Monthly Archives: February 2009
Just a little musing I had…
From the little I know about the workings of the illicit drug market, marijuana is one of the main crops. Pretty much everybody — at least everyone in my generation — knows at least one pot-smoker in their lives. Far fewer know people who use (or admit to the use) of hard drugs. But drug dealers are a lot more likely to be one-stop shops than explicitly limiting themselves to a specific drug. So the illicit drug industry — for those who are looking to use hard drugs — is served by a relatively innocuous drug like marijuana being illegal. It ensures that the drug dealers have a much wider prospective net of potential customers. To put it simply, by knowing a few marijuana users, an individual is only a few phone calls away from access to pretty much any illicit substance they want.
So the simple question is:
What would happen to the illicit drug industry if pot — and only pot — were legalized?
There’s a chance that it would sever a link between most people and most dealers. How much illicit drug use would go away simply by legalizing the one drug that connects a large group of drug users to their black market connections?
From Ezra Klein:
Over the weekend, I asked Henry Aaron, an economist at Brookings, whether it would be fair to say that the definition of fiscal responsibility had changed. Where once it meant entitlement cuts, now it meant an attention to health reform.
“Yeah,” he said. “That’s exactly right.”
Ahh, I see… Instead of trying to find ways to spend less of our money — or at least to make such spending sustainable over the long term, they’re just going to spend more of it on something else.
I guess if we’re talking about Doublespeak, I think it’s becoming clear that “Hope and Change” equals “Tax and Spend” in Obama’s dictionary.
From the Governator:
“You’ve got to listen to the people. If the nation is screaming out loud, ‘We need health care reform. We want to have universal health care. We want to have everyone insured. We want to bring the costs down. We want everyone to have access.’ I mean, that’s what they want; that’s what you do,” Schwarzenegger said on ABC’s “This Week.”
“Even though it maybe is against your principles or philosophy, you still have to go, because that’s what the people want you to do,” he said.
Remember… It doesn’t matter if it’s right or wrong. It doesn’t matter whether you believe it or not. If you go against the people, they’ll vote you out, so fer chrissakes do what they say! Principles, as the Republicans of 2000-2006 proved, are for those who aren’t in power; once you’re in you’d better do what is expedient to stay there.
Hat Tip: McQ @ QandO
David Blankenhorn and Jonathan Rauch, who come from totally opposite sides of the same-sex marriage debate, offer this compromise in a New York Times Op-Ed this morning:
It would work like this: Congress would bestow the status of federal civil unions on same-sex marriages and civil unions granted at the state level, thereby conferring upon them most or all of the federal benefits and rights of marriage. But there would be a condition: Washington would recognize only those unions licensed in states with robust religious-conscience exceptions, which provide that religious organizations need not recognize same-sex unions against their will. The federal government would also enact religious-conscience protections of its own. All of these changes would be enacted in the same bill.
Linking federal civil unions to guarantees of religious freedom seems a natural way to give the two sides something they would greatly value while heading off a long-term, take-no-prisoners conflict. That should appeal to cooler heads on both sides, and it also ought to appeal to President Obama, who opposes same-sex marriage but has endorsed federal civil unions. A successful template already exists: laws that protect religious conscience in matters pertaining to abortion. These statutes allow Catholic hospitals to refuse to provide abortions, for example. If religious exemptions can be made to work for as vexed a moral issue as abortion, same-sex marriage should be manageable, once reasonable people of good will put their heads together.
The first problem with this proposal seems to be rather self evident to me. Namely, where in Article I, Section 8 of the Constitution is Congress granted the power to regulate marriage ? Some might argue that Section 5 of the 14th Amendment creates such a power to the extent that marriage is a “privilege or immunity” contemplated by Section 1 of that Amendment, or that depriving homosexuals of the rights and benefits of civil marriage constitutes a deprivation of life, liberty, or property, without due process of law; or that it denies them equal protection of the laws. However, that argument would run head-on into the fact that there’s little evidence that the framers of the 14th Amendment intended it to be such complete a usurpation of state’s rights as this argument would contemplate. Moreover, such an interpretation of the 14th Amendment would effective mean that the 10th Amendment had been repealed by it’s ratification; and there’s no evidence that was the intention back in 1865.
