Monday, January 25, 2010

Philosophical Foundation of Progressive & Conservative Thought (part I)

A friend of mine routinely e-mails me replies to my posts that presents me with thoughtful counterpoints to my positions. He puts forth some good examples of where state intervention proved to be beneficial on a domestic and international level. What surprises both of us is that given my generally libertarian positions, I agree with most of his points, particularly towards the merits of well thought out government intervention to improve the quality of water and air.

After putting much thought into it, I realized that I am not inherently opposed to progressive end points (position and policies), but rather their starting point (their philosophical foundation). This may seem like an academic argument, but it has very real social, political and economic repercussions on lives of Americans. More importantly, it determines the future trajectory of American life.

Government regulation of industry undoubtedly improved working conditions and the safety of many products, so I do acknowledge there are some instances in which limiting choices available to businesses, workers and consumers are necessary. However, the starting point, the default setting needs to be maximum liberty for individuals and enterprises, which means that the burden of proof must fall on those who seek to limit social & economic liberty, not on those who seek to defend it. Unfortunately, we have experienced a near total philosophical reversal. Rather than believe that individuals should be free to pursue their personal and productive endeavors unless compelling evidence is presented that they harm the public, most Americans implicitly believe that no endeavor can be pursued without the state first granting permission, imposing regulations and imposing substantial taxation.

Take the issue of professional licenses. We can have the philosophical starting point of: individuals should be free to pursue the proffesion of their choice and still arrive at the conclusionthat there are several notable exceptions to this rule. Specifically, the state has a vital interest in regulating proffesions that potentiall involve life-and-death outcomes, like: medicine, psychology, architecture and engineering. However, due to the domination of the progressive philosophical default setting, in most localities, individuals must now seek the permission of the state to engage in any economic activity, even hair braiding, flower arranging, interior design and the sale of caskets. In fact, a salon in Atlanta Georgia was fined $500 for having two unlicensed hair braiders and the said employees were required to obtain a cosmetology license would cost them somewhere between $5,000 - $10,000 in training, tests and license fees. Granted, a bad hair day can be traumatic for some, but no physical harm has ever ensued from poorly braided hair. Many economists look beyond "public welfare" rhetoric and see such regulation for what it is - entrenched and politically connected companies using the state to limit competition. The starting point must be that the burden of proof must fall on those who seek to limit the ability of individuals to freely exchange goods and services, NOT the other way around.

My associate presented me with some fair compelling arguments why some of the bailouts may have been necessary in the face of extraordinary circumstances. However, the philosophical default setting in a free and prosperous society must be that the seizure and redistribution of wealth from one individual, group, enterprise or segment of the economy to another is a harmful aberration. In undemocratic societies the right of redistribution allowed kings and generals to freely and arbitrarily pilfer the wealth of their citizenry. In democratic societies, this allowed for harmful misallocations of resources and market distortions that in the long run lowered the living standards of all, except of course the ruling elite. Every dollar in subsidies that politically connected corporations and industries directly not only equal an added tax burden on the general population, but less potential capital for new creative and productive enterprises. So, the burden of proof must NOT fall on those who oppose bailouts and subsidies, but on those who propose continuing them. In practical terms this means that burdensome subsidies would not be set on auto-pilot; each year their proponents would have to justify the clear and present danger in not continuing them.

When we explore issues of welfare and entitlements, the discussion becomes less clear, because there are many examples of a clear and present danger being posed by not having the state intervene. Take the very example of a single mother with four children; of course we can argue that the public should not bear the burden of her financially disastrous choices. And we can argue that individuals and societies evolve towards sustainable social behavior and social structures only when they face the consequences of their behavior. But, in practical terms if we did not provide her with ample food, medical and housing subsidies, her children would unduly suffer.

So, what good is the conservative default position: pathological choices of individuals must not be subsidized by the state, if we know that we will frequently have to violate it? Why not simple embrace the progressive starting point of the welfare of individuals must be unconditionally guaranteed by the state? Because, the abandonment of the former position by government bureaucracies and society at large has led to the systematic subsidization of unsustainable choices and social structures. If more of our ruling elite had not abandoned the conservative starting point, government bureaucracies would have more carefully guarded against the unintended consequences that their policies have engendered. To start off with they would have encouraged a curriculum that discussed the consequences of single motherhood for individuals and communities. And while applying for government assistance, the social welfare bureaucrat might have said to the expecting single mother "we will fully provide for your 1st child, we will only cover 50% of the cost of maintaining your 2nd choice and after that, you are on your own..."

The issue that most represents a clash of underlying visions is immigration, yet few of its partisans are fully aware their implied philosophical foundations. In the past 20 years, we have substantially shifted towards towards the progressive starting point, which entails that:

1. The burden of proof lies with those who seek to enforce basic immigration law and curtailing the massive flow of legal immigration.

2. Those who seek to curtain legal or illegal immigration are inhumane, anti-immigrants.

Although, I do not support a hard line on immigration enforcement and I am open to a well structured path to citizenship for undocumented immigrants, I believe that this philosophical starting point is largely bereft of reason. To start off with, it's obvious that by openly and systematically failing to enforce a law, rather than changing it through the legislative process, we serious erode the rule of law. Second, it sets a very bad precedent to allow the violators of a law to override it by overwhelming the capacity of the system to enforce it. This too, constitutes an erosion of the rule of law. Third, even though I am sympathetic to the plight of undocumented immigrants, there is no argument in the rational universe for allowing non-citizens the right to determine a nation's immigration laws; this constitutes a clear erosion of national sovereignty. Fourth, the implied progressive premise that someone has a right to remain in a country because they were able to cross a border is without any rational foundation. Fifth, contrary to the claims of its authors, the amnesty of 1986 resulted in a surge in undocumented immigration, which makes the claims of today's proponents of amnesty all the more dubious. And last but not least, the burden of proof must fall on those who seek a demographic transformation that entails tremendous economic, social and political ramifications.

So, why embrace the conservative philosophical starting point if I am not willing to follow through to its logical conclusion: a tough and systematic prosecution of those who violate immigration law? And what rational argument do I have for digressing from sound philosophical premises? The answer to the latter question is: there is no rational argument; my progressive digression rests on feelings, on sympathy for good people who were compelled to violate reasonable laws and on an aversion for the immediate suffering that tough enforcement of those laws entails. But, on a rational level I cannot escape the fact that the progressive position will engender long term suffering, most of all for immigrants and their descendants, by further depressing the wages of low skilled workers and by overwhelming our capacity to provide quality public services (schools, hospitals, police) in their communities.

This brings us to an underlying problem in the progressive vision: short term pain is avoided at the cost of long term sickness. Extraordinary circumstances and compassion compels even the most staunch conservatives to accept temporary measures that we know are unwise over the long run. But, we must remain vigilant that temporary measures do not become permanent fixtures in our social, economic and political system that erode the long term welfare of our great republic. FDR's "emergency measures" to assist beleaguered farmers did not end with the Great Depression, rather they have grown and mutated and become the worst examples of corporate welfare. And modest safety nets like social security have ballooned into unsustainable entitlements that will continue to consume more and more of our budget, squeezing out other vital programs and driving us towards financial insolvency. So, those who express reservations about Obama's "modest proposals" for health care reform are neither heartless nor greedy, they are students of history who are aware of the consequences of severing ties to the sound philosophical principles of limited government, economic liberty and rule of law. And perhaps most importantly, they understand that individuals, enterprises and communities only evolve when they face the consequences of their errors and enjoy the fruits of their labor.

Too Stupid To Be True?

