-- F.A. Hayak
Saturday, March 28, 2009
Friday, March 27, 2009
"I will not be initiating investigations through press releases, nor will I treat all corporate executive expenditures as presumptively wrongful. Wisconsin law certainly does not. Financial institutions (and other businesses) on the verge of insolvency are ill-advised to make unnecessary expenditures, whether to executives or otherwise. At the same time, contractual obligations are generally to be fulfilled, work should earn compensation, and there is no law in Wisconsin making a contract illegal simply because someone is well compensated. Absent specific information indicating a transaction is fraudulent as opposed to foolish, I will not use my office to threaten litigation in an attempt to micromanage Wisconsin's businesses. Corporate governance is generally a matter for shareholders, not public officeholders."
Thursday, March 26, 2009
Copied, in whole, from the irrepressible Iowahawk
(With apologies to Rod Serling)
A stark dressing room in the underbelly of the White House, bathed in the dim yellow light of a 25-watt compact fluorescent bulb. The dingy walls are plastered with Shepard Fairey "HOPE" posters. Off stage is heard the cringing, muffled gasps of a stunned arena audience. Suddenly the door bursts open and enters BARACK "BAM BAM" OBAMA, former champion, unconscious on a stretcher carried by his handlers -- cut man TWINKLETOES EMANUEL, manager PAPPY AXELROD, SPITBUCKET BEGALA and SPINDOC GREENBURG. His nose is bleeding profusely, his eyes nearly swollen shut, and his forehead is embossed with a reverse "BRUNSWICK" from an errant bowling ball. They are trailed into the room by a pack of concerned sportswriters as they place the stretcher on a stark table.
TWINKLETOES EMANUEL: Alright, alright! Give 'em some air, you mugs!
PAPPY AXELROD: Can you hear me, Champ?
BAM BAM: We would save enough money... uhh... we would... money save... the ones we are looking for...
PAPPY AXELROD (gently slapping Bam Bam's face): Champ, Champ! Look at me! How many teleprompters am I holding up?
BAM BAM (giggling): Special Olympics... Heckuva job Timmy...
TWINKLETOES EMANUEL: Somebody get me the stimulus salts!
Twinkletoes opens a wallet under Bam Bam's nose and he groggily regains consciousness
BAM BAM: Whuh... huh... whuhappened?
RED KRUGMAN: Yeah, dat's what we wanna know! What happened to the kid's uppercut? C'mon, Pappy, we got a deadline for the morning edition!
BAM BAM: How... duuh... did I do?
SPITBUCKET BEGALA: T.K.O., 13 seconds in the first round. Lucky shot. You'll get 'em next time champ!
SCOOP KROFT: Champ, champ! Scoop Kroft, Columbia Broadcasting System. Are you punch-drunk?
BAM BAM: heh... hehheh... wheeee!
TWINKLETOES EMANUEL: Put down da notepad, Kroft! You an' da rest of you scribes! Let the kid come to. Give 'em a chance to clear out da cobwebs.
PAPPY AXELROD: C'mon kid, shake it off. What's the last thing you remember?
BAM BAM: I... uh... remember getting, uh, fit with the new, uh, silk robe... then the, uh, Ring Magazine cover shoot... duhrrr... I remember people cheering... after that it's kinda uh, all fuzzy like...
PAPPY AXELROD: You were doing great, champ! You were magnificent in the walk-in. Magnificent! You shoulda seen the crowd go wild, all the way up until you stepped through da ropes.
RED KRUGMAN: That was one helluva tumble you took there, kid! Are you still feeling that concussion?
BAM BAM: Is dat where I got dese rope burns?
SPINDOC GREENBURG (examining Bam Bam's face): Damn! Dis ain't no cut, it's an irrigation ditch! I ain't got enough styptic to close this thing. Somebody fetch my stitch bag and polling charts.
FRANKIE RICH: Hey, what gives, Axlerod? You told us this kid was a natural. You said he was ready for a title shot. I even said so in my column! Now there's an arena full of angry jamokes out there hollerin' for a refund!
RED KRUGMAN: Yeah, I told everybody dis was a sure thing. I put 50 bucks of my own 401k on the kid myself!
PAPPY AXELROD: Aw hell, he just had a bad week. Everybody has bad weeks. He just wasn't used to fighting without his headgear. You saw him win the Chicago Golden Gloves in '04, you all saw that unanimous decision over Johnny Arizona.
SCOOP KROFT: That old crippled tomato can? C'mon! If I didn't know better I'd say the kid took a dive tonight.
