Free Markets, Free People

Government

It’s Hard To Tell The Players Without A Program … Or Even With One

Who said:

“We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled.”

Why that would be Ray LaHood, the supposed Republican Secretary of Transportation.

Who said:

“The policy of taxing motorists based on how many miles they have traveled is not and will not be Obama administration policy.”

Well if you guessed Barack Obama, you’re wrong. And if your second guess was Robert Gibbs, President Obama’s Press Secretary, you’re 0-2.

No, it was Lori Irving.

And who is Lori Irving?

Well she’s the department spokeswoman for Secretary Ray LaHood’s Transporation Department.

Which begs the question – who is running Transportation? Or, perhaps, for whom is Lori Irving really the spokeswoman?

And more importantly why is a Republican putting this idea forward in the first place, I mean if its true they’ve finally “found” themselves?

~McQ

Old America v. New America – Justice vs. Fairness

David Brooks does his usual NYT spin job:

Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible

That’s the rumor. The reality, as we’ll see, doesn’t conform with the rumor. The why is in a single word: ‘justice’. What Brooks talks about here are the supposed foundations of our civilization and way of life. Individual responsibility and justice. Individuals are responsible for their condition (through their choices) and expected to live with them. Their condition isn’t anyone else’s fault or problem barring force or fraud. A just society understands that and, as is necessary, holds them responsible for their choices. Lessons are only learned when one has to live with the consequences of one’s choices. But what a just society doesn’t do is penalize those which have made the right or proper choices in their lives. It doesn’t require such people to prop up or rescue those who have made poor choices. Such a society would see that as “unjust” and work against the concept of individual choice and individual responsibility.

A just society is where everyone is afforded the same opportunities and held to the same standards of behavior and the law. Success, however, is left up to individual effort and ability. In a just society you are free to do, within reason, whatever you desire to do, but you’re expected to live with the consequences.

With that preface, let’s look at Brooks’ next couple of paragraphs:

Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.

While Brooks properly chastises the banks, automakers and state governments, he leaves out one of the most irresponsible of entities which played as large a role as any other contributor to this current financial debacle – the federal government. If ever there was an enabler for all of this, it is Washington DC. Much of what happened can be laid directly at the feet of the Fed. The financial  implosion didn’t start on Wall Street but with the insolvency of the quasi-governmental entities  Freddie Mac and Fannie Mae. Yet they’ve not been in the spotlight of Congressional hearings or had the millions paid their top execs complained about and capped. Where’s the justice in that?

So to get back on topic after that brief aside to assail writers like Brooks for excusing the Federal government from their condemnations (and you’ll see why he did so in a moment), the reason that Brooks seems so angry in this part of his op-ed is he is giving lip service to some foundational American ideals and pretending to be outraged that they’re being violated just before he pulls the rug out from under them.  It is obvious to Brooks and anyone with the IQ of a melon that those who are running the show in DC have absolutely no desire for a “just” society based on individual responsibility anymore but he wants to break it to you gently. That’s the old America. The new America is one based in “fairness” and collective responsibility.  At this point, Brooks wants you believing he’s an “old America” kind of guy.

So he relates the fact that many in America are still mired in their old fashioned belief in justice and are, consequently, a little ticked about this payoff to the irresponsible among us.   People are complaining about it. And after a reasonably good, but disingenuous start, it is here where Brooks pulls the mask off completely:

These injustices are stoking anger across the country, lustily expressed by Rick Santelli on CNBC Thursday morning. “The government is promoting bad behavior!” Santelli cried as Chicago traders cheered him on. “The president … should put up a Web site … to have people vote … to see if they want to subsidize losers’ mortgages!”

Well, in some cases we probably do. That’s because government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.

Irresponsibility is not really penalized in New America. New America is driven by the belief that it is our collective responsiblity to those in need, regardless of how they got there or what it entails, to satisfy that need. So when the life vest of your money (via taxes and debt you will be taxed to repay) is offered to someone drowning as a result of their own irresponsible choices, you are expected to accept that as your duty and not complain about it.

You see, per Brooks, government isn’t in the justice business, it’s in the “economic stabilization” business.

Really? Since when?

And since when did the economic stabilization business involve rewarding incompetence and irresponsibility while punishing their opposites? Isn’t such a policy of rewarding incompetence and irresponsibility a huge moral hazard, not to mention self-defeating? Why would someone change their behavior if there is no real punishment for their present behavior? Isn’t government picking “winners” and “losers” even while Brooks claims government isn’t in the “Last Judgment” business?