Pictured Above: Two of Chicago's leading policy makers.

In social and economic policy we can discern two general approaches to improving the welfare of its citizenry. One that seeks to improve welfare by redistributing social & economic capital, whereas the other seeks to achieve the same end by increasing the general level of capital.

The first path is alluring because it offers almost instant benefits to its recipients, whereas the second path is pursued by few politicians, because it is slow, laborious and requires a populace that is committed to self improvement.

Surveying the successes and failures of diverse nations, I am certain that the latter path is the only one that provides a firm foundation for long term wealth, peace and prosperity, as best seen in South Korea, Taiwan and Israel. Conversely, socialist nations that pursued the path of redistribution, condemned the majority of its people to squalor and deprivation.

Unfortunately the political establishment of Chicago shows a greater inclination towards the failed path of redistribution. When faced with the reality that a comparatively low number of
African-Americans and Latinos were passing the police entrance examination, the city declared its intention to toss out the examination entirely.

I can think of no better example of lowering standards in the name of equality and diversity. The end result of engineering equal outcomes at the expense of merit is an increase in the cost of and a reduction in the quality of city services. To do so in a slothful city bureaucracy is foolish, but to do so with civil servants who are vital to the safety and welfare of Chicagoans constitutes criminal neglect. And ironically, the cost of lowering the quality of policemen will be most heavily born by African-Americans and Latinos who disproportionately are the victims of crime.

An administration committed to building human capital would strive to help foster educational & professional development in African-American and Latino communities. Rather than lower standards of excellence, they would help more people achieve those standards. And instead of offering jobs to the less qualified, they would work to address the underlying factors which have led to a lower presence of qualified individuals in certain communities.

First and foremost they would work to improve Chicago Public Schools and increase
opportunities for individuals of marginalized communities to attend quality private schools. Secondly, they would seek to address the underlying cultural factors that have slowed the development of human capital in diverse communities.

Unfortunately this is highly unlikely, because few politicians are willing to take on the administrators and teacher's unions that for the most part defend the status quo.

And even fewer are willing to candidly speak to African-Americans and Latinos as capable adults who, like all human beings, hold the key to their own self improvement. Rather, these politicians
sell cheap narratives of victimology that may earn them votes, but have yet to improve the quality of a single classroom or police officer.

Police may scrap entrance exam

'OPEN UP THE PROCESS' Union chief: It's 'too stupid to be true'

January 6, 2010


The Chicago Police Department is seriously considering scrapping the police entrance exam to bolster minority hiring, save millions on test preparation and avert costly legal battles that have dogged the exam process for decades, City Hall sources said Tuesday.

If the process is opened to everyone who applies and meets the minimum education and residency requirements, Chicago would be virtually alone among major cities. Most cities have police entrance exams -- and for good reason, experts say.

"A background check and a psych [exam] alone will not eliminate some people who should not be there," said Brad Woods, who ran the Personnel Division under former Chicago Police Superintendents Phil Cline and Terry Hillard.

Calling an application-only process a "step backward" and the "wrong way to go," Woods said, "When you lower your quality, you will get poor police service and more complaints. ... Whenever you make it easier to be the police, you're doing the citizens and the Police Department a disservice."

Charlie Roberts, who ran the training division from 1995 to 1999, noted that there are "eleven tracks" recruits must go through in the police academy, including the law and the municipal code.
"If you don't give someone at least a reading comprehension test, can you just put them in and risk the possibility of having so many of them fail? That could get quite expensive," Roberts said.
"We were getting people with 60 hours of college credit who were reading at a third-grade level. What do you think you'll get if you have no screening process?"

Human Resources Department spokesperson Connie Buscemi acknowledged Tuesday that the Daley administration has been exploring other "options" since last fall, when a "request-for-proposals" for companies interested in preparing an on-line police entrance exam was cancelled.

The last police entrance exam was held on Nov. 5, 2006.

"We wanted to try to develop something on-line to allow the city to accommodate members of the U.S. military who are on active duty. But, we didn't get any responses that met our needs. No one said they could administer an on-line exam" and guarantee its integrity, Buscemi said.

"We're [now] reviewing our options on how to administer the police application process."

Other sources confirmed that the police entrance exam could be scrapped altogether "to open up the process to as many people as possible." A final decision could be made later this week.

Fraternal Order of Police President Mark Donahue said the idea "sounds too stupid to be true."

"You need a testing process. ... You need to be very concerned about the very limited information you would get from just a screening and application process," Donahue said.

Hiring and promotions in the Police and Fire Departments have generated controversy in Chicago for as long as anyone can remember.

The criticism reached a crescendo in 1994 after a sergeants exam produced just five minority promotions out of 114.

The test was the first to be administered by the city after "race-norming" -- the practice of adjusting scores on the basis of race -- was ruled unconstitutional.

In November 2005, City Hall announced plans to offer the police entrance exam a record four times the following year -- and for the first time on the Internet -- after an unprecedented outreach campaign that bolstered the number of minority applicants to 34 percent black, 24 percent Hispanic and 26 percent women.

More than two years later, black ministers told newly-appointed Police Supt. Jody Weis that, if he was serious about re-establishing trust between police and the black community, he should start by hiring and promoting more African Americans.

The Police Department is currently operating at least 2,000 officers-a-day short of authorized strength, counting vacancies, medical leave and limited duty.

Mayor Daley's 2010 budget uses federal stimulus funds to add just 86 officers, 30 of them for the CTA.

That's nowhere near enough hiring to solve a manpower shortage that, Weis fears, will get dramatically worse when as many as 1,000 more officers retire later this year.,CST-NWS-policeexam06web.article

We Need a New Model...

The United States and other nations recently experienced record cold and snowfall, which (to the best of my knowledge) were not predicted by popular models of global warming. I do not doubt that we are experiencing climate change, however it appears as if we need a new model to better analyze, explain and predict climate patterns. Questions remain about the extent and precise manner in which human activities influence climate change. Until these questions are answered, we cannot blindly invest trillions of dollars to reduce our carbon output, because the benefits would be questionable, while the costs would be crushing.

Arctic freeze and snow wreak havoc across the planet

January 5, 2010

Charles Bremner in Paris and Richard Lloyd Parry Tokyo

Arctic air and record snow falls gripped the northern hemisphere yesterday, inflicting hardship and havoc from China, across Russia to Western Europe and over the US plains.

There were few precedents for the global sweep of extreme cold and ice that killed dozens in India, paralysed life in Beijing and threatened the Florida orange crop. Chicagoans sheltered from a potentially killer freeze, Paris endured sunny Siberian cold, Italy dug itself out of snowdrifts and Poland counted at least 13 deaths in record low temperatures of about minus 25C (-13F).

The heaviest snow yesterday hit northeastern Asia, which is suffering its worst winter weather for 60 years. More than 25 centimetres (10in) of snow covered Seoul, the South Korean capital — the heaviest fall since records began in 1937.

In China, Beijing and the nearby port city of Tianjin had the deepest snow since 1951, with falls of up to 8in and temperatures of minus 10C. In the far north of China, the temperature fell to minus 32C. More than two million Beijing and Tianjin pupils were sent home and 1,200 flights were delayed or cancelled at Beijing’s international airport.

The same far-eastern weather system took its toll of Sakhalin, the Russian island off Siberia, which was hit by blizzards and avalanches. Farther west, in northern and eastern India, more than 60 people, mainly homeless, died of exposure. Thousands of schools were closed. In Uttar Pradesh, the state neighbouring Nepal, the authorities spent £1.3 million on blankets and firewood for needy households.

