It’s tempting to just give up and become a liberal

Every single time I look at the headlines, I get frustrated and indignant. That’s because every headline describes a new way the federal government is proposing to reduce the efficacy of the free market (which it laughingly calls “unfettered”), reduce the choices available to consumers, reduce the ability of entrepreneurs to innovate and support themselves, and reduce the long-term health of our nation, both fiscally and physically.

But the “other side” – those who are ideologically convinced that the government’s guiding hand is necessary in almost every sphere of human endeavor, lest someone have to face a negative outcome at some point in their lives – is in its ascendancy. They won the Presidency, and they have Congress. Those who advocate personal responsibility and the novel idea that some businesses with lobbyists on their payrolls actually should be allowed to fail sometimes are on the defensive, and are losing ground quickly.

So to avoid the bitterness and acrimony I feel when I look at the headlines, I’m tempted to simply agree with the fatuous economic assumptions that liberals hold so dear. I read this editorial by one of Obama’s economic advisors, Laura D’Andrea Tyson. In it, she outlines how responsible the federal spending spree has been, and how sensible and down-to-earth Obama’s mind-numbingly expensive federal interventions are.

It is so well-worded and nicely presented that if you ignore all the mitigating information, the dozens of “Yes, but…” moments in the essay, you can almost believe it. I’m tempted to accept her premises just so I can look at headlines again without experiencing a bilious and indignant response. It would probably be better for my health.

I’ll try being a liberal for a couple of weeks and see if it helps.

An old liberal trick unveiled

Every once in a while, there is a glimmer of honesty that shows through the muck of power-brokering and obfuscation in Congress. When it comes to the government-interventionists responding to the economic downturn, these glimmers of honest are few and far between, but here’s a good one tucked away in an MSNBC story regarding the Obama administration’s fatuous claim that its policies will “create or save 3.5 million jobs”:

“You created a situation where you cannot be wrong,” the chairman of the Senate Finance Committee, Montana Democrat Max Baucus, told Geithner last week. “If the economy loses 2 million jobs over the next few years, you can say yes, but it would’ve lost 5.5 million jobs. If we create a million jobs, you can say, well, it would have lost 2.5 million jobs,” Baucus said. “You’ve given yourself complete leverage where you cannot be wrong, because you can take any scenario and make yourself look correct.”

But this is an old trick, albeit executed with a tad more aplomb by Obama’s people. Liberals in the past have implemented policies, and then when they don’t work out, simply claim that it would have been much worse without their intervention. The Obama administration has fixed this so that now they insert the ambiguity right from the outset, rather than having to explain it later.

Obama budget replaces your charities with his

There are two ways to interpret President Obama’s proposed budget measures, if you are someone who believes in the basic laws of economics. One way is to assume that he simply refuses to believe that government fiscal policies can have negative effects in society. Another way is to assume that he knows the pernicious effects of what he’s doing – permanently and irrevocably growing government, and the people’s dependence on it – and that it is indeed his end-game.

This passage of an economic analysis from economist Michael Boskin, for example, leads me to believe it is the latter interpretation that’s closer to the truth:

The president’s proposed limitations on the value of itemized deductions for those in the top tax brackets would clobber itemized charitable contributions, half of which are by those at the top. This change effectively increases the cost to the donor by roughly 20% (to just over 72 cents from 60 cents per dollar donated). Estimates of the responsiveness of giving to after-tax prices range from a bit above to a little below proportionate, so reductions in giving will be large and permanent, even after the recession ends and the financial markets rebound. [emphases mine]

The Obama administration responds to this contention by noting that the “economic recovery” act includes $100 million for non-profits and charities.

So, in short, the charities chosen by us – the mindless rabble that must have its decisions usurped by the federal government – will get less money from us, while charities chosen by the Obama administration will benefit from federal largesse.

In short, government picks the winners and losers in the non-profit and charitable sector as well as in business, where it subsidizes failed companies in their death throes, thereby crowding out new, agile and innovative businesses.

At every turn, the Obama administration is intent on substituting its “wisdom” for our own apparently misguided decisions.

Free market to the rescue in the mortgage mess

A new firm set up by former executives of Countrywide Mortgage has started to make possible exactly what the government was hoping would happen in this mortgage fiasco: take over “toxic debts” and make money for themselves and the government.

