December 31, 2010

Nationalizing Airports Because Of a Bit of Snow?

Well, not a bit of snow actually. Some tens of thousands of travelers were stranded at the London airports because of the poor weather conditions there. No wonder that Britain's leftist newspaper The Guardian favors renationalization then.

According to The Guardian's Neil Clark even before last weeks terrible delays, Britain's privatized airports, "with their shortage of public seating, their lack of reasonably priced food and drink outlets, and their depressing, unfriendly atmosphere, were an international disgrace." I never noticed Heathrow had a lack of "public" seats but I do wonder just what constitute "reasonable" food and drink prices according to Mr Clark? Also, could he point to a single government building that has an uplifting, "friendly" atmosphere to it? And is that really what travelers were upset about when they spent the night at the airport?

Airports' "spectacular failure to adequately deal with recent snowfalls has," according to Clark "surely exposed to all but the most fanatical free marketeers, the enormous price we pay for having our infrastructure in private ownership." He reminiscences about the 1960s when state owned terminals had to provide "lots of seating" for the public whereas according to the "commercial attitude" of private airlines today, "every square inch must be turned over to retail space." Isn't that despicable?

Unlike its state owned predecessor, the privately owned BAA is seemingly guided by just one concern: maximising profits for its Spanish owned parent company, Ferrovial.

Clark seems startled to find that a private company cares to turn a profit. Indeed, it's ridiculous, he writes, "to have profit hungry multinational companies running things that really are best left to the public sector." If that includes airports, what doesn't it, I wonder?

Public seating aside and disregarding the moral implications of public versus private ownership, there is no doubt that privately owned services always do better than their public counterparts. As Clark so disgustingly points out, private companies care about maximizing profits. That means that they have to offer better products and better service than their competitors else their customers will turn elsewhere. Indeed, people are quite willing to drive an extra mile for an airport that serves cheaper airlines and flights. They aren't usually so willing to pay extra for comfortable seating though---which is probably why many people fly economy while very few buy a first or business class ticket.

Public ownership by contrast has no competitors. Consequently, it has no reason to innovate, no reason to improve its service, for the people have nowhere else to go. The only reason government has to ensure that its nationalized companies do well is some altruist benevolence maybe or the fear of being voted out of office. History tells us that the profit motive is a far more solid incentive.

December 26, 2010

Fallacies of Net Neutrality

"As there is no real problem with the Internet, it's not surprising that some of our top minds have been working diligently on a solution."

David Harsanyi wrote that at Reason this May and argued against the proposition of mandating "neutrality" on the Web in the same article.

The problem, according to proponents of "net neutrality", is that large companies, Google and Microsoft for instance, would soon be able to afford faster delivery of their content at the disadvantage of smaller companies and startups. That is unfair, says the Federal Communications Commission (FCC) and it is considering regulation that would ensure equal access for all Internet companies.

As Harsanyi puts it, that "makes as much sense as mandating that tricycle riders have the same rights and privileges as cars and trucks on our roads---highway neutrality."

The FCC promises it doesn't have any intention of controlling Internet content, only of making access fair. But empowered with the ability to regulate the flow of online traffic, it offers a semantic, not substantive, excuse for a power grab.

Peter Suderman, also with Reason, has similarly been arguing against net neutrality. He sees no reason to worry. "If anything, it seems like consumers would benefit from larger web providers being able to offer nifty, advanced services that a smaller competitor might not be able to afford."

He isn't convinced that the theoretical tiny competitor's inability to pay for speedier service is a concern serious enough to warrant regulatory meddling. "Think of how FedEx and UPS operate," he suggests. "Some customers pay to have their packages delivered to their destinations faster, yet no one thinks of this as harmful to those who choose regular speed delivery. Why should it be any different with ISPs [Internet service providers], which are essentially delivery networks for data rather than physical goods?"

Startups always face long odds against entrenched competitors, which is why the majority of new businesses fail relatively quickly. But the best startups compete through genuine innovation, not by taking advantage of government enforced business model barriers.

December 21, 2010

Milton Friedman was right, Thomas Friedman is not

Good stuff from Foreign Policy's "Shadow Government" blog. William Tobey writes:

In a column again lamenting the benighted state of the United States, Thomas Friedman criticizes China's treatment of Nobel laureate Liu Xiaobo. Liu is a political prisoner serving an 11-year sentence for subverting state power. Of course, just a bit more than a year ago, Friedman was comparing the U.S. government with China's -- unfavorably!

On Sept. 8, 2009 he wrote, "[I]t is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one party democracy, which is what we have in America today. One party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages."

Friedman went on to note approvingly Beijing's ability to command orderly entry into the clean technology industry, versus the United States' reliance on chaotic markets.

Of course, Milton Friedman understood, but Thomas Friedman apparently does not, that over the long haul, capitalism and freedom work together, and that they are not separable from each other. The Beijing government's powers to throw a human rights activist in jail and to command massive economic projects are of a piece. They are antithetical to representative democracy and rule of law.

It is understandable that in these tough times people will question how well our system is working, but some perspective is necessary. The past 100 years of U.S. economic performance are unmatched in human history. The engine of the U.S. economy powered enormous improvements in the health, welfare, and living standards of hundreds of millions of people. The political and economic freedoms guaranteed by our system of government made such prosperity, innovation, and achievement possible.

Twenty-five years ago, the passing intellectual fancy was the United States' decline relative to another rising Asian power, Japan, because of Tokyo's ability to plan economic growth and manage private sector investment. Such predictions look silly today.

Warren Buffett, who has the true perspective of a long term investor, has observed, "In the 20th Century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."

As we consider what is next for the United States, rather than turning to the coercive power of centralized planning, as Thomas Friedman seems to consider, we should affirm our confidence in the values that have brought us so far -- capitalism and freedom -- as Milton Friedman knew. Nobody ever made money for long by selling America or American values short.

December 20, 2010

Don't Ask, Don't Tell Repealed

It's old news but I'd like to mention here the Republican and Independent Senators who voted to repeal the decade old ban that prohibits gay servicemen and -women from openly serving in the military.

Scott Brown of Massachusetts, John Ensign of Nevada, Mark Kirk of Illinois, Joe Lieberman of Connecticut, Lisa Murkowski of Alaska, Olympia Snowe of Maine and George Voinovich of Ohio.

They stood up against what was a bigoted and wrong policy even if the majority of their fellow GOP legislators opposed repeal.

Jim Bunning of Kentucky, Judd Gregg of New Hampshireand Orrin Hatch of Utah didn't cast a vote.

December 17, 2010

Microsoft's Failure and the Success of the Market

Ten years ago, Microsoft was on top of the world. Newspapers predicted it would rule the world and governments from Europe to the United States launched antitrust investigations, set on breaking up the company that seemed well underway to establishing a permanent monopoly.

In just a few short years, Microsoft is on the decline. Competitors who once complained of its "Death Star" might are doing better in new areas of information technology. What happened? The Huffington Post explains:

In short, changing appetites of the marketplace, technological evolution and questionable decision-making inside Microsoft itself have combined to accomplish what antitrust regulators never did: rolling back the company's dominance and opening the terrain for newer, nimbler entrants.

Imagine that. The free market at work.

December 15, 2010

Republicans Blame Government for Financial Crisis

From The Huffington Post:

The four Republicans appointed to the commission investigating the root causes of the financial crisis plan to bypass the bipartisan panel and release their own report Wednesday, according to people familiar with the commission's work.

The Republicans, led by the commission's vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They'll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities, these people said.

The Republicans' report is expected to conclude that government policy helped inflate the housing bubble and that prices weren't expected to crash because the government pushed homeownership so aggressively. They say that the report will note that once the bubble burst, a financial panic followed because firms weren't adequately prepared.

Besides Thomas, the Republicans on the panel include Peter Wallison, a fellow at the American Enterprise Institute, Keith Hennessey, former head of the National Economic Council under George W. Bush and as a fellow at the Hoover Institution, and Douglas Holtz-Eakin, former chief of the Congressional Budget Office and now with American Action Forum, a policy institute in Washington.

December 14, 2010

Why Republicans Can't Just Be Reasonable

Riding on a powerful wave of resentment with the Obama Administration's interventionist policies, the Republicans performed exceptionally well in last month's midterm elections. They picked up scores of House and Senate seats, several governorships and many state legislatures turned red.

