(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.
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 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.
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.
From the annals of surprising research results: new research suggests that one can get an accurate sense of someone’s creditworthiness by looking at their face. That’s in the sense that physiognomy has statistically significant predictive value that is independent of other measurable factors.
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.)
If Lynn Chu’s Wall Street Journal op-ed is accurate, the class-action lawsuit against Google for digitizing and posting copyrighted books is reaching a horrifying conclusion. Apparently, Google has reached a settlement in which Google gets to post books, and a new entity is created that decides how much the authors will be paid. (Also, the class-action lawyers make $30 million.) Shockingly, this arrangement would apply to authors who are not a party to the litigation and have not consented to the settlement.
This can’t be right, can it? The comments to Jonathan Adler’s strongly suggest it is, at least to some extent (it’s hard to know what a 385-page legal settlement actually means). Lynn Chu expands on authors’ options here.
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.)
As a child, the standard cry whenever you lose something is “who stole my pencil?” (or whatever). To a child, it doesn’t occur that he simply forgot where he left it, it must be the fault of some malicious external actor.
Keith Olbermann, it seems, never grew up. Olbermann blasted Twitter as the “worst person in the world” when he learned that it had allowed someone else to open a Twitter account in his name. That someone naturally had to be Fox News. (Those guys are always stealing Olbermann’s pencils.)
As it turned out, the Twitter account was being run by Olbermann’s employer, MSNBC, which was running it to promote his program.
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.
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.
Israeli campaign against Palestinian terrorists last December brought, as it always did, stories of Israeli war crimes. The New York Times ran a story on Israeli “excessive force and wanton killing,” based entirely on hearsay and rumor. These sorts of stories always turn out to be false, and this one is no exception. An IDF investigation found no evidence that any of the incidents happened. (Via Power Line.)
The striking thing here is that papers like the NYT, after repeatedly being used by anti-Israeli agitators, continue credulously to report their stories, which invariably turn out to be false. One might draw the conclusion that the NYT is more interested in attacking Israel than it is in reporting the truth.
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.
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.
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.
Hey, I’ve got an idea — why don’t we organize society so that it rewards hard work! We could even see that people who work harder and do better make more money! And then their efforts would pay off in more general societal prosperity, making life better for everyone! And we could . . . Naaaah.
The President is committed to responsibly winding the war down. I don’t do foreign policy, but I can tell you this: ending wars saves money – and so the Administration’s budget includes savings from ramping down overseas military operations over time.
Orszag cites cost-savings in defense starting in 1991, but those cost-savings reflected not just the end of Operation Desert Storm, but a general drawdown in military spending at the end of the Cold War (the “peace dividend”).
In fact, it turns out that pulling out of Iraq will not save any money at all in the short run. The GAO says that the process of withdrawing from Iraq will cost a “significant” amount for several years:
The removal of about 140,000 U.S. troops from Iraq by the end of 2011 will be a “massive and expensive effort” that is likely to increase rather than lower Iraq-related expenditures during the withdrawal and for several years after its completion, government investigators said in a report released yesterday.
“Although reducing troops would appear to lower costs,” the Government Accountability Office said, withdrawals from previous conflicts have shown that costs more often rise in the near term. The price of equipment repairs and replacements, along with closing or turning over 283 U.S. military installations in Iraq, “will likely be significant,” the GAO reported.
Moreover, the GAO also says that the some of the necessary closings will take longer than estimated. For example, the closing of Balad Air Base needs to begin immediately to keep to the president’s timeline.
The Justice Department’s Office of Legal Counsel is important because it interprets the law for the executive branch before the fact. That is, the OLC’s purpose is not to litigate to defend the administration’s actions, but to ensure that it obeys the law in the first place.
The OLC has been particularly controversial in recent years because the OLC issued a number of memos that have been construed as expanding presidential power. (This may be true; I don’t have the legal background to say.) Most notorious was the so-called “torture memo” which sought to establish what constitutes torture and is therefore illegal. (Many disagreed with the memo’s conclusions, and construed it as justifying torture. The memo was later rescinded, and new legislation later clarified the law somewhat.)
Dawn Johnsen is President Obama’s nominee for the Justice Department’s Office of Legal Counsel. Johnsen was an outspoken critic of expanding presidential power during the Bush administration, but was a strong proponent of expanding presidential power during the Clinton administration, explains Andrew McCarthy:
Particularly rich is Johnsen’s diatribe against Bush’s purportedly outlandish claim of power to ignore statutes that encroach on executive authority. When Johnsen served in the Clinton administration (which invented extraordinary rendition, detained Cuban refugees without trial at Guantanamo Bay, conducted warrantless national-security searches, and attacked a foreign country without congressional authorization), OLC’s official position was that “the President has enhanced responsibility to resist unconstitutional provisions that encroach upon the constitutional powers of the Presidency.” The office opined that several statutes (including privacy provisions in the federal wiretap law) could not bind the president, and Johnsen herself authored a 1997 OLC opinion concluding that presidents were above consumer-credit-disclosure laws. In that case, she broadly asserted that “statutes that do not expressly apply to the President must be construed as not applying to him if such application would involve a possible conflict with his constitutional prerogatives.”
So, Johnsen isn’t so much an opponent of expanded presidential power, as she is an opponent of expanded Republican presidential power.
In a similar fashion, she opposes politicization of the justice department by the right, but supports it (explicitly!) by the left:
A parallel hypocrisy is illustrated by Johnsen’s rants about how the Bush administration “politicized” the Justice Department. Her solution to this problem: Politicize the Justice Department. She argues that job applicants who may have been passed over by the Bush administration for holding leftist political views should get “special consideration” in DOJ hiring but, at the same time, maintains that nominees for the federal judiciary should be rejected out of hand if they embrace constitutional originalism or are members of the judicially conservative Federalist Society
Not only is Johnsen a partisan gunslinger, but she also has a history of making outlandish legal arguments. In 1989, as part of an argument for government funding of abortion, she infamously argued that unwanted pregnancy is tantamount to slavery, and restrictions on abortion violate the 13th Amendment. This year, when questioned by the Senate Judiciary Committee about that argument, she denied that she had ever made it, until her words were quoted back to her.
Most of the OLC’s opinions are never tested in court, so it’s important that it be giving sober, non-partisan legal advice. With her record, it seems unlikely that Johnsen will give advice that is either sober or non-partisan. It’s not even clear that she wants to.
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?
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.
The Obama Administration argued before the Supreme Court Tuesday that the government has the power to ban political books, signs, and YouTube videos. Alas, this is no joke:
By the end of an exceptionally lively argument at the Supreme Court on Tuesday, it seemed at least possible that five justices were prepared to overturn or significantly limit parts of the court’s 2003 decision upholding the McCain-Feingold campaign finance law, which regulates the role of money in politics.
Several of the court’s more conservative justices reacted with incredulity to a series of answers from a government lawyer about the scope of Congressional authority to limit political speech. The lawyer, Malcolm L. Stewart, said Congress has the power to ban political books, signs and Internet videos, if they are paid for by corporations and distributed not long before an election. . .