But because Countrywide played a role in creating the mortgage mess in the first place, so-called “advocates” of consumers are deriding the new company – called the Private National Mortgage Acceptance Company, or PennyMac – and its executives. Why would they do such a thing? Because they don’t like the idea of folks profiting from a situation they themselves may have helped create.

But that’s absurd reasoning. Whether or not Countrywide was irresponsible in its lending practices is up for debate. We may not know details of Countrywide’s alleged practices for months or years, but one thing is certain: FannieMae and FreddieMac were ordered by their Congressional overlords to assure a market for sub-prime loans by buying more and more of them, in order to help more folks afford homes.

In other words, Congressional policy was to encourage sub-prime loans as a way to promote home ownership among people who otherwise would be ineligible. So why would it then be a surprise that the private sector responded in exactly the way they were expected to respond? They loosened standards, and many more people ended up with their own homes.

Now that Congressional good intentions have blown up in all our faces (as is often the case), our lawmakers have tried to fix the problem by purchasing bad debt and reselling it to the private sector in hopes that somebody can make money on it, and provide taxpayers a return on their bailout “investment.” That’s exactly what PennyMac is doing. And what do they get for their efforts in terms of publicity? They get a sneering, woefully biased article in the New York Times by reporter Eric Lipton.

The reporter refers to the spacious offices of PennyMac, the leather chair of CEO Stanford Kurland, the profits the company is making, and the view from Mr. Kurland’s office. The quotes from the homeowners who have been able to stay in their homes as a result of PennyMac’s efforts are presented low in the story and far outweighed by the detractors of PennyMac and its executives, whose claims take up the vast majority of the story.

The bottom line is this: Mortgage companies loosened their lending standards because Fannie and Freddie were buying up sub-prime mortages at Congress’s request. In other words, mortgage companies did what Congress hoped they would. And now, PennyMac is doing what exactly what the government wants it to do: helping people stay in their homes and mitigating taxpayer losses on toxic debt.

Vermont legislature working hard to maximize recession’s negative impact

Not content with the ravages of the already-deep recession, the Vermont legislature is considering a raft of legislation that will make things worse. I will mention several of the measures here, but I’d like to point out from the very beginning that no matter how horribly these initiatives scar the state’s economy, no matter how perfectly critics are able to predict the negative outcomes of the liberals’ agenda, you will never, ever hear an admission from Democrats and Progressives that they were wrong.

Why? Because they can simply point to the recession as the cause of our ills, and then they will intone – with all seriousness – that things would have been so much worse if we hadn’t implemented their tax increases and other ill-advised measures.

1. Increased funding for the state’s Department of Tourism and Marketing by $2.5 million: First of all, it’s a terrible idea for the state to subsidize the tourism industry in Vermont by taking on a portion of its marketing costs. If the ski resorts and the myriad other tourist-oriented businesses in the state want to put up a united front to market the state, they should pool their own resources to market themselves. Using taxpayer money from loggers, truckers, consultants, farmers, home-builders and others who don’t benefit directly from tourism is blatantly unfair. Sure, the state as a whole is more prosperous through tourism, but the state is also more prosperous through a million other economic activities. To single out one of them to subsidize is simply wrong. I have to pay for my own marketing; so should they.
2. Time-of-sale energy efficiency standards: This would require that any home being sold meets some arbitrary “minimum” standard of energy efficiency. With Vermont’s extremely old housing inventory, this measure will make selling homes more expensive in almost all cases, and prohibitively expensive in many cases. The net effect will be to slow the already-moribund housing market. This is at a time when the legislature is allegedly looking to increase economic activity.
3. Taxing downloaded property: This is an appalling measure – the legislature wants to tax anything you download from the internet, including music, videos, video games, cell phone ring-tones, books, and more. Aside from the fact that this is unenforceable in most cases (unless they also plan to install download-monitoring software in all computers or internet service-providers in the state), this is another measure that will serve as a brake on economic development. Consider companies that have to download multiple copies of many types of software for their operations… an already pricey cost of doing business then also becomes a tax liability. Consider my own situation – one of my biggest start-up costs was software investments, and now taxes will be added to them?
4. Vermont Yankee decommissioning funding: The legislature is considering legislation that would force Vermont Yankee to increase the amount of money in its decommissioning fund, claiming that the fund will be insufficient to close down the plant in 2012. This move comes despite a lack of consensus about whether the fund is currently inadequate, and despite the lack of certainty that the plant will have to close in 2012. The cost of the legislature’s rush to judgement will be passed on to rate-payers, and will make Vermont even less attractive for businesses as a location to set up, and will encourage businesses already here to re-think their plans to stay.
5. “Entrepreneurship” legislation: Proving that even liberals can identify the benefits of lower taxes and less regulation, the legislature is considering legislation that would reduce licensing requirements and provide tax relief (Senate Bill 107). The problem is that it also adds to the state government’s role as a bank. The legislation proposes providing high-risk capital to start-ups and high-risk loans to tech companies. It’s stunning to me that the state hasn’t learned anything from this recession. It was looser lending standards (i.e. the willingness to accept higher risk) that contributed mightily to this economic downturn, and they are proposing more of the same. I have some groundbreaking advice: If a commercial bank or private equity firm is unwilling to invest in a commercial enterprise, it’s generally for good reason; therefore, the government need not be in the business of playing high-risk gambles with taxpayers’ money.