So, at the very least, we’ve got a significant federalism problem that shouldn’t be dismissed.
A second problem with this proposal is that it continues with the idea of creating two separate statuses. What, exactly, would be the difference between marriage and these civil unions ? Unless the differences are in name only, then we’re not talking about real equality. Would heterosexual couples be able to enter into these civil unions instead of marriages ? If not, then you really are creating two different classes of people. And, finally, what would be the rules regarding dissolution of a civil union ? Would it be easier ? Harder ? Would traditional domestic relations law apply ?
If the only difference between “marriage” and “civil union” is the name, then what’s the point of having two different institutions ?
A final problem with this proposal is that it raises what is clearly a straw man in this whole debate. Except in the mind of the truly wacko, the idea that same-sex marriage poses any serious threat to religious liberty. Modern marriage is a civil institution governed by the state, so long as that is the case then the state has no right to discriminate against people when it decides who is and is not entitled to claim the benefits of that relationship. Churches, on the other hand, are free under the First Amendment to confer their religious marriages under any circumstances they deem fit.
The problem, of course, is that marriage today is still a hybrid institution.
Is it a civil relationship governed by the state, or a religious one governed by the laws of whatever deity(ies) you happen to worship, or, is it a combination of both ?
The solution, as I’ve mentioned before, seems rather obvious:
If that’s what you believe a marriage is, the union of a man and woman before God and man, then what does the state have to do with so fundamentally a religious institution ? Why does the state need to recognize it at all and why does it need to grant that religious institution preferntial benefits in the form of tax breaks and a protected legal status that is not available to unmarried persons ?
Kellie and I were married in the Roman Catholic Church, which has requirements for marriage that exceed, and are different from, those of civil marriage. That wedding ceremony is what made the marriage official in the eyes of God, not the little piece of paper we got from Cuyahoga County, Ohio the day before.
Here’s my proposal. Get rid of civil marriage licenses entirely. Let people decide for themselves what they believe about marriage and let them, if they wish solemnize that union in a church of their choice. We are hundreds of years past the day where the state was involved in religious affairs, it doesn’t need to be involved in this matter either.
It’s really not as radical an idea as you might think. Contrary to what some of the “traditional marriage” advocates would have you think, state involvement in marriage is a relatively recent thing historically:
For 16 centuries, Christianity also defined the validity of a marriage on the basis of a couple’s wishes. If two people claimed they had exchanged marital vows — even out alone by the haystack — the Catholic Church accepted that they were validly married.
In 1215, the church decreed that a “licit” marriage must take place in church. But people who married illictly had the same rights and obligations as a couple married in church: their children were legitimate; the wife had the same inheritance rights; the couple was subject to the same prohibitions against divorce.
Not until the 16th century did European states begin to require that marriages be performed under legal auspices. In part, this was an attempt to prevent unions between young adults whose parents opposed their match.
That practice carried over to the American colonies and, later, the United States, where marriage licensing laws quickly became a way to prevent socially disapproved inter-racial marriages and to limit the rights of women:
By the 1920s, 38 states prohibited whites from marrying blacks, “mulattos,” Japanese, Chinese, Indians, “Mongolians,” “Malays” or Filipinos. Twelve states would not issue a marriage license if one partner was a drunk, an addict or a “mental defect.” Eighteen states set barriers to remarriage after divorce.
So, the idea that the marriage must be something defined by the state isn’t as historically grounded as some would have you think.
And what about the supposed threat to religious liberty if homosexuals were allow to declare themselves married ?
