Free Markets, Free People

Michael Wade

Dealergate and Statistics

Yet another statistical analysis of the Chrysler dealership closings has been conducted, although this one appears to be both much more thorough (albeit preliminary) and concentrated on the correct data (my emphasis):

To start with, we pulled raw donor data from The Center for Responsive Politics / OpenSecrets.org for the 2008 election cycle and extracted ~865 megabytes of 2008 individual contribution (“IC”) cycle table entries.

[...]

… this particular output is the widest available dataset on contributions. We matched this data against two Chrysler dealer lists:

First, Docket #797 “Document #3″ “Schedule of Designated Domestic Dealer Agreements and Cure Costs Related Thereto” (a list of dealers expected to survive).

Second, the famous “Exhibit A” document of dealers to be closed.

[...]

We ran binary logistic regressions across the variables. The results are interesting but the most dramatic was saved dealers v. donations by candidate and/or party.

The results of the analysis suggest that donors to Hillary Clinton in the recent presidential race received some preferential treatment. That does not mean that anyone has proven anything, nor that the statistical analysis makes any sort of unassailable case. It merely raises a concern that, given the probabilities, Clinton donors appear to have survived the dealership closings surprisingly well.

This puzzled us. Why would there be an significant noticeable (we have rightly been called out for using significant here) and highly positive correlation between dealer survival and Clinton donors? Granted, that P-Value (0.125) isn’t enough to reject the null hypothesis at 95% confidence intervals (our null hypothesis being that the effect is due to random chance), but a 12.5% chance of a Type I error in rejecting a null hypothesis (false rejection of a true hypothesis) is at least eyebrow raising. Most statistians would not call this a “find” as 95% confidence intervals are the gold standard for this sort of work. Nevertheless, it seems clear that something is going on here. Specifically, the somewhat low probability that the Clinton data showing higher survivability of Clinton donors could result just from pure chance. But why not better significance with any of the other variables? Why this stand out?

Then we got to thinking. Steven Rattner, the Car Czar, is married to Maureen White, one-time national finance chairman of the Democratic National Committee. What does Maureen do now? From her website:

Maureen White is currently Chairman of the Board of Overseers of The International Rescue Committee (IRC), a member of the North American Advisory Board for the London School of Economics, and a National Finance Chair of the Hillary Clinton for President Campaign. (emphasis ours)

That website looks dated, but you get the idea.

Again, we want to point out that our findings are preliminary and subject to change. But whatever the result, the Administration has made themselves very vulnerable by taking charge of the dealership closing decisions.

I’m still not sure if there’s anything to the allegations, but there seems to be more than enough anomalies to warrant some questions being asked of the Obama administration. It should be noted that the theory regarding potential shenanigans has morphed from Obama creating a Republican hit list with the closings, to Obama benefiting Democrat donors by allowing their dealerships to survive (and thrive), to Obama’s “Car Czar” rewarding donors to his wife’s favorite political candidate (Hillary Clinton). When the theory moves that much, often it’s a sign that one is fishing for a villain. And despite the evidence amassed in this case showing that an unusual number of Democrat donors are set to prosper from the closing decisions, that may be the case here.

However this all turns out, one thing is certain: by involving itself so deeply in the fate of Chrysler (and GM), the Obama administration invited scrutiny concerning its decision-making processes. Furthermore, in being so opaque about how the government is picking winners and losers (not to mention that it is making these decisions at all), the Obama administration has left itself open to attacks of favoritism. That has nothing to do with Obama or partisanship in particular, but with the fact that unaccountable power rightfully raises fears and suspicions of favoritism. If Chrysler had been left to fend for itself in bankruptcy, none of these questions would have been raised.

The government arrogated to itself tremendous amounts of power over what would normally be private business decisions. In the process, the Obama administration blatantly used its power and influence to reward a favored constituent group (the UAW). Now that statistical evidence suggests more favoritism may have been in play, it’s a little late to cry “conspiracy theory.” Instead, the Obama administration should start opening the books and answering questions.