Obama hypocritically embraces “trickle-down” economics

It’s now official. After decades of trying to deny the fact that fiscally healthy and profitable corporations create jobs and sustainable economic growth, the Democrats have finally embraced the so-called “trickle-down” effect. The only problem is that they recognize it only when they themselves are directly controlling the spending, and the fates of the companies in question.

President Obama, in his address to Congress last night, justified the appalling waste of taxpayer money on bailouts and “stimulus” by saying that handing money to failing institutions and over-extended mortgage-holders is “not about helping banks, it’s about helping people.”

In other words, he says that giving billions of dollars to these institutions that might otherwise fail is a way to help everyone who relies on them for lending and other services, and for their jobs. But, during times not characterized by economic crisis, when Republicans or others familiar with the basic laws of economics advocate reducing taxes on corporations that create jobs, innovate, and generally build our economy, Democrats like Obama shriek that we’re making the rich richer at the expense of everyone else.

They have picked up the lesson at exactly the wrong time, and then catastrophically misapplied it. The whole idea is that healthy corporations should have fewer impediments (like taxes and regulations) so that they can continue growing and benefitting customers, employees, and the communities in which they do business. The Democratic idea of giving away hundreds of billions of our dollars to FAILING companies and over-extended mortgage holders – in order to help everyone else – is just about the most idiotic application of a sound economic reality as I can imagine.

It’s nice that the leftists have finally seen an economic principle they can get on board with, but it’s tragic that they have chosen to apply it in such a twisted, hypocritical manner.

A quick word on the auto industry bailout

Every once in a while, a columnist summarizes a political situation so succinctly that it’s a shining gem in the gravel-pit of rhetoric. Reason columnist Steve Chapman’s recent commentary on the auto bailout hit the nail on the head:

And what about the automakers that have not run themselves into the ground? They get nothing. Actually, they get worse than nothing: They get the privilege of competing not just against GM and Chrysler but against the federal government, which has unlimited resources and is now in full partnership with the two.

It’s not just Ford, Toyota, Honda, Nissan, Volkswagen, and all the other companies that sell (and often build) cars here that are seeing their wisdom and restraint punished. It’s also the American people—most of whom voted with their pocketbooks not to support GM and Chrysler but now see their money forcibly diverted to those automakers anyway.

It’s rare that the bailouts are characterized so clearly as the almost-criminal enterprises they are.

The liberal willingness to watch poor people die

I often point out that liberal policies kill people. In part, of course, the way I present it is stark hyperbole to grab people’s attention, but for the most part, it’s true; liberal willingness to allocate society’s resources to fit their view of what’s “fair,” “safe,” or “compassionate” necessarily result in societal ills, including unnecessary death. Onerous regulations on new drugs or medical procedures result in people dying as they await the FDA’s stamp of approval; appallingly expensive safety regulations on rental units result in more homelessness; agricultural subsidies for commodities make junk food far more inexpensive and profitable to sell than healthy foods, rending our society fat, sick, and expensive to care for; and the list could go on forever.

If you have a reality-based outlook on politics, you recognize that it’s about balancing often-times unpalatable options to achieve positive outcomes for society. Liberals, on the other hand, see only solutions. Such is the case with environmental protection, as is on display in this horrendously biased story in the New York Times by Lydia Polgreen. She begins with a gushing description of the pristine wilderness of Gabon, and notes the irony that the country’s reliance on oil exports (described as “filthy”) is what allowed them to keep the forest undeveloped.