Well, it ain’t there:
[N]obody is saying that your church has to approve or consecrate same-sex unions. Heck, you could have a religion that said people with different hair colors can’t get married if you wanted to, just don’t make it the business of the state to codify your religious prejudices.
Blankehorn and Rauch make a good effort at trying to find some middle ground on this issue. And that alone I take as a sign that the rigid opposition to same-sex unions that we’ve seen in the past is melting away far quicker than anyone anticipated (just look at Utah for more proof of that assertion). As a practical, Constitutional solution to the problem, though, I’m afraid they’ve fallen short.
Originally posted at Below The Beltway
Over at Ezra Klein, the yuppies are in a tizzy:
But Matt misses the neighborhood effects. It’s a pretty sure bet that if you live near a Starbucks, you also live near a $8 sandwich shop. And probably another $8 sandwich shop. You’re not far, I’d imagine, from frozen yogurt, or maybe an artisanal chocolate store. There’ll be a sushi place that makes rolls with names like “volcano roll” and “ninja roll.” There might be a Whole Foods around the corner. If not, then a Trader Joes. Certainly someone will sell you Balsamic vinegar.
This isn’t desert island development. Yuppies want to live near Starbucks because Starbucks denotes areas friendly to yuppies. There are, of course, exceptions. The McDonald’s on 14th and U is actually closer to yuppie-Mecca Busboys and Poets than the Starbucks on 13th and U. But the Starbucks on 14th and Irving is in spitting distance from a New Haven-style pizzeria and a Five Guy’s.
Oh, the self-congratulation is almost unbearable… Read the comments. The derision about McDonald’s is so thick you could cut it with a shovel.
But it belies a more important point. McDonald’s makes better coffee. I’m not just spouting off my own opinions here (although I certainly agree), Consumer Reports said so.
There’s been much discussion among the right-side of the blogosphere about this case out of Oklahoma:
OKLAHOMA CITY — A handmade anti-abortion sign in the back of an Oklahoma City man’s pickup truck prompted a traffic stop and a visit from the Secret Service.
However, a police supervisor acknowledged Thursday that confiscating the man’s sign went too far.
According to a police report, Hal “Chip” Harrison, 55, was pulled over by police at 8:30 a.m. on Feb. 12 along Interstate 44 at Southwest 119th Street because of a sign in the back of his vehicle that read, “Abort Obama Not The Unborn.”
Officers believed the sign constituted a threat, confiscated it and contacted the Secret Service, prompting a brief investigation.
Secret Service agents determined Harrison was no threat to the president after conducting a walk-through of his southeast Oklahoma City home. Agents conducted a field interview on his patio, Harrison said.
Police soon returned the sign as well.
While stopping Harrison was up to the officer’s discretion, Oklahoma City Capt. Steve McCool said the officer should not have confiscated the sign.
“We feel it was a bad decision to confiscate the sign. It’s kind of a First Amendment issue — freedom of speech — and that probably shouldn’t have been confiscated,” McCool said.
He said the decision to contact the Secret Service is also up to the officer.
However, Harrison said his sign was in no way meant to be a threat against President Barack Obama.
“My sign is about anti-abortion. It’s not about killing the president,” Harrison said.
Here’s an interview with Harrison from a local television station:
It’s worth noting that Harrison was not arrested and he isn’t being charged with anything. The question, though, is whether the police and Secret Service went over the top in pulling him over and then questioning him about a sign hanging in his car window.
It seems to me that the answer to that question is two-fold.
First, Harrison’s “speech” was stupid and sophomoric, but the First Amendment protects all speech, even the stupid and sophomoric stuff.
Second, there really isn’t anything out of the ordinary about this. The Secret Service has *always* been aggressive, some would say overly aggressive, in investigating people who make what some might interpret as threats against the President, and this has become even more the case since 9/11. The fact that the President was Obama instead of Bush wouldn’t matter to them.
Consider these examples from the Bush years:
And that’s just from the first two pages of a Google search for Secret Service and Bush threats.
