Category: Government

“Get Out of the Way” is a valid choice.

Like most Robert Samuelson columns, I like significant portions and despise the rest. Usually I like his analysis and despise his proposals. The former rests on economics. The latter rests on government. Yesterday’s column is no different. His conclusion, which is the sanity:

All this is telling. The administration and Congress, though pledging to restore economic growth, care more about protecting foreclosure victims and promoting homeownership among the young and poor. Politics trumps economics.

That is spot-on. But his proposal is that the Obama administration and Congress are trying wrong sort of political interference in the economy. He suggests this:

The simplest way is to bribe prospective buyers not to wait. For example: Give them a 10 percent tax credit, up to $15,000, on the purchase of a new home. Anyone who bought a $150,000 home would get a $15,000 tax break. The credit would expire in a year. Waiting would be costly. Buyers would delay only if they thought home prices would drop as much or more.

The $15,000 tax break is problematic on its own. But the 1 year expiration date shows the true problem. This proposal is an attempt to manipulate the market into preferred behavior now, believing that the possible short-term boost will not result in a long-term letdown. But purchasing a home is not a spur-of-the-moment decision. Treating it that way politically and financially is a large reason we’re in our current mess. There are consequences of this behavior. For example, if artificially rising home prices encourages more people to attempt to sell their homes, are we better off?

Somehow, we need to cut bloated inventories (13 months of supply for unsold new homes), curb falling prices and stimulate new construction. …

In the short term, I doubt we can manipulate two of those at the same time. But cutting bloated inventories and stimulating new construction are mutually exclusive as concurrent political strategies. I vote against trying to cheat on either, but considering them demonstrates only a desire to promote home ownership over renting. Home ownership is not the valid choice for everyone, so this still places politics over economics.

Ron Paul is still not a libertarian.

Too many libertarians pounced on the promise of having a libertarian candidate for president. Hence, Rep. Ron Paul generated significant support from libertarians last year. He still receives many kudos. Unfortunately, Ron Paul is not a libertarian. The few labeling him as such harms us all. Yesterday Andrew Sullivan linked to a story about Rep. Paul with this introduction:

Even libertarians get their pork:

The story:

Rep. Ron Paul vehemently denounced the $410 billion catch-all spending bill approved last week by the House of Representatives.

But although the libertarian-leaning Republican from Lake Jackson cast a vote against the massive spending measure, his fingerprints were on some of the earmarks that helped inflate its cost.

Paul played a role in obtaining 22 earmarks worth $96.1 million, which led the Houston congressional delegation, according to a Houston Chronicle analysis of more than 8,500 congressionally mandated projects inserted into the bill. His earmarks included repair projects to the Galveston Seawall damaged by Hurricane Ike and the Gulf Intracoastal Waterway.

Rep. Paul is touted as Dr. No because he votes against what he believes to be beyond the legitimate powers of the federal government. That would earn my endorsement, except he behaves without principles. Yes, that money is going to be spent somewhere else if Rep. Paul doesn’t request it for his district. That does not mean he has to request it. He requests it, repeatedly, because he figures it might as well go to his district. His actions legitimize the illegitimate expansion of the federal government. He harms the credibility of libertarianism as a political philosophy.

This reminds me of something I posted early last year when the Ron Paul newsletter mess was in the news. It’s a quote from Wirkman Virkkala:It is an odd thing, trying to be a civilized person in the libertarian movement — or in modern society. You have to keep some independence of mind. You cannot allow yourself to become part of any cult. For all the leaders will betray you. All the prophets will prove false. All the gems will prove brummagem.

As libertarians do we really need to keep repeating this lesson? Shouldn’t we understand this by now?

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More from the Houston Chronicle article:

Earmarks, said Rep. Ted Poe, R-Humble, “allow lawmakers to have a say in how taxpayer dollars (are) spent.” His nine earmarks included $712,500 to mitigate airport noise at George Bush Intercontinental Airport.

“It is in the best interest of the taxpayers,” Poe said, “to have their member of Congress secure funding for local projects than to leave it up to unaccountable and un-elected bureaucrats in Washington.”

It is in the best interest of the taxpayers to have them make their own funding decisions for projects they endorse and deem necessary. Don’t act pious because you redistributed my money rather than a bureaucrat. Taking my money and giving it to someone else is still taking my money. Why should I pay to repair the Galveston Seawall, which is more than 1,400 miles from my home?

Prior Ted Poe nonsense here and here.

Capitalism improves. Social engineering punishes.

In yesterday’s Washington Post, E.J. Dionne wrote a column around this idea:

The central issue in American politics now is whether the country should reverse a three-decade-long trend of rising inequality in incomes and wealth.

Politicians will say lots of things in the coming weeks, but they should be pushed relentlessly to address the bottom-line question: Do they believe that a fairer distribution of capitalism’s bounty is essential to repairing a sick economy? Everything else is a subsidiary issue.

Apparently we can’t ask whether or not our current and prior attempts to achieve a “fairer” distribution of capitalism’s bounty contributed to our sick economy. Not that we have capitalism in the way that Dionne wishes to imply. The failings of a mixed economy do not prove that it’s time to toss the capitalism from the mix. Making that case requires a bit more than tossing around the undefined, subjective word fair and pretending that the argument is won.

As Dionne continues:

“Over the past two or three decades, the top 1 percent of Americans have experienced a dramatic increase from 10 percent to more than 20 percent in the share of national income that’s accruing to them,” said Peter Orszag, Obama’s budget director. Now, he said, was their time “to pitch in a bit more.”

Is there more direct proof that liberals view the rich as the nation’s piggy bank than claiming it’s time for the top 1 percent “to pitch in a bit more”? Does Orszag mean the top 1 percent who paid 39.89% of all federal income taxes in 2006? Dionne is saying that it’s okay to increase the existing unfairness in the tax code because the disparity in income at the extremes is unacceptable to his sense of fairness. He must ignore the question of whether or not the alleged victims of the unfairness of capitalism’s bounty are better off than they were in the past. He concludes:

Do we want to be a moderately more equal country or not? This is the question Obama has put before the nation. Let’s debate it without the distracting rhetorical sideshows designed to obscure the stakes in the coming battle.

I would ask something different: Do we want to be a more productive country or not? Does everybody gain, even if the distribution is “unfair”, or do we harm some to improve others in the short-term? Dionne has the wrong preference.

I didn’t like President Obama’s speech.

I’m a bit behind on this, but I didn’t read the transcript of President Obama’s Tuesday speech to Congress until last night. The people who see little starbursts every time the President speaks scare me. Because they’ll listen to that speech and see change. They argue that we finally have an adult in the White House. Probably, but he’s still a politician. That speech was not change. It wasn’t even well written. It was political theater, a giant lie masquerading as the maturity of a statesman. It was drivel.

I pulled many bits out of the speech to highlight, but that review would be too long and too detailed. The general theme is the same from every point, anyway. I narrowed my focus to three passages that I think capture the essence of the charade. First:

In other words, we have lived through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election.
…

As soon as I took office, I asked this Congress to send me a recovery plan by Presidents Day that would put people back to work and put money in their pockets, not because I believe in bigger government — I don’t — not because I’m not mindful of the massive debt we’ve inherited — I am.

What was the deficit spending bill, if not the pursuit of short-term gains? President Obama made a case that he’s investing in the future, but the fear he used to quickly sell it suggests otherwise. Only productive activity puts new money in people’s pockets. The money the government seeks to put into people’s pockets today is money extracted from future productivity. It is borrowed, as our ballooned deficit proves. That is a short-term gain prized over long-term prosperity.

Packed in there is also the lie that President Obama does not believe in bigger government. If he believed that, his speech would’ve been very different. He wouldn’t have asked Congress to join him “in doing whatever proves necessary”. He wouldn’t have promised new ways that government would “rebuild” America. “Remake” would’ve been the accurate word choice. His call is for more government. For example, how else can he square this paragraph with his small government claim?

We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet it is China that has launched the largest effort in history to make their economy energy efficient. We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it. New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.

President Obama argues that “the largest effort in history” is how to measure what a country is doing. Forget benchmarks that would clearly show the Chinese much further behind us in modern energy technology. Forget future results from the efforts. It’s the largest effort in history. They must be doing it correctly. He’s shifted the debate to big actions that he will tell us only the government can undertake.

The real clue is the last line. If we make plug-in hybrids, that’s not enough because Koreans are making the batteries. A global economy involves exports and imports. President Obama is making a moral argument that we We should make batteries without making the argument that they They make the batteries less productively than We would make them. Nor does He he make the case that overall production is worse off. If we have a comparative advantage in making batteries, that’s interesting but incomplete. What else would we make if the Koreans freed us from making batteries? Or are the Koreans just supposed to wait for us to make everything and then they can buy our cars with… If we take over the world’s production, what exactly would they pay us with?

President Obama is a politician engaging in populist rhetoric. He shows this again when he gets to taxes.

We will root out — we will root out the waste and fraud and abuse in our Medicare program that doesn’t make our seniors any healthier. We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.

In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans.

There’s more that follows, and much of it reads as though he’s tacking fantastical lie after fantastical lie to his speech as he thinks of them. But these two paragraphs provide enough insight into his political goal.

First, it’s nonsense to think of jobs as “our jobs”. There’s more to economic success than Us Doing Something. Something has to be more than anything. What are we good at? What are others good at? These are economic questions to be sorted, not political questions to be dictated.

Second, President Obama is surely aware of how the income tax burden is overwhelmingly shouldered by the highest income earners in America. (There is a difference between wealth and income that President Obama ignores.) We have lost our sense of fairness and balance, but taxing the more productive members of society more will further distort the unfair imbalance, not rectify the problem. President Obama is a politician engaging in populist rhetoric.

KipEsquire provides a concise summary of why progressive taxation is inherently unfair, in the context of President Obama’s newly-proposed budget. Matt Welch explains how President Obama contradicted his statemen’s pose with his own words. Cato @ Liberty’s Daniel Ikenson explores a different explanation (e.g. the high tax burden faced by American corporations) for why American companies outsource “our” jobs.

Fiscal Irresponsibility (D-US) replaced Fiscal Irresponsibility (R-US)

And the government-as-parent continues:

President Obama warned the nation’s mayors yesterday that he will hold officials at all levels of government accountable for how they spend federal stimulus money, pledging to “call them out” if the funding is wasted on projects that do not generate jobs for the struggling economy.

Politicians are incapable of being shamed, so this is pointless. There’s also real money involved, so I’m not comforted knowing that waste will be dealt with through stern words. More to the point, this:

“If you’re seeking to simply fund a personal agenda at the expense of creating jobs and using taxpayer money to do it, the president will call that out and stop it,” press secretary Robert Gibbs said yesterday. “That’s true for agencies and members of this administration. That’s true for governors. That’s true for mayors. That’s true for anybody that might take part in any amount of this funding.”

How is this an option? The government will spend $800 billion. If we’re to believe that it’s money well spent, then there should already be a plan for every penny. I don’t believe that, of course, but we’re still supposed to trust what is clearly a plan based on the belief that money spent is money well spent. That’s the Keynesianism we’re stupidly embracing. And the Obama administration is saying that we have to spend the money without extended consideration, but if it’s not spent well, he’ll call out those responsible. The one person out of his line of ire is himself. An accident, I’m sure.

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This popped up today, tying uncomfortably to the previous story:

Less than a week after signing the largest economic stimulus package in U.S. history, President Obama is turning his attention to the nation’s long-term financial condition with an unprecedented effort to rein in government spending.

To kick off the effort, the new president has invited about 130 people to the White House State Dining Room on Monday for a “fiscal responsibility” summit, a marathon session on long-term budget-busters such as Social Security, Medicare, federal purchasing and tax policy.

Perhaps the time to do that was before shoving $800 billion out of the Treasury as quickly as possible. But it’s okay, a room full of partisans should be able to hammer out their differences in a marathon session. We’ll be saved!

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On a less comforting note, I’m starting to sense that press secretary Robert Gibbs, at least, views President Obama as an economic dictator. I am not reassured.

The Bully With the Guns Always Wins

CNBC reporter Rick Santelli gave an inspired rant in response to the Obama housing plan I criticized here. It was a masterpiece, as you can see in the video at the end of this entry. The Obama administration disagrees:

Apparently someone in the White House was. In response, Gibbs attacked Santelli by name repeatedly at a news briefing, accusing him of not reading the president’s housing plan and mocking the former derivatives trader as an ineffective spokesman for the little guy.

“I’m not entirely sure where Mr. Santelli lives or in what house he lives,” Gibbs told reporters in a derisive tone. “Mr. Santelli has argued — I think quite wrongly — that this plan won’t help everyone. This plan will help . . . drive down mortgage rates for millions of Americans.”

Later, Gibbs added: “I would encourage him to read the president’s plan and understand that it will help millions of people, many of whom he knows. I’d be more than happy to have him come here and read it. I’d be happy to buy him a cup of coffee, decaf.”

I have two responses. First, Gibbs should not be engaging in this type of rhetoric. Obama is President of the United States, not just President of the United States’ Economically Illiterate. He – and his representatives – should refrain from behaving in this manner. It’s possible to disagree without mockery.

Second, if the President’s plan insists on the 1.05 mortgage-to-market-value ratio requirement, he’s right that it will not help most speculators. However, as I wrote earlier this week, it won’t help anyone other than those not in distress. I don’t concede that we should help those in distress, but if we should, the people who qualify for the President’s plan offer the least bang for the national buck. Forget politics, that’s bad policy.

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Video link via Kip’s tweet.

Press Release: An Instrument of Distortion

I loosely follow a rule in my blogging that I don’t bother with press releases. They’re skewed to push the angle of whoever is paying the bill. It might be worth picking out the propaganda from a press release to find the facts, but I can usually achieve that with less effort by going to news sources to make a point. (Of course, most news sources reporting on circumcision are filled with propaganda, too.) Generally a press release is only good for demonstrating propaganda. This recent press release is a good example:

Hospitals in states where Medicaid does not pay for routine male circumcision are only about half as likely to perform the procedure, and this disparity could lead to an increased risk of HIV infection among lower-income children later in life, according to a UCLA AIDS Institute study.

The first half is fact. The second half is conjecture. News, then propaganda. The HIV-circumcision studies researched the effect of voluntary, adult male circumcision in reducing the risk of female-to-male HIV transmission from heterosexual intercourse. It is inaccurate to draw the conclusion that the foreskin puts men at higher risk of HIV. Unprotected sex with HIV-infected partners increases an individual’s risk of HIV infection. The male must first engage in that specific activity to become infected. Focusing on the foreskin distracts from efforts to reduce such behavior.

But that doesn’t sell the way fear sells.

But recent clinical trials in South Africa, Kenya and Uganda have revealed that male circumcision can reduce a man’s risk of becoming infected with HIV from a female partner by 55 to 76 percent. In June 2007, the AAP began reviewing its stance on the procedure.

By now you know what was left out of that summary, right? When public health officials talk about voluntary, adult male circumcision, they never mean voluntary, adult. Never.

As the press release so helpfully theorizes in its opening line:

Lack of coverage puts low-income children at higher risk of HIV infection

Think of the (poor) children. That’s not very original. It has the added bonus of being inaccurate. Are these children sexually active? Specifically for the age of the children discussed in this press release, the answer is no for 100% of them. They are not at risk of (female-to-male) sexually-transmitted HIV infection. But those necessary, contradictory details must be ignored. Think of the (poor) children.

That is how propaganda is done.

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Not to let an opportunity go to push for a collective response to an individual problem, the Family Planning Cooperative Purchasing Program helpfully regurgitates this press release, with the necessary bits of speculation helpfully emphasized in bold. An example:

In addition to the overall lower circumcision rates, the researchers found that the more Hispanics a hospital served, the fewer circumcisions the hospital performed. For Hispanic parents, the circumcision decision was about more than simply cost, since male Hispanic infants were unlikely to receive the procedure even in states in which it was fully covered by Medicaid.

What point is FPCPP trying to make with that emphasis, given the sentence that follows it? The only justification I infer is an implicit suggestion that we need to encourage Hispanics to “Americanize”. That wouldn’t surprise me because it’s the typical, mindless support for non-therapeutic genital mutilation in America. And FPCPP files this under “Public Policy”, among other categories. See above re: voluntary and adult. If it’s not that, I’m stumped.

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You and I, through a grant from the National Institute of Mental Health, paid for this research. Mental Health? With mission creep like that, who could possibly worry about government-run health care?

However, this raises the question of national health care and the future of routine infant male circumcision in America. I’ve long held that the former would not end the latter. The political environment for defending non-therapeutic circumcision is too strong, as evidenced by studies like the one leading to the above press release. No politician is going to say that parents can’t circumcise, despite the clear constitutional flaw in our status quo.

Ending public funding isn’t sufficient. The state should not pay for mutilation, but fails to end the practice. Poor parents pay for the surgery out-of-pocket. They complain about it, citing the potential benefits as an excuse for why Someone Else should pay, but they pay the cost anyway. Their sons are not protected by their state’s lack of Medicaid reimbursement. And ending government reimbursement doesn’t always end government reimbursement, as Minnesota’s politically-motivated solution showed.

Still, I need to have a think on my position. I won’t suddenly support government-run health care, but I should explore the nuances further.

Linkfest

LINK: Think government manipulation of intervention in the economy is good? Read George Will’s latest column. (H/t: Cafe Hayek)

LINK: Jim Harper has an entry on Cato @ Liberty discussing President Obama’s pledge to post all bills for 5 days of public comment before signing them. Mr. Harper reviews the steps the administration has taken and offers a positive review of the idea, although he correctly criticizes the administration for playing loosely with the 5 day timeline.

I agree with that in principle, but that’s not my concern here. The deficit spending bill mistakenly labeled The American Recovery and Reinvestment Act of 2009 is now online for public comment. I thought about adding comments, but why? I’m realistic enough to understand that what I say will not matter. It will not matter how many people comment against it, this is a done deal. The five days concept as implemented is worthless political propaganda. Honestly, if members of Congress can’t be bothered to read the bill, yet they’ll happily vote by party line, they don’t care what the American people think. They’re trading favors for power. The game hasn’t changed. So, wake me when this fails and tell me what the next stupid idea is.

LINK: I reject non-therapeutic infant circumcision because it is logically and ethically unacceptable. I question the science surrounding claims, particularly those involving HIV risk reduction, because there are obvious holes in the argument. However, unlike (too) many activists, I have no problem with vaccines. I think the logical and ethical arguments differ, and I don’t believe in conspiracy theories about Big Pharma. And from what I’ve read, the autism-vaccine link appears weak, at best. This report seems to confirm that (link via Kevin, MD):

THE doctor who sparked the scare over the safety of the MMR vaccine for children changed and misreported results in his research, creating the appearance of a possible link with autism, a Sunday Times investigation has found.

I would use this as a lesson for everyone who thinks that a claimed HIV risk reduction for (adult, voluntary) male circumcision need to be concerned about the long-term reality of their idea. I think we will eventually look back on the HIV-foreskin connection and realize the mistakes in the studies. But I do not approach the topic from that angle. I don’t need it, of course. I can concede the point for the argument and rely on ethics and objective indications of health and easier methods prevention.

For now, it’s too late anyway. The link has gained widespread acceptance because people want to believe it, regardless of facts or reasonable caution. The mindset is the same, as this excerpt from Orac’s post at Respectful Insolence suggests. (I read the post, but there’s too much to parse easily, so I’m using the summary pulled by Kevin, MD.)

“None of this will matter to antivaccinationists,” he writes, “who view Wakefield as . . . a persecuted scientific hero . . . I’m sure that [anti-vaccine proponents] will wax ridiculous about what a great doctor and man Wakefield is and how it’s big pharma and its minions who, frightened by the implications of Wakefield’s work, are working hard to demonize him and suppress his ‘science.'”

When emotion precedes logic in an objective debate, reason is lost. That would be unfortunate but defensible if it only affected the decision maker. It does not. The individual fears of parents results in poorly conceived decisions for children. Vaccinate but circumcise. Don’t vaccinate and don’t circumcise. Neither combination is justifiable when weighing the evidence with logic and ethics.

LINK: To lighten things up just a bit, will the Mets never learn?

“Whatever they did last year, they already got paid,” [Francisco] Rodriguez told the New York Daily News. Whatever they did, I have all the respect in the world. They worked hard and they deserve it. This is a different year and different ballclubs now. I don’t want to make any controversy, but with me and (J.J.) Putz and the additions in the bullpen, I feel like now we are the team to beat.”

K-Rod should ask Carlos Beltran how that worked out last year. However, I love this rivalry.

Insight from an Irrelevant Question

From President Obama’s press conference last night, one reporter asked a pointless question about Alex Rodriguez and steroids. I don’t much care for the story, although if you played a drinking game based on his answers, you got to drink because he broke out the “for the children” defense. (But, remember, he’s not playing political games, unlike the rest of Washington.) Still, there’s something useful in his answer [transcript here]:

Q Yes, thank you, sir. What is your reaction to Alex Rodriguez’s admission that he used steroids as a member of the Texas Rangers?

THE PRESIDENT: I think it’s depressing news on top of what’s been a flurry of depressing items when it comes to Major League Baseball. And if you’re a fan of Major League Baseball, I think it — it tarnishes an entire era to some degree. And it’s unfortunate, because I think there are a lot of ballplayers who played it straight. And the thing I’m probably most concerned about is the message that it sends to our kids.

What I’m pleased about is Major League Baseball seems to finally be taking this seriously, to recognize how big of a problem this is for the sport. And that our kids, hopefully, are watching and saying, you know what, there are no shortcuts; that when you try to take shortcuts, you may end up tarnishing your entire career, and that your integrity is not worth it. That’s the message I hope is communicated. [emphasis added]

The correct lesson is that shortcuts have consequences that each person must weigh for himself. Borrowing and spending $800 billion in an attempt to prop up an economy that has fundamental problems caused by government profligacy is a shortcut. It will have consequences. But with government the lesson is always the same. It’s not okay for an individual to take a shortcut that may have long-term consequences limited to himself because the shortcut offends our morals. But when government forces everyone to take a shortcut, then it’s okay because the shortcut is for the public good. Somehow.

Video here.

Compare and Contrast

President Obama said the following last night:

“I can’t afford to see Congress play the usual political games. What we have to do right now is deliver for the American people,” Obama said just hours after the legislation narrowly cleared a key procedural hurdle in the Senate, where it is likely to gain final passage today.

But he can play (not really) unusual political games last week.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

Or last month:

… What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long no longer apply.

President Obama is a politician. Politicians play political games. That’s no surprise, so back to last night:

“So, you know, we can differ on some of the particulars, but again, the question I think that the American people are asking is: Do you just want government to do nothing, or do you want it to do something? If you want it to do something, then we can have a conversation,” he said. “But doing nothing — that’s not an option, from my perspective.”

If we’re willing to accept the parameters he dictates, then we can talk. Otherwise, we’re cynics to be ignored. I see “change” in where the efforts are directed, not in how they are directed.