“Dealergate”: Things To Keep In Mind

Whether or not the decisions to close certain Chrysler dealerships was political motivated is still an open question, and based mostly on anecdotal evidence as well as an incomplete analysis data. Regardless, the evidence available thusfar, when viewed in light of the Obama administration’s previously demonstrated willingness to meddle for partisan gain (UAW anyone?), suggests that in the very least more investigation is warranted.

As the investigation unfolds (the yeoman’s work of which is being done by Doug Ross and Joey Smith), there are couple of things to keep in mind. Although many people have referred to the closing list of dealerships as a “hit list” it makes much more sense to concentrate on the dealerships remaining open and regarding it as a potential “friends Obama supports” list. By way of example, the evidence unearthed by Joey Smith regarding the RLJ-McLarty-Landers enterprise reveals that big time Democrat donors and partisans are reaping enormous benefits from the Chrysler plan in the form of all its competition being wiped out. So who owns this luckiest of dealerships?:

In my analysis of the Chrysler dealers that will remain open, I came across one dealer group that stood out to me.
The company is called RLJ-McLarty-Landers, and it operates six Chrysler dealerships throughout the South. All six dealerships are safe from closing.

[...]

The interesting part is who the three main owners of the company are. The owners are Steve Landers (long-time car dealer, 4th-generation dealer), Thomas “Mack” McLarty (former Chief of Staff for President Clinton), and Robert Johnson (founder of Black Entertainment Television and co-owner of the NBA’s Charlotte Bobcats). Landers has given money to Republicans in the past, but McLarty campaigned for Obama in 2008, and Johnson has given countless amounts of money to Democrats over the years.

Smith has found a similar fortune for Lithia Motors, whose CEO Sidney Deboer is a Democratic donor (although he’s also given to Republicans) and has come out publicly in favor of the Obama administration.

Of course, all of this is still anecdotal, but the planned closings look awfully fishy when the list of canceled dealerships is so totally dominated by Republican donors, and the list of survivors features prominent Democrat supporters.

Regardless of the above, Nate Silver has provided the excuse for Obama supporters to safely ignore this story by declaring the percentage of Republican car dealers to be so high in comparison to Democrats, that there should be little to no surprise when the closing list is so chock full of GOP partisans:

There is just one problem with this theory. Nobody has bothered to look up data for the control group: the list of dealerships which aren’t being closed. It turns out that all car dealers are, in fact, overwhelmingly more likely to donate to Republicans than to Democrats — not just those who are having their doors closed.

[...]

Overall, 88 percent of the contributions from car dealers went to Republican candidates and just 12 percent to Democratic candidates. By comparison, the list of dealers on Doug Ross’s list (which I haven’t vetted, but I assume is fine) gave 92 percent of their money to Republicans — not really a significant difference.

There’s no conspiracy here, folks — just some bad math.

Despite what Silver asserts (i.e. that the control group of non-closing dealerships should be examined), he does no such thing. Instead, he researches the Huffington Post’s Fundrace database for donations from car dealers to arrive at his decision that such occupation gives to the GOP at the tune of 8-1. However, Open Secrets arrives at a much different conclusion, especially over the long term, in which dealers only gave to the GOP at approximately a 3.5-1 clip. At those numbers, one would expect to find somewhere around a quarter of the closings to affect Democrat donors, instead of the 2.36% found thus far:

In fact, I have thus far found only a single Obama donor ($200 from Jeffrey Hunter of Waco, Texas) on the closing list.

Another review of all 789 closing dealerships, by WND, found $450,000 donated to GOP presidential candidates; $7,970 to Sen. Hillary Clinton; $2,200 to John Edwards and $450 to Barack Obama.

Of course, it’s important to remember that statistics do not prove the existence of anything, just its likelihood of existing. Nevertheless, the details uncovered so far suggest that partisanship may have indeed played a role in deciding which franchises remained open.

Juxtaposition

Compare and contrast this rehabilitation effort of Timothy Geitner:

After his hellish opening weeks, Treasury Secretary Timothy Geithner started inviting White House economic officials across the street to his conference room for hours-long working dinners that have helped get — and keep — the whole team on the same page.

[...]