So, there really isn’t anything unusual about what happened in this case and, when the sign was brought to the attention of the Secret Service’s attention, they did the same thing they would’ve done regardless of who the President was.
As for the legality of all this, Eugene Volokh makes an excellent point about the stop and subsequent investigation:
A bad decision on the officers’ part, but a correct one on the higher-ups’.
The Secret Service also apparently visited Harrison and asked “to (walk through the house) and make sure [the driver] wasn’t a part of any hate groups” (I quote Harrison here). “He said they interviewed him for about 30 minutes and then left, not finding any evidence Harrison was a threat to the president.” This seems a bit heavy-handed.
At the same time, law enforcement is indeed entitled to investigate — and to ask people’s consent for searches — based on nothing more than a hunch, or a sense that there’s a very low probability that the subject of the investigation may have committed a crime or may be a planning to commit a crime. And such a hunch or felt probability might be based on what the subject is saying; if the statement is ambiguous, they may investigate to resolve the ambiguity. (I assume that the Secret Service was interested in whether Harrison belonged to groups that might be a threat to the President, not to “hate groups” in the more general sense.) I don’t think there was any real ambiguity here, but the Secret Service is naturally and understandably pretty careful about such things
I agree with Volokh; the stop was a bad decision on the officers’ part, but it wasn’t anywhere close to being outside of the scope of reasonable suspicion necessary for a stop. And the Secret Service clearly didn’t do anything wrong.
In the end, this strikes me as something that’s a bit over-the-top but not at all unusual and certainly not the assault on free speech that some have characterized it as being.
Update: I obviously didn’t make it clear enough in the original post, but my point is that, under current law, the officers were close to the line when it came to the decision to pull this guy over. They should not have done it, but given the amount of discretion that Court’s have given the police in recent years, it’s likely that a good number of Judges would say that the stop was okay. Where they went too far, I think, was reporting the sign to the Secret Service. Once it was in the Secret Service’s hands, though, the situation played out pretty the same way these types of situations always have — they agent investigates, finds out there’s nothing to worry about, and closes the case.
Although you’ve got to wonder if Mr. Harrison’s name isn’t on a list somewhere now because of this.
And if that’s the case, then this really is a travesty.
At the same time, though, this is not the attack on free speech that Malkin and others on the right have tried to characterize it as being.
Originally posted at Below The Beltway
This might be the best rant about Obama’s $75 billion dollar home mortgage bailout plan I’ve heard so far broadcast by the MSM. Get ready to stand up and cheer this man!
$42B in budget shortfalls. A new budget raising taxes statewide by $12B. Is this a good time for a giveaway to the entertainment industry?
Gov. Arnold Schwarzenegger, a former movie actor, has been trying for years to get tax credits to keep California’s signature industry at home.
He got his wish early Thursday when the Legislature approved tax credits for film and television productions as part of an economic stimulus provision of the new state budget.
The credits — capped at $500 million over five years — are modest compared with those offered by other states.
I don’t have to tell readers here that I’m anti-tax. I don’t have to tell you that I’m almost universally for lower taxes, whenever and wherever I can get them. I further applaud tax reductions that I don’t necessarily get to take, because I know that if I could get those like that for myself, I would be very happy to take advantage of them.
But after all that, I can’t help but find myself enraged by this bullshit. They’re slapping new income and sales taxes on me (thankfully I think we dodged the alcohol tax increase), while offering $500M in tax credits to the MOVIE INDUSTRY?! Time for another recall.
Katherine Mangu-Ward, discussing beer vending machines in the Armed Forces Retirement Home:
I hear rumors from the old folks that you used to be able to get cigarettes this way as well. But that’s probably just the Alzheimer’s talking.
Sometimes it’s lines like this that remind me just how much things have changed — in my short lifetime.
