Free Markets, Free People

Daily Archives: May 6, 2010

Mainstream coverage of Nashville floods is minimal – and I’m fine with that

Longtime QandO readers know how cynical I have become about national media. They’re mostly biased, incompetent hacks and far more interested in pushing an agenda and a narrative than researching stories and actually telling us anything of importance.

Too often, that shows up in what they don’t cover just as much as what they do. I’m told their coverage of the Nashville floods was perfunctory. Even the Brits did a better job than some of the mainstream press in the US. This was a situation, perhaps the first one that affected me, where YouTube was the best bet for coverage.

Really, though, I’m glad we didn’t get much attention from those hacks during the last week. I’m sure a few are disappointed that we didn’t hand them any ready-made stories reinforcing their opinions that we’re just a bunch of rubes who need their enlightened guidance to take care of ourselves. But, hey, you guys have the oil slick to get hysterical over.

So, please, you mainstream hacks should just stay away from us. We’ve got work to do. We certainly don’t need your usual, lazy, formulaic, agenda-driven reporting on our work. It’s pointless – it all comes out looking like this:

**** Update 1:45 PM CST ****

I should also mention that I’m happy that Nashville isn’t so brain-damaged that bottled water is illegal here as it is in one of those Yankee cities. With one of our two water treatment plants out and water supplies disrupted in various places, a lot of of us lived on bottled water the last week. I’m still drinking it because I don’t completely trust the water supply yet.

The one-sided war against Wall Street

Does Wall Street have come culpability in the financial meltdown we suffered?  Of course they do.  But so far, Democrats have chosen to focus only on that and ignore the culpability shared to an even larger degree by government.

Slipping through the news cycle yesterday at about 5pm eastern was this little jewel:

Freddie Mac is asking for $10.6 billion in additional federal aid after posting a big loss in the first three months of the year. It’s another sign that the taxpayer bill for stabilizing the housing market  will keep mounting.

The McLean, Va.-based mortgage finance company has been effectively owned by the government after nearly collapsing in September 2008. The new request will bring the total tab for rescuing Freddie Mac to $61.3 billion.

The fact that Freddie Mac and his ailing sister Fanny Mae have been hemorrhaging money since September 2008 with no end it sight didn’t stop them from paying retention bonuses to their officers even while private payments such as that were vilified and demonized.

Another bit of fiction that Democrats in Congress like to use is that both are “quasi-governmental” entities, or, in fact, really private institutions.  In fact they’re not at all:

As the CBO notes in a recent background paper, the standards for when to include government-sponsored entities in the budget go back to the 1960s, when a Presidential commission laid out a set of questions.

To wit: “Who owns the agency?” (In the case of Fan and Fred, taxpayers.) “Who supplies its capital?” (Taxpayers.) “Who selects its managers?” (The federal government.) And finally, “Do the Congress and the President have control over the agency’s program and budget, or are the agency’s policies the responsibility of the Congress or the President only in some broad ultimate sense?” (The feds have control in every sense.)

All that happened in September of 2008 is Hank Paulson put them in conservatorship. In fact, Freddie and Fannie alone will account for up to $391 billion in bailouts over 10 years according to the CBO. So why are the Democrats pointedly ignoring these two institutions? Reread the CBO background paper, especially the part about who selects the managers and who has control over the agency’s program and budget, not to mention control over it’s policies.

Ezra Klein tries to wave it all away as he delicately attempts to explain how Freddie and Fanny are really beneficial to society as a whole and not financial black holes. But now matter who hard he tries, he can’t quite avoid the truth:

The mortgage giants, slightly confusingly, do not sell mortgages. They buy them from the banks that sell them. About 90 percent of them, to be precise. They do that to make mortgages — and thus home ownership — cheaper. That’s fine. If the country wants to encourage home ownership as a policy, subsidizing banks so they can offer better mortgage terms is a sensible way to do it.

I assume he typed that with a straight face. Uh, no Ezra, that’s not the way to do it. That “policy” (Community Reinvestment Act) which was hardly endorsed by the “country” is precisely what incentivized sub-prime mortgages (you sell ‘em, we’ll buy ‘em no matter how bad they are) and the eventual collapse. So that makes it anything but “sensible”.

Klein then attempts to further the myth of “quasi-governmental” status for the two institutions and, in a rather amusing and round about way, admits they were the cause of the whole thing:

Rather than using taxpayer dollars to subsidize mortgages, they were borrowing money very cheaply because their quasi-governmental status assured the market that there’d be a taxpayer bailout in the case of any sort of collapse. That is to say, their business model relied on markets ignoring the risk of their activities. And then, because they were private companies with shareholders to please, they also got into slicing and dicing mortgage packages to make money like an investment bank rather than a housing policy. In theory this should’ve worried the markets where they borrowed their money, but again, the government backstop saved them. Forget too-big-to-fail. This was not-allowed-to-fail.

Their “business model” relied on markets ignoring the risk of their activities? No. Instead their policy (CRA) directed that Fannie and Freddie ignore the risk an buy these mortgages that were a bad deal. In effect, by direction of a policy that encouraged and incentivized it, mortgage companies complied with the CRA and Freddie and Fannie bought the bad paper.

Klein denies this had anything much at all to do with the collapse of the mortgage market – even with $391 billion in bailouts staring him in the face. The most he’ll admit too is they were “part of the problem.” And that is at least better than the Democrats will do.

But he ends up doubling back on himself without seemingly knowing it:

Of course, you don’t necessarily need to eliminate Fannie and Freddie. You could solve the problem by fully incorporating them into the government and making them a straightforward housing subsidy rather than a stealth housing subsidy hidden within a profit-maximizing company. But it’s not clear that bringing more major institutions under the control of the government is going to be popular, either. So what do you do?