PAPPY AXELROD: Dive? C'mon you mugs, you saw it. You saw Bam Bam open up with that flurry of jabs. You saw him connect with that huge left hook haymaker!
RED KRUGMAN: Yeah. We saw it. We also saw him land it square on his own damn glass jaw. How are we supposed to make that look good? Half the dopes in this city lost their entire paychecks wagering on this stumblebum, and now they're gonna blame us newspaper boys.
TWINKLETOES EMANUEL: Okay boys, here's how you're gonna play it. Three column headline, 60 point type: "BAM BAM SCORES FIRST ROUND KAYO. ECONOMY FAILS TO LAND SINGLE BLOW. CHAMP READY FOR NEXT TITLE BOUT."
SPITBUCKET BEGALA: Yeah yeah! That's the ticket!
BAM BAM: I like tickets.
TRIXIE DOWD: C'mon Pappy, the only people drunk enough to swallow that line of malarky are the winos down in the Nutroots skid row.
BIFF OLBERMANN: Don't listen to her, champ! I still believe in you!
TRIXIE DOWD: See what I mean? If we keep printing this stuff our circulation is gonna drop below Newsweek!
TWINKLETOES EMANUEL: Let me remind you that you've got as much riding on Bam Bam as me. Do you really want to help him? Here's how you can help him. Leave him alone. Print the headlines like I told you, and let the Champ train for the next main event.
FRANKIE RICH: I dunno, Twinkletoes. He don't look so good.
TOMMY FREIDMAN: Yeah, dose are da worst pair of cauliflower ears I ever seen.
BAM BAM (singing): Don't stop! Be-leeeee-vin'!
TRIXIE DOWD: You sure he's ready to go up against Max Tehran? I heard he's kind of a scrapper.
PAPPY AXELROD: You just leave him to us. Bam Bam's got some new fancy footwork that'll make Tehran unclench his fist. Guaran-teed! Ain't that right, Champ?
BAM BAM: I extend my hand like this, right?
RED KRUGMAN: Okay Pappy, we'll hype his big comeback. But eventually the public is gonna start noticing the bookie odds. C'mon boys, let's go.
The reporters leave, morosely.
TWINKLETOES EMANUEL: Okay champ, let's not let a good disaster go to waste. Get a good night's sleep 'cause tomorrow we start training bright and early.
PAPPY AXELROD: See you at the Oprah studio gym at 5 AM.
The handlers leave.
BAM BAM: (sighs) I coulda been a contender.
Numerous studies show that when differences in training, work hours, and continuity of employment are taken into account, the pay gap all but disappears. Most economists, including liberal feminists such as Harvard's Claudia Goldin, agree that while sex discrimination exists, male-female disparities in earnings and achievement are due primarily to personal choices and priorities. Women are far more likely than men to avoid jobs with 60-hour workweeks and to scale down their careers while raising children. They are also more likely to choose less lucrative but more fulfilling jobs.
Wednesday, March 25, 2009
Monday, March 23, 2009
This requires those in the private sector to remember that government assistance is a privilege, not a right. When financial institutions come to us for direct financial assistance, our government has a responsibility to ensure these funds are deployed to expand the flow of credit to the economy, not to enrich executives or shareholders.
Sen. Elton was himself charging the state even more in per diem. Not only that, it appears that unlike Palin who was actually billing the state for legitimate expenses - Elton seems to have been abusing the process.
But many people do not realize that the stimulus money runs out in 24 months -- at which point South Carolina will be forced to find a new source of funding to sustain the new level of spending, or to make sharp cuts.
While these governors posture, Black folks suffer the most. In all of these states, Black unemployment is at least twice that of Whites--and in Louisiana and Mississippi, the two Blackest states in the Union, the unemployment rate among Black people approaches three times that of their White neighbors.
Saturday, March 21, 2009
By week's end, I was more depressed about the financial crisis than I've been since last September. Back then, the issue was the disintegration of the financial system, as the Lehman bankruptcy set off a terrible chain reaction. Now I'm worried that the political response is making the crisis worse. The Obama administration appears to have lost its grip on Congress, while the Treasury Department always seems caught off guard by bad news.
And Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.
There are times when anger is cathartic. There are other times when anger makes a bad situation worse. "We need to stop committing economic arson," Bert Ely, a banking consultant, said to me this week. That is what Congress committed: economic arson.
Mr. Nocera then proceeds to enumerate how the political reaction to our economic crisis is making things worse. You would do well to read the whole piece.