» Read more
Václav Klaus gave a speech that U.S. politicians would do well to listen to:
The citizens of the Czech Republic feel that the European integration has an important and needed mission and task. It can be summarized in the following way:
– removing unnecessary – and for human freedom and prosperity counterproductive – barriers to the free movement of people, goods, services, ideas, political philosophies, world views, cultural patterns and behaviour models that have been for various reasons over the centuries formed among the individual European states;
– a joint care of the public goods, existing on the continental level, meaning projects that cannot be effectively carried out through bilateral negotiations of two (or more) neighbouring European countries.
This is closely connected with the question of prosperity. We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy. Although history has more than clearly proven that this is a dead end, we find ourselves walking the same path once again. (my emphasis – tarran) This results in a constant rise in both the extent of government masterminding and constraining of spontaneity of the market processes. In recent months, this trend has been further reinforced by incorrect interpretation of the causes of the present economic and financial crisis, as if it was caused by free market, while in reality it is just the contrary – caused by political manipulation of the market. It is again necessary to point out to the historical experience of our part of Europe and to the lessons we learned from it.
Predictably, his speech calling for less political centralization and more economic liberalization was poorly received, with a substantial portion of the parliament walking out on his speech after booing him:
Read the entire thing.
H/T Lew Rockwell
Much to my delight and surprise, the news of Nadya Suleman (a.k.a. Octomom) giving birth to 8 children in addition to her other 6 children she could ill afford to support has not been well received by a large portion of the American public. Octomom seemed to go into this undertaking with the idea that she wouldn’t actually have to support these children herself because giving birth to so many children would make her an instant celebrity complete with book deals, TV specials, movie offer and other such ways to cash in. With the popularity of the Duggar and Gosselin families with their fame and modest fortunes derived from reality shows and book deals, it’s not too difficult to see how Octomom might come to such a conclusion (and at the end of the day, with our celebrity worship culture, her calculation might pay off).
But something unique about Octomom didn’t quite have the same charm as the Duggars and the Goslins: the ability to support the children. For all of my personal objections (which I will not get into here) I have with a family such as the Duggars cranking out 18 babies in a span of 12 years, I certainly respect the dedication of the parents to support their family themselves. While Jon and Kate Gosselin had the help of fertility science which resulted in 8 children in 2 separate pregnancies, they went into each hoping for just one child and also support the family themselves. The Duggar and Gosselin children also benefit from a two parent household.
In contrast, Octomom, an unemployed single woman on welfare, intentionally impregnates herself with the help of in vitro fertilization resulting in 14 children without any concern of how she would support these children if her celebrity scheme wasn’t realized.
What’s not to like?
This Octomom attitude seems to be that she’s entitled to have as many children as she wants because it has always been “her dream” to have lots and lots of children. Where does she get this notion that because someone has “a dream” she is entitled to force others to help her realize this dream?
One doesn’t have to look far to realize that this entitlement mentality has been fostered by the Democratic Party at least since FDR’s New Deal. The Democrats constantly demand that the most productive members of society support the
“less fortunate” less productive class to help realize their dreams. According to the 2008 Democratic Party Platform, everyone has a right to a job that pays a “living wage,” “affordable” healthcare, free daycare, free education, paid family leave, and an “affordable” home.
What the Left fails to realize is that there’s no such thing as a free lunch. There never has and there never will be. Every one of these policies to give “free” or “affordable” service to those who do not have the wherewithal to provide these “rights” for themselves have to come from someone because they are not without cost. Whether or not Octomom paid for the birth of her 8 children, there was still a significant cost to the medical staff that provided this service. But what does she care? If she doesn’t get the multi-million dollar TV show, she can always count on the taxpayer to bail her out. No longer a single mother, Octomom will be married to the State.
While I’m sure many on the Right would nod in agreement with much of what I have said so far, I would have to ask them: where have you been the last 8 years? The Republican President Bush with Republican majorities in the House and the Senate for the majority of that time presided over the greatest expansion of government since LBJ’s Great Society programs. Yes, it was the G.O.P. that gave us No Child Left Behind, Medicare Part D, and TARP just to name a few. This is the party of small government?