Justice Samuel A. Alito Jr. asked . . . whether a campaign biography in book form could be banned. Mr. Stewart said yes, so long as it was paid for with a corporation’s general treasury money, as opposed to its political action committee.
Chief Justice John G. Roberts Jr. asked whether it would make a difference if a 500-page book had a single sentence in it that said “vote for X.” Then he asked about “a sign held up in Lafayette Park saying vote for so and so.”
If corporate money were used to pay for the book or the sign, Mr. Stewart said, Congress would have the power to ban them before elections.
The real culprit here is McCain-Feingold, which established the principle that the government could suppress speech based on extrinsic conditions such as how it was paid for. The First Amendment says Congress will make no law “abridging the freedom of speech, or of the press.” There is no proviso in the First Amendment saying that Congress can abridge freedom of speech in a manner that is not content-based. McCain-Feingold created that proviso, and the Supreme Court accepted it in the 5-4 McConnell v. FEC decision. (Wherein, incidentally, the majority was made up of the “liberal” justices.)
Once McCain-Feingold was upheld, the government had the power to ban speech. It was only a matter of time until the next step was taken, to extend the government’s speech-suppressing power from TV to other media. The Obama Administration has now taken that step.
The good news is that it seems the administration’s new censorship regime is too much for the Supreme Court to stomach. Several justices (the conservative justices and Souter) seemed horrified by the administration’s claim to have the power to ban books. It looks as though Deputy Solicitor General Stewart’s efforts may have backfired, and may even lead to a reconsideration of McCain-Feingold.
That would be good news. Ironically, the administration’s position might inadvertently end up as a big victory for free speech.
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.
In most of the Muslim world, Israel is the all-purpose scapegoat for anything bad that happens. Whatever atrocity is committed, and no matter how clear it is who perpetrated it, it was actually an Israeli conspiracy (or perhaps an American one). For example, throughout the Muslim world, the overwhelming majority believe that Osama bin Laden was not connected to 9/11. The popular choices for the real perpetrators are Israel, the US, or some vague “non-Muslim terrorists.”
The latter theory is popular in Pakistan (and probably Bangladesh, which was not surveyed). There, in the Subcontinent, India rather than Israel takes the role of the all-purpose scapegoat. Here’s two stories from a couple of weeks ago. The first regards the terrorist attack in Pakistan on the Sri Lankan cricket team. Among the Pakistani talking heads, it was clear that the culprit was not Pakistani terrorists, but an Indian conspiracy:
FOR many foreigners, events in Lahore, the capital of Punjab province, on March 3rd confirmed their view of Pakistan as a hotbed of terrorism. A dozen masked gunmen ambushed a convoy carrying Sri Lanka’s national cricket team, killing six policemen and two others, and wounding seven cricketers and a British coach. But for many Pakistani pundits, quick to appear on television, events fitted another familiar pattern: Pakistan as victim of Indian conspiracy.
In January Punjab’s intelligence service had warned the police that India’s spies were planning to attack the Sri Lankan team. Now the pundits claimed the ambush was intended as retaliation for the attack on Mumbai in November in which more than 170 people were killed, to show that Pakistan was a security risk. As evidence, they pointed to the assailants’ escape: Pakistan’s Islamist terrorists, went the argument, make sure to kill themselves as well as their victims. To bolster their case, they cited India’s crowing over its decision not to send its own cricket team, for which Sri Lanka’s was standing in, and its leaders’ complaints, after the attack, about Pakistan’s intact terrorist “infrastructure”.
This far-fetched analysis, and the refusal to accept the reality of Pakistan’s terrorist problem, owes much to the religious-nationalist leanings of many young but influential television presenters. Their opinions were formed by the distorted education they received under General Zia ul-Haq, Pakistan’s dictator from 1977-88. So, despite many occasions when al-Qaeda has claimed attacks in Pakistan, many Pakistanis refuse to believe the group exists, let alone that it is dangerous for their country.
The terrorists’ escape, and the fact that India accurately judged Pakistan as unsafe, are both evidence that India was responsible. Awesome.
India, it seems, has a long reach. Because at the same time as it was orchestrating a terrorist attack on Sri Lankan cricketers, it is also accused of instigating a mutiny in Bangladesh:
EVEN as the corpses of 56 army officers—victims of a mutiny on February 25th and 26th by Bangladesh’s paramilitary border force—were being retrieved from a mass grave and sewers in Dhaka, the conspiracy histories were being written.
Rabid nationalists, on the fringe of the opposition Bangladesh Nationalist Party (BNP), blamed India for the uprising, which occurred at the huge headquarters of the Bangladesh Rifles (BDR) force, then flared at paramilitary camps around the country.
In Bangladesh, at least, the India theory was only one of many conspiracies used to explain the mutiny.
One of the most important freedoms enjoyed by most Americans is afforded not by the Constitution, but by Henry Ford. Affordable access to automobiles gives us the ability to come and go wherever and whenever we please. We are not limited to the routes offered by trains, nor are we limited to their schedules. This freedom is as fundamental to our lives as many of those in the Bill of Rights.
Outside the world’s wealthy nations, most people do not enjoy that freedom because they cannot afford a car. But soon, many more people will be able to enjoy that freedom. India’s Tata motors has repeated Henry Ford’s feat and dramatically reduced the cost of an automobile. Its new car, the Nano, will cost just $2000 new. This brings the car within the grasp of the developing world’s middle class, and will bring them a freedom of mobility they have never known.
Naturally, many environmentalists are appalled. Only by living in abject poverty can people keep their carbon emissions at a satisfactory level.
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.
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.
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.
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.
It seems obvious to me that the AIG bonuses confiscation bill is unconstitutional. The Constitution says:
No bill of attainder or ex post facto Law shall be passed.
The dictionary defines bill of attainder:
a legislative act that imposes punishment without a trial
That’s exactly what the bill is, so it’s unconstitutional, right? Well, I’m relying here on the plain meaning of the Constitution. That, I suppose, is what lawyers call a “naive argument.” To find out what the Constitution really means, you can’t look at its text, you have to look at centuries of case law.
The one thing everyone (except Congress) seems to agree on is this is terrible policy. Not just because it would undercut Treasury’s ability to deal with the financial crisis, but because it’s a terrible precedent to say that the government can confiscate any income it thinks is too much.
The rush to do this, despite it obviously being a bad idea, is because the Democrats are exposed. They made this happen, and now they need cover.
President Obama has demonstrated his “smart diplomacy” yet again. This time, he snubbed French President Nicolas Sarkozy by writing to his predecessor Jacques Chirac as if he were still a head of state. Jim Lindgren has the story, and speculates:
If we could see the address on the letter to Chirac, it might be clear whether Obama or one of his staff was confused about the identity of the French President. My guess is that this was just a rookie mistake, i.e., bad diplomacy in wording a letter, not confusion about identities. . .
