Collapse of Global Warming

Collapse Continues

IBD: 17 Oct. 2010

Climate Change: The scientific “consensus” that man is warming the planet is cracking, and so is a group that was going to push for cap-and-trade. Some business members no longer feel threatened by the government.

Oil giants ConocoPhillips and BP and heavy equipment maker Caterpillar said Tuesday they’d be leaving the U.S. Climate Action Partnership, described on IBD’s front page as “a coalition of green groups and leading corporations pushing for a cap-and-trade bill to curb emissions of carbon dioxide.”

IBD on Wednesday reported that the three corporations “indicated that their leaving was based on disputes within USCAP over the direction the legislation was taking in Congress,” that it has become “now tilted toward coal-based energy producers.”

We’re not as diplomatic as these companies, so we can provide a more plausible explanation: They see the agenda of the global warming alarmists crumbling and have determined they don’t have as much to fear from government regulation as they once did.

Cartoon: Out of Control Spending

More Bloomin’ Czars

By INVESTOR’S BUSINESS DAILY | 21 Aug. 09

Big Government: Ron Bloom, who heads the government’s auto task force, may soon have a new job. As Bloomberg reports, the White House wants him to become a new de facto manufacturing czar. What next?

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Read More: Business & Regulation

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Once in power, Democrats love nothing more than finding a problem so they can create a new level of government to deal with it. Even if there’s no problem, they will — pardon the phrase — manufacture one.

So it is with the possible appointment of Bloom, a former United Steelworkers union adviser who now heads the U.S. auto task force, to be a kind of national industrial policy czar.

The manufacturing sector has indeed been hit hard by the downturn. But so has the rest of U.S. industry. The only real growth sector, as the Rockefeller Institute reported Thursday, is government. While private jobs have shrunk 6.9 million since the start of the recession, state and local governments have added 110,000 positions.

Problem is, President Obama signed a $787 billion stimulus bill in February and vowed to create 3.5 million jobs over the next two years. And a major part of his support comes from unions.

His “stimulus” isn’t working, and he must be seen as “doing something.” Thus, Bloom gets named factory czar.

The question naturally arises: Do we really need a factory guru, especially one whose expertise is in advising labor unions — the cause of much of the U.S. steel and car industries’ woes?

The obvious answer is no. This is just another attempt to revive the long-discredited idea of industrial policy — the notion that markets are inefficient and unfair, and the economy can best be managed by government “experts.”

In the case of manufacturing, it isn’t as sick as we’ve been led to believe. In fact, total value added by the nation’s factories in 2008 hit a record $1.64 trillion for a gain of 21% since 2003.

And despite talk of the U.S. losing its industrial might, we still make up 25% of the world’s manufacturing value added — nearly 2 1/2 times China’s output, U.N. data show.

True enough, manufacturing has lost jobs in recent years. But most of the decline is due to rising productivity. Since 1990, factory output has soared 44%, while the number of factory jobs has fallen 32%. This may be the greatest productivity boom since the Industrial Revolution — an economic triumph rather than a tragedy.

Do manufacturers need a bureaucrat as boss? Or even as their advocate? Of course not. They need what the rest of us need — a healthy private economy. Create conditions for that — with lower taxes, fewer regulations and freer trade — and factories will flourish. And Obama’s 3.5 million jobs might not be such a pipe dream.

Health Care Industry Shouldn’t Be Taken Without Due Process And Compensation

IBD      6 Aug 09

Under the Fifth Amendment, if the government takes property, the holder is entitled to due process and compensation. Usually, this concept of eminent domain applies to real estate seized for a public purpose.

What if the seizure is not of real property, but a business? The broad concept is still the same: If the government takes your property, you are entitled to your day in court and adjudicated compensation.

What if the government uses its cash to muscle into your territory and forces you to surrender customers by underpricing you for the sake of the “uninsured”?

Further, what if the government passes such stringent regulations that only a few large insurers already in bed with the government can survive?

The current House medical insurance bill and the purported Blue Dog compromise constructively take property without due process of law and compensation. Speaker Nancy Pelosi calls the insurers “immoral” and “villains” and contends “they are doing everything they can to stop a public option.”

Why is someone a villain if he doesn’t agree to being robbed?

The speaker has forced the question: Who is the villain?

The medical industry is much more complicated than it needs to be. The terrible compromises made by large insurers with big government are well beyond the scope of this article.

The criticism of proposed government expansion of medical insurance was muted when the insurance industry thought it was going to keep its preferred tax status and pick up an extra 46 million subsidized Medicare Plus-type clients, and the pharmaceutical companies and the AMA had been squeezed or bought off enough.

But reality bites. The insurers are finding the government is a hungry partner with an insatiable appetite, and next up on the menu is their prime territory.