Yes, in the Chairmen’s Preamble of the 2008 Republican Party Platform there’s a very libertarian friendly line that the Republican Party has “Distrust of government’s interference in people’s lives” then the document proceeds to outline exactly how they plan to have the government interfere in people’s lives. As awful as the Democrat Platform is, at least I can say they are honest and consistent; more than what I can say about the Republicans.
When the going got tough, the Republicans abandoned free market principles and adopted the Democrat’s approach of bailing out businesses which were “too big to fail.” Now that the Democrats run the show, the Republicans hope we will forget* that they were the other party of big government.
With the Republicans failing to stand up for these principles, perhaps Octomom also believed she was “too big to fail” (both figuratively and literally).
Oh, wait…the Republicans have stayed true to one principle: the old “every sperm is sacred” (every sperm, egg, embryo) principle. When asked why she chose to implant every single one of the embryos Octomom explained that if she allowed them to expire, it would be like killing them. As she has learned from the Republicans, if ever a “life” is created existing even on a multi-cellular level, she has a duty to give these tiny clumps of cells a “chance to be born” or otherwise be accosted for “murdering the unborn.”
I can’t help but wonder whether or not the Octomom culture would exist at all if it were Libertarian policies in place over the last 70 or so years rather than Democrat and Republican policies. If such were the case, I am sure Suleman would have made certain she had the resources to take care of herself first and playing the odds of celebrity roulette would probably been too big of a risk. If the thought of the government bailing out financial institutions and the big three was considered politically unfeasible because government only stayed within its Constitutional limits, then there certainly wouldn’t be any political will to support “one woman’s dream.”
The Obama administration, having retained the basic elements of Bush’s disastrous n ational security policies, and having applied a similar political approach to the economy, has set the stage for the collapse of the U.S.
The number of laws that tangle us all continues to multiply. At this point it is probably impossible for us to survive, let alone prosper, without breaking one or more laws on a weekly basis. People seem to be helpless in the face of these out of control laws. Some people wonder how far people can be pushed before violent revolution takes place.
There will be no violent revolt. People have too much to lose, and we are not a violent people. Nor should there be – we can look to the fall of the communist states of the old Warsaw Pact, where the state collapsed and freedom spread with hardly a shot being fired. Violent revolution, such as that which led to Caucescu and his wife being gunned down by a firing squad, were the exception rather than the rule.
How did these states collapse? Simply put, the people stopped respecting the state, and began to ignore its edicts. They ignored the laws forbidding certain economic activity. They ignored the laws demanding the payment of taxes. They ignored the laws demanding people acquire licenses to take up certain professions. They ignored the laws mandating that young men report for mandatory military service.
Our salvation lies through systematic disobedience to the state.
In a way, Obama is doing us – those who love freedom – a favor. His policies will push the people to the ragged edge. Many people will come to hate and distrust the state. Like bitter soviet citizens, they become cynical, and develop a visceral understanding of public choice theory. And when a sufficient number of people recognize that the problem is not a conflict between Democrat and Republican but between the government and the market, between the alliance of politicians and rent-seeking big businessmen and the people, then the true revolution will begin.
Maybe he should have driven there in a hybrid car:
The head of the Drug Enforcement Administration spent more than $123,000 to charter a private jet to fly to Bogota, Colombia, last fall instead of taking one of the agency’s 106 planes.
The DEA paid a contractor an additional $5,380 to arrange Acting Administrator Michele Leonhart’s trip last Oct. 28-30 with an outside company.
The DEA scheduled the trip as the nation was reeling from the worst economic crisis in decades and the national debt was climbing toward $10 trillion. Three weeks later, lawmakers slammed chief executive officers from three automakers for flying to Washington in private jets as Congress debated whether to bail out the auto industry.
William Brown, the special agent in charge of the DEA’s aviation division, said he’d asked DEA contractor L-3 Communications to arrange the flight because the plane that ordinarily would’ve flown the administrator was grounded for scheduled maintenance. He said he didn’t question the cost at the time.