2d UPDATE: As noted by the Christian Science Monitor and elsewhere, the context was the one I suspected. Obama was writing to Chirac as the head of his Foundation for Sustainable Development and Cultural Dialogue.
The Economist reports that things have worked out very well for Colombia:
A YEAR ago Colombia’s neighbours condemned it for sending troops into Ecuador to bomb and overrun a camp of the Revolutionary Armed Forces of Colombia (FARC). The raid was a success: one of the FARC’s senior leaders, Raúl Reyes, was killed and Colombian forces grabbed three laptops containing vital intelligence, including evidence of the guerrillas’ contacts with the leftist governments of Ecuador and Venezuela. Since then Colombia’s American-backed drive to crush the FARC has made further progress. The guerrillas have lost other leaders and suffered desertions. A group of prominent hostages they were holding was rescued in July. On March 2nd the army said it had killed another FARC leader, José de Jesús Guzmán, alias “Gaitán”, suspected of organising bombings in the capital, Bogotá.
After last year’s raid, Ecuador and Venezuela severed diplomatic relations with Colombia and sent troops to their borders with it. Other South American countries, even moderate Brazil, condemned the incursion. Two regional clubs, the Organisation of American States (OAS) and the Rio Group, expressed disapproval. However, within weeks of the raid, Colombia’s President Álvaro Uribe was again on backslapping terms with President Hugo Chávez of Venezuela. Mr Uribe smoothed things over with Brazil on a recent visit there. Relations with Ecuador remain cut but overall, says Alfredo Rangel, a security analyst in Bogotá, Colombia has paid a “small diplomatic price”.
The diplomatic price has certainly been insignificant when weighed against the enormous intelligence benefits they gained from the raid. FARC is all but defeated now.
But, relations are still frosty between Colombia and Ecuador:
[Ecuadorean President Rafael] Correa says relations will not be restored until certain conditions are met. These include Colombia improving its border security to stop the FARC crossing into Ecuador. Mr Correa also wants the Colombians to give a full report of their raid on his country’s territory, including all the information they found on the FARC’s computers. . . Finally, Mr Correa wants Colombia to stop “defaming” his government by revealing what the computers told it about the rebels’ links to Ecuadorean officials.
Let me get this straight. FARC is a guerilla army fighting the Colombian government (on the occasions it’s not functioning as a mere criminal gang), and Ecuador gave them save haven, but it’s Colombia’s responsibility to keep them from using that safe haven? Also, Ecuador wants to know all the intelligence that Colombia gained. Surely only a cynic would wonder if it might somehow get turned over to FARC. Finally, they want Colombia to stop showing the world proof of the ties between FARC and Ecuador. If that’s the price of good relations, I’m sure Colombia will be content with bad ones.
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.
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.
Huge news for real-life ray guns: Electric lasers have hit battlefield strength for the first time — paving the way for energy weapons to go to war.
In recent test-blasts, Pentagon-researchers at Northrop Grumman managed to get its 105 kilowatts of power out of their laser — past the “100kW threshold [that] has been viewed traditionally as a proof of principle for ‘weapons grade’ power levels for high-energy lasers,” Northrop’s vice president of directed energy systems, Dan Wildt, said in a statement.
When President Obama snubbed British PM Gordon Brown a couple of weeks ago by giving him a set of DVDs (whereas Brown gave Obama a collection of uniquely historical gifts), some wondered if they would even play in the UK, due to DVD region restrictions. I thought that was unnecessarily cynical; surely the White House would at least have gone to the trouble to get region 2 DVDs.
I was wrong. This White House is really starting to look uniquely incompetent.
Nancy Pelosi wants to avoid the outrage over the AIG bonuses, so she wants us to know that she isn’t reponsible for the provision that protects them. But Pelosi goes further, and makes the bizarre, counterfactual claim that the House never saw the provision at all:
Pelosi continuously denied that she or any other House Democrat signed off on the provision, even though the House eventually voted to agree to the conference report on the stimulus bill.
“This was never brought to conference,” she said. “This never came to the House side, and you can talk to any of our conferees. It’s a matter of fact and record.”
Obviously, the bill did come to the House side, since that’s how bills become law. Presumably Pelosi knows this; does she think we don’t? Anyway, to avoid any confusion, I’m offering this as a public service:
Attorney General Eric Holder said some detainees being held at Guantanamo Bay, Cuba, may end up being released in the U.S. as the Obama administration works with foreign allies to resettle some of the prisoners.
I’m surprised the Administration would want to make itself a hostage to fortune like this. When these released detainees start committing crimes, the voters will know who to blame. The convict furloughs of yesteryear pale to this.
The U.S. Census is supposed to be free of politics, but one group with a history of voter fraud, ACORN, is participating in next year’s count, raising concerns about the politicization of the decennial survey.
The Association of Community Organizations for Reform Now signed on as a national partner with the U.S. Census Bureau in February 2009 to assist with the recruitment of the 1.4 million temporary workers needed to go door-to-door to count every person in the United States — currently believed to be more than 306 million people.
ACORN invented hundreds of thousands of people for the voting rolls, and now it’s going to be counting people for the census. Swell. But wait:
ACORN spokesman Scott Levenson told FOXNews.com that “ACORN as an organization has not been charged with any crime.” He added that fears that the organization will unfairly influence the census are unfounded.
The Service Employees International Union (SEIU) is union-busting the union that organizes its staff, or so the latter is complaining. The Washington Post reports:
The workers union, which goes by the somewhat postmodern name of the Union of Union Representatives, has filed charges of unfair labor practices against the SEIU with the National Labor Relations Board. The workers union’s leaders say that the SEIU is engaging in the same kind of practices that some businesses use: laying off workers without proper notice, contracting out work to temporary-staffing firms, banning union activities and reclassifying workers to reduce union numbers.
The THAAD system was tested successfully again yesterday. That extends missile defense’s near-perfect testing record since the system was deployed in December 2002. This seems like a good occasion to update the testing chronology:
Despite President Obama’s loudly expressed outrage over the AIG bonuses, it turns out that he knew about them already, reports the Washington Post:
President Obama was informed about the $165 million in bonuses due to employees of the American Insurance Group the day before they were paid out last week, the White House disclosed late Tuesday.
Obama has expressed outrage that the company, which has received about $170 billion in government bailout money, proceeded to pay out the bonuses. He said the idea of a company rescued with taxpayer money awarding bonuses runs counter to “our values.”
The timeline released Tuesday marked the first time the White House has acknowledged when the president was told about the bonuses, which have prompted calls from Congress for the administration to recover the money. . .
The president did not publicly express anger over the bonuses until after they were disclosed Sunday in The Washington Post.
So the bonuses were no big deal, as long as no one knew about them. It wasn’t until they became public that Obama needed to get in front of the issue.
In fact, not only was Obama okay with the bonuses until Monday, it seems that he was instrumental for making them happen. The stimulus bill actually explicitly protects the bonuses:
(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.”
When asked about the bonuses, Harry Reid said “hindsight is 20/20.” But, in fact, the Senate had the foresight to prohibit them in its original bill. That provision was deleted in conference, and replaced with the provision protecting the bonuses, CNN reports:
The mystery isn’t just how what was effectively a protection for AIG was put into the stimulus bill — it’s also how a provision intended to prevent AIG from giving executive bonuses, was taken out.
The Senate passed a bipartisan amendment proposed by Sen. Olympia Snowe, R- Maine, and Sen. Ron Wyden, D-Oregon, that would have taxed bonuses on any company getting federal bailout dollars, if the company didn’t pay back the bonus money to the government.
But the idea was stripped from the stimulus bill during hurried, closed-door negotiations with the White House and House of Representatives.
So, who did it? Blame had been centering on Christopher Dodd (D-CT), the chair of the Senate banking committee, who reportedly added the provision. But Dodd says it wasn’t his fault, it was the Treasury Department. The New York Times reports:
Mr. Geithner reiterated the Treasury position that lawyers inside and out of government had agreed that “it would be legally difficult to prevent these contractually mandated payments.”
That position was being questioned at the Capitol. Congressional Republicans, eager to implicate Democrats, initially blamed Senator Christopher J. Dodd, the Connecticut Democrat who heads the banking committee, for adding to the economic recovery package an amendment that cracked down on bonuses at companies getting bailout money, but that exempted bonuses protected by contracts, like A.I.G.’s.
Mr. Dodd, in turn, responded Tuesday with a statement saying that the exemption actually had been inserted at the insistence of Treasury during Congress’s final legislative negotiations.
So if Dodd is to be believed (a big if), the Obama Administration actually insisted on the bonuses it is now condemning. If Dodd is lying, the President Obama still negotiated the bill and signed it. Either way, this is Obama’s baby.
UPDATE: Actually, Dodd originally said he wasn’t involved in the provision “in the slightest.” Now he says Treasury insisted on it. Either way, Dodd lied. So I should have said: if Dodd is to be believed now. . .
Treasury Learned of AIG Bonuses Earlier Than Claimed
Although Treasury Secretary Timothy Geithner told congressional leaders on Tuesday that he learned of AIG’s impending $160 million bonus payments to members of its troubled financial-products unit on March 10, sources tell TIME that the New York Federal Reserve informed Treasury staff that the payments were imminent on Feb. 28. That is 10 days before Treasury staffers say they first learned “full details” of the bonus plan, and three days before the Administration launched a new $30 billion infusion of cash for AIG.
For the first time in ages, the GOP leads on the generic ballot 41-39, according to the latest Rasmussen poll. (Via Hot Air.) The Democrats lead by seven points on Inauguration Day, but have steadily faded since then.
It’s not just Rasmussen; the latest NPR poll has the parties tied 42-42 on the generic ballot. (Via Power Line.) NPR reports the poll here, but don’t expect to find any mention of the generic ballot; the NPR story cherrypicks the results that are positive for Democrats. You can find the full results (including the generic ballot on page 3) here (pdf).
When Brazilian President Luiz Inacio Lula da Silva becomes the first Latin American leader to sit down with President Barack Obama this weekend, he brings undisputed clout. . .
Still, the White House made several moves interpreted as snubs by the Brazilian media.
Silva aides said the trip was pushed forward from Tuesday because of the St. Patrick’s Day holiday — making Latin America once again look like an afterthought. Then, the White House announcement misspelled his name as “Luis Ignacio” and put “Lula” — a nickname that decades ago became a legal part of the Brazilian leader’s name — in quotes.
Maybe this is actually really clever. In order to patch things up with the UK, the White House is snubbing everyone, in order that that its treatment of the British PM will be nothing out of the ordinary. But if that’s the plan, they dropped the ball with Ireland; the teleprompter breakdown with the Irish PM was more of a screw-up than a real snub.
It’s not just tax cheats that get jobs in the Obama Administration, but thieves as well:
Troubles for the man in charge of federal spending and policy on information technology continue to be revealed.
According to Maryland state records, Vivek Kundra, the White House chief information officer who took leave last Thursday — one week after being named to the position, pleaded guilty to a petty theft charge 12 years ago.
Kundra, who was formerly the D.C. technology officer, received supervised probation before judgment in 1997 for pleading guilty to a theft of less than $300. He was also fined $500, which was lowered to $100 after the rest was suspended.
ASIDE: This is separate from the recent FBI raid on Kundra’s office, in an investigation of which we are assured Kundra is not a target. We’ll see.
One’s first inclination is to blame incompetent vetting, but that might not be right. We just learned yesterday that the Obama Administration was aware of the tax problems with many of its nominees, but decided to go forward with them anyway. So it seems possible, even likely, that the vetters were aware that Kundra is a convicted thief, but the White House hired him anyway.
When Australia introduced Internet censorship to stop child pornography, I was not alone in predicting that it wouldn’t be used only against child pornography for long. Still, I didn’t think that Australia would be blocking political content quite so soon.
It’s happening now. The Australian Communications and Media Authority (ACMA) has blacklisted an anti-abortion web site that shows gruesome pictures of aborted babies. That’s not even the end of the story. Whirlpool, a web site of discussion forums on the Internet and broadband, was given a takedown notice for linking to the site, according to the Australian. Had they refused, they would have faced fines of $11,000 (Australian) per day. (The placeholder for one deleted post can be seen here.)
The anti-abortion activists are not alone. ACMA has also blacklisted Wikileaks, for including a copy of Denmark’s blacklist.
The current state of affairs of Australian censorship allows the ACMA to censor domestic content, using takedown notices and threats of huge fines. However, the ACMA has no power (obviously) to take down foreign content. To correct that “problem”, the Australian government is looking to institute nationwide net filtering.
The Australian Minister for Broadband, Communications, and the Digital Economy, Stephen Conroy, assures Australians that:
The Government does not view this debate as an argument about freedom of speech. Freedom of speech is fundamentally important in a democratic society and there has never been any suggestion that the Australian Government would seek to block political content.
“The Government of Australia is elected,” he said. “If the parliament wants to take this path, the last time I checked, that’s ok.”
Have faith in the censors? Heh. Good one. Anyway, Conroy clearly has forgotten the principles of limited government, if he ever knew them. An elected government can do anything it wants? What has become of you, Australia?
Last week, President Barack Obama convened a health-care summit in Washington to identify programs that would improve quality and restrain burgeoning costs. He stated that all his policies would be based on rigorous scientific evidence of benefit. The flagship proposal presented by the president at this gathering was the national adoption of electronic medical records — a computer-based system that would contain every patient’s clinical history, laboratory results, and treatments. This, he said, would save some $80 billion a year, safeguard against medical errors, reduce malpractice lawsuits, and greatly facilitate both preventive care and ongoing therapy of the chronically ill.
Following his announcement, we spoke with fellow physicians at the Harvard teaching hospitals, where electronic medical records have been in use for years. All of us were dumbfounded, wondering how such dramatic claims of cost-saving and quality improvement could be true.
The basis for the president’s proposal is a theoretical study published in 2005 by the RAND Corporation, funded by companies including Hewlett-Packard and Xerox that stand to financially benefit from such an electronic system. And, as the RAND policy analysts readily admit in their report, there was no compelling evidence at the time to support their theoretical claims. Moreover, in the four years since the report, considerable data have been obtained that undermine their claims. The RAND study and the Obama proposal it spawned appear to be an elegant exercise in wishful thinking.
As a small, open economy dependent on banking, beach tourism and beef exports, Uruguay ought to be more exposed to the world recession than Argentina, with its large domestic market. Both economies have slowed sharply after years of rapid growth. But Uruguay looks set to fare much less badly than Argentina. . .
That is because the growth in Argentina owed much to expansionary fiscal and monetary polices which caused the economy to overheat. Over the past year prices for its farm exports have fallen, bringing down tax revenues. To keep public spending going, President Cristina Fernández de Kirchner nationalised the private pension system in October, destroying what little confidence investors had in her government. Argentines, long inured to such behaviour, responded as they always do, by taking their money out. Capital outflows reached 7% of GDP in 2008.
Much of that money went across the river. Deposits in Uruguay’s banks by non-residents rose by 41% in the 12 months to December. These pesos follow others: during the presidency of Néstor Kirchner, Ms Fernández’s husband and predecessor, some Argentine beef farmers sold their herds rather than submit to export bans and price controls, and ploughed the money into Uruguayan ranches. . .
Uruguay is better placed to mitigate recession than its neighbour. Argentina may struggle to roll over the $23 billion in debt maturing this year and next because of investors’ distrust: its bonds yield 15 percentage points more than American Treasury bonds. Uruguay is charged a premium of only five percentage points, and can thus more easily afford a fiscal stimulus.
The geniuses who run the Democratic party have determined that this is the perfect time for a trade war:
A long-simmering trade dispute boiled over into sanctions on Monday after Mexico said it would raise tariffs on $2.4bn of US exports in retaliation for ending a pilot programme to allow Mexican trucks on American roads.
The announcement marks one of the first big tests for trade policy under President Barack Obama, who has sought to tread a fine line between assuaging his domestic constituencies and upholding the US’s international obligations.
Mexico said it would increase tariffs on 90 industrial and agricultural goods, likely to include politically sensitive farm products, after Congress last week killed a pilot programme allowing a limited number of Mexican trucks on American highways. Mexico obtained a judicial ruling in 2001 under the North American Free Trade Agreement (Nafta) allowing it to impose such sanctions, but has held off since the US introduced the pilot scheme.
The sanctions, which Mexican officials say are set to be imposed later this week, will be one of the largest acts of retaliation against US exports. US goods exports to Mexico totalled $151.5bn last year. On Monday, Gerardo Ruíz Mateos, Mexico’s economy minister, said: “We believe that the action taken by the US is wrong, protectionist and in clear violation of Nafta.”
The White House said on Monday it would seek to create a new programme that would address what it called the “legitimate concerns of Congress” while meeting the US’s Nafta commitments. But Mexican officials said they would not be bought off with promises.
The Seattle Post-Intelligencer, which has been in financial trouble since I was a child, has finally folded.
The failure of the PI can be seen as an application of Hotelling’s Law. Two newspapers can survive with one slightly left of center and the other slightly right of center. Then each gets half the market share. With one far left paper (the Seattle Times) and one even further left paper (the PI), the one at the extreme will not survive.
What is the deal with the outbreak in blatantly unconstitutional legislative proposals? In just the last few days:
the US Congress has considered a bill giving House representation to a non-state,
the Connecticut legislature has considered a bill that would dictate the way the Catholic Church governs itself, and
the Iowa legislature is considering a bill that would limit criticism of politicians and would even limit factual reporting of their votes, and
the US Congress passed a stimulus bill (which the President signed with much fanfare) that overrides state constitutions, removing the governor’s power of veto if he or she declines to accept stimulus funding.
Wasn’t there a time when our leaders felt a responsibility to obey the Constitution, or am I looking back to a halcyon age that never really existed? If it ever existed, that time is surely gone now. Today, many of our leaders (“rulers” might be more apt) have clearly decided that the thankless task of applying the Constitution is the sole provenance of the courts. Their job, as they see it, is to get away with as much as they can.
The reason so many Obama nominees have had tax problems is the Administration thought it was no big deal, reports the DC Examiner:
It’s been a recurring question about the young Obama administration: Why have so many of its nominees come down with tax problems?
Timothy Geithner, Tom Daschle, Ron Kirk, Nancy Killefer, and a number of others who didn’t make it to the nomination stage — all have been felled, or tainted, by unpaid tax bills ranging from a few hundred dollars to more than $140,000. After the first few cases, Republican Rep. Eric Cantor quipped that “it’s easy for [Democrats] to sit here and advocate higher taxes because — you know what? — they don’t pay them.”
For their part, some Democrats have suggested that the Senate Finance Committee, which investigates nominees before confirmation, has gotten so nit-picky in examining tax returns that good candidates have gone down in flames. “The Finance Committee has gone a bit overboard, and I find it a little striking that a Democratic committee is doing this to a Democratic administration,” one anonymous insider told the Politico recently. . .
Now, we find out that neither Cantor nor the unnamed Democrat was correct. The problem is not with Democrats in general, nor with the Finance Committee in particular. The problem is the Obama White House, which, fully aware of its nominees’ tax issues, decided that those problems were trivial, or that the public wouldn’t care about them, and pushed forward with nominations that in the past would have been quietly shelved.
In little-noticed remarks last week, Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, gave us a look inside the confirmation process. Irritated by news reports suggesting the committee had been too hard on Obama’s nominees, Grassley pointed the finger back at the White House.
“I want to stress that the Finance Committee is not doing anything different now from what it has always done under the leadership of either Senator Baucus or me,” Grassley said, referring to Democratic chairman Max Baucus of Montana. “We are vetting nominees for the current administration the same way we vetted nominees for the previous administration.”
“The tax issues of the nominees considered by the committee this year came to be public only because the nominees chose to proceed.”
It might be simplest if the White House announced that all of its campaign rhetoric is “no longer operative.” To wit: taxing health benefits, formerly the worst idea ever, is now under consideration. James Capretta explains:
Remember this devastating political ad from last year?
Many Americans probably do, as it represented a real turning point in the presidential campaign.
Aired in October, the ad picked up on an exchange from the vice-presidential debate between then-Senator Joe Biden and Alaska Gov. Sarah Palin. Palin had just explained that the McCain health-care plan would provide refundable tax credits of $5,000 per household to help families buy portable insurance. Biden, who had clearly been waiting for the issue to come up, responded with a scripted attack. What the McCain-Palin folks don’t tell you, Biden warned, is that they would — “for the first time in history” — tax your employer-provided health benefits.
The public, most of whom get their insurance from their workplaces, was taken aback and confused. Why would Republicans want to tax employer-sponsored health-care benefits? Aren’t Republicans for cutting taxes? Aren’t they for private, as opposed to public, health insurance? And how could a tax increase make anyone better off?
It was a devastating blow. The McCain campaign never adequately explained their plan or offered an effective counter-argument — and the Obama-Biden campaign never looked back. They rode the issue for weeks, airing millions of dollars in attack ads. Indeed, the effectiveness of the coordinated attack on the McCain health plan is surely one of the main reasons for Obama’s victory in November.
Well, guess what? Not five months later, having secured the presidency, President Obama has changed his tune. Taxing health-care benefits is not such a bad idea after all, he and his team now say.
If done properly, this could be a good idea. The preferential tax treatment of benefits (principally health care) has distorted employee compensation, favoring benefits over wages. In regards to health care, this has an important undesirable second-order effect. When a large part of employee compensation can be spent only on health care, employees are encouraged thereby to spend more on health care. Supply and demand then tell us that, consequently, the price of health care and the quantity consumed will increase.
Of course, the new tax on benefits ought to be matched with a tax cut, in order to leave taxes unchanged overall. This was John McCain’s plan. Once people adjust to the new incentives, the end result is simply more money in your pocket to spend on whatever you want, rather than only on health care. Unfortunately, President Obama almost certainly will not do it that way, because (unlike McCain) he sees it as a source of revenue, rather than a way to remove a distortion in the marketplace.
And so Obama’s true hypocrisy is revealed. McCain never planned a tax increase levied on health-care benefits (attack ads notwithstanding). Obama is considering exactly that. Thus, the policy that Senator Obama attacked so effectively never was McCain’s policy, but it has now become Obama’s.
Dramatic advances in public attitudes are sweeping Iraq, with declining violence, rising economic well-being and improved services lifting optimism, fueling confidence in public institutions and bolstering support for democracy.
The gains in the latest ABC News/BBC/NHK poll represent a stunning reversal of the spiral of despair caused by Iraq’s sectarian violence in 2006 and 2007. The sweeping rebound, extending initial improvements first seen a year ago, marks no less than the opportunity for a new future for Iraq and its people. . .
While deep difficulties remain, the advances are remarkable. Eighty-four percent of Iraqis now rate security in their own area positively, nearly double its August 2007 level. Seventy-eight percent say their protection from crime is good, more than double its low. Three-quarters say they can go where they want safely – triple what it’s been.
Few credit the United States, still widely unpopular given the post-invasion violence, and eight in 10 favor its withdrawal on schedule by 2011 – or sooner. But at the same time a new high, 64 percent of Iraqis, now call democracy their preferred form of government. . .
The number of Iraqis who call security the single biggest problem in their own lives has dropped from 48 percent in March 2007 to 20 percent now. Two years ago 56 percent called it the single biggest problem for the country as a whole; that’s down to 35 percent now, including a 15-point drop in the last year alone. Fifty-nine percent now feel “very” safe in their communities, up 22 points from last year and more than double its lowest. Recent local fighting among sectarian forces is reported by 6 percent, compared with 22 percent a year ago.
Optimism and confidence have followed. Sixty-five percent of Iraqis say things are going well in their own lives, up from 39 percent in 2007 (albeit still a bit below its 2005 peak). Fifty-eight percent say things are going well for Iraq – a new high, up from only 22 percent in 2007. Expectations for the year ahead, at the national and personal levels, also have soared, after crashing in 2007. And the sharpest advances have come among Sunni Arabs, the favored group under Saddam Hussein, deeply alienated by his overthrow, now re-engaging in Iraq’s national life. . .
Basic views on governance also mark the sea change in Sunni views: In March 2007 58 percent of Sunnis said the country needed a “strong leader – a government headed by one man for life” (presumably a throwback to their one-time protector, Saddam), while just 38 percent preferred a democracy. Today that’s more than flipped: Sixty-five percent of Sunnis want a democracy; just 20 percent, a strong leader.
Critically, there’s been a complementary change among Shiites – in their case a drop in preference for an Islamic state from 40 percent in 2007 to 26 percent now, and a concomitant 21-point rise in favor of democracy. Kurds, for their part, have been and remain broadly pro-democracy.
There’s much more. It is a pity they don’t credit the United States, but gratitude was never the point. The point is that Iraq is no longer a state sponsor of terrorism, nor a danger of becoming so again. Besides, why should Iraq be different from other democracies that exist due to American efforts (which is to say nearly all of them)?
We’re constantly told that taxes don’t matter to business and investors, but listen to that noted supply-side economist, Alec Baldwin. The actor recently rebuked New York Governor David Paterson for threatening to try to help close the state’s $7 billion budget deficit by canceling a 35% tax credit for films shot in the Big Apple.
“I’m telling you right now,” Mr. Baldwin declared, “if these tax breaks are not reinstated into the budget, film production in this town is going to collapse, and television is going to collapse and it’s all going to go to California.” Well, well. Apparently taxes do matter, at least when it comes to filming “30 Rock” in Manhattan.
Heh. Seriously, though, I doubt anyone needs to strike Mr. Baldwin from their dinner party invitation list. I’m sure that Baldwin is just looking for preferential treatment for his own industry, not to stimulate the economy in general.
Ronald Rotunda (writing for the Chicago Tribune) notices an unconstitutional provision in the stimulus act. It seems that if a state governor has the temerity to refuse the stimulus funding, the act gives the state legislature the power to override him. The federal government most certainly does not have the power to override state constitutions like that.
Alas, the provision will surely be found to be severable, so we can’t realistically hope that this will bring down the entire mess.
On January 1, 1995, after two years of Republican filibusters, the New York Times wrote it was time to abolish the filibuster:
The U.S. Senate likes to call itself the world’s greatest deliberative body. The greatest obstructive body is more like it. In the last session of Congress, the Republican minority invoked an endless string of filibusters to frustrate the will of the majority. This relentless abuse of a time-honored Senate tradition so disgusted Senator Tom Harkin, a Democrat from Iowa, that he is now willing to forgo easy retribution and drastically limit the filibuster. Hooray for him. . . Now is the perfect moment . . . to get rid of an archaic rule that frustrates democracy and serves no useful purpose.
But, by March 2005, when Democrats were the ones employing the filibuster, the New York Times was able to see a useful purpose after all:
In the past we’ve been frustrated when legislators tried to stop important bills from passing by resorting to the same tactic. The filibuster, which allows 41 senators to delay action indefinitely, is a rough instrument that should be used with caution. But its existence goes to the center of the peculiar but effective form of government America cherishes. . .
While the filibuster has not traditionally been used to stop judicial confirmations, it seems to us this is a matter in which it’s most important that a large minority of senators has a limited right of veto. . .
A decade ago, this page expressed support for tactics that would have gone even further than the “nuclear option” in eliminating the power of the filibuster. At the time, we had vivid memories of the difficulty that Senate Republicans had given much of Bill Clinton’s early agenda. But we were still wrong. To see the filibuster fully, it’s obviously a good idea to have to live on both sides of it. We hope acknowledging our own error may remind some wavering Republican senators that someday they, too, will be on the other side and in need of all the protections the Senate rules can provide.
As one of the nation’s least consistent, most partisan papers, it seemed likely that the NYT’s opportunistic rediscovery of the filibuster’s value would disappear once the Republicans began using it again. With Democrats in ascendance, it seemed inevitable that the NYT would rediscover the evil of the filibuster. It’s only been a matter of time.
Nevertheless, I am a little bit surprised. I thought that they would wait until the Republicans had actually filibustered something. Nope. Two weeks ago, the NYT ran two op-ed pieces vilifying the filibuster, and this week the NYT’s editorial page launched its pre-emptive strike on the filibuster. Moreover, it took a strikingly shrill tone:
When President George W. Bush was stocking the federal courts with conservative ideologues, Senate Republicans threatened to change the august body’s rules if any Democrat dared to try to block his choices, even the least-competent, most-radical ones. Filibustering the president’s nominees, they said, would be an outrageous abuse of senatorial privilege. . .
Now that President Obama is preparing to fill vacancies on federal benches, Republican senators have fired off an intemperate letter threatening — you got it — filibusters if Mr. Obama’s nominees are not to their liking. . .
It is particularly strange to see Senate Republicans raising the specter of filibustering nominees. When Mr. Bush was doing the nominating, Senator Orrin Hatch, Republican of Utah and a former Judiciary Committee chairman, warned Democrats that filibusters “mired the judicial-confirmation process in a political and constitutional crisis that undermines democracy, the judiciary, the Senate, and the Constitution.”
A filibuster can be an appropriate response when it is clear that a particular nominee would be a dangerous addition to the bench. The Republicans’ rush to threaten filibusters in the absence of actual nominees is not only at odds with their previous views on the subject, but shows a lack of respect for the confirmation process.
The NYT is clearly conscious of the danger of making itself a laughingstock if it reverses itself a second time, so it tries to find some nuance. Filibustering an actual nominee, that’s okay (when he or she would be a “dangerous addition” to the bench), but writing a letter saying that you might filibuster a nominee, that is beyond the pale!
Come again? If filibustering is okay, how can not-yet-filibustering be wrong?
There is a matter of substance to address here, though. To try to hide its own hypocrisy, the NYT employs a bit of rhetorical jujitsu. The Republicans are being hypocritical, they argue, because they used to argue that filibusters were bad, and now they plan to use them. Michael Barone’s first rule (all process arguments are insincere) certainly comes to mind, but I think the GOP can actually offer a good defense.
They key point is that the Democrats prevailed on the filibuster. Republicans argued that what the Democrats were doing was wrong, and tried to put a stop to it, but they failed. If the GOP had exercised the “nuclear option,” abolishing filibusters of judicial nominees, and then demanded them back, they would be hypocrites of the first order.
But they did not. Filibusters of judicial appointments were not abolished, and were used extensively. Republicans need to use them now. If they do not, they accede to an arrangement in which Democrats block nominees and Republicans do not. That kind of unilateral disarmament would be fatal to all we hold dear, and it is preposterous for the NYT to suggest that the GOP submit to it.
ASIDE: Something very much like this happened in the debate over term limits. The term-limits caucus failed to enact them for everyone, but far too many of them decided to impose them on themselves. As a result, the term-limits caucus is largely gone. All that are left are the “hypocrites” who decided not to impose term limits unilaterally on themselves.
POSTSCRIPT: Beyond its flagrant hypocrisy, Jonathan Adler points out that the NYT editorial also includes a number of factual distortions. There’s also the topic of blue slips, which I’ll leave for another post.
According to Tapped (a lefty blog), negotiators on the foreclosure bill have agreed that the cramdown provision will apply only to mortgages that exist when the bill is passed, not new mortgages going forward. If true, this has to be taken as tacit acknowledgement that mortgage cramdowns are generally bad policy, that would cause mortgage rates to rise on good credit risks in order to subsidize bad ones.
By limiting cramdowns to existing mortgages, the bill would avoid the effect on interest rates going forward. Except, that is, to the extent that lenders are not fools. Lenders will learn not to trust the government; what it does now, it will do again. Any loan they make will ultimately be subject to cramdown the next time there’s a foreclosure bill.
But the primary effect of the bill is still on existing mortgages, and that’s still where it is truly dangerous. The banking system is still reeling from the impact of a drop in the value of its loans. Cramdown would be yet another blow to those assets and to the banking system. To do it right now is the apotheosis of stupidity.
President Obama has determined that the United States will no longer hold enemy combatants, er, in the sense that we will no longer use the word “enemy combatant.” In substance, the policy remains essentially unchanged. In the new policy, disclosed Friday, President Obama claims an ever so slightly broader authority to hold Al Qaeda and Taliban fighters, and an ever so slightly narrower authority to hold others. Scotusblog has the rundown. (Via Instapundit.)
I think Ed Whelan has the right idea. Next we can resolve the Guantanamo problem in a similar manner, by renaming Guantanamo.
Douglas Shoen (a pollster for Bill Clinton) and Scott Rasmussen write that President Obama is not polling well:
It is simply wrong for commentators to continue to focus on President Barack Obama’s high levels of popularity, and to conclude that these are indicative of high levels of public confidence in the work of his administration. Indeed, a detailed look at recent survey data shows that the opposite is most likely true. The American people are coming to express increasingly significant doubts about his initiatives, and most likely support a different agenda and different policies from those that the Obama administration has advanced.
Polling data show that Mr. Obama’s approval rating is dropping and is below where George W. Bush was in an analogous period in 2001. . . Overall, Rasmussen Reports shows a 56%-43% approval, with a third strongly disapproving of the president’s performance. This is a substantial degree of polarization so early in the administration. Mr. Obama has lost virtually all of his Republican support and a good part of his Independent support, and the trend is decidedly negative.
A detailed examination of presidential popularity after 50 days on the job similarly demonstrates a substantial drop in presidential approval relative to other elected presidents in the 20th and 21st centuries. The reason for this decline most likely has to do with doubts about the administration’s policies and their impact on peoples’ lives.
Our sister publication asks analysts whether the administration’s economic forecasts are too optimistic. They would have gotten a more interesting discussion if their query had been “Is the Pope Catholic?” Of course they’re too optimistic. In fact, the word optimistic is too optimistic. A better choice might have been “insane”. Like Greg Mankiw, I would love to find a sucker investor who is willing to take the other end of a bet that both growth and revenue will fall short of the administration’s predictions.
Having defended Obama’s candidacy largely on his economic team, I’m having serious buyer’s remorse. Geithner, who is rapidly starting to look like the weakest link, is rattling around by himself in Treasury. Meanwhile, the administration is clearly prioritized a stimulus package that will not work without fixing the banks over, um, fixing the banking system. . .
The budget numbers are just one more blow to the credibility he worked hard to establish during the election. Back then, people like me handed him kudoes for using numbers that were really much less mendacious than the general run of candidate program promises. Now, he’s building a budget on the promise that this recession will be milder than average, with growth merely dipping to 1.2% this year and returning to trend in 2010. . . He has now raced passed Bush in the Delusional Budget Math olympics.
