Detailed Abstractions

Well, the verdict is in. The Republicans are being cast as the party of no.  The party without ideas.  The party of obstruction.

Please make no mistake about it, this marketing push isn’t really about obstruction, but about the upcoming elections.  Just as President Clinton did brilliantly prior the 1996 elections when he cast all Republicans as following Newt Gingrich and obstructing spending laws, the Obama administration is moving forward in much the same pattern.

This is possible because the White House, regardless of occupant, has historically been able to control the news cycle.  In my opinion, this should be an indictment on journalism as a whole when alternatives which exist aren’t being reported, but simply put:  when the President talks, news happens.  When your normal representative talks, you’re lucky if you even hear about it.

It worked during the Clinton Administration on spending, it worked during the Bush (43) Administration on the Patriot Act, & it certainly might work again this time. Irregardless, the campaign is back and in high gear (here via USA Today):

…”Too often, the Republican leadership in the United States Senate chooses to filibuster our recovery and obstruct our progress,” Obama said. “And that has very real consequences.”…

Or here via NY Times blog, here via WaPo, & on and on and on…

From a critical point of view however, obstructionist should not automatically be a pejorative.   Without analyzing what exactly is being obstructed, this is little more than name calling.

As an example, if say in the 1940s Congress was actively trying to “obstruct” the intermittent of thousands of innocent Japanese-Americans, this would not only be a moral good, but any thoughts to compromise solely to be seen as a non-obstructionist would be wrong.  What would be a compromised alternative?  House arrest?

Additionally, we have to be on the lookout for the differences between the marketing of bills and their actual language.  Think of the new health care legislation.  President Obama’s promises of more health care for all at cheaper prices, simply don’t seem to be fulfilled by the 2500 page law passed… or maybe they are being fulfilled, but like the Patriot Act, no one really knows what the new legislation actually means (here via Cato):

…The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.

The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact….

Or on yesterday’s Meet The Press Rep. Van Hollen stated (transcripts here via MSNBC):

…The frustration is there are lots of important bills to push for jobs that are sitting over in the Senate.  But it’s not the fault of the Democratic leadership in the Senate.  I mean, frankly, you know, John Cornyn and his allies have been trying to block a whole lot of very important jobs measures.  We in fact sent a piece of legislation over very recently that would remove these perverse tax incentives to ship American jobs overseas, that give American corporations a bonus if they ship American jobs overseas….

Just like health care, the basic idea that our representatives are working on private job creation incentives is a good one.  But just like the Obama Administration’s promises on health care, Rep. Van Hollen is selling us a job creation bill which has little chance of actually creating jobs.

To translate – what they mean by “removing incentives” is to increase taxes on businesses who outsource.  Now, some may want this to happen for various reasons, but the economics are pretty straight forward.  Tax increases have never increased jobs & forcing a tax such as this could actually result in companies simply moving their head quarters as well.

To be fair, there are bills I don’t believe the Republicans should block, for instance the extension on unemployment benefits (though it seems likely to pass soon: here via The Hill).

Yes, the point isn’t that the Republicans are doing the right thing and the Democrats are failing at every single step, the point is only intended to remind us of the old saying about representative governance:

The people will get the government they deserve.

& so long as we allow marketing campaigns to have more force in elections than critical analysis does, we will likely continue to be disappointed.

Come on…. we can’t find any good justices to nominate to SCOTUS?  This is what… the third (including the previous administration) uninspired justice nominated in just 5 years.

For such a prestigious and life long appointment, we should expect much better (via Cato here):

Elena Kagan, President Obama’s nominee for the Supreme Court, seemed to shock many people when she dodged questions about the Declaration of Independence during her testimony before the Senate Judiciary Committee…

DA posts here & here

Via Freakanomics here, which will hopefully put to rest the idea that nurses go on strike to “help” patients, from the NBER paper:

…Controlling for hospital-specific heterogeneity, patient demographics and disease severity, the results show that nurses’ strikes increase in-hospital mortality by 19.4% and 30-day readmission by 6.5% for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity….