Thursday, March 19, 2009
You can read the full press release, here.
"This is a majority black district, and we think that it should have black representation," said Malcolm Suber, who is leading the recall petition. "And if it is going to be a white representative, they should be sensitive to the black community, and she is not ... She is opposed to the interests of the black community, and again I think she's a racist."
For those of you who found Dodd's explanation indecipherable, note that he explaned nothing.
Here's what actually happened. The original amendment sent to the White House as part of the overall bailout package contained language that prohibited all bonuses to firms receiving bailout money. When someone realized that this restriction abrogated thousands of contracts language was inserted that excepted contractually obligated bonuses agreed to before Feb 11, 2009.
In other words, between Dodd, Geithner, and the White House essentially all of last years bonuses were allowed. Note that Dodd and the White House are some of the loudest voices (although not nearly the stentorian levels of Barney Frank) condemning the payout of these bonuses.
Tuesday, March 17, 2009
- Mexico now has sanctions against the US for NAFTA violations
- The Colombia Free Trade Agreement is on ice.
- The EU is outraged at trade protectionist, buy-America provisions signed into law by Obama.
- Africa is despondent about the Obama budget's cuts in Bush HIV/AIDs programs.
- Darfur is worsening by the day with no US reaction (except an ICC indictment which, like the International Criminal Tribunal in Yugoslavia, in effect tells a genocidal leader that once he is done killing everybody there is going to be a lawsuit).
- Central and Eastern Europe feels sold down the river on efforts to defend against a growing nuclear and missile threat in Iran.
- The Chinese have reminded the US that they hold $1 trillion in US debt and don't much like our ships in the South China Sea or back talk on human rights, and the North Koreans are preparing a "space launch" -- over Japan.
Sunday, March 8, 2009
"...made Neville Chamberlain seem forceful. The State Department blushingly suggested that the expulsion "is certainly not helpful to the people who need aid."
This puzzles Kristof. He observes that
Obama, Biden, Clinton were all tough on Darfur when they were in the Senate and when they were running for office, so let's hope they aren't backing down now that they are in office.Isn't this rich? What exactly does Kristof mean by 'tough', unless you think strong talk is 'tough'. With the exception of Obama, Biden and Clinton, along with the other tough talkers on the left, backed off of actually getting tough with Iraq and doing something about Saddam Hussein's support for terrorism, his rape rooms, and exposing his genocidal evil for the world to see. For Kristof and his fellow travelers, talking tough is sufficient.
Hand-wringing of the sort expressed in Kristof's column is narcissistic feel-good, public emoting that amounts to little more than moral preening.
Saturday, March 7, 2009
"If you want to infuriate a conservative, tell him a lie. If you want to infuriate a liberal, tell him the truth."
The specific problems, however, far outweigh the positives. First are the quite optimistic forecasts, despite the higher taxes and government micromanagement that will harm the economy. The budget projects a much shallower recession and stronger recovery than private forecasters or the nonpartisan Congressional Budget Office are projecting. It implies a vast amount of additional spending and higher taxes, above and beyond even these record levels. For example, it calls for a down payment on universal health care, with the additional "resources" needed "TBD" (to be determined).
The Obama Justice Department has adopted a legal stance identical to, if not more aggressive than, the Bush version. It argues that the court-forced disclosure of the surveillance programs would cause "exceptional harm to national security" by exposing intelligence sources and methods.
In court documents filed hours later, Justice argues that the decision to release classified information "is committed to the discretion of the Executive Branch, and is not subject to judicial review. Moreover, the Court does not have independent power . . . to order the Government to grant counsel access to classified information when the Executive Branch has denied them such access." The brief continues that federal judges are "ill-equipped to second-guess the Executive Branch."
...the "Imperial Presidency" is only imperial when the President is a Republican. Democrats who spent years denouncing George Bush for "spying on Americans" and "illegal wiretaps" are now conspicuously silent. Yet these same liberals are going ballistic about the Bush-era legal memos released this week.
Speaking in Baltimore in November at the bishops' fall meeting, Bishop Thomas Paprocki, a Chicago auxiliary bishop, took up the issue of what to do with Catholic hospitals if FOCA became law. "It would not be sufficient to withdraw our sponsorship or to sell [the hospitals] to someone who would perform abortions," he said. "That would be a morally unacceptable cooperation in evil."
According to the CHA, Catholic hospitals make up 13 percent of the country's nearly 5,000 hospitals, and employ more than 600,000 people. CHA says one of every six Americans hospitalized in the United States is cared for in a Catholic hospital.
...that she did not believe the language in the most recent version of FOCA despite its definition of abortion as a fundamental right would force Catholic hospitals to perform abortions. But she also said that if it did, the church would look to the historical example of racial segregation as a model for civil disobedience.
"From the other side we hear consistent talk about being pro-choice," Keehan said. "If FOCA passes, the concept of being pro-choice will not be incompatible with our position our choice would be not to participate."
So why has this zombie idea it keeps being killed, but it keeps coming back taken such a powerful grip? The answer, I fear, is that officials still aren't willing to face the facts. They don't want to face up to the dire state of major financial institutions because it's very hard to rescue an essentially insolvent bank without, at least temporarily, taking it over.
Friday, March 6, 2009
In a previous post, I had some fun at the expense of several commentators, both left and right, for having publically expressed regret for supporting Obama. Some in the Obama administration took note of these changes in attitude and responded directly to David Brooks, a New York Times columnist and recent turncoat. Mr. Brooks has summarized the administration's response in his most recent column.
My view, after having read Brook's response, is that he is still drinking the Kool-Aid. The problem with the administration's rebuttal has everything to do with reality and nothing to do with hope and lofty rhetoric. For example, Brooks writes that the administration claims that its proposed budget...
...isn't some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform.
Second, they argue, the Obama administration will not usher in an era of big government. Federal spending over the last generation has been about 20 percent of G.D.P. This year, it has surged to about 27 percent. But they aim to bring spending down to 22 percent (my emphasis) of G.D.P. in a few years. And most of the increase, they insist, is caused by the aging of the population and the rise of mandatory entitlement spending. It's not caused by big increases in the welfare state.
The White House has produced a chart showing nondefense discretionary spending as a share of G.D.P. That's spending for education, welfare and all the stuff that Democrats love. Since 1985, this spending has hovered around 3.7 percent of G.D.P. This year, it's about 4.6 percent. The White House claims that it is going to reduce this spending to 3.1 percent by 2019, lower than at any time in any recent Republican administration.
I hope David Brooks does a little research. For example, I hope he learns that ...
- The tax cuts for the middle class are not necessarily tax cuts. Many are grants to people who do not pay taxes. In other words, they are transfer payments from the most productive members to the least productive members of society. One does not expand an economy and create jobs by taking from Peter and giving to Paul.
- Describing the tax increase as 'slightly above' those of the Clinton years is disingenuous. These are marginal tax rates and even slight increases in marginal rates reduce incentives, increase payroll expenses, and eliminate jobs.
- Of the many problems that contributed to the economic downturn, health-care spending was not one of them. In fact, the health care industry has been one of the brightest spots in an otherwise drifting economy.
- The administration's argument assumes that all temporary stimulus spending (e.g., higher Pell Grants, health spending, etc.,) will be allowed to expire. Congress has never, ever in its history, allowed such spending to expire. Never! On those rare occasions when congress does address an out-of-control 'temporary' expense, they reduce its growth rate. Unless you live in a blue state, you understand that this definition is at odds with 'eliminate' or 'reduce'.
- The administration's argument assumes the economy will contract only 1.2 percent this year. Baloney! The economy is already contracting at an annualized rate of over 5 percent with larger contractions expected in the last half of this year. The White House completely ignores the estimates of the Congressional Budget Office forecast of 2.2 percent decline for 2009. The administration's economic assumptions are deeply at odds with both history and reality.
- If based on faulty assumptions, the tax revenue forecasts are similarly faulty. The administration assumes receipts of $3.2 trillion in 2012 based on the faulty assumptions pointed out above.
The administration claims his budget will cut the deficit in half by 2012. This claim is absurd on its face -- One does not reduce debt by going further in debt. The administration's claims are hopeful fantasies. Those fantasies won't survive reality, and neither will this budget.
When Franklin D. Roosevelt was campaigning for reelection in 1936, his opponents began to call attention to the president's failure to keep the promises he had made while campaigning for election in 1932. Roosevelt had promised, among other things, that he would balance the budget, yet in the fiscal years 1934, 1935, and 1936, which were entirely the responsibility of his administration, he had not come close to balancing the budget.