The upshot, however, is that Gabon might develop parts of its wilderness to replace income, now that their oil is running out. Polgreen spoke to many environmental activists who decried the government’s plans to replace the oil income with other mineral-based sources of revenue. She quoted government officials as saying they plan to proceed with the project. But her story never made even the slightest attempt to address the central issue: if the country’s primary source of revenue is drying up, what can it do to replace it?

Polgreen touches on the heart of the matter early in the story, but doesn’t pursue it further than a brief description:

In neighboring countries, impoverished hordes have razed and burned their forests to plant crops and make charcoal. They have slaughtered the gorillas, elephants, chimpanzees and hippos in jungles for meat. But the Gabonese flocked to cities, living in comparative splendor.

Perhaps she simply doesn’t make the connection, but to me it’s obvious. Poverty breeds rampant environmental destruction as people use up resources quickly and inefficiently in an effort to survive another day, month, or year. Does she – and other liberal “environmentalists” – not see that if Gabon doesn’t replace its oil income, it will end up as poor and desperate as its neighbors? And if that happens, you can be sure that its “pristine” wilderness will be raped within a generation.

Polgreen never addresses this in the story, when this is what the story, in fact, is all about. For her and the environmentalists she interviews, the issue is solely about environmental preservation as a solution with no trade-offs. Development of wilderness is a categorical evil to be avoided, no matter what.

In other words, if the Gabonese people have to suffer and die because the alternative is environmental destruction, then so be it.

Secret meetings charting the course to government healthcare

With leftists dominating Congress and holding the White House, we must conclude that the American people are gung-ho about having the government make their decisions for them on a host of issues, healthcare among them. And, as further evidence of our abdication of personal responsibility, we have now gotten to the point in our political development at which it is not only tolerated, but expected, that these decisions will be made by a cabal of “experts” behind closed doors and under strict secrecy. This is the lead of the NYT story:

Since last fall, many of the leading figures in the nation’s long-running health care debate have been meeting secretly in a Senate hearing room.

As a journalist, I would think a bit more would be made of the fact that our futures are being decided behind closed doors by a group of people who have huge vested interests in the outcome of the discussion. One can, of course, contend that these folks are merely discussing, and that there will be real, substantive debate in Congress that will allow for plenty of input from voters.

But that’s a lie.

In fact, these folks behind closed doors are defining the parameters of the debate, such that whatever the resulting legislation, most or all of them win. Leftists will say that is paranoid thinking, but that’s a tactic they routinely use to dismiss critics without actually addressing the substance of their criticism. The fact of the matter is that my contention is spelled out clearly in the NYT article:

“Many of the parties, from big insurance companies to lobbyists for consumers, doctors, hospitals and pharmaceutical companies, are embracing the idea that comprehensive health care legislation should include a requirement that every American carry insurance. While not all industry groups are in complete agreement, there is enough of a consensus, according to people who have attended the meetings, that they have begun to tackle the next steps: how to enforce the requirement for everyone to have health insurance; how to make insurance affordable to the uninsured; and whether to require employers to help buy coverage for their employees.”

So, to sum up, even those with completely opposing views on healthcare in the U.S. are deciding the limits of “reasonable discussion” when it comes to healthcare.

The worst part about this whole affair – and one that hasn’t yet been brought to the fore – is that no matter the outcome of this effort, the federal government will be in charge of rationing healthcare… deciding what treatments insurance companies will or will not cover, and therefore what treatments will be available. Again, this is dismissed as paranoid, because leftists contend that “medical decisions will be left to medical professionals,” not the government. However, the system they advocate precludes that possibility completely. It is NOT possible to “control costs” of the healthcare system without controlling procedures, equipment, and drugs by deeming them worthy of funding or not worthy. Even at this early stage:

Some participants in the talks said Congress should specify the benefits. But “the sense of the room seemed to be” that Congress should leave details to a group of experts, according to the memorandum.

Under this proposal, the experts would define the minimum coverage “within statutory parameters” set by Congress. Insurers might be allowed to offer different benefits with the same overall value.

The group has also been discussing the possibility that federal standards “may supersede state benefit mandates.”