The proposed House legislation contemplates the government will offer competing health insurance. The law would bar some health insurance companies from adding new customers, which ensures that through attrition the firms will liquidate their business.

The Blue Dog “compromise” doesn’t quite do that, but it does sanction overwhelming public sector competition. President Obama has disingenuously criticized critics of his bailout plans by saying if the government is such a bad business manager, why do they fear us as a competitor?

Well, all businesses fear predatory monopoly pricing in a competitor, especially a stupid one with the ability to print dollars and set regulations — a competitor that can easily bankrupt you and doesn’t care about losing money.

And like shareholders of Ford, shareholders of the private insurers will have their tax dollars used to shore up their ignorant but powerful competitor.

America was built on real competition, based on supply and demand and real price discovery. The original sin of the health insurance industry was in its birth as a non-taxable employment benefit. How did that happen?

Just as Franklin Roosevelt tried to support falling prices during the Depression (making it worse), the government disguised rising wages during World War II by labeling medical insurance nontaxable. Cash wages were deductible by the employer, taxable to the employee and portable.

Once health insurance was deductible by the employer, but nontaxable to the employee, health insurance became nonportable. Yes, the industry grew faster than others, but with twisted incentives that severed the consumers from the producers, and increasingly without price discovery. Without true price discovery, no one can really compete and medical insurance is misallocated.

Recently, the CBO said the House plan would be more expensive for the country than the limited form of competition we have. Real competition is the only way to reduce costs on a sustainable basis.

The health insurance industry has a public market capitalization of about $100 billion, down from much higher amounts a while back. The CBO never gave any consideration to the constitutional requirements of providing eminent domain reimbursement to the shareholders of the health insurers whose property is being taken away from them bit by bit.

If it did, the scales of justice would tip even further against the proposed law. The truly private portion of the health insurance industry would be entitled to something like an additional $50 billion to $100 billion to compensate them.

If the government were judged by its own laws, a case could be made for antitrust damages arising from predatory pricing by a monopoly. In the House bill, the government self-consciously exempts itself from just such liability.

At the very least, the shareholders of the private insurers that stand to be driven out of business deserve compensation.

Anything less is slow motion theft by the real villains.

our comments- and the real villains are?

• Singer is the manager for the Congressional Effect Fund.

Are We In America Or Amerika?

IBD

10 Aug 09

Public Debate: Democrats, bloodied over their attempt to force health care “reform” on Americans, are looking more unreasonable and hysterical by the day. This isn’t healthy for the republic.

Their increasing anxiety and fear of failure are typified in the words of the leader of their party, who wants Republicans to keep their mouths shut while he “fixes” health care.

“I don’t want the folks who created the mess to do a lot of talking,” the president said Thursday at a political rally in Virginia. “I want them to get out of the way so we can clean up the mess.”

So much for the promises of bipartisan lawmaking. So much for open discussion. So much for understanding who really caused the “mess” in the first place. Like Al Gore claiming the debate about global warming is over, the White House simply wants to shut down dialogue over who controls more than one-seventh of the economy.

House Speaker Nancy Pelosi has yet to come out in favor of repressing speech. But she’s inclined to ignore it. The San Francisco Democrat vowed Thursday in Denver that the swelling public opposition to government-run health care would not persuade party leaders to back down.

“The plan for August is to have a discussion, to listen carefully to what people are saying, what ideas they may have to improve the legislation as it affects them,” Pelosi said. In other words, Americans can suggest changes, but the elitists in Washington will not withdraw plans to take over the best health care system in the world.

Earlier in the week, Senate Majority Leader Harry Reid walked the same line as Pelosi, making it clear that the Democratic leadership had no intention of listening to fed-up voters.

“In spite of the loud, shrill voices trying to interrupt town hall meetings and just throw a monkey wrench into everything,” he said, “we’re going to continue to be positive and work hard.”

By Thursday, Reid was saying that protesters were trying to “sabotage” the democratic process, which apparently in his world is a place where there is no opposition to the Democrats’ process of invading every corner of private life.

On the same day, Sen. Blanche Lincoln, Democrat of Arkansas, said she thought the protests against government health care at lawmakers’ town hall meetings were “un-American and disrespectful.” Hours later, she retracted the statement, probably less concerned about the inaccuracy of her statement than mindful of the fact that she had just insulted a large group of voters who can unseat her.

Truth is, there’s nothing more American than revolting against heavy-handed authority, be it a long train of abuses from a king or the lawmaking of elected officials with strong authoritarian urges. This is a nation founded on independence, and there is a large portion of it that wants to retain that priceless heritage.

This seems to confuse some lawmakers. Rep. Brian Baird, D-Wash., can’t understand that what he’s watching is a freedom movement. In his eyes, the protesters are Nazis — or almost.

