

More broadly, no international agreement will ever achieve meaningful reductions in emissions because the costs created and the cross-country transfers implied would require a level of coercion that the relevant powers are not willing to utilize.

So it is time to accept that whatever climate change is going to happen is going to happen, and learn to adapt to whatever costs this creates.

When the U.S. invaded Afghanistan and then Iraq, I suggested to my father that we would exit within a few years.  He laughed, and said "25 years, at least."

I am beginning to think he was right.  I predict we will have at least 200,000 troops in Iraq / Afghanistan in November, 2012.  We currently have about 120,000 in Iraq, and with the new surge we will have about 100,000 in Afghanistan.

New York lawmakers on Wednesday rejected a bill that would have made their state the sixth to allow gay marriage, stunning advocates who suffered a similar decision by Maine voters just last month.

The New York measure needed 32 votes to pass and failed by a wider-than-expected margin, falling eight votes short in a 24-38 decision by the state Senate. The Assembly had earlier approved the bill, and Gov. David Paterson, perhaps the bill's strongest advocate, had pledged to sign it.

The outcomes in New York and Maine are disappointing because they would have represented legislative legalization of gay marriage, rather than judicial imposition.   The former is more likely to reflect the general will of the people and therefore be more stable.
 
I wonder whether advocates of gay marriage would have greater success if they focussed on civil unions, rather than marriage per se.  While the actual difference is small to non-existent, the symbolic difference seems to be large.  Widespread adoption of civil union need not be the ultimate goal, but it represents a significant, positive step.
 
The ultimate goal, of course, should not be marriage for opposite and same-sex couples; it should be civil unions for both, with marriages a private matter left to religions.   The strategy of adopting civil unions for same-sex couples would not necessarily achieve this goal, but the current strategy does not appear especially successful either.

In a recent op-ed, Federal Reserve Chairman Ben Bernanke argues that proposals in Congress to reduce the Fed's powers or increase Congressional oversight are misguided.  My reactions to Ben's piece are as follows:

1. Given that the Fed exists, it probably made sense for it to lower interest rates in response to the financial crisis.  The private sector expected this; had the Fed not undertaken these actions, the confusion generated might have been counterproductive.

2. The Fed should have argued vociferously against, rather than for, the bailouts of Wall Street banks.  These bailouts probably made things worse rather than better in the short term by generating uncertainty and delaying appropriate adjustments in bank balance sheets.  And the bailouts virtually guarantee increased moral hazard in the long term.

3. Granting more regulatory power to the Fed is silly.  Regulation of large, complex, and constantly evolving finanicial market activities is not going to fix anything, since the financial sector will innovate around it.  Worse, regulation gives some investors a false sense of security.

4. Giving Congress more oversight of the Fed is a terrible idea; libertarians, in particular, should be wary of fixing bad government with more government.  The way to improve the Fed is to eliminate the Fed.

The event, tomorrow night at the Skirball Center at NYU, is produced by Intelligence Squared; see here for details.

Fareed Zakaria, Andres Martinez, and I will aruge in favor of the proposition:

America is to Blame for Mexico's Drug Wars

Jorge Casteneda, Chris W. Cox, and Asa Hutchinson will argue against.

Stay tuned for the outcome; I2 identifies the winner as the side that moved the most undecided members of the audience to its position.

For the past many months, President Obama has been trying to convince us that the nation can lower its health care costs by adopting a new government health insurance program that will cost at least $1 trillion over the next ten years.

In tonight's address from West Point, the President will try to convince us that we can implement a good exit strategy from Afghanistan by sending another 30,000 troops there.

Really?

It was a gentlemen's protest: Scores of cigar-smokers filed into an upscale steakhouse in Reston on Monday night to light up their stogies over cocktails and beef Wellington and lament that the smoking police had finally come to, of all places, Virginia.

Four hundred years after John Rolfe planted the nation's first commercial tobacco in Virginia, and decades after state leaders paid homage to the crop by carving its leaves into the ceiling of the old state Senate chamber, smoking officially becomes illegal Tuesday in the state's 17,500 bars and restaurants.

Smoking bans in restaurants make no sense for the simple reason that anyone who dislikes second-hand smoke can frequent non-smoking restaurants.  Market demand has produced large numbers of smoke-free restuarants because that is what much of the public wants.  Bans impose the preferences of some on the many, without justification.

A bigger cost of smoking bans is that they will evolve into prohibitions on tobacco.  When that happens, the tobacco wars will mimic the drugs wars in all but name.

In 1939, FDR decided to move Thanksgiving Day forward by a week. Rather than take place on its traditional date, the last Thursday of November, he decreed that the annual holiday would instead be celebrated a week earlier.

The reason was economic. There were five Thursdays in November that year, which meant that Thanksgiving would fall on the 30th. That left just 20 shopping days till Christmas. By moving the holiday up a week to Nov. 23, the president hoped to give the economy a lift by allowing shoppers more time to make their purchases and—so his theory went—spend more money.

 The plan did not turn out too well:

For the next two years, Roosevelt continued to move up the date of Thanksgiving, and more states resigned themselves to celebrating early. By 1941, however, the facts turned against Roosevelt.

By then, retailers had two years of experience with the early Thanksgiving, and data were available regarding the 1939 and 1940 Christmas shopping seasons. In mid-March 1941, The Wall Street Journal reported the results of a survey done in New York City. The Journal's headline put it succinctly: "Early Thanksgiving Not Worth Extra Turkey or Doll." Only 37% of stores surveyed favored the early date. In Washington, the federal government reported that the early Thanksgiving resulted in no boost to retail sales.

And so, on May 20, 1941, FDR called a press conference at the White House and announced that he was changing Thanksgiving Day back to its traditional date. The early Thanksgiving had been an "experiment," he said, and the experiment failed. It was too late to move the 1941 Thanksgiving back to the traditional date, but in 1942 Thanksgiving would revert to the last Thursday of the month. This was "the first time any New Deal experiment was voluntarily abandoned," a Washington Post columnist wrote.

Apparently during the debate over whether to honor the Roosevelt's wishes,

People started referring to Nov. 30 as the "Republican Thanksgiving" and Nov. 23 as the "Democratic Thanksgiving" or "Franksgiving."

On the heels of its ballyhooed "Cash for Clunkers" program for cars, the federal government is expected to finalize details in the coming weeks of another tax-supported shopping extravaganza, known as "Cash for Appliances."

Supported by $300 million from the economic stimulus, the program will offer rebates to consumers who buy energy-efficient refrigerators, dishwashers, air conditioners and other appliances to replace their older models.

This program is just as misguided as the original Cash for Clunkers.  The only half-way respectable argument in its favor is the one offered by the Council on Economic Advisers:

Clunkers "is one of several stimulus programs whose purpose is to shift expenditures by households, businesses, and governments from the future to the present," the council wrote in a September report. "Such time-shifting is valuable in a recession, when the economy has an abundance of unemployed resources that can be put to work at low net economic cost."

This view could be right in principle, but it is unlikely to be right in practice.  Just as governments are error-prone and easily swayed by special interests when it comes to picking industries to support (industrial policy), they are likely to miscalculate often in picking when and where to stimulate.

Plus, this particular stimulus requires destruction of consumer durables that still work, an unambiguous waste.

Given its $300 million size, the program cannot have much influence.  But a better approach with that $300 million is to reduce tax rates and let consumers choose how to spend their money.

A discussion at the New York Times's Room for Debate.  My bottom line:

Any policy to reduce emissions may be more costly than the emissions themselves, given the unintended consequences of such policies (e.g., pushing carbon-emitting activity to countries with lower carbon prices).

At most colleges, marijuana is very much an extracurricular matter. But at Med Grow Cannabis College, marijuana is the curriculum: the history, the horticulture and the legal how-to’s of Michigan’s new medical marijuana program. ...

Even though the business of growing medical marijuana is legal under Michigan’s new law, there is enough nervousness about the enterprise that most students at a recent class did not want their names or photographs used. An instructor also asked not to be identified.

“My wife works for the government,” one student said, “and I told my mother-in-law I was going to a small-business class.”

 The rest of the story is here.

George Will writes an interesting column on medical marijuana. 

Will argues that a large fraction of "medical" marijuana purchases are in fact for recreational use, a claim no reasonable person disputes.  Will believes that widespread circumvention of the law's official intent undermines respsect for the rule of law, and I agree.

Will also suggests that estimates of the tax revenue states can collect from medical marijuana are probably inflated; my own estimates suggest he is right on this as well.

But the most intriguing issue is Will's last sentence:

By mocking the idea of lawful behavior, legalization of medical marijuana may be more socially destructive than full legalization.

This last sentence leaves us hanging: is Will advocating legalization, or arguing that legalization is undesirable and medicalization is even worse? 

If Will is true to his small government, individual responsibility ideals (which I share), he must surely advocate full legalization.  To the best of my knowledge, however, he has yet to do that in so many words. 

Now would be a good time.

As millions of Americans struggle to hold on to their homes, Wall Street has found a way to make money from the mortgage mess.

Investment funds are buying billions of dollars’ worth of home loans, discounted from the loans’ original value. Then, in what might seem an act of charity, the funds are helping homeowners by reducing the size of the loans.

But as part of these deals, the mortgages are being refinanced through lenders that work with government agencies like the Federal Housing Administration. This enables the funds to pocket sizable profits by reselling new, government-insured loans to other federal agencies, which then bundle the mortgages into securities for sale to investors.

While homeowners save money, the arrangement shifts nearly all the risk for the loans to the federal government — and, ultimately, taxpayers — at a time when Americans are falling behind on their mortgage payments in record numbers.

Yet one more reason why the deficit situation is far worse than the administation admits. Many of these insured mortgages will fail, and taxpayers will foot the bill.

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My thoughts at Alister and Paine.