Well, it’s hard to say. Procedurally, Democrats think that the Fannie and Freddie question is a housing market question and should be dealt with in the context of a major housing-policy bill. What that bill will do, however, is anyone’s guess. And that’s pretty much where we are on Fannie and Freddie.

As pointed out, they both are “fully incorporated” into government whether that’s technically true or not. They’re certainly not private, and they’ve never really been “quasi-governmental”. They’ve been organs that execute government policy, no matter how absurd or costly. And recommending the two institutions be handled in the context of a “major housing-policy bill”, further cements the point that they’re part of the government that executes policy as it pertains to the housing industry.

And by the way – the payments to these two institutions are being kept “off the books” – meaning they don’t have to be accounted for in budgeting.

Until and unless these two institutions are addressed within any “comprehensive” financial reform bill, the bill isn’t worth the powder to blow it to hell. And when Sen. Chris Dodd (D-CT) announces, “we’ve ended the ‘too big to fail’ debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer” feel fully entitled to shout that which fans normally shout at officials at sporting events who get the call wrong.

~McQ

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Drones, “war criminals” and the ICC

You probably recall the left’s call for the US to join the International Criminal Court. One of the primary reasons behind that call was a desire to see George Bush tried as a “war criminal” by much of the more extreme left. And that is one of the declared purposes of that court.

The Clinton Administration signed the Rome Statute in 2000 establishing the court but never submitted it for Senate ratification. Then Senator Barack Obama, when asked if the US should join the ICC, said “yes”, echoing the far left’s desire.

So I read this particular article with interest the other day, and wondered if their desire to join the court is still as strong now as it was then:

The pilots waging America’s undeclared drone war in Pakistan could be liable to criminal prosecution for “war crimes,” a prominent law professor told a Congressional panel Wednesday.

Harold Koh, the State Department’s top legal adviser, outlined the administration’s legal case for the robotic attacks last month. Now, some legal experts are taking turns to punch holes in Koh’s argument.

It’s part of an ongoing legal debate about the CIA and U.S. military’s lethal drone operations, which have escalated in recent months — and which have received some technological upgrades. Critics of the program, including the American Civil Liberties Union, have argued that the campaign amounts to a program of targeted killing that may violate the laws of war.

In a hearing Wednesday before the House Committee on Oversight and Government Reform’s national security and foreign affairs panel, several professors of national security law seemed open to that argument. But there are still plenty of caveats, and the risks to U.S. drone operators are at this point theoretical: Unless a judge in, say, Pakistan, wanted to issue a warrant, it doesn’t seem likely. But that’s just one of the possible legal hazards of robotic warfare.

Now note carefully what is being said. Not all drone pilots are considered to be violating the laws of war. For instance, an airforce officer flying a drone is a combatant and are normally found operating in a combat zone (Afghanistan) in support of combat operations.

However, it is argued, CIA operatives flying them in Pakistan and using lethal force for targeted killings in an undeclared war may be liable to charges of “war crimes”. It would, of course, require some legal entity in Pakistan to issue a warrant to take this argument from theoretical to real.

Now you may or may not agree with the legal arguments. But let’s stipulate, for the sake of argument, that they’re correct. Where does that lead us? Well, here:

Loyola Law School professor David Glazier, a former Navy surface warfare officer, said the pilots operating the drones from afar could — in theory — be hauled into court in the countries where the attacks occur. That’s because the CIA’s drone pilots aren’t combatants in a legal sense. “It is my opinion, as well as that of most other law-of-war scholars I know, that those who participate in hostilities without the combatant’s privilege do not violate the law of war by doing so, they simply gain no immunity from domestic laws,” he said.

“Under this view CIA drone pilots are liable to prosecution under the law of any jurisdiction where attacks occur for any injuries, deaths or property damage they cause,” Glazier continued. “But under the legal theories adopted by our government in prosecuting Guantánamo detainees, these CIA officers as well as any higher-level government officials who have authorized or directed their attacks are committing war crimes.”

There’s no question where the buck stops when talking about who has “authorized or directed” such attacks. It stops at the Oval Office.

So … about those cries for membership in the ICC and those shouts of “war criminal” by the left. Where in the world have they gone?
~McQ

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Massachusetts town bans bottled water

More nanny state fascism in the name of the environment, this time at a local level:

“We only have one planet and I just don’t want to see it spoiled,” said Jean Hill, who introduced the measure at Concord’s Town Meeting.

And with that Jean Hill managed to get the town of Concord MA to ban the sales of bottled drinking water in 2011.  Jean Hill and Concord’s town government have decided their concerns will take the decision out of your hands if you live in that town, after all:

“Water is something we can get from the faucet. You can’t turn your faucet on and get soda,” said Selectwoman Virginia McIntyre, explaining why other plastic bottles would not be banned.

Right – and you are now restricted to water from your faucet there.

As Lisa F., who sent the link in an email, asks:

What if my tap water smells like sulfur?

What about natural disasters when I’m told by the government to stock bottled water?

What about new moms who want to use filtered water for formula?

Well, Lisa, the government monopoly has spoken and it appears its just tough toenails for you and your rights.  A legal product has just been arbitrarily banned for use. Grab your reusable container if you want water other than that the government provides.

Of course Concord is a small town among many towns no banning bottled water so I don’t see avoidance of the law as a particularly onerous chore.  Instead Concord provides another example of the use of government and law to push a political agenda.  Their job should be the provision of essential services and protection while staying out of the business of dictating what citizens can or can’t own, use or do unless those activities violate the rights of others.

Oh, and a final note:

The ban on plastic water bottle sales may be largely symbolic. Town officials aren’t sure they have the power to enact the ban without approval from the state.

Unfortunately, the state is MA.

~McQ

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