After two years of obstructionism, the left, including the White House, has urged the opposition to become a more "responsible" stakeholder. As they will have a majority in the House of Representatives next year, Republicans should work with Democrats, the president said on election night, not "spend the next two years refighting the political battles of the last two." The challenges that the country faces, he added, do not "lend themselves to simple solutions or bumper sticker slogans. Nor are the answers found in any one particular philosophy or ideology." He shouldn't expect Republicans to share that view.

Republican leaders know that the Tea Party insurrection launched against government overreach in the private sector, including health care, last year was not exclusively aimed at Democrats. Conservatives also blame Republicans who, especially during the Bush Administration, allowed a huge expansion in the size of government and a vast increase in public spending as a consequence. Federal spending nearly doubled between 2000 and 2008 in fact.

Under the Obama Administration the spending spree has continued with hundreds of billions in stimulus and an overhaul of health insurance that is projected to explode Medicaid costs. The Federal Governments has already to borrow more than a third of what it spends and that deficit will only grow in the years to come. But bumper sticker slogans and ideological divide are precisely what will prevent meaningful reform.

Ahead of November's congressional elections, Republican leaders pledged to rein in spending, somehow but they have so far refrained from championing concrete austerity measures. They know that even if the self proclaimed fiscal conservatives of the Tea Party oppose bigger government they like a lot of what government does for them.

Overwhelmingly tea partiers, like all Americans, want to keep Medicare and Social Security for the elderly and oftentimes Medicaid for low income families as well. Cuts in defense spending moreover are anathema to all wings of the Republican Party yet along with entitlements, these are the Federal Government's single largest expenditures.

Without entitlement reform and reductions in defense spending, it is nigh impossible to bring down the deficit and balance the budget, except through raising taxes---something else Republicans won't do.

Republicans' unwillingness to see tax rates go up was most dramatically exposed this month when they blocked all pending legislation in Congress before an extension of Bush era tax cuts would be enacted. They had a good case to make, arguing that during a time of recession, the government should provide certainty and stability before anything else. Democrats were suddenly concerned about the deficit on the other hand, pointing out that if they let the Bush tax cuts on the wealthiest of Americans expire, it would produce several hundreds of billions in revenue.

A compromise negotiated with the White House ultimately saw Republicans agreeing to an extension of unemployment benefits in return for the tax cuts---another multibillion dollar expense, at least for the next thirteen months. The fundamental unwillingness to compromise on core principle remains however.

Democrats and the White House may claim to be open to compromise but when it comes to spending cuts, they are far from pragmatic. When the chairmen of the president's debt commission proposed to reform Social Security this month in order to ensure the system's affordability for several more decades, including a gradual raise in the retirement age, dozens of Democratic lawmakers immediately lined up to "stand firmly against" pension cuts. The president himself has pledged to preserve Social Security "forever" while Speaker Nancy Pelosi promised to "do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare."

The president's health insurance reform was conspicuously absent from the commission's recommendations moreover and in all likelihood, Democrats will oppose any attempt to repeal the law or stall its implementation.

If Democrats remain averse to entitlement reform, Republicans cannot agree to tax hikes. Revenues may have dropped as a natural result of the recession but Republicans are right to point out that Washington has a spending problem before anything else.

Democrats have raised public spending as high as 25 percent of GDP, a level not seen since World War II. As a result of health care and financial reform, government interference in the private sector has grown substantially; a role that is only set to expand if the administration manages to advance its energy agenda. Restoring balance to the budget is not just a political cause for Republicans; it is economically imperative.

Originally published at the Atlantic Sentinel, December 14, 2010.

December 13, 2010

Court Rules Health Mandate Unconstitutional

In what is another major setback for the administration's health care reform agenda, a federal judge in Virginia ruled part of the ObamaCare legislation unconstitutional today, noting that a mandate to buy health insurance exceeds the boundaries of Congress' power.

The state's Republican attorney general filed suit against the health reform law this summer along with prosecutors across the country who contested the mandate's constitutionality. The White House has maintained that the mandate is constitutional under the Commerce Clause which allows the Federal Government to regulate interstate trade. District Judge Henry Hudson has now struck down that view.

Federal courts in Michigan and Virginia previously ruled differently, opining that the mandate was constitutional. In his ruling Monday, Hudson stopped short of blocking health care reform's implementation until a higher court acts. "The final word will undoubtedly reside with a higher court," he wrote. Opponents of the law as well as the Justice Department expect the Supreme Court to ultimately make a ruling on the issue.

Health care reform's assault on individual rights may be argued to exceed the mandate however. Not only would all Americans be forced to buy insurance; health insurance companies could not deny coverage to anyone. The law is further meant to drive down permissible doctors' fees, affecting the rights of health providers.

The White House on Monday tried to downplay the significance of the Virginia ruling, point out that the full health care reform bill does not take effect until 2014. The administration expects all challenges to the law will have worked their way through the legal system by then.

Originally published at the Atlantic Sentinel, December 13, 2010.

Defending the Right to Smoke

Watch the video then click here to sign the petition.

Federal Judge Strikes Down ObamaCare

From the AP wire:

RICHMOND, Va. – A federal judge in Virginia has declared the Obama administration's health care reform law unconstitutional.

US District Judge Henry Hudson is the first judge to rule against the law, which has been upheld by two others in Virginia and Michigan.

Virginia Attorney General Ken Cuccinelli filed the lawsuit challenging the law's requirement that citizens buy health insurance or pay a penalty starting in 2014.

He argues the federal government doesn't have the constitutional authority to impose the requirement.

Other lawsuits are pending, including one filed by 20 states in a Florida court. Virginia is not part of that lawsuit.

The US Justice Department and opponents of the health care law agree that the US Supreme Court will have the final word.

December 10, 2010

The Story of Business: When Costs Compete With Passion

Restoring Balance to the United States Budget

After billions in stimulus spending and bailing out banks and automakers, America’s public finances are in a dismal state. This year, the federal deficit alone is set to near $1.5 trillion while the national debt reach a staggering $13.7 trillion last month. Americans may need to brace for austerity but plans to rein in spending are few and controversial.

Ahead of November's midterm elections for Congress, Republicans pledged to rein in spending, somehow but they volunteered few specifics. A deal struck with the administration this week, which sees an extension of tax cuts combined with continued unemployment benefit spending into next year, offers little hope for future bipartisan agreement. Similarly, both parties' response to the only concrete plans for deficit reduction drawn up so far have been virtually opposite on all major items.

The National Commission on Fiscal Responsibility and Reform which was formed by President Barack Obama in January, proposed deep budget cuts last month, including a freeze in government salaries, reductions in subsidies and an end to congressional earmarks. The largest expenditures of government---entitlements as Medicaid, Medicare and Social Security which together account for more than $1.4 trillion in federal spending---were not exempt from the commission's recommendations although proposed reforms fell short of actually balancing the books on these programs. ObamaCare, which will only increase health care spending, was not mentioned in the commission's report.

Raising the retirement age and asking doctors if not insurers to share in the burden of mounting health care costs, as the commission prescribed, will not make the entitlements affordable unless their scope is reduced or taxes are raised. Democrats are adamantly opposed to entitlement reform however and the president has explicitly pledged to preserve Social Security "forever." Republicans will block any proposed tax hike, leaving the country with a huge deficit that equals approximately a third of total spending.

If Democrats and Republicans cannot manage to shrink the deficit there is another way---freeze federal spending altogether. Even if revenues collapsed to barely 15 percent of national income as a result of the recession, the Congressional Budget Office estimates that tax revenues will grow by an average of 7.3 percent annually over the next decade. Without an increase in government spending, the budget will balance itself by 2016. Even if spending is allowed to keep pace with inflation and grow at 2 percent a year, the budget balances in 2020.

By that year even the president's fiscal commission is still several hundreds of billions short of balance. But as the national debt continues to mount, so do interest payments which this year amounted to more than $160 billion---an 18 percent increase compared to 2009.

A freeze in federal spending---which, as the economy recovers and begins to grow again, effectively amounts to a reduction in the size of government---should not be anathema to any politician. Democrats have raised spending as high as 25 percent of GDP, a level not seen since World War II. The debt it incurs is unsustainable while such a raised involvement of government in the private sphere is economically unsound.