“Was it excessive? I guess you could look at it that way, but I don’t think so,” he said.
The failures of the US automakers pale in comparison to the failure of the DEA to accomplish their mission. Yet we’re not supposed to believe this is excessive when he spends 100x more than a commercial flight to get to Colombia.
Mencken had the right idea.
Over at Reason, Radley Balko has published a damning article and video of Dr Michael West attempting to murder a man named Jimmie Duncan.
In 1993, [Dr Michael West and Dr Steven Hayne] conducted an examination on a 23-month-old girl named Haley Oliveaux of West Monroe, Louisiana, who had drowned in her bathtub. The video shows bite marks mysteriously appearing on the toddler’s face during the time she was in the custody of Hayne and West. It then shows West repeatedly and methodically pressing and scraping a dental mold of a man’s teeth on the dead girl’s skin. Forensic scientists who have viewed the footage say the video reveals not only medical malpractice, but criminal evidence tampering.
The dental mold came from the teeth of the man babysitting the girl at the time of her death. The manufactured bite-mark evidence put the man, Jimmie Duncan on death row. I am convinced that Mr Duncan, who was described by witnesses as being very remorseful and in hysterics with shame, was guilty of negligent manslaughter. Nowhere in the United States are people executed for manslaughter through negligence. In his attempt to make him look more depraved than he actually is, by attempting to send him to the death chamber without justification, Dr West was attempting to murder Jimmie Duncan, as surely as if he had booby-trapped Duncan’s car with a bomb connected to the ignition system.
This might seem like an isolated incident, except for the fact that Dr Hayne has conducted nearly every autopsy of crime victims performed in the state of Mississippi in the past 20 years. In cases where Dr Hayne could not find evidence to help convict criminals, he frequently sent the bodies to Dr West, who had a special test for bite-marks that has never been reproduced by any other forensic specialist. And, like any monopoly, the monopoly criminal apprehension organization operated by the Mississippi state government refuses to revisit all the cases affected by these men’s testimony.
Given the thousands of people that Hayne and West helped put behind bars, there is a near certainty that many innocent people have been sent to jail for crimes committed by others. One could argue that that amounts merely to malpractice. However, the last time I checked, when one person tampers with a crime scene for the purpose of framing an innocent man with a crime while obsucring the actual guilty party’s role, it is called being “An accessory to murder after the fact”
I strongly encourage our readers in Mississipi to question the news media and government officials regarding the destructive trail of injustice left by Dr’s West and Hayne. Their victims cry out for justice.
From Ayn Rand in Atlas Shrugged:
“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”
Matthew Parris has an interesting argument in The Spectator that is worth quoting at length:
[A]mid all the doom-mongering and recanting, I have an assertion to make. The market has not failed. The present collapse is evidence that the market is working. Confidence bubbles are an inherent feature of a free market system. Panics — confidence vacuums — are an inherent feature too. The test of the theory of market capitalism is whether the system provides from within itself the means to prick both.
It does. The first — a confidence bubble — has been pricked. We are now sucking ourselves the other way: into a confidence vacuum. In time this too will be pricked. The market will steady.
The bubble that has just burst was based, worldwide, on financial services. Financial services are a product. It is true they are a product critical to the efficient functioning of the market (so is electricity, so is oil) but that just makes them an unusually important product. From time to time products fail in any market. They may fail through force majeure — droughts, floods, pestilence. They may fail due to inherent flaws — airships, Thalidomide, blue asbestos. Or they may fail through ignorance, trickery or the credulity of human beings — Madoff, the property bubble, the repackaging of sub-prime debt.
The present financial crash has been precipitated by product failure of the third kind. Trade in financial instruments too opaque for even those who traded in them to assess them properly, and bonus incentive schemes that acted against the interests of the companies offering them, fuelled a banking bubble that has now burst.
