Internet Scofflaw

(Stop me if you’ve heard this one before. . .)  The latest Obama cabinet appointment with unpaid tax is HHS nominee Kathleen Sebelius:

Health and Human Services nominee Kathleen Sebelius recently corrected three years of tax returns and paid more than $7,000 in back taxes after finding “unintentional errors” _ the latest tax troubles for an Obama administration nominee. The Kansas governor explained the changes to senators in a letter dated Tuesday that the administration released. She said they involved charitable contributions, the sale of a home and business expenses.

(Via Instapundit.)

Here’s the updated scorecard:

• Geithner, Treasury Secretary (confirmed)
• Daschle, HHS Secretary (withdrawn)
• Killefer, “Chief Performance Officer” (withdrawn)
• Solis, Labor Secretary (confirmed)
• Emanuel, Chief of Staff (no confirmation required)
• Kirk, US Trade Representative (confirmed)
• Sebelius, HHS Secretary (nominated)

Sebelius’s last trip into the national limelight was when when she politicized a tornado disaster by blaming the Iraq War for missing equipment.  The charge ultimately proved to be entirely without merit, which was obvious from the outset to anyone who knew how the military was managing equipment in Iraq.

The Washington Post reports:

The Equal Employment Opportunity Commission, responsible for ensuring that the nation’s workers are treated fairly, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has ruled.

The agency’s practice of offering compensatory time off to its employees rather than overtime pay amounted to “forced volunteering” and was a knowing violation of the law, according to the ruling.

“The case before me, in my view, demonstrates action that went beyond mere negligence,” arbitrator Steven M. Wolf wrote in a decision released last week.

(Via Hot Air.)

I’m surprised that the Fair Labor Standards Act actually applies to government agencies.  Usually the government exempts itself from the rules it imposes on the private sector.

Senate Budget Chairman Kent Conrad (D-ND) seems to think that Herbert Hoover was a laissez-faire conservative:

That’s going back to Hoover economics. The notion that the government doesn’t have much of a role, that the market will correct itself on its own. It didn’t work in the Great Depression, it wouldn’t work here, and even the previous administration recognized that.

It’s not remotely true; Hoover was a progressive interventionist.  In fact, such was Hoover’s reputation among progressives that in 1920 there was talk of a Hoover-Roosevelt Democratic ticket.  During the 1932 campaign, Hoover proclaimed:

Two courses were open to us. We might have done nothing. That would have been utter ruin. Instead, we met the situation with proposals to private business and to the Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put that program in action.

The most that can be said is that Hoover’s “gigantic program of economic counterattack” paled in comparison to his successor’s.

Perhaps Conrad is confusing Hoover with his predecessor, Calvin Coolidge.  Coolidge was a laissez-faire conservative, and he was frequently at odds with Hoover (his Secretary of Commerce). Regarding Hoover, he once remarked “for six years that man has given me unsolicited advice–all of it bad.”

Coolidge’s worst mistake, in retrospect, probably was declining to run for re-election.  He said, if he were elected to a second full term, that would make him president for ten years, “longer than any other man has had it–too long!”  We never found out how Coolidge’s policies would have worked.  Probably he would have let the banks fail, which we know now was one of the major causes of the depression.  On the other hand, Smoot-Hawley, another major cause of the depression, would certainly not have become law in the Coolidge administration.

It’s not surprising that the left wants to make Hoover into a laissez-faire conservative.  Hoover, after all, was a disaster.  But it’s far from the truth.

When the bank bailout was carried out, Secretary Paulson strong-armed all the major banks into taking the money, including those that didn’t need it.  The idea was that if only the weak banks took the money, taking TARP funds would become a stigma of instability, which could further weaken the banks they were trying to save.

Now, many of those banks are regretting going along with the scheme. The government’s (predictable) interference in their affairs is making it hard to do business.  In particular, restrictions on executive pay is making it hard to them to retain good people.  Consequently, many banks want to give the money back.  (Via Instapundit.)

Ah, but it’s not so simple, because the government won’t let them return the money until regulators complete a “stress-test” of the banks (whatever that means), which will happen, well, some time in the future.