Geithner, a former president of the New York Federal Reserve who once looked like he was floundering in one of the administration’s most scrutinized jobs, is emerging in a new position of strength with the media and the markets, just as he launches President Barack Obama’s high-stakes effort to re-regulate the nation’s financial markets.

[...]

The secretary’s advisers acknowledge that his newfound political standing is tied, in part, to the state of the economy, which is now showing early signs of improvement. But Treasury officials also have updated their playbook after his Feb. 10 speech on financial recovery, which was panned by the press and blamed for a 381-point slide in the stock market.

They decided to “let Tim be Tim” and accepted the fact that his strength wasn’t giving a speech in front of a bunch of flags. Rather, they let reporters see him in off-camera, pen-and-pad settings, where he fielded questions with the confidence that his staff saw behind the scenes. He aced an interview with PBS’s Charlie Rose, thriving in a relaxed setting where he could explain issues at length.

… with this bit of economic reality:

China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed’s direct purchase of US Treasury bonds.

Richard Fisher, president of the Dallas Federal Reserve Bank, said: “Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature.”

“I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States,” he told the Wall Street Journal.

[...]

The Oxford-educated Mr Fisher, an outspoken free-marketer and believer in the Schumpeterian process of “creative destruction”, has been running a fervent campaign to alert Americans to the “very big hole” in unfunded pension and health-care liabilities built up by a careless political class over the years.

“We at the Dallas Fed believe the total is over $99 trillion,” he said in February.

“This situation is of your own creation. When you berate your representatives or senators or presidents for the mess we are in, you are really berating yourself. You elect them,” he said.

His warning comes amid growing fears that America could lose its AAA sovereign rating.

I guess since the media tried to talk down the economy for the previous eight years, they may as well try and talk it up now that their boy is in the White House. The shame of it is that as the economy worsens, a lot of people are going to be shocked.

Media Matters Takes On Sotomayor Quote

Water is wet, the sky is blue, and Media Matters tortures facts and logic to arrive at the conclusion that Sotomayor is being unfairly treated with respect to a prior statement:

Better than a white man?

Better than a white man?

“… I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.”

According to Media Matters, FoxNews babe Megyn Kelly and renowned ABC correspondent Jan Crawford Greenberg misrepresented the above remark and skewed Sotomayor’s true meaning:

Fox News host Megyn Kelly and ABC correspondent Jan Crawford Greenburg misrepresented a remark that Judge Sonia Sotomayor, President Obama’s nominee to the Supreme Court, made in a speech delivered at the University of California, Berkeley, School of Law, claiming that she suggested, in Kelly’s words, “that Latina judges are obviously better than white male judges.” In fact, when Sotomayor asserted, “I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life,” she was specifically discussing the importance of judicial diversity in determining race and sex discrimination cases.

Oh, so it’s okay if Sotomayor thinks that her race and gender make her a superior judge in certain cases. Obviously Kelly and Greenberg were horribly unfair then in accusing the SCOTUS nominee of thinking that in every case, since it’s perfectly justified to be a little bit racist and/or sexist … in some cases … sometimes.

As Media Matters for America has noted, former Bush Justice Department lawyer John Yoo has similarly stressed that Supreme Court Justice Clarence Thomas “is a black man with a much greater range of personal experience than most of the upper-class liberals who take potshots at him” and argued that Thomas’ work on the court has been influenced by his understanding of the less fortunate acquired through personal experience.

Well that really nails the coffin shut, doesn’t it? Media Matters goes to the man whom they were vilifying just two weeks ago as the arbiter of what sorts of statements concerning a judge’s race and gender are acceptable. Of course, in making the comparison between Yoo’s statement and Sotomayor’s, they miss a couple of critical points:

(1) In direct contrast to Sotomator’s statement, Yoo never claimed that Clarence Thomas’ experience made him a better judge than anyone else. Instead he merely pointed out that Thomas’ experience aids in his judicial decision-making, just as those who often attack him claim they want from diversity on the bench, and that comparatively, Thomas is in a much better position to understand the plight of the less fortunate than a bunch of upper-class liberals.

(2) Sotomayor was speaking for herself, while Yoo was speaking abouts someone else.

