FOR years now, many businesses and individuals in the United States have been relying on the power of government, rather than competition in the marketplace, to increase their wealth. This is politicization of the economy. It made the financial crisis much worse, and the trend is accelerating.
Well before the financial crisis erupted, policy makers treated homeowners as a protected political class and gave mortgage-backed securities privileged regulatory treatment. Furthermore, they allowed and encouraged high leverage and the expectation of bailouts for creditors, which had been practiced numerous times, including the precedent of Long-Term Capital Management in 1998. Without these mistakes, the economy would not have been so invested in leverage and real estate and the financial crisis would have been much milder.
But we are now injecting politics ever more deeply into the American economy, whether it be in finance or in sectors like health care. Not only have we failed to learn from our mistakes, but also we’re repeating them on an ever-larger scale.
Tyler Cowan, “Where Politics Don’t Belong”, New York Times, 2009-09-12
September 14, 2009
QotD: Depoliticizing the economy
September 9, 2009
QotD: The Democratic Party’s problem with criticism
Why did it take so long for Democrats to realize that this year’s tea party and town hall uprisings were a genuine barometer of widespread public discontent and not simply a staged scenario by kooks and conspirators? First of all, too many political analysts still think that network and cable TV chat shows are the central forums of national debate. But the truly transformative political energy is coming from talk radio and the Web — both of which Democrat-sponsored proposals have threatened to stifle, in defiance of freedom of speech guarantees in the Bill of Rights. I rarely watch TV anymore except for cooking shows, history and science documentaries, old movies and football. Hence I was blissfully free from the retching overkill that followed the deaths of Michael Jackson and Ted Kennedy — I never saw a single minute of any of it. It was on talk radio, which I have resumed monitoring around the clock because of the healthcare fiasco, that I heard the passionate voices of callers coming directly from the town hall meetings. Hence I was alerted to the depth and intensity of national sentiment long before others who were simply watching staged, manipulated TV shows.
Why has the Democratic Party become so arrogantly detached from ordinary Americans? Though they claim to speak for the poor and dispossessed, Democrats have increasingly become the party of an upper-middle-class professional elite, top-heavy with journalists, academics and lawyers (one reason for the hypocritical absence of tort reform in the healthcare bills). Weirdly, given their worship of highly individualistic, secularized self-actualization, such professionals are as a whole amazingly credulous these days about big-government solutions to every social problem. They see no danger in expanding government authority and intrusive, wasteful bureaucracy. This is, I submit, a stunning turn away from the anti-authority and anti-establishment principles of authentic 1960s leftism.
Camille Paglia, “Too late for Obama to turn it around?”, Salon, 2009-09-09
August 28, 2009
Chilling the news, Toronto style
Matt Gurney risks being sued by taking a stand against Toronto city government’s latest brain fart:
Setting aside the oddity of Toronto’s politicians suing their cheerleaders at the Star, there are serious issues at play here. Despite having recently voted down a proposal that would have let city councillors sue citizens on the taxpayers’ dime, it is still permissible for the city to fund lawsuits approved by various officials at city hall. What could be more chilling to free speech than a thin-skinned politician or bureaucrat with a taxpayer-financed legal team? Remember, folks — even asking reasonable, fair, and completely valid questions might bankrupt you, if you can’t afford to pay for your defence.
Beyond that issue is a more philosophical one. When does criticism of a government program become an attack on those running it? Depending on how broad an interpretation the courts choose to settle upon, opinion journalism and political reporting in this country could grind to a halt. Is a criticism of Ottawa’s handling of the isotope shortage an attack on the bureaucrats involved? Imagine a reporter discovering that a department was blowing millions or billions of dollars on a program with almost no practical benefit (Think long-gun registry). Would that reporter dare report it, and risk a ruinous lawsuit filed by the people running the program? Where does political commentary end and defamation begin? I don’t know, but the Toronto city government seems determined to find out.
These worrisome legal and philosophical issues might pale in comparison to the sheer logistics of such a regime. If the Toronto government, or any other, can go after anyone who criticizes it, how long until there is an entire cadre of bureaucrats whose job it is to seek out and bankrupt critics? It might sound paranoid, but remember this is government we’re talking about.
H/T to Elizabeth for the link.
August 24, 2009
August 16, 2009
August 7, 2009
August 6, 2009
“In his final act of betrayal . . .”
I suspected that the recent labour deal between the city of Toronto and their striking municipal workers would not be a particularly fair deal. Fair to the city and the taxpayers, that is. Apparently, from what Howard Levitt writes, I’m not pessimistic enough:
In his final act of betrayal, not only has Toronto Mayor David Miller agreed to the city’s inside and outside unionized workers retaining their sick leave benefits, he has prevented any future mayor from removing them. In doing so, Toronto’s mayor has provided the city’s taxpayers with a poisoned chalice.
What he has negotiated cannot be changed until the city’s next round of bargaining, more than a year after any new election. His new collective agreement, unlike the old, provides union members with the right to cash out their sick-leave provisions immediately rather than waiting until they retire.
The little-understood impact of that is that if, in the next election, any mayoralty candidate runs on the promise to remove that benefit and wins, union members will simply threaten to cash it out immediately, plunging Toronto into a profound financial crisis until that demand is withdrawn.
Now that was a slick move . . . from the point of view of the union. From the taxpayer’s viewpoint, not so much.
But it was still not the whole of the love showered on the union by the Mayor . . .
Almost as egregious as this sleight of hand is Miller’s amnesty for criminals. What I always do in strikes is warn the union that lawbreakers will be criminally prosecuted instantly and that there will be no ultimate amnesty. That warning usually curtails violence. Miller did not do that.
Instead, Miller’s agreement, which ended a 39-day strike last week, provides a message to all city workers that they can misbehave with impunity in any future strike. And what does he claim to have received in return? A promise by the union that no havoc will be wreaked against those employees that continued to work. In short, a benefit in return for the union agreeing not to indulge in illegal hooliganism.
August 4, 2009
California looking for all kinds of new sources of income
Neil Gaiman has some issues with the California tax department (individual Twitter messages, in sequence):
It wasn’t identity theft screwing up my credit rating. Twas the idiot state of idiot california deciding I lived there & wasn’t paying tax.
I know that California is bankrupt and stupid, but ohhhh the stupidness and ohhh the cupidity. Twerps.
They decided I lived there & wasn’t paying tax & took out a Tax Lien; then cancelled it when we yelled, but it lives on in the credit rpt.
Right. I just spoke to a nice man who pretended he wasn’t in India who said he’d get onto fixing it. We shall see what happens.
July 29, 2009
QotD: Conspiracy theorists
Science fiction writer Damon Knight once claimed that the popularity of conspiracy theories could be explained by our “desire to believe that there is some group of folks who know what they’re doing.”
Wishful thinking. And few “groups of folks” have displayed less aptitude in the art of keeping secrets than government.
Yet no matter who is in power, no matter how incompetent they may be, there always exists this irate minority that believes politicians possess supernatural powers of deception.
The mystery the nation faces isn’t President Barack Obama’s birth certificate. The mystery is how any American could believe that all the president’s former political opponents, both the Republican and Democratic parties, Hawaiian officials and two Honolulu newspapers (nay, the entire press corps) could work in concert to conceal the biggest con of the eon.
David Harsanyi, “Close Encounters of the Absurd Kind: What the Obama birth certificate conspiracy says about American politics”, Reason Online, 2009-07-29
July 28, 2009
QotD: Re-interpreting that number
There have been two trends in US health care over the last decade. On the one hand, a lot of Americans have become, in any rational sense, over-insured: They get tested for things they’ll never get. On the other, there has been an abandonment of health insurance by the rich. If you peel the Census Bureau and DHHS figures, of those alleged “45 million uninsured Americans”, one-fifth aren’t Americans; another fifth aren’t uninsured but are covered by Medicare; another two-fifths are the young and mobile (they don’t have health insurance, but they don’t have life insurance or home insurance, either: they’re 22 and immortal and life’s a party); and the remaining fifth are wealthier than the insured population. Really. According to a 2006 Census Bureau report, 19 per cent of the uninsured have household income of over $75,000. Since the last round of government “reform” in the Nineties, wealthy Americans have been fleeing insurance and opting to bring health care back to a normal market transaction. And, if you look at the “uninsured discount” offered by doctors, one can appreciate that, for everything but chronic disability, it’s not an irrational decision to say I’ll get a better deal for my broken leg or my colonoscopy or my heavy cold if I just write a check for it.
Mark Steyn, “The Nationalization of Your Body”, National Review, 2009-07-28
“The best thing about Miami is how close it is to the United States”
Ryan Grim looks at the (government assisted) rise of Miami’s drug trade:
Miami was the perfect base for largescale drug smuggling. By the mid-1970s Coconut Grove was bursting with hippies, the type of smart, anti-authoritarian troublemakers who make the best smugglers. The Carter administration had pulled back on the effort to overthrow Cuban leader Fidel Castro, leaving South Florida with an idle army of welltrained, mostly Cuban-American adepts of the dark arts that would become valuable in the cocaine smuggling business. They knew how to acquire and use weapons, how to hide money, how to surreptitiously pilot planes and boats. A speedboat could zip through any one of the Everglades’ hundreds of little waterways to find a hidden place to unload, or dock elsewhere along Florida’s 3,000 miles of coastline.