Originally published at the Atlantic Sentinel, December 9, 2010.

More Unions and Companies Win ObamaCare Exemptions

Elizabeth MacDonald reporting for the Fox Business Channel:

The list of companies, insurers and unions winning exemptions from the new health reform legislation has grown to 222, doubling since early November and up from just 30 in the month of October.

Companies and unions that provide health coverage for more than 1.5 million people now don't have to abide by health reform changes for one year beginning January 1. That includes 34 unions with more than 140,000 members.

Many unions had fought hard for health reform and were dismissive about fears that companies would simply dump their coverage if health reform passed. But they are now demanding to be exempt from the new law.

MacDonald rightly wonders whether it's fair that companies without sufficient political pull in Washington DC must follow the new health care rules and regulations while their competitors who get waivers do not. It's not just unfair. It's outrageous.

Ron Paul Will Chair Fed Oversight Committee

Libertarian Texas Congressman Ron Paul will chair the Domestic Monetary Policy Subcommittee in the next Congress; the committee that oversees the Federal Reserve Reserve which Paul is an outspoken opponent of.

Twice before did Paul try to get elected chairman of the committee. In the present Congress, he has been the Republican ranking member on the committee. Reportedly, John Boehner, the next Speaker, tried to prevent Paul's election as he's likely to use his position to continue to criticize the Fed. Polls show that approximately half of all Americans are in favor of either reining in the Fed's power or abolishing it altogether. Particularly among tea partiers, antagonism of the central bank is widespread.

December 8, 2010

WikiLeaks, Doing the Work of Totalitarianism

Theodore Dalrymple is skeptical of WikiLeaks' release of confidential American embassy cables. He warns that the whistleblowers are unwittingly doing the work of totalitarianism.

The idea behind WikiLeaks is that life should be an open book, that everything that is said and done should be immediately revealed to everybody, that there should be no secret agreements, deeds, or conversations. In the fanatically puritanical view of WikiLeaks, no one and no organization should have anything to hide. It is scarcely worth arguing against such a childish view of life.

What WikiLeaks will accomplish, Dalrymple predicts, is precisely the opposite of what it champions. "Far from making for a more open world, it could make for a much more closed one."

Secrecy, or rather the possibility of secrecy, is not the enemy but the precondition of frankness. WikiLeaks will sow distrust and fear, indeed paranoia; people will be increasingly unwilling to express themselves openly in case what they say is taken down by their interlocutor and used in evidence against them, not necessarily by the interlocutor himself. This could happen not in the official sphere alone, but also in the private sphere, which it works to destroy. An Iron Curtain could descend, not just on Eastern Europe, but over the whole world. A reign of assumed virtue would be imposed, in which people would say only what they do not think and think only what they do not say.

Dissolving the distinction between public and private is characteristic, if not the outspoken aim, of any totalitarian regime. "Opening and reading other people’s e-mails is not different in principle from opening and reading other people’s letters," argues Dalrymple. WikiLeaks has assumed the role of censor to the world, he believes, "a role that requires an astonishing moral grandiosity and arrogance to have assumed. Even if some evils are exposed by it, or some necessary truths aired, the end does not justify the means."

December 4, 2010

The Gulag State

Jeremy Hildreth reporting for The Wall Street Journal reminds us of the real face of Communism: the gulag.

[...] there once were 8,000 Soviet labor camps spattered like islands across the Russian landscape—the "Gulag archipelago" of which Alexander Solzhenitsyn famously wrote. Each camp housed about 250 prisoners, most serving 10- to 25-year sentences for contrived offenses like "uncooperativeness" or "sabotage." By the time the U.S.S.R. fell, some 30 million individuals had experienced the Gulag personally [...]

The atrocities of Soviet Russia were worse than the gulag. Millions more died as a result of the failed collectivization of Russian agriculture and the famine that ensued. Suffering was the universal condition under Communism. Scarcity its norm.

As Hildreth wandered about Perm-36, the last remaining Gulag forced labor camp, which is now a tourist attraction and memorial, he wondered the same time while beholding the Killing Fields of Cambodia, the former KGB prison in Lithuania, and the wrecked streets of East Timor: "How did this ever seem like the right thing?" Consider this quote from Ayn Rand, "Conservatism: An Obituary," published in Capitalism: The Unknown Ideal (1966):

The social system based on and consonant with the altruist morality—with the code of self-sacrifice—is socialism, in all or any of its variants: fascism, Nazism, communism. All of them treat man as a sacrificial animal to be immolated for the benefit of the group, the tribe, the society, the state. Soviet Russia is the ultimate result, the final product, the full, consistent embodiment of the altruist morality in practice; it represents the only way that that morality can ever be practiced.

United States, Korea Finalize Trade Deal

South Korea and the United States finalized a free trade agreement over the weekend which the White House hopes will boost American exports by some $11 billion and sustain at least 70,000 jobs at home. That makes the pact the largest of its kind since the North American Free Trade Agreement with Canada and Mexico came into force in 1994.

In Seoul last month President Barack Obama had to postpone the signing of a trade deal with Korea. In a statement released Saturday, the president explained that he had directed American negotiators "to achieve the best deal for American workers and companies," particularly with regard to car exports and beef.

Instead of cutting a 2.5 percent tariff on Korean car imports, the United States will lift the tax over the next five years. A 25 percent tariff on trucks will be phased out during the next decade. South Korea's tariff on American trucks has to be eliminated immediately however. Under the agreement, American automakers are each allowed to export up to 25,000 cars to Korea annually.

Korea's existing tariffs on agricultural imports are exceptionally high at 54 percent. As the new trade agreement eliminates or reduces import levies, the American Farm Bureau Federation estimates that farmers' and ranchers' exports to Korea will increase by as much as $1.8 billion every year thanks to expected increases in sales of major grain, oilseed, fiber, fruit, vegetable, and livestock products. Koreans bought $3.9 billion worth of agricultural products in 2009 and are America's fourth largest beef importers.

Last month's economic summit of Pacific countries in Japan attested a commitment to free trade and according to the president, the new trade deal not only "deepens the strong alliance between the United States and the Republic of Korea" at a time of considerable upheaval on the peninsula; it also "reinforces American leadership in the Asia Pacific."

South Korea is already America's eight largest trading partner. Last year the United States imported $11 billion more worth in goods from Korea than they exported though---an imbalance that the free trade pact seeks to remedy. The American trade surplus to South Korea was $7.1 billion in 2008.

Business leaders as well as seniors Republicans have welcomed the trade agreement which is subject to congressional approval.

Originally published at the Atlantic Sentinel, December 4, 2010.

November 30, 2010

The Failure of the Environmentalist Lobby

Margaret Wende has an excellent article in The Globe and Mail that describes the failure of the environmentalist lobby. She first lambasts environmentalists, politicians and journalists who had such high hopes for the United Nations climate summit in Copenhagen earlier this year.

The only surprise was that this outcome should have come as a surprise to so many intelligent people. These people actually seemed to believe that experts and politicians have supernatural powers to predict the future and control the climate. They believed that experts know how fast temperatures will rise by when, and what the consequences will be, and that we know what to do about it. They believed that despite the recent abject failure of Kyoto (to say nothing of other well-intentioned international treaties), the nations of the world would willingly join hands and sacrifice their sovereignty in order to sign on to a vast scheme of unimaginable scope, untold cost and certain damage to their own interests.

"Copenhagen was not a political breakdown," according to Wende. "It was an intellectual breakdown so astonishing that future generations will marvel at our blind credulity." Fortunately, she adds, nobody will pay much attention to the climate conference in Cancun next week.

The delusional dream of global action to combat climate change is dead. Barack Obama’s cap-and-trade scheme is dead. Chicago’s carbon-trading market is dead. The European Union’s supposed reduction in carbon emissions has been exposed as a giant fraud.

The environmentalist lobby -- "No interest group in modern times has been so free from skepticism, scrutiny or simple accountability as the environmental establishment," according to Wende -- hasn't given up entirely. It shouldn't, she believes. Rather people who care about the planet should turn to more pressing, real problems, as the fate of many animals, including lions and tigers, who see humans encroaching upon their habitats. "Their problem isn’t climate change," she writes. "It’s us."