Furthermore, going back to first, misguided point, the claim that Sotomayor was speaking only about sex and discrimination cases is more than a stretch. In fact, she was directly countering a statement attributed to Sandra Day O’Connor, and not at all limiting her refutation of that sentiment to particular cases (my emphasis):

Whether born from experience or inherent physiological or cultural differences, a possibility I abhor less or discount less than my colleague Judge Cedarbaum, our gender and national origins may and will make a difference in our judging. Justice O’Connor has often been cited as saying that a wise old man and wise old woman will reach the same conclusion in deciding cases. I am not so sure Justice O’Connor is the author of that line since Professor Resnik attributes that line to Supreme Court Justice Coyle. I am also not so sure that I agree with the statement. First, as Professor Martha Minnow has noted, there can never be a universal definition of wise. Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.

While it’s true that Sotomayor is addressing sex and discrimnation cases overall, it’s clear that, in this passage, she is listing the reasons that she thinks the O’Connor (Coyle?) platitude is mistaken in general, not just in specific circumstances. Accordingly, Kelly and Greenberg get it exactly right, and Media Matters proves, yet again, that they no more than a propaganda outfit.

RNC “Fumbles” Sotomayor Talking Points?

According to The Hill’s Blog, the Republican National Committee has already screwed up their opposition to Sonia Sotomayor’s nomination:

Whoops. The Republican National Committee (RNC) has apparently inadvertently released its list of talking points on the nomination of Judge Sonia Sotomayor to the Supreme Court.

Included on the released list were a few hundred influential Republicans who were the intended recipients of the talking points. Unfortunately for the RNC, so were members of the media.

Yikes! Sounds bad doesn’t it? There must be some mention of Sotomayor being an “especially dangerous” candidate because of her Hispanic ethnicity or something. Well, let’s have a look-see:

o President Obama’s nomination of Judge Sonia Sotomayor to the Supreme Court is an important decision that will have an impact on the United States long after his administration.

o Republicans are committed to a fair confirmation process and will reserve judgment until more is known about Judge Sotomayor’s legal views, judicial record and qualifications.

o Until we have a full view of the facts and comprehensive understanding of Judge Sotomayor’s record, Republicans will avoid partisanship and knee-jerk judgments – which is in stark contrast to how the Democrats responded to the Judge Roberts and Alito nominations.

o To be clear, Republicans do not view this nomination without concern. Judge Sotomayor has received praise and high ratings from liberal special interest groups. Judge Sotomayor has also said that policy is made on the U.S. Court of Appeals.

o Republicans believe that the confirmation process is the most responsible way to learn more about her views on a number of important issues.

o The confirmation process will help Republicans, and all Americans, understand more about judge Sotomayor’s thoughts on the importance of the Supreme Court’s fidelity to the Constitution and the rule of law.

o Republicans are the minority party, but our belief that judges should interpret rather than make law is shared by a majority of Americans.

o Republicans look forward to learning more about Judge Sotomayor’s legal views and to determining whether her views reflect the values of mainstream America.

Wow. That’s devastating. Republicans want a “fair confirmation process” devoid of “knee-jerk judgments” so that they can take the time to study Sotomayor’s record. Actually that sounds about right. Maybe this is one of those communiques that require a special liberal decoder ring to reveal the “code words” and their obviously racists message.

Pressing on with points about Obama’s motivations in picking a nominee:

o Liberal ideology, not legal qualification, is likely to guide the president’s choice of judicial nominees.

o Obama has said his criterion for nominating judges would be their “heart” and “empathy.”

o Obama said he believes Supreme Court justices should understand the Court’s role “to protect people who may be vulnerable in the political process.”

o Obama has declared: “We need somebody who’s got the heart, the empathy, to recognize what it’s like to be a young teenage mom, the empathy to understand what it’s like to be poor or African-American or gay or disabled or old-and that’s the criterion by which I’ll be selecting my judges.”

For sure, quoting the President in your talking points is a sneaky way to get around the racist message that must be lurking in there … I sure could use that decoder ring.

Further points:

o Justice Souter’s retirement could move the Court to the left and provide a critical fifth vote for:

o Further eroding the rights of the unborn and property owners;

o Imposing a federal constitutional right to same-sex marriage;

o Stripping “under God” out of the Pledge of Allegiance and completely secularizing the public square;

o Abolishing the death penalty;

o Judicial micromanagement of the government’s war powers.

Ummm … so that’s it? Talking points that reiterate what the GOP has been saying for years? I’m missing where the RNC “fumbled” anything. Instead, it looks like The Hill got pwned.

Closing Dealerships Via Barack-Foolery?

I watched this story percolate throughout the day, wondering if there was anything of substance to it. Even now I’m not entirely sure how much is pure speculation and how much can be decisively proven. If any of it turns out to be true, however, then the repercussions could prove politically fatal. Doug Ross has the scoop:

A tipster alerted me to an interesting assertion. A cursory review by that person showed that many of the Chrysler dealers on the closing list were heavy Republican donors.

To quickly review the situation, I took all dealer owners whose names appeared more than once in the list. And, of those who contributed to political campaigns, every single one had donated almost exclusively to GOP candidates. While this isn’t an exhaustive review, it does have some ominous implications if it can be verified.

However, I also found additional research online at Scribd (author unknown), which also appears to point to a highly partisan decision-making process.

[...]

I have thus far found only a single Obama donor (and a minor one at that: $200 from Jeffrey Hunter of Waco, Texas) on the closing list.

Chrysler claimed that its formula for determining whether a dealership should close or not included “sales volume, customer service scores, local market share and average household income in the immediate area.”

In fact, there may have been other criteria involved: politics may have played a part. If this data can be validated, it would appear to be further proof that the Obama administration is willing to step over any line to advance its agenda.

Doug notes some anecdotal evidence to back up his theory, and reading through the various personal accounts from dealerships who claim to be successful, and yet who are being shut down, lends some credibility to the idea. As does the fact that the closing list is reportedly populated almost exclusively with Republican donors and/or those who gave money to Obama’s Democratic rivals. But the real test is in a comparison of the lists of dealerships staying open and those that are closing against a campaign donor database (which I haven’t done, but feel free to scrutinize them for yourself).

Nevertheless, the following bit of research from Red State strikes an ominous chord:

Eric Dondero recognizes some of the dealers’ names on the hit list:

“Vern Buchanan is a Republican Congressman from the Tampa Bay area. Robert Archer is the son of former Republican Congressman Bill Archer. John Culberson, a libertarian-leaning Conservative, is now the Congressman for that West Houston District. He was heavily supported in his election efforts by the Archers Family.”

“Additionally, James Crowley, owner of a Chrysler Dealership in Escondido, California is on the list to be closed. Crowley is a big backer of libertarian-leaning Republican Cong. John Campbell of Orange County.”

The list is heavy with influential Republicans and libertarians. Another name on the list is Ray Huffines, who owns a large dealerhsip in the Metro-Dallas/Ft. Worth area. The Huffines family have been major contributors to Rep. Ron Paul (R-TX) over the years.

It’s hard to know what to make of all this, but at first blush it certainly looks like the decisions to close dealerships may have been influenced by the political affiliations of the dealers. Under regular circumstances that would elicit a big shrug, but when Chrysler’s decisions are basically being made for them, well, that’s a whole ‘nother kettle of fish (via Reliapundit):

A lawyer for Chrysler dealers facing closure as part of the automaker’s bankruptcy reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.

“It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers,” Bellavia said. “It really wasn’t Chrysler’s decision. They are under enormous pressure from the President’s automotive task force.”

Given the other sorts of thuggery that have been alleged in these Chrysler proceedings, this should come as no shock. But the fact that these closings will have to be approved by the creditors in the bankruptcy case lends a certain bit of intrigue to this case and raises a lot questions in my mind.

Assuming that the closings are motivated by political payback from Obama, how will that plan affect the stakeholders in the new company? If there really are profitable dealerships being shutdown just because they gave money to the wrong candidates, then it stands to reason that the remaining dealers will be something less than the cream of the crop, and therefore the new Chrysler will have a less than optimal distribution chain for its products. It’s not entirely clear why shutting down dealerships helps Chrysler anyway, since they are essentially the real customers of the carmaker, but it seems to me that those who plan to profit from the new venture would have something to say about the plan in the bankruptcy case. Presumably, they will want to protect their investment by challenging any plan for closings that does not maximize their return. If and when they do, it could get very interesting for Obama (again, assuming that any of this is true).

It should be noted that until some further confirmation surfaces, this story should be treated with a healthy dose of skepticism. Indeed, if it weren’t for the rather dictatorial way the Obama administration has dealt with the entire automaker bailout fiasco, these allegations of political payback would ring pretty hollow. Yet, considering the past bullying, the story definitely merits further consideration, so keep your eyes and ears open for more.

Sotomayor Nominated to SCOTUS

As a surprise to almost no one, Obama went with the candidate who fills the most quotas for his first Supreme Court pick. Since I’ve already covered what sort of Justice I think she’d be, I’ll just note that I think Obama picked the least qualified and most political of the three top contenders (Kagan and Wood being the others). Other than that, I don’t think her nomination will make much difference in the grand scheme of things.

Ilya Somin arrives at basically the same conclusion, and along the way takes special exception a particular statement from Sotomayor (my emphasis):

I am not yet sure what position to take on President Obama’s selection of Sonia Sotomayor. My general sense is that she is very liberal, and thus likely to take what I consider to be mistaken positions on many major constitutional law issues. I am also not favorably impressed with her notorious statement that “a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.” Not only is it objectionable in and of itself, it also suggests that Sotomayor is a committed believer in the identity politics school of left-wing thought. Worse, it implies that she believes that it is legitimate for judges to base decisions in part on their ethnic or racial origins.

Expect to see that quote get much airtime as Republicans seek some ground from which to undermine Sotomayor’s nomination.

As for whether or not the Republicans should go to the mat on this, it seems to me like a bad idea. I think there are certainly some troubling aspects to Sotomator’s candidacy (such as her quote above), but there is also almost zero possibility that she will not be confirmed. With 59 Democrats in the Senate, there is also little hope of fillibustering the nomination. Accordingly, if Republicans choose this particular hill to die upon, they spend political capital for no gain, and risk losing the ability to generate opposition to any subsequent nominees who may have more substantive influence on the direction of the Court (e.g. a replacement for Kennedy or Scalia).

Since it appears that taking on Sotomayor’s nomination is rife with bad consequences for the GOP, I think it is a very safe bet that they will pull out all the stops in order to oppose her. This will prove once again that, sometimes, it takes great effort to earn minority party status. In that endeavor, expect the Republicans to leave no stone unturned.

Newspeak Update: Spending Cuts = Dictatorship

Bizarro world continues unabated. The logic behind this assertion is … uh, “subtle” to say the least (my emphasis):

First, on “constitutional dictatorship,” there is, somewhat surprisingly, Minnesota, where Gov. Tim Pawlenty, a favorite of the Repblican right wing (assuming there is anything else than a right wing in the GOP these days) is apparently going to use all of his powers under the Minnesota have exercised such powers, but Pawlenty’s exercise in unilateral government seems to be of a different magnitude. Perhaps we should view Minnesota as having the equivalent of a Weimar Constitution Article 48, the “emergency powers clause” that allowed the president to govern by fiat. Throughout the 1920s, it was invoked more than 200 times to respond to the economic crisis. Pawlenty is sounding the same theme, as he prepares to slash spending on all sorts of public services. The fact that this will increase his attractiveness to the Republican Right, for the 2012 presidential race that has already begun, is, of course, an added benefit, since one doubts that he is banking on a political future within Minnesota itself (which didn’t give him a majority at the last election; he was elected, as was Gov. Rick Perry of Texas, only because of the presence of third-party candidates). One might also look forward to whether he will refuse to certify Al Franken’s election to the Senate even after the Minnesota Supreme Court, like all other Minnesota courts, says that he has won. Whoever thought that Minnesota would be the leading example of a 21st-century version of “constitutional dictatorship” among the American states?

I don’t know who Sandy Levin, the author of the above screed, is but I have to believe he has become lost in his own rhetoric. We are honestly being asked to accept the premise that a Governor, using his constitutionally-approved and legislature-granted powers, is somehow a “dictator” for … slashing spending in a time of budget shortfalls?

