Free Markets, Free People

Government

Is There Anything These Boobs Won’t Try To Legislate Or Intrude Upon?

And yes, it’s another Republican:

Sen. Orrin Hatch, R-Utah, may be a skinny guy with a high voice. But he’s angrily setting out to tackle the biggest powers in college football, vowing to pound them until they reform the Bowl Championship Series.

He called them out Wednesday, as he and Sen. Herb Kohl, D-Wisc. — respectively the top Republican and Democrat on a Judiciary subcommittee on antitrust — released a list of topics that panel plans to consider this year.

A bit buried on Page 4 of an eight-page list, amid somewhat sleep-inducing reading on oil and railroad antitrust, is a nifty paragraph about the BCS.

“The BCS system leaves nearly half of all the teams in college football at a competitive disadvantage when it comes to qualifying for the millions of dollars paid out every year,” their joint statement says.

Then it drops its first unexpected bomb: “The subcommittee will hold hearings to investigate these issues.”

That is followed by a second: “Sen. Hatch will introduce legislation to rectify this situation.”

Hatch’s office did not comment about exactly what may be in the yet-to-be-written bill — including whether it might attempt to mandate a playoff system similar to that in college basketball, or simply mandate that all colleges be given a fair shot to play their way into a national championship.

no one is particularly happy with the BCS and how they rank colleges or the method of “playoff” they’ve come up with. However let me be very clear here. This is none of Congress’s business. None. Nada. Zip. Zero.

Sorry if BSU was 13-0 and wasn’t crowned national champs. But that’s life and the system that’s in place. Get over it and worry about the things which are important – like shrinking government instead of making it more intrusive.

I’m coming to the conclusion we should hold Congress to the same standard as concerns their pay as we held AIG about the bonuses.

If we did that, most of these yahoos would be flat broke or owning the Treasury money at the end of the year. That’s certainly one way to cut spending.

~McQ

 

[HT: Liberty Papers]

Proposed Taxes On Oil Producers Will Be Paid At The Pump

This is such a basic lesson I’m surprised it has to be repeated so often.  

The background:

Under pressure to narrow projected deficits, President Barack Obama’s 2010 budget proposal calls for raising more than $31 billion over the next decade by eliminating the oil and gas industry’s eligibility for various tax breaks.

When you’re thowing around 3.6 trillion dollar figures for budgets, someone is going to ask, “how are you going to pay for it?” A 3.6 trillion dollar budget certainly doesn’t answer, “by cutting spending” does it? So new sources of revenue have to be found. But in a consumer society who is the ultimate source of all revenue? If you answered, “the consumer” you get a gold star.

So revenue is the purported reason for the focus on oil companies. Additionally, they’re easy to demonize which makes for easy political pickings. That seems to be the modus operandi of this administration.
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The propsoal:

The plan would slap companies with a new excise tax on production in the Gulf of Mexico worth $5.3 billion between 2010 and 2019, and repeal the industry’s eligibility for a manufacturing tax credit worth $13.3 billion in that period.

In an era in which the word “trillions” is uttered with abandonment, billions suddenly don’t seem like much do they? Unless of course you’re a middle or lower income family. Then trillions and billions are meaningless. It’s how far can you stretch the thousands of dollars you earn each year?

Well that $13 a week tax cut you’re contemplating will quickly disappear at the gas pump if Congress and the adminstration get their way. Fuel prices will rise at the pump and may rise rather dramatically. That’s because that approximately 20 billion you see above will most likely morph into about 400 billion cost to the oil companies during that period:

The industry says the final cost of Mr. Obama’s proposals on petroleum production could top $400 billion, once his plan to put a price on greenhouse-gas emissions is factored in.

The lie:

The Obama administration has generally justified its proposals by arguing that taxpayers deserve a better deal.

Yeah, I know, “lie” is a strong word. I’ve always considered it to be the knowing telling of a falsehood. And that’s precisely what this “justification” is. The “taxpayer” being talked about isn’t you in this scenario. It’s the government. You will be paying the passed through tax at the pump which the oil companies will then send to DC.209546302_54daa93f9b

For the seeming millionth time, corporations don’t pay taxes, they collect them and pass them on. Individuals pay taxes.

Last but not least – Raising taxes in recessionary times (not matter how indirect) is a recipe for economic disaster. Additionally such taxes in recessionary times may have the effect of driving jobs offshore where taxes and restrictions are less onerous and seeing oil companies produce less oil and natural gas domestically in a time when there is a growing and increasingly worrisome energy gap.

Not a very bright policy.

~McQ

Federal Drug Warriors Double Down On The Drug War (UPDATE)

New administration, same lame approach:

U.S. Secretary of State Hillary Rodham Clinton on Wednesday pledged to stand “shoulder to shoulder” with Mexico in its violent struggle against drug cartels, and acknowledged the U.S. shares blame because of its demand for drugs and supply of weapons.

She said the United States shares responsibility with Mexico for dealing with violence now spilling across the border and promised cooperation to improve security on both sides.

And it’s your fault:

“I feel very strongly we have a co-responsibility,” Clinton told reporters, adding: “Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians.”

Of course, if we had control of our borders and drugs weren’t “illegal”, we probably wouldn’t be seeing the slaughter on the border now, would we?

Look, I know, as does everyone who reads this blog, that the sudden realization that it is the prohibition that drives all of this violence and not the demand, isn’t going to suddenly dawn on the politicians. The lessons of 1920′s prohibition have apparently been lost on them. The lawlessness, the gun violence, the flouting of the law by a majority of the population – all were essentially eliminated with the repeal of the 18th Amendment.

I’m not going to make the argument that drugs are good for you, harmless or something I’d want my grandkids to do. But I understand, despite all of that, that our approach – prohibition – is an abject failure and the war on the border is simply a manifestation of that failure.

The key to winning this war is to take the profit motive for criminals out of the equation. For most observers that seems self-evident. No profit, no war. No war, no need for guns and killing.
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Yet governments seem to resist that obvious point. Instead they wage “war” on the producers, suppliers and users. But the profits, propped up by the government prohibition, are so obscene that the replacement of producers and suppliers taken out of the “business” is almost instant. And the size of the user population is such that only low single digit percentages of them are ever caught and prosecuted.  It is, relatively speaking, a low risk business with very high rewards for the producers.

In reality, a criminal business is motivated by the very same things as is a legal business. It responds to the same sorts of market incentives as a legal business. The market, however, isn’t created by natural demand and regulated by competition. Instead, the market is one created by government prohibition. No prohibition, no “illegal” demand. No illegal demand, no possibility of the obscene profits enjoyed and no real appeal to a criminal enterprise or syndicate.

So calling for more of the same in terms of addressing this problem seems insane. As long as the prohibition remains in place the profit motive for the criminal gangs remains in place as well. And as long as the profits are large enough to more than offset the losses incurred in the distribution process (and the fight with governments and police), they will continue in their “business” until such a profit motive disappears.  And as long as the price of drugs remains reasonably low and readily available (and the enjoyment remains high), and the population wanting them remains large, demand will remain pretty constant.

As has been demonstrated for decades, governmental efforts to stem both supply and demand through prohibition has been a pitiful failure. Yet here we are, getting ready to double down on this horribly failed policy.

In reality, this is again a manifestation of the nanny state. It is a determination by government that something it has decided is detrimental to individuals should be denied them. Instead of approaching the issue as it did with alcohol, our government has eschewed the lessons learned and the success of that effort in favor of the approach it is now taking.

To most rational people such an approach seems absurdly irrational. Yet there is no serious debate within government circles about the failure of the present approach or discussion of alternatives. And that’s in the face of evidence that drugs are now being used to finance terror organizations.

Something has got to change. And it needs to change quickly, or what you see on the border now will only grow worse. We’ve talked about how governments can distort markets. What you see now is a classic example of the results of such a distortion.

UPDATE: New York is trying something different in terms of combatting drugs.  Although still not signed into law, the Governor and legislature have agreed to legislation which would dismantle much of the ’70s era “mandatory sentencing” laws and put more of an emphasis on treatment:

The deal would repeal many of the mandatory minimum prison sentences now in place for lower-level drug felons, giving judges the authority to send first-time nonviolent offenders to treatment instead of prison.

The plan would also expand drug treatment programs and widen the reach of drug courts at a cost of at least $50 million.

New York’s drug sentencing laws, imposed during a heroin epidemic that was devastating urban areas nearly four decades ago, helped spur a nationwide trend toward mandatory sentences in drug crimes. But as many other states moved to roll back the mandatory minimum sentences in recent years, New York kept its laws on the books, leaving prosecutors with the sole discretion of whether offenders could be sent to treatment.

“We’re putting judges in the position to determine sentences based on the facts of a case, and not on mandatory minimum sentences,” said Jeffrion L. Aubry, an assemblyman from Queens who has led the effort for repeal.

“To me, that is the restoration of justice.”

To me, it’s a start.

~McQ

The Difference Between A Business and A Government

At least when it comes to spending money. Business takes a hard look at the potential and when there doesn’t seem to be any, it pulls back. Government, on the other hand, decides it believes something has a future and spends money to try to make their belief a reality.

For example:

Oil Major Royal Dutch Shell Plc doesn’t plan to make any more large investments in wind and solar energy in the future and does not expect hydrogen to play an important role in energy supply for some time.

“We do not expect material amounts of investment in those areas going forward,” Linda Cook, head of Shell’s gas and power unit told reporters at a press conference on Tuesday.

“They continue to struggle to compete with the other investment opportunities we have in our portfolio,” Cook said of solar and wind.

Shell’s future involvement in renewables will be principally limited to biofuels, which the world’s second-largest non- government-controlled oil company by market value believes is a better fit with its core oil and gas operations.

Now let’s be clear. “Oil companies” such as Royal Dutch Shell understand that in reality they’re “energy companies”. They realize that somewhere in the far distant future, we’ll wean ourselves from fossil fuels and they need to be in a position to supply what we decide is the viable alternative fuel(s) for that time. And my guess is, they’ll do so.

However, on a purely business assessment of “potential” (that would be potential profit) for some of the favorite alternatives of this era, Shell just doesn’t see a real future, at this time, in solar, wind or hydrogen.

With one exception:

In the past year, the company said it was refocusing its wind business on the U.S. as it pulled out of European projects.

Can anyone guess why that may be? Well, whether or not wind works or has a real application anytime soon, there’s money being promised for R&D. Why not get a little of it even while pulling back in Europe where it sees no real future for wind at this time? They’d like to keep researching it, but why spend their own money when it would appear they can use yours?

Meanwhile, I’m sure we’ll hear all about the government no longer subsidizing Big Oil with tax breaks (while you pay the difference at the pump).

I’m no arguing for tax subsidies or anything else. I’m just pointing out a few things. Shell obviously believes there’s no real business potential in the alternatives it’s backing out on right now. But it will certainly accept subsidy money for wind research if our government is handing it out, all the while our government is telling us it is no longer subsidizing Big Oil. It’s an irony thing.

In the meantime, given Shell’s decision, I don’t expect much from the billions of your money the government plans on throwing at alternatives any times soon. But I could be wrong. After all, isn’t there a new emerging “conventional wisdom” about markets among the anti-capitalists among us?

Markets – they’re always wrong, aren’t they?

~McQ

Constitution? We Don’t Need No Stinkin’ Constitution!

As the Senate takes up its version of the violation of Article 1, Section 9 of the Constitution, also known as the bill to tax the hell out of the AIG bonuses, one note of sanity sounds through. Sen. John Kyl:

“I don’t believe that Congress should rush to pass yet another piece of hastily crafted legislation in this very toxic atmosphere, at least without understanding the facts and the potential unintended consequences,” he said.

“Frankly, I think that’s how we got into the current mess,” he added.

Heh … ya think?

Not that it matters – this will most likely pass the Senate as well and be signed into law by “Constitutional Law Professor” and President Barack Obama, but when it ends up in court and is declared unconstitutional, it shouldn’t come as a surprise. The Constitution always takes a back seat to populism and CYA.

~McQ

Rudderless and Sinking

Here’s about as succinct a summary of the Obama administration to date that I’ve seen:

President Obama still enjoys the popularity that comes with not being George Bush, especially in a city top-heavy with Democrats. But his initial response to the global calamity that he found on entering the Oval Office has not inspired popularity’s more sober elder brother, confidence. Large constituencies, notably business, are voicing their scepticism openly. The President’s much-vaunted $787 billion stimulus package is being widely interpreted, even by some of those (such as Warren Buffett, America’s second-richest man) who openly supported Mr Obama for the presidency, as a serious failure.

And I don’t foresee it getting much better. Of course the summary comes to us via the British press (Simon Heffer) who have the luxury of being once removed from the situation and therefore have the ability to be somewhat more objective than much of our own media.

For instance, the much more perceptive analysis of the AIG mess:

Conscious that he has made mistakes, and conscious especially of the increasing perception that he is simply throwing cash at unreformed institutions in the hope that something will happen, Mr Obama is trying to raise his game. He had a soft target two days ago, when he joined in America’s outrage at the paying of bonuses to executives of AIG, the sinking insurance giant now buoyed by public money. This provoked further attacks on him from the Right. Why was he using US taxpayers’ money to bail out a company whose main investors were French, German, Swiss and British banks? And wasn’t he merely jumping on the bandwagon of attacking the bonuses to distract attention from his own policy failings – creating a bogeyman in the same way that Gordon Brown and Harriet Harman did with Sir Fred Goodwin last month?

And of course, we’re witnessing how poorly that’s turning out (you know there’s a political problem when the CEO of AIG comes off as a more sympathetic figure than Barney Frank and Chris Dodd).

Heffer says that instead of concentrating on what ails us financially, Obama has another much broader agenda:

Instead he has been trying, on a broad front, to fulfil the reformist ideal that informed his election campaign. Rather like a would-be government in Britain that talked of “sharing the proceeds of growth”, the candidate who wanted to redistribute wealth now, as President, has no wealth to redistribute. A $3.6 trillion budget showed little sign of addressing the problem of stimulating demand. Both big corporations and small businesses feel overtaxed, their competitiveness hampered, and incapable of creating jobs at a time when they are desperately needed. Mr Obama’s green agenda, which was also a significant part of his election promises, entailed higher taxation that will retard the economy just when it needs to grow. His greatest ambition – of starting a national health service – seems impossible in the present climate. As he seeks to move forward on this broad front Warren Buffett himself has attacked him, saying that his first three priorities should all be the economy. Paralysed by inexperience and a Blairish desire to be liked, and hampered by inadequate senior staff, he is now finding that even some of his own party in Congress feel he has gone too far in the socialist experiment. Mrs Pelosi admitted at the weekend that a second stimulus package – which leftist Democrats are calling for, to the horror of much of the rest of America – was not yet on the cards.

Dead on right. The line “paralyzed by inexperience and a Blairish desire to be liked, and hampered by inadequate senior staff”, strikes home. It is a particularly lethal political combination which we’re seeing displayed in spades. It is no longer a comedy show, it has become a horror show. And with the move by the Fed to buy back long-term bonds, the horror is only deepening.

And we’re stuck looking to Timothy Geithner, Barack Obama and Chris Dodd for salvation? Lord help us all.

~McQ

[HT: Joel C.]

Some Bonuses Less Outrageous Than Others

If you are inclined to accept without question that the bonuses paid to AIG employees deserve unmitigated moral indignation, as Pres. Obama and the Democrats seem to, then shouldn’t that opprobrium cut across the board? Well, I guess some animals are more equal than others:

At least four Fannie Mae executives are slated to receive more than $400,000 in bonuses each this year as a result of the company’s government-approved retention program, The Post’s Zach Goldfarb reports.

The executives include chief operating officer Michael Williams ($611,000), deputy chief financial officer David Hisey ($517,000), and executive vice presidents Thomas Lund ($470,000) and Kenneth Bacon ($470,000).

Each of these executives earned about $200,000 in retention payments last year and salaries ranging from $385,000 to $676,000.

According to the report, such bonuses are doled out depending on how integral the employee is to the companies, as approved by the FHFA:

Fannie Mae, which suffered $59 billion in losses last year, has requested $15 billion in taxpayer assistance, and has said it expects to need plenty more.

All major compensation decisions are authorized by Fannie Mae’s federal regulator, the Federal Housing Finance Agency, which created a retention program when the company was seized last September to hold on to key employees.

Under the program, employees are eligible to receive up to 150 percent of their salary in bonuses this year, but many will receive far less than that, and some might receive zero, depending on how central they are deemed to the company’s task.

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Congressman Barney Frank, one of Fannie Mae’s and Freddie Mac’s biggest supporters, and Chairman of the House Financial Services Committee which oversees the institutions, was reached for comment and had this to say about whether paying retention bonuses was really necessary:

That’s nonsensical. It’s clear they made a lot of mistakes and we need to undo what they did. If they really understood what they did in the first place, seriously, they probably wouldn’t have done much of it. Secondly, when you are trying to undo something, it is often not the case that the people who did it are the ones to put in place. People are sometimes committed to not admitting mistakes. … So that argument I think is in fact almost counter, because the argument that you take the people who made the mistake and put them in charge of undoing the mistake goes against the human impulse not to admit a mistake.

Oops! Sorry, about that. The foregoing statement was from Barney Frank, but he was referring to AIG bonuses.

This morning, ThinkProgress sat down with Rep. Barney Frank (D-MA), who chairs the House Financial Services Committee and has called for the firing of AIG executives. When asked to respond to Sorkin’s claim that only AIG employees can navigate the economy out of the mess they created, Frank dismissed it as “nonsensical”

Pigs in the House indeed.

Newspeak: Pelosi Style

Up is down. In is out. Billions in earmarks are no big deal, but millions in “bonuses” merit extreme outrage. And now, per Speaker Nancy Pelosi, illegal aliens represent the height of patriotism, but enforcing American laws is “un-American”:

No I can't!

No I can't!

House Speaker Nancy Pelosi recently told a group of both legal and illegal immigrants and their families that enforcement of existing immigration laws, as currently practiced, is “un-American.”

The speaker, condemning raids by Immigration and Customs Enforcement agents, referred to the immigrants she was addressing as “very, very patriotic.”

“Who in this country would not want to change a policy of kicking in doors in the middle of the night and sending a parent away from their families?” Pelosi told a mostly Hispanic gathering at St. Anthony’s Church in San Francisco.

As some might say, that’s muy estúpido. But the Speaker wasn’t done:

Referring to work site enforcement actions by ICE agents, Pelosi said, “We have to have a change in policy and practice and again … I can’t say enough, the raids must end. The raids must end.

“You are special people. You’re here on a Saturday night to take responsibility for our country’s future. That makes you very, very patriotic.”

Our country? Perhaps Pelosi is unclear on the concept of illegal immigrants? Do you think she realizes that they are not part of our country?

And the idea that enforcing our immigration laws is somehow “un-American” is beyond ludicrous. Although, when you consider this is coming from the party that seems to think paying taxes is a only a patriotic duty if you aren’t working for the Democrats, then I suppose it makes sense.

In the spirit of Pelosi’s newspeak, may I just say that the Madam Speaker is clearly a thoughtful and intelligent lawmaker who is doing a fine job at her post.

[HT: HotAir HL]

Barely Legal

surf-beaver

Talk about the government getting all up in someone’s business:

Things could get hairy in New Jersey this summer for women who sport revealing bikinis or a little bit less.

The painful Brazilian wax and its intimate derivatives are in danger of being stripped from salon and spa menus if a recent proposal to ban genital waxing is passed by the state’s Board of Cosmetology and Hairstyling.

[...]

New Jersey statutes allow waxing of the face, neck, arms, legs and abdomen, but officials say that genital waxing has always been illegal, although not spelled out.

Regardless, almost every salon in South Jersey, from Atlantic City casinos to suburban strip malls, has been breaking the law for years by ridding women, and some men, of their pubic hair for $50 to $60 a session.

Jeff Lamm, a spokesman for New Jersey’s Division of Consumer Affairs, said that the proposal would specifically ban genital waxing, and was prompted by complaints to the board from two women who were injured and hospitalized. One of them sued. Lamm said that the state only investigates infractions if consumers complain.

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What happened to “keep your hands off my body”? If the government can dictate the size and shape of the drapes, what’s to stop it from taking over the whole womb room? It’s not as if the rights of the unshorn are at risk here. In addition, there is a legitimate concern for where women will turn if they lose the right to freely control their bare necessities:

Cherry Hill salon owner Linda Orsuto said that women would “go ballistic” if the proposal passed. She said that some women would resort to waxing themselves, visiting unlicensed salons or traveling to other states, including Pennsylvania, in a quest to remain bare down there.

“The clients are going to freak,” said Orsuto, who owns 800 West Salon & Spa, on Route 70. “It’s a hot issue, and we’re going to have to do something.”

Scary. If the government camel insists on sticking its nose under Jersey girls’ skirts, can back-alley bush removal with rusty razors be far behind? beach-beaver

Now, I understand that some aficionados of adult entertainment from the 70′s might be excited about the return of a tufted tarts and piliferous punani. But that sort of hirsute protectionism treads dangerously upon our most cherished freedoms, and will potentially lead to messy entanglements from which we will find it hard to extricate ourselves (think “velcro”).

Accordingly, I stand firmly behind the women of New Jersey and fully support their rights to depilate as they see fit, with the advice and counsel of their salon professional. So say it loud, ladies, in all your glabrous glory: “We’re bare! Down there! And we’re proud!”

Governmental 3 Card Monte

A week or so ago, I highlighted a story about the possibility that Democrats were going to tax your employee health care benefits (after all, those among the 95% who are getting a tax cut have to have something to spend it on) and I was assured this particular plan comes up all the time and never gets out of committee. Well it appears those assurances of nothing to worry about were premature. The idea may not only get out of committee this time, but be signed into law as well:

The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.

So you’ll pay taxes on your private health benefits to pay for health benefits for others, while government tells you how expensive your private coverage is and how they can run it much more cheaply and efficiently if only you’ll pitch in and pay for it.

Question: If taxes on your health care benefits are going to pay for a governmental health care system overhaul, and one assumes the purpose of the overhaul is to bring more and more of the health care system under governmental control, how will government “pay” for all of this in the future when you no longer have private health care benefits to tax?

Read the whole article.  It doesn’t even take a double digit IQ to spot the law of unintended consequences laying in the weeds just salivating over this one.

~McQ