Western Russia suffered a deep freeze as snow swept across the Baltic and north-central Europe, leaving the worst devastation in Poland, where 13 people died, bringing the toll from the cold this winter to 122.

Up to ten skiers died or were missing in avalanches. The worst incident was in the Diemtig Valley in Switzerland on Sunday, when avalanches hit a group of skiers and then the rescuers who went to their aid. Eight people were pulled from the snow alive, but four died, including an emergency doctor, and three more were missing.

In Italy, emergency services struggled with rare cold and ice. Motorways in the northeast were closed and military helicopters were sent to Sicily with medical aid.

In the United States, heavy snow fell again on the northeast

In Burlington, Vermont, a record 33in of snow fell in a weekend storm. The previous record in a three-day period was set in 1969. Residents of the Northern Plains were warned to expect lethally cold temperatures of about minus 30C.

The icy conditions of Western Europe, which broke records in half a dozen countries in December, are expected to last for at least another week.

Guo Hu, the head of the Beijing Meteorological Bureau, linked this week’s conditions to unusual atmospheric patterns caused by global warming.

Meteorologists were also trying to find a pattern in the heavy rains that have hit equatorial regions and the southern hemisphere in the past week.

At least 20 people have been killed in flash floods in Kenya after torrential rains made thousands homeless.

In Australia, the authorities declared a natural disaster along the Castlereagh River as it peaked after torrential rain, forcing 1,200 residents to abandon their homes for high ground.

In Brazil, the death toll from flooding and mudslides over the past four days rose above 80.

Closer to home, forecasters have warned Britons to brace themselves for a freezing cold, bleak new year — this winter is set to be the coldest for more than 30 years.

Great Article on Israel

Pictured Above: David Brooks

Kibbutzim may have helped found Israel, but today creative capitalism has allowed Israel to not only survive, but to thrive.

The Tel Aviv Cluster


Published: January 11, 2010

Jews are a famously accomplished group. They make up 0.2 percent of the world population, but 54 percent of the world chess champions, 27 percent of the Nobel physics laureates and 31 percent of the medicine laureates.

Jews make up 2 percent of the U.S. population, but 21 percent of the Ivy League student bodies, 26 percent of the Kennedy Center honorees, 37 percent of the Academy Award-winning directors, 38 percent of those on a recent Business Week list of leading philanthropists, 51 percent of the Pulitzer Prize winners for nonfiction.

In his book, “The Golden Age of Jewish Achievement,” Steven L. Pease lists some of the explanations people have given for this record of achievement. The Jewish faith encourages a belief in progress and personal accountability. It is learning-based, not rite-based.

Most Jews gave up or were forced to give up farming in the Middle Ages; their descendants have been living off of their wits ever since. They have often migrated, with a migrant’s ambition and drive. They have congregated around global crossroads and have benefited from the creative tension endemic in such places.

No single explanation can account for the record of Jewish achievement. The odd thing is that Israel has not traditionally been strongest where the Jews in the Diaspora were strongest. Instead of research and commerce, Israelis were forced to devote their energies to fighting and politics.

Milton Friedman used to joke that Israel disproved every Jewish stereotype. People used to think Jews were good cooks, good economic managers and bad soldiers; Israel proved them wrong.

But that has changed. Benjamin Netanyahu’s economic reforms, the arrival of a million Russian immigrants and the stagnation of the peace process have produced a historic shift. The most resourceful Israelis are going into technology and commerce, not politics. This has had a desultory effect on the nation’s public life, but an invigorating one on its economy.

Tel Aviv has become one of the world’s foremost entrepreneurial hot spots. Israel has more high-tech start-ups per capita than any other nation on earth, by far. It leads the world in civilian research-and-development spending per capita. It ranks second behind the U.S. in the number of companies listed on the Nasdaq. Israel, with seven million people, attracts as much venture capital as France and Germany combined.

As Dan Senor and Saul Singer write in “Start-Up Nation: The Story of Israel’s Economic Miracle,” Israel now has a classic innovation cluster, a place where tech obsessives work in close proximity and feed off each other’s ideas.

Because of the strength of the economy, Israel has weathered the global recession reasonably well. The government did not have to bail out its banks or set off an explosion in short-term spending. Instead, it used the crisis to solidify the economy’s long-term future by investing in research and development and infrastructure, raising some consumption taxes, promising to cut other taxes in the medium to long term. Analysts at Barclays write that Israel is “the strongest recovery story” in Europe, the Middle East and Africa.

Israel’s technological success is the fruition of the Zionist dream. The country was not founded so stray settlers could sit among thousands of angry Palestinians in Hebron. It was founded so Jews would have a safe place to come together and create things for the world.

This shift in the Israeli identity has long-term implications. Netanyahu preaches the optimistic view: that Israel will become the Hong Kong of the Middle East, with economic benefits spilling over into the Arab world. And, in fact, there are strands of evidence to support that view in places like the West Bank and Jordan.

But it’s more likely that Israel’s economic leap forward will widen the gap between it and its neighbors. All the countries in the region talk about encouraging innovation. Some oil-rich states spend billions trying to build science centers. But places like Silicon Valley and Tel Aviv are created by a confluence of cultural forces, not money. The surrounding nations do not have the tradition of free intellectual exchange and technical

For example, between 1980 and 2000, Egyptians registered 77 patents in the U.S. Saudis registered 171. Israelis registered 7,652.

The tech boom also creates a new vulnerability. As Jeffrey Goldberg of The Atlantic has argued, these innovators are the most mobile people on earth. To destroy Israel’s economy, Iran doesn’t actually have to lob a nuclear weapon into the country. It just has to foment enough instability so the entrepreneurs decide they had better move to Palo Alto, where many of them already have contacts and homes. American Jews used to keep a foothold in Israel in case things got bad here. Now Israelis keep a foothold in the U.S.

During a decade of grim foreboding, Israel has become an astonishing success story, but also a highly mobile one.

Watch the A-Team Instead!

When I listen to Obama and his cohorts discussing the merits of their stimulus plan I feel as if I am watching a terrible re-run. A similar recovery plan was tried in Japan, which not only failed to end their economic malaise, but resulted in the quadrupling of their national debt. So, if you are in the mood for a re-run, watch the A-Team instead; the action and dialogue are far more intelligent than anything coming out of the White House. And as Mr. T would say "I pity the full who don't learn from history!" To view the full article scroll down and click on the link.

Japan's 'Lost Decade' Argues Against Obama's Policies

By Sean Rushton

February 14, 2009

During this period, the Japanese government engaged in numerous, mammoth infrastructure spending projects, meant to increase “aggregate demand.” The result was a nation of bridges to nowhere and empty superhighways, as The New York Times reported recently. A telling quote: “Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like [Treasury Secretary Tim] Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.” That is, citizens who actually lived through it think the spending was ineffective, but outside theorists like Geithner know better. Meanwhile, the ‘90s stimuli quadrupled Japan’s national debt, driving it to more than 180 percent of GDP.

Debt Ceiling Raised By $1.9 Trillion!

I can think of no issue that threatens the welfare of our republic than our rapidly spiralling national debt. The cost of servicing this debt will grow like a cancer, consuming a larger and larger share of our budget. In other words, capital that should be invested in educational, environmental and economic development will go towards paying interest. Far too many people on the right and left alike are distracted by meaningless cultural battles, while the debt bomb keeps on ticking away.

JANUARY 22, 2010,

$1.9T US Debt Ceiling Hike Likely To Last Into 2011

By Meena Thiruvengadam Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--The $1.9 trillion U.S. debt ceiling increase proposed in the U.S. Senate likely would cover the country's spending into early 2011, an Obama administration source said Friday.