“What we’re seeing right now is close to brownshirt tactics,” Baird said Wednesday, by way of explaining why he was refusing to face his constituents directly in town hall meetings and would instead hold telephone town halls.

Voters’ deep anger is justifiable. They have every right to disrupt and shout down public figures who, as the protesters can be heard chanting, work for them. At dispute is not a mere difference of opinion that can and should be discussed in a civil manner, but a fundamental question of who is in charge of peoples’ lives.

We are not advocating violence, though coercive government is at its core violent as the state is required to resort to force to ensure that its directives aren’t violated.

But we do support our fellow citizens’ right to express their rage at an injustice, particularly if it makes lawmakers uncomfortable. Shouldn’t Americans bristle when their independence is threatened, when a federal official, in this case White House deputy chief of staff Jim Messina, says party leaders “will punch back twice as hard” when voters merely show their displeasure?

The freedom the protesters are defending can sometimes be messy and imperfect. A lack of freedom, however, is eternally oppressive. It is an unrelenting prison that poisons the human spirit, even when cloaked in allegedly humane programs such as government-run health care.

Logic Gets Lost Amid Hysteria About ‘Reform’

IBD   21 July 09

by Thomas Sowell

Is there a coherent argument for government-controlled medical care or are slogans and hysteria considered sufficient?

We hear endlessly about how many Americans don’t have health insurance. But, if we stop and think — which politicians hope we never do — that raises the question as to why that calls for government-controlled medical care.

A bigger question is whether medical care will be better or worse after the government takes it over. There are many available facts relevant to those crucial questions but remarkably little interest in those facts.

There are facts about the massive government-run medical programs already in existence in the United States — Medicare, Medicaid and veterans’ hospitals — as well as government-run medical systems in other countries.

None of the people who are trying to rush government-run medical care through Congress before we have time to think about it are pointing to Medicare, Medicaid or veterans’ hospitals as shining examples of how wonderful we can expect government medical care to be when it becomes “universal.”

As for those uninsured Americans we keep hearing about, there is remarkably little interest in why they don’t have insurance. It cannot be poverty, for the poor can automatically get Medicaid.

In fact, we already know that there are people with substantial incomes who choose to spend those incomes on other things, especially if they are young and in good health. If necessary, they can always go to a hospital emergency room and receive treatment there, whether or not they have insurance.

Here, the advocates of government-run medical care say that we all end up paying, one way or another, for the free medical care that hospitals are forced by law to provide in their emergency rooms.

But unless you think that any situation you don’t like is a reason to give politicians a blank check for “change,” the relevant question becomes whether the alternative is either less expensive or of better quality. Nothing is cheaper just because part of the price is paid in higher taxes.

Such questions seldom get asked, much less answered. We are like someone being rushed by a used car dealer to sign on the dotted line. But getting stuck with a car that is a lemon is nothing compared to signing away your right to decide what medical care you or your loved ones will get in life-and-death situations.

Politicians can throw rhetoric around about “bringing down the cost of health care,” or they can even throw numbers around. But the numbers that politicians are throwing around don’t match the numbers that the Congressional Budget Office finds when it analyzes the hard data.

An old advertising slogan said, “Progress is our most important product.” With politicians, confusion is their most important product. They confuse bringing down the price of medical care with bringing down the cost. And they confuse medical care with health care.

Nothing is easier than for governments to impose price controls. They have been doing this, off and on, for thousands of years — repeatedly resulting in (1) shortages, (2) quality deterioration and (3) black markets. Why would anyone want any of those things when it comes to medical care?

Refusing to pay the costs is not the same as bringing down the cost. That is why price controls create these problems. When developing a new pharmaceutical drug costs roughly a billion dollars, you are either going to pay the billion dollars or cause people to stop spending a billion dollars to develop new drugs.

The confusion of “health care” with medical care is the crucial confusion. Years ago, a study showed that Mormons live a decade longer than other Americans. Are doctors who treat Mormons so much better than the doctors who treat the rest of us? Or do Mormons avoid doing a lot of things that shorten people’s lives?

The point is that health care is largely in your hands. Medical care is in the hands of doctors. Things that depend on what doctors do — cancer survival rates, for example — are already better here than in countries with government-run medical systems. But if political rhetoric prevails, we may yet sell our birthright and not even get the mess of pottage.

Give The Gov’t A Year To Exit Private Sector

IBD 22 June 09

By Sen. John Thune

Last fall’s economic downturn and liquidity crisis were very serious. However, in the course of responding to them, the government abandoned its initial plan of action to purchase toxic assets and instead took to buying ownership stakes in a large number of private companies. 

An attempt to respond to an emergency quickly changed into something unanticipated by most Americans and most members of Congress. When the dust settled, the federal government had become a major investor in more than 500 private American businesses.