Pressed by advisers, Roosevelt decided to go on the offensive to dispose of this point against him. In a speech in Pittsburgh on October 1, 1936, he explained:
The only way to keep the Government out of the red is to keep the people out of the red. And so we had to balance the budget of the American people before we could balance the budget of the national Government.A few days ago, while introducing the Obama administration's budget for fiscal year 2010, President Barack Obama said:
While we must add to our deficits in the short term to provide immediate relief to families and get our economy moving, it is only by restoring fiscal discipline that we can produce sustained growth and shared prosperity.Many people have been calling for a new New Deal. The Obamistas seem to have heard their plea.
Thursday, March 5, 2009
Here's how one top Wall Street exec, who has tried passing along ideas to the Obama team, put it: "Geithner thinks he's in charge, but he has no staff to get anything done. Summers sits there and likes to remind everyone he's in charge - and Volcker, probably the only adult in the room, has his nose out of joint because no one is listening to him."
While middle class Americans are invited to submit questions and ideas through the task force's website, AStrongMiddleClass.gov, tickets for the Philadelphia meeting were distributed [only] to labor and environmental groups. [Moreover] the task force did not accept questions from the audience. "If Biden and his team want to go into this [middle class issue]," said Daniel Morris, communications director of the Drum Major Institute, a think tank that analyzes middle class policy issues, "They're going to need to talk to real members of the middle class. There's no substitute for immediate intimate interaction."
WASHINGTON (AP) Education Secretary Arne Duncan said Wednesday that poor children getting vouchers to attend private schools in the District of Columbia should be allowed to stay there, putting the Obama administration at odds with Democrats trying to end the program.
Duncan opposes vouchers, he said in an interview with The Associated Press. But he said Washington is a special case, and kids already in private schools on the public dime should be allowed to continue.
"I don't think it makes sense to take kids out of a school where they're happy and safe and satisfied and learning," Duncan told said. "I think those kids need to stay in their school."
Rep. Darrell Issa of California released documents Wednesday that he said showed former Fannie CEO Franklin Raines received special treatment in 2003 when he refinanced with Countrywide Financial Corp. . . . Raines, a prominent Washington figure who was President Clinton's budget director, resigned from Fannie Mae in 2004 after an accounting scandal. Fannie Mae and sibling company Freddie Mac were seized by federal regulators last fall.
Wednesday, March 4, 2009
Well, every law passed by government, good or bad, restricts liberty. This is the nature of law and is the reason why our founding fathers constructed a government that was self-limiting (think checks and balances). When government is expanded at the rate and extent proposed by President Obama, especially a President unchecked by the legislative branch, we will surely have validated Newsweek's claim that "We are all Socialist Now".
Monday, March 2, 2009
The market has notably plunged since Mr. Obama introduced his budget last week, and that should be no surprise. The document was a declaration of hostility toward capitalists across the economy. Health-care stocks have dived on fears of new government mandates and price controls. Private lenders to students have been told they're no longer wanted. Anyone who uses carbon energy has been warned to expect a huge tax increase from cap and trade. And every risk-taker and investor now knows that another tax increase will slam the economy in 2011, unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.
Meanwhile, Congress demands more bank lending even as it assails lenders and threatens to let judges rewrite mortgage contracts. The powers in Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the very capitalists who are essential to a sustainable recovery. The result has been a capital strike, and the return of the fear from last year that we could face a far deeper downturn. This is no way to nurture a wounded economy back to health.
Is the title of this editorial in Investor's Business Daily. Its author presents a grim picture of the economy and our future. Capital is fleeing the United State along with young, high-earning professionals from India and China. To this end, the IBD quotes a new study asserting that "some 100,000 highly educated, well-trained Indans now living in the U.S. will return home in the next few y ears. Ditto China" Capital flight and emigration are bellweathers of the future. The editorial closes with an eloquent conclusion:
No, we don't blame all our current ills on President Obama. He came in at a tough time, when many bad decisions had already been made. But he is responsible for what he's done since.
His stimulus package is little more than a down payment on a socialist economy. It raises taxes on the successful, brings back the welfare state, hands out favors and cash to friends of one political party, while imposing government control over the entire free market in ways that just a year ago would have seemed unimaginable.
President Barack Obama gave his first State of the Union speech.... The president presented a $3.6 trillion budget, and announced that we are getting out of Iraq but not really....
Hold on-there's a typo in that paragraph. "$3.6 trillion budget" can't be right. The entire national debt is-what-about $11 trillion? He can't actually be proposing to spend nearly one-third of that in one year, surely. Let me check. Hmm. He did. The Wall Street Journal notes that federal outlays in fiscal 2009 will rise to almost 30 percent of the gross national product. In language that even an innumerate English major such as myself can understand: The US government is now spending annually about one-third of what the entire US economy produces.