Gov. Tim Pawlenty promised Thursday to bring Minnesota’s deficit-ridden budget back into balance on his own if the session ends Monday without an accord, using line-item vetoes and executive powers to shave billions in spending.

[...]

Pawlenty held out the possibility of a negotiated agreement, but said he was prepared to use vetoes, payment suspensions and so-called unallotment to cut the two-year budget to $31 billion. That’s about $3 billion smaller than the slate of spending bills sent to him.

The move infuriated Democrats who run the Legislature. House Speaker Margaret Anderson Kelliher of Minneapolis dubbed Pawlenty “Governor Go It Alone.” Pawlenty shot back that without the step Kelliher would be “Speaker Special Session.”

“There will be no public hearings. There will be no public input. There will just be a governor alone with unelected people whispering in his ear of what to cut and what not to cut,” Kelliher said, calling it “bullying.”

Apparently this is exactly what Levinson and the Minnesota left want us to believe — i.e. that using duly constituted powers is the equivalent of behaving as a dictator. How utterly ridiculous.

If this were a situation where the governor was unilaterally deciding to burden the taxpayers more, or he was singling out a particular group of people to bear the brunt of arbitrary government rules, I could see where the dissenters here would have a point. If the executive branch suddenly declared, without any legislative input, that English was the official language of Minn. and no other languages would be recognized anywhere in the state upon penalty of law, then, legally granted powers or not, I would understand and support Levinson et al.

Instead, the perfectly preposterous idea that balancing a state budget, using the very powers granted the governor to accomplish the task, is now deemed the equivalent of the Weimar Republic emergency powers (you know, the ones that allowed Hitler to declare himself supreme dictator over Germany).

To be sure, the focus of this vitriolic (and, I’d say, hysterical) attack on Pawlenty stems from his threatened use of “unallotment” powers:

The procedure exists under state statute, and “the first prerequisite to unallotment is that the Commissioner of Finance ‘determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed.”

Then the ball is in the governor’s court:

“After the Commissioner of Finance determines that the amount available for the biennium is less than needed, the governor must approve the commissioner’s actions before the commissioner can either reduce the amount in the budget reserve or reduce allotments.”

The Legislature is consulted but does not have any power or ultimate say in the governor’s actions. The process starts at the beginning of the next fiscal biennium, which means that Pawlenty won’t enact anything until July 1. And what he’ll do is anyone’s guess.

“Depending on what he does with line-item vetoes, I figure we’ll see anywhere from a half a billion to $2 billion in unallotments,” Schultz said. “It’s unprecedented in dollar amount and in willingness to use it.”

Is it good policy or politics?

Schultz points out that unallotment is on the books for “emergency conditions” in which “the Legislature can’t do its job,” such as a budget forecast that comes out when lawmakers aren’t in session.

But in Schultz’s opinion, Pawlenty is “creating the emergency conditions that allow him to use it.”

“He appears to not want to negotiate in good faith,” Schultz offered. “Working with the Legislature is supposed to be a cooperative venture, not a take-it-or-leave-it one.”

The problem, of course, is that the legislature keeps sending a bill that proposes more spending than Minnesota’s revenues will allow. Because the governor and the legislature can’t agree on identifying new revenue sources (e.g. Leg. wants to tax the rich, Gov. wants to borrow against tobacco settlement), then the two sides are at an impasse. Despite what some might say, a proposed $3 billion deficit with no budget alternative in place does represent a fiscal emergency. After all, the money has to come from somewhere, or the services (giveaways, or whatever) will have to be cut, and the government may be forced to shut down. Why that doesn’t represent a fiscal emergency of the very type contemplated by the unallotment statute remains a bit of mystery for us less hysterical folks.

Jumping out the weeds, and regardless of how one might view the necessity of spending more or less via the Minnesota budget, I am simply flabbergasted that anyone could possibly suggest that forcing the government to spend less is in anyway, shape or form equivalent to dictatorship. To accept such premise is accept the idea that government spending is the sole source of freedom. I categorically reject any such notion. And if dictatorship is to be defined as standing in firm opposition to it, then sign me up.

Podcast for 10 May 09

In this podcast, Michael, and Dale discuss the county’s failing energy and economic policies.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Car Czar Thuggery (Updated)

rattner

Steven Rattner, the Obama administration’s “Car Czar,” was recently accused of acting, well, rather czar-ishly by White & Case attorney Tom Lauria. Those accusations were later corroborated by others privy to the meetings. Now comes a rather disturbing (and presently unsubstantiated) account of exactly what was said1:

Confronting the head of a non-TARP fund holding Chrysler debt and unwilling to release it for any sum less than that to which it was legally entitled without compelling cause, this country’s “Car Czar” berated the manager of said fund with an outburst of prose substantially resembling this:

Who the f*** do you think you’re dealing with? We’ll have the IRS audit your fund. Every one of your employees. Your investors. Then we will have the Securities and Exchange Commission rip through your books looking for anything and everything and nothing we find to destroy you with.

Faced with these sorts of threats, in this environment, with valued employees in the crosshairs and AIG a fresh, open wound upon the market, the fund folded.

Keep in mind that the non-TARP creditors in the bankruptcy have been forced to lump their fates in with the TARP recipients (emphasis added):

As of last night’s deadline, we were part of a group of approximately 20 relatively small organizations; we represent many of the country’s teachers unions, major pension and retirement plans and school endowments who have invested through us in senior secured loans to Chrysler. Combined, these loans total about $1 billion. None of us have taken a dime in TARP money.

As much as anyone, we want to see Chrysler emerge from its current situation as a viable American company, and we are committed to doing what we can to help. Indeed, we have made significant concessions toward this end — although we have been systematically precluded from engaging in direct discussions or negotiations with the government; instead, we have been forced to communicate through an obviously conflicted intermediary: a group of banks that have received billions of TARP funds.

Rattner’s alleged threats should give everyone some pause. Is it really the case that private companies will be forced to do the President’s bidding or face the full brunt of the state’s police power? Because that’s exactly what’s being alleged. I share the concern of the reporter of Rattner’s comments in that I certainly hope the accusations are inaccurate/misstated/outrageously untrue.

It is my deepest wish at this point that there is nothing about this latest bit of Car Czar thuggery even remotely based in fact- as this would mean that this country has truly and unarguably descended into fascism.

I use this term, “fascism,” quite deliberately. I also use it well aware that many will consider it needlessly inflammatory. Be this as it may, I submit there is simply no other term that properly describes the style and tenor of government emerging both in public and behind once closed doors.

The corporatist model — i.e. where unelected government officials and industry “leaders” fashion economic policy for the benefit of the state as whole, and in complete disregard of, and often quite hostile to, individual liberty — has never died, and is used more often than you might think (e.g. in the creation of energy policy, environmental policy, financial market rules, etc.), albeit in less radical form. That does not mean that Jews or any other disfavored groups will be marched off to concentration camps (opponents of gay marriage not named “Barack” can be forgiven for thinking otherwise). But it does mean that the preconditions necessary to ease the way for totalitarian control are already present. If enough people buy the “myth” presented by those in charge, then more and more power will eventually be ceded to a central authority, who will then have the ability to steamroll any opponents to the collective will. The accusations presented above suggest that Rattner (and one has to presume Pres. Obama), believes that enough Americans have bought the myth as to allow for such bullying. If so, that is a truly disturbing thought to contemplate.

UPDATE: In an article at the WSJ essentially chiding the MSM for failing to dig into this story, Tom Blumer notes the following (my emphasis):

The New York Times, in a report by Michael J. de la Merced and Jonathan D. Glater, does note the threats and Gonzales’s ruling, and has the following at its second-last paragraph.

When the debtholders, calling themselves the Committee of Non-TARP Lenders, made their first public statement last Thursday, they said their group consisted of about 20 investment firms holding about $1 billion. According to their motion to file under seal, the group now claims about $300 million in holdings.

de la Merced and Glater were apparently not curious about the possible reasons why the amount involved, and presumably the number of holders, is significantly lower than it was just a few days ago.

Maybe it’s because the threats are real, guys.

Maybe.

________________________________
1 Edited to make SFW.