The White House is refusing Freedom of Information Act requests for documents regarding the Anti-Counterfeiting Trade Agreement, on national-security grounds:
“Please be advised the documents you seek are being withheld in full,” wrote Carmen Suro-Bredie, chief FOIA officer in the White House’s Office of the U.S. Trade Representative.
The national security claim is stunning, given that the treaty negotiations have included the 27 member states of the European Union, Japan, South Korea, Canada, Mexico, Australia, Switzerland and New Zealand, all of whom presumably have access to the “classified” information.
Veterans Affairs Secretary Eric Shinseki confirmed Tuesday that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance. . .
No official proposal to create such a program has been announced publicly, but veterans groups wrote a pre-emptive letter last week to President Obama voicing their opposition to the idea after hearing the plan was under consideration.
The groups also cited an increase in “third-party collections” estimated in the 2010 budget proposal — something they said could be achieved only if the Veterans Administration started billing for service-related injuries.
Asked about the proposal, Shinseki said it was under “consideration.”
“A final decision hasn’t been made yet,” he said.
Currently, veterans’ private insurance is charged only when they receive health care from the VA for medical issues that are not related to service injuries, like getting the flu.
Charging for service-related injuries would violate “a sacred trust,” Veterans of Foreign Wars spokesman Joe Davis said. Davis said the move would risk private health care for veterans and their families by potentially maxing out benefits paying for costly war injury treatments.
I’m honestly shocked by this. Set aside the obvious (or so I would have thought) immorality of charging veterans for treatment of injuries incurred while serving their country. Also set aside the bizarre spectacle of arguing for universal health care while cutting back health care for veterans. And set aside the strange decision to demand sacrifices of veterans while the government goes on a deficit-financed spending spree.
All that aside, it strikes me as terrible politics. Why slap veterans in the face with a plan that will never be enacted? I don’t get it.
The increasing use of presidential signing statements began in the Reagan Administration and continued into the administrations that followed. The primary historical use of signing statements was to point out constitutional problems and direct the executive branch in how to deal with them. So has there been a great increase in unconstitutional legislation? Quite possibly, but there is another reason why the use of signing statements has grown.
When interpreting the law, courts frequently go back to its legislative history to get a sense of its authors’ intent. This leads to an imbalance between the branches of government, because the legislative and judicial branches both get their say regarding the meaning of the law, but not the executive branch. To address that imbalance, Samuel Alito (then Deputy Assistant Attorney General) proposed in a 1986 memo (pdf) to expand the use of signing statements:
Our primary objective is to ensure that Presidential signing statements assume their rightful place in the interpretation of legislation. In the past, Presidents have issued signing statements when presented with bills raising constitutional problems. [Office of Legal Counsel] has played a role in this process, and the present proposal would not substantively alter that process.
The novelty of the proposal previously discussed by this Group is the suggestion that Presidential signing statements be used to address questions of interpretation. Under the Constitution, a bill becomes law only when passed by both houses of Congress and signed by the President (or enacted over his veto). Since the President’s approval is just as important as that of the House or Senate, it seems to follow that the President’s understanding of the bill should be just as important as that of Congress. Yet in interpreting statutes, both courts and litigants (including lawyers in the Executive branch) invariably speak of “legislative” or “congressional” intent. Rarely if ever do courts or litigants inquire into the President’s intent. Why is this so?
Part of the reason undoubtedly is that Presidents, unlike Congress, do not customarily comment on their understanding of bills. Congress churns out great masses of legislative history bearing on its intent–committee reports, floor debates, hearings. Presidents have traditionally created nothing comparable. Presidents have seldom explained in any depth or detail how they interpreted the bills they have signed. Presidential approval is usually accompanied by a statement that is often little more than a press release. From the perspective of the Executive Branch, the issuance of interpretive signing statements would have two chief advantages. First, it would increase the power of the Executive to shape the law. Second, by forcing some rethinking by courts, scholars, and litigants, it may help to curb some of the prevalent abuses of legislative history.
Alito accurately predicted that Congress would not take kindly to the proposal:
It seems likely that our new type of signing statement will not be warmly welcomed by Congress. The novelty of the procedure and the potential increase of presidential power are two factors that may account for this anticipated reaction. In addition, and perhaps most important, Congress is likely to resent the fact that the President will get in the last word on questions of interpretation.
I’m not aware of an occasion in which an expanded signing statement has been tested in court, so it’s too soon to say whether Alito’s experiment has succeeded.
President Obama tried to overturn his predecessor again on Monday, saying he will not use bill signing statements to tell his aides to ignore provisions of laws passed by Congress that he doesn’t like. . . Obama sent a two-page memo to department heads saying he would only raise constitutional issues in his signing statements and do so in “limited circumstances.” These statements “should not be used to suggest that the president will disregard statutory requirements on the basis of policy disagreements,” the memo said.
Bush’s tactics were not cited specifically. Obama also instructed agencies to consult Attorney General Eric Holder before relying on any previous signing statement as a basis for “disregarding, or otherwise refusing to comply with any provision of a statute.” . . .
In his memo, Obama asked aides to work out constitutional problems before Congress acts.
Michelle Boardman, a deputy assistant attorney general in the Bush administration, said the Bush White House tried to do just that. She said it is the executive branch’s responsibility to point out conflicts between newly passed laws and the Constitution.
Obama “will discover for himself just how infrequently Congress shows any interest in removing unconstitutional provisions,” she said.
President Barack Obama, sounding weary of criticism over federal earmarks, defended Congress’ pet projects Wednesday as he signed an “imperfect” $410 billion measure with thousands of examples. . . On another potentially controversial matter, the president also issued a “signing statement” with the bill, saying several of its provisions raised constitutional concerns and would be taken merely as suggestions. He has criticized President George W. Bush for often using such statements to claim the right to ignore portions of new laws, and on Monday he said his administration wouldn’t follow those issued by Bush unless authorized by the new attorney general.
So the Obama Administration’s position on substantive signing statements is identical to that of the Bush Administration (and others as far back as the Monroe Administration), to use them to identify constitutional problems in legislation and to direct the executive branch how to deal with them. The only difference is a new president bringing new ideology.
This is expected. Regardless of what they say on the campaign trail, presidents invariably are fans of presidential power. Senator Obama may have chafed at presidential signing statements, but President Obama is going to use them all he likes. The only surprising thing is that anyone would be surprised.
There is something new here, though. Before issuing his first signing statement, President Obama did issue a memo overturning all previous signing statements. As far as I know, that hadn’t been done before. It makes sense, though, from Obama’s point of view. He need not support his predecessors’ executive power in order to exercise his own. Posturing aside, all his memo Monday did was order the executive branch to follow his signing statements, but not to follow anyone else’s without checking first.
In this, Obama has surely set a new precedent. The next Republican president no doubt will issue a similar memo overturning all previous signing statements. On that day, there will be much hue and cry from Democrats, and the signing statement will become bad again. Until the next Democrat.
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