Robert Reich via Salon.com here demonstrates once again how much politics effects his economic analysis.  According to him, this whole economic mess, including a potential backslide can be blamed solely on deregulation:

…starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It increased the cost of public higher education and cut public transportation. It shredded safety nets…

Which he believes is causing greater wage disparities:

…We’re back to the same ominous trend as before the Great Recession: a larger and larger share of total income going to the very top while the vast middle class continues to lose ground….

Because with deregulation, of course, companies can become EVIL:

…Companies were allowed to slash jobs and wages, cut benefits and shift risks to employees (from you-can-count-on-it pensions to do-it-yourself 401(k)s, from good health coverage to soaring premiums and deductibles)….

I submit what Mr. Reich fears is freedom – freedom of business owners to hire and fire as they wish, freedom of employees to change jobs easily (401K allows this, pension does not), just freedom.

Secondarily, you can see in his writing that the only thing the government has ever done wrong, is by not getting involved enough.  He doesn’t mention government meddling, deficit spending, enormous new health care expenses, entirely new federal agencies which more money will be needed, idiotic regulations like a moratorium on all oil drilling due to one company’s failure….

Nope, for Mr. Reich, it’s all because the government hasn’t taken enough control over the little people.

Via Cato here, more news on the Obama Administration’s transparency:

The Social Security’s trustees’ annual report is, by law, supposed to be published by April 1. This year, however, the trustees have postponed its release indefinitely. The program’s financial condition continues to remain hidden from public view — and by many accounts will continue to be so until the end of the fiscal year….

Wonder if Reich views this as an issue?

It should be no surprise to those who watch, but just know:  the tide against freedom is continuing.

Today – it’s the DISCLOSE Act, meant to remove the freedom enhancing SCOTUS decision earlier this year (via the Atlantic here):

…The DISCLOSE Act, aimed at addressing the Supreme Court’s Jan. Citizens United v. FEC ruling by requiring additional campaign finance disclosures from outside organizations that can run political advertisements, ran into snags last week….

What is this wonderful legislation you ask (here via ABC News)?

…A pending piece of legislation known as the Disclose Act would require the heads of companies, unions and nonprofit groups to personally appear in any sponsored political ads and endorse the message. It would also require them to reveal the names of the top five donors who helped foot the advertising bill….

Which seems like a solution a Senator might have picked up from visiting an elementary school, but the reality is the Disclose act is an incredible move against free speech.  There are some complaints about the political nature that are indeed worth noting:

…But House Democrats, eager to pass the bill and avoid a fight with one of Washington’s most powerful lobbies, have agreed to exempt from the new rules a small but highly influential group of organizations that most notably includes the NRA….

Obviously excluding certain, influential lobbying groups for tighter rules is a no-no, but the real danger is losing the idea of anonymity with reference to free speech.

The objections come from the usual sources – Cato (here).  They note that while proponents of the bill claim to resolve these ills:

Rep. Price cites three harms from such speech: “the opportunity for corporations, unions and associations to dominate the playing field, intimidating public officials and drowning out the candidates’ own messages.”…

That in reality:

…Notice that these alleged harms are caused by the speech itself and not by the fact that the speech might be anonymous….

Yes indeed, what Senators and the White House is claiming is that by knowing exactly who wrote message X, or even who funded message X, that you now understand more about message X than you would’ve otherwise.   Which works well on a micro level, say arguing on the play ground & when you start losing you can just yell out “liar” or “stupid”, but in real life – for those seeking the best we can hope for, the messenger is less important overall than the message itself.

Don’t misunderstand – pointing and laughing at hypocrites who tell us what to do when they refuse to do so is funny, amusing, and a good waste of time, but ultimately irrelevant to whether the points they made were indeed true.

The odd part about this… it’s likely to die solely because of the exemptions and not because it’s an attack on free speech… but in case it does contain longevity, here’s the ACLU’s thoughts as well (via Reason.com here):

1. The DISCLOSE Act fails to preserve the anonymity of small donors, thereby especially chilling the expression rights of those who support controversial causes….

2. The DISCLOSE Act would chill not only express advocacy on political candidates, but also issue advocacy….

3. The DISCLOSE Act imposes impractical requirements on those who wish to communicate using broadcasting messages….

4. The DISCLOSE Act imposes unjust restrictions on contractors, TARP participants and corporations with minimal foreign participation.

Via The Big Picture – Is WordPress As Big As Guttenberg?Almost.:

WordPress, the blogging software that powers The Big Picture along with 11 million other blogs and has 256 million unique visitors to its hosted sites, may not be as revolutionary as movable type but it is a crucial element in what has made it possible for blogging to grow from a hobby into a major threat to the mainstream media….

Via Reason.com – In England it’s so bad, cops rob you! (here):

Police in Exeter, England, say some residents make life too easy for burglars, and to prove it, they’ve burgled around 50 homes themselves. The police look for places with unlocked doors or open windows, and then they slip inside and put valuables into a bag for the owners to find.

Via Cato – Cisneros, the Clinton Administration’s head of Housing and Urban Development (HUD) explains how the government had little to do with the housing crisis – Cato responds (here):

In a recent speech to real estate interests, former Clinton HUD secretary Henry Cisnerospreposterously claimed that the recent housing meltdown “occurred not out of a governmental push, but out of a hijacking of the homeownership process by some unscrupulous interests.”

The only criticisms Cisneros could muster for the government’s housing policies over the past 20 years were that regulations weren’t tough enough and it should have focused more onrental subsidies.

Imagine that… government officials acting as if they  weren’t effecting anything even though their entire intention was to affect the housing market.  Their entire reason for being is to affect the housing market.

Seems oddly similar to recent reports from the White House on the oil spill.  Listen carefully and you’ll hear this:  ”We have been in charge since the incident occurred, but everything that is happening is someone else’s fault.”

Speaking of which, Obama’s approval rating down (here via Gallup).  In late January of this year, 66% approved, only 19% disapproved.  The latest figures show 49% approval, 44% disapprove.  That was quick…

Lastly, but certainly not least – great pictures of the birth of a star (here via Yale):

New Haven, Conn. — Astronomers have glimpsed what could be the youngest known star at the very moment it is being born. Not yet fully developed into a true star, the object is in the earliest stages of star formation and has just begun pulling in matter from a surrounding envelope of gas and dust, according to a new study that appears in the current issue of the Astrophysical Journal.

This is one of those cases where it’s almost as if the planets aligned perfectly to show anyone willing to see the complete idiocy of our current economic policies.  In the midst of a recovery that is anything other than certain, a time when the US government, its citizens, and indeed larges swaths of the world are simply broke, yet we keep on spending.

The Federal Reserve Chairman has stated directly (here via Reason.com):

Today may be terrible, but tomorrow is going to be much worse, at least as measured by such metrics as deficits, debt, and entitlement spending. In an April speech, Federal Reserve Chairman Ben Bernanke laid out the misery that awaits us. “The arithmetic is, unfortunately, quite clear,” he said. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above.”…

Yet just yesterday, the committee to reduce budget deficits is joining a long line of other government employees in asking for more.  Over @ Cato (here):

It’s rather symbolic of what’s wrong with Washington that a commission ostensibly created to promote deficit reduction is seeking a bigger budget….

Yep, that’s correct.  As private businesses have continued to contract to meet decreased demands, the federal government continues to grow.  This happens when the federal government is allowed to print money, but that’s a side note.

Simple fact is, we have no money, yet we are still spending like drunken sailors and it seems we don’t understand.  When the governor of New Jersey is forced to tell people directly:  unlike the US government, the state of New Jersey can’t print money, we’ve run into a major problem.

& like most problems, the federal government will not help.  They are the enemy of spending policy as we can easily see, but for those that think maybe they can help here… please watch their latest commercials for the census count and ask yourself what is they underlying theme?  On the government’s own website propoganda, what is the underlying theme?

What is the main thing they want you to take away from this?  That government is the answer.  Our leaders are telling us, in no uncertain terms the same unsustainable and morally questionable hypothesis:  Make sure you get counted…. so you too can get paid.

Maybe it’s time to start asking:  exactly where are they leading us?

DA has several posts on the reasons behind the economic collapse as well as financial reform itself.  &, as is usual, the government is using the “crisis” as a power grab.

@ MarketWatch (here

):

…The comprehensive bill is an attempt fix holes in the regulatory system that helped lead to the Great Recession….

At this point, Republicans are blocking a Senate vote:

…Among the sticking points are provisions that would give regulators the authority to guarantee debts of large financial institutions, provisions that would give the Federal Reserve authority to lend money to banks in an emergency, and a proposal to deal with failing systemically important companies by setting up a “burial insurance” fund….

Now I’m no fan of the Republicans and understand full well some of their opposition is about politics and not the actual bill, but I’m pleased with this block. First, guaranteeing debts of larger financial institutions does the exact opposite of the administration’s consistently stated goal – end too big too fail. @ MarketWatch (here):

NEW YORK (MarketWatch) — The U.S. must pass legislation to reform the financial system , in particular to make sure that no bank operates on the assumption that it will be bailed out by taxpayers, Lawrence Summers, the director of the National Economic Council and President Barack Obama’s top economic adviser, said Sunday.

“We must end too big to fail,” he said on Face the Nation. “There is no one associated with the White House who believes “too big to fail” is acceptable, or that it’s acceptable for financial institutions to rely on a bailout.”…

@ Daily Finance (here):

Too big to fail? This isn’t a designation that the Obama administration wants to exist any more….

& the President himself via YouTube (here). Insuring potential debts for very large institutions which might fail, is insuring too big to fail continues.  In this particular case, the logic is obvious and inescapable.  If an institution becomes very large, then the government designates them as whatever, which in turn tells the investing public that that institution is backed by the federal government. This will not only give larger banks an advantage (would you rather invest in a business you know won’t be allowed to fail or one that you know will be allowed to fail?), making it more difficult for smaller banks to compete, but actually incents banks to become big enough to get the designation itself. But why stop there? @ MarketWatch (here

):

…The legislation would set up a new agency to protect consumers from lending abuses. It would also give the government the authority to wind down big financial institutions, and expand oversight of the derivatives market….

Soooooo… the government, which continued to support Fannie and Freddie after being told by numerous groups the risk they posed, the government which regulated ratings agencies who gave triple-A bond ratings to MBSs, the government who’s economic predictions have failed again and again needs yet another agency from which to fail?  Maybe it’s just me, but I thought the justice system was supposed to protect consumers… But that’s simply not enough power either.  They also need more control over the derivatives market.  You know, the market which had nothing to do with the economic crisis.  They also plan to more heavily regulate pay-day loan companies.  Not sure what they had to do with the crisis either… I think Alan Reynolds @ Cato stated it very well (here):

The Obama administration thinks it has discovered the perfect formula to cram legislation through in a hurry:  Demonize some prominent firm within an industry you plan to redesign, and then pass a law that has nothing to do with the accusation against the demonized firm.  They did this with health insurance and now they’re trying it with finance.

However it’s said and whatever is said, this legislation will do the opposite of its theoretical intent.  It will not protect anyone, but  hurt all consumers.  By adding more and more layers of of regulations, the barriers to entry are increased for everyone, hurting competition, and raising prices for the end consumer.

Obamacare - was the final push an act of noble means or just hubris? (via Reason.com here)

…At a time when America’s economy is still in bad shape and when we face numerous problems abroad, Obama has put the country through a shattering political battle—and, with legal challenges and promises of repeal, the fight may be just beginning.

This seems, at the moment, less a monument to idealism than to hubris.

Rep. Mike Honda, D-CA seems to think Fannie Mae knows their stuff (via Politico here).  In asking for more money to prevent legal foreclosures, he gives us this:

…In addition, Fannie Mae estimates that as many as 50 percent of the minority homeowners who received a subprime loan should have qualified for a prime loan. This clearly indicates the need for housing counseling services….

With all due respect to Mr. Honda, I think all this clearly indicates is poor critical thinking skills.  When a GSE which apparently knew nothing about the impending crisis and was proactively laying down on the job when it came to auditing loan standards gives you estimates on who might or might not have qualified for what kind of loan – laughter is the appropriate response.  Not regurgitation.

Cato on telephony deregulation, cell phone innovation, & ingratitude (here).  Discussing his memories as a child where phone line were costly and long distance was only slightly less expensive than actual driving as compared to today’s age:

Then came the breakup of the AT&T monopoly in 1984. Phone technology and competitive service provision exploded. In 1982, Motorola produced the first portable mobile phone. It weighed about 2 pounds and cost $3995.

Within a very few years they were much smaller, much cheaper, and selling like hotcakes.  Today there are some 4.6 billion mobile phones in the world, and counting, or about 67 per every 100 people in the world.

Then he moves forward to the ingratitude:

And to celebrate this incredible achievement, Slate and the New America Foundation are holding a forum titled “Can You Hear Me Now? Why Your Cell Phone is So Terrible.”

From the CEI (Competitive Enterprise Institute), we learn the EPA is about to expand its powers (here):

Washington, D.C., March 30, 2010 – The Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) are expected this week to finalize their joint greenhouse gas (GHG)/fuel economy standards rule. This will make carbon dioxide an “air pollutant subject to regulation” under the Clean Air Act for the first time. The rulemaking, and the endangerment finding that is its prerequisite, will allow EPA to immediately exercise and continue to amass powers never delegated to the agency by Congress….

I suppose those supporting the decision know nothing about the EPA’s massive failure in just the Energy Star program.

Lastly, as a reminder, most places and people in the US did NOT buy homes they couldn’t afford (via WSJ here):

The U.S. still is feeling the effects of widespread housing bust, but a new report serves as a reminder that large swaths of the nation didn’t experience a boom in home prices and hasn’t suffered from the bust….

In fact, most of the insane double digit growth in real estate prices were in 5 main areas – NY corridor, Florida, Arizona, California, Nevada.  Make of it what you will that almost all flyover states never experienced the irrational boom, to be inevitably followed by the burst.

Under the title, Unnecessary Court Decisions, FIRE has won a victory for free speech rights on college campuses (here):

FORT WORTH, Texas, March 16, 2010—Late yesterday, in a striking victory for the First Amendment on campus, a federal district court in Texas ruled that a number of restrictions on students’ speech at Tarrant County College (TCC) are unconstitutional. In his decision, U.S. District Judge Terry R. Means found that TCC’s reliance on a policy prohibiting “disruptive activities” to restrict students Clayton Smith and John Schwertz from holding an “empty holster” protest violated the First Amendment….

Congrats to FIRE once again for trying to teach society what free speech actually means, just wish a court wasn’t required to force “educators” to understand freedom.

More “When I say what others should be allowed to do, that doesn’t apply to me” politicians.  This time via Reason Foundation discussing Arne Duncan, the current US Secretary on Education has prevented poor people in one district from having vouchers while maintaining a system for the well connected in other parts of the country (here):

US Education Secretary Arne Duncan has been unwilling to support the DC Opportunity Scholarship program that allows disadvantaged students to attend higher-quality DC private schools and even rescinded the scholarships of 216 children that had already been accepted into the program this year. This becomes even more ironic in light of the fact that Duncan maintained an exclusive list of well-connected folks that he helped exercise school choice in Chicago’s highest quality public schools….

What they call ironic, I consider extreme arrogance, but to-may-to, to-mah-to…

CATO shows us an interesting chart about the level of government spending in health care.  Hopefully with straight forward facts we can start to disabuse others of the notion that the current state of health care is due to private industry (whole thing here):

via Mercury News, CA, with major budget issues (via KNX 1070 News), but should that stop them from further propping up home sales during a correction in the market cycle?  Well, if you’d think yes, then you give too much credit (here):

…The deal reached Monday provides $200 million in new tax credits for homebuyers…

Which is stupid enough, but politicians can’t be held back by things such as economics.  So while more sellers exist than buyers, they also want to spur construction:

…to be split evenly among those buying a home for the first time and anyone buying a newly constructed home. Anyone qualified who makes a purchase between this May and August 2011 will receive a credit for 5 percent of the home’s purchase price, up to $10,000 over three years….

DA has several posts on the governments’ continuing actions which are understood to have been part of the problem in the first economic crisis (here, here, & here), but attempting to add new inventory to a market under correction is grossly irresponsible.