The long-term consequence of this is the business world has learned not to accept the government’s money unless they really, really need it.  Consequently, the government will probably never be able to carry out a TARP-like bailout again.  Depending on what you think of the bailout, that might be a good thing.  The irony is it’s exactly the people who believe in government intervention in the economy who are doing it.

UPDATE: Dear God.  Barney Frank thinks that the government should be setting salaries throughout Wall Street, not just at TARP recipients.

UPDATE: More here on how the government forced the money on banks, and now refuse to accept it back.  (Via Instapundit.)

The LA Times comments:

Reporting from Washington — President Obama’s plan to save failing U.S. automakers — and make them the instruments for creating a cleaner, greener transportation system — marked a major step across the line that traditionally separates government from private industry.

His announcement Monday of a new position on bailing out Detroit went beyond a desire to be sure tax dollars were not wasted in bailing out struggling companies. It put the Obama administration squarely in the position of adopting a so-called industrial policy, in which government officials, not business executives or the free market, decided what kinds of products a company would make and how it would chart its future.

His automotive task force concluded, for example, that the Chevy Volt, the electric car being developed by General Motors Corp., would be too expensive to survive in the marketplace. It declared that GM was still relying too much on high-margin trucks and SUVs, and that Chrysler’s best hope was to merge with a foreign automaker, Fiat.

Judgments like those are usually rendered in corporate boardrooms or announced in quarterly reports. But this time they were coming directly from the White House.

President Obama says he doesn’t want to run GM, but apparently he means that only in the sense that he doesn’t want to manage its day-to-day operations.  Choosing the CEO, dictating business plans, and passing judgement on products; all that he is willing to do.

Obama says he doesn’t want to waste the taxpayers’ money.  That’s a load of crap.  Every dollar we put into these failing companies is wasted.  Soon these companies will be going into bankruptcy; everyone sees that now.  We could have let them go into bankruptcy several billion dollars ago.

But apparently we now live in a country where the government runs businesses, and not merely in the old-fashioned way (“you’d better make more home loans to low-income buyers, or else”) either.  We have a model of how government-run businesses work out, and it’s not pretty.

UPDATE: I guess the Democrats are serious about getting the government into the auto business.  House Majority Leader Steny Hoyer wants to create a trade-in program.  (Via the Corner.)

The Washington Times reports:

As Democrats prepared to take control of Congress after the 2006 elections, a top boss at the insurance giant American International Group Inc. told colleagues that Sen. Christopher J. Dodd was seeking re-election donations and he implored company executives and their spouses to give. . .

Mr. Dodd’s campaign quickly hit pay dirt, collecting more than $160,000 from employees and their spouses at the AIG Financial Products division (AIG-FP) in Wilton, Conn., in the days before he took over as the committee chairman in January 2007. Months later, the senator transferred the donations to jump-start his 2008 presidential bid, which later failed.

(Via Instapundit.)

The New York Times asks, Do New Bulbs Save Energy if They Don’t Work?

A lot of people these days are finding the new compact fluorescent bulbs anything but simple. Consumers who are trying them say they sometimes fail to work, or wear out early. At best, people discover that using the bulbs requires learning a long list of dos and don’ts. . .

Irritation seems to be rising as more consumers try compact fluorescent bulbs, which now occupy 11 percent of the nation’s eligible sockets, with 330 million bulbs sold every year. Consumers are posting vociferous complaints on the Internet after trying the bulbs and finding them lacking.

This key point is this one:

Some experts who study the issue blame the government for the quality problems, saying an intensive federal push to lower the price essentially backfired by encouraging manufacturers to use cheap components.

“In the pursuit of the holy grail, we stepped on the consumer,” said Michael Siminovitch, director of a lighting center at the University of California, Davis.

Despite a massive PR effort, public opinion shifted slightly against President Obama’s budget over the last week.  (Via Instapundit.)

No big surprise to me.  The more people hear about it, the worse it looks.

Bolivia has a new constitution.  In itself, this is nothing unusual; the South American socialist states adopt them all the time.  But Bolivia’s new constitution has an unusual provision, authorizing so-called “community justice.”  Community justice is about giving village elders the authority to impose penalties on accused offenders without the rigmarole of trials, juries, or even laws.  This supposedly takes Bolivia back to a more enlightened time, before the arrival of westerners and western ideas.  What it really does is authorize and encourage mob rule.

A particularly prominent incident involves a major opponent of the new constitution:

Ahead of a referendum in January in which voters approved this document, [Victor Hugo] Cárdenas appeared in opposition television advertisements. He says that the constitution’s endorsement of “community justice” is a “mechanism of abuse”.

On March 7th a mob of indigenous people several hundred-strong attacked Mr Cárdenas’s house in a village on the shore of Lake Titicaca, violently evicting his wife, Lidia Katari, herself an indigenous-rights activist, and two of his children before setting fire to his belongings. The few police who turned up did nothing. The assailants claimed that they had staged an act of “community justice” against Mr Cárdenas. They later said that they would not allow him, the police or public prosecutors to enter the area, claiming that the new constitution gives them control over a large swathe of surrounding territory.

Mr Morales may well have had nothing to do with the attack. But his opponents have long claimed that he is opening the way to this kind of mob rule. The government information service implausibly claimed that Mr Cárdenas had staged the incident himself as a publicity ploy.

Tsk, tsk.  But that’s just a Latin American banana republic that has intentionally turned its back on idea of rule of law.  This has nothing to do with the west, right?

Don’t be so sure.  In the UK, scapegoating of bankers is starting to result in mob violence.  But that’s just the UK, right?  Consider this:

Andrew M. Cuomo is starting to unearth some of the most closely guarded secrets on Wall Street: the identities of Merrill Lynch employees who collected large bonuses even as the brokerage firm lost billions.

Mr. Cuomo, the New York attorney general, won a legal battle on Wednesday to compel Bank of America, which bought Merrill in December, to provide his office with the names of the Merrill employees with the 200 largest bonuses. Mr. Cuomo said he would make the names public as early as Thursday.

He also vowed to identify publicly the employees who had received bonuses at the American International Group, whose payouts prompted an uproar, and to work with other financial companies that have received taxpayer dollars to consider disclosing more about employee compensation.

Mr. Cuomo pledged to press ahead with his effort even as Edward M. Liddy, the embattled chief executive of A.I.G., told Congress on Wednesday that some A.I.G. employees received death threats in recent days as the public furor over pay escalated.

The highest-ranking law-enforcement officer in the State of New York plans to publicize the names of AIG bonus recipients and other financial figures (with public opprobrium, to be sure), despite the fact that some of these people are already receiving death threats.

Even being uninvolved is no protection:

As AIG employees get disturbing threats from people ticked off about bonuses that came in the wake of the federal bailout, the state has thrown someone into the fire who did not belong there, a [Connecticut] state representative says.

Christopher Pohle, of New Canaan, was falsely identified as an AIG employee who received a retention bonus, State Representative John W. Hetherington, said in a news release Thursday. To be clear, everyone, he did not get a bonus.

Pohle is demanding that the State of Connecticut, including the Attorney General and the legislature’s Banks Committee, apologize and issue a retraction.

(Via Instapundit.)

Of course, the United States is far from becoming Bolivia, but nevertheless we’re seeing is a breakdown in confidence in the rule of law, with public sentiment whipped up by cynical politicians.

Marion Barry is the latest.  Since Barry is an actual criminal, this isn’t all that surprising.

(Via Instapundit.)

The Economist makes a strong case for decriminalizing drugs.

What’s next after AIG bonus confiscation?  This is funny.  I think.

(Via Instapundit.)

I agree with Glenn Reynolds, President Obama should take as much time off as he likes.  Maybe next time he can take some of Congress with him.

The Hill reports:

The Democratic Senatorial Campaign Committee (DSCC) has apparently decided to keep $100K in contributions from Bernie Madoff, who faces up to 150 years in prison for swindling billions from the likes of Steven Spielberg, Elie Wiesel, Kevin Bacon and Kyra Sedgwick in a massive Ponzi scheme.

In campaigns, one side often calls on the other to return money for one reason or another. Sometimes it’s valid, sometimes not. Regardless, it’s Campaign 101. But when the contributor in question is the single biggest financial criminal in history, there can be no question that those illicit funds should not remain in campaign coffers.

Sens. Charles Schumer (D-N.Y.) and Ron Wyden (D-Ore.) gave thousands in Madoff donations to charity. Reps. John Dingell (D-Mich.) and Charles Rangel (D-N.Y.) are doing the same.

Given the economic uncertainty our nation faces and that Madoff not only fleeced the rich and famous but major corporations such as HSBC — in other words, Madoff swindled all of us — the DSCC’s decision is shockingly tone-deaf.

However, what’s almost equally surprising is the virtual silence from the media. During the Enron scandal, returning campaign money was a daily drumbeat, as were the news stories discussing Enron’s purported ties to President Bush. Now, when the Democratic Senate campaign vehicle makes the conscious decision to keep $100K in Madoff money, stolen just as if it came from a bank holdup, there’s little to no outrage. Why?

(Via the Corner.)

Why no media outrage?  That’s what is called a “rhetorical question.”

Even when running a monopoly that is used by every single person in America, the government can’t stay in the black.  By all means, let’s let these people run the health care and financial industries.  What could go wrong?

This open letter of resignation by an AIG vice-president gives a window into the terrible state of morale at the insurance giant.  (Via the Corner.)  Who is going to want to work there, when one is being publicly vilified, US Senators are calling for your suicide, and Congress is trying to remove any financial incentive to stay?  Without qualified personnel, AIG won’t survive for long.

The peculiar thing is that the United States just bought AIG.  With an 80% government stake, it’s close to a wholly owned subsidiary.  So it appears that the government’s policy towards AIG is to buy it, then destroy it.  One might question the wisdom of this policy.

There’s been a lot of talk of individuals going John Galt.  It seems like the government is going Francisco d’Anconia.

UPDATE: More people bail out of AIG.

He trails Pat Toomey 41-27.  Specter won the 2004 primary by 2 points, after receiving the endorsements of President Bush and Rick Santorum.  This time there’s no one to save him.

(Via the Corner.)

(From the Washington Post.  Via the Foundry, via Instapundit.)

The Bush budget for 2009 would have been about $1 trillion in deficit, based on current economic conditions.

Michael Barone makes a very interesting observation.  The Geithner plan, finally unveiled on Monday, relies on unregulated firms to bail out the regulated ones.  It’s hard to excerpt, but here’s the main point:

I have noticed what I think is a paradox in the Geithner plan. He is asking the most unregulated parts of the financial system—hedge funds, private equity firms—to bail out the most regulated part of the financial system—the banks. . .

Geithner, as I see it, is asking the unregulated players—the hedge funds and private equity firms—to do what Wallison recommended that the government do, buy the troubled assets “at their ‘net realizable value,’ which is based on an assessment of their current cash flows, discounted by their expected credit losses over time.” He’s trusting the unregulated players, rather than the government, to discover what that value is, by subsidizing their investments while limiting their downside risk. The government provides six-sevenths of the price, gets half the profits, but doesn’t have recourse to go back to the investors to recover losses. The unregulated players have great leverage to make profits while their losses are limited to their outlays.

This may work as intended. I certainly hope so. But it does give us some things to keep in mind as we ponder how financial markets should be regulated in the future. We don’t want to regulate every player strictly. There is a place for unregulated operators. And tight regulation will never automatically protect us against systemic risk. We need to keep our eyes open for areas where we need tighter regulation and where we don’t.

(Via Instapundit.)

A government rescue for newspapers?  (Via Instapundit.)

Whew.  Statement here.

The Obama Administration wants the Treasury Department to have the power to seize any business.  Swell.

Plasma TVs may be the cheaper way to get a large-screen HD television, but it seems they use a little more power than LCDs, so California is going to ban them.  The LCD industry approves.

How can you make the Wall Street Journal a supporter of card check? You can’t, honestly that is.  But, if you’re George Miller (D-CA), the chairman of the House Labor Committee, you can make it appear as though they do by some editing.  Here’s the quote, as the Wall Street Journal wrote it, and as Miller rendered it:

The bill doesn’t remove the secret-ballot option from the National Labor Relations Act but in practice makes it a dead letter.

(Archived here.) (Via ShopFloor, via the Corner.)

Come on, that’s not even clever.

But, I guess the SEIU (the nation’s most influential union) thought it was clever, because they’re doing it too.

Here’s the week’s scariest story that doesn’t mention Iran.  President Obama wants the government to control executive pay, and not just at firms accepting bailout money, and not even just at financial firms:

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said. . .

The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort. . .

One proposal could impose greater requirements on company boards to tie executive compensation more closely to corporate performance and to take other steps to ensure that compensation was aligned with the financial interest of the company.

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies.

(Via the Corner.)

Can anyone deny that President Obama is a socialist with a straight face any more?

Geithner knew about the AIG bonuses at least a week earlier than he has admitted:

The question was direct and prescient. Representative Joseph Crowley, Democrat of New York, asked the Treasury secretary in an open hearing what could be done to stop American International Group from paying $165 million in bonuses to hundreds of employees in the very unit that had nearly destroyed the company.

Timothy F. Geithner, the Treasury secretary, responded by saying that executive pay in the financial industry had gotten “out of whack” in recent years, and pledged to crack down on exorbitant pay at companies like A.I.G. that were being bailed out with billons of taxpayer dollars.

The exchange took place before the House Ways and Means Committee on March 3 — one week before Mr. Geithner claims he first learned that the failed insurance company was about to pay a round of bonuses that have since caused a political uproar.

(Via the Corner.)

But don’t take the New York Times’s word for it, the C-SPAN video is available on YouTube.

So there are just two possibilities: either Geithner wasn’t listening during the March 3 committee meeting, or his claims not to heard until March 10 are a fabrication.  Fool or liar, take your pick.

POSTSCRIPT: The straw I think Geithner will grasp is this: Geithner says he didn’t know the “full extent” until March 10.  Although Crowley told Geithner enough, Geithner will say that Crowley didn’t tell him the full extent.  Geithner spoke the literal truth, he will argue.  But the literal truth can still be a lie, when fashioned to deceive.  Geithner’s clear and deliberate implication was that he didn’t know enough to act, which we now know is false.

The LA Times reports: Obama White House bars press from press award ceremony.

(Via Instapundit.)

The inimitable Mark Steyn writes:

In turbulent times, it’s good to know some things never change. After a week in which President Obama thanked himself for inviting him to the White House, compared AIG executives to suicide bombers, and did the first Presidential retard joke on national TV, I was impressed to find that Slate is bravely keeping up its Bushism Of The Day feature.

Bob Krumm makes a good point about the AIG bill of attainder:

As bad a precedent as the AIG bill is, there is one positive.  Congress has established the principle that $165 million is not too inconsequential a sum as to require strict budget hawkishness.  I can’t wait to apply that standard during the next earmark fight.

(Via Instapundit.)

The problem with this point is it assumes some sort of consistency from Congress.  This isn’t about fiscal policy, this is the Congressional equivalent of a mob with torches and pitchforks.

Even President Obama’s supporters are starting to lose patience with him, with a savaging on the New York Times editorial page:

The leading liberal voices of the New York Times editorial pages all criticized—and, in some cases, clobbered—President Obama on Sunday for his handling of the economy and national security.

It’s not unusual for Barack Obama to take a little friendly fire from the Times. But it’s perhaps unprecedented for him to get hit on the same day by columnists Frank Rich, Thomas Friedman and Maureen Dowd—and in the paper’s lead editorial. Their critique punctuated a weekend that started with a widely circulated blog post by Paul Krugman that said the president’s yet to be announced bank rescue plan would almost certainly fail. 

The sentiment, coming just two months after the president was sworn in, reflects elite opinion in the Washington-New York corridor that Obama is increasingly overwhelmed, and not fully appreciative of the building tsunami of populist outrage.

(Via Instapundit.)