In fact it is and has been in the “Last Judgment” business for a while. And in the case here, the judgment made by government is that it is only fair to pick up those who’ve fallen short at the expense of those who haven’t. It has made the judgment that their need is far greater than the need of those who have played by the rules and done their part – after all those who have done the right thing are relatively better off than those who haven’t aren’t they? If, as Obama claimed at the Greek Temple, “we are our brother’s keepers” (well except in a real, Obama-family sense), then the “last judgment” was made then and is now merely being implemented.

We are, apparently, no longer a nation which seeks justice and equal opportunity. That’s Old America. New America seeks fairness as its highest goal. And in the New America, that means an equality of outcome where new “rights” are invented which entitle us to our desires, even at the expense of others.

Brooks goes on to apologize and attempts to minimize the horrific damage being done to America as we used to know it. He serves his purpose and spins the utter destruction of Old America and the emergence of New America as something which just had to be done by our new leader and his benevolent band of brothers, all of whom have your best interest at heart.

It’s enough to make you sick.

~McQ

“This is our house now”

Remember the organization that refused to pay its own workers a “living wage” even while it agitated for higher minimums for other businesses? The same organization that has been the subject of several voting fraud investigations? And the same one to receive $2 Billion from the stimulus bill? Well, its now in the process of “peacefully” occupying homes that are in the process of foreclosure. That organization, of course, is ACORN:

A community organization breaks into a foreclosed home in what they are calling an act of civil disobedience.

The group wants to train homeowners facing eviction on peaceful ways they can remain in their homes.

[...]

“The mortgage went up $300 in one month,” said Hanks, former homeowner.

ACORN fights foreclosures by breaking the law

ACORN fights foreclosures by breaking the law


She says the bank refused to modify her loan and foreclosed, kicking her out of the house in September.

The community group ACORN calls Hanks a victim of predatory lending.

“This is our house now,” said Louis Beverly, ACORN.

And on Thursday afternoon, they literally broke the foreclosure padlock right off the front door and then broke into the house, letting Hanks back in for the first time in months.

“We are actually trespassing, and so this is a way of civil disobedience to try to stay into our house,” said Beverly. “Legally it’s wrong, but homesteading is the only means that she has left to stay into her house. And we feel as though this is the right thing to do at this particular time to save this family.”

So even though they know it’s “legally wrong” ACORN is going to go ahead and do it anyway? Maybe they could take some of the $2 Billion they received and help Ms. Hanks pay her mortgage or even renegotiate it. Presumably ACORN received the stimulus money to do something other than commit criminal acts. Didn’t it?

[HT: Rick Moore]

Dissent and Hate Speech

Apparently signs equal threats to some of our police:

An Oklahoma City police officer wrongly pulled over a man last week and confiscated an anti-President Barack Obama sign the man had on his vehicle.

firstamendment-757857The officer misinterpreted the sign as threatening, said Capt. Steve McCool, of the Oklahoma City Police Department, and took the sign, which read “Abort Obama, not the unborn.”

Chip Harrison said he was driving to work when a police car followed him for several miles and then signaled for him to pull over.

”I pulled over, knowing I hadn’t done anything wrong,” Harrison said in a recent phone interview.

When the officer asked Harrison if he knew why he had been pulled over, Harrison said he did not.

”They said, ‘It’s because of the sign in your window,’” Harrison said. 

When did cops start pulling people over for political bumper stickers or signs?

Anyway, Harrison tried to explain what the sign meant, they disagreed and he was issued a a slip of paper that said he was a part of some sort of investigation. They took his sign. Later, he’s contacted by the police saying the policeman misunderstood and asking him if he wanted his sign back. They had contacted the Secret Service about the sign, and they had told the police it wasn’t a threat. Except apparently they were blowing smoke:

”The Secret Service called and said they were at my house,” Harrison said.

”When I was on my way there, the Secret Service called me and said they weren’t going to ransack my house or anything … they just wanted to (walk through the house) and make sure I wasn’t a part of any hate groups.”

Harrison said he invited the Secret Service agents into the house and they were “very cordial.”

”We walked through the house and my wife and 2-year-old were in the house,” Harrison said.

He said they interviewed him for about 30 minutes and then left, not finding any evidence Harrison was a threat to the president.

Walk through my house? Uh, get a warrant.

Hate groups? They knew what the sign was about, what was the rest of this about?

Which segues nicely into the next portion of the post – hate speech.

Eugene Volokh has a very interesting post up about a UCLA Chicano Studies Research Center study titled Hate Speech on Commercial Talk Radio.