But ask: what pricked it? Did politicians rumble the trade? Did governments, or international forums or symposiums, provide the sharp instrument? Did academic research and expertise expose the dodgy product? Did statutory regulators apply the pin? No, the free market wised up and pricked this bubble. Politicians and finance ministers (if they had had the power) would have tried to keep it inflated. The market puffed itself up, and then, without intervention — despite intervention — the market let itself down. The speed with which this has happened has been awful, but however inconvenient for many or catastrophic for a few, correction is not a failure of the market, but a success.
The Austrians among us would go further and argue that the bubble was itself created by the distortions in the market that are the inevitable result of government fiscal and monetary policy or, in the case of the various regulations that made it easier for people to buy houses they couldn’t afford, government social policy. The market, they would argue, did they best that it could to absorb these distortions but, over time, it was inevitable that the distortions — the “bubble” as some might call it — would become far too big to sustain itself.
And so, the bubble pops.
Parris is also correct when he notes that not only didn’t politicians have no role in popping the financial bubble, they did everything they could to sustain it and, even today, are implementing policies that are ultimately aimed at re-inflating the housing bubble that started this disaster.
For many reasons, blaming the current crisis on free-market capitalism is absurd, not the least of them being the fact that we have no such system in existence anywhere in the world at this time.
What nobody seems to consider, though, is the possibility that the crisis we’re living through today is itself a sign that, in the end, the free market works.
H/T: Hit & Run
It takes years of schooling and a series of hard exams to become a doctor or a lawyer, but just about anyone, with enough tenacity, can become responsible for billions of dollars. Pretty much anyone can call themselves an economist and opine about fiscal policy. Perhaps even more troubling, there exists no uniform set of standards which entitles someone to work in finance. It makes John Kay wonder if we should introduce professional standards to the finance industry.
A lack of understanding and competence inflicted lots of damage. Could that have been avoided if the industry had required passage of a series of exams in order to become a hedge fund portfolio manager, or a quant, or even a banker (and I mean something more demanding than the likes of the Series 7)?
One reason so many smart and ambitious types entered the industry, as opposed to medicine or law, was the high compensation relative to the years of necessary training. Higher standards probably would have discouraged some people from entering the industry, but it would have provided some screening for intellect, ability, and determination.
Of course… It’s for the integrity of the system…
Despite what Milton Friedman would say:
The justification offered is always the same: to protect the consumer. However, the reason is demonstrated by observing who lobbies at the state legislature for the imposition or strengthening of licensure. The lobbyists are invariably representatives of the occupation in question rather than of the customers. True enough, plumbers presumably know better than anyone else what their customers need to be protected against. However, it is hard to regard altruistic concern for their customers as the primary motive behind their determined efforts to get legal power to decide who may be a plumber.
There were many causes of the mess we’re in… But I don’t think we have any recourse to say that it would have been solved by licensing. It was often those with the highest intellect, ability, and determination who led the charge into the abyss.
Seeking to stabilize the foundering housing market, President Obama is offering a plan to help as many as nine million families refinance their mortgages or avoid foreclosure, according to a summary released by the White House on Wednesday morning.
The plan, which is more ambitious than expected, would spend $75 billion to help keep as many as four million families in their homes, and would help as many as five million more refinance their mortgages to take advantage of lower interest rates.
“The plan not only helps responsible homeowners on the verge of defaulting, but prevents neighborhoods and communities from being pulled over the edge too,” the White House said in a fact sheet.
The plan would allow four million to five million homeowners refinance mortgages guaranteed by the government-controlled housing giants Freddie Mac and Fannie Mae. The administration said allowing people to refinance at lower mortgage rates would reduce monthly payments and save families thousands of dollars every year.
The plan would seek to entice lenders into lowering rates, and would offer homeowners a chance to shave thousands of dollars off their mortgages. The government would offer homeowners principal reductions of $1,000 a year for five years if they stayed current on their payments, and would give $500 to loