04 December, 2009

Uncertain Trumpet

Uncertain Trumpet
Charles Krauthammer
Friday, December 04, 2009

WASHINGTON -- We shall fight in the air, we shall fight on the landing grounds, we shall fight in the fields, we shall fight in the hills -- for 18 months. Then we start packing for home.

We shall never surrender -- unless the war gets too expensive, in which case, we shall quote Eisenhower on "the need to maintain balance in and among national programs" and then insist that "we can't simply afford to ignore the price of these wars."

The quotes are from President Obama's West Point speech announcing the Afghanistan troop surge. What a strange speech it was -- a call to arms so ambivalent, so tentative, so defensive.

Which made his last-minute assertion of "resolve unwavering" so hollow. It was meant to be stirring. It fell flat. In August, he called Afghanistan "a war of necessity." On Tuesday night, he defined "what's at stake" as "the common security of the world." The world, no less. Yet, we begin leaving in July 2011?

Does he think that such ambivalence is not heard by the Taliban, by Afghan peasants deciding which side to choose, by Pakistani generals hedging their bets, by NATO allies already with one foot out of Afghanistan?

Nonetheless, most supporters of the Afghanistan War were satisfied. They got the policy, the liberals got the speech. The hawks got three-quarters of what Gen. Stanley McChrystal wanted -- 30,000 additional U.S. troops -- and the doves got a few soothing words. Big deal, say the hawks.

But it is a big deal. Words matter because (BEG ITAL)will(END ITAL) matters. Success in war depends on three things: a brave and highly skilled soldiery, such as the U.S. military 2009, the finest counterinsurgency force in history; brilliant, battle-tested commanders such as Gens. David Petraeus and McChrystal, fresh from the success of the surge in Iraq; and the will to prevail as personified by the commander in chief.

There's the rub. And that is why at such crucial moments, presidents don't issue a policy paper. They give a speech. It gives tone and texture. It allows their policy to be imbued with purpose and feeling. This one was festooned with hedges, caveats and one giant exit ramp.

No one expected Obama to do a Henry V or a Churchill. But Obama could not even manage a George W. Bush, who, at an infinitely lower ebb in power and popularity, opposed by the political and foreign policy establishments and dealing with a war effort in far more dire straits, announced his surge -- Iraq 2007 -- with outright rejection of withdrawal or retreat. His implacability was widely decried at home as stubbornness, but heard loudly in Iraq by those fighting for and against us as unflinching -- and salutary -- determination.

Obama's surge speech wasn't a commander in chief's, but a politician's, perfectly splitting the difference. Two messages for two audiences. Placate the right -- you get the troops; placate the left -- we are on our way out.

And apart from Obama's own personal commitment is the question of his ability as a wartime leader. If he feels compelled to placate his left with an exit date today -- while he is still personally popular, with large majorities in both houses of Congress, and even before the surge begins -- how will he stand up to the left when the going gets tough and the casualties mount, and he really has to choose between support from his party and success on the battlefield?

Despite my personal misgivings about the possibility of lasting success against Taliban insurgencies in both Afghanistan and the borderlands of Pakistan, I have deep confidence that Petraeus and McChrystal would not recommend a strategy that will be costly in lives, without their having a firm belief in the possibility of success.

I would therefore defer to their judgment and support their recommended policy. But the fate of this war depends not just on them. It depends on the president. We cannot prevail without a commander in chief committed to success. And this commander in chief defended his exit date (versus the straw man alternative of "open-ended" nation-building) thusly: "because the nation that I'm most interested in building is our own."

Remarkable. Go and fight, he tells his cadets -- some of whom may not return alive -- but I may have to cut your mission short because my real priorities are domestic.

Has there ever been a call to arms more dispiriting, a trumpet more uncertain?

12 November, 2009

The Rush to Therapy


The New York Times



November 10, 2009
OP-ED COLUMNIST

The Rush to Therapy

We’re all born late. We’re born into history that is well under way. We’re born into cultures, nations and languages that we didn’t choose. On top of that, we’re born with certain brain chemicals and genetic predispositions that we can’t control. We’re thrust into social conditions that we detest. Often, we react in ways we regret even while we’re doing them.

But unlike the other animals, people do have a drive to seek coherence and meaning. We have a need to tell ourselves stories that explain it all. We use these stories to supply the metaphysics, without which life seems pointless and empty.

Among all the things we don’t control, we do have some control over our stories. We do have a conscious say in selecting the narrative we will use to make sense of the world. Individual responsibility is contained in the act of selecting and constantly revising the master narrative we tell about ourselves.

The stories we select help us, in turn, to interpret the world. They guide us to pay attention to certain things and ignore other things. They lead us to see certain things as sacred and other things as disgusting. They are the frameworks that shape our desires and goals. So while story selection may seem vague and intellectual, it’s actually very powerful. The most important power we have is the power to help select the lens through which we see reality.

Most people select stories that lead toward cooperation and goodness. But over the past few decades a malevolent narrative has emerged.

That narrative has emerged on the fringes of the Muslim world. It is a narrative that sees human history as a war between Islam on the one side and Christianity and Judaism on the other. This narrative causes its adherents to shrink their circle of concern. They don’t see others as fully human. They come to believe others can be blamelessly murdered and that, in fact, it is admirable to do so.

This narrative is embraced by a small minority. But it has caused incredible amounts of suffering within the Muslim world, in Israel, in the U.S. and elsewhere. With their suicide bombings and terrorist acts, adherents to this narrative have made themselves central to global politics. They are the ones who go into crowded rooms, shout “Allahu akbar,” or “God is great,” and then start murdering.

When Maj. Nidal Malik Hasan did that in Fort Hood, Tex., last week, many Americans had an understandable and, in some ways, admirable reaction. They didn’t want the horror to become a pretext for anti-Muslim bigotry.

So immediately the coverage took on a certain cast. The possibility of Islamic extremism was immediately played down. This was an isolated personal breakdown, not an ideological assault, many people emphasized.

Major Hasan was portrayed as a disturbed individual who was under a lot of stress. We learned about pre-traumatic stress syndrome, and secondary stress disorder, which one gets from hearing about other people’s stress. We heard the theory (unlikely in retrospect) that Hasan was so traumatized by the thought of going into a combat zone that he decided to take a gun and create one of his own.

A shroud of political correctness settled over the conversation. Hasan was portrayed as a victim of society, a poor soul who was pushed over the edge by prejudice and unhappiness.

There was a national rush to therapy. Hasan was a loner who had trouble finding a wife and socializing with his neighbors.

This response was understandable. It’s important to tamp down vengeful hatreds in moments of passion. But it was also patronizing. Public commentators assumed the air of kindergarten teachers who had to protect their children from thinking certain impermissible and intolerant thoughts. If public commentary wasn’t carefully policed, the assumption seemed to be, then the great mass of unwashed yahoos in Middle America would go off on a racist rampage.

Worse, it absolved Hasan — before the real evidence was in — of his responsibility. He didn’t have the choice to be lonely or unhappy. But he did have a choice over what story to build out of those circumstances. And evidence is now mounting to suggest he chose the extremist War on Islam narrative that so often leads to murderous results.

The conversation in the first few days after the massacre was well intentioned, but it suggested a willful flight from reality. It ignored the fact that the war narrative of the struggle against Islam is the central feature of American foreign policy. It ignored the fact that this narrative can be embraced by a self-radicalizing individual in the U.S. as much as by groups in Tehran, Gaza or Kandahar.

It denied, before the evidence was in, the possibility of evil. It sought to reduce a heinous act to social maladjustment. It wasn’t the reaction of a morally or politically serious nation.

06 November, 2009

What Independents Want

I completely agree with Brook's message for wooing independents in the future:

"First Wall Street got disproportionately big, then Washington. It’s time to return to fundamentals. No short-term fixes. Government should do what it’s supposed to do: schools, roads, basic research. It should not be picking C.E.O.’s or setting pay or fizzing up the economy with more debt. It should give people the tools to compete, not rig the competition. Lines of restraint have dissolved, and they need to be restored."


The New York Times



November 6, 2009
OP-ED COLUMNIST

Liberals and conservatives each have their own intellectual food chains. They have their own think tanks to provide arguments, politicians and pundits to amplify them, and news media outlets to deliver streams of prejudice-affirming stories.

Independents, who are the largest group in the electorate, don’t have any of this. They don’t have institutional affiliations. They don’t look to certain activist lobbies for guidance. There aren’t many commentators who come from an independent perspective.

Independents are herds of cats who find out what they think through a meandering process of discovery. Right now, independent voters are astonishingly volatile. Democrats did poorly in elections on Tuesday partly because of disappointed liberals who think that President Obama is moving too slowly, but mostly because of anxious suburban independents who think he is moving too fast. In Pennsylvania, there was an eight-point swing away from the Democrats among independents from a year ago. In New Jersey, there was a 12-point swing. In Virginia, there was a 13-point swing.

The most telling races this year were the suburban rebellions across the country. For example, in Westchester and Nassau counties in New York, Republican candidates came from nowhere to defeat entrenched Democratic county officials. In blue Pennsylvania, the G.O.P. won six out of seven statewide offices.

Middle-class suburban voters who have been trending Democratic for a decade suddenly lurched out of the Democratic camp — and are now in play.

Why? What do these voters want?

The first thing to say is that this recession has hit the new suburbs hardest, exactly where independents are likely to live. According to a survey by the National Center for Suburban Studies at Hofstra University, 76 percent of suburbanites say they or someone they know have lost a job in the past year.

The second thing to say is that in this time of need, these voters are not turning to government for support. Trust in government is at its lowest level in recent memory. Over the past year, there has been a shift to the right on issue after issue. According to Gallup, the percentage of Americans who believe that there is too much government regulation rose from 38 percent in 2008 to 45 percent in 2009. The percentage of Americans who want unions to have less influence rose from 32 percent to a record 42 percent.

Americans have moved to the right on abortion, immigration and global warming. Over the past seven months, the number of people who say government is doing too many things better left to business has jumped from 40 percent to 48 percent, according to a Wall Street Journal/NBC News poll.

According to that same survey, only 31 percent of Americans believe that the president and Congress “should worry more about boosting the economy even though it may mean larger budgetdeficits.” Sixty-two percent, twice as many, believe the president and Congress “should worry more about keeping the deficit down, even though it may mean it will take longer for the economy to recover.”

These shifts have not occurred because conservatives and liberals have changed their minds. They haven’t. The shift is among independents.

According to Gallup, the share of independents who describe their views as conservative has moved from 29 percent last year to 35 percent today. The share of independents who believe there is too much government regulation of business has jumped from 38 percent to 50 percent. Independents are in the position of a person who is feeling gravely ill at the same time he has lost faith in his doctor.

This does not mean that independents are turning into Republicans. G.O.P. ratings are still in the toilet. But it does mean the Democrats have to fight to regain some of their most crucial supporters.

If I were a politician trying to win back independents, I’d say something like this: When I was a kid, I had a jigsaw puzzle of the U.S. Each state was a piece, and on it there was a drawing showing what people made there. California might have movies; Washington State, apples; New York, fashion or publishing. That puzzle represented an economy that was diverse and deeply rooted.

We’ve lost that. First Wall Street got disproportionately big, then Washington. It’s time to return to fundamentals. No short-term fixes. Government should do what it’s supposed to do: schools, roads, basic research. It should not be picking C.E.O.’s or setting pay or fizzing up the economy with more debt. It should give people the tools to compete, not rig the competition. Lines of restraint have dissolved, and they need to be restored.

Independents support the party that seems most likely to establish a frame of stability and order, within which they can lead their lives. They can’t always articulate what they want, but they withdraw from any party that threatens turmoil and risk. As always, they’re looking for a safe pair of hands.

The Bias at Fox News

Fox Fever -- The Latest Pandemic
Larry Elder
Thursday, November 05, 2009

I spoke at a recent town hall forum. The many issues discussed included the Obama administration's attack on Fox News. Later, one of the audience members came up to me and sneered, "Well, even you must admit that Fox News is biased in favor of Republicans."

Separate the opinion guys from the news deliverers. Does Fox focus on stuff that the others -- MSNBC, CNN, ABC, NBC, CBS -- do not? Yes. Is that stuff more critical of liberals and less critical of conservatives? Yes.

The best gauge is who watches these stations. Fox News Channel, as a percentage of viewers, includes more self-described libs and indies than CNN or MSNBC includes self-described conservatives and indies. Pew Research Center recently studied the cable channels' viewers' politics. CNN? Fifty-one percent liberal, 23 percent independent and 18 percent conservative. MSNBC? Forty-five percent liberal, 27 percent independent and 18 percent conservative. Don't know about the "fair" part, but Fox's audience was the most "balanced," with 39 percent conservatives, 33 percent liberals and 22 percent independents.

I know from my appearances that the audiences differ -- at least as to the e-mail I receive.

When I appear on Fox, as I did to promote my latest book, "What's Race Got to Do with It," I get mostly approving e-mail. When I get one that disagrees, the writer points out -- using facts, information or analogies -- what, in his or her opinion, undermines my position. But when I appear on Wolf Blitzer's CNN show -- oh, man! Hundreds of hostile e-mails accuse me of everything but the Lincoln assassination. Only rarely, such as when someone took exception to the book's premise -- that white racism no longer poses a potent or even significant factor in America -- does anyone argue intelligently, with facts or information. It's snarl, attack, name-call.

On a recent appearance on Ed Schultz's MSNBC show, I opposed Obamacare -- or tried to, given the host's interruptions. The e-mails I received were unprintable.

The White House loathes Fox News. President Obama pointedly excluded Fox while appearing on ABC, NBC, CBS and CNN. Obama's communications director, on CNN, complained about Fox's year-old coverage of Obama's campaign. But a Pew Research Center study found that during the last six weeks of the campaign, 61 percent of CNN's stories on John McCain were negative, compared with 39 percent on Obama. On MSNBC, 73 percent of McCain stories were negative, while only 14 percent of stories on Obama were negative. But 40 percent of Fox News' stories on Obama and 40 percent of those on McCain aired during the final six weeks of the race were negative. So, of the three major cable news networks, who can legitimately claim to be more "fair and balanced"?

But let's assume, for the sake of argument, Fox News slants toward conservatives. On one side stand conservative talk radio, Investor's Business Daily and some conservative/libertarian publications, writers, bloggers and, yes, Fox News. On the other stand The New York Times, the Los Angeles Times, The Washington Post, the San Francisco Chronicle, The Atlanta Journal-Constitution and even the news section of The Wall Street Journal, as well as the editorial pages of virtually every big-city newspaper. It includes PBS, NPR, NBC, ABC, CBS, CNN and MSNBC. In the 1992 presidential election, for example, almost 90 percent of Washington-based journalists admitted to voting for Bill Clinton for president.

But because Fox News is allegedly biased in favor of conservatives, critics whine like children whose lunch money got snatched. Conservatives have been pummeled for decades. Now that Fox News and conservative talk radio give people alternatives, critics squeal as if being sodomized.

Is Fox skeptical about the "bailout" and Cash for Clunkers or more likely to blame government rather than "greed" for the housing meltdown? Yes. Does Fox appear to focus more on Obama's dithering over his top Afghanistan commander's request for the troops the general thinks necessary to succeed? Yes. The better question is, why aren't the others doing the same thing? The double standards and pro-liberal negligence are mind-boggling. If media malpractice were a crime, many "reporters" would be on death row.

When the Obama administration claimed 640,000 jobs were "saved or created" with $159 billion of the "stimulus," many "news" outlets blithely "reported" this. Do you know that comes to $250,000 per job?!!! And the administration claimed half the jobs were teachers. How many teachers make $250,000 per year? Very little skepticism. Why didn't "journalists" immediately challenge this as a matter of who, what, where, when and why? If George W. Bush had done this (God forbid he'd have supported an $800 billion stimulus package), the mainstream media would have -- and should have -- said, "Why, that comes to $250K per job!!!!!"

But as to Fox News, it's BMW -- bitch, moan and whine. Oh, the humanity!

02 September, 2009

Clunker Legislation

Clunker Legislation
John Stossel
Wednesday, September 02, 2009

The economic illiterates in Washington are so impressed with the "success" of Cash for Clunkers that they're readying Cash for Clunker Appliances. The ludicrous "stimulus" bill gave $300 million to the Department of Energy to provide rebates for 10 types of appliances that have been rated energy efficient.

Before government extends Cash for Clunkers to more products, it might be a good idea to examine the original. The fact that Washington and the buyers who took advantage of Cash for Clunkers are gaga is hardly evidence that it was in the public interest.

It wasn't. As usual, the program has been judged only by its first and most visible consequences, violating Henry Hazlitt's teaching in his classic, "Economics in One Lesson":

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

If you only look at the immediate effects, Cash for Clunkers appears pretty good. People traded in gas-guzzlers for more fuel-efficient new cars. The program cut carbon emissions slightly and gave the auto industry a boost.

"Manufacturing plants have added shifts and recalled workers. Moribund showrooms were brought back to life, and consumers bought fuel-efficient cars that will save them money and improve the environment," Transportation Secretary Ray LaHood bragged. "American consumers and workers were the clear winners thanks to the Cash for Clunkers program."

But wait. Shouldn't that be some consumers and some workers? And only in the short run?

Let's start at the beginning. The government paid car owners to trade in their old cars, which will be destroyed. But the government is running a deficit. So it doesn't have $3 billion to hand out. It must borrow the money, which reduces the amount of money for other investments. Moreover, the government must raise taxes in the future to pay back the principal and interest -- or the Federal Reserve will monetize the debt through inflation. Either way, we pay.

That isn't all. Those car buyers were either going to trade in their used cars soon or they weren't. If they were, Cash for Clunkers simply moved up the schedule. The stimulation of the auto industry occurred earlier. Big deal. But if buyers planned to keep their cars longer, the program imposed costs that are less visible. Without the government incentive to buy cars, consumers would have bought other things -- computers, washing machines, televisions. The manufacturers and sellers of those products didn't get to make those sales. Why should the auto industry get privileges at the expense of others?

Then there are the mechanics who would have serviced those used cars. They've lost business. Some will be laid off. Nor should we forget low-income people who depend on the used-car market for their transportation. The cheap cars they would have bought were destroyed.

What about the alleged environmental benefits? Assuming that cutting carbon emissions is worthwhile, was Cash for Clunkers helpful? It's hard to see why. People who traded in inefficient cars for efficient ones will likely drive more and therefore use more gasoline.

Even if carbon emissions are cut by a lot, economist Christopher Knittel says the program will cost more than $365 per ton of carbon saved.

Economist Bruce Yandle points out what a lousy deal that is: "The much celebrated Waxman-Markey cap-and-trade carbon-emission control legislation estimates the cost of reducing a ton of carbon to be $28 when done across U.S. industries. Yes, we are getting carbon-emission reductions by way of clunker reduction, but we are paying a pretty penny for it" (http://tinyurl.com/lnua3k).

Finally, there is something revolting about the government subsidizing the destruction of useful things. It reminds me of the New Deal policy of killing piglets and pouring milk down sewers to keep food prices from falling.

Leave it to politicians to think we can prosper by obliterating wealth.

19 August, 2009

Whose Medical Decisions?

Whose Medical Decisions?
Thomas Sowell
Wednesday, August 19, 2009

When famed bank robber Willie Sutton was asked why he robbed banks, he said: "Because that's where the money is."

For the same reason, it is as predictable as the sunrise that medical care for the elderly will be cut back under a government-controlled medical system. Because that's where the money is.

My experience is probably not very different from that of many other people in their seventies. My medical expenses in the past year have been more than in the first 40 years of my life-- and I did not spend one night in a hospital all last year or go to an emergency room even once.

Just the ordinary medical expenses of keeping an old geezer going along in good health are high. Throw in a medical emergency or two and the costs go through the roof.

So long as my insurance company and I are paying for it, it is nobody else's business what my medical expenses are. But once the government is involved, everything is their business.

It is not just a question of what the government will pay for. The logic of their collectivist thinking-- and the actual practice in some other countries with government-controlled health care-- is that you cannot even pay for some medical treatments with your own money, if the powers that be decide that "society" cannot let its resources be used that way, or that it would not be "social justice" for some people to have medical treatments that others cannot get, just because some people "happen to have money."

The medical care stampede is about much more than medical care, important as that is. It is part of a whole mindset of many on the left who have never reconciled themselves to an economic system in which how much people can withdraw from the resources of the nation depends on how much they have contributed to those resources.

Despite the cleverness of phrases about people who "happen to have money," very few people just happen to have money. Most people earned their money by supplying other people with goods or services that those people were willing to pay for.

Since it is their own money that they have earned, these people feel free to spend it to give their 80-year-old grandmother another year or two of life, or to pay for a hip replacement operation for their mom or dad, even If some medical "ethicist" might say that the resources of "society" would be better used to allow some 20-year-old to talk over his angst with a shrink.

Barack Obama has talked about the high costs of taking care of elderly or chronically ill patients in terms of "society making those decisions." But a world in which individuals make their own trade-offs with their own money is fundamentally different from a world where third parties take those decisions out of their hands and impose their own notions of what is best for "society."

Calling these arbitrary notions "ethics" doesn't change anything, however effective it may be as political spin.

More is at stake than the outcomes of medical decisions, extremely important as those are. What is also at stake is freedom and the dignity of individuals who do not live their lives as supplicants of puffed-up power holders who are spending the money taken from them in taxes.

One of the many phony arguments for government-controlled medical care is that Americans do not have any longer life expectancy than in other countries, despite much higher medical expenditures.

This argument is phony because longevity depends on health-- and "health care" and "medical care" are not the same, no matter how many times the two are confused in the media or in politics. Health care includes things that doctor cannot do much about.

Homicide affects your longevity but there is not much that doctors can do about it when they arrive on the scene after you have been shot through the heart, except fill out the paperwork. Rates of homicide, obesity and narcotics usage are higher here than in many other countries, reducing our longevity.

But in the things that medical care can do something about-- like cancer survival rates-- the United States ranks at or near the top in the world. But that can change if we give up the real benefits of a top medical system for the visions and rhetoric of politicians.

17 August, 2009

The "Preventive Care" Myth

The "Preventive Care" Myth
Charles Krauthammer
Friday, August 14, 2009

WASHINGTON -- In the 48 hours of June 15-16, President Obama lost the health care debate. First, a letter from the Congressional Budget Office to Sen. Edward Kennedy reported that his health committee's reform bill would add $1 trillion in debt over the next decade. Then the CBO reported that the other Senate bill, being written by the Finance Committee, would add $1.6 trillion. The central contradiction of Obamacare was fatally exposed: From his first address to Congress, Obama insisted on the dire need for restructuring the health care system because out-of-control costs were bankrupting the Treasury and wrecking the U.S. economy -- yet the Democrats' plans would make the problem worse.

Accordingly, Democrats have trotted out various tax proposals to close the gap. Obama's idea of limits on charitable and mortgage-interest deductions went nowhere. As did the House's income tax surcharge on millionaires. And Obama dare not tax employer-provided health insurance because of his campaign pledge of no middle-class tax hikes.

Desperation time. What do you do? Sprinkle fairy dust on every health care plan, and present your deus ex machina: prevention.

Free mammograms and diabetes tests and checkups for all, promise Democratic leaders Nancy Pelosi and Steny Hoyer, writing in USA Today. Prevention, they assure us, will not just make us healthier, it also "will save money."

Obama followed suit in his Tuesday New Hampshire town hall, touting prevention as amazingly dual-purpose: "It saves lives. It also saves money."

Reform proponents repeat this like a mantra. Because it seems so intuitive, it has become conventional wisdom. But like most conventional wisdom, it is wrong. Overall, preventive care increasesmedical costs.

This inconvenient truth comes, once again, from the CBO. In an Aug. 7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes: "Researchers who have examined the effects of preventive care generally find that the added costs of widespread use of preventive services tend to exceed the savings from averted illness."

How can that be? If you prevent somebody from getting a heart attack, aren't you necessarily saving money? The fallacy here is confusing the individual with society. For the individual, catching something early generally reduces later spending for that condition. But, explains Elmendorf, we don't know in advance which patients are going to develop costly illnesses. To avert one case, "it is usually necessary to provide preventive care to many patients, most of whom would not have suffered that illness anyway." And this costs society money that would not have been spent otherwise.

Think of it this way. Assume that a screening test for disease X costs $500 and finding it early averts $10,000 of costly treatment at a later stage. Are you saving money? Well, if one in 10 of those who are screened tests positive, society is saving $5,000. But if only one in 100 would get that disease, society is shelling out $40,000 more than it would without the preventive care.

That's a hypothetical case. What's the real-life actuality in the United States today? A study in the journal Circulation found that for cardiovascular diseases and diabetes, "if all the recommended prevention activities were applied with 100 percent success," the prevention would cost almost 10 times as much as the savings, increasing the country's total medical bill by 162 percent. Elmendorf additionally cites a definitive assessment in the New England Journal of Medicine that reviewed hundreds of studies on preventive care and found that more than 80 percent of preventive measuresadded to medical costs.

This doesn't mean we shouldn't be preventing illness. Of course we should. But in medicine, as in life, there is no free lunch. The idea that prevention is somehow intrinsically economically different from treatment -- that treatment increases costs and prevention lowers them -- is simply nonsense.

Prevention is a wondrous good, but in the aggregate it costs society money. Nothing wrong with that. That's the whole premise of medicine: Treating a heart attack or setting a broken leg also costs society. But we do it because it alleviates human suffering. Preventing a heart attack with statins or breast cancer with mammograms is costly. But we do it because it reduces human suffering.

However, prevention is not, as so widely advertised, healing on the cheap. It is not the magic bullet for health care costs.

You will hear some variation of that claim a hundred times in the coming health care debate. Whenever you do, remember: It's nonsense -- empirically demonstrable and CBO-certified.

11 August, 2009

How's the new car?

Can someone explain to my why I should pay for someone else to get a new car? And as far as stimulating the economy, it does no such thing. Sales made through this program are either frontloaded sales that would have occurred anyway, or an artificial reason to spend money that could have been spent elsewhere rather than true "stimulus". And if they purchasers did not have the $$ to make the purchase, now they have traded in a low-debt car for a high-debt car - deepening the debt cycle that has contributed to the poor economy in the first place.

Mostly I am just pissed that my tax dollars are going to help people buy new cars. Is that what taxes are for?

I am so glad to see people are not getting caught up in the "buy American" crazy - buy the best product at the best price. In this case, those options appear to be foreign...

Cash for Clunkers: Trade in American, Buy Foreign

The only part of the stimulus program that is working, the cash-for-clunkers program is, in reality, a subsidy to foreign car companies, proving that Barack Obama is the best president Japan ever had.

The Department of Transportation reports that the ten leading trade-ins are all American branded cars while six of the top ten new cars purchased - and four of the top five - are foreign. So the United States Senate is about to pass additional funds to subsidize the trade-in of American cars and the purchase of foreign cars.

DOT reports that the following are the ten top trade-ins, all American:

1. Ford Explorer
2. Ford F150 Pickup 2WD
3. Jeep Grand Cherokee 4 WD
4. Jeep Cherokee 4 WD
5. Dodge Caravan/Grand Caravan
6. Chevrolet Blazer 4 WD
7. Ford Explorer 2 WD
8. Ford F150 Pickup 4 WD
9. Chevrolet C1500 Pickup 2 WD
10. Ford Windstar FWD Van

And the top ten new car purchases, subsidized by the American taxpayer, are mainly foreign vehicles:

Top Ten New Car Purchases: Cash for Clunkers

1. Toyota Corolla
2. Ford Focus FWD
3. Honda Civic
4. Toyota Prius
5. Toyota Camry
6. Ford Escape FWD
7. Hyndai Elantra
8. Dodge Caliber
9. Honda Fit
10. Chevrolet Cobalt

It is a violation of the World Trade Organization rules to enact a public subsidy program and skew it toward only domestically produced products, so the Congress has no choice but to extend the program to all comers. No choice, that is, but to not spend the money in the first place.

Cash for Clunkers will do wonders for the Japanese economy, but its impact on the US job situation is problematic. This unintended consequence is a great illustration of what happens when the blunt tool of government subsidy is applied to the fine tuning of a free market economy. Government planners keep getting it wrong. That's why socialism is such a bad idea.

So Obama can boast of a great success in taking American cars off the road and replacing them with foreign cars. Great going!

05 August, 2009

How Much is That Clunker In the Window?

How Much is That Clunker In the Window?
Jonah Goldberg
Wednesday, August 05, 2009

Ce qu'on voit et ce qu'on ne voit pas. That may exhaust my French phrase quota for the year, but it's worth it. The saying is the title of an essay by 19th century French economist Frederic Bastiat and means "that which is seen, and that which is not seen."

Bastiat's essay is most famous for the "parable of the broken window," in which a young boy shatters a shopkeeper's window and, after some initial outrage, the villagers conclude that the rascal helped the local economy. Why?

Because if no one broke windows, window makers would be out of business, and if window makers were out of business, they wouldn't buy any more bread or shoes, hurting the bakers and cobblers. So the six francs the shopkeeper must spend for a new window is really a boon to the community.

The problem with this argument can be gleaned from the title of Bastiat's essay. By counting the money the shopkeeper spends to replace a perfectly good window (that which is seen), we ignore the money he might have spent on something else (that which is unseen). The shopkeeper might have instead dropped six francs on new shoes, a book or a bonus for his assistant. Those who celebrate the broken window as a generator of growth take "no account of that which is not seen."

Sorry for the long digression, but the parable of the broken window is worth keeping in mind, or perhaps even worth updating to the parable of the crushed clunker.

This parable is more convoluted, but the upshot is that Uncle Sam pays people to destroy their own cars as long as they use the money to buy a new, more expensive car.

As you've no doubt heard, the "cash for clunkers" program gives buyers up to $4,500 of taxpayer dollars toward the purchase of a new car if they trade in their old cars for vehicles with better gas mileage. The old cars, still roadworthy, are then destroyed just like the shopkeeper's window.

The thinking behind the program is that the car companies need a boost, Michigan needs a boost, the environment needs a boost (through lower emissions), and Americans need help too.

Unsaid, but just as relevant, is that the authors of the government's mammoth stimulus plan need some proof that something is being stimulated.

The program's $1 billion funding evaporated in days rather than months as consumers, most of whom had been waiting to trade in their clunkers anyway, lined up for free cash. Washington is now agog with its successful effort to give out free money.

That Washington is shocked by the news that Americans like getting free money shows how thick the Beltway bubble really is.

Like the drunk who only looks for his car keys where the light is good, Washington can only see the economic activity it has created, not the activity it has destroyed.

For starters, who says the smartest thing for people with working cars is to buy new ones? Personal debt is supposed to be a problem, so why not look at this as bribing consumers into taking out car loans they don't need? Even with the $4,500 subsidy, not all of these customers are going to be paying cash for their new cars. So they'll be swapping serviceable-but-paid-for cars for nicer cars that are owned by banks.

Besides, maybe some people would be smarter to buy a savings bond or max out their kid's college fund or -- here's a crazy thought -- buy health insurance. But instead they've been seduced into spending the equivalent of their six francs on a car they don't really need.

But, you might say, some buyers surely do need a new car. True. But if they needed a new car, they'd get one anyway, eventually. Indeed, they might already have gotten it, but rationally opted to wait for the program to kick in.

Or maybe they'd have needed to delay the purchase until next year, or buy a cheaper car, possibly even a used car, which will now become more difficult for poor people to find because we are taking all these cheap cars off the market.

But at least under these scenarios, they'd be spending their own money.

Under the government's program, tax dollars are being diverted to people with cheap cars so they can buy expensive ones. That's just really inefficient wealth distribution, not wealth creation. But government can see it, and that's all that counts.


Impossible Promises

Impossible Promises
John Stossel
Wednesday, August 05, 2009

I keep reading about health-care "reform," but I have yet to see anyone explain how the government can make it easier for more people to obtain medical services, control the already exploding cost of those services and not interfere with people's most intimate decisions.

You don't need to be a Ph.D. in economics to understand that government cannot do all three things. (Judging by what Paul Krugman writes, a Ph.D. may be an obstacle.)

The New York Times describes a key part of the House bill: "Lawmakers of both parties agree on the need to rein in private insurance companies by banning underwriting practices that have prevented millions of Americans from obtaining affordable insurance. Insurers would, for example, have to accept all applicants and could not charge higher premiums because of a person's medical history or current illness."

No more evil "cherry-picking." No more "discrimination against the sick. But that's not insurance. Insurance is the pooling of resources to cover the cost of a possible but by no means certain misfortune befalling a given individual. Government-subsidized coverage for people already sick is welfare. We can debate whether this is good, but let's discuss it honestly. Calling welfare "insurance" muddies thinking.

Such "reform" must increase the demand for medical services. That will lead to higher prices. Obama tells us that reform will lower costs. But how do you control costs while boosting demand?

The reformers make vague promises about covering the increased demand by cutting other costs. We should know by now that such promises aren't worth a wooden nickel. The savings never materialize.

Some of the savings are supposed to come from Medicare. The Times reports "Lawmakers also agree on proposals to squeeze hundreds of billions of dollars out of Medicare by reducing the growth of payments to hospitals and many other health care providers."

With the collapse of the socialist countries, we ought to understand that bureaucrats cannot competently set prices. When they pay too little, costs are covertly shifted to others, or services dry up. When they pay too much, scarce resources are diverted from other important uses and people must go without needed goods. Only markets can assure that people have reasonable access to resources according to each individual's priorities.

Assume Medicare reimbursements are cut. When retirees begin to feel the effects, AARP will scream bloody murder. The elderly vote in large numbers, and their powerful lobbyists will be listened to.

The government will then give up that strategy and turn to what the Reagan administration called "revenue enhancement": higher taxes on the "rich." When that fails, because there aren't enough rich to soak, the politicians will soak the middle class. When that fails, they will turn to more borrowing. The Fed will print more money, and we'll have more inflation. Everyone will be poorer.

The Times story adds: "They are committed to rewarding high-quality care, by paying for the value, rather than the volume, of [Medicare] services."

Value to whom? When someone buys a service in the market, that indicates he values it more than what he gives up for it. But when the taxpayers subsidize the buyer, the link between benefit and cost is broken. Market discipline disappears.

Listening to the health-care debate, I hear Republicans and Democrats saying it's wrong to deny anyone anything. That head-in-the-sand attitude is why Medicare has a $36-trillion unfunded liability. It's not sustainable -- and they know it.

They've given us a system that now can be saved only if bureaucrats limit coverage by second-guessing retirees' decisions. Government will decide which Medicare services have value and which do not. Retirees may have a different opinion.

One may be willing to give up the last year of life if he's in pain and has little hope for recovery. Another may want to fight to the end. But when taxpayers pay, the state will make one choice for all retirees.

Now, to reduce the financial burden of the medical system, Obama proposes a plan that inevitably will extend the second-guessing to the rest of us. So much for his promise not to interfere with our medical decisions.


30 July, 2009

States in a Fiscal Hole They Dug

States in a Fiscal Hole They Dug
Steve Chapman
Thursday, July 30, 2009

Everywhere you look, states are being crunched by fiscal emergencies that range from painful to excruciating. California, which has been paying bills with IOUs, is now preparing to close state parks and furlough state employees -- which is what you have to do when your budget deficit is bigger than the entire budget of some states.

It's not alone. "At least 39 states have imposed cuts that hurt vulnerable residents," trumpeted a recent report from the liberal Center on Budget and Policy Priorities. California, New York and Delaware have approved income-tax increases, and Pennsylvania and Illinois are considering doing likewise.

We all know the reason for the squeeze: An unexpected, severe national recession has dried up revenues just when states need funds to help out-of-work citizens. That's true: You would expect the worst downturn in decades to have a negative effect on tax collections. But it's a long way from the whole truth.

The crisis in state budgets is not an accident, and it wasn't unforeseeable. For years, most states have spent like there's no tomorrow, and now tomorrow is here. They bring to mind the lament of Mickey Mantle, who said, "If I knew I was going to live this long, I'd have taken better care of myself."

If they had known the revenue flood wasn't a permanent fact of life, governors and legislators might have prepared for drought. Instead, like overstretched homeowners, they took on obligations they could meet only in the best-case scenario -- which is not what has come to pass.

Over the last decade, state budgets have expanded rapidly. We have had good times and bad times, including a recession in 2001, but according to the National Association of State Budget Officers, this will be the first year since 1983 that total state outlays have not increased.

The days of wine and roses have been affordable due to a cascade of tax revenue. In state after state, the government's take has ballooned. Overall, the average person's state tax burden has risen by 42 percent since 1999 -- nearly 50 percent beyond what the state would have needed just to keep spending constant, with allowances for inflation.

Even low-tax states like Texas and Nevada have followed the same course. No one has been inclined to say, "Taxpayers don't need to send us more money. We've got plenty."

All that growth should have been enough to pay for essential programs and furnish ample reserves, allowing state governments to weather a downturn without major adjustments. But the states put a priority on burning through all the cash they could get. Last year, they spent about 77 percent more than they did 10 years before.

California illustrates the problem. Adam Summers of the libertarian Reason Foundation in Los Angeles has calculated that if it "had simply limited its spending increases to the 4.38 percent average annual increase in the state's consumer price index and population growth each years since fiscal year 1990-91, the state would be sitting on a $15 billion budget surplus right now."

Illinois is another problem child. The state's general fund appropriation is some two-thirds higher today than it would be if the state had just kept those outlays in line with inflation over the last two decades. That increase, as in California, is the difference between a gaping deficit and a comfortable surplus.

Then there is New York. Last fall, Democratic Gov. David Paterson called for an end to the "unsustainable growth in state spending" in recent years. Since the mid-90s, he noted, the state budget has doubled, outstripping the inflation rate by nearly twofold. And New York was not exactly notorious for its frugality 15 years ago.

Unlike the federal government, states can't simply run deficits indefinitely. For that reason, they have a powerful duty to pile up surpluses during fat years, which would allow them to make up the revenue that goes missing during lean years. But for many lawmakers, the future extends only to the next election. So any money they have, they feel an insatiable need to lavish on someone.

Politicians are happy to blame the recession for depriving citizens of programs they have come to expect. The recession didn't create the gap between state government commitments and state government resources. It only exposed it.


07 July, 2009

In Search of Dignity

July 7, 2009
OP-ED COLUMNIST

In Search of Dignity

When George Washington was a young man, he copied out a list of 110 “Rules of Civility and Decent Behavior in Company and Conversation.” Some of the rules in his list dealt with the niceties of going to a dinner party or meeting somebody on the street.

“Lean not upon anyone,” was one of the rules. “Read no letter, books or papers in company,” was another. “If any one come to speak to you while you are sitting, stand up,” was a third.

But, as the biographer Richard Brookhiser has noted, these rules, which Washington derived from a 16th-century guidebook, were not just etiquette tips. They were designed to improve inner morals by shaping the outward man. Washington took them very seriously. He worked hard to follow them. Throughout his life, he remained acutely conscious of his own rectitude.

In so doing, he turned himself into a new kind of hero. He wasn’t primarily a military hero or a political hero. As the historian Gordon Wood has written, “Washington became a great man and was acclaimed as a classical hero because of the way he conducted himself during times of temptation. It was his moral character that set him off from other men.”

Washington absorbed, and later came to personify what you might call the dignity code. The code was based on the same premise as the nation’s Constitution — that human beings are flawed creatures who live in constant peril of falling into disasters caused by their own passions. Artificial systems have to be created to balance and restrain their desires.

The dignity code commanded its followers to be disinterested — to endeavor to put national interests above personal interests. It commanded its followers to be reticent — to never degrade intimate emotions by parading them in public. It also commanded its followers to be dispassionate — to distrust rashness, zealotry, fury and political enthusiasm.

Remnants of the dignity code lasted for decades. For most of American history, politicians did not publicly campaign for president. It was thought that the act of publicly promoting oneself was ruinously corrupting. For most of American history, memoirists passed over the intimacies of private life. Even in the 19th century, people were appalled that journalists might pollute a wedding by covering it in the press.

Today, Americans still lavishly admire people who are naturally dignified, whether they are in sports (Joe DiMaggio and Tom Landry), entertainment (Lauren Bacall and Tom Hanks) or politics (Ronald Reagan and Martin Luther King Jr.).

But the dignity code itself has been completely obliterated. The rules that guided Washington and generations of people after him are simply gone.

We can all list the causes of its demise. First, there is capitalism. We are all encouraged to become managers of our own brand, to do self-promoting end zone dances to broadcast our own talents. Second, there is the cult of naturalism. We are all encouraged to discard artifice and repression and to instead liberate our own feelings. Third, there is charismatic evangelism with its penchant for public confession. Fourth, there is radical egalitarianism and its hostility to aristocratic manners.

The old dignity code has not survived modern life. The costs of its demise are there for all to see. Every week there are new scandals featuring people who simply do not know how to act. For example, during the first few weeks of summer, three stories have dominated public conversation, and each one exemplifies another branch of indignity.

First, there was Mark Sanford’s press conference. Here was a guy utterly lacking in any sense of reticence, who was given to rambling self-exposure even in his moment of disgrace. Then there was the death of Michael Jackson and the discussion of his life. Here was a guy who was apparently untouched by any pressure to live according to the rules and restraints of adulthood. Then there was Sarah Palin’s press conference. Here was a woman who aspires to a high public role but is unfamiliar with the traits of equipoise and constancy, which are the sources of authority and trust.

In each of these events, one sees people who simply have no social norms to guide them as they try to navigate the currents of their own passions.

Americans still admire dignity. But the word has become unmoored from any larger set of rules or ethical system.

But it’s not right to end on a note of cultural pessimism because there is the fact of President Obama. Whatever policy differences people may have with him, we can all agree that he exemplifies reticence, dispassion and the other traits associated with dignity. The cultural effects of his presidency are not yet clear, but they may surpass his policy impact. He may revitalize the concept of dignity for a new generation and embody a new set of rules for self-mastery.

02 July, 2009

Memorization & Knowledge? So overrated...

My favorite part: This is the sort of thing Justice Ruth Bader Ginsburg described in the text as just the workings of politics. Writing in Slate, Yale Law faculty member Emily Bazelon goes further. She laments that the promotion test rewarded memorization and that it favored "'fire buffs' -- guys who read fire suppression manuals on their down time."
She is outraged that a fire department might want to promote firefighters who know more about suppressing fires, rescuing victims and protecting their colleagues rather than simply promote a predetermined number of members of specific racial groups whose self-appointed political spokesmen back the politicians in office.


Firefighter Case Shows Seamy Side of Racial Politics

Michael Barone
Thursday, July 02, 2009

The Supreme Court's decision in Ricci v. DeStefano, the case of the New Haven firefighters, was a ringing endorsement of the Civil Rights Act of 1964's ban on racial discrimination and a repudiation of Supreme Court nominee Sonia Sotomayor's decision in the Second Circuit U.S. Court of Appeals. While five justices flatly rejected Sotomayor's ruling, even the four dissenters wouldn't have let stand her ruling allowing the results of a promotion exam to be set aside because no black firefighter had a top score.

Ricci is also something else: a riveting lesson in political sociology, thanks to the concurring opinion by Justice Samuel Alito. It shows how a combination of vote-hungry politicians and local political agitators -- you might call them community organizers -- worked with the approval of elite legal professionals like Sotomayor to employ racial quotas and preferences in defiance of the words of the Civil Rights Act.

One of the chief actors was the Rev. Boise Kimber, a supporter of Mayor John DeStefano. The mayor testified for him as a character witness in a 1996 trial in which he was convicted of stealing prepaid funeral expenses from an elderly woman. DeStefano later appointed Kimber the head of the board of fire commissioners, but Kimber resigned after saying he wouldn't hire certain recruits because "they just have too many vowels in their name."

After the results of the promotion test were announced, showing that 19 white and one Hispanic firefighter qualified for promotion, Kimber called the mayor's chief administrative officer opposing certification of the test results.

The record shows that DeStefano and his appointees went to work, holding secret meetings and concealing their motives, to get the Civil Service Board to decertify the test results. Kimber appeared at a board meeting and made "a loud, minutes-long outburst" and had to be ruled out of order three times.

City officials ignored the inconvenient fact that they had hired an independent and experienced firm -- this is a thriving business -- to draw up a bias-free test and paid a competing firm to draw up another test. Its head testified that the first firm's test was biased without seeing it. The board capitulated and decertified the test. DeStefano was prepared to overrule it if it had gone the other way.

Such is governance these days in a liberal university town. It may remind some of us old enough to remember of the machinations and contrivances of Southern white officials and agitators employed to prevent blacks from registering and voting.

This is the sort of thing Justice Ruth Bader Ginsburg described in the text as just the workings of politics. Writing in Slate, Yale Law faculty member Emily Bazelon goes further. She laments that the promotion test rewarded memorization and that it favored "'fire buffs' -- guys who read fire suppression manuals on their down time."

She is outraged that a fire department might want to promote firefighters who know more about suppressing fires, rescuing victims and protecting their colleagues rather than simply promote a predetermined number of members of specific racial groups whose self-appointed political spokesmen back the politicians in office.

Bazelon and Sotomayor, who voted to uphold the city's decertification of the promotion test, are typical of liberal elites who are ready to ratify squalid political deals -- and blatant racial discrimination -- in return for the political support and the votes that can be rallied by the likes of Kimber. You supply the numbers on Election Day, and we'll supply the verbiage to put a pretty label on your shenanigans.

Usually the people who are hurt by this are not as sympathetic as Frank Ricci, the dyslexic firefighter who paid a friend $1,000 to read the training manuals and studied hard enough to get the highest score on the test.

But I think we ought to reserve some of our sympathy for the purported beneficiaries of this wretched discrimination, the black firefighters. Their champions -- Kimber and DeStefano, Bazelon and Sotomayor -- are telling them that their way up in life should not be determined by the content of their character or by mastery of their worthy craft, but by the color of their skin. Not by a fair and unbiased test, but by dishonest wire-pulling and threats of political retaliation.

Thanks to Justice Alito, for pulling back the curtain and showing the ugly reality of racial discrimination in America today.


30 June, 2009

Reaction to the New Haven firefighter case

On Race, the Slog Goes On
George Will
Monday, June 29, 2009

WASHINGTON -- Although New Haven's firefighters deservedly won in the Supreme Court, it is deeply depressing that they won narrowly -- 5-4. The egregious behavior by that city's government, in a context of racial rabble-rousing, did not seem legally suspect to even one of the court's four liberals, whose harmony seemed to reflect result-oriented rather than law-driven reasoning.

The undisputed facts are that in 2003 the city gave promotion exams to 118 firemen, 27 of them black. The tests were prepared by a firm specializing in employment exams and were validated, as federal law requires, by independent experts. When none of the African-Americans did well enough to qualify for the available promotions, a black minister allied with the seven-term mayor warned of a dire "political ramification" if the city promoted from the list of persons (including one Hispanic) that the exams identified as qualified. The city decided that no one would be promoted, calling this a race-neutral outcome because no group was disadvantaged more than any other.

The city's idea of equal treatment -- denying promotions equally to those deemed and those not deemed qualified -- was particularly galling to Frank Ricci, who had prepared for the exams by quitting his second job, buying the more than $1,000 worth of books the city recommended, paying to have them read onto audiotapes -- he is dyslexic -- and taking practice tests and interviews. His efforts earned him the sixth-highest score.

He and others denied promotions for which their exam scores made them eligible sued, charging violations of the Constitution's guarantee of equal protection of the laws and of the 1964 Civil Rights Act. The city argued that if it had made promotions based on the test results, it would have been vulnerable under the 1964 act to being sued for adopting a practice that had a "disparate impact" on minorities. On Monday, the court's conservatives (Anthony Kennedy writing for the majority, joined by John Roberts, Antonin Scalia, Clarence Thomas and Samuel Alito) held:

The rights of Ricci et al. under the 1964 act were violated. The city's fear of a disparate impact litigation was not unfounded, but that did not justify the race-based response to the exam results because New Haven did not have "a strong basis in evidence" to believe it would be held liable. There is such evidence only if the exams "were not job related and consistent with business necessity, or if there existed an equally valid, less discriminatory alternative" that would have served the city's needs but that it refused to adopt.

"All the evidence demonstrates that the city rejected the test results because the higher scoring candidates were white." The city's criticisms of the exam "are blatantly contradicted by the record." And "the city turned a blind eye to evidence supporting the exams' validity" (emphases added).

Ruth Bader Ginsburg, joined in dissent by John Paul Stevens, David Souter and Stephen Breyer, rejected the majority's conclusions root and branch. She cited a federal report from the early 1970s about discrimination in hiring firefighters, disputed even the "business necessity" of the exams' 60/40 written/oral ratio and defended the integrity of New Haven's decision-making -- rejecting Alito's concurrence, which dwelt on the rancid racial politics of the Rev. Boise Kimber. Alito concluded that "no reasonable jury" could find that the city possessed a "substantial basis in evidence to find the tests inadequate."

Scalia, concurring separately, said Monday's ruling "merely postpones the evil day" on which the court must decide "whether, or to what extent," existing disparate-impact law conflicts with the 14th Amendment guarantee of equal protection of the law. Conceding that "the question is not an easy one," Scalia said: The federal government is prohibited from discriminating on the basis of race, so surely "it is also prohibited from enacting laws mandating that third parties" -- e.g., a city government -- "discriminate on the basis of race." Scalia added:

"Would a private employer not be guilty of unlawful discrimination if he refrained from establishing a racial hiring quota but intentionally designed his hiring practices to achieve the same end? Surely he would. Intentional discrimination is still occurring, just one step up the chain."

The nation shall slog on, litigating through a fog of euphemisms and blurry categories (e.g., "race-conscious" actions that somehow are not racial discrimination because they "remedy" discrimination that no one has intended). This is the predictable price of failing to simply insist that government cannot take cognizance of race.

22 June, 2009

The "Uninsured"

I really like the illustration regarding the photograph changing every six months...

Taking a Razor to the President's Plan

George Will
Sunday, June 21, 2009

WASHINGTON -- To dissect today's health care debate, the crux of which concerns a "public option," use the mind's equivalent of a surgeon's scalpel, Occam's razor, a principle of intellectual parsimony: In solving a puzzle, start with the simplest explanatory theory.

The puzzle is: Why does the president, who says that were America "starting from scratch" he would favor a "single-payer" -- government-run -- system, insist that health care reform include a government insurance plan that competes with private insurers? The simplest answer is that such a plan will lead to a single-payer system.

Conservatives say that a government program will have the intended consequence of crowding private insurers out of the market, encouraging employers to stop providing coverage and luring employees from private insurance to the cheaper government option.

The Lewin Group estimates that 70 percent of the 172 million persons privately covered might be drawn, or pushed, to the government plan. A significant portion of the children who have enrolled in the State Children's Health Insurance Program since eligibility requirements were relaxed in February had private insurance.

Assurances that the government plan would play by the rules that private insurers play by are implausible. Government is incapable of behaving like market-disciplined private insurers. Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers. Besides, unless the point of a government plan is to be cheaper, it is pointless: If the public option conforms to the imperatives that regulations and competition impose on private insurers, there is no reason for it.

The president characteristically denies that he is doing what he is doing -- putting the nation on a path to an outcome he considers desirable -- just as he denies any intention of running General Motors. Nevertheless, the unifying constant of his domestic policies -- their connecting thread -- is that they advance the Democrats' dependency agenda. The party of government aims to make Americans more equal by making them equally dependent on government for more and more things.

Arguments for the public option are too feeble to seem ingenuous. The president says competition from a government plan is necessary to keep private insurers "honest." Presumably, being "honest" means not colluding to set prices, and evidently he thinks that, absent competition from government, there will not be a competitive market for insurance. This ignores two facts:

There are 1,300 competing providers of health insurance. And Roll Call's Morton Kondracke notes that the 2003 Medicare prescription drug entitlement, relying on competition among private insurers, enjoys 87 percent approval partly because competition has made premiums less expensive than had been projected. The program's estimated cost from 2007 to 2016 has been reduced 43 percent.

Some advocates of a public option say health coverage is so complex that consumers will be befuddled by choices. But consumers of many complicated products, from auto insurance to computers, have navigated the competition among providers, who have increased quality while lowering prices.

Although 70 percent of insured Americans rate their health care arrangements good or excellent, radical reform of health care is supposedly necessary because there are 45.7 million uninsured. That number is, however, a "snapshot" of a nation in which more than 20 million working Americans change jobs every year. Many of them are briefly uninsured between jobs. If all the uninsured were assembled for a group photograph, and six months later the then-uninsured were assembled for another photograph, about half the people in the photos would be different.

Almost 39 percent of the uninsured are in five states -- Florida, Texas, New Mexico, Arizona and California, all of which are entry points for immigrants. About 21 percent -- 9.7 million -- of the uninsured are not citizens. Up to 14 million are eligible for existing government programs -- Medicare, Medicaid, SCHIP, veterans' benefits, etc. -- but have not enrolled. And 9.1 million have household incomes of at least $75,000 and could purchase insurance. Those last two cohorts are more than half of the 45.7 million.

Insuring the perhaps 20 million persons who are protractedly uninsured because they cannot afford insurance is conceptually simple: Give them money -- (refundable) tax credits or debit cards (which have replaced food stamps) loaded with a particular value. This would produce people who are more empowered than dependent. Unfortunately, advocates of a government option consider that a defect. Which is why the simple idea of the dependency agenda cuts like a razor through the complexities of this debate.


09 June, 2009

Pay-as-you-go

I think this is a fantastic idea, and a real step in the right direction.  The government has to get a grip on spending.  Typically pay-as-you-go laws are dangerous because rather than cutting existing spending to pay for new initiatives, the legislature just raises taxes.  I'm not sure that is an option at the moment given Obama's pledge not to raise taxes on 95% of Americans and the fact he has already raised taxes on the remaining 5% by letting existing tax cuts expire.  Kudos to Obama for making an effort to reign in runaway spending.

One caveat here:  unless a mechanism exists to alow a reduction in overall spending, all the president has done is freeze spending at the highest level in our nation's history.

Obama pitches pay-as-you-go plan for Congress

WASHINGTON – President Barack Obama on Tuesday challenged Congress to pay for new increases in federal benefit programs as it goes rather than sink the nation deeper into a debt, calling it a matter of public responsibility.

Republicans lashed back that Obama is no voice of fiscal restraint as the deficit soars.

The president's plan would require Congress to pay for new entitlement spending, such as health care, by raising taxes or coming up with budget cuts — a "pay-as-you-go" system that would have the force of law. Under the proposal, if new spending or tax reductions are not offset, there would be automatic cuts in so-called mandatory programs — although Social Security payments and some other programs would be exempt.

Not noted by the president: Tuesday's plan is a watered-down version of the so-called "PAYGO" rules proposed just last month in his own budget plan.

That version would have required, on average, all affected legislation to be paid for in the very first year. The new plan only requires such legislation to be financed over the coming decade. That mirrors congressional rules and reflects the likelihood that health care reform will add to the deficit in the early years.

Obama said the principle is simple: Congress can only spend a dollar if it saves a dollar somewhere else.

"It is no coincidence that this rule was in place when we moved from record deficits to record surpluses in the 1990s — and that when this rule was abandoned, we returned to record deficits that doubled the national debt," Obama said, flanked at the White House by supportive Democratic lawmakers.

"Entitlement increases and tax cuts need to be paid for," he said. "They're not free, and borrowing to finance them is not a sustainable long-term policy."

Republican leaders, critical of the Obama-championed $787 billion stimulus package and other deficit spending, called the president disingenuous.

"It's as if the administration and these Democrat leaders are living in an alternate universe," said House Republican Whip Eric Cantor of Virginia. "The quickest way to save money is to stop recklessly spending it."

The pay-as-you-go rules would not apply to discretionary spending — the portion that Congress decides how to spend each year — which accounts for almost 40 percent of the budget, said Peter Orszag, the administration's budget director.

Obama's call for binding legislation comes as a reward to moderate-to-conservative "Blue Dog" Democrats who are big believers in pay-as-you go. Their votes were crucial to passing a congressional budget blueprint that generally follows Obama's budget.

The House and Senate already have their own PAYGO rules, but have routinely found ways around them. For example, a bill to effectively double GI Bill education benefits was enacted last year because of a loophole in congressional rules.

Obama's "PAYGO" plan would also require future tax cuts to be financed by tax increases elsewhere in the code, though exceptions are made for extendingPresident George W. Bush's 2001 and 2003 tax cuts, as well as other tax cuts that are scheduled to expire.

The federal deficit is on pace to explode past $1.8 trillion this year, more than four times last year's all-time high.

The deficit figures flow from the deep recession, the Wall Street bailout and the cost of the economic stimulus bill. Obama has defended the massive stimulus plan as essential to helping pump some life back in the economy, one that is still shedding jobs but showing more signs of life in recent weeks.

"The fact is, there are few who aren't distressed by deficits," Obama said. He said restoring a pay-as-you-go method under law would force lawmakers to deal not just with the politics and crises of the day, but also remain fixed on the nation's long-term financial health.

08 June, 2009

Yay, let's celebrate the fact judges appear to be biased by gender...

 I love the portion in red - the author thinks this study proves that diversity of judges is a good thing.  I think it proves only that judges need to base their their legal reasoning to the law, regardless of their gender.  If the findings were truly based on legal reasoning, there wouldn't be any correlation between the gender of the judge and the judge's findings.  That study should be very concerning to anyone who want the law to be enforced equaly and fairly.  What happened to "justice is blind"?

Have We Got a Deal For You

Have We Got a Deal For You
George Will
Sunday, June 07, 2009

WASHINGTON -- "I," said the president, who is inordinately fond of the first-person singular pronoun, "want to disabuse people of this notion that somehow we enjoy meddling in the private sector." He said that in March, when the government already owned 80 percent of AIG, Fannie Mae and Freddie Mac. "When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision." But the government is GM's largest shareholder, customer, tax collector, regulator, partner in determining employees' compensation, protector of dealers and pension guarantor. GM's other large owner, the United Auto Workers, is increasingly a government dependant.

Yet Steve Rattner and Ron Bloom, two of the president's fixers of Detroit, recently wrote in USA Today that government "will play no role" in running GM. They were not under oath.

"What we are not doing -- what I have no interest in doing -- is running GM," says the president who, when not firing GM's CEO, purging its board of directors and picking new members, is designing new products (imposing fuel economy requirements that will control size, weight, passenger capacity and safety). The president, overcoming his professed reluctance to run GM, resembles the journalist Don Marquis when, after a month on the wagon, he ordered a double martini and exclaimed: "I've conquered my goddam willpower."

Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7,500 tax credit for purchasers of the electric Chevrolet Volt, supposedly GM's salvation. So, GM is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of America's families.

It is reasonable to assume that GM will become profitable -- if you make unreasonable assumptions about annual vehicle sales and GM's share of the market. Besides, the government that runs Amtrak (which has lost $23 billion, in today's dollars, just since 1990) vows to make GM efficient.

But one reason Amtrak runs on red ink is that legislators treat it as their toy train set, preventing it from cutting egregiously unprofitable routes. Will Congress passively accept auto plant-closing decisions? Rattner says Washington's demure vow is: "No plant decisions, no dealer decisions, no color-of-the-car decisions." He is one-third right. Last week, under the headline "Senators Blast Automakers Over Dealer Closings," The Washington Post reported, "Because the federal government is slated to own most of General Motors and 8 percent of Chrysler, some of the senators said they have a responsibility, as major shareholders do, to review company decisions."

The pressure to politicize the economy is spreading. John Sweeney, head of the AFL-CIO, and Gerald McEntee, head of the American Federation of State, County and Municipal Employees -- which is government organized as an interest group to lobby itself -- have demanded the resignation of two directors of Citigroup. Their premise is that businesses receiving direct government subventions should conform to the wishes of the president's allies.

GM is adopting new ways to lose money: Responsive to its UAW masters, GM is moving from China to America the production of some components of one Chevrolet model. Says UAW President Ron Gettelfinger, "It should be built here if it's going to be sold here." That principle, now successfully asserted, means economic autarky -- the end of international trade, and of prosperity.

The government's $50 billion -- so far -- acquisition of the shadow of GM will injure, with unfair financial advantages, the surprisingly healthy U.S. auto company, Ford. Of course, the government does not intend that injury, any more than it intended to cause protests in Mexico over the high price of corn tortillas, a result of Washington's mandate that Americans burn corn (ethanol) in their cars.

Washington's "rescue" of GM began because GM is "too big to fail," and bankruptcy is (well, was) "unthinkable." Big? GM's market capitalization, $375.8 million on Wednesday, is about the size of California Pizza Kitchen's ($340 million) -- is it too big to fail? -- and one-eleventh that of Harley-Davidson ($4.3 billion). Fail? If GM has not already failed, New Coke was a success.

The administration is determined to prop up GM as a jobs program for the UAW and Midwestern states rich in electoral votes. This frenzy will intensify as the administration's decisions deepen the debacle.

02 June, 2009

GM - Government Motors


The New York Times



June 2, 2009
OP-ED COLUMNIST

The Quagmire Ahead

On Jan. 21, 1988, a General Motors executive named Elmer Johnson wrote a brave and prophetic memo. Its main point was contained in this sentence: “We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.”

On Jan. 26, 2009, Rob Kleinbaum, a former G.M. employee and consultant, wrote his own memo. Kleinbaum’s argument was eerily similar: “It is apparent that unless G.M.’s culture is fundamentally changed, especially in North America, its true heart, G.M. will likely be back at the public trough again and again.”

These two memos, written by men devoted to the company, get to the heart of G.M.’s problems. Bureaucratic restructuring won’t fix the company. Clever financing schemes won’t fix the company. G.M.’s core problem is its corporate and workplace culture — the unquantifiable but essential attitudes, mind-sets and relationship patterns that are passed down, year after year.

Over the last five decades, this company has progressively lost touch with car buyers, especially the educated car buyers who flock to European and Japanese brands. Over five decades, this company has tolerated labor practices that seem insane to outsiders. Over these decades, it has tolerated bureaucratic structures that repel top talent. It has evaded the relentless quality focus that has helped companies like Toyota prosper.

As a result, G.M. has steadily lost U.S. market share, from 54 to 19 percent. Consumer Reports now recommends 70 percent of Ford’s vehicles, but only 19 percent of G.M.’s.

The problems have not gone unrecognized and heroic measures have been undertaken, but technocratic reforms from within have not changed the culture. Technocratic reforms from Washington won’t either. For the elemental facts about the Obama restructuring plan are these: Bureaucratically, the plan is smart. Financially, it is tough-minded. But when it comes to the corporate culture that is at the core of G.M.’s woes, the Obama approach is strangely oblivious. The Obama plan won’t revolutionize G.M.’s corporate culture. It could make things worse.

First, the Obama plan will reduce the influence of commercial outsiders. The best place for fresh thinking could come from outside private investors. But the Obama plan rides roughshod over the current private investors and so discourages future investors. G.M. is now a pariah on Wall Street. Say farewell to a potentially powerful source of external commercial pressure.

Second, the Obama plan entrenches the ancien régime. The old C.E.O. is gone, but he’s been replaced by a veteran insider and similar executive coterie. Meanwhile, the U.A.W. has been given a bigger leadership role. This is the union that fought for job banks, where employees get paid for doing nothing. This is the organization that championed retirement with full benefits at around age 50. This is not an organization that represents fundamental cultural change.

Third, the Obama approach reduces the fear that impels change. The U.S. government will own most of G.M. It would be politically suicidal for the Democrats, or whoever is in power, to pull the plug on the company — now or ever. Therefore, the current managers can rest assured that they never need to fear liquidation again. There will always be federal subsidies for their own mediocrity.

Fourth, the Obama plan dilutes the company’s focus. Instead of thinking obsessively about profitability and quality, G.M. will also have to meet the administration’s environmental goals. There is no evidence G.M. is good at building the sort of small cars the administration demands. There is no evidence that there is a large American market for these cars. But G.M. now has to serve two masters, the market and the administration’s policy goals.

Fifth, G.M.’s executives and unions now have an incentive to see Washington as a prime revenue center. Already, the union has successfully lobbied to move production centers back from overseas. Already, the company has successfully sought to restrict the import of cars that might compete with G.M. brands. In the years ahead, G.M.’s management will have a strong incentive to spend time in Washington, urging the company’s owner, the federal government, to issue laws to help it against Ford and Honda.

Sixth, the new plan will create an ever-thickening set of relationships between G.M.’s new owners — in government, management and unions. These thickening bonds between public and private bureaucrats will fundamentally alter the corporate culture, and not for the better. Members of Congress are also getting more involved in the company they own, and will have their own quaint impact.

The end result is that G.M. will not become more like successful car companies. It will become less like them. The federal merger will not accelerate the company’s viability. It will impede it. We’ve seen this before, albeit in different context: An overconfident government throws itself into a dysfunctional culture it doesn’t really understand. The result is quagmire. The costs escalate. There is no exit strategy.

01 June, 2009

Criticize, then Confirm

Sotomayor: Criticize, then Confirm
Charles Krauthammer
Friday, May 29, 2009

WASHINGTON -- Sonia Sotomayor has a classic American story. So does Frank Ricci.

Ricci is a New Haven firefighter stationed seven blocks from where Sotomayor went to law school (Yale). Raised in blue-collar Wallingford, Conn., Ricci struggled as a C and D student in public schools ill-prepared to address his serious learning disabilities. Nonetheless he persevered, becoming a junior firefighter and Connecticut's youngest certified EMT.

After studying fire science at a community college, he became a New Haven "truckie," the guy who puts up ladders and breaks holes in burning buildings. When his department announced exams for promotions, he spent $1,000 on books, quit his second job so he could study eight to 13 hours a day, and, because of his dyslexia, hired someone to read him the material.

He placed sixth on the lieutenant's exam, which qualified him for promotion. Except that the exams were thrown out by the city, and all promotions denied, because no blacks had scored high enough to be promoted.

Ricci (with 19 others) sued.

That's where these two American stories intersect. Sotomayor was a member of the three-member circuit court panel that upheld the dismissal of his case, thus denying Ricci his promotion.

This summary ruling deeply disturbed fellow members of Sotomayor's court, including Judge Jose Cabranes (a fellow Clinton appointee) who, writing for five others, criticized the unusual, initially unpublished, single-paragraph dismissal for ignoring the serious constitutional issues at stake.

Two things are sure to happen this summer: The Supreme Court will overturn Sotomayor's panel's ruling. And, barring some huge hidden scandal, Sotomayor will be elevated to that same Supreme Court.

What should a principled conservative do? Use the upcoming hearings not to deny her the seat, but to illuminate her views. No magazine gossip from anonymous court clerks. No "temperament" insinuations. Nothing ad hominem. The argument should be elevated, respectful and entirely about judicial philosophy.

On the Ricci case. And on her statements about the inherent differences between groups, and the superior wisdom she believes her Latina physiology, culture and background grant her over a white male judge. They perfectly reflect the Democrats' enthrallment with identity politics, which assigns free citizens to ethnic and racial groups possessing a hierarchy of wisdom and entitled to a hierarchy of claims upon society.

Sotomayor shares President Obama's vision of empathy as lying at the heart of judicial decision-making -- sympathetic concern for litigants' background and current circumstances, and for how any judicial decision would affect their lives.

Since the 2008 election, people have been asking what conservatism stands for. Well, if nothing else, it stands unequivocally against justice as empathy -- and unequivocally for the principle of blind justice.

Empathy is a vital virtue to be exercised in private life -- through charity, respect and lovingkindness -- and in the legislative life of a society where the consequences of any law matter greatly, which is why income taxes are progressive and safety nets built for the poor and disadvantaged.

But all that stops at the courthouse door. Figuratively and literally, justice wears a blindfold. It cannot be a respecter of persons. Everyone must stand equally before the law, black or white, rich or poor, advantaged or not.

Obama and Sotomayor draw on the "richness of her experiences" and concern for judicial results to favor one American story, one disadvantaged background, over another. The refutation lies in the very oath Sotomayor must take when she ascends to the Supreme Court: "I do solemnly swear that I will administer justice without respect to persons, and do equal right to the poor and to the rich. ... So help me God."

When the hearings begin, Republicans should call Frank Ricci as their first witness. Democrats want justice rooted in empathy? Let Ricci tell his story and let the American people judge whether his promotion should have been denied because of his skin color in a procedure Sotomayor joined in calling "facially race-neutral."

Make the case for individual vs. group rights, for justice vs. empathy. Then vote to confirm Sotomayor solely on the grounds -- consistently violated by the Democrats, including Sen. Obama -- that a president is entitled to deference on his Supreme Court nominees, particularly one who so thoroughly reflects the mainstream views of the winning party. Elections have consequences.

Vote Democratic and you get mainstream liberalism: A judicially mandated racial spoils system and a jurisprudence of empathy that hinges on which litigant is less "advantaged."

A teaching moment, as liberals like to say. Clarifying and politically potent. Seize it.

28 May, 2009

Who does Sotomayor empathize with? Who cares!

This idea of judicial "empathy" is driving me nuts.  We are trying to find a US Supreme Court Justice, not a personal life coach.  These are the folks who are supposed to interpret the law, not twist the law to accommodate those who are worthy of empathy.  As John Roberts said,  "Somebody asked me, you know, 'Are you going to be on the side of the little guy?' And you obviously want to give an immediate answer. But as you reflect on it, if the Constitution says that the little guy should win, the little guy is going to win in court before me. But if the Constitution says that the big guy should win, well, then the big guy is going to win, because my obligation is to the Constitution. That's the oath. The oath that a judge takes is not that 'I'll look out for particular interests.' . . . The oath is to uphold the Constitution and laws of the United States, and that's what I would do."

Exactly.

Commentary: Who does Sotomayor empathize with?

By Leslie Sanchez




WASHINGTON (CNN) -- The Obama administration has no intention of pushing comprehensive immigration reform any time soon, but with his nomination of Judge Sonia Sotomayor to the Supreme Court, the president may have found a suitable consolation prize for the Hispanic community.

A prize is due. Hispanics gave 67 percent of their votes to President Obama, delivering key states like Colorado, Nevada and New Mexico to his electoral column, and sending him two new Democratic senators and three new House Democrats from those states alone.

But the problem with identity politics is that not just any Hispanic will do. Obama made clear he wanted to pick a justice who would have empathy for those whose cases come before the court.

As impressive as Sotomayor's life story is, it remains to be seen whether she truly has the much-talked-about "empathy" for Hispanic values and dreams.

If Sotomayor is truly representative of our values, she will understand that the entrepreneurial spirit is alive and well in the Hispanic community and is our best hope for moving Hispanic households solidly into the ranks of the American middle class.

In a study earlier this year, HispanTelligence, the research arm of Hispanic Business magazine, confirmed that there are at least 2.2 million Hispanic-owned businesses in the U.S., generating about $388 billion in combined revenue.

Empathy with the lives of millions of Hispanics today means that she must appreciate the impact of federal, state and municipal tax and regulatory schemes on individuals and small businesses alike. Her writings should reflect the view that access to the marketplace is a constitutional guarantee no less important than freedoms of speech, religion or assembly.

If she understands the hopes and aspirations of the Hispanic community, she should have a record of interpreting the Commerce Clause of the Constitution in ways that encourage individual risk-taking, free enterprise and job creation, not in ways that discourage it.

Likewise, Sotomayor should show evidence of being suspicious of government's power. Many Hispanics are fresh from regimes where the rule of law has been crushed or never existed; we know that with centralized power comes arrogance, and that bureaucracies inevitably become cold, callous, unyielding and corrupt.

She should be imbued with a core appreciation that our Constitution establishes a government of limited, enumerated powers, and should have a record of writings and decisions that support the conclusion that she will err on the side of limiting, not expanding, the powers and influence of government.

Like all other immigrants, Hispanics came here with the hope of acquiring property for themselves and their children. We treasure as sacred our own homes, farms and land, and we know there is often little practical difference between broad government restrictions on the use and enjoyment of that property and its being taken outright.

As a Supreme Court justice, Sotomayor should believe, as we Hispanics do, that the Constitution affords us due process and just compensation in either case -- and that no property should be taken unless there is a legitimate public use.

As everyone knows, at the core of the Hispanic experience are our families and the opportunity to freely exercise our religion. The next justice, if she is empathetic to our lives and values, will protect the sanctity of the family and of life itself.

Obama's nomination of the first Latina to the Supreme Court is a historic moment that has moved each of us, but our pride will be fleeting if she doesn't really share Hispanic values.

The opinions expressed in this commentary are solely those of Leslie Sanchez. 

07 May, 2009

"Empathy" vs. the Law

"Empathy" Versus Law
Thomas Sowell
Tuesday, May 05, 2009

Justice David Souter's retirement from the Supreme Court presents President Barack Obama with his first opportunity to appoint someone to the High Court. People who are speculating about whether the next nominee will be a woman, a Hispanic or whatever, are missing the point.

That we are discussing the next Supreme Court justice in terms of group "representation" is a sign of how far we have already strayed from the purpose of law and the weighty responsibility of appointing someone to sit for life on the highest court in the land.

That President Obama has made "empathy" with certain groups one of his criteria for choosing a Supreme Court nominee is a dangerous sign of how much further the Supreme Court may be pushed away from the rule of law and toward even more arbitrary judicial edicts to advance the agenda of the left and set it in legal concrete, immune from the democratic process.

Would you want to go into court to appear before a judge with "empathy" for groups A, B and C, if you were a member of groups X, Y or Z? Nothing could be further from the rule of law. That would be bad news, even in a traffic court, much less in a court that has the last word on your rights under the Constitution of the United States.

Appoint enough Supreme Court justices with "empathy" for particular groups and you would have, for all practical purposes, repealed the 14th Amendment, which guarantees "equal protection of the laws" for all Americans.

We would have entered a strange new world, where everybody is equal but some are more equal than others. The very idea of the rule of law would become meaningless when it is replaced by the empathies of judges.

Barack Obama solves this contradiction, as he solves so many other problems, with rhetoric. If you believe in the rule of law, he will say the words "rule of law." And if you are willing to buy it, he will keep on selling it.

Those people who just accept soothing words from politicians they like are gambling with the future of a nation. If you were German, would you be in favor of a law "to relieve the distress of the German people and nation"? That was the law that gave Hitler dictatorial power.

He was just another German chancellor at the time. He was not elected on a platform of war, dictatorship or genocide. He got the power to do those things because of a law "to relieve the distress of the German people."

When you buy words, you had better know what you are buying.

In the American system of government, presidential term limits restrict how long any given resident of the White House can damage this country directly. But that does not limit how long, or how much, the people he appoints to the Supreme Court can continue to damage this country, for decades after the president who appointed them is long gone.

Justice John Paul Stevens virtually destroyed the Constitution's restrictions on government officials' ability to confiscate private property in his 2005 decision in the case of "Kelo v. New London"-- 30 years after President Ford appointed him.

The biggest danger in appointing the wrong people to the Supreme Court is not just in how they might vote on some particular issues-- whether private property, abortion or whatever. The biggest danger is that they will undermine or destroy the very concept of the rule of law-- what has been called "a government of laws and not of men."

Under the American system of government, this cannot be done overnight or perhaps even during the terms in office of one president-- but it can be done. And it can be done over time by the appointees of just one president, if he gets enough appointees.

Some people say that who Barack Obama appoints to replace Justice Souter doesn't really matter, because Souter is a liberal who will probably be replaced by another liberal. But, if no one sounds the alarm now, we can end up with a series of appointees with "empathy"-- which is to say, with justices who think their job is to "relieve the distress" of particular groups, rather than to uphold the Constitution of the United States.

Part II

The great Supreme Court justice Oliver Wendell Holmes is not the kind of justice who would have been appointed under President Barack Obama's criterion of "empathy" for certain groups.

Like most people, Justice Holmes had empathy for some and antipathy for others, but his votes on the Supreme Court often went against those for whom he had empathy and for those for whom he had antipathy. As Holmes himself put it: "I loathed most of the things in favor of which I decided."

After voting in favor of Benjamin Gitlow in the 1925 case of Gitlow v. People of New York, Holmes said in a letter to a friend that he had just voted for "the right of an ass to drool about proletarian dictatorship." Similarly, in the case of Abrams v. United States, Holmes' dissenting opinion in favor of the appellants characterized the views of those appellants as "a creed which I believe to be the creed of ignorance and immaturity."

By the same token, Justice Holmes did not let his sympathies with some people determine his votes on the High Court. As a young man, Holmes had dropped out of Harvard to go fight in the Civil War because he opposed slavery. In later years, he expressed his dislike of the minstrel shows that were popular at the time "because they seem to belittle the race."

When there were outcries against the prosecution of Sacco and Vanzetti in the 1920s, Holmes said in a letter, "I cannot but ask myself why this so much greater interest in red than black. A thousand-fold worse cases of negroes come up from time to time, but the world does not worry over them."

Yet when two black attorneys appeared before the Supreme Court, Holmes wrote in another letter to a friend that he had to "write a decision against a very thorough and really well expressed argument by two colored men"-- an argument "that even in intonation was better than, I should say, the majority of white discourses that we hear."

Holmes understood that a Supreme Court justice was not there to favor some people or even to prescribe what was best for society. He had a very clear sense of what the role of a judge was-- and wasn't.

Justice Holmes saw his job to be "to see that the game is played according to the rules whether I like them or not."

That was because the law existed for the citizens, not for lawyers or judges, and the citizen had to know what the rules were, in order to obey them.

He said: "Men should know the rules by which the game is played. Doubt as to the value of some of those rules is no sufficient reason why they should not be followed by the courts."

Legislators existed to change the law.

After a lunch with Judge Learned Hand, as Holmes was departing in a carriage to return to work, Judge Hand said to him: "Do justice, sir. Do justice."

Holmes had the carriage stopped. "That is not my job," he said. "My job is to apply the law."

Holmes wrote that he did not "think it desirable that the judges should undertake to renovate the law." If the law needed changing, that was what the democratic process was for. Indeed, that was what the separation of powers in legislative, executive and judicial branches by the Constitution of the United States was for.

"The criterion of constitutionality," he said, "is not whether we believe the law to be for the public good." That was for other people to decide. For judges, he said: "When we know what the source of the law has said it shall be, our authority is at an end."

One of Holmes' judicial opinions ended: "I am not at liberty to consider the justice of the Act."

Some have tried to depict Justice Holmes as someone who saw no need for morality in the law. On the contrary, he said: "The law is the witness and external deposit of our moral life." But a society's need to put moral content into its laws did not mean that it was the judge's job to second-guess the moral choices made by others who were authorized to make such choices.

Justice Holmes understood the difference between the rule of law and the rule of lawyers and judges.

Part III

There is a reason why the statue of Justice wears a blindfold. There are things that courts are not supposed to see or recognize when making their decisions-- the race you belong to, whether you are rich or poor, and other personal things that could bias decisions by judges and juries.

It is an ideal that a society strives for, even if particular judges or juries fall short of that ideal. Now, however, President Barack Obama has repudiated that ideal itself by saying that he wants to appoint judges with "empathy" for particular groups.

This was not an isolated slip of the tongue. Barack Obama said the same thing during last year's election campaign. Moreover, it is completely consistent with his behavior and associations over a period of years-- and inconsistent with fundamental principles of American government and society.

Nor is this President Obama's only attempt to remake American society. Barack Obama's vision of America is one in which a President of the United States can fire the head of General Motors, tell banks how to bank, control the medical system and take charge of all sorts of other activities for which neither he nor other politicians have any expertise or experience.

The Constitution of the United States gives no president, nor the entire federal government, the authority to do such things. But spending trillions of dollars to bail out all sorts of companies buys the power to tell them how to operate.

Appointing judges to the federal courts-- including the Supreme Court-- who believe in expanding the powers of the federal government to make arbitrary decisions, choosing who will be winners and losers in the economy and in the society, is perfectly consistent with a vision of the world where self-confident and self-righteous elites rule according to their own notions, instead of merely governing under the restraints of the Constitution.

If all this can be washed down with pious talk about "empathy," so much the better for those who want to remake America. Now that the Obama administration has a Congressional majority that is virtually unstoppable, and a media that is wholly uncritical, the chances of preventing the president from putting someone on the Supreme Court who shares his desire to turn America into a different country are slim or none.

The only thing on the side of those who understand this, and who oppose it, is time. Reshaping the Supreme Court cannot be done overnight, the way Congress passed a vast spending bill in two days.

Replacing Supreme Court justices is something that can only be done one at a time and at unpredictable intervals. What this means is that Senators who do not have enough votes to stop an Obama nominee for the High Court from being confirmed nevertheless have an opportunity- and a duty-- to alert the public to the dangers of what is being done.

This does not mean turning confirmation hearings into a circus or a kangaroo court with mud-slinging at judicial nominees, the way Robert Bork and Clarence Thomas were smeared. But it also does not mean taking the path of least resistance by quietly voting for people like Ruth Bader Ginsberg and Stephen Breyer, who treat the Constitution as a grant of arbitrary power to themselves, rather than a restriction of power on the government as a whole.

It is all too easy to say "a president has a right to appoint the kind of people he wants on the Supreme Court." He does. But that does not mean that those who don't have the votes to stop dangerous nominees from being confirmed are obliged to vote for them or to stand mute.

Since Justice David Souter is likely to be replaced by another liberal, it is all too easy to say that it is no big deal. But with all the indications already as to how the Obama administration is trying to remake America on many fronts, the time to begin alerting the public to the dangers is now.

Given the age and health of other Supreme Court justices, more replacements are likely during Obama's time in the White House. Time is an opportunity to mobilize public opinion and perhaps change the composition of the Senate that confirms judicial nominees.

But time by itself does nothing. It is what we do with time that matters.


The International Community

The What Of Nations?

A pandering Obama praised Europe's 'leading role in the world.' Actually, Europe exercises almost no leadership, even in Europe.

George F. Will
NEWSWEEK
From the magazine issue dated Apr 20, 2009

"He's a man way out there in the blue, riding on a smile and a shoeshine. And when they start not smiling back—that's an earthquake." 
—Arthur Miller, "Death of a Salesman"

President William Howard Taft understood how political cant can bewitch the speaker's mind. Listening to an aide natter on about "the machinery of government," Taft murmured, "The young man really thinks it's a machine." The current president's U.N. ambassador, Susan Rice, was on Sunday television recently explaining why she thinks Iran, now several decades into its pursuit of nuclear weapons and close to consummation, might succumb to the siren song of sweet reason and retreat from success. Doing so, she said, would enable Iran "to be a responsible member of the international community"—perhaps not the highest priority for a regime that denies the Holocaust happened, and vows to complete it—and "enter the community of nations." Otherwise Iran will face "the full force of the international community."

Rice really thinks there is a community out there. To believe that is to believe, as liberals do, that harmony is humanity's natural condition, so discord is a remediable defect in arrangements.

Regarding North Korea's missile launch, Rice was very stern. She said the U.N. Security Council would "meet," and there would be "consultation with our partners," who "all need to come together" and "add to" the 2006 U.N. resolution that North Korea had just disregarded, the one that demanded a halt to future missile-related activity, including launches. The Security Council met. It could not even bring itself to say North Korea's launch had violated the resolution against launches.

In the 1950s, conservatives vowed to "roll back" the Iron Curtain. Rice spoke of "ensuring that we roll back" North Korea's nuclear program. She took heart from what she called "some serious dismantlement" of North Korea's principal reactor. Actually, the reactor was not dismantled but disabled, an easily reversible act. Fuel rods were removed and the cooling tower was destroyed. The rods can be reinserted. The reactor can operate without the cooling tower—warm water would be released, which might kill lots of wildlife, but, then, the regime kills lots of North Koreans, even though that supposedly causes frowns to crease the faces of the supposed community of nations.

Perhaps Rice thinks the mere existence of the U.N. proves the existence of an international community. If so, she should spend some communitarian time with our allies the Saudis. The Obama administration has decided to join them as members of the U.N. Human Rights Council, which the Bush administration boycotted because it includes despotic regimes that are ludicrous auditors of other nations' respect for human rights.

An unmarried 23-year-old Saudi woman became pregnant when abducted and gang-raped. She was convicted of adultery and sentenced to a year in prison—and to a perhaps fatal 100 lashes after her child is born. Another woman was visited by two men—one had been breast-fed by her; the other was bringing her bread. Convicted of the crime of being in the presence of men who are not family members, she was sentenced to 40 lashes, which is perhaps a death sentence for a 75-year-old. The "community of nations" that liberals like Rice believe in certainly has what liberals celebrate: diversity.

If there is a "community of nations," then "Yes, we can" do this and that. But if not?

During Barack Obama's trip abroad, during which he praised himself by disparaging his predecessor and deploring America's shortcomings, he took pandering to a comic peak, combining criticism of America with flattery of Europe, when he deplored America's "failure to appreciate Europe's leading role in the world." Actually, as the crisis of aggression and ethnic cleansing in the Balkans demonstrated a decade ago, Europe plays almost no leadership role, even in Europe, which remains a geographical rather than a political denotation.

Europe's collective existence through NATO might be ending. Afghanistan, the supposed "graveyard of empires," might be the burial ground of NATO, which is 60 years old and showing signs of advanced senescence. Officially, NATO says the Afghanistan campaign is vital; actually, it promises a mere 5,000 more troops, none of them for combat. Most of the NATO nations that grudgingly send dribs and drabs of troops to Afghanistan send them enveloped in caveats that virtually vitiate their usefulness, including the stipulation that they shall not be put in harm's way. Tom Korologos, who was U.S. ambassador to Belgium from 2004 to 2007, recalls that when Belgium finally agreed to send a few hundred troops from its unionized "army"—average age: 40—other caveats concerned bottled water, a certain ratio of psychiatrists to troops and a requirement that dust be kept to a minimum.

In Europe, during his first star turn on the world stage, the president learned, or should have, that charm and two euros will almost get him a copy of the International Herald Tribune. Out there in the blue, flying high, selling himself, he found out how far he can go on a smile and a shoeshine.

America's enemies are not smiling back. Those are smirks, not smiles.

30 April, 2009

Credit Card "Bill of Rights"

I agree with most of what John says here.

Credit cards are often the lender of last resort, giving individuals the means to spend money for things they need now while giving them the flexibility to pay later.  In exchange for this temporary loan, banks charge an interest rate on unpaid balances.  These rates are based on historical behavior and the likelihood that the borrower will repay their debt. 

These rates are not randomly assigned; they are reflective of the borrower's credit history.  High rates that are accepted in advance by the borrower are not predatory, they are the fair market value for money loaned to that specific individual.  Politicians who think forcing banks to offer lower rates will help "protect" those who need these funds most are clearly misguided.  Banks won't offer the mandated lower rate.  For those people whose credit histories require a higher rate than the maximum allowed by the new government rule, those people will be denied outright.  The unintended consequence will be fewer credit cards for those who need them most.  These people will be forced to turn to payday loans - a source of funds imposing even higher rates on borrowers.

John and I disagree on the matter of banks changing the interest rate on existing balances.  Allowing banks to do this is like allowing them to readjust fixed rate mortgages after the loan has been agreed to by both parties.  This practice should be abolished.  Banks should be free to change the interest rate on future balances, but existing balances should remain at the previously contracted rate.  

Government Help Hurts

John Stossel
Wednesday, April 29, 2009

"Rate hikes and late fee traps have to end. No more fine print, no more confusing terms and conditions", said President Obama last week when advocating another big-government solution -- this time to evils committed by credit-card companies.

Credit cards are a demagogue's dream come true. What better way to win public affection than to rail against banks for their harsh terms? In the politicians' morality play, creditors are the villains and debtors their helpless victims.

A little context first: No one has a natural right to a credit card. Someone has to be willing to undertake the risk in issuing it. Banks issue cards in their quest for profits. Nothing wrong with that.

Think about what a credit card is. It's convenient access to unsecured loans, permitting consumers to buy things large and small -- not to mention emergency services -- without cash. Pay the bill promptly, and you enjoy a fantastic service for virtually nothing. If circumstances prevent you from paying the bill in full, you can set your own payment schedule, realizing there is a minimum payment and that you will be charged interest on the unpaid balance. No surprise there.

To appreciate credit cards, it is worth recalling that before they came along, people got personal loans from banks, finance companies, pawnshops and loan sharks. Such loans were less convenient, and repayment was less flexible. Some people bought things on layaway, which meant they didn't take the goods home until they were paid for. Loan sharks sometimes broke people's legs.

Credit cards didn't create consumer debt -- they are merely a superior alternative to older methods.

As President Obama and other politicians demagogue this issue, keep two things in mind: Life would be more difficult without credit cards, and banks don't have to keep issuing them. Be careful what you ask for.

Politicians are too short-sighted and vote-hungry to say such things. They want a "credit card holders' bill of rights" that would prohibit certain billing practices, like raising interest rates on existing balances. The House could approve the "bill of rights" this week.

Understandably, these billing practices endear themselves to no one, but competition makes the worst of them far less common. And as for raising rates, revolving credit means that a balance is a fresh loan each month; as the terms state, the rate can change. If issuers can never raise rates on existing balances, even when economic conditions change, they will be likely to charge everyone a higher rate to make up for the risk.

Todd Zywicki, a professor at George Mason University Law School and an expert on consumer credit, points out that the credit-card industry is highly competitive. The web is full of sites that permit easy comparison shopping. Competition has driven banks to more precisely match consumer costs to individual risk. In earlier days, every cardholder paid higher interest rates than today and an annual fee (a way around usury laws). Now, annual fees are largely gone. Rates are lower. Late and over-the-limit fees are unpleasant, but they aren't charged until a cardholder's conduct triggers them. This is not to say credit-card companies never abuse customers, but as Zywicki notes, "[T]here are ample tools for courts and regulators to attack deceptive and fraudulent practices on a case-by-case basis."

Politicians assume we are ignorant about credit-card terms. However, Zywicki points to evidence that people who carry credit-card balances are aware of the interest rate they're paying, and "those who carry larger balances are even more likely to ... comparison shop."

The "bill of rights" seems designed to prevent people from getting themselves in over their heads. That motive is honorable, but government has never been very good at such protection. The law of unintended consequences cannot be repealed, and what government gives with one hand, it inadvertently takes away with the other. Increasing the banks' costs will make it harder for poorer people to get credit cards, and that will only push them into costlier forms of debt, like payday lenders.

I've never understood how the poor are helped by limiting their choices. 

27 April, 2009

Thank you, George Will

The Wreck of the Racial Spoils System
George Will
Sunday, April 26, 2009

WASHINGTON -- Wednesday morning, a lawyer defending in the Supreme Court what the city of New Haven, Conn., did to Frank Ricci and 17 other white firemen (including one Hispanic) was not 20 seconds into his argument when Chief Justice John Roberts interrupted to ask: Would it have been lawful if the city had decided to disregard the results of the exam to select firemen for promotion because it selected too many black and too few white candidates?

In 2003, the city gave promotion exams -- prepared by a firm specializing in employment tests, and approved, as federal law requires, by independent experts -- to 118 candidates, 27 of them black. None of the blacks did well enough to qualify for the 15 immediately available promotions. After a rabble-rousing minister with close ties to the mayor disrupted meetings and warned of dire political consequences if the city promoted persons from the list generated by the exams, the city said: No one will be promoted.

The city called this a "race-neutral" outcome because no group was disadvantaged more than any other. So, New Haven's idea of equal treatment is to equally deny promotions to those who did not earn them and those, including Ricci, who did.

Ricci may be the rock upon which America's racial spoils system finally founders. He prepared for the 2003 exams by quitting his second job, buying the more than $1,000 worth of books the city recommended, paying to have them read onto audiotapes (he is dyslexic), taking practice tests and practice interviews. His studying -- sometimes 13 hours a day -- earned him the sixth-highest score on the exam. He and others denied promotions sued, charging violations of the 1964 Civil Rights Act and the Constitution's guarantee of equal protection of the law.

The city claims that the 1964 act (BEG ITAL)compelled(END ITAL) it to disregard the exam results. The act makes it unlawful for employers to discriminate against an individual regarding the "terms, conditions, or privileges of employment because of such individual's race." And two Senate supporters of the 1964 act, both of them leading liberals (Pennsylvania Democrat Joseph Clark and New Jersey Republican Clifford Case), insisted that it would not require "that employers abandon bona fide qualification tests where, because of differences in background and educations, members of some groups are able to perform better on these tests than members of other groups."

In a 1971 case, however, the Supreme Court sowed confusion by holding that the 1964 act proscribes not only overt discrimination but also "practices that are fair in form, but discriminatory in operation." But what New Haven ignored is that the court, while proscribing tests that were "discriminatory" in having a "disparate impact" on certain preferred minorities, has held that a disparate impact is unlawful only if there is, and the employer refuses to adopt, an equally valid measurement of competence that would have less disparate impact, or if the measurement is not relevant to "business necessity." One of the city's flimsy excuses for disregarding its exam results was that someone from a rival exam-writing firm said that although he had not read the exam the city used, his company could write a better one.

New Haven has not defended its implicit quota system as a remedy for previous discrimination, and has not justified it as a way of achieving "diversity," which can be a permissible objective for schools' admissions policies, but not in employment decisions. Rather, the city says it was justified in ignoring the exam results because otherwise it might have faced a "disparate impact" lawsuit.

So, to avoid defending the defensible in court, it did the indefensible. It used anxiety about a potential challenge under a statute to justify its violation of the Constitution. And it got sued.

Racial spoils systems must involve incessant mischief because they require a rhetorical fog of euphemisms and blurry categories (e.g., "race-conscious" measures that somehow do not constitute racial discrimination) to obscure stark facts, such as: If Ricci and half a dozen others who earned high scores were not white, the city would have proceeded with the promotions.

Some supporters of New Haven, perhaps recognizing intellectual bankruptcy when defending it, propose a squishy fudge: Return the case to the trial court to clarify the city's motivation. But the motivation is obvious: to profit politically from what Roberts has called the "sordid business" of "divvying us up by race."

10 April, 2009

Budget Alternatives

08 April, 2009

More facts about GM

I really like his point about the government only agreeing to bailout Chrysler if they are taken over by Italian automaker fiat.  At the least this seems a little inconsistent with President Obama's "America First" approach to manufacturing...

P.S. - Did you know the Prius sells at a loss?  Funny, you don't hear that part of the story very often...

Car Designer in Chief

George Will
Sunday, April 05, 2009

WASHINGTON -- The Constitution enumerates three requirements of those who would be president (they must be natural-born citizens, at least 35 and a resident within the country for 14 years) and now the government's thrashing about in the economy imposes a fourth: Presidents must be able to speak pluperfect nonsense with a straight face, lest the country understand what the government is doing. Obfuscation serves political salvation when what the government is doing includes promising that if Chrysler will sell itself to Fiat, U.S. taxpayers will lend that Italian firm $6 billion.

Barack Obama displayed reality-denying virtuosity last week when, announcing the cashiering of General Motors' CEO, and naming his replacement, and as the government was prompting selection of a new majority of GM's board of directors, and as the government announced the next deadline for GM to submit a more satisfactory viability plan than it submitted at the last faux deadline, and as the government kept the billions flowing to tide GM over until, well, whenever, the president said: "The United States government has no interest in running GM."

Actually, his administration prefers to do that rather than allow bankruptcy to infuriate the United Auto Workers union, which was pre-emptively grateful to Obama's administration with lavish contributions to candidate Obama. The president supposedly showed "toughness" in sacking a conspicuous member of a particularly unpopular little cohort, CEOs of big corporations. He will need more grit if, as his administration hints, this time it is serious, that its patience is wearing thin, that someday GM could face "controlled" or "prepackaged" or "surgical" bankruptcy. One suspects that those adjectives intimate that it will be faux bankruptcy, gentle in dealing with the UAW.

Last November, five months and $17.4 billion in auto bailouts ago, this column noted: "Some opponents of bankruptcy say: GM must not be allowed to fail before it perfects batteries for its electric-powered Volt, which supposedly is a key to the company's resurrection. This vehicle was concocted to serve GM's prolonged attempt to ingratiate itself with the few hundred environmentally obsessed automotive engineers in Congress. They have already voted tax credits of up to $7,500 for purchasers of such cars -- bribes that reveal doubts about consumer enthusiasm for them at a price that would reflect cost."

In December, GM, by then a mendicant groveling before its congressional masters, ran a full-page newspaper ad apologizing for having "disappointed" everyone, vowing to stop selling so many "pickups and SUVs" (which were 11 of GM's 20 most profitable products in 2008), and promising "revolutionary new products like the Chevrolet Volt." Another ad, which appeared before December and is still running, features a car attached to an electric cord, and says the Volt amounts to "reinventing the automobile."

Last week, in an unenthralled summary of GM's "viability" plan, Obama's administration said: "GM earns a large share of its profits from high-margin trucks and SUVs, which are vulnerable to a continuing shift in consumer preference to smaller vehicles. Additionally, while the Chevy Volt holds promise, it will likely be too expensive to be commercially successful in the short term."

The stunning shift in consumer preferences that should make the White House's freshly minted auto experts feel vulnerable has been reported under headlines such as "Like a Rock: Hybrid Car Sales Plummet" (Wall Street Journal, Dec. 9) and "Hybrid Car Sales Go from 60 to 0 at Breakneck Speed" (Los Angeles Times, March 17). Absent $4 gasoline, customers, those nuisances with their insufferable preferences, do not want the vehicles the politicians want them to want, even with manufacturers now offering large rebates and other incentives.

The two best-selling vehicles in America this year are large pickup trucks (Ford F-Series and Chevy Silverado). In February, Toyota sold 13,600 Tundra and Tacoma pickups and 7,232 Priuses. It sells the Prius at a loss, which it can afford to do because it makes pots of money selling pickups. Has the Car Designer in Chief, aka the president, considered the possibility that what he calls "the cars of tomorrow" will forever be that?

His administration cannot be faulted for failing to do well what cannot be done well -- industrial policy, wherein the political class, with negligible experience in commerce, flounders. The administration can, however, be faulted for trying. The government's wallow in the automobile industry, under this and the previous administration, merits a hockey coach's evaluation of his team: "Everyday you guys look worse and worse. And today you played like tomorrow."

02 April, 2009

You Break it...

Obama and GM
Dick Morris and Eileen McGann
Wednesday, April 01, 2009

GM, now renamed Government Motors, has a new CEO: President Barack Obama. By replacing the head of the company and demanding a restructuring of its board in return for further financial TARP aid, Obama has taken upon himself the responsibility for the future of the company. As Gen. Colin Powell said when Bush was considering invading Iraq and toppling the Saddam Hussein government, "If you break it, you own it." Now it is Obama's company.

This move will backfire big-time! The auto giant is very, very unlikely to be saved by this current TARP infusion. Doubtless, it will need more in the near term. But the resentment now focused on the management of the company will then turn to Obama. Having demanded a replacement of the management, it is he who will be held responsible for the company's future.

And, each time GM asks for more money, Obama will face a choice: take personal responsibility for laying off 100,000 autoworkers or anteing up the additional cash. By intruding himself so deeply into the management of the company, Obama makes himself central to its future. If Obama lets the company fail, having already extended credit, he will have all of Michigan on his case. If he keeps coming up with more and more tax money, he will earn the contempt of the voters.

Socialism has its price. By taking over the management of a company, you become the determinant of its fate in the public's mind.

Obama does not seem to realize that government takeover is the beginning, not the end, of the problem. He should have stuck with being president and leave making cars to others.

And, as the new CEO of General Motors, what will his policy be on corporate compensation? Will the public tolerate his letting his new company pay salaries sufficient to attract the talent necessary to salvaging the firm? Or will he have to rely on a bunch of kids right out of school, willing to work for one or two hundred thousand a year, for the company's salvation?

When it comes to the hard work of cutting retiree health benefits, reducing salaries, laying off workers and closing plants, is Obama willing to resist calls for his intervention? Is he up for getting the blame for all the "heartless" measures GM will have to take to salvage its future? He has put himself squarely in a position to pay a steep political price for his assumption of power in GM.

Most troubling is the sense that Obama cannot have thought this through. He can't have planned this. President Clinton used to say at strategy meetings that we needed to think three or four moves ahead and not just "kick the can down the road." Obama is clearly not following his predecessor's advice.

He realized GM needed money. He knew the public would have a fit if he gave it. So he decided that he would appease his electorate by exacting blood from the company's management and directors by using his guillotine on some of its old grey heads.

But, had he thought before he acted, he would have realized that it would have been far better to have criticized GM from a distance even as he extended more money rather than to, in effect, take over the company.

The president's protestations that the government does not want to own a car company are quite beside the point. It's his now, and he better figure out what to do with it. 

The Devil is in the Details...

While I don't totally blame government leaders for relying on statistics compiled by others, using statistics that are so blatently wrong definitely skews the debate...

The Myth of 90 Percent: Only a Small Fraction of Guns in Mexico Come From U.S.

While 90 percent of the guns traced to the U.S. actually originated in the United States, the percent traced to the U.S. is only about 17 percent of the total number of guns reaching Mexico.

Thursday, April 02, 2009

EXCLUSIVE: You've heard this shocking "fact" before -- on TV and radio, in newspapers, on the Internet and from the highest politicians in the land: 90 percent of the weapons used to commit crimes in Mexico come from the United States.

-- Secretary of State Hillary Clinton said it to reporters on a flight to Mexico City.

-- CBS newsman Bob Schieffer referred to it while interviewing President Obama.

-- California Sen. Dianne Feinstein said at a Senate hearing: "It is unacceptable to have 90 percent of the guns that are picked up in Mexico and used to shoot judges, police officers and mayors ... come from the United States."

-- William Hoover, assistant director for field operations at the Bureau of Alcohol, Tobacco, Firearms and Explosives, testified in the House of Representatives that "there is more than enough evidence to indicate that over 90 percent of the firearms that have either been recovered in, or interdicted in transport to Mexico, originated from various sources within the United States."

There's just one problem with the 90 percent "statistic" and it's a big one:

It's just not true.

In fact, it's not even close. The fact is, only 17 percent of guns found at Mexican crime scenes have been traced to the U.S.

What's true, an ATF spokeswoman told FOXNews.com, in a clarification of the statistic used by her own agency's assistant director, "is that over 90 percent of the tracedfirearms originate from the U.S."

But a large percentage of the guns recovered in Mexico do not get sent back to the U.S. for tracing, because it is obvious from their markings that they do not come from the U.S.

"Not every weapon seized in Mexico has a serial number on it that would make it traceable, and the U.S. effort to trace weapons really only extends to weapons that have been in the U.S. market," Matt Allen, special agent of U.S. Immigration and Customs Enforcement (ICE), told FOX News.

A Look at the Numbers

In 2007-2008, according to ATF Special Agent William Newell, Mexico submitted 11,000 guns to the ATF for tracing. Close to 6,000 were successfully traced -- and of those, 90 percent -- 5,114 to be exact, according to testimony in Congress by William Hoover -- were found to have come from the U.S.

But in those same two years, according to the Mexican government, 29,000 guns were recovered at crime scenes.

In other words, 68 percent of the guns that were recovered were never submitted for tracing. And when you weed out the roughly 6,000 guns that could not be traced from the remaining 32 percent, it means 83 percent of the guns found at crime scenes in Mexico could not be traced to the U.S.

So, if not from the U.S., where do they come from? There are a variety of sources:

-- The Black Market. Mexico is a virtual arms bazaar, with fragmentation grenades from South Korea, AK-47s from China, and shoulder-fired rocket launchers from Spain, Israel and former Soviet bloc manufacturers.

-- Russian crime organizations. Interpol says Russian Mafia groups such as Poldolskaya and Moscow-based Solntsevskaya are actively trafficking drugs and arms in Mexico.

- South America. During the late 1990s, the Revolutionary Armed Forces of Colombia (FARC) established a clandestine arms smuggling and drug trafficking partnership with the Tijuana cartel, according to the Federal Research Division report from the Library of Congress.

-- Asia. According to a 2006 Amnesty International Report, China has provided arms to countries in Asia, Africa and Latin America. Chinese assault weapons and Korean explosives have been recovered in Mexico.

-- The Mexican Army. More than 150,000 soldiers deserted in the last six years, according to Mexican Congressman Robert Badillo. Many took their weapons with them, including the standard issue M-16 assault rifle made in Belgium.

-- Guatemala. U.S. intelligence agencies say traffickers move immigrants, stolen cars, guns and drugs, including most of America's cocaine, along the porous Mexican-Guatemalan border. On March 27, La Hora, a Guatemalan newspaper, reported that police seized 500 grenades and a load of AK-47s on the border. Police say the cache was transported by a Mexican drug cartel operating out of Ixcan, a border town.

'These Don't Come From El Paso'

Ed Head, a firearms instructor in Arizona who spent 24 years with the U.S. Border Patrol, recently displayed an array of weapons considered "assault rifles" that are similar to those recovered in Mexico, but are unavailable for sale in the U.S.

"These kinds of guns -- the auto versions of these guns -- they are not coming from El Paso," he said. "They are coming from other sources. They are brought in from Guatemala. They are brought in from places like China. They are being diverted from the military. But you don't get these guns from the U.S."

Some guns, he said, "are legitimately shipped to the government of Mexico, by Colt, for example, in the United States. They are approved by the U.S. government for use by the Mexican military service. The guns end up in Mexico that way -- the fully auto versions -- they are not smuggled in across the river."

Many of the fully automatic weapons that have been seized in Mexico cannot be found in the U.S., but they are not uncommon in the Third World.

The Mexican government said it has seized 2,239 grenades in the last two years -- but those grenades and the rocket-propelled grenades (RPGs) are unavailable in U.S. gun shops. The ones used in an attack on the U.S. Consulate in Monterrey in October and a TV station in January were made in South Korea. Almost 70 similar grenades were seized in February in the bottom of a truck entering Mexico from Guatemala.

"Most of these weapons are being smuggled from Central American countries or by sea, eluding U.S. and Mexican monitors who are focused on the smuggling of semi-automatic and conventional weapons purchased from dealers in the U.S. border states of Texas, New Mexico, Arizona and California," according to a report in the Los Angeles Times.

Boatloads of Weapons

So why would the Mexican drug cartels, which last year grossed between $17 billion and $38 billion, bother buying single-shot rifles, and force thousands of unknown "straw" buyers in the U.S. through a government background check, when they can buy boatloads of fully automatic M-16s and assault rifles from China, Israel or South Africa?

Alberto Islas, a security consultant who advises the Mexican government, says the drug cartels are using the Guatemalan border to move black market weapons. Some are left over from the Central American wars the United States helped fight; others, like the grenades and launchers, are South Korean, Israeli and Spanish. Some were legally supplied to the Mexican government; others were sold by corrupt military officers or officials.

The exaggeration of United States "responsibility" for the lawlessness in Mexico extends even beyond the "90-percent" falsehood -- and some Second Amendment activists believe it's designed to promote more restrictive gun-control laws in the U.S.

In a remarkable claim, Auturo Sarukhan, the Mexican ambassador to the U.S., said Mexico seizes 2,000 guns a day from the United States -- 730,000 a year. That's a far cry from the official statistic from the Mexican attorney general's office, which says Mexico seized 29,000 weapons in all of 2007 and 2008.

Chris Cox, spokesman for the National Rifle Association, blames the media and anti-gun politicians in the U.S. for misrepresenting where Mexican weapons come from.

"Reporter after politician after news anchor just disregards the truth on this," Cox said. "The numbers are intentionally used to weaken the Second Amendment."

"The predominant source of guns in Mexico is Central and South America. You also have Russian, Chinese and Israeli guns. It's estimated that over 100,000 soldiers deserted the army to work for the drug cartels, and that ignores all the police. How many of them took their weapons with them?"

But Tom Diaz, senior policy analyst at the Violence Policy Center, called the "90 percent" issue a red herring and said that it should not detract from the effort to stop gun trafficking into Mexico.

"Let's do what we can with what we know," he said. "We know that one hell of a lot of firearms come from the United States because our gun market is wide open."

31 March, 2009

1 Year Anniversary


Today is the 1-year anniversary of the blog.  Thank you to everyone who reads and contributes to this space.  Have a great week.

27 March, 2009

Budget Chart

If this doesn't scare you, I don't know what will.  Below are the actual budget deficits (in gray) amassed by the federal government compared to the projected deficits (in red) should President Obama's current budget be approved by congress.

Wow.

First of all, I don't know how anyone can say "but Republicans did it too".  Yes, that is true (and not something they should be proud of), but those levels of spending do not compare to what is being contemplated now.  Every time someone goes to that excuse, it means they can't justify what they are proposing with actual facts and have to try to shift the focus and blame elsewhere.

How can we possibly recover from such ridiculously high spending levels? 

26 March, 2009

First NY's "Fat Tax", now this...

Is this the world you want?  Where any decision that might negatively impact someone at sometime will be banned?  I am all for trying to reduce negative externalities, but this is ridiculous...

California to reduce carbon emissions by... banning black cars?!



In a move that will likely get California's consumers in a huff, impending legislation may soon restrict the paint color options for Golden State residents looking for their next new vehicle. The specific colors that are currently on the chopping block are all dark hues, with the worst offender seemingly the most innocuous color you could think of: Black. What could California possibly have against these colors, you ask? Apparently, the California Air Resources Board figures that the climate control systems of dark colored cars need to work harder than their lighter siblings – especially after sitting in the sun for a few hours. Anyone living in a hot, sunny climate will tell you that this assumption is accurate, of course. In fact, legislation already exists for buildings that has proven successful at reducing the energy consumption of skyscrapers.

So, what's the crux of the problem... can't paint suppliers just come up with new, less heat-absorbent dark paints? According to Ward's, suppliers have reportedly been testing their pigments and processes to see if it's possible to meet CARB's proposed mandate of 20% solar reflectivity by 2016 with a phase-in period starting in 2012, and things aren't looking good. Apparently, when the proper pigments and chemicals are added to black paint, the resulting color is currently being referred to as "mud-puddle brown." That doesn't sound very attractive, now does it? Windshields, backlights and sunroofs are also slated to get reflective coatings starting in 2012.

When we first heard of this issue, an internal debate immediately began as to whether this might be an elaborate early April Fool's joke, but it isn't. Read through CARB's complete Cool Cars Standards and Test Procedures here for more.

The party of "no"? Um...No

House Republicans Propose Alternative Budget

By Perry Bacon Jr.

House Republicans today outlined how they would write the federal budget if they controlled Congress, looking to rebut criticism from President Obama that the GOP is simply complaining about his blueprint but not offering proposals of its own.

Republican lawmakers refused to offer details of how much their alternative budget proposal would cost or how much it would increase the deficit, saying they would release overall numbers next week. Instead, they provided a general outline of proposals that included cutting overall government spending except for defense, banning any additional spending for bailouts of financial companies and a huge income tax cut that would make the maximum tax rate 25% instead of 36% as under current law.

"Two nights ago, the president said we haven't seen a budget yet of the Republicans," said House Minority Leader Rep. John Boehner (R-Ohio). "Well, it's not true, because here it is Mr. President." He waved a thin document called "The Republican Road to Recovery" that describes the GOP proposal.

Rep. Paul Ryan (R-Wis.), the top Republican on the House Budget Committee, said "while we criticize, we propose."

Senate Republicans have decided not to release an alternative budget, but will offer a series of amendments next week to try to reduce the spending under the Democratic budget proposals. House rules allow Democrats to limit the number of amendments offered, so Republicans there will offer only their complete budget alternative.

"Our economic plan amounts to less government, lower taxes and economic prosperity," the GOP document says.

The proposal continues Republicans' push for lower spending and greater tax cuts in response to Obama's budget proposal, which costs about $3.6 trillion and would increase the deficit by $1.38 trillion next year.

24 March, 2009

Political Malfeasance and the Financial Meltdown

Political Malfeasance and the Financial Meltdown
George Will
Tuesday, March 24, 2009

WASHINGTON -- With the braying of 328 yahoos -- members of the House of Representatives who voted for retroactive and punitive use of the tax code to confiscate legal earnings of a small unpopular group -- still reverberating, the Obama administration Monday invited private-sector investors to become business partners with the capricious and increasingly anti-constitutional government. This latest plan to unfreeze the financial system came almost half a year after Congress shoveled $700 billion into the Troubled Asset Relief Program, $325 billion of which has been spent without purchasing any toxic assets.

TARP funds have, however, semi-purchased, among many other things, two automobile companies (and, last week, some of their parts suppliers), which must amaze Sweden. That unlikely tutor of America regarding capitalist common sense has said, through a Cabinet minister, that the ailing Saab automobile company is on its own: "The Swedish state is not prepared to own car factories."

Another embarrassing auditor of American misgovernment is China, whose premier has rightly noted the unsustainable trajectory of America's high-consumption, low-savings economy. He has also decorously but clearly expressed sensible fears that his country's $1 trillion-plus of dollar-denominated assets might be devalued by America choosing, as banana republics have done, to use inflation for partial repudiation of improvidently incurred debts.

From Mexico, America is receiving needed instruction about fundamental rights and the rule of law. A leading Democrat trying to abolish the right of workers to secret ballots in unionization elections is California's Rep. George Miller who, with 15 other Democrats, in 2001 admonished Mexico: "The secret ballot is absolutely necessary in order to ensure that workers are not intimidated into voting for a union they might not otherwise choose." Last year, Mexico's highest court unanimously affirmed for Mexicans the right that Democrats want to strip from Americans.

Congress, with the approval of a president who has waxed censorious about his predecessor's imperious unilateralism in dealing with other nations, has shredded the North American Free Trade Agreement. Congress used the omnibus spending bill to abolish a program that was created as part of a protracted U.S. stall regarding compliance with its obligation to allow Mexican long-haul trucks on U.S roads. The program, testing the safety of Mexican trucking, became an embarrassment because it found Mexican trucking at least as safe as U.S. trucking. Mexico has resorted to protectionism -- tariffs on many U.S. goods -- in retaliation for Democrats' protection of the Teamsters union.

NAFTA, like all treaties, is the "supreme law of the land." So says the Constitution. It is, however, a cobweb constraint on a Congress that, ignoring the document's unambiguous stipulations that the House shall be composed of members chosen "by the people of the several states," is voting to pretend that the District of Columbia is a state. Hence it supposedly can have a Democratic member of the House and, down the descending road, two Democratic senators. Congress rationalizes this anti-constitutional willfulness by citing the Constitution's language that each house shall be the judge of the "qualifications" of its members and Congress can "exercise exclusive legislation" over the District. What, then, prevents Congress from giving House and Senate seats to Yellowstone National Park, over which Congress exercises exclusive legislation? Only Congress' capacity for embarrassment. So, not much.

The Federal Reserve, by long practice rather than law, has been insulated from politics in performing its fundamental function of preserving the currency as a store of value -- preventing inflation. Now, however, by undertaking hitherto uncontemplated functions, it has become an appendage of the executive branch. The coming costs, in political manipulation of the money supply, of this forfeiture of independence could be steep.

Jefferson warned that "great innovations should not be forced on slender majorities." But Democrats, who trace their party's pedigree to Jefferson, are contemplating using "reconciliation" -- a legislative maneuver abused by both parties to severely truncate debate and limit the minority's right to resist -- to impose vast and controversial changes on the 17 percent of the economy that is health care. When the Congressional Budget Office announced that the president's budget underestimates by $2.3 trillion the likely deficits over the next decade, his budget director, Peter Orszag, said: All long-range budget forecasts are notoriously unreliable -- so rely on ours.

This is but a partial list of recent lawlessness, situational constitutionalism and institutional derangement. Such political malfeasance is pertinent to the financial meltdown as the administration, desperately seeking confidence, tries to stabilize the economy by vastly enlarging government's role in it. 

19 March, 2009

Clearly, we have the right team in Washington

So, add Chris Dodd to the clown circus.  My problem is not with the bonuses (if they were contractual obligations then the blame goes to the company for signing the contracts, not fulfilling them) - my problem is with the disingenuous Senators and Congressmen who (and maybe the Obama Administration) who lie about their actions.  Watch the video first, as it updates some of the information in the article...

http://www.cnn.com/2009/POLITICS/03/18/campbell.brown.AIG/index.html

Bonuses allowed by stimulus bill

From Dana Bash and Ted Barrett
CNN
WASHINGTON (CNN) -- Democratic leaders scrambling to strip AIG executives of bonuses are having a hard time answering a key question: Why didn't Congress act to prevent the bonuses in the first place?

"There's always more we can do, and hindsight is 20/20," said Senate Majority Leader Harry Reid Tuesday.

But though some lawmakers did move to prevent bonuses in the stimulus bill last month, the final language actually makes an exception for pre-existing contracts, effectively exempting AIG.

Senate Banking Committee Chairman Chris Dodd, D-Connecticut, who originally proposed the executive compensation provision, said he did not include the exemption clause, which said new rules "shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009."

In an interview with CNN, Dodd denied inserting that exemption at the 11th hour, and insisted he doesn't know how it got there.

"When I wrote the language there was no such language like that," Dodd told CNN Tuesday. Who's insured by AIG? »

Multiple Senate Democratic leadership sources also deny knowing how the exemption got into the bill.

The mystery isn't just how what was effectively a protection for AIG was put into the stimulus bill -- it's also how a provision intended to prevent AIG from giving executive bonuses, was taken out. See a snapshot of facts, attitudes and analysis on the recession »

The Senate passed a bipartisan amendment proposed by Sen. Olympia Snowe, R- Maine, and Sen. Ron Wyden, D-Oregon, that would have taxed bonuses on any company getting federal bailout dollars, if the company didn't pay back the bonus money to the government.Watch congressional reaction to AIG bonuses »

But the idea was stripped from the stimulus bill during hurried, closed-door negotiations with the White House and House of Representatives.

Senate Finance Committee Chairman Max Baucus, D-Montana, who is now pursing a similar bonus tax idea in the wake of outrage over AIG, said it was a mistake to drop it from the stimulus bill. He made a stunning admission. Watch why Americans are angry »

"Frankly it was such a rush -- we're talking about the stimulus bill now -- to get it passed, I didn't have time and other conferees didn't have time to address many of the provisions that were modified significantly," said Baucus.

"We shouldn't be here. That should have passed, but it didn't," he said.

Snowe chastised colleagues for expressing outrage about AIG's bonuses, when just last month they did away with her amendment intended to prevent it.

"We tried. It simply didn't happen, and that's a tragedy, given what's happened today," Snowe told CNN in an interview.

Majority Leader Reid would not directly answer a question from CNN about whether that was a mistake.

18 March, 2009

Prosperity...still available

Making It
John Stossel
Wednesday, March 18, 2009

I'm sick of hearing that America is no longer a land of opportunity.

Even before the current recession, politicians and pundits were constantly wringing their hands about the "demise of the middle class."

"Middle class families are struggling," President Barack Obama kept saying on the campaign trail.

Lou Dobbs hammers away at this night after night: "What's left of our middle class may be on the verge of collapse."

And author Barbara Ehrenreich won fame by claiming that it's almost impossible for an entry-level worker to make it in America. She wrote "Nickel and Dimed," a book that describes her failure to "make it" working in entry-level jobs. Her book is now required reading in thousands of high schools and colleges. I spoke to her for my ABC special "Bailouts, Big Spending and Bull".

"I worked as a waitress and an aide in a nursing home and a cleaning lady and a Wal-Mart associate. And that didn't do it."

If you do a good job, can't you move up?

"That's not easy. Wal-Mart capped the maximum you can ever make."

But if you do a good job, you could be promoted to assistant manager, store manager.

"Well, I suppose."

I pointed out that the new CEO of Wal-Mart, Mike Duke, started out as an hourly worker.

"There are always exceptions," she said. "My father worked his way up and became a corporate executive. But that was a one-in-a-million situation."

Oh, yeah?

"I read 'Nickel and Dimed,'" Adam Shepard told me. He was assigned her book in college and decided to test Ehrenreich's claim.

He picked a city out of a hat, Charleston, S.C., and showed up there with $25. He didn't tell anyone about his college degree. He soon got an $8/hour job working for a moving company. He kept at it. Within a year, he told me, "I have got $5,500 and a car. I have got a furnished apartment."

Adam writes about his search for the American Dream in "Scratch Beginnings". It's a very different book from "Nickel and Dimed."

"If you want to fail, go for it, " he said.

Barbara Ehrenreich wanted to fail?

"Absolutely, I think she wanted to fail -- and write the book about it.

I asked him for evidence.

"She is spending $40 on pants. She is staying in hotels. I made sacrifices so that I could succeed. She didn't make any sacrifices."

I asked Ehrenreich: Why can he do it, when you couldn't?

"I know, it's embarrassing."

Were you trying to fail?

"I think that is so unfair. The $40 pants, that was a big mistake, and that was one mistake I made early on. The motels, that's not a rich person option."

You could have succeeded if you'd gotten a roommate.

"In time, yes, I could have gotten roommates."

You're saying you can't make it in America in these jobs. And you can.

"I said, here's what my experience was."

Her account of her experience is a very misleading portrait of opportunity in America. American Enterprise Institute president Arthur Brooks points out, "From 1950 to 2007, middle-class family income went up, in real dollars, adjusted for inflation, from $29,000 a year to $75,000."

Of course now we're in the midst of a recession. Millions have lost jobs.

"We can't make light of that. But we have to keep this in perspective. We've had worse recessions."

Perspective is right.

"Middle-class people today live like rich people lived in the 1950s."

"We've always said, 'But in the old days things were better,'" Brooks notes. "They said that in the 1920s. They said that in the 1950s, and we say it again today. It's not that we have less money. It's that our expectations have risen."

Lately, fear has risen, as the economy has fallen. But economies do recover.

"We have a society that rewards hard work and merit," Brooks adds. "Half of the poor actually are not poor 10 years later. Nobody is stuck where they start out." 

Representative Barney Frank

Quote today from Barney Frank:

He (AIG CEO) noted that he believed the retention bonuses at the financial products unit were necessary, so that competition would not take AIG's best minds away.But lawmakers disagreed, arguing that AIG was fighting to retain the wrong people.  "These are not the people you want to retain -- you need to get people who understand the mistakes and undo them," said committee chairman Barney Frank, D-Mass.

Let's repeat that - "These are not the people you want to retain -- you need to get people who understand the mistakes and undo them".  Look in the mirror, Barney.

Quote by Barney Frank...

House Financial Services Committee hearing, Sept. 25, 2003:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . .

Article outlining how Barney Frank pushed houses for people who could not afford them and fought regulatory reform at every turn...

Barney's Rubble

Barney Frank didn't like our recent editorial taking him to task for his longtime defense of Fannie Mae and Freddie Mac, and the Congressional baron defends himself in his signature style here. We'd let him have his say without comment except that his "whole story" is, well, far from the whole truth.

Mr. Frank contends that he favored "very strong reform" of Fannie Mae and Freddie Mac, even before Democrats took over Congress after the 2006 elections. To adapt a famous phrase, this depends on what the meaning of "reform" is. Mr. Frank did support a bill that he and others on Capitol Hill described as reform. But on the threshold reform issue -- limiting the size of the portfolios of mortgage-backed securities (MBS) that the two companies could hold -- Mr. Frank was a stalwart opponent.

In fact, Mr. Frank was publicly arguing for an increase in the size of their combined $1.4 trillion portfolios right up to the day they were bailed out. Even now, after he's been proven wrong about a taxpayer guarantee, he opposes Treasury's planned reduction in the size of the portfolios starting in 2010, according to a quote attributed to him in this newspaper last week. "Good luck on that," he reportedly said. Mr. Frank's spokeswoman hung up the phone when we sought confirmation Tuesday.

[nowides]The MBS portfolios have long been both the chief source of the systemic risk posed by the two mortgage giants and of the profits that so handsomely enriched shareholders and officers alike for decades. Without the extreme leverage inherent in those portfolios -- which the companies borrowed heavily, at taxpayer-subsidized rates, to accumulate -- their federal takeover might never have become necessary.

For years, Mr. Frank and other friends of Fan and Fred opposed not only bills written to limit the size of their portfolios, but any bill that in their view gave an independent regulator too much discretion to order a reduction. This was true of the reform that his House committee passed last year. Only when the White House caved to Mr. Frank and dropped its earlier insistence that a reform bill rein in the portfolios did Mr. Frank move his bill.

In his letter, Mr. Frank also repeats his familiar claim that Fannie and Freddie are vital because they support "affordable housing." This is political smoke. The awful irony of Fan and Fred is that they have done very little to assist affordable housing. Most of the taxpayer subsidy has gone to enrich shareholders and Fannie managers, as a 2003 study by the Federal Reserve shows.

Mr. Frank says he favored the disclosure of Fannie and Freddie compensation -- which is nice, but beside the point. The source of the rich pay packages was the Fannie business model that Mr. Frank fought so hard to protect. Instead of helping the poor, Mr. Frank was enriching Jim Johnson, Frank Raines, Angelo Mozilo and Wall Street.

If Mr. Frank thinks his "affordable housing" goals are so popular, he can always ask Congress to appropriate money for any housing subsidy he desires. But he knows those votes are hard to come by. It's much easier to have Fannie and Freddie take inordinate risks, even at taxpayer expense, so they can pay a political dividend called an "affordable housing trust fund" that politicians will disperse. In opposing genuine reform of Fan and Fred, Mr. Frank wasn't acting like a principled liberal. He was protecting corporate giants while hiding their risks from taxpayers until the middle class got stuck with the bill.

More info and quotes from those who in Washington who ignored this problem...

http://online.wsj.com/article/SB122290574391296381.html

13 March, 2009

Why wouldn't they renew this program?

A Sellout of Our Unemployed
Patrick J. Buchanan
Friday, March 13, 2009

By the choices we make we define ourselves. We reveal our biases and beliefs. And so, too, do our institutions.

In writing the $789 billion stimulus bill, Congress revealed that, for all its "Buy American" blather, it does not truly put America first. It does not believe that 10 million jobless Americans, in the country their fathers built, should receive any preference in hiring 12 million to 20 million illegal aliens who broke into this country and owe her no loyalty, allegiance or love.

Is this a slur on the patriotism of some of our congressmen? You betcha.

What other conclusion can one reach after Congress refused to require that employers on construction projects, paid for by U.S. tax dollars in the stimulus bill, verify that their workers are Americans?

For that is precisely what Congress did.

The first paragraph of the front-page story in USA Today says it all. "Los Angeles -- Tens of thousands of jobs created by the economic stimulus law could end up filled by illegal immigrants, particularly in big states like California where undocumented workers are heavily represented in construction, experts on both sides of the issue say."

According to the Center for Immigration Studies, illegal aliens will take 300,000 of the 2 million construction jobs to be created by the stimulus bill. The CIS figure is based on Census Bureau estimates that 15 percent of all construction workers are illegal aliens or immigrants who are not authorized to work in the United States.

Robert Rector of Heritage Foundation concurs with the figures on the number of jobs Congress just voted to give to non-Americans.

"Without specific mechanisms to ensure that workers are U.S. citizens or legally authorized to work, it is likely that 15 percent of these workers, or 300,000, would be illegal immigrants."

Other experts put the figure far higher than 15 percent, and certainly higher in California and other Southwestern states, where illegals tend to congregate.

In taking these jobs, illegals will be shouldering aside unemployed Americans. Yet Congress could have, with one vote, guaranteed that virtually every job paid for by U.S. taxpayers would go to U.S. workers.

How? By mandating that all beneficiaries of stimulus money use the E-Verify program of the Department of Homeland Security, which lets employers check the validity of the Social Security number of all new hires. E-Verify is available on a voluntary basis. It is simple, swift and easy to use.

Indeed, E-Verify is becoming standard operating procedure for U.S. businesses that wish to obey the law. According to NumbersUSA, U.S. businesses have used E-Verify in 3 million inquiries this year alone. That is almost half the total of 6.6 million inquiries for all of 2008 and five times the rate of use in 2007.

E-Verify is a smashing success with an accuracy rate of over 99 percent that holds out promise of a day when every employer in America will be able to ensure that every employee is an American or someone authorized to work here. At its rising rate of use, one-fourth to one-third of all new hires could soon be checked by E-Verify.

Isn't this what we all want, what we have all sought -- an easy, verifiable, non-intrusive, inexpensive way for businesses to assure that those they hire are in our country legally?

No, it is not. For Tuesday night, the Senate voted to strip away this protection of American workers from the unfair competition of illegal aliens.

The Senate voted 50 to 47 to end E-Verify in six months, when current funding runs out. Sen. Jeff Sessions' proposal to give this successful program five more years was rejected 50 to 47.

Republicans and seven Democrats voted to save E-Verify. But only Democrats voted to kill it.

How did Harry Reid kill the E-Verify provision that was in the House version of the stimulus package? The Senate was not even allowed to vote on it. And when the two bills were reconciled in the Pelosi-Reid conference, E-Verify disappeared.

This was a huge victory for La Raza and the U.S. Chamber of Commerce, whose lobbyists have labored long to ensure that their member companies pay no price for dumping U.S. workers and hiring illegal aliens.

Yet, this battle is not over. If Americans understand that the Pelosi-Reid Democrats have no problem with illegal aliens taking jobs from unemployed Americans, that party can be made to pay a price in 2010.

As of today, there exists a Republican-Blue Dog Democrat coalition in both houses that is serious about putting our country and countrymen first, be it on spending bills or trade measures. This is a foundation to build on.

E-Verify is not dead. For the Reid-Pelosi-Obama Left cannot survive the perception that it is aiding and abetting illegal aliens in taking the jobs of unemployed Americans. 

Copyright © 2009 Salem Web Network. All Rights Reserved. 

Sent to my Congressman

Feel free to use my text if you wish to contact your elected officials.

To know how your representative/Senator voted:

Senate Voting (voice vote - no record)

Dear Congressman ______, Thank you for voting against the 2009 Budget. I know it would have been easy to follow the party and the President and vote for this bill.  

President Obama's promise to cut the deficit in the future does not do enough to stem the tide of our country's debt. Why is he not talking about reducing our total national debt? Reducing the deficit means we continue to add to our obligations. It is time for the "tough decisions" we were promised.  

Thank you again for your vote, ______

05 March, 2009

David Brooks


The New York Times



February 24, 2009
OP-ED COLUMNIST

The Big Test

“We cannot successfully address any of our problems without addressing all of them.”

Barack Obama, Feb. 21, 2009

When I was a freshman in college, I was assigned “Reflections on the Revolution in France” by Edmund Burke. I loathed the book. Burke argued that each individual’s private stock of reason is small and that political decisions should be guided by the accumulated wisdom of the ages. Change is necessary, Burke continued, but it should be gradual, not disruptive. For a young democratic socialist, hoping to help begin the world anew, this seemed like a reactionary retreat into passivity.

Over the years, I have come to see that Burke had a point. The political history of the 20th century is the history of social-engineering projects executed by well-intentioned people that began well and ended badly. There were big errors like communism, but also lesser ones, like a Vietnam War designed by the best and the brightest, urban renewal efforts that decimated neighborhoods, welfare policies that had the unintended effect of weakening families and development programs that left a string of white elephant projects across the world.

These experiences drove me toward the crooked timber school of public philosophy: Michael Oakeshott, Isaiah Berlin, Edward Banfield, Reinhold Niebuhr, Friedrich Hayek, Clinton Rossiter and George Orwell. These writers — some left, some right — had a sense of epistemological modesty. They knew how little we can know. They understood that we are strangers to ourselves and society is an immeasurably complex organism. They tended to be skeptical of technocratic, rationalist planning and suspicious of schemes to reorganize society from the top down.

Before long, I was no longer a liberal. Liberals are more optimistic about the capacity of individual reason and the government’s ability to execute transformational change. They have more faith in the power of social science, macroeconomic models and 10-point programs.

Readers of this column know that I am a great admirer of Barack Obama and those around him. And yet the gap between my epistemological modesty and their liberal worldviews has been evident over the past few weeks. The people in the administration are surrounded by a galaxy of unknowns, and yet they see this economic crisis as an opportunity to expand their reach, to take bigger risks and, as Obama said on Saturday, to tackle every major problem at once.

President Obama has concentrated enormous power on a few aides in the West Wing of the White House. These aides are unrolling a rapid string of plans: to create three million jobs, to redesign the health care system, to save the auto industry, to revive the housing industry, to reinvent the energy sector, to revitalize the banks, to reform the schools — and to do it all while cutting the deficit in half.

If ever this kind of domestic revolution were possible, this is the time and these are the people to do it. The crisis demands a large response. The people around Obama are smart and sober. Their plans are bold but seem supple and chastened by a realistic sensibility.

Yet they set off my Burkean alarm bells. I fear that in trying to do everything at once, they will do nothing well. I fear that we have a group of people who haven’t even learned to use their new phone system trying to redesign half the U.S. economy. I fear they are going to try to undertake the biggest administrative challenge in American history while refusing to hire the people who can help the most: agency veterans who are registered lobbyists.

I worry that we’re operating far beyond our economic knowledge. Every time the administration releases an initiative, I read 20 different economists with 20 different opinions. I worry that we lack the political structures to regain fiscal control. Deficits are exploding, and the president clearly wants to restrain them. But there’s no evidence that Democrats and Republicans in Congress have the courage or the mutual trust required to share the blame when taxes have to rise and benefits have to be cut.

All in all, I can see why the markets are nervous and dropping. And it’s also clear that we’re on the cusp of the biggest political experiment of our lifetimes. If Obama is mostly successful, then the epistemological skepticism natural to conservatives will have been discredited. We will know that highly trained government experts are capable of quickly designing and executing top-down transformational change. If they mostly fail, then liberalism will suffer a grievous blow, and conservatives will be called upon to restore order and sanity.

It’ll be interesting to see who’s right. But I can’t even root for my own vindication. The costs are too high. I have to go to the keyboard each morning hoping Barack Obama is going to prove me wrong.

Cramdown Mortgage Modification

Wow, could we please come up with some more bad ideas?  Today's latest is a proposal to allow judges to forcibly restructure mortgage contracts for those who are having trouble paying.  There are numerous problems with this plan:
  • A mortgage contract is just that - a contract.  As long as the signing and original agreement of that contract was legal, the only parties who should have the ability to adjust the terms are the signers of the document.  Allowing a 3rd party (the government) to adjust the terms to whatever they deem reasonable makes contracts temporary and unreliable rather than their original intention: a dependable, legally binding basis for a business transaction
  • Why should the lending party (in this case the bank) be forced to suffer hardship due to the  borrower's inability to pay?  As long as the bank did not commit fraud in presenting the terms to the borrower, the borrower has a legal responsibility to pay.  If the borrower does not pay, the lender has the legal authority to recover the collateral on the loan (the house). Now, if the bank feels it is in their best interest to renegotiate the terms of the loan, that is THEIR BUSINESS, but they should not be forced to do so against their will.
  •  How did we reach the point where the government has decided that everyone has a right to maintain their current standard of living indefinitely?  If you can't afford the house you are in, feel free to move to a more affordable abode.
  • This system is even worse than the government paying off loans (although I oppose that too).  If the government pays the loans, at least the costs are spread across all taxpayers who can share their opinion through their representatives and through their votes.  This plan forces a small group (banks and their shareholders) without direct representation to take the losses for which they did nothing to contribute (once again, with the caveat that the loans were made in good faith and with full disclosure).
I understand that some people have recently lost their jobs.  I have many friends who have already lost their jobs or are in danger of losing their jobs.  I do not begrudge homeowners facing hardship for asking for help.  It is only natural.  But it is the job of society and the government to uphold the law (the contract), because once you treat contracts as temporary, flexible documents, they lose all authority, further eroding the confidence that is so sorely needed by this economy.

House to vote on bankruptcy mortgage rewrites

WASHINGTON – Debt-strapped homeowners unable to afford their mortgages could get their monthly payments lowered in bankruptcy court under a controversial element of President Barack Obama's housing rescue plan.

The legislation is part of a broader housing package scheduled for a House vote Thursday. It's the toughest piece of Obama's efforts to prevent foreclosures — a stick to go with the many carrots he is offering the mortgage industry to help borrowers afford their home loans.

On Wednesday, Obama's team announced details of his broader $75 billion housing plan, which features cash incentives for mortgage holders — known as loan servicers — who cut deals with borrowers for new, more affordable terms.

The legislation has been the subject of an intense lobbying campaign by the financial services industry, which has worked hard to kill it. It has exposed rifts among liberal Democrats who regard it as the only real way to help debt-strapped homeowners avoid foreclosures and moderates who want to give voluntary efforts a chance to work before resorting to the courts.

The same divisions are at work in the Senate, which is expected to consider its own version of the legislation in the coming weeks.

The industry already won several concessions from Democrats in the House, who agreed to limit the measure to existing loans, to homeowners who sought a loan modification from their lenders before filing for bankruptcy, and to people who can no longer afford to pay their mortgages.

Democrats were forced to put off action on the measure when moderates voiced concerns last week that the bill was still overly broad. They wrote a compromise that requires bankruptcy judges to consider whether banks offered homeowners reasonable loan restructuring deals before they weigh in with their own rewrites.

Borrowers also would have a responsibility to prove that they tried to modify their mortgages with their lenders before seeking help in bankruptcy court.

The deal would require judges to consider whether homeowners were offered a "qualified" loan workout consistent with Obama's plan. That program would let eligible homeowners rework their mortgages to bring their monthly payments down to no more than about one-third of their incomes.

The mortgage industry has argued that unfettered access to bankruptcy court mortgage modifications would impose steep and unpredictable costs on its companies that would be passed along to borrowers as higher fees and interest rates.

Although it calls the new compromise a good step, the industry is still opposed to the measure it brands the "cramdown." Lobbyists pressed lawmakers to limit the measure to subprime mortgages and to block homeowners who had been offered a mortgage workout by their lenders from getting one through a bankruptcy judge.

Backers and a wide range of economists say that because the measure is limited to existing loans, banks would have no reason to raise future rates to factor in the cost of forced loan rewrites.

The measure is part of a broader housing package that would raise the Federal Deposit Insurance Corporation's borrowing authority and boost incentives for lenders to rework mortgages. The legislation takes $2 billion out of the $700 billion Wall Street bailout fund to bolster an existing program to allow homeowners rework or refinance their mortgages.

The bill is H.R. 1106.

04 March, 2009

What might have been...

Remember the promise to "Make them famous"?  I do. Does anyone doubt this process would have gone differently under a McCain administration?

International Herald Tribune
Maureen Dowd: This great stage of fools
Wednesday, March 4, 2009

WASHINGTON: If only Shakespeare had known how to Twitter.

There was a bit of King Lear in the scene on the Senate floor, a stormy, solitary John McCain on "this great stage of fools," as the Bard wrote, railing against both parties and the president in fiery speeches and rapid-fire tweets.

"He's mad that trusts in the tameness of a wolf, a horse's health, a boy's love, or a whore's oath," the Fool told Lear.

And he's truly mad that trusts in the promise of a presidential candidate to quell earmarks.

The 72-year-old senator who seemed hopelessly 20th century when he confessed during the campaign that he didn't know how to use a computer or send an e-mail has now mastered the latest technology fad, twittering up a twizzard to tweak his former rival.

Before the Senate resoundingly defeated a McCain amendment on Tuesday that would have shorn 9,000 earmarks worth $7.7 billion from the $410 billion spending bill, the Arizona senator twittered lists of offensive bipartisan pork, including:

- $2.1 million for the Center for Grape Genetics in New York. "quick peel me a grape," McCain twittered.

- $1.7 million for a honey bee factory in Weslaco, Texas.

- $1.7 million for pig odor research in Iowa.

- $1 million for Mormon cricket control in Utah. "Is that the species of cricket or a game played by the brits?" McCain tweeted.

- $819,000 for catfish genetics research in Alabama.

- $650,000 for beaver management in North Carolina and Mississippi.

- $951,500 for Sustainable Las Vegas. (McCain, a devotee of Vegas and gambling, must really be against earmarks if he doesn't want to "sustain" Vegas.)

- $2 million "for the promotion of astronomy" in Hawaii, as McCain twittered, "because nothing says new jobs for average Americans like investing in astronomy."

- $167,000 for the Autry National Center for the American West in Los Angeles. "Hopefully for a Back in the Saddle Again exhibit," McCain tweeted sarcastically.

- $238,000 for the Polynesian Voyaging Society in Hawaii. "During these tough economic times with Americans out of work," McCain twittered.

- $200,000 for tattoo removal violence outreach program to help gang members or others shed visible signs of their past. "REALLY?" McCain twittered.

-$209,000 to improve blueberry production and efficiency in Georgia.

"When do we turn off the spigots?" McCain said in his cri de coeur on the Senate floor. "Haven't we learned anything? Bills like this jeopardize our future."

In one of his disturbing spells of passivity, President Barack Obama decided not to fight Congress and live up to his own no-earmark pledge from the campaign.

He's been lecturing us on the need to prune away frills while the economy fizzles. He was slated to make a speech on "wasteful spending" on Wednesday.

"You know, there are times where you can afford to redecorate your house and there are times where you need to focus on rebuilding its foundation," he said recently about the "hard choices" we must make. Yet he did not ask Congress to sacrifice and make hard choices; he let it do a lot of frivolous redecorating in its budget.

He reckons he'll need Congress for more ambitious projects, like health care, and when he goes back to wheedle more bailout billions, given that AIG and GM and our other corporate protectorates are burning through our money faster than we can print it and borrow it from the ever-more-alarmed Chinese.

Team Obama sounds hollow, chanting that "the status quo is not acceptable," even while conceding that the president is accepting the status quo by signing a budget festooned with pork.

Obama spinners insist it was "a leftover budget." But Iraq was leftover, too, and the president's trying to end that. This is the first pork-filled budget from a new president who promised to go through the budget "line by line" and cut pork.

On "Face the Nation" on Sunday, Obama's chief of staff, Rahm Emanuel, dismissed the bill as "last year's business," because most of it was written last year.

But given how angry Americans are, watching their future go up in smoke, the bloated bill counts as this year's business.

It includes $38.4 million of earmarks sponsored or co-sponsored by Obama's labor secretary, Hilda Solis; $109 million Hillary Clinton signed on to; and $31.2 million in earmarks sought by Transportation Secretary Ray LaHood with colleagues.

(Even Barack Obama was listed as one of the co-sponsors of a $7.7 million pet project for Tribally Controlled Postsecondary Vocational Institutions until he got his name taken off last week.)

And then there are the 16 earmarks worth $8.5 million that Emanuel put into the bill when he was a congressman, including money for streets in Chicago suburbs and a Chicago planetarium.

Blame it on the stars, Rahm, or on old business. But as Shakespeare wrote in "Lear": "This is the excellent foppery of the world, that, when we are sick in fortune - often the surfeits of our own behavior - we make guilty of our own disasters, the sun, the moon, and the stars."



03 March, 2009

The news is a lot more interesting when you know the tricks...

You know, one of the best things about watching watchdog shows like the "O'Reilly Factor" is that you finally get a view into how media shapes this country.  While I don't always agree with O'Reilly or appreciate his aggressive tone, I do appreciate it when he reveals to me how manipulated I am.  Watch the clip of O'Reilly on Feb 23 below for context (sorry, I wasn't able to embed it), then scroll down to see a mainstream news source (CNN) do exactly what O'Reilly describes.  It is really quite amazing when you know the tricks...


Link to Video


Prosecutor: Levy 'random victim' of Salvadoran laborer

WASHINGTON (CNN) -- Nearly seven years after the remains of federal intern Chandra Levy were found in a Washington park, a jailed laborer from El Salvador faces a murder charge in her death, authorities said Tuesday.

A judge on Tuesday signed an arrest warrant for Ingmar Guandique, 27, who is serving a 10-year sentence for two assaults in Rock Creek Park that occurred around the time of Levy's disappearance.

Her remains were found in Rock Creek Park about a year after she was reported missing.

"We believe Levy was a random victim of Guandique, who attacked and killed her as she jogged in Rock Creek Park," said Jeffrey Taylor, U.S. attorney for the District of Columbia.

Guandique's public defenders said the case was far from over, and urged the public not to jump to conclusions.

"This flawed investigation, characterized by the many mistakes and missteps of the Metropolitan Police Department and every federal agency that has attempted to solve this case, will not end with the simple issuance of an arrest warrant against Mr. Guandique," the federal public defender's office said in a statement ... We look forward to trying this case before unbiased jurors who will not rush to judgment."

Guandique faces a first-degree murder charge. A conviction on the charge would bring a mandatory sentence of 30 to 60 years in prison, Taylor said.

The massive publicity surrounding the Levy case was largely a result of her romantic affair to then-Rep. Gary Condit, a California Democrat. Police questioned Condit many times in connection with the slaying, but the congressman was never considered a suspect. 

A California native working as an intern for the Federal Bureau of Prisons, Levy, 24, disappeared May 1, 2001. Her remains were found in May 2002 by a man walking his dog in a remote area of the park.

Guandique has been imprisoned at the Federal Correctional Institution-Victorville, a medium-security facility northeast of Los Angeles, California. Officials hope to transfer him from California to the nation's capital in 45 to 60 days.

He's serving his sentence on the two assault convictions in California because there are no federal prisons in the District of Columbia. Those convicted of federal crimes in the capital are sent to various federal prisons across the country.

Guandique was considered a person of interest in 2002 in connection with Levy's death, authorities said Tuesday. Before the new charges, his projected release date from prison was October 5, 2011.

According to officials at Tuesday's news conference -- and the affidavit supporting the arrest warrant for Guandique -- circumstantial evidence played a large role in the case. Authorities presented no evidence Tuesday of anyone seeing Guandique and Levy together. 

But the affidavit said a witness reported seeing and running from a man in the park, and she said she believed that occurred on the same day as Levy disappeared. Upon seeing a photograph of Guandique in the interim, the woman thought he looked like the man who followed her in the park, the affidavit said.

Another witness reported seeing Guandique with "a fat lip and scratches on his face" about the time of Levy's disappearance, the affidavit said. The witness added that Guandique said he was injured by his girlfriend during an argument.

Interviewed by police, Guandique's girlfriend at the time said that while he was violent with her on occasion, "at no time during any of the arguments or fights did [she] ever strike Guandique or cause any injuries to his face or neck."

Two other witnesses reported that Guandique told them he committed crimes against women, including rape and murder, according to the affidavit. And another witness last month told police Guandique admitted his involvement in Levy's killing, as well as that he tried to rape two other women in the park at knifepoint, the affidavit said.

When news emerged last month that Guandique's arrest was imminent in the Levy case, the same witness told police Guandique "became very anxious and said something to the effect of, '[Expletive], it's over. They got me now. What am I gonna do?' "

Authorities searching Guandique's cell in California in September found a photograph of Levy that apparently had been taken from a magazine, the affidavit said.

Speaking last month as news emerged that an arrest in the case was imminent, Levy's mother, Susan, said, "It's a bittersweet situation for me as the mother of a daughter who is no longer here. I want justice. I want to know that the person who did it is in jail and will not do it to anybody else."

She added, "Every day the elephant is there. Every day you get a knot in your stomach. It doesn't go away. It's a life sentence for the families and relatives that miss their loved ones. We have a life sentence of hurt."



02 March, 2009

Finally

Finally, something upon which President Obama and I can agree...

President Obama's Attorney General, Eric Holder, recently mentioned that the administration wishes to reinstate the Assault Weapons Ban that expired in 2004.  (Click here to learn more about the ban).  Assault weapons have no private legitimate purpose.  They are not used for hunting, and are not practical for personal defense.  They do, however, represent a significant threat to citizens and police officers.  While I generally oppose the government selecting what items I can and cannot own, I believe the freedom lost in this case is far outweighed by the increased in general safety.  I was disappointed when the Republican led congress allowed this clause to expire - kudos to the President for looking to take action on this matter.


27 February, 2009

Once again, who will pay for it?

Obama's Deficit Charade
Terence Jeffrey
Wednesday, February 25, 2009

President Obama posed as a fiscal conservative Monday when he hosted a "fiscal responsibility summit."

Close inspection reveals that what he is actually proposing, however, is a massive increase in government debt -- thus raising the already unsustainable burden of government that is certain to fall on our children unless the welfare state is somehow curtailed.

In the first seven fiscal years overseen by the high-spending President Bush, the annual federal budget deficits were truly obscene. Yet, they never exceeded $500 billion.

In fiscal 2002 through 2008, according to the historical tables published by the Office of Management and Budget last fall, the annual deficits were $157.7 billion, $377.5 billion, $412.7 billion, $318.3 billion, $248.1 billion, $162 billion and $410 billion. (The Congressional Budget Office has since calculated that the fiscal 2008 deficit actually ended up being $454.8 billion.)

President Obama said Monday that his "administration has inherited a $1.3 trillion deficit" for fiscal 2009.

The extraordinary size of that deficit is due, of course, to what one would have hoped were passing circumstances and one-time policies: a recession, a $700 billion bailout of the banking industry and that part of the $787 billion "stimulus" President Obama signed last week that will actually be spent in this fiscal year.

"And that's why today I'm pledging to cut the deficit we inherited in half by the end of my first term in office," President Obama said at his summit.

But what does that mean? The administration says President Obama's promise to "cut the deficit we inherited in half" means he will reduce it from $1.3 trillion in fiscal 2009 to $533 billion in fiscal 2013.

This $533 billion deficit -- that President Obama vows will be the lowest annual deficit he runs in any of the next four years -- is larger than any deficit the profligate President Bush ran before this recessionary year.

In fact, President Obama's planned $533 billion deficit for fiscal 2013 is more than twice as large as the $248.1 billion deficit Bush ran in 2006 and more than three times as large as the $162 billion deficit Bush ran in 2007.

In other words, President Obama is planning to permanently increase the scale of government borrowing -- even before we are hit by the fiscal tidal wave that will come when the bulk of the baby boom generation retires and begins collecting Social Security and Medicare benefits.

The truth is this: Our federal government has been wading ever deeper into red ink for a full half-century, and President Obama is now planning to wade deeper and faster than any president who has gone before him.

According to the Bureau of the Public Debt, the overall federal debt has increased every single year for the past 50 years. The last time it declined from one year to the next was from 1956 to 1957.

Overall federal debt increased even in each year from 1998 to 2001, when the OMB was calculating annual federal surpluses. This seeming contradiction, budget experts tell me, results from the fact that when they calculate the annual surplus or deficit they do not account for the interest the government pays itself on paper for the money it has borrowed out of the Social Security, Medicare and other entitlement trust funds to pay for current expenditures in other government programs.

The interest paid on the money the government has borrowed from Social Security and Medicare taxes to fund other things does not require the government to dole out real cash today. It will require the government to dole out real cash tomorrow, however, when the number of retired people receiving Social Security and Medicare benefits balloons compared to the number of younger working people paying taxes to support those programs.

Every dollar President Obama borrows and spends, like every dollar President Bush borrowed and spent, adds to the permanent burden of government laid on the backs of our children.

Last year, then-Comptroller General David Walker reported that every American household would have to put up $455,000 to cover the $53 trillion gap that already exits between the entitlement benefits promised to living Americans and the tax revenue currently expected to pay for those entitlements.

On top of this, President Obama has just promised to add more than $2 trillion to the national debt over the next four years.

To expand on a metaphor I used in a previous column, America is heading down the blind alley of big government toward the brick wall of national bankruptcy -- and President Obama is now putting his foot on the accelerator. What's next: Liberals will use the coming crash as an argument for even more big government, quite possibly in the form of socialized medicine that seeks to control government spending by rationing the health care of all Americans. 

24 February, 2009

The State of the Union

As I listen to the President's State of the Union, I am struck by the ease with which he communicates his ideas. He effectively speaks to the world as he sees it and the steps that must be taken to meet our nation's challenges. My problem is that I disagree with his remedies, as I believe they often are either a) ineffective or b) create unacceptable unintended consequences.

Those who hold views contrary to the President's must learn how to effectively communicate why their solutions are better or why the path outlined by the president is faulty.

Below are concepts that came up tonight that need rebuttal in a clear, concise way Americans can easily understand:

1) Why outsourcing isn't always bad, and letting low cost producers produce the items they create most efficiently makes everyone better off (i.e. car batteries in Korea)
2) Why the government should not try to centrally plan industries according to a grand strategy disconnected from what consumers want (US Auto Manufacturing)
3) Why the federal government shouldn't be paying for local police officers just to protect jobs
4) Where does the $800 billion for the recent stimulus package come from? Is it fair to call it an $800 billion bill when borrowing costs are likely to add billions more?  Why do we not include these borrowing costs in our calculations and public statements?
5) Explain how the Constitution specifically makes education the purview of the states and not the federal government; also how allowing states to control education creates 50 different petri dishes that allow new ideas to be tested and explored
6) Explain that cutting the deficit in half means you still spent more than you earn - as unacceptable a situation to government as it is for households
7) Why the phrase "ship our jobs overseas" is misguided (see #1)
8) How it is impossible to lower taxes for 95% of Americans when 40% of Americans pay
zero taxes - also, explore the impact of what is essentially a welfare check to these 40%
9)  Explain why true "stimulus" would come from a simple reduction in payroll taxes - allowing consumers to inject $$ in all areas of the economy simultaneously
10)  Why it is now disingenous to suggest you will "end" the war in Iraq when it is already won
11)  Why it is irresponsible to suggest you will close Guantanemo Bay when you do not have a viable alternative
12)  Why it is misleading to say "America does not Torture" when you allow rendition to continue (the practice of allowing other countries with less stringent interrogation restrictions to "question" our captives)
13)  Why Charles Schumer is wrong and the American people care or should care about earmarks and wasteful pork projects
14)  Why any State of the Union must speak about our military engagements in a time of war
15)  Explain how it is mathmatically impossible to bailout the banks, spend $800 billion (plus interest) to stimulate the economy, Nationalized Healthcare, increase education, refinance mortages, lower taxes for 55% of Americans (95-40% in #8), give welfare checks to 40% of Americans, and cut the deficit in half using only the savings from reduced Iraq operations and eliminating the Bush Tax Cuts for the wealthiest 2% of taxpayers.  Seriously, how can anyone think that is possible?  Just writing that list pissed me off.... 