The increase would bring the U.S. debt ceiling tp $14.3 trillion. The U.S. statutory debt limit currently stands at $12.394 trillion while the public debt subject to that limit is at $12.271 trillion.

The source said the U.S. likely won't reach its current debt limit until March.

Tuesday, January 19, 2010

Ahhh, Sweet Reason...

Ahhh...more sweet reason from Thomas Sowell. To those who believe that the federal government can lower the cost of health care without inducing grave unintended consequences, I urge you to read up on the history of price controls. And I ask you to delve even deeper and explore the fundamental question of what are prices. The source of many progressive fallacies is their tendency to treat prices are arbitrary, rather than as market signals that are essential in any productive economy. The great paradox is that in a free market prices convey supply, demand & scarcity and offer vital incentives to producers and consumers, far greater than the most brilliant economic planners could ever hope to do so. In virtually every instance when prices were arbitrarily assigned by the state, scarcity, poverty and a misallocation of resources emerged.

The ‘Costs’ of Medical Care, Part III

By Thomas Sowell One of the strongest talking points of those who want a government-run medical care system is that we simply cannot afford the high and rising costs of medical care under the current system.

First of all, what we can afford has absolutely nothing to do with the cost of producing anything. We will either pay those costs or not get the benefits. Moreover, if we cannot afford the quantity and quality of medical care that we want now, the government has no miraculous way of enabling us to afford it in the future.

If you think the government can lower medical costs by eliminating "waste, fraud and abuse," as some Washington politicians claim, the logical question is: Why haven't they done that already?

Over the years, scandal after scandal has shown waste, fraud and abuse to be rampant in Medicare and Medicaid. Why would anyone imagine that a new government medical program will do what existing government medical programs have clearly failed to do?

If we cannot afford to pay for doctors, hospitals and pharmaceutical drugs now, how can we afford to pay for doctors, hospitals and pharmaceutical drugs, in addition to a new federal bureaucracy to administer a government-run medical system?

Nothing is easier for politicians than to rail against the profits of pharmaceutical companies, the pay of doctors and other things that have very little to do with the total cost of medical care, but which can arouse emotions to the point where facts don't matter. As former Congressman Dick Armey put it, "Demagoguery beats data" in politics.

Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual's own circumstances and preferences.

Politics deals with the same problem by making promises that cannot be kept, or which can be kept only by creating other problems that cannot be acknowledged when the promises are made.

Price controls are a classic example. At various times and places, in countries around the world, price controls have been put on any number of goods and services — going all the way back to the days of the Roman Empire and ancient Babylon.

Price controls create lower prices for open and legal transactions — but also black markets where the prices are higher than they were before, because the risks of punishment for illegal activity has to be compensated. Price controls also lead to shortages and quality deterioration.

But politicians who take credit for lower prices blame all these bad consequences on others. Diocletian did this in the days of the Roman Empire, leaders of the French Revolution did this when their price controls on food led to hungry and angry people, and American politicians denounced the oil companies when price controls on gasoline led to long lines at filling stations in the 1970s. It is the same story, whatever the country, the times or the product or service.

The self-rationing that people do when prices are free to convey the inherent impossibility of any economy to supply as much as everybody wants is replaced, under price controls, with rationing imposed by government, which cannot possibly have the same knowledge of each individual's circumstances and preferences — least of all when it comes to medical care, where patients differ in innumerable ways.

Here, as elsewhere, there is no free lunch — even though politicians get elected by promising free lunches. A free lunch in medical care is one of the most dangerous illusions of all.

Waiting in long gasoline lines at filling stations was exasperating back in the 1970s, but waiting weeks to get an MRI to find out why you are sick, and then waiting months for an operation, as happens in countries with government-run medical systems, can be not only painful but dangerous.

You can be dead by the time they find out what is wrong with you and do something about it. But that will "bring down the cost of medical care" because you won't be around to require any.

Monday, January 11, 2010

Demolishing Another Edifice

Recent reductions in crime have occurred in the face of rising poverty and unemployment, which largely demolishes another liberal edifice. This theory grows even weaker when you look around the world and see that nations such as Venezuela and Brazil have a much higher living standard than India, yet their crime rates are far higher. In the face of these puzzling statistics, I am unable to come up with a cogent explanation, but I know a flawed one when I see it.

A Crime Theory Demolished

If poverty is the root cause of lawlessness, why did crime rates fall when joblessness increased?


The recession of 2008-09 has undercut one of the most destructive social theories that came out of the 1960s: the idea that the root cause of crime lies in income inequality and social injustice. As the economy started shedding jobs in 2008, criminologists and pundits predicted that crime would shoot up, since poverty, as the "root causes" theory holds, begets criminals. Instead, the opposite happened. Over seven million lost jobs later, crime has plummeted to its lowest level since the early 1960s. The consequences of this drop for how we think about social order are significant.

The notion that crime is an understandable reaction to poverty and racism took hold in the early 1960s. Sociologists Richard Cloward and Lloyd Ohlin argued that juvenile delinquency was essentially a form of social criticism. Poor minority youth come to understand that the American promise of upward mobility is a sham, after a bigoted society denies them the opportunity to advance. These disillusioned teens then turn to crime out of thwarted expectations.

The theories put forward by Cloward, who spent his career at Columbia University, and Ohlin, who served presidents Kennedy, Johnson and Carter, provided an intellectual foundation for many Great Society-era programs. From the Mobilization for Youth on Manhattan's Lower East Side in 1963 through the federal Office of Economic Opportunity and a host of welfare, counseling and job initiatives, their ideas were turned into policy.

If crime was a rational response to income inequality, the thinking went, government can best fight it through social services and wealth redistribution, not through arrests and incarceration. Even law enforcement officials came to embrace the root causes theory, which let them off the hook for rising lawlessness. Through the late 1980s, the FBI's annual national crime report included the disclaimer that "criminal homicide is largely a societal problem which is beyond the control of the police." Policing, it was understood, can only respond to crime after the fact; preventing it is the domain of government welfare programs.

The 1960s themselves offered a challenge to the poverty-causes-crime thesis. Homicides rose 43%, despite an expanding economy and a surge in government jobs for inner-city residents. The Great Depression also contradicted the idea that need breeds predation, since crime rates dropped during that prolonged crisis. The academy's commitment to root causes apologetics nevertheless persisted. Andrew Karmen of New York's John Jay College of Criminal Justice echoed Cloward and Ohlin in 2000 in his book "New York Murder Mystery." Crime, he wrote, is "a distorted form of social protest." And as the current recession deepened, liberal media outlets called for more government social programs to fight the coming crime wave. In late 2008, the New York Times urged President Barack Obama to crank up federal spending on after-school programs, social workers, and summer jobs. "The economic crisis," the paper's editorialists wrote, "has clearly created the conditions for more crime and more gangs—among hopeless, jobless young men in the inner cities."

Even then crime patterns were defying expectations. And by the end of 2009, the purported association between economic hardship and crime was in shambles. According to the FBI's Uniform Crime Reports, homicide dropped 10% nationwide in the first six months of 2009; violent crime dropped 4.4% and property crime dropped 6.1%. Car thefts are down nearly 19%. The crime plunge is sharpest in many areas that have been hit the hardest by the housing collapse. Unemployment in California is 12.3%, but homicides in Los Angeles County, the Los Angeles Times reported recently, dropped 25% over the course of 2009. Car thefts there are down nearly 20%.