It’s a fascinating post which demonstrates how hard certain groups are working another angle aimed at talk-radio (and read the comments, where commenters take the study’s assertions aparat). Hate-speech is a lever that various groups on the left have been trying to enable for years. From the study, here’s their definition of hate speech:

Types of Hate Speech

We identified four types of speech that, through negative statements, create a climate of hate and prejudice: (1) false facts [including "simple falsehoods, exaggerated statements, or decontextualized facts [that] rendered the statements misleading”], (2) flawed argumentation, (3) divisive language, and (4) dehumanizing metaphors (table 1).

Hate speech or controlled speech

Hate speech or controlled speech

 

Then the examples:

Table 1. Analysis of Hate Speech from The John & Ken Show

EXAMPLE
“And this is all under the Gavin Newsom administration and the Gavin Newsom policy in San Francisco of letting underage illegal alien criminals loose” (from the July 21, 2008, broadcast).

TARGETS
Vulnerable group: foreign nationals (undocumented people).
Social institutions: policy and political organizations (city policy and mayor’s office).

FALSE FACTS
The sanctuary policy preceded Gavin Newsom’s tenure as San Francisco’s mayor, and neither Newsom nor the sanctuary policy supports “letting underage illegal alien criminals loose.”

FLAWED ARGUMENTATION
Guilt by association is used to make the hosts’ point. Undocumented youth and those who are perceived as their endorsers at the institutional level are stigmatized by being associated with criminality.

DIVISIVE LANGUAGE
Criminalized undocumented youth and their perceived validators (Gavin Newsom and the sanctuary policy) are depicted as a threat to San Francisco citizens, setting up an “us versus them” opposition.

ANALYSIS The language depicts the hosts’ targets (undocumented people, city policy, and Mayor Gavin Newsom) as dangerous, criminal, and collusive. In addition, the focus of that policy (undocumented people) becomes reduced to “underage illegal alien criminals.”

Talk about over-analysis. The bottom line is this matrix of assessment is based in pure biased opinion disguised as objectivity. Hate speech, in this case, is nothing more than saying “letting underage illegal alien criminals loose” is wrong.

As Volokh says:

The vagueness and potential breadth of the phrase “hate speech” is a pretty substantial reason — though just one among many — to resist the calls for a “hate speech” exception to the First Amendment. And the vagueness and potential breadth is also a reason to be skeptical of uses of the phrase even outside the law: It’s very easy to define “hate speech” as you like (or leave it undefined, as some arguments do), and use it to condemn people who express a wide range of views that you disapprove of.

One of the most defining phrases in the history of America free speech is “I may not agree with what you say, but I will defend to the death your right to say it.”

It has never been “I don’t like what you say and it sounds like “hate speech” to me so you should be silenced”.

~McQ

Is The Obama Mortgage Solution Just More Pain Avoidance?

As you recall, the following is partially blamed for getting us into the current housing crisis:

Ever since the credit crisis began, a lot of blame has been heaped on adjustable-rate mortgages, home loans that recalibrate according to market fluctuations. One brand of these innovative mortgages that have come under special criticism has been so-called “exploding A.R.M.’s” that lured borrowers with unusually low teaser rates that then reset skyward a few years later. These have often been derided as predatory, and lenders who offered them accused of luring homeowners into buying homes they couldn’t afford for the long-term.

So is the Obama administration, with its $75 billion mortgage bailout, any better than those previous lenders who were described as “predatory”? Well not according to the plan he’s put forward:

Critics of these might want to check out the Homeowner Stabilization Plan put forward by the Obama administration today. The plan would reduce mortgage payments and interest rates for homeowners who have seen their payments rise to more than 38% of their monthly income. But those reductions last just five years, after which they begin to reset to higher rates. In short, Obama is just drawing out the teaser rates a bit longer.

During the next five years, the Stabilization Plan will encourage lenders to lower loan payment below 38% of the owners’ income and provide subsidies for banks that lower the payments to 31%. The actual rate of payment will be even lower, since the government will also pay homeowners with the reduced rates $1000 a year to stay current on their payments.

After five years however, those government sponsored adjustable-rate mortgages will reset. The Obama adminstration promises they will reset at a moderate phased in level. But the loss of both the subsidy and the $1000 payment will automatically make the monthly payments much more expensive. What’s more, many market watchers expect interest rates will be much higher five years from now, putting additional pressure on mortgage rates. We could, in short, simply be prolonging the housing crisis.

Nothing like kicking the can down the road 5 years is there? The hope, obviously, is that Obama is safely in his second term when this new crisis hits, and, of course, by then he can safely denounce those who default on their mortgages again as people who were given a chance but didn’t take advantage of it.

Now obviously the people who get this “help” can sell their homes in that 5 years (and, of course, that was the idea when many of these people took out the low adjustable rate loans previously – a quick flip. But the market tanked.). However, it will be a buyer’s market in the coming years. So there’s a very good chance that in 5 years we’re going to see the very same problem we have now resurface.

So what are we doing with this 75 billion?

More pain avoidance which, it appears, will simply prolong the problem.

~McQ

Automakers – Gathering At The Trough Again

To be blunt about it, this just pisses me off:

GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly” and would only be pursued as a last resort.

Really? Well guess what – it’s even more “risky” and “costly” for the taxpayer to give GM another 100 billion bucks (and further on in the article it is acknowledged that a pre-packaged bankruptcy would cost about 30 billion).

GM claims its going to pare down its working force and model line. But what isn’t clear is how it plans on eliminating the legacy costs which still make it uncompetitive. Anyone know what would require them to confront that issue? That’s right – bankruptcy.

As for Chrysler:

Chrysler’s plan said the company would likely have to file for Chapter 11 protection if it doesn’t get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. But company officials said in a conference call that they believe a Chapter 11 filing is “not necessary” for Chrysler’s survival.

Uh no. Want more money? See Cereberus, the company you belong too and which is sitting on about 150 billion in assests. Let them pick up the tab. If not, see you in bankruptcy court.

This is ridiculous.

In particular, new opposition to further aid for Chrysler seemed to be building on Capitol Hill. In an interview Tuesday, Sen. Judd Gregg (R., N.H.) said no more taxpayer money should be given to Chrysler until its majority owner, private-equity firm Cerberus Capital Management LP, agrees to inject more funds into it.

Good. It’s about time this demand was made. What in the world is government doing throwing money at Chrysler when it has an owner with plenty of money? And Cerberus’ answer?

Cerberus said in a statement that it can’t put additional investments into Chrysler because agreements with its investors limit how much it can commit to any single investment. It added Cerberus has agreed to forgo any Chrysler profits before the government loans are repaid.

Tough beans. In that case, Cerberus had better find a way to sell off some of its investments to raise the necessary cash or be prepared to watch Chrysler hit bankruptcy court. Whichever choice it makes, it is not the job of the taxpayer to keep a marginal company afloat. And that’s even more true when that company has private assets upon which it can draw.

But when politicians are in the pain avoidance business, the Constitution is just a piece of paper and whatever they think they need to do to protect their positions of power will be done, regardless of law, principle or morality.

Just watch.

~McQ

Irony – Advice From Putin … But Will We Heed It?

Amazing that it is Russia giving the advice and the US deciding it isn’t valid:

Russian Prime Minister Vladamir Putin has said the US should take a lesson from the pages of Russian history and not exercise “excessive intervention in economic activity and blind faith in the state’s omnipotence”.

“In the 20th century, the Soviet Union made the state’s role absolute,” Putin said during a speech at the opening ceremony of the World Economic Forum in Davos, Switzerland. “In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.”

Unfortunately I think this lesson is mostly lost on us and it will, just as it did Russia, cost us dearly.

~McQ

Why Government Intervention In Recession Won’t Work

Well, the “stimulus” monstrosity has been signed and all the words of praise it doesn’t deserve have been said.  Now, here’s why it won’t work all in a succinct four paragraphs:

Most economists agree that America has enjoyed unprecedented prosperity, based primarily on excessive debt. Thus, any healthy correction would necessarily involve serious deleveraging and a severe recession. After a lot of pain, the economy would rebuild with healthier fundamentals. Infrastructure improvement would aid, but not cause, the eventual recovery.

Recession is the natural cure for the politically inspired profligacy that America has enjoyed for almost 40 years. Unfortunately, the side effects of this medicine, namely the rapid reallocation of labor resources and deflationary damage to debtors, are still unpalatable to pandering politicians.

The Washington regime, particularly members of the Democrat persuasion, leans towards a socialist solution of avoiding recession at any cost. After all, the bills are paid by others, such as taxpayers and holders of US dollars. This results in an increasing amount of other people’s money being spent on “public” works that would in other times carry the label “pork barrel”.

Washington is choosing to pursue the policy of continued and ever-increasing false prosperity, financed eventually by hyper-taxation, hyper-debt and hyper-inflation accompanied by a gradually eroded standard of living. The jobs created by the bill are by and large non-productive and will divert resources from the private sector and rob consumers of their power to make free choices in the marketplace.

Pain avoidance drove the call for stimulus.  Politicians are naturally for that because it ensures their future.  But in reality it isn’t pain avoidance at all, but simply a form of pain management.  And since that management will be spread over many years, those who will lose under it will be less likely to notice that loss over the years than they would if that loss happened all at once.  But there’s a price for that, and it will become apparent eventually.  That gradual loss won’t allow the recovery to the previous standard of living because government will have supplanted much of the private sector and many of those options (and resources) for regaining that level are no longer available.

Of course, the good news for the present crop of politicians is that realization of loss won’t happen on their watch.  And as far as the political class is concerned, that’s all that matters.

Let the good times roll!

~McQ

The Fight In Kansas

While California’s budget debacle seems to be catching most of the MSM coverage, there’s an interesting drama in Kansas going on as well.  Kansas pits a Democratic governor against a Republican legislature.

The situation:

Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem.

Payments to Medicaid providers and schools also could be delayed.

“We are out of cash, in essence,” state budget director Duane Goossen said.

The move places state taxpayers, workers and schoolchildren in the middle of a political battle over budget cuts.

Before we move on, note how the situation is framed. Clearly, at least to me, the bias leans toward what? Averting pain. In essence the state should do what is necessary – even if illegal and counterproductive – to avoid any pain.

The fight then, is about pain avoidance or, said another way, facing up to what excessive spending and poor budgeting has brought to the state of Kansas.

Why? Well what happens to politicians when pain is visited on voters? So it’s a very natural thing for politicians who enjoy the perks and power of office and harbor hopes of even higher office to want to avoid pain and the possiblity of losing that power and those perks.

That is essentially what is going on in KS where the governor wants to rob one fund which is healthy to pay out in other areas and the legislature is saying a) that’s illegal and b) we insist instead that we take a hard look at the situation and do things which will actually remedy it while, unfortunately, causing some pain.

The fight:

Republicans, who hold majorities in both chambers, blocked Gov. Kathleen Sebelius’ proposal to borrow $225 million from healthy state funds to cover shortages in accounts used to meet the state’s payroll and issue tax refunds.

GOP leaders said they won’t approve the IOUs until Sebelius either cuts the current budget herself or signs the bill they passed last week slashing $326 million — including $32 million for education — to balance the budget.

Republican leaders said they had no choice, that by law the state can’t borrow any more money from itself.

Sebelius and Democrats disagree and accuse the GOP of playing politics with people’s paychecks.

“Through their refusal to act today, the Republican legislative leadership is jeopardizing our citizens’ pocketbooks for no other reason than to play political games — games in which the only ones set to lose are Kansas families, workers and schools,” Sebelius said in a written statement.

Replied House Speaker Mike O’Neal: “While we all can agree that these are trying times for Kansas families, seniors and business owners, the Kansas House of Representatives respectfully disagrees with breaking the law in order to gain political capital.”

Notice the Governor and Democrats come back – the GOP is “playing politics with people’s paychecks”. But what is the Governor trying to “play” with:

The Governor is asking the Legislature to be complicit in breaking the law by approving certificates of indebtedness outside of the parameters set in statute. Kansas law requires the Director of the Budget to certify that money will be present at the end of the year to pay off certificates of indebtedness, and there is no evidence that will be the case. There is no reason to believe that under the current budget such money will be available. It is irresponsible and illegal to act as if the money will be available when all economic indicators show that we may see even less.

So, in fact, it appears that the GOP isn’t “playing” with anything to include the law, while the Governor wants to waive it so she doesn’t have to face the music and make the cuts necessary to bring the budget of Kansas back into balance.

Given that, which then is the “reality based” group in Kansas? And, after adapting to the new reality, to include the pain it will bring, do you think Kansas will be on the road to recovery faster than some state where pain avoidance is being practiced? Last, but not least – want to bet Governor Sebelius delays signing the bill which would require such cuts hoping the “stimulus” bill to be signed today by Obama will rescue her and help keep her from having to make that difficult decision (and avoid the pain)?

Pain avoidance for political purposes or rule of law?  Screw the law, opt for pain avoidance, even if illegal.

That’s exactly the type person I want as my governor.  [/sarc]

~McQ

Can Someone Explain This To Me?

Supposedly, this video explains what took place behind closed doors with Hank Paulson and members of Congress to include Rep Kanjorski which caused them to throw $700 billion at Paulson.


At 2 minutes, 20 seconds into this C-Span video clip, Rep. Paul Kanjorski of Pennsylvania explains how the Federal Reserve told Congress members about a “tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars.” According to Kanjorski, this electronic transfer occurred over the period of an hour or two.

Has anyone heard this story previously?  If so, has there been any explanation of the “tremendous draw-down” offered?

If true, this seems like it may have been something other than a “bubble” which precipitated this crisis. I’m not normally a conspiracy buff, but this seems more than a little odd.

~McQ