$1,000,000 for 2,000 years gets you what?

22 February, 2009

Patriotic Duty

Be a Patriot: Pay Up!
David Harsanyi
Friday, February 20, 2009

Given that most of you will be paying your neighbors' mortgages soon, it only seems prudent that we start thinking in bolder terms. And by "thinking in bolder terms," I mean thinking about me.

Why, for instance, should I be on the hook to pay those grating high-interest credit cards I signed up for? Or those detestable car payments? My cable bill's sorta steep, too.

For you folks who are less than ecstatic about straightening out my fiscal affairs, well, I have two things to say: 1) Don't be selfish. 2) Forget everything you ever have heard about the American Revolution. Taxes, extreme government spending and wealth redistribution are patriotic. And you're going to see so much patriotism your kids will be pigtailed uber-nationalists by the time they hit kindergarten.

This week, Barack Obama heroically signed away $787,000,000,000 for so-called stimulus. He reportedly praised a Republican supporter for her patriotism in supporting the bill -- which, by logical extension, means that those who voted "no" are unpatriotic toads.

Your president loves his country so much that he would sacrifice up to $275,000,000,000 of your money to keep the housing bubble bubbling, with almost no legislation or debate required. Obama claims his new mortgage bailout would give a second chance to those "homeowners who have played by the rules (and) have been making their payments on time."

Who knew that playing by the rules comes with a government warranty? After all, I may play by the rules and engage in bizarrely self-destructive behavior. You may not. You may have played by the rules -- invested in the stock market, a home, a business, a career -- and found yourself stuck with a financial dud.

But as every 2-year-old knows, consequences are the incentive to avoid risky behavior. So why are we rewarding failure and attempting to abolish consequences? Many of the homeowners government is bailing out took the unnecessarily chancy loans that helped fuel the financial jam we're in.

More than 90 percent of Americans, though, pay their mortgages on time, follow the rules and, for the most part, live in homes they can afford. You don't deserve help. Though luckily, you will be subsidizing those who acted recklessly. Remember: country first. And if you happen to be a renter who pinched and scraped in hopes of one day owning a home responsibly, you are out of luck, too. Just consider it your patriotic duty.

The more irresponsibly you behave, in fact, the more government works for you. This week, the federal government doubled its commitment to Fannie Mae and Freddie Mac, promising to reimburse the companies up to $400,000,000,000 for the losses they sustained from their investments in mortgage loans.

Yes, the same Freddie and Fannie -- once implicitly guaranteed by government and now explicitly run by government -- that helped, through social engineering, to push us into recession. It is vital, apparently, that we keep them afloat.

The only business plan that is more staggeringly counterproductive came from the auto industry, which is back for another bite.

In last year's second quarter, GM lost about $118,000 a minute. So naturally, GM would like another $16,600,000,000 so it can fire 47,000 people. Makes sense. Because you decide not to spend your money on a GMC Acadia, the government will make you pay for one anyway.

After meting out nearly $1 trillion of government expansion in the stimulus -- including the canard of "tax relief," which, in effect, was only more wealth spreadin' -- how can Washington say no to anyone?

Obama has told us the American dream must be saved. So far, his remedy entails government rewarding bad behavior, encouraging dependency, subsidizing failure and penalizing success and prosperity.

It's the new patriotism. So don't complain. 

10 February, 2009

More information about the Stimulus Package

The Top Six Problems With the Stimulus
John Hawkins
Tuesday, February 10, 2009

1) First of all, it's very debatable whether stimulus bills work at all. As Walter Williams has pointed out,

"In stimulus package language, if Congress taxes to hand out money, one person is stimulated at the expense of another, who pays the tax and is unstimulated. A visual representation of the stimulus package is: Imagine you see a person at work taking buckets of water from the deep end of a swimming pool and dumping them into the shallow end in an attempt to make it deeper. You would deem him stupid. That scenario is equivalent to what Congress and the new President proposes for the economy." -- Walter Williams

2) According to the Wall Street Journal, there is very little actual "stimulus" in the stimulus bill,

"In selling the plan, President Obama has said this bill will make 'dramatic investments to revive our flagging economy.' Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus."

3) Even if you set aside #1 and #2, a significant percentage of the spending in the stimulus bill doesn't occur for two years.

"Although the argument for quickly passing the $800-billion-plus stimulus bill now before Congress is that pumping money into the economy immediately will spur economic growth and create jobs, almost half of the new spending—as opposed to tax cuts—being proposed in the bill would not be spent until at least two years from now, according to an analysis published by the Congressional Budget Office."

How is spending that's not going to occur for two years supposed to stimulate the economy today and prevent those 500 million lost jobs per month that Nancy Pelosi told us about? If Barack Obama really believes what he says and thinks that, "A failure to act, and act now, will turn crisis into a catastrophe," then why isn't the spending frontloaded into this bill?

4) Even the "non-partisan" Congressional Budget Office, which many Republicans consider to be tilted to the left, is saying that this bill is worse than doing nothing over the long-haul.

President Obama's economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

How much sense does it make to push through a bill designed to "stimulate" our economy when we know that it will actually reduce economic growth?

5) Despite the initial claims that this bill would be "targeted, timely, and temporary," the Democrats have moved quite a few regular budget items into the stimulus package. Republican Senator Jeff Sessions says this was done in order to avoid the normal budgeting process and that the new baseline for these programs will be the amount that they were allocated in the last budget plus the amount the programs receive in the stimulus package.

In other words, the stimulus package seems likely to add hundreds of billions of dollars, every year going forward, to the budget deficit. No wonder Barack Obama is predicting that America will run "trillion-dollar deficits for years to come" under his "leadership."

6) The sheer cyclopean size of this stimulus package, which comes up to roughly 1.2 trillion dollars when you add in the interest over 10 years, is difficult for most people to comprehend. How big is it? As Mitch McConnell said,

"If you started spending the day that Jesus was born and you spent a million dollars every single day, you still wouldn't have spent a trillion dollars."

Still having trouble wrapping your mind around it? Think of it like this: in today's dollars, the stimulus bill will cost more than the war in Korea and the war in Iraq -- combined! It will cost about the same amount as FDR's New Deal AND the war in Vietnam combined! It'll cost far more than the Marshall Plan, the Louisiana Purchase, and putting a man on the moon -- combined!

Those were momentous events in our history. Going to the moon, rebuilding Europe, fighting wars -- meanwhile, ten years from now, we'll have very little to show from this stimulus plan other than a considerably larger national debt and slower economic growth. In other words, all hyperbole aside, this may very well be the single least effective, most wasteful, most costly piece of legislation in all of recorded human history.

06 February, 2009

Write to your Senator/Representative

If you would like to write to your local Senator/Representative, you can find that information at the address below.  Feel free to use my wording as a template if you wish - this is a copy of the message I sent to my legislators.


Dear Senator ________, 
 
I am writing to ask you to reconsider your support of the current stimulus bill. As an American under the age of 30, I am very concerned about the future ramifications of the current rate of spending proposed by our government. Given the amount of money being spent, I believe it is the important job of the House and Senate to ensure that all proposed programs have an immediate impact and are directly related to building infrastructure, saving taxpayer dollars, or creating jobs. 
 
Many of the proposed programs contained in the bill you approved are nothing more than attempts to enact political and social changes in the midst of the current economic crises. These issues are clearly not stimulus-related and should be handled separately from any stimulus bill.  The current economic situation should not used as oportunistic excuse to give money to causes that do not directly result in immediate economic recovery.  While it is true that any spending could be termed "stimulus", I do not believe it is the government's place to determine which favored causes or industries should receive such funds, especially if they do not contribute to long-term economic recovery.  
 
Rather than having the government act as a central planner, rewarding a few chosen industries or companies, the stimulus plan currently under consideration should return tax dollars to those who paid those taxes, allowing consumers to spend that returned money as they see fit and, therefore, stimulating every part of the economy. In order to be effective, such a tax stimulus cannot be a one-time rebate, but must be a long-term tax break to raise consumer confidence and result in spending rather than saving. 
 
Thank you for your service to our state. 
 
John Felton 

 

04 February, 2009

The Stimulus Package

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The Stimulus Package Is More Debt We Don't Need

Can Obama really defend this 'line by line'?

As the Senate considers a massive $1.1 trillion stimulus bill, it is vital that the American people ask hard questions of their elected officials. When they do, it will become very clear that the bill will not only fail to stimulate the economy, but could seriously delay economic recovery.

As a nation, we got into this mess by spending and investing money that didn't exist. We won't get out of it by doing more of the same.

Yet this is precisely what this bill proposes we do. Less than 10% of the bill could be considered true stimulus, if one assumes tax credits and infrastructure spending will jolt the economy. The other 90% of the bill represents one of the most egregious acts of generational theft in our nation's history, with taxpayer money going to special-interest earmarks, an ill-conceived bailout to states, and permanent spending increases that expand government's reach in areas like health care and education.

The bill's selling point is that three million jobs will be created or saved by this package. What's alarming is that each job will cost $286,000 to create or save. Moreover, one in five will be a government job.

One of the more egregious provisions in the Senate bill is a $166 billion bailout plan for the states that rewards bad budgeting at the state level. Simply sending cash to states without asking for appropriate sacrifices is grossly irresponsible. States will no longer have the incentive to live within their means, because they'll assume the federal government will be there to bail them out.

Instead of a bailout, Congress could offer states an emergency loan that could be repaid at a low interest rate. This approach apparently wasn't considered because the members who wrote the bill aren't simply interested in saving jobs -- they want to push their agenda along the way.

A key example is health care. The Senate bill doubles the amount of the Medicaid bailout requested by governors and lays the groundwork for government-run health care, which invariably leads to rationing. This ideological overreach has led even some Democrats, like Nebraska's Ben Nelson, to express concern that various "sacred cows" in the package are hurting the bill's overall goals.

The bill is also loaded with old-fashioned pork, despite President Barack Obama's insistence that members of Congress refrain from adding earmarks. In fact, the bill contains the most expensive earmark in history: $2 billion for the FutureGen near-zero emission power plant in Matoon, Ill.

Other nonstimulative pork provisions include $88 million for a new polar icebreaker for the Coast Guard, $600 million to buy hybrid vehicles for federal employees, and $850 million for Amtrak.

What is not in the bill is as troubling as what is. The package does nothing to clear the toxic assets and bad mortgages that helped trigger the credit crisis. It also contains very little meaningful tax relief to make small businesses and American companies more competitive. Instead, the tax provisions of the stimulus are essentially a modest cash handout that repeats the failed policy of George W. Bush's rebate-check stimulus.

Finally, the bill's sponsors have made zero effort to pay for this new spending by eliminating programs that aren't working. Mr. Obama's pledge to go through the budget line-by-line has made no impression on the bill's authors, nor has the plight of millions of Americans faced with tough spending choices.

Dozens of independent watchdog groups, think tanks and elected officials on both sides of the aisle have spent decades identifying areas of the budget that can be cut. Yet Congress remains focused on finding "shovel ready" projects when at least $300 billion in wasteful programs are "scissor ready" today.

One of the lessons I've learned from the practice of medicine is the danger of treating symptoms rather than the disease. Doing so makes the disease worse and causes the symptoms to come back with a vengeance. It's time for government to quit masking the symptoms and deal with this crisis at its source: toxic assets in the mortgage market and a federal government that continues to pollute our economy with pork and failed interventionist policies.

Dr. Coburn is a Republican senator from Oklahoma.

30 January, 2009

America's Treatment of the Muslim World

Obama Just Flatters Himself
Charles Krauthammer
Friday, January 30, 2009

WASHINGTON -- Every new president flatters himself that he, kinder and gentler, is beginning the world anew. Yet, when Barack Obama in his inaugural address reached out to Muslims with "to the Muslim world, we seek a new way forward, based on mutual interest and mutual respect," his formulation was needlessly defensive and apologetic.

Is it "new" to acknowledge Muslim interests and show respect to the Muslim world? Obama doesn't just think so, he said so again to millions in his al-Arabiya interview, insisting on the need to "restore" the "same respect and partnership that America had with the Muslim world as recently as 20 or 30 years ago."

Astonishing. In these most recent 20 years -- the alleged winter of our disrespect of the Islamic world -- America did not just respect Muslims, it bled for them. It engaged in five military campaigns, every one of which involved -- and resulted in -- the liberation of a Muslim people: Bosnia, Kosovo, Kuwait, Afghanistan and Iraq.

The two Balkan interventions -- as well as the failed 1992-93 Somali intervention to feed starving African Muslims (43 Americans were killed) -- were humanitarian exercises of the highest order, there being no significant U.S. strategic interest at stake. In these 20 years, this nation has done more for suffering and oppressed Muslims than any nation, Muslim or non-Muslim, anywhere on earth. Why are we apologizing?

And what of that happy U.S.-Muslim relationship that Obama imagines existed "as recently as 20 or 30 years ago" that he has now come to restore? Thirty years ago, 1979, saw the greatest U.S.-Muslim rupture in our 233-year history: Iran's radical Islamic revolution, the seizure of the U.S. embassy, the 14 months of America held hostage.

Which came just a few years after the Arab oil embargo that sent the United States into a long and punishing recession. Which, in turn, was preceded by the kidnapping and cold-blooded execution by Arab terrorists of the U.S. ambassador in Sudan and his charge d'affaires.

This is to say nothing of the Marine barracks massacre of 1983, and the innumerable attacks on U.S. embassies and installations around the world during what Obama now characterizes as the halcyon days of U.S.-Islamic relations.

Look. If Barack Obama wants to say, as he said to al-Arabiya, I have Muslim roots, Muslim family members, have lived in a Muslim country -- implying a special affinity that uniquely positions him to establish good relations -- that's fine. But it is both false and deeply injurious to this country to draw a historical line dividing America under Obama from a benighted past when Islam was supposedly disrespected and demonized.

As in Obama's grand admonition: "We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name." Have "we" been doing that, smearing Islam because of a small minority? George Bush went to the Islamic Center in Washington six days after 9/11, when the fires of Ground Zero were still smoldering, to declare "Islam is peace," to extend fellowship and friendship to Muslims, to insist that Americans treat them with respect and generosity of spirit.

And America listened. In these seven years since 9/11 -- seven years during which thousands of Muslims rioted all over the world (resulting in the death of more than 100) to avenge a bunch ofcartoons -- there's not been a single anti-Muslim riot in the United States to avenge the greatest massacre in U.S. history. On the contrary. In its aftermath, we elected our first Muslim member of Congress and our first president of Muslim parentage.

"My job," says Obama, "is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives." That's his job? Do the American people think otherwise? Does he think he is bravely breaking new ground? George Bush, Condoleezza Rice and countless other leaders offered myriad expressions of that same universalist sentiment.

Every president has the right to portray himself as ushering in a new era of this or that. Obama wants to pursue new ties with Muslim nations, drawing on his own identity and associations. Good. But when his self-inflation as redeemer of U.S.-Muslim relations leads him to suggest that pre-Obama America was disrespectful or insensitive or uncaring of Muslims, he is engaging not just in fiction but in gratuitous disparagement of the country he is now privileged to lead.

"Stimulus"

The Stimulus Shopping List: $1.17 Trillion in Pork Goodies

Thursday, January 29, 2009 4:00 PM

By: David A. Patten 

The $1.17 trillion stimulus bill passed by House Democrats on Wednesday bears little resemblance to the bill originally proposed by President Obama, with less than 5 percent of the funds now going to repair America’s deteriorating infrastructure.

GOP critics point out the bill is loaded with tens of billions for items ranging from Amtrak subsidies to sexually transmitted diseases to the National Endowment for the Arts -- much of which won’t actually flow into the economy until long after economists expect the current economic crisis to subside.

In late November, Obama promised: “It will be a two-year, nationwide effort to jumpstart job creation in America, and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges,” modernizing schools and stimulating development of alternative forms of energy.

Even some Democrats are now objecting that the measure contains too few highway and mass transit projects. Moreover Mark Zandi, chief economist for Moody’s Economy.com, says most of the infrastructure spending in the plan won’t occur until 2010 or later.

Provisions of the bill that many legislators are questioning:

  •  $1 billion for Amtrak, which hasn’t earned a profit in four decades.

  •  $2 billion to help subsidize child care.

  •  $400 million for research into global warming.

  •  $2.4 billion for projects to demonstrate how carbon greenhouse gas can be safely removed from the atmosphere.

  •  $650 million for coupons to help consumers convert their TV sets from analog to digital, part of the digital TV conversion.

  •  $600 million to buy a new fleet of cars for federal employees and government departments.

  •  $75 million to fund programs to help people quit smoking.

  •  $21 million to re-sod the National Mall, which suffered heavy use during the Inauguration.

  •  $2.25 billion for national parks. This item has sparked calls for an investigation, because the chief lobbyist of the National Parks Association is the son of Rep. David R. Obey, D-Wisc. The $2,25 billion is about equal to the National Park Service’s entire annual budget. The Washington Times reports it is a threefold increase over what was originally proposed for parks in the stimulus bill. Obey is chairman of the House Appropriations Committee.

  •  $335 million for treatment and prevention of sexually transmitted diseases.

  •  $50 million for the National Endowment for the Arts. $4.19 billion to stave off foreclosures via the Neighborhood Stabilization Program. The bill allows nonprofits to compete with cities and states for $3.44 billion of the money, which means a substantial amount of it will be captured by ACORN, the controversial activist group currently under federal investigation for vote fraud. Another $750 million would be exclusively reserved for nonprofits such as ACORN – meaning cities and states are barred from receiving that money. Sen. David Vitter, R-La., charges the money could appear to be a “payoff” for the partisan political activities community groups in the last election cycle.

  •  $44 million to renovate the headquarters building of the Agriculture Department.

  •  $32 billion for a “smart electricity grid to minimize waste.

  •  $87 billion of Medicaid funds, to aid states.

  •  $53.4 billion for science facilities, high speed Internet, and miscellaneous energy and environmental programs.

  •  $13 billion to repair and weatherize public housing, help the homeless, repair foreclosed homes.

  •  $20 billion for quicker depreciation and write-offs for equipment.

  •  $10.3 billion for tax credits to help families defray the cost of college tuition.

  •  $20 billion over five years for an expanded food stamp program.

    Republican leaders say the stimulus package will add 32 new government programs at a cost of $136 billion. They object that many of the programs, once established, are likely to continue indefinitely.

    Most media outlets are reporting the cost of the package at $819 billion. As Newsmax revealed yesterday, however, the Congressional Budget Office calculates that the interest on the debt generated by the bill’s spending will cost another $347.1 billion, making the total cost approximately $1.17 trillion.

    Of course, the measure contains hundreds of billions in tax cuts and infrastructure projects that conservatives will find palatable. But as House Minority whip Eric Cantor, R-Va., told the media Wednesday, “This was not a stimulus bill. It was a spending bill.”

  • 20 January, 2009

    Affordable Housing

    Lured to Disaster
    Thomas Sowell
    Tuesday, January 20, 2009

    Behind the housing boom and bust was one of those alluring but undefined phrases that are so popular in politics-- "affordable housing."

    It is hard for me to know specifically what politicians are talking about when they use this phrase. But then politics is about evoking emotions, not examining specifics.

    In looking back over my own life, I find it hard to think of a time when I didn't live in affordable housing.

    When I first left home, back in 1948, I rented a room about 4 by 8 feet, costing $5.75 a week. Since my take-home pay was $22.50, that was affordable housing. (Multiply these numbers by about ten to get the equivalent in today's prices).

    After three years of living in rented rooms, I began living in Marine Corps barracks, and sometimes tents none of which cost me anything. That was certainly affordable.

    As a civilian again, in 1954 I rented my first apartment, a studio apartment-- small but affordable. But a year later, I went off to college and lived in dormitories on various campuses for the next six years. None was fancy but all of them were affordable.

    After completing my academic studies, I rented another studio apartment-- not a big advance, but it was affordable.

    In 1969, I rented my first house, which I could now afford, after several years as a faculty member at various colleges and universities. A dozen years later, I began to buy my first house.

    While the specifics will differ from person to person, my general pattern was not unusual. Most people pay for what they can afford at the time.

    What, then, is the "problem" that politicians claim to be solving when they talk about creating "affordable housing"?

    What they are saying and doing usually boils down to trying to enable people to choose what housing they want first-- and then have some law or policy where somebody else, somewhere else, somehow or other, makes that housing "affordable" for them.

    If you think it through, that is a policy for disaster. We cannot all go around buying whatever we want, whether or not we have enough money to afford it, and have somebody else make up the difference. For society as a whole, there is no somebody else.

    But of course political slogans are not meant to be thought through, are they? They are often an emotional substitute for thinking at all.

    Sometimes some semblance of rationality is given to the phrase "affordable housing" by comparing the cost of housing to the income of those who live in it. That was certainly what I did when I rented my first room. That's not rocket science, then or now.

    The difference is that today there is some arbitrary percentage of one's income that sets the limit to what the government will consider to be affordable housing. It used to be 25 percent but it might be 30 percent or some other proportion.

    But, whatever the percentage, it is no longer the individual's responsibility to choose housing that fits within that limit. It is somehow the taxpayers' job to make up the difference, when someone chooses housing whose cost exceeds that magic number.

    It is certainly no longer considered to be the individual's own responsibility to acquire the work skills and experience to be able to earn enough to afford better housing as the years passed. Why do that, when the government can simply "spread the wealth around," to use another political phrase?

    The ultimate irony is that increasing government intervention in the housing market over the years has generally made housing less affordable than before, by any standard.

    A hundred years ago, Americans spent a smaller percentage of their incomes on housing than they do today. In 1901, housing costs took 23 percent of the average American's income. By 2003, it took 33 percent of a far larger income.

    In particular places where government regulations and restrictions have been especially severe, such as coastal California, rents or monthly mortgage payments have averaged as high as 50 percent of the average person's income.

    Most of our problems are not nearly as severe as political "solutions." In housing, government policies have lured people into situations that were untenable to them and to the country.