The recession crime free fall continues a trend of declining national crime rates that began in the 1990s, during a very different economy. The causes of that long-term drop are hotly disputed, but an increase in the number of people incarcerated had a large effect on crime in the last decade and continues to affect crime rates today, however much anti-incarceration activists deny it. The number of state and federal prisoners grew fivefold between 1977 and 2008, from 300,000 to 1.6 million.

The spread of data-driven policing has also contributed to the 2000s' crime drop. At the start of the recession, the two police chiefs who confidently announced that their cities' crime rates would remain recession-proof were Los Angeles Police Chief William Bratton and New York Police Commissioner Ray Kelly. As New York Police Commissioner in the mid-1990s, Mr. Bratton pioneered the intensive use of crime data to determine policing strategies and to hold precinct commanders accountable—a process known as Compstat. Commissioner Kelly has continued Mr. Bratton's revolutionary policies, leading to New York's stunning 16-year 77% crime drop. The two police leaders were true to their word. In 2009, the city of L.A. saw a 17% drop in homicides, an 8% drop in property crimes, and a 10% drop in violent crimes. In New York, homicides fell 19%, to their lowest level since reliable records were first kept in 1963.

The Compstat mentality is the opposite of root causes excuse-making; it holds that policing can and must control crime for the sake of urban economic viability. More and more police chiefs have adopted the Compstat philosophy of crime-fighting and the information-based policing techniques that it spawned. Their success in lowering crime shows that the government can control antisocial behavior and provide public safety through enforcing the rule of law. Moreover, the state has the moral right and obligation to do so, regardless of economic conditions or income inequality.

The recession could still affect crime rates if cities cut their police forces and states start releasing prisoners early. Both forms of cost-saving would be self-defeating. Public safety is the precondition for thriving urban life. In 1990s New York, crime did not drop because the economy improved; rather, the city's economy revived because crime was cut in half. Keeping crime rates low now is the best guarantee that cities across the country will be able to exploit the inevitable economic recovery when it comes.

Ms. Mac Donald is a contributing editor at the Manhattan Institute's City Journal.

On My Own Dime

A friend of mine was taken back when I revealed to him that I strive to consume seasonal foods that are locally grown. Apparently he was surprised that someone who advocates such conservative policies could be so "progressive" in some of their personal practices. If we would have delved deeper into my consumer philosophy, he would have learned that I generally avoid shopping at large chains such as Walmart, instead directing my dollars towards smaller, independently owned businesses. I can understand how this may come off as strange to my readers, considering my staunch opposition to legislation, primarily sponsored by Alderman Joe Moore, to block the entry of Walmart into Chicago.

The answer to these seeming contradictions is found in my belief that I only have the right to be "progressive" on my own dime. Or more importantly, it originates in the strong reservations that I and many other libertarians have about limiting the freedom of choice of others. I may be willing and able to pay more to shop at a mom-and-pop shop, but I have no right to limit the freedom of poor and working class families who rely on the savings provided by big box chains. I would never choose to work for a large corporation, but what right do I have to infringe upon the freedom of others to make that choice? And I may choose to subsidize less competitive local farmers and producers with my purchases, but what right do I have to force other tax payers to do so?

Some may say if this approach is too individualist, after all we lives in a society of interconnected individuals and communities? Don't you want more people to engage in socially responsible behavior such as directing more of their resources towards the growers, manufacturer and entrepreneurs that live and work in their communities?"

My answer is "yes, I do, however a just state is one that seeks to minimize the extent to which it coerces its citizens and usurps the fruits of their labor." Real change must come through engaged and educated citizenry working for change within the context of a vibrant and free civil society. This might sound like a tall order, but look at how many individuals have freely joined and formed organizations, contributing their time and money to educate and inform their fellow citizens to take action about pressing social matters, such as combating pollution and working towards a cure for breast cancer.

By looking at the state as the primary engine to express care and compassion for our neighbors, we in effect become socially and morally disengaded from our fellow citizens. This helps explain why conservatives are more likely to contribute to charities that their liberal counterparts.( And this also explains why those who freely and directly fund charities and not-for-profits guard against waste and ineffectiveness, whereas most people are indifferent to the billions of dollars of other people's money that the federal government wastes in programs of questionable effectiveness.

In contrast to most of other societies, the free hand of civil society is almost always the engine of positive change, rather than the heavy hand of the state. Does this mean that the state should never seek to promote common welfare through (for example) mandating clean air and water standards? Of course not. It simply means that our first instinct should be to convince our fellow citizens, rather than coerce them, our first impulse should be to spend our dime in the pursuit of progress, rather than that of our neighbor. Evolution from below may be a slow and at times painful process, but the temptation of the "wise" to impose a revolution from above must be avoided, for it is antithetical to a free and democratic people and provides a poor foundation for "real change that we can believe in."

Achieving Balance (Through Libertarians)

When I voice my support for Ron Paul or any libertarian oriented candidate, the usual response is "how can you support someone who wants to legalize crack and eliminate the minimum you support those positions?!?"

Although I do not see eye to eye with Dr. Paul on these issues, I find the reservations of these individuals to be unreasonable. They presuppose that Dr. Paul or any libertarian would be able to push through their entire platform to its extreme, in the context of a legislative, judicial and (presumably) an executive branch that would resist many of its tenants.

In a system that (for good and for bad) centers around compromise, a libertarian's more "radical" and "distasteful" positions and policies would be defeated and (if their power were sufficient) positive compromises would emerge.

For example, they would never be able to legalize crack, but they may be able to push through the decriminalization of marijuana and a transition to a more humane system that treats drug addiction as a medical and psychological issue, rather than a criminal one.

This principle applies to a host of issues. For example, they would never be able to eliminate the welfare state. but they may be able to push it in a direction that limits the pathological, long term dependency of many of its users.

While they would not be able to eliminate America's overseas military presence, they may be able to revive the founding father's reservations about needlessly getting involved in the conflicts of other nations.

And while they would never garnish sufficient public support to eliminate all state intervention in the economy, they hopefully could end the more egregious examples, like agricultural subsidies that go primarily towards large agro-corporations, including tobacco growers.

In other words, they may be able to push the economic and political system towards greater balance and equilibrium. In this case they may be able to help move us away from dangerous growth in the size and scope of the state that has led to: spiralling national debt, fundamental market distortions, endless warfare and a growing disregard for individual liberty.

Saturday, January 9, 2010

Urban Farming?

Growing Corn in the Motor City?

We are witnessing the growth of urban farming, especially in one of America's most desolate cities, Detroit. As property values plummet and empty lots proliferate, it has become economically logical to grow food and even raise chickens and turkeys in the middle of the (former) motor city. And even in bustling cities like Los Angeles, bee keeping and commercial flower growing are (no pun intended) sprouting up.

Hobby farmers and budding entrepreneurs are predictably facing resistance from some city officials as they expand their production. Interestingly, this may be another issue that progressives and libertarians will see eye to eye on. Whereas most progressives look very favorable upon locally grown produce and green enterprises, libertarians are supportive of the rights or property owners and entrepreneurs.

This is another example of the creativity and resilience of individuals and communities. Free markets allow individuals to spontaneously create wealth and opportunities while serving the needs and desires of their communities, without the coercive hand of the state. But to be fair, politicians can provide bullshit, which is an excellent fertilizer!

Urban farmers fight nationwide to sow green biz


The Associated Press Friday,

February 5, 2010; 1:41 PM

LOS ANGELES -- Tara Kolla fancied herself a green thumb-turned-green businesswoman when she planted an organic flower plot in her yard and sold poppies, sweet peas and zinnias at the local farmers market. For her neighbors, it was an eyesore.