No matter how you slice it, government control of healthcare – to the extent that these “experts” are discussing – means rationing, which means people will die who otherwise would not. Procedures that might be available today but are “experimental” or “new to the market” and therefore too expensive simply won’t be covered by the government’s system. Politicians and bureaucrats are too risk-averse to allow an innovative, risk-taking healthcare system run up taxpayer costs that might not prove effective. Innovation will be squelched, people will die, and long waiting lists for common procedures will become the norm.

Why? Because there are no solutions… only trade-offs. Leftists refuse to see the world as requiring a careful balancing of pros and cons, and instead see it as a series of problems to be solved. No matter how many new problems each of their “solutions” creates, they never tire of engineering masses of people, abrogating their decisions, belittling their opinions, and taking their money to thus subjugate them.

Obama works to divide and conquer

The strategy of the Democratic party – and of leftists in general – is to continually push policies that centralize control of citizens’ lives at the federal level. This is where they – the elite who have much better ideas than we, the benighted rabble – can have the most impact on us while remaining far more insulated from citizens’ electoral wrath than local-level politicians.

This strategy is clear in Obama’s recent admonition to the U.S. Conference of Mayors, in which he put them on notice that he’ll hold them accountable for how they spend the stimulus money being sent from Washington. Obama says the money should be spent “wisely, free from politics and free from personal agendas.”

In other words, he’s positioning Washington as the wise steward of our money, while the local-level politicians – the ones we actually have a prayer of reaching with our opinions and ideas – are irresponsible spendthrifts unable to resist political winds and lobbyists.

This is appalling hypocrisy, given the furious lobbying that resulted in the unprecedented waste of this stimulus bill. One of the biggest winners in the stimulus is the federal government itself. Let’s take a look at some of the spending provisions, as listed by Reason magazine. Take note of how much of this “stimulus” is directed to further expanding and feeding our federal government and its programs:

• $24 million for United States Department of Agriculture buildings and rent
• $176 million for renovating Agricultural Research Service buildings
• $290 million for flood prevention
• $50 million for watershed rehabilitation
• $1.4 billion for wastewater disposal programs
• $295 million for administrative expenses associated with food stamp programs
• $1 billion for the 2010 Census
• $200 million for public computer centers at community colleges and libraries
• $650 million for the digital TV converter box coupon program
• $2 billion for Byrne Justice Assistance Grant program
• $10 million to combat Mexican gunrunners
• $125 million for rural communities to combat drug crimes
• $1 billion for the Community Oriented Policing Services program
• $1 billion for NASA
• $300 million to purchase scientific instruments for colleges and museums
• $400 million for equipment and facilities at the National Science Foundation
• $3.7 billion to conduct “green” renovations on military bases
• $375 million for Mississippi River projects
• $10 million for urban canals
• $5 billion for weatherizing buildings
• $2 billion to develop advanced batteries for hybrid cars
• $3.4 billion for fossil energy research
• $5.1 billion for environmental cleanup around military bases
• $5.5 billion for “green” federal buildings
• $300 million for “green” cars for federal employees
• $20 million for IT upgrades at the Small Business Administration
• $200 million to design and furnish Department of Homeland Security headquarters
• $98 million earmarked for a polar icebreaker
• $210 million for State and local fire stations
• $125 million to restore trails and abandoned mines
• $146 million for trail maintenance at National Park Service sites
• $140 million for volcano monitoring systems
• $600 million for the Environmental Protection Agency Superfund environmental cleanup program
• $200 million to clean up leaking underground storage tanks
• $500 million for forest health and wildfire prevention
• $25 million for the Smithsonian Institution
• $50 million for the National Endowment for the Arts
• $1.2 billion for “youth activities” (for “youth” up to 24 years old)
• $500 million earmarked for National Institute of Health facilities
• $1 billion for Head Start Program
• $32 million for home-delivered nutrition services
• $160 million for volunteer programs at the Corporation for National and Community Service
• $500 million earmarked for the SSA National Computer Center in Maryland
• $220 million for the International Boundary and Water Commission, U.S. and Mexico
• $8 billion for high-speed railways (This amount is 4 times higher than the one voted on Tuesday in the Senate bill)
• $1.3 billion for Amtrak

On the tax side of the package, the tax credit for golf carts was retained, along with $300 million for Federal Employee Company Cars. And despite the role that home buying played in putting the economy into recession, the conference report also includes tax credits—up to $15,000—for buying new homes.

After looking at this list, it’s difficult for me to take seriously Obama’s admonition to mayors to “spend wisely.”