Before they were sucked into the giant vortex of global warming, environmentalists did useful things. They protested against massive Third World dams that would ruin both natural and human habitats. They warned about invasive species and diseases that could tear through our forests and wreck our water systems. They fought for national parks and greenbelts and protected areas. They talked about the big things too – such as how the world could feed another three billion people without destroying all the rain forests and running out of water. They believed in conservation – conserving this beautiful planet of ours from the worst of human despoliation – rather than false claims to scientific certainty about the future, unenforceable treaties and radical utopian social reform.

November 24, 2010

Cato's Plan to Cut Spending

Is it really that hard to balance to the US budget? Not according to Chris Edwards, Director of Tax Policy Studies with the libertarian Cato Institute. He prepared A Plan to Cut Spending and Balance the Federal Budget by 2020.

The plan would cut spending to 18.5% of GDP by 2020, which would balance the budget with current tax relief in place. Have a look!

November 21, 2010

Weak Leadership Hampers America's Comeback

Writing for Fox Business, David Asman describes what's hampering the recovery of the United States today: the perception of American weakness.

European and Asian countries dismiss us as weak and humiliate the president when he goes overseas looking for trade deals and backup for his own failed economic policies. Our dollar looks weak, even though it could be strong if the Fed would stop weakening it by printing more dollars to buy up our debt.

Even the president keeps the myth of our weakness alive by lamenting the weakness of our economy, rather than taking the blame because of his big government economic policies that haven't worked.

If the president just listened more to businesses, he'd hear what Scoreboard hears from every small business we talk to: that they'd be fine if government just got out of their way.

America is still a strong country, according to Asman. "But the perception of weakness leads to uncertainty about where we stand."

November 15, 2010

Unions Extracting Waivers For ObamaCare

The conservative blog RedState reports today on the many American trade unions that are seeking waivers to the health care reform plans enacted by Congress this summer.

Union bosses fought tooth and nail to nationalize America's health care---even, in many cases, to the detriment of their own members. Now, instead of chewing on and swallowing what they bit off, unions are getting waivers to the very plan that they shoved down everyone else's throat.

November 11, 2010

Debt Commission Proposes Deep Budget Cuts

Members of the president's debt commission have proposed deep budget cuts in order to rein in government spending in the United States. Entitlement programs as Medicare and Social Security, which are responsible for the brunt of federal spending, would be hit especially hard.

The National Commission on Fiscal Responsibility and Reform, created by President Barack Obama in January of this year, was not supposed to release its recommendations for several weeks yet. Its two chairmen however, former Republican Senator Alan Simpson and Democrat Erskine Bowles, who was President Bill Clinton's White House chief of staff in the 1990s, came out with proposals this week already. They have stressed that theirs are personal recommendations, not the findings of the commission as such which includes eighteen members in total, among them Congressman Paul Ryan of Wisconsin who has previously proposed entitlement reform in order to balance the federal budget. Partisan deadlock may have compelled the chairmen to publish their own ideas after almost ten months of discussion.

Although the president has promised to preserve Social Security "forever", describing privatization as "an ill conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market," America's pension system is in dire need of reform. Medicare as well as Social Security will bankrupt without intervention.

In order to save the programs and achieve "nearly $4 trillion in deficit reduction through 2020" while reducing the deficit to just over 2 percent of GDP by 2015, the chairmen of the debt commission, in a draft put out by them Wednesday, suggest to raise the retirement age by one month every two years after it reaches 67 under current law. The retirement age would then reach 68 around 2050 and 69 by 2075. There would be a "hardship exemption" however for those unable to work beyond the age of 62. Other proposals include:

  • Granting retirees the choice of collecting half of their benefits early and the other half at a later age to support phased retirement options;
  • Asking doctors and other health care providers to slow the increase in health care costs;
  • Reducing farm subsidies by $3 billion a year;
  • Freezing federal salaries and government employee bonuses;
  • Eliminating congressional earmarks

Several of the Democrats who sit on the commission have already voiced their opposition to these supposedly radical proposals. They warn that there will be no fourteen vote majority for many of these notions.

Several dozen of Democratic legislators immediately released a joint statement after the commission chairmen released their findings, urging the president to protect Social Security. "If any of the commission's recommendations cut or diminish Social Security in any way, we will stand firmly against them," they have pledged.

Democrat Raúl Grijalva of Arizona, who is considered one of the most liberal of congressman, complained that "we have waited through nine months of backroom negotiations only to be told that the American people will have to tighten their belts another notch while defense spending continues to grow and corporate bonuses continue to expand." Congress should have a "realistic, productive conversation" about deficit reduction, he believes. "Instead, we're debating a proposal from a commission dedicated to cutting crucial social programs and reducing corporate and upper income taxes at the same time."

The commission chairmen have proposed to reduce income tax rates but attest that the losses in revenue can be offset by closing tax loopholes and eliminating scores of tax deductions which currently make the US tax code incredibly complicated.

According to Speaker of the House Nancy Pelosi, who will lose her job next year since Republicans regained control of the lower chamber of Congress in this November's midterm elections, pension reform as considered by the commission is utterly unacceptable. "Any final proposal from the commission," she has declared, "must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare."

Conservatives on the commission, including Paul Ryan, have cautiously praised the chairmen for their suggestions. Although Republicans are divided on entitlement and earmark reform, fiscal hawks as Ryan would rather reform be more comprehensive. His "Roadmap for America's Future," which is a detailed plan to restore balance to the federal budget, represents, as then Office of Management and Budget Director Peter Orszag put it in February of this year, a "dramatically different approach in which much more risk is loaded onto individuals." Congressman Jeb Hensarling of Texas and Senator Tom Coburn of Oklahoma are also renowned for their opposition to deficit spending but the other five Republican members of the commission may be more inclined to compromise. They have all spoken out against raising taxes however.

At a press conference Wednesday afternoon the two commission chairmen acknowledged the difficulty of reforming entitlement programs, something that has long been anathema to lawmakers from both sides. "We'll both be in a witness protection program when this is all over," joked Simpson. Bowles added that they weren't asking anyone to vote for their plan. "This is a starting point," he explained.

Originally published at the Atlantic Sentinel, November 10, 2010.

October 19, 2010

Democrats Confounded by Voter Frustration

Mere weeks ahead of the congressional midterms elections in November, many Americans are no longer able to "think clearly" because of the economic malaise they are suffering. According to President Barack Obama the burden is on Democrats "to break through the fear and the frustration people are feeling."

"Part of the reason that our politics seems so tough right now and facts and science and argument does not seem to be winning the day all the time is because we're hardwired not to always think clearly when we're scared," Obama said on Saturday during a fundraiser event, Politico reports.

The president and his party have been lambasting the opposition for supposedly tapping into that fear. "The biggest mistake we can make right now," said Obama, "is to go back to the very same policies that caused this mess in the first place." With the economic recovery stalling and Democratic candidates across the country distancing themselves from the administration's landmark legislative achievements---health care and financial reform---its new message of "hope" is apparently that Republicans will do even worse if elected.

There is certainly a lot of anger on the right. The huge electoral defeats of 2006 and 2008 left the Republican Party rather without direction, allowing loud and controversial opinion makers as Glenn Beck, Rush Limbaugh and Sarah Palin to fill an ideological void.

What restored coherence to conservative America was the interventionist economic agenda of the Obama Administration. Tea Party activists rallied against health care reform. Stalwart Republicans once again championed constitutional conservatism. Libertarian candidates and congressmen as Rand Paul of Kentucky and Paul Ryan of Wisconson won primary elections and crusaded for less government in the immediate aftermath of a crisis that Democrats blamed on the free market.

Presuming that unbridled greed and unregulated capitalism caused the downturn, it is difficult for Democrats to understand why millions continue to oppose their Big Government solutions. Even BP's oil spill in the Gulf of Mexico this summer wouldn't convince tea partiers. White House chief of staff at the time, Rahm Emanual alleged that Republicans saw BP as the aggrieved party under the circumstances, not local fishermen. "They think that the government's the problem," he exclaimed in disbelief.

The whole Tea Party phenomenon was not taken very seriously by Democrats initially. Since it became evident that the Tea Parties were a force to be reckoned with however, as they marched by the hundreds of thousands and helped elect populist candidates in GOP primary elections, the left has been quick to label them as radical and extremist.

Since the start of this year, different commentators and lawmakers have alleged or suggested that the Tea Parties are racist. A recent study by the Institute for Research and Education on Human Rights, which is an organization critical of fringe and racist movements, entitled Tea Party Nationalism, "found Tea Party ranks to be permeated with concerns about race and national identity and other so-called social issues," contrary to the movement's self proclaimed focus on government excess. "Tea Party organizations have given platforms to anti-Semites, racists, and bigots," according to the report. The MSNBC documentary Rise of the New Right further tied anti-government protests to militias and fanatics, conveying the notion that the whole of this "new" right is inclined to violence or at least willing to sanction it.

On the campaign trail in April 2008, Obama said that he understood how people could become embittered and "cling to guns or religion or antipathy to people who aren't like them" in times of economic hardship. Since then, millions more Americans have lost their jobs while government stimulus measures have delivered little more than trillion dollar deficits.

Democrats meanwhile continue to blame Republican policies for the "mess" America is in and warn that their return to power will only herald greater inequity and despair. The White House is now theorizing that "secret foreign money" is paying for Republican campaign advertisements and the president himself doesn't even talk about health care anymore.

Less than two years after promising "hope and change," Obama and his party don't appear to have much of a message, let alone vision, for the upcoming elections anymore---which are a referendum on the presidency whatever the administration may like to pretend. Democrats' inability and unwillingness to defend their own policy record of the past two years is a dismal sign of weakness and failure, one Republicans eagerly exploit. Democrats don't seem to understand why people are so upset. The president said it best in April of this year when he talked about Tea Party protesters. "I think they should be saying thank you."

Originally published at the Atlantic Sentinel, October 9, 2010.

October 15, 2010

Napolitano Breaks it Down

The judge appeared on Glenn Beck's show recently to talk about what's wrong with America and why November's elections are so important.

October 8, 2010

How to Balance the US Budget

A message from Cato's Daniel Mitchell:

The political establishment in Washington wants everyone to believe that there is no way to balance the budget without higher taxes.

This new video debunks this myth, using Congressional Budget Office numbers to show that it is simple to get rid of red ink if politicians restrain the growth of federal spending.

October 5, 2010

Another Company Feeling the Pain of ObamaCare

The Wall Street Journal reports that manufacturing company 3M Co. will stop offering its health insurance plan to retirees, citing the federal health overhaul as a factor.

The changes won't start to phase in until 2013. But they show how companies are beginning to respond to the new law, which should make it easier for people in their 50s and early-60s to find affordable policies on their own. While thousands of employers are tapping new funds from the law to keep retiree plans, 3M illustrates that others may not opt to retain such plans over the next few years

Whereas the administration previously insisted that retiree plans would remain largely exempt from the health insurance overhaul, an internal 3M memo states that "health care reform has made it more difficult for employers like 3M to provide a plan that will remain competitive." The company didn't specify how many workers would be impacted. It currently has 23,000 American retirees.

October 4, 2010

O'Donnell: China Conniving to Take Over USA

I like the Tea Party. Really. But Republican Senate nominee Christine O'Donnell from Delaware is making it harder every day for me to take her seriously.

From Politico:

Delaware GOP Senate nominee Christine O'Donnell once claimed to have classified information showing that China was plotting to conquer the United States.

China had a "carefully thought out and strategic plan to take over America" O'Donnell said during a 2006 Senate primary debate [...]

When her opponent pointed out that China and the US were so economically interdependent that an aggressive move of that kind on the part of China would make no sense, O'Donnell accused him of appeasement.

"A country that forces women to have abortions and mandates that you can only have one child and will not allow you the freedom to read the Bible, you think they can be our friend?" she said. "We have to look at our history and realize that if they pretend to be our friend it's because they've got something up their sleeve."

Such fantasies are no more than silly in the average person but a United States Senate candidate should know better. Christine O'Donnell should not be elected.

Are Islam Bashers to Blame for Terror Threat?

Whatever happened to Newsweek? In a recent article two of the magazine's contributors suggest that the rise of anti-Islam parties throughout Europe is somehow connected with the raised terror alert on the continent. Not only do the authors fail to explicate a connection between the two; they fail even to substantiate this assertion.

According to the magazine, people in Europe are "afraid, caught between terrorists who are plotting attacks against them and politicians who are not only exploiting the public's fears but, in some cases, openly taunting the terrorists." I can't speak as to the mood in every part of Europe, but in general, there doesn't seem to be an awful lot of fear around. Indeed, American news media have been more anxious to report on the terror plot that Al Qaeda affiliates were or are supposed to planning against France, Germany and the UK than their European counterparts.

The authors conveniently glance over the near absence of extremist parties in those countries though. They point out that "from Sweden and Denmark to Italy, Holland and Hungary" anti-immigration parties are on the rise (which is true), and they conclude that "It's been years since the clash of civilizations seemed so real and so imminent" (which is preposterous).

If the mounting popularity of Islam bashers in the aforementioned countries were to incite terrorism, why aren't those countries targeted? The answer, of course, is that unlike those countries (with the exception of the Netherlands), Britain, France and Germany have actually fought terrorism instead of Islam, from Western Africa to Afghanistan. That's why terrorists are attempting to strike against them.

Muslim extremists make a lot of fuss when someone like Geert Wilders declares Islam a "fascist ideology" and suggest that the Qur'an should be outlawed, but Geert Wilders isn't taking the war to them. France, Germany and the United Kingdom are.

October 3, 2010

ObamaCare Forces Insurer Off Market

Cato @ Liberty reports that financial services provider Principal Financial Group is exiting the health insurance business as the impact of the Democrats' health insurance overhaul becomes clearer.

By forcing the exit of Principal Financial Group---which ran a profitable, $1.6 billion health insurance business---ObamaCare has now left 840,000 Americans to find another source of coverage.

And Principal is not the only one. Many small health insurers are struggling to meet the new requirement to spend at least 80 percent of their revenue on actual health care.

September 22, 2010

Administrations Threatening Private Health Insurers

Health care premiums are likely to go up as a result of the recent health care and insurance overhaul enacted by the Obama Administration. The Heritage Foundations' Kathryn Nix explains:

Starting this year, Obamacare prohibits plans from placing lifetime limits on coverage, severely limits rescissions, and requires all plans to cover children up to age 26. Plans also have to fully cover preventive services and are prohibited from denying children due to pre-existing conditions. The list goes on. Since extra benefits cost more, it makes sense that insurance premiums would climb as a result of the new law. Insurers cited increases between 1 and 9 percent.

The administration's response? Health and Human Services Secretary Kathleen Sebelius announces that "there will be zero tolerance for this type of misinformation and unjustified rate increases."

What will "zero tolerance" means? Why is it "misinformation" on the part of private health insurers? Just what constitutes a "justified" price increase. And who decides that?

Well, Secretary Sebelius is clear on at least one of those issues. She decides what prices health insurers can set and if they don't fall in line, there'll be "zero tolerance" for them!

GOP "Don't Ask, Don't Tell" Filibuster Makes Some Sense

I complained of Republicans blocking a vote on the repeal of "Don't Ask, Don't Tell" yesterday -- something I'm strongly in favor of. But as it turns out, that's not the whole of the story.

Over at Redstate, Dan McLaughlin explains how Democrats tied a vote on immigration reform onto a vote on defense appropriations -- which included "Don't Ask, Don't Tell." The so-called DREAM Act is somewhat related to defense in that it would allow illegal aliens to earn citizenship by serving in the military or enroll in college, but it's understandable that Republicans didn't appreciate having to say "yes" to both at once.

I'm all in favor of freer immigration as well and the DREAM Act sounds like a smart idea but this unnecessary trick on part of the Democrats makes no sense. If they want to repeal "Don't Ask, Don't Tell", why attach it to a vote on immigration reform which they could perfectly expect Republicans to filibuster?

But now, they have a chance to portray Republicans as both anti-gay and anti-immigration, all that just a few weeks before the midterm elections which are likely to turn out disastrous for them anyway.

September 21, 2010

Senate Republicans Block "Don't Ask, Don't Tell" Repeal

Politico reports today that the effort to repeal the military's "Don't Ask, Don't Tell" policy went down to defeat this afternoon, with Senate Democrats and Republicans squaring off in a procedural vote.

In the face of a promised filibuster by Sen. John McCain (R-Ariz.), Democrats could not convince a single GOP senator to cross over and provide the 60th vote needed to begin debate on a defense spending bill containing the repeal measure.

This is extremely unfortunate. "Don't Ask, Don't Tell" is arbitrary government discrimination, pure and simple. There isn't a shred of evidence to support the preposterous assertion forwarded by some Republicans that allowing gay men and women to serve openly would somehow diminish "moral" or even the military's effectiveness. To the contrary, in practically all developed countries, gay men and women can serve openly and do so with success.

Tom Ricks of Foreign Policy offered a piece of sensible advice a couple of days ago, citing the unfortunate dismissal of three combat veterans under "Don't Ask, Don't Tell."

Collectively, they represent almost a decade of combat experience, a big handful of Purple Hearts and Bronze Stars, service as aide-de-camps to general officers and as platoon leaders and company commanders in combat, and the investment of millions of dollars in taxpayer funds. They have offered blood, sweat, and tears in defense of a nation that discriminates against them for no good reason.

This policy must end.

OMB Director Candidate Says Deregulation Didn't Cause Crisis

The Huffington Post reports that former Citigroup executive Jacob Lew, the administration's nominee to lead the Office of Management and Budget, told Senate Budget Committee this Thursday that deregulation was not exclusively to blame for the financial meltdown and recession.

Lew was asked by Senator Bernie Sanders of Vermont whether he believed that the "deregulation of Wall Street, pushed by people like Alan Greenspan [and] Robert Rubin, contributed significantly to the disaster we saw on Wall Street."

Lew answered that "the problems in the financial industry preceded deregulation," and after discussing those issues, added that he didn't "personally know the extent to which deregulation drove it, but I don't believe that deregulation was the proximate cause."

The Huffington Post can hardly believe it, stressing that experts and policymakers, "including US Senators, commissioners at the Securities and Exchange Commission, top leaders in Congress, former financial regulators and even Obama himself have pointed to the deregulatory zeal of the Clinton and George W. Bush administrations as a major cause of the worst financial crisis since the Great Depression." The article further alleges that "experts agree on most of the several factors that led to the crisis," and since they agree, evidently, the argument requires no further explanation.

Repeatedly "Wall Street greed" and "inhuman capitalism" are attacked for a recession that started in one of the single most regulated sectors of the US economy: the housing market. The past decade experienced President George W. Bush's attempt to bring about his "ownership society" and the country today is witnessing the results of this experiment. Through consistent all time low interest rates set by the Federal Reserve and through an enormous increase in size and influence of the government-sponsored Fannie Mae and Freddie Mac enterprises, Washington promoted homeownership by artificially extending credit to people that, put simply, could never dream of affording their own house---let alone pay back their loans.

That is not to say that the private sector is free from blame entirely. But consider that Fannie Mae and Freddie Mac, supposedly privately owned, were publicly chartered and represented the archetype of unfair competition. Consider the Community Reinvestment Act of 1977 that "encouraged" banks to lend to uncreditworthy borrowers and sought to end "discriminatory" credit practices against low-income neighborhoods. And consider that the very banks who let themselves be pressured into participating in this madness were "bailed-out" by the government with billions of dollars of taxpayers' money. Was this a free market at work?

In a truly free market, failure is possible and consumers are aware of the risk---with the result that they rationally and voluntarily assume less of it. What the US economy needs is not more government oversight. What is needs is more personal responsibility.

Obama Denies Vilifying Business

President Barack Obama denied vilifying businesses at a CNBC town hall event in Washington DC on Monday. He praised the free market system instead, claiming that he wants government to "get out of the way" of innovation and job creation.

The president has been criticized fiercely in recent months from both within the business community and the Republican opposition about his apparent war on capitalism. On health care and financial reform as well as BP's oil spill in the Gulf of Mexico this summer, Obama used strong language to denounce private health insurers, banks and the embattled energy conglomerate. He alleged that medical insurance companies were driven by a "business mentality" that supposedly prevented them from caring about patients. He complained of "fat cat bankers" on Wall Street who awarded themselves "excessive" bonuses while knowingly perverting the financial system and leaving the country on the brink of economic collapse. And he publicly lambasted BP's Chief Executive Tony Hayward. Indeed, the president interpreted the Gulf oil spill as the result of "of a failed philosophy that views all regulation with hostility---a philosophy that says corporations should be allowed to play by their own rules and police themselves." The lesson to be learned, he said, "is that we need better regulations, better safety standards, and better enforcement."

On Monday, the president reiterated this sentiment, noting that "basic rules of the road" have to be in place so that "consumers, workers, ordinary folks out there aren’t taken advantage of by sharp business practices." He added: "I don't think there's anything in there that's inherently anti-business."

The administration previously urged businesses to stop complaining. After passing a health care reform bill that puts insurers at a disadvantage and is expected to cost business dearly; after threatening the high tech sector with antitrust investigations in spite of it being nearly the only profitable and certainly the only free market left in America; after using BP's oil spill last April to impose an unlawful moratorium on deepwater drilling throughout the Gulf of Mexico and launch an attack on Big Oil altogether; and after hammering out a financial reform scheme that leaves the prime instigators of the recession, the semi-government entities Fannie Mae and Freddie Mac untouched at the cost of multibillion dollar tax hikes and regulation on the part of private banks, the president and his administration are evidently trying to assure businesses by saying---it could have been a lot worse. "There's a big chunk of the country that thinks I've been too soft on Wall Street," said Obama.

Wall Street isn't convinced. Nearly half of financial workers polled recently by CNBC said that increased regulation under the Obama Administration is bad for the economy. Just 34 percent believes that the new regulations have had a positive effect.

The president knows though that "what sets America apart" is that it has "the most dynamic free market economy in the world. And that has to be preserved," he believes.

We benefit from entrepreneurs and innovators who are going out there and creating jobs, creating business. Government can't create the majority of jobs. And, in fact, we want to get out of the way of folks who've got a good idea and want to run with it and are going to be putting people to work.

That's not how things look for the average businessman however, no matter the president's championing of small business. Instead, a government knows best mentality appears to pervade in Obama's America and although the president can hardly be blamed for it entirely, his party is largely responsible for implementing superfluous regulations on every level of government. Companies of any size and character are confronted with an array of laws and taxes throughout the country so dazzling that no small businessowner can reasonably be expected to know which apply to his field of work and how.

The president may not be to blame entirely for this positively anti-business environment but it is the very notion that he professed last Monday---that some "rules of the road" are necessary to protect the common man from ferocious business practices---that inspires lawmakers in every state to enact laws that limit the entrepreneur's freedom and his ability to innovate and create jobs.

When government believes that it is morally empowered to regulate people's business activities, its willingness to do so will be limited by political expediency alone. In the wake of the recession, the Democrats in power have had the political capital to extend regulation in many, indeed major sectors of the US economy. A majority of American voters now appears to realize that government simply can't micromanage the nation's economy nor spend it into recovery. The president, for one, has already begun to adopt a more conciliatory tone.

Originally published at the Atlantic Sentinel, September 21, 2010.

September 16, 2010

Fact Checking the President on Tax Policy

Elizabeth MacDonald of the Fox Business Network fact checks President Barack Obama on tax policy, disputing his claims that his tax cut will benefit the whole of the middle class whereas Republicans would favor tax relief for "millionaires and billionaires." Some excerpts:

Taxpayers making $250,000 or more are considered middle class in many urban areas with a high cost of living, and are not as the President said “millionaires and billionaires.”


Small businesses will be hurt by the tax hike on the upper bracket.

And from Ray Hennessey:

At the heart of why the administration does not want every American to be treated equally is an idea that spreading the wealth around – better known as wealth redistribution – helps make the economy better.

If you succeed, you should throw back some of that success to those who don’t, thus making them succeed, too. But there’s no basis in economic theory that supports that.

In fact, wealth redistribution is the destruction of wealth. If you work hard, succeed and make an income that hits some kind of arbitrary level, you are expected then to kick that back to the government so that the public sector can then make sure that those who perhaps have not worked hard or succeeded get an income, too.

So your wealth is capped. More importantly, that approach kills initiative, entrepreneurism and work ethic – all pillars on which this country is built. Why work hard to build your wealth when you will be forced to just give it to others?

Fannie and Freddie: Banks Should Return the Favor

From the AP wire:

WASHINGTON — The nation's largest banks have an obligation to pay some of the cost for bailing out mortgage buyers Fannie Mae and Freddie Mac because they sold them bad mortgages, a government regulator said Wednesday.

Edward DeMarco, the acting director for the Federal Housing Finance Agency, said the banks this summer have refused to take back $11 billion in bad loans sold to the two government-controlled companies [...]

Really? Private banks have an obligation to help out the so-called government "sponsored" monstrosities that were largely responsible for bringing down the financial system and starting the recession America is still in? Really? They need to "return the favor"?

Is this a bad joke?

September 13, 2010

The Pragmatist

With his approval ratings hovering around 50 percent and the opposition likely to win significantly in November's midterm elections for Congress, Barack Obama should begin to wonder what went wrong along the way. With a message of "hope and change" the president won almost ten million more voters than his opponent in the 2008 elections but has since become divisive and controversial.

The president's mistake is to be pragmatic when he shouldn't but stand on principle when he can't afford to.

The political left, including elements in his own party, have reason to complain about the president's aloofness to legislative achievements as health care and financial reform. Though praised as monumental and far reaching, Obama failed to effectively sell both overhauls to the public. His administration never managed to counter the Republican narrative of "government takeovers" and is now suffering the consequences in the polls.

A waning approval rating may have discouraged the administration from pursuing principle on issues that were more straightforward. When a federal judge, last month, dismissed California's ban on same sex marriage as arbitrary and unconstitutional, the White House remained silent, no matter its careful attempts at repealing the military's infamous policy of "don't ask, don't tell" toward gay servicemen and -women.

When the Governor of Arizona signed a controversial immigration bill into law last April, one that many allege not only legalizes but encourages racial profiling, the president merely voiced disapproval but didn't take advantage of the situation to make the case for freer immigration to America.

Most recently, with the planned construction of a Muslim community center in Lower Manhattan, New York inspiring a newfound resentment with Islam throughout the country, Obama at first appeared to defend religious freedom only to retreat the very next day, noting that the project---which opponents have successfully dubbed the "Ground Zero mosque"---really isn't any of his business as president.

This president is perfectly adamant about reforming the US economy, favoring a greater involvement for government in regulating and overseeing industry and trade in spite of a majority of Americans opposing his policies in this regard. But whenever he has a chance to assert leadership on values---including marriage, immigration and faith---Obama refrains from spearheading the national debate but lets his popularity suffer instead.

Obama's declining appeal with voters both right and center should not be blamed entirely on unpopular legislation. What has Americans worried and confused is that their president exhibits no clear principles but prides himself on being "pragmatic" and "willing to compromise." That's fine for any lawmaker but a president should lead on ideas, not just listen to them.

Originally published at the Atlantic Sentinel, September 13, 2010.

September 12, 2010

Michelle Obama: Don't Go Into Corporate America!

The New York Times' David Brooks quotes Michelle Obama in the context of America's changing attitude toward capitalism.

"Don't go into corporate America," she told a group of women in Ohio. "You know, become teachers. Work for the community. Be social workers. Be a nurse. ... Make that choice, as we did, to move out of the money-making industry into the helping industry." As talented people adopt those priorities, America may become more humane, but it will be less prosperous.

What the First Lady is saying: Don't be so selfish, you smart people. Don't obsess about making money. Dedicate your life to those less fortunate instead. Because that's virtuous.

In "The Morality of Making Money" at the Atlantic Sentinel I previously contested this sentiment, citing Ayn Rand who considered money representative of productiveness and freedom. Making money, according to Rand, rests on the axiom "that every man is the owner of his mind and his effort."

A virtuous man, a man who makes money honestly and purposefully, is a proud man. Pride, consequently, is one of the defining values of Objectivism. "It means that one must earn the right to hold oneself as one's own highest value by achieving one's own moral perfection," wrote Rand in "The Objectivist Ethics," The Virtue of Selfishness (1964). One must strive relentlessly for accomplishment and success to pursue happiness and the will to "make money," to create one's own wealth, is the indispensable articulation of this code.

September 8, 2010

Even Castro Doesn't Believe in Communism Anymore

From the Associated Press wire:

HAVANA – Fidel Castro told a visiting American journalist that Cuba's communist economic model doesn't work [...]

The fact that things are not working efficiently on this cash-strapped Caribbean island is hardly news. Fidel's brother Raul, the country's president, has said the same thing repeatedly. But the blunt assessment by the father of Cuba's 1959 revolution is sure to raise eyebrows.

Jeffrey Goldberg, a national correspondent for The Atlantic magazine, asked if Cuba's economic system was still worth exporting to other countries, and Castro replied: "The Cuban model doesn't even work for us anymore" Goldberg wrote Wednesday in a post on his Atlantic blog.

On Cuba, the state controls well over 90 percent of the economy, paying workers salaries of about $20 a month in return for free health care and education, and nearly free transportation and housing.

Little wonder, after sixty years to trying that, the country is desolately poor and backward and even Fidel Castro can't pretend otherwise.

September 5, 2010

Should Washington Leave Social Security Alone?

Ezra Klein likes to think so. In Newsweek he urges lawmakers not to mess with Social Security in order to restore balance to the federal budget.

Popular wisdom has it has Social Security is financially unsustainable. Klein disputes that. He notes that, over the next 75 years, the program's shortfall will equal approximately 0.7 percent of GDP. That isn't a crisis, he attests. "It's a question of priorities."

Both Democrats and Republicans in Washington agree that raising the retirement age is part of the solution. "We live longer, and so we should work longer," writes Klein. But he doesn't agree. "Most people," he believes, "by the time they're in their 60s [...] want to retire." Evidently, because they want to, they should be able to. "We have more than enough money to buy ourselves some leisure time at the end of our lives. At least if that's one of our priorities."

What Klein conveniently neglects to consider is that it's not people buying themselves some leisure time at the end of their lives; people working today are forced by their government to pay for other people's leisure with the thin and evermore uncertain assurance that there'll be workers just like them, paying for their retirement in the future.

But let's take up Klein's challenge and pretend that organizing people's pension plans is a "priority" of government. All we need to solve now is find out how to pay for it! According to polling data, some two thirds of people oppose raising the retirement age. Instead, a little over 60 percent are in favor of eliminating the cap on payroll taxes so that workers who are better off pay the tax on their full income. Presumably, that 60 percent wouldn't be the ones affected by what amounts, effectively, to a tax increase.

It's always easy to spend other people's money and Ezra Klein is no exception. His solution to fixing Social Security's long term unsustainability is to have the rich pay more. It takes him three pages to cloud that proposition in praise of Social Security's efficiency and egalitarianism along with complaints of Washington's detachment from ordinary Americans but that doesn't change the fundamental premise of his argument: that the more you make, the more you pay.

September 1, 2010

The Return of the $1,000 Down Mortgage

In case you assume people learn from their mistakes, read this story in The Washington Independent.

In the states of Idaho, Massachusetts and Wisconsin, the National Council of State Housing Agencies along with Fannie Mae---the government "sponsored" enterprise that just recently had to be saved from bankruptcy with billions in federal aid but continues to purchase mortgages from lending banks---have launched a pilot program called "Affordable Advantage." (California, Colorado and Pennsylvania have similar schemes in place.) The gist? With just $1,000 down, people can get a mortgage to buy a home there.

Given the dangers of these types of mortgages and the specter of the housing bubble, where unconventional loans wreaked disaster, it is also raising questions from wary housing experts and legislators.

You think?

At Voices for Reason, Alex Epstein reminds us that this is exactly the sort of policies that brought about the recession in the first place. "The idea that it is the government's job to 'promote homeownership' or create 'stimulus' is the root cause of the financial crisis." While millions of Americans are still out of work or struggling to make ends meet, government agencies are already hard at work, preparing the way for the next recession.

August 30, 2010

Does the GOP Support Privatizing Social Security?

A recent headline at The Huffington Post tells us that "GOP Candidates Endorse Draconian Proposal To Cut Social Security," referring to Congressman Paul Ryan's "Roadmap for America's Future" which includes plans to privatize America's expensive government pension scheme.

But if we click through to read the article in question, it turns out there's just four Republicans currently running for Congress who've embraced the notion that Social Security, as it is, is unaffordable and that allowing a healthy bit of a free market competition in the area may be the best way out. That's four out of hundreds of Republicans running for political office throughout the country, with not a single high ranking party member having formally endorsed the plan.

It's not too surprising. While many lawmakers on the Republican side are right to stress that the Federal Government's ongoing spending spree is unsustainable and bound to drown future generations in debt, few have dared propose radical measures to cut spending, particularly when it comes to the entitlements many Americans have come to take for granted. No matter the fearmongering on the left, it doesn't seem likely that Republicans will actually go ahead and privatize Social Security if they have the chance. Ryan, so far, has been quite alone in his campaign for limited government.

August 29, 2010

Beck and Palin Could Split the Tea Party

From Politico:

A POLITICO/TargetPoint poll conducted at the massive Tax Day protest on the National Mall in April discovered that tea party activists are divided roughly into two camps along a distinct fault line: one that’s libertarian-minded and largely indifferent to hot-button values issues and another that’s culturally conservative and equally concerned about social and fiscal issues.

Libertarians and conservatives could unite behind their shared frustration with Obama’s economic policies or the growing national debt, but they split over gay marriage and abortion. Specifically, 51 percent of tea party activists polled said “government should not promote any particular set of values,” while 46 percent said “government should promote traditional family values in our society.”

Beck and Palin are two of the most prominent spokespeople for the latter. If they make these issues more salient, they could risk dividing the movement.

Not only risk dividing the movement but risk alienating moderate, centrist voters and undermine a chance to reform the Republican Party along constitutionally conservative lines.

August 27, 2010

Governor Daniels on Obamacare’s Consequences

Governor Mitch Daniels of Indiana, who is sometimes mentioned as a possible Republican contender for the presidency in 2012, was recently interviewed by the conservative Heritage Foundation about the Democrats' overhaul of American health insurance.

Needless to say, Governor Daniels understands why it's a bad reform plan---and he knows how to do it better.

At Heritage's blog, the governor writes that that "it's a misnomer to even refer to this as 'reform.' It doesn't reform anything," he believes. "Instead, it perpetuates and magnifies all the worst aspects of our current system: fee for service reimbursement, 'free' to the purchaser consumption, and an irrationally expensive medical liability tort system. It's a sure recipe for yet more overconsumption and overspending."

August 25, 2010

Biden: Republicans "Nostalgic" for Failed Bush Policies

Vice President Joe Biden responded to criticism about the administration's economic policies today, alleging that the opposition has nothing new on offer. "We've seen this movie before," he said. "We've seen it before and we know how it ends."

For eight years before we arrived in the West Wing, [House Minority Leader] Boehner and his party ran the economy literally into the ground.

It's true, but with a twist.

Biden's remarks do nothing but perpetuate the Democratic narrative of pretending that economic policy under President George W. Bush was something resembling laissez-faire. This is nonsense. It were President Bush's policies that are to blame for the crisis.

In the name of "compassionate conservatism" it was under President Bush that the Federal Government instructed Fannie Mae, Freddie Mac and the Federal Reserve to keep home mortgages cheap and interest rates low in order to promote homeownership, particularly with racial minorities. It was under President Bush that hundreds of thousands of Americans were able to buy houses they couldn't afford.

When the bubble burst, it was the Bush Administration that rallied up to save banks from insolvency by injecting billions of taxpayers' dollars into the financial system. Fannie and Freddie were saved, as were several large private corporations that had participated in the precrisis mortgage frenzy. And it was under President Bush that the first stimulus efforts were undertaken.

It gets worse, if you look into Bush's economic decisions during his eight years in office in more detail. Read my post about "Bush's Conservative Legacy" to learn more.

What the Obama Administration has done is simply continue Bush era policies. Democrats may like to claim that Republicans favored the free market before the recession hit in order to justify their own, interventionist agenda today, but that is blatantly untrue. At least under President George W. Bush, Republicans were as adverse to capitalism as Democrats are today.

August 22, 2010

Is Reality Real?

You'd think so, but no, says Robert Lanza, M.D. at The Huffington Post. "Is it possible we live and die in a world of illusions?" he wonders. Why, of course! It's no coincidence that this nonsense is posted on a left wing political blog. The best way to face reality after all, is to pretend that it doesn't exist at all.

Lanza quotes a famous experiment of a cat in a box to illustrate his argument: the cat is "both alive and dead," he writes: "both possibilities exist until you open the box and investigate."

Of course, they don't. If the cat is dead, it won't come alive when you open the box. The cat is dead or alive regardless of your perception. Existence is exists, even when you close you eyes. As Ayn Rand put it in Atlas Shrugged (1957):

Existence exists---and the act of grasping that statement implies two corollary axioms: that something exists which one perceives and that one exists possessing consciousness, consciousness being the faculty of perceiving that which exists.

If nothing exists, there can be no consciousness: a consciousness with nothing to be conscious of is a contradiction in terms. A consciousness conscious of nothing but itself is a contradiction in terms: before it could identify itself as consciousness, it had to be conscious of something. If that which you claim to perceive does not exist, what you possess is not consciousness.

Whatever the degree of your knowledge, these two---existence and consciousness---are axioms you cannot escape, these two are the irreducible primaries implied in any action you undertake, in any part of your knowledge and in its sum, from the first ray of light you perceive at the start of your life to the widest erudition you might acquire at its end. Whether you know the shape of a pebble or the structure of a solar system, the axioms remain the same: that it exists and that you know it.

To exist is to be something, as distinguished from the nothing of nonexistence, it is to be an entity of a specific nature made of specific attributes. Centuries ago [Aristotle] stated the formula defining the concept of existence and the rule of all knowledge: A is A. A thing is itself. [...] Existence is Identity, Consciousness is Identification.

(The rest of Lanza's article is useless mumbo jumbo meant to suggest that we're all helpless victims of a malevolent universe playing tricks on us, which is why I haven't bothered to quote from it more extensively.)

August 21, 2010

Socializing Social Security Even Further

President Barack Obama may wish to preserve Social Security forever, he certainly doesn't intend to preserve it in its current form.

The Wall Street Journal reports that the White House-created commission studying the future of Social Security is considering:

[...] raising the retirement age, which is now set to reach age 67 in 2027, specific cuts under consideration include lowering benefits for wealthier retires and trimming annual cost-of-living increases, perhaps only for wealthier retirees.

Raising the retirement age is sound policy considering that living expectations have risen sharply since Social Security was originally enacted.

Lowering benefits for "wealthier" retirees is outright unfair though considering that everyone's been paying equally into the fund. But wait, the administration might chance that as well:

On the tax side, the leading idea is to increase the share of earned income that is subject to Social Security taxes, officials said. Under current law, income beyond $106,000 is exempt.

So if you make a little more money, you're hit from both sides when it comes to your retirement: first, you have to pay more into the scheme while you're still working only to receive less when you retire.

These sort of shenanigans are inevitable when dealing with a government entitlement program that's financially unsustainable in the long run. How matter how much more money the government intends to take from the "wealthy", in the end, Social Security will bankrupt itself.

The only rational solution is to phase out the system over the years ahead and eventually abolish it. People should be responsible for their own pension.

August 18, 2010

Beyond Toleration: George Washington's View of Liberty

Via Cato @ Liberty, quoted from a letter of President George Washington's to the Hebrew Congregation of Newport, Rhode Island, 220 years ago today:

The Citizens of the United States of America have a right to applaud themselves for having given to mankind examples of an enlarged and liberal policy: a policy worthy of imitation. All possess alike liberty of conscience and immunities of citizenship. It is now no more that toleration is spoken of, as if it was by the indulgence of one class of people, that another enjoyed the exercise of their inherent natural rights. For happily the Government of the United States, which gives to bigotry no sanction, to persecution no assistance requires only that they who live under its protection should demean themselves as good citizens, in giving it on all occasions their effectual support.

As Cato's David Boaz points out, note particularly Washington's dismissal of "toleration" as "the indulgence of one class of people," tolerating another and its practices. The full meaning of freedom is not the mere toleration of what a majority may otherwise frown upon or wish to restrict but the exercise by all of "their inherent natural rights."