I share the concerns of those who are alarmed at the federal government’s increasing role in our economy, both through spending enormous sums of borrowed money and unprecedented intervention into private businesses.

A poll released last week by Rasmussen Reports found that 80% of Americans want the federal government to sell its stakes in auto companies as soon as possible and 71% want the federal government to sell its stakes in banks as soon as possible.

The public opposition to government ownership of private businesses is well-founded.

The whole adventure undercuts the free-market principles that have guided our economy since our nation was founded.

The fundamental assumptions about how a market economy should function are contradicted by insertion of government bureaucrats into business decisions and by a market where government-favored firms compete against nonfavored, privately owned firms. 

A market economy can be compared to a sporting event, where teams play by rules enforced by a neutral referee.

In a market economy, the government serves as the referee, enforcing the laws adopted by Congress or the private contracts freely entered into by private firms.

When the government also becomes a player, it can no longer serve as an impartial referee; the government’s team will be favored. The fundamental dynamics of competition are disrupted.

Today, we are witnessing the behavior of companies for which the president of the United States is serving as a de facto CEO and Congress is serving as a 535-member board of directors. Business decisions are clouded by political calculations.

This arrangement does not inspire confidence. The American people realize that elected officials and government bureaucrats are ill-equipped to run banks, insurance companies and car manufacturers.

Last week I introduced legislation along with a dozen of my colleagues that would scale back the government’s involvement in the private sector.

My bill, the Government Ownership Exit Plan Act, would prohibit the future purchase of new or additional ownership interests in private firms through the Troubled Asset Relief Program (TARP).

Of equal importance, my bill would make the federal government end its ownership of private businesses acquired through TARP by July 1, 2010.

My bill would require the Treasury Department to sell any ownership interest such as warrants or stocks and use any revenue from the sale of those assets to reduce the national debt.

This straightforward legislation would also prohibit the federal government from making or unduly influencing management decisions, including appointing senior executives or board members.

The federal government does not have the knowledge or the resources to continue trying to run successful companies, and the American taxpayers deserve better.

Nobody understands this better than the Chamber of Commerce, the world’s largest pro-business advocacy group, which has voiced its support for my new legislation.

To reverse the alarming trend toward government ownership of private business, it’s important to move quickly.

Sadly, the Treasury secretary, who recently testified before the Senate Banking Committee, stated he has no such plan when it comes to divesting the federal government’s ownership stake in private firm. 

If we do not adopt an exit strategy, we risk government ownership becoming a permanent state of affairs. 

Increased government control of private businesses threatens the fair competition and economic freedom that Americans have enjoyed throughout our nation’s history.

A growing number of individuals are rightfully leery of the government’s ability to effectively manage the taxpayer money that has been diverted into private entities, but without congressional action the intervention will continue unchecked.

The Government Ownership Exit Plan Act is an important first step toward restoring the limited role of government in the economy.

In the weeks ahead I will work to see that this matter is considered by the full Senate.

Thune is the junior senator from South Dakota.

Tax Hike Comin’

IBD July 16 09

Paying For Reform: New data from a nonpartisan think tank confirm our worst fears about health care reform: The plans proposed by the White House and Congress will lead to economically ruinous tax hikes.

Thursday marked the kickoff for the White House’s push to get medical insurance reform passed in Congress. Top White House aides David Axelrod and Rahm Emanuel and spokesman Robert Gibbs will make a hard sell on reform’s big benefits.

Likely missing from their pitch will be the tragic cost it will mean for the economy once the huge new tax hikes to pay for it are in place. The House bill, for instance, is estimated to cost $1 trillion to $1.5 trillion over 10 years. To pay for it, the White House has proposed raising taxes by $544 billion, almost all on the “rich” — those in the top 5% of incomes.

That leaves a $1 trillion gap. Where will the rest of the money come from? The government claims it will be able to “save” that amount. But please name any government program that saves money over a private one. The only way government will save money is to ration care — that is, give you less medical care at lower quality. Is that your idea of reform?

When the savings fail to appear, higher taxes will have to be imposed — especially on a middle class that’s been led to believe it’ll get something for nothing on health care.

And why the middle class? “Because,” as bank robber Willie Sutton said when asked why he robbed banks, “that’s where the money is.”

Douglas Elmendorf, director of the Congressional Budget Office, sees no savings from the health reform plans offered. He reckons that current legislation would raise costs.

Faced, then, with exploding annual deficits over the next decade of $1 trillion or more, the federal government will be looking high and low — mostly high — for more revenues.

The government’s pitch will go like this: Don’t worry, we’ll make the rich pay. And, indeed, the House’s reform plan will hit millionaires with a 5.4% tax surcharge, and gradually raise taxes on those with incomes starting at $280,000.