The infrastructure for this multibillion-dollar import business wasn’t created solely for cocaine, or even for marijuana before it. South Florida had a long history of smuggling coffee, tobacco, and other products subject to tariffs. A “mother ship,” either from the Caribbean or directly from Colombia, would anchor near the shore, though not close enough to be seen from land. Yachts or cigarette boats — named for the vessels that smuggled bootleg tobacco — would zip out to the offshore vessel to load up with coke. The drug also came in by air. In the late ’70s and early ’80s customs officials estimated that more than 80 cocaine-laden planes landed in the United States every night, mostly in Florida. In 1980 the U.S. Customs Service seized 200 cigarette boats and 50 airplanes, one of which was a World War II–era bomber. It had previously been used by customs agents investigating drug operations.
July 27, 2009
Audax toujours
Thaddeus Tremayne may appear to have gone off his medications when he proposed this:
I think it behooves us to begin spreading this idea: that people who work in the public sector should be exempt from having to pay tax. All tax.
But he really does have a valid and interesting point:
No, what I am proposing is the stripping away of a fig-leaf that disguises the very important distinction between tax-payers and tax-consumers.
Currently, only those who earn their living in the private or voluntary sector are tax-payers and while public sector employees do file tax returns and, on the face of it, pay their taxes too, this is a mere bookkeeping fiction. They are the recipients of tax, adding nothing to the public purse. The number of people who fail to understand this distinction, holding instead that “we are all taxpayers” is alarmingly high. By forcing the public sector to lead tax-free lives, we make their true status not just clearer but undeniable.
Consider the meme-spreading to have started.
July 25, 2009
Quebec voters’ relationship with the rest of Canada
Publius outlines exactly my suspicions about the way a significant number of Quebec voters view the rest of Canada:
The hard truth of Canadian unity, and why Quebecers “park” their votes with the Bloc, is that each of the two solitudes views Canada differently. To anglophones Canada is — save some of the more Balkanized ethnics ghettoes — their country. To francophones, especially in Quebec, Canada is simply a vehicle to advance their cultural interests. If French culture can be better preserved by keeping Quebec in Canada, so be it. If independence — or whatever half-way house euphemism the separatists are using at the moment — looks like a better option, vive la independence!
The Bloc Quebecois is monumentally useless if your political aims is something humdrum, like forming a government. But if the goal is to extort concessions form the rest of the country, by raising the specter of national destruction, the Bloc is wildly successful. Stephen Harper has to run a national governing party. The West wants to scrap the Wheat Board and the Long-gun Registry. The typical Ontarian couldn’t tell wheat from cauliflower and is terrified of being caught in a drive-by, while touring the less scenic parts of Toronto. A certain measure of negotiation and compromise is required to run so disparate a group, how much is another matter. Giles Duceppe, the longest serving party leader in Canada, doesn’t have to face such wide cultural chasms. He leads a nearly monoethnic one issue, one note party where the internal debate is about when to pick up and leave. The swing voters who alternately support the Bloc, the Tories and the Liberals, aren’t Canadians mulling over policy options, but foreigners in spirit trying to get the best deal. Expecting them to put Canada’s interests above their parochial concerns is a fantasy.
QotD: the last honest trash collector
There are lots of levels of fear and complaint about the government getting involved in business. First and foremost, of course, is incompetence. We actually have experiential evidence about this. In England, all the English car companies were beginning to circle the drain in a series of well-deserved failures and bankruptcies, earned by making lousy products with very poor production at high prices. So, the government, back in the ’70s, nationalized all the British car companies. The result was British Leyland, a name that perhaps doesn’t resonate much with you. Many of your friends probably drive Humber Super Snipers, or perhaps not. [Laughs.] That’s certainly one thing that we’re headed for. The other thing is that there’s a very good reason that governments aren’t supposed to compete with private-enterprise companies. Governments have monopolies on certain things, like eminent domain and deadly force. What’s another example of an organization that gets into the same business that you’re in, except that their guys have got guns? That would be the Mob. Ford is like the last honest trash collector in the New York metropolitan area, the last one that’s not mobbed-up. How long is that gonna go on for?
P.J. O’Rourke interviewed by Gregg LaGambina, A.V. Club, 2009-07-16