Where Kolla saw her efforts as creating a lush sanctuary, her neighbors witnessed dusty pots, steaming compost, flies and a funky aroma on their tiny cul-de-sac in Los Angeles. They complained to zoning officials - and prevailed.

Kolla and other urban farmers are fighting back by challenging city halls across the country to rewrite ordinances that govern residential gardens. They believe feeding their fellow urbanites homegrown tomatoes, fresh eggs and sweet corn will change the world one backyard at a time.

Seattle has loosened its rules for backyard goats, New York City's health department is taking steps to legalize beekeeping and Detroit is looking into regulating compost and greenhouses.

In Detroit, where zoning laws ban growing crops and raising livestock for profit, city planner Kathryn Lynch Underwood is part of a work group rewriting the regulations and defining what kinds of urban farms might need more oversight.

"The city has not been treating it as an illegal use or a nuisance because it has been a good thing," Underwood said.

She is hopeful that urban agriculture and the city's nearly 1,000 community gardens will create good jobs in a city that desperately needs them and put vacant lots to use in blighted neighborhoods.

Kolla, meanwhile, found a loophole allowing her to grow vegetables while lobbying for the right to set up a city farm at her home just four miles from the urban jungle of downtown Los Angeles.

The challenge for cities is to balance the potential to grow green businesses with the concerns of neighbors who don't want a thriving, for-profit enterprise next door, never mind the noise and smells that come from compost and small livestock.

Urban agriculture crosses jurisdictional lines, said Alfonso Morales, a professor of planning at the University of Wisconsin. He advises cities to set up a one-stop-shop for urban farms, like they have for small business development, so that city farmers can deal with zoning, home business regulations and nuisance laws all in one place.

"There's such enthusiasm that people push the laws and upset their neighbors," he said. "The fact is you can't do anything you want on your property."

In middle class areas, concerns about property values and aesthetic differences lead to conflicts.

Kolla alienated neighbors on her quiet cul-de-sac of Spanish bungalows and neat green lawns in the city's Silver Lake section when she began peddling organic bouquets at farmers markets that she grew on her 21,000 square-foot lot.

"They're trying to grow it into something bigger than what should be in a small neighborhood," said Frank San Juan, who lives across the street from Kolla. "When she started having these gardening workshops without telling anybody, there was no parking. You couldn't enjoy your weekends."

Just a half century ago, Los Angeles was transforming itself from the most lucrative farm county in the nation into a major metropolis. A zoning ordinance written in 1946 as developers were cutting down the San Fernando Valley's citrus orchards to build suburbia allowed small farms to grow vegetables to truck to market, but banned growing fruit, nuts or flowers for sale on residential plots.

Kolla could get a conditional use permit, but she has a stubborn streak and it costs $15,000 just to apply. She and others are trying to reverse the zoning laws with a proposal called "The Food and Flowers Freedom Act."

Growers from across Los Angeles formed the Urban Farming Advocates to rally around Kolla, defend her right to grow and lobby the city.

"Most people would pay to have a view of her backyard," said founding member Erik Knutzen, who keeps chickens and grows food in his yard. "I can understand someone not wanting 50 roosters or an autobody shop next door, but our proposal is about bringing common sense back to our lives."

In July, City Council President Eric Garcetti introduced a motion to clarify city policies on urban farms and allow cultivation and sale of flowers, fruits, nuts or vegetables.

While the city farmers wait patiently for the proposal to work its way through the planning commission, Kolla started a weekly vegetable box subscription service so as not to miss too many of Southern California's long growing seasons.

She feels the distinction between vegetables and fruit is arbitrary and unscientific.

"Broccoli is a flower, and a tomato is a fruit. And some of my flowers are edible," Kolla said. "It's more legal for people to grow marijuana in L.A. than flowers."

Making Busybodies of Us All...

During recent conversations with tolerant, liberal friend of mine, I could not believe my ears when they started ranting about "fat, chain smoking hillbillies" and "single mothers and illegals churning out endless babies..."These friends generally were not judgemental and certainly not concerned about the private lives and personal choices of others.

So, what was responsible for their transformations into "intolerant busy-bodies"?

Both of these friends of mine have two thing in common: they are both doctors who spent time working in an emergency room. They told me of "revolving door patients" whose personal choices of smoking, drinking and overheating had cost the public hundreds of thousands of dollars. My friend calculated that one patient had cost the public over $100,000 in the course of a year. Because the public covered all their expenses, they had no incentives to change their behavior. And even though they could not afford their 1st child, the single mothers had two, three and even four more children, whose health care, food, housing and education were costing the public hundreds of thousands of dollars a year.

It may be noble for the state to unconditionally care for the needs of all, but when the public has to bear the cost of private choices, even the most liberal and tolerant citizens become judgemental, busy-bodies. Most progressives seek a state and society that are responsible for the welfare of all, while simultaneously respecting the independence and autonomy of its citizenry, but unfortunately I do not believe that these two opposing goods can be reconciled.

Inevitably as the costs of entitlements spiral out of control, we will be forced to go down one of two paths: increase the extent to which we control the (formerly) private lives of our fellow citizens or forcing them to bear more of the costs and consequences of their personal choices. Statists and collectivists will choose the former and those who truly value individual liberty and autonomy will choose the latter, but you cannot choose both.

What Happened to Transparency?

Obama promised that his administration would be transparent and openly air important policy negotiations on C-Span, a promise that he has clearly broken.

Gibbs Refuses to Address Question About Obama's Broken C-SPAN Promises

It wasn't even a FOX News reporter that asked the question.

Given the generally sycophantic attitude of the White House Press Corps, Robert Gibbs may have been caught off guard when he started facing some tough questions on President Obama's apparent flip-flop regarding his many promises to broadcast health care negotiations on C-SPAN. Gibbs stubbornly refused to answer multiple questions about the broken promises.

Naked Emperor News complied video clips of eight instances of Obama promising to broadcast those negotiations on C-SPAN "so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies", as he said during one speech. The President has reneged on that commitment by reportedly encouraging Congressional leaders to skip conference committee negotiations.

C-SPAN CEO Brian Lamb recently sent a letter to the President and Congressional leaders "respectfully request[ing] that you allow the public full access, through television, to legislation that will affect the lives of every single American." That request went unheeded.

Given (candidate) Obama's insistence on transparency in the health care negotiations, Gibbs probably should have expected to face at least a couple questions on the president's blatant about-face. But asked about "something that's in direct violation of a promise [Obama] made during the campaign," in the words of one correspondent, Gibbs dismissed the issue and refused to answer. Video here.

QUESTION: During the campaign the President on numerous occasions said words to the effect of -- quoting one -- "all of this will be done on C-SPAN in front of the public." Do you agree that the President is breaking an explicit campaign promise?

GIBBS: Chip, we covered this yesterday and I would refer you to yesterday's transcript.

QUESTION: But today is today and --

GIBBS: And the answer that I would give today is similar to the one --

QUESTION: But there was an intervening meeting in which it's been reported that the President pressed the leaders in Congress to take the fast-track approach, to skip the conference committee. Did he do that?

GIBBS: The President wants to get a bill to his desk as quickly as possible.

QUESTION: In spite of the fact that he promised to do this on C-SPAN?

GIBBS: I would refer you to what we talked about in this room yesterday.

QUESTION: But the President in this meeting yesterday --

GIBBS: And I addressed that --

QUESTION: -- pressed for something that's in direct violation of a promise he made during the campaign.

GIBBS: And I addressed that yesterday...

QUESTION: Well, does the President think it would be more helpful if this process were more transparent, that the American people could see --

GIBBS: Mike, how many stories do you think NBC has done on this?

QUESTION: Speaking for myself --

GIBBS: Just a guess.

QUESTION: That's not the issue. The issue is whether he broke an explicit campaign promise.
GIBBS: So the answer is --

QUESTION: I deal with the information that --

GIBBS: So the answer is hundreds, is that correct?

QUESTION: Right, but that's got nothing to do with it. I deal with the information, however much or little of it, there is. I'm saying would people benefit by having more information?

GIBBS: Have you lacked information in those hundred stories? Do you think you've reported stuff that was inaccurate based on the lack of information?

QUESTION: Democrats ran against the very sort of process that is being employed in this health care --

GIBBS: We had this discussion yesterday. I answered this yesterday. Is there anything --

QUESTION: But the President met with members of Congress in the meantime --

GIBBS: And he'll do so today.

QUESTION: -- and pressed them to --

GIBBS: Do you have another question?

Kudos to the Press Corps for pressing Gibbs on this one, but odds are they--and Americans--will never get a straight answer. This is just another case of broken campaign promises. It's the age old adage: candidate makes promise, officeholder breaks it

Sunday, January 3, 2010

Brainzzzzz You Can Believe In...

On Political Marketing & Branding (part III)

Marketing & Branding You Can Believe In!

The ascension of Obama represents the triumph of marketing and branding, over political discourse and decisions centered on a critical assessment of the true consequences of policies and philosophies. Where more Americans willing or able to look beyond charisma and catch phrases, they would be horrified by the unintended, long term consequences engendered by the policies of the Obama Administration. This should be especially true for progressives who rightly criticized GW Bush for his corporate cronyism and imperialist foreign policy, yet are for the most part reticient about Obama's commitment to similar policies. So, what should voters who care more about consequences than charisma do?

The 1st thing is to simply ignore the empty phrases that drive political marketing. "Change We Can Believe In" tells us no more about policies than "Coke Is It" tells us about a high fructose, carbonated beverage. And the eloquence and charm of Obama tells us no more about the merit of his policies than the antics of Ronald McDonald tells us about the quality of mass produced burgers. And conversely, McCain's uninspiring and incoherent campaign told us nothing about the relative merit of his economic policies, it simply revealed the incompetence of Republican marketers and political strategists. This is hardly a reason to vote for or against a candidate.

Second, do not base your support of a policy or politician on the demographics of their followers. The fact that my habits are thoroughly blue, does not mean that I can't vote red. Just because I choose cappuccinos over Coors and Nabokov over Nascar doesn't mean that I can't vote for conservative candidates.

Once we go beyond marketing and branding and focus on action, we can explore the relative merits of different political and economic visions. Few of the critics of free markets and limited government possesses even a rudimentary understanding of them. The disastrous effect of GW Bush's domestic and foreign policies reflect on conservative philosophies, no more than Obama's expansion of the war in Afghanistan reflect on liberal philosophies. Read up on history, economics and philosophy; all of this "change we can believe in" has been unsuccessfully tried in the past in this and other nations. In FDR's Folly, Jim Powell presents a compelling argument that President Roosevelt's policies greatly extended the Great Depression. This is of paramount importance, because many of policies and programs that the Obama Administration have undertaken are virtually carbon copies of the the Roosevelt Administration's. Go a step further and seek to answer the questions of what cultural, constitutional and economic factors allowed the United States to become the most free and prosperous nation in the history of the world. And if you, like many progressives, believe the United States to be an overwhelmingly racist and oppressive nation, explore the past and present of other nations.

Next we should disregard the intentions of policies and focus directly on the unintended consequences. Who doesn't want all Americans to have access to affordable, universal health care? The reason why so many people opposed the health care reform plan was the realization that it would accelerate the growth of our massive national debt, while offering dubious benefits. And never forget that the worth or worthlessness of a policy is not determined by the good intentions or even the intelligence of a leader and their followers. Obama's campaign inspired millions of Americans to work towards a better tomorrow, yet over the long run his policies will burden future generations with a lower living standard via endless debt, crushing taxation and general economic stagnation.

Last but not least, hold so called conservative politicians to the fire. No one deserves greater derision that the politicians who utilize conservative marketing yet spend like socialists and wage war like imperialists. Such politicians have sullied the name of conservatism. Do not put party above good policy; so called conservative commentators like Sean Hannity, who attack Obama, yet remained uncritical of Bush's fiscal irresponsibility have done great harm to conservatives. Many people are hopelessly entranced by liberal marketing and will never be open to sound conservative principles. Yet, there are many people who are in the "conservative closet"; they are aghast at the corporate welfare and continuous warfare that the Obama Administration has engaged in, yet the awful marketing and branding of the Republican Party has made it impossible for them to identify themselves as and vote as conservatives. It's time for new marketing, it's time for you to come out of the conservative closet and work together to achieve real change that will ensure that our children and grandchildren will enjoy peace and prosperity for generations to come.

On Political Marketing & Branding (part II)

Seemingly senseless political acts become reasonable when you analyze them as marketing phenomena. Take the Democratic Party primary; why did they choose Obama over Hillary Clinton? Hillary was clearly more experienced & intelligent. We can assume that it wasn't a question of policies, because the policies promoted by a Clinton administration would not be so drastically different than those of the Obama administration. The answer is that the powers that be in the Democratic Party believed that the Obama Brand would command a greater market share than the Clinton Brand, even though their products were virtually identical.

Why is Little Billy So Angry?

Little Billy is angry because our generation has run up a national debt so large that the we cannot possibly hope to pay it off. One way or another, his generation will have to pay the principle plus interest. So, our current welfare and warfare policies are tantamount to a massive transference of wealth from future generations to this present one. Great civilizations work to ensure the prosperity of future generations. To burden our children and grandchildren with crushing debt is selfish and thoughtless to a criminal degree.

Saturday, January 2, 2010

Time to Clean Out My Ears...

It must be time to clean out my ears, because surely "progressives" would protest a president's lavish use of public funds for their private entertainment, yet I have heard little about Obama's tax payer financed night out in NYC. So, it must be time to clean out my ears...

CURL: The cost of a NYC weekend


In another odd twist left unexamined by the media, the White House on Monday said it simply would not release the cost of President Obama's weekend jaunt to New York City, where the First Couple had dinner and caught a Broadway show.

Spokesman Robert Gibbs, keeping the White House press corps in stiches, as he always does, said the Obamas would have preferred using a commercial airline shuttle to New York and back, but the Secret Service would not allow such unprotected travel (ba da bing).

And that was that. No further probing; asked and answered; time to move on.

There was, of course, an ironic element of the trip. In February, Obama scolded corporate executives (while also costing Las Vegas some $130 million) when he said: "You can't get corporate jets. You can't go take a trip to Las Vegas, or go down to the Super Bowl on the taxpayers' dime."

But the Chief Executive (Oval) Officer had made a promise to his good wife that after the campaign, they'd take in a Broadway show, and darn it, he meant to keep that promise.

One early estimate (from the New York Post) put the cost at $24,000. Absurdly low. The Daily Mail in London threw out another number — $75,000. Sure, three times as much as the first estimate, but still probably spectacularly low. Remember, joyriding Air Force One around for a few hours over Manhattan a couple months ago cost $250,000, so the cost of the weekend trip was likely not likely that low.

With the White House simply refusing to say how much taxpayer money it spent, here's a helpful way to calculate the cost of the trip:

First, the First Couple (and entourage) flew from the White House to Andrews Air Force Base — three choppers (two decoys), if the Marines stuck to standard operating procedure (and they are sticklers for SOP). That means dozens of men and women — radar, communications, mechanics, crews, everyone, perhaps 100, who knows? — were involved. (A batch of tagalongs must've taken a taxpayer pool of vehicles out from the White House to AAFB, since it took three jets to get the gang to NYC).

Second, the president moving on a Saturday takes a full operation at and around the White House, dozens and dozens of people. Maybe they're all on salary, so that didn't likely cost much. But all the cops involved — D.C. police, uniformed Secret Service officers, Capitol police — were probably paid overtime, even double time. Probably, again, 100 personnel or so.

Then there were the jets — at least $24,000 for the three aircraft used to ferry the Obamas, aides and reporters to New York. The Obamas' jet, a Gulfstream 500, served as Air Force One.

Third, a C-17 had to fly to NYC to put in place a full motorcade (at least a dozen vehicles, maybe more). The military cargo plane may have taken up at least two, but maybe three, more choppers to fly the whole party from JFK to a Wall Street landing zone, where the motorcade was waiting. If not, the choppers flew there solo (White House veteran reporter Mark Knoller of CBS Radio wrote recently that "The VH-3D that serves as Marine One consumes about 1,200 pounds of fuel per hour." Ouch.

Fourth, driving through Manhattan is an expensive exercise. Dozens, perhaps hundreds, of NYPD have to be stationed all along the way, shutting down roads, holding back pedestrians. There were police cars involved, dozens of motorcycles, and the ever-present NYC ambulance (oh, don't forget that the White House doctor also probably went — with all his gear). The city likely gets reimbursed by the White House for the cost (they usually do). And they were all probably getting time and a half (the NYPD overtime budget is extraordinary).

Fifth, the United States Secret Service (USSS) had to scope out the whole thing, then station agents all over — sharpshooters, undercover agents, etc. — at a huge cost. Who knows if they were on overtime. And if you think they went up Saturday morning, think again. They were likely in NYC upwards of a week before, planning the whole evening, every second of every movement. They had to map out five movements — from JFK to the Wall Street LZ, then a motorcade to the restaurant, then another motorcade to the play, then a final motorcade back to the LZ, then a chopper flight to JFK, before the First Couple and crew jetted back to AAFB for another chopper to the White House.

One thing is known — The Obamas picked up the cost of dinner costs and their orchestra seat tickets, which cost $96.50 a piece. So if the whole thing cost $250,000, the Obamas offset that by at least a few hundred bucks. Phew.

Everyone Is Tightening Their Belts...

It looks like everyone is tightening their belts during this brutal recession...except the federal government. Rather than conceptualize federal government programs as transfers of wealth to the poor, it would be more accurate to characterize them as illicit transfers of wealth from productive Americans to the bloated bureaucratic class that administers federal government programs. State and local governments can be equally wasteful, however their hubris is limited by their inability to print money.

For feds, more get 6-figure salaries

By Dennis Cauchon, USA TODAY

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

"There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House's federal workforce subcommittee.

Jessica Klement, government affairs director for the Federal Managers Association, says the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers. She says federal employees make 26% less than private workers for comparable jobs.

USA TODAY analyzed the Office of Personnel Management's database that tracks salaries of more than 2 million federal workers. Excluded from OPM's data: the White House, Congress, the Postal Service, intelligence agencies and uniformed military personnel.

The growth in six-figure salaries has pushed the average federal worker's pay to $71,206, compared with $40,331 in the private sector.

Key reasons for the boom in six-figure salaries:

• Pay hikes. Then-president Bush recommended — and Congress approved — across-the-board raises of 3% in January 2008 and 3.9% in January 2009. President Obama has recommended 2% pay raises in January 2010, the smallest since 1975. Most federal workers also get longevity pay hikes — called steps — that average 1.5% per year.

•New pay system. Congress created a new National Security Pay Scale for the Defense Department to reward merit, in addition to the across-the-board increases. The merit raises, which started in January 2008, were larger than expected and rewarded high-ranking employees. In October, Congress voted to end the new pay scale by 2012.

• Paycaps eased. Many top civil servants are prohibited from making more than an agency's leader. But if Congress lifts the boss' salary, others get raises, too. When the Federal Aviation Administration chief's salary rose, nearly 1,700 employees' had their salaries lifted above $170,000, too.

Ahhh, In The Good Old Days...

Ahhh, the Good Old Days...when GW Bush doled out billions of dollars in tax cuts and subsidies to connected corporations, "progressives" cried of "corporate welfare". Now, most of them remain silent as Obama funnels billions of dollars in public funds to private interests. I guess its only "corporate welfare" when the other guys do it.

Treasury to dole out $3.8 billion to GMAC, raise stake

WASHINGTON (Reuters) – The U.S. is injecting another $3.8 billion into GMAC Financial Services to help cover mortgage losses, in a bailout that makes the government the majority owner of the auto and home finance company.

GMAC said after the capital infusion it does not expect to record more major losses from its mortgage lending unit, which should help stabilize results.

The company is one of the largest car loan makers in the United States, and earning profit will give it more capacity to make loans and eventually pay back the government.

Many analysts see GMAC's mortgage assets, which make up about a third of the company's $178.2 billion balance sheet, as the main obstacle to the lender reaching profitability.

Those assets have already forced GMAC to seek new funds. Before Wednesday's capital infusion, GMAC had already received $12.5 billion of aid from the United States.

A government test of the company's capital in May, known as the stress test, found that GMAC needed $11.5 billion of equity. About $9.1 billion of that equity had to be new capital, while the rest could come from converting existing capital into new instruments such as common equity.

GMAC has raised about $7.3 billion of that $9.1 billion of new capital from the United States. The government decided that the company has raised enough because the bankruptcy of General Motors , which once owned all of GMAC, had less of an impact on the finance company than previously expected.


Questions still remain for GMAC, though. The extent of future losses from its mortgage assets is not yet clear, a bondholder said.

He added that the best route for GMAC to follow now would be to sell off GMAC's mortgage servicing business, which collects payments from borrowers and is worth more than $3 billion on the company's books.

The bondholder, who requested anonymity because he is not authorized to speak to the media, said the company could continue to make new home loans through its Ally Bank unit.
GMAC's remaining mortgage loans could be used to pay off coming debt obligations linked to its Residential Capital unit, the investor added. If the assets don't perform well enough, that unit could go into bankruptcy, he added.

GMAC said in its statement that its board of directors reviewed Residential Capital's options and decided unanimously to take the steps announced on Wednesday.

GM sold a 51 percent stake in GMAC to private equity firm Cerberus in 2006, but held onto 49 percent of the company. Over time, GM's stake has been whittled down to 16.6 percent, including a trust managed for GM's benefit. Cerberus' stake is now 14.9 percent. The U.S. now holds 56.3 percent, with the rest of the company being held by Cerberus investors.

The government previously held about 35 percent of the company's common stock.
GMAC's mortgage business lost nearly $600 million in the third quarter, but its auto finance operations were profitable, earning about $164 million after taxes.

In November, GMAC Chief Executive Al de Molina resigned and was replaced by Michael Carpenter, a board member and former Citigroup executive.

On news reports of the planned capital infusion, the cost to insure GMAC's debt against default in the credit derivatives market fell to around 4.4 percentage points, or $440,000 a year for five years, from 4.66 percentage points at Tuesday's close, according to market data company Markit.

(Additional reporting by Corbett B. Daly and Tim Ahmann in Washington, and Dan Wilchins and Karen Brettell in New York; Editing by Derek Caney, Dave Zimmerman and Steve Orlofsky)