“I promised that Americans making $250,000 a year or less would not pay more in taxes,” President Obama said Monday. “These are promises that we’re keeping as reform moves forward.”

But read the bill’s fine print. Those earning less than $250,000 will be hit with new taxes, too. Those who don’t sign up for health care, for instance, will be taxed up to 2.5% of their income. Small businesses that don’t have health plans will have to pay up to 8% of their payroll as a “fee.”

These new taxes will have a devastating effect on the economy. According to the National Tax Foundation, the top total tax rate on Americans — that is, state, local and federal taxes — will top 50% in 39 states.

Will entrepreneurs and small businesses expand and create new jobs if they know more than half what they earn will be taken by government? Not likely.

Two million jobs have been lost this year. If you think that, and 9.5% unemployment, is bad, wait till health reform passes.

Unloved Stimulus

IBD: 15 July 2009

Spending: The stimulus isn’t working, and Americans don’t want another. At least, that’s what our latest IBD/TIPP Poll shows. So why is Congress mulling a second stimulus when the first has so obviously failed?

In our national poll taken last week, 53% said the $787 billion stimulus plan passed in February was “not effective” in “getting the economy going in the right direction.”

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So while we have very little economic activity to show for all the stimulus and bailout money spent, we’ll have a massive debt hanging over our collective heads for decades to come.

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With joblessness now at 9.5%, White House economic adviser Christina Romer on Tuesday admitted there was no way to tell how many jobs were created or saved. Stimulus, it seems, is faith-based economics.

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Hasn’t anyone noticed that despite a 20% jump in spending over the last year, tax revenues have plunged 18% — largely because many of the “millionaires” Congress is going after are going broke?

So are the rest of us. Web site E-forecasting.com estimates the U.S. has lost over $108 billion in real GDP since the stimulus began.

Bureaucracy

This cartoon (Non Sequitur, by Wiley)is  dated 28 March 1996.  13 YEARS AGO!

“Where can I find the czar’s office?”

click to view larger

The Pursuit of John Yoo

Wall Street Journal 24 June 09

Here’s a political thought experiment: Imagine that terrorists stage an attack on U.S. soil in the next four years. In the recriminations afterward, Administration officials are sued by families of the victims for having advised in legal memos that Guantanamo be closed and that interrogations of al Qaeda detainees be limited.

Should those officials be personally liable for the advice they gave President Obama?

We’d say no, but that’s exactly the kind of lawsuit that the political left, including State Department nominee Harold Koh, has encouraged against Bush Administration officials. This month a federal judge in San Francisco ruled that a civil suit filed by convicted terrorist Jose Padilla can proceed against former Justice Department lawyer John Yoo for violating the terrorist’s rights. Mr. Yoo is one of those who wrote memos laying out the legal parameters for aggressive interrogation of al Qaeda captives. If Mr. Yoo can be sued, why couldn’t Obama officials also be held liable for their advice if there’s an attack on their watch?

The mention of Mr. Koh is pertinent because the legal outfit suing Mr. Yoo, and other Bush officials in a separate case in South Carolina, is affiliated with Yale Law School. Mr. Koh is the outgoing dean of Yale and has been perhaps the most prominent legal critic of Bush interrogation policies. He once referred to President Bush as the “torturer in chief.” Yet now President Obama has nominated Mr. Koh to be State Department legal adviser, who is charged with defending U.S. officials from legal assaults. It’s as if Mr. Obama had nominated the AFL-CIO’s John Sweeney as U.S. Trade Representative.

At least the Justice Department is still defending Mr. Yoo, as it should since his advice was offered while working for the U.S. government. But that could change if a second part of this exercise in political revenge goes forward. For five years the Justice Department’s Office of Professional Responsibility (OPR) has been investigating Mr. Yoo and former Justice lawyers Jay Bybee and Steven Bradbury for alleged misconduct in writing those legal interrogation memos.

Last month, in a leak full of malice aforethought, the press reported that OPR’s draft report recommends disciplinary action against the Bush lawyers. If the final report reaches the same conclusion, the left-wing bar will try to have those lawyers disbarred, while liberals in Congress could pursue impeachment against Mr. Bybee, a federal judge on the Ninth Circuit Court of Appeals. In that event, Justice might also stop defending Mr. Yoo in court. A professor at Berkeley Law, Mr. Yoo would have to pay hundreds of thousands of dollars to defend himself.

This is exactly what the anti-antiterror left hopes to accomplish. Having failed to enact their agenda in Congress, or now even via Mr. Obama, their aim is to ruin and bankrupt individuals in the Bush Administration who played key roles in the war on terror. Their goal is to make sure that no one in public life ever again offers advice that disagrees with their view that terrorists should be handled in nonmilitary courts like common burglars.

The May news leak was especially pernicious because it came before the Bush officials or their lawyers had been allowed to respond to OPR’s accusations. They are still bound by a pledge of confidentiality. Our guess is that the leak was intended to box in Attorney General Eric Holder, who will ultimately have to sign off on the report.

Mr. Holder knows that former Attorney General Michael Mukasey had rejected the OPR draft in a scathing, 15-page, single-spaced memo. His deputy, Mark Filip, also refused to endorse the OPR draft. Yet OPR lawyers ran out the clock on Mr. Mukasey, hoping that an Obama AG will validate their work.

The leak of a draft report is itself an act of professional irresponsibility worthy of punishment. And the entire exercise is bizarre, since Messrs. Yoo, Bybee and Bradbury were only doing what their superiors and the CIA asked of them. If OPR’s lawyers want to claim misconduct, they should target former Attorney General John Ashcroft or President Bush, who personally named Padilla an enemy combatant. But it’s so much easier to pick on mid-level officials who lack a platform to fight back. In any case, OPR is supposed to investigate genuine misconduct such as withholding evidence (the Ted Stevens case), not opine on the legal analysis of other, in this case far superior, lawyers.

As for the lawsuit, Padilla’s rights were never violated. Mr. Bush’s decision to name the so-called “dirty bomber” an enemy combatant was defended in court by executive branch lawyers, who won in the Fourth Circuit. The Bush Administration later transferred Padilla to be tried in a Miami court, and the Supreme Court declined to hear an appeal. Padilla was convicted after receiving every due process protection and is now serving a 17-year prison sentence.

Politics can be vicious, but we have come to a very strange pass when government lawyers acting in good faith can be sued by convicted terrorists and investigated for giving advice solicited by their superiors. Mr. Holder will do the country, and his own colleagues in the Obama Administration, a service if he speaks out against the Padilla lawsuit and puts an end to Justice’s part in this nasty exercise.

 

Our Comments

– Can America servive with these kinds of lawyers?  And, since when do terrorists have more rights than Americans?

Regulation Nation

By INVESTOR’S BUSINESS DAILY |  18 June 2009

Regulation: The White House wants to impose sweeping new rules for the financial industry to prevent another meltdown. Unfortunately, it was government — not the private sector — that was to blame.

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Citing a “culture of irresponsibility” that it says helped cause last year’s financial crisis, the White House on Wednesday released an 88-page report that proposes major changes in America’s financial system. The Associated Press aptly called it “the greatest regulatory transformation since the Great Depression.”

Among the reforms put forward were a new, pumped-up Federal Reserve with greater powers to regulate and oversee the entire financial system, a new consumer credit watchdog to oversee home loans and credit cards, and new rules and oversight for hedge funds and exotic securities, such as credit default swaps and collateralized debt obligations, which some blame for making the financial crisis worse.

It’s nice to see that our government is so concerned about not repeating the errors of the past. But our advice comes from an ancient proverb:

“Physician, heal thyself.”

The White House’s financial regulation proposal blames “gaps in regulation” for our financial crisis. Wrong. It was in fact government misregulation and miscalculation that created our financial crisis — not private businesses. The record on this is quite clear.

As economic historian Lawrence White of the University of Missouri has written:

“The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of ‘creative’ nonprime lending followed Congress’ strengthening of the Community Reinvestment Act, the Federal Housing Administration’s loosening of down-payment standards, and the Department of Housing and Urban Development’s pressuring lenders to extend mortgages to borrowers who previously would not have qualified.”

Add to that Fannie Mae and Freddie Mac — created and regulated by acts of Congress — which together at one point controlled nearly half of the nation’s $12 trillion mortgage market. The two quasi-private entities served as the grand financial engine by which Congress would boost homeownership.

It worked well for a while. And we can’t fault the intent to help people. But the failure was one of too much government — not too little, which is the rationale for the new financial regulation regime sought for Wall Street and the banks.

As for the Fed’s new powers, we happen to believe the central bank has done a reasonably good job responding to this crisis — though as many others have noted, the vast expansion of the U.S. money supply in the last year poses a future inflationary threat.

But we don’t think the Fed needs enhanced powers. Far from it. It’s too powerful already. Giving it virtually unbridled control over our financial system without having to directly answer to the people is a danger to free market capitalism.

Many have argued that the Fed’s slashing of interest rates from 6.25% in 2001 to 1% in 2003 — following a stock market meltdown, a recession, the 9/11 attacks and the start of the War on Terror — was too much and led to the housing market bubble.

Now, strangely, many of the same people advocate giving the Fed even more power. It makes no sense.

If the White House really wants to fix our ailing financial system, it would do well to start by repealing what remains of TARP, undoing the government’s takeover of our auto industry and halting the fraudulent and wasteful $787 billion “stimulus” program.

Then you might see a real economic recovery take place.

Cartoon: Government vs. Private Healthcare

Obamanation!

Europe’s Lesson

IBD 9 June 09

Stimulus: With the votes tallied from a weekend election, it’s now apparent that the European Union has taken another step to the right. There’s a message in this for both the White House and the U.S. Congress.

Results from the vote for the EU Parliament showed huge disaffection among Europeans for state-directed answers to the economic crisis — specifically, for the kinds of massive stimulus programs pushed by the U.S.

Parties allied with German Chancellor Angela Merkel and French President Nicolas Sarkozy — who have both made a point of opposing any kind of U.S.-style stimulus — made big gains. Even Italy’s Silvio Berlusconi, embroiled in a scandal in his home country, saw his party increase its strength in the Euro Parliament.

We mention this because, just one day after this sweeping repudiation of statism in Europe, the White House is doubling down on a losing bet, moving to “accelerate” stimulus spending and claiming it’ll “save or create” up to 600,000 jobs.

Pardon us if we’re skeptical. Earlier this year, the White House predicted the jobless rate would top out at 8% if Congress passed the $787 billion stimulus package. Well, since then, 1.5 million jobs have been lost, and unemployment just hit a 26-year high of 9.4%. So, by the administration’s own yardstick, it hasn’t worked at all.

Ignoring this reality, the new “Roadmap to Recovery” unveiled Monday seeks to accelerate stimulus spending on 10 major projects, ranging from road and airport repairs to hiring 135,000 teachers to finding 125,000 summer jobs for youth.

It sounds noble, but it’s just plain foolish.            (STUPID!)

As we’ve written before, the economy’s already on the mend and likely to show positive GDP growth before the end of the year — and perhaps as early as the third quarter. The $787 billion stimulus, which is only 6% spent, has nothing to do with this. It won’t even start being spent in significant amounts until early next year.

Virtually all of the jobs in Monday’s stimulus do-over are nonproductive government jobs — not productive private sector ones. Virtually all economists agree: Real job creation means permanent jobs in the private sector, not make-work jobs for government.

The short-term recovery that looks under way was baked in the cake when the Fed cut interest rates to a record low 0% last December. Still, with economic policy favoring high taxes and government over the private sector, the rebound’s not likely to be a strong one. And looking long term, the outlook is troubling. With an estimated $13 trillion in new spending planned by 2019, the U.S. government is fast becoming a bloated leviathan.

Americans will pay for this through higher taxes, more regulation, fewer jobs, lower incomes and less freedom. The surge in government spending and taxes will significantly hurt our productivity, damaging our economy’s long-term growth.

Just half a decade ago, it was commonly assumed that U.S. GDP could grow indefinitely by 3.5% or more, thanks to surging productivity. Now economists think we’ll be lucky to get 2% growth.

When Europeans trooped to the polls, they gave a definitive “no” to more and bigger government. Maybe Americans are ready to do the same; last weekend, a Gallup Poll showed most Americans for the first time view President Obama unfavorably when it comes to “controlling federal spending.”

There’s a lesson in this for the White House, if it’s willing to listen.

Cartoon: Health of America

28 April 09

from IBD

Cartoon: Top Secret Memos

29 April 09

IBD

Cartoon: Give Me Liberty Or Give Me A Government Bailout

8 April 09

IBD

Muslim Brotherhood Falters As Egypt Outflanks Islamists

Wall Street Journal 15 May 09

By Yaroslav Trofimov

ALEXANDRIA, Egypt — Egypt’s Muslim Brotherhood is on the defensive, its struggles reverberating throughout Islamist movements that the secretive organization has spawned world-wide.

Just recently, the Brothers’ political rise seemed unstoppable. Candidates linked with the group won most races they contested in Egypt’s 2005 parliamentary elections, gaining a record 20% of seats. Across the border in Gaza, another election the following year propelled the Brotherhood’s Palestinian offshoot, Hamas, into power.

Since then, Egypt’s government jailed key Brotherhood members, crimped its financing and changed the constitution to clip religious parties’ wings. The Brotherhood made missteps, too, alienating many Egyptians with saber rattling and proposed restrictions on women and Christians. These setbacks have undermined the group’s ability to impose its Islamic agenda on this country of 81 million people, the Arab world’s largest.

“When we’re not advancing, we are retreating. And right now we are not spreading, we are not achieving our goals,” the Brotherhood’s second-in-command, Mohamed Habib, said in an interview.

Across the Muslim world, authoritarian governments, Islamist revivalists and liberals often fight for influence. Egypt is a crucial battleground. A decline of the Brotherhood here, with its shrill anti-Israeli rhetoric and intricate ties to Hamas, strengthens President Hosni Mubarak’s policy of engagement with the Jewish state. It could also give him more room to work with President Barack Obama, who is scheduled to visit Egypt next month, on reviving the Arab-Israeli peace process.

Brotherhood leaders caution against reading too much into the current troubles, saying the 81-year-old group has bounced back from past challenges. Others say the government’s suppression of the Brotherhood, Egypt’s main nonviolent opposition movement — paired with arrests of Mr. Mubarak’s secular foes — can unleash more radical forces.

“If it continues this way, it’s very dangerous and could lead to the return of extremism and terrorism in Egypt,” says Ayman Nour, a liberal politician who ran for president against Mr. Mubarak in 2005 and was later imprisoned on campaign-fraud charges that the U.S. government condemned as politically motivated.

Tyranny Grows…. GREAT ARTICLE

Dear Bijenkorf readers,

On the same page as this Investor’s Business Daily – was an article encouraging more government funding for education – no one wants to criticize that – but it seems apparent to me that the kind of education the tax payers are getting isn’t doing much good.  The quality and the content of that education is seriously lacking.

This article by Walter Williams is a WONDERFULLY REFRESHING example of the level of education that many of our reader’s experienced.

Today? – Ask ANY highschool graduate and any member of our Congress or even any of our last several PRESIDENTS – what kind of government we have in America.

I’ll be willing to bet that what you will hear for a response will be “a democracy” – when ALL of our founders did everything they could do – to prevent that from happening.

They read history – they read books and all of them were smarter than all those sitting in Washington – occupying seats of power that they don’t deserve.

Don

Tyranny Grows When Majority Rules The Law

By WALTER E. WILLIAMS | Investor’s Business Daily 16 April 2009

Democracy and majority rule give an aura of legitimacy to acts that would otherwise be deemed tyranny.

Think about it.

How many decisions in our day-to-day lives would we like to be made through majority rule or the democratic process?

How about the decision whether you should watch a football game on television or “Law & Order”?

What about whether you drive a Chevrolet or a Ford, or whether your Easter dinner is turkey or ham?

Were such decisions made in the political arena, most of us would deem it tyranny.

Why isn’t it also tyranny for the democratic process to mandate what type of light bulbs we use, how many gallons of water to flush toilets or whether money should be taken out of our paycheck for retirement?

The founders of our nation held a deep abhorrence for democracy and majority rule.

In Federalist Paper No. 10, James Madison wrote: “Measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.”

John Adams predicted: “Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There was never a democracy yet that did not commit suicide.”

Our founders intended for us to have a republican form of limited government where the protection of individual God-given rights was the primary job of government.

Alert to the dangers of majoritarian tyranny, the Constitution’s framers inserted several anti-majority rules.

One such rule is that election of the president is not decided by a majority vote but instead by the Electoral College.

Nine states have more than 50% of the U.S. population. If a simple majority were the rule, conceivably these nine states could determine the presidency.

Fortunately they can’t, since they have only 225 Electoral College votes when 270 of the 538 total are needed. Were it not for the Electoral College, which some politicians say is antiquated and would like to do away with, presidential candidates could safely ignore the less-populous states.

Part of the reason our founders created two houses of Congress was to have another obstacle to majority rule.

Fifty-one senators can block the designs of 435 representatives and 49 senators. The Constitution gives the president a veto to weaken the power of 535 members of both houses of Congress.

It takes two-thirds of both houses of Congress to override a presidential veto.

To change the constitution requires not a majority but a two-thirds vote of both Houses to propose an amendment, and to be enacted requires ratification by three-fourths of state legislatures.

The Constitution’s Article V empowers two-thirds of state legislatures to call for a constitutional convention to propose amendments that become law when ratified by three-fourths of state legislatures.

I used to be for this option as a means of enacting a spending limitation amendment to the Constitution but have since reconsidered.

Unlike the 1787 convention attended by men of high stature such as James Madison, Thomas Jefferson, George Washington and John Adams, today’s attendees would be moral midgets: the likes of Barney Frank, Chris Dodd, Olympia Snowe and Nancy Pelosi.

In addition to an abhorrence of democracy, and the recognition that government posed the gravest threat to liberty, our founders harbored a deep distrust and suspicion of Congress.

This suspicion and distrust is exemplified by the phraseology used throughout the Constitution, particularly our Bill of Rights, containing phrases such as Congress shall not: abridge, infringe, deny, disparage or violate.

Today’s Americans think Congress has the constitutional authority to do anything upon which they can get a majority vote.

We think whether a particular measure is a good idea or bad idea should determine passage as opposed to whether that measure lies within the enumerated powers granted Congress by the Constitution.

Unfortunately for the future of our nation, Congress has successfully exploited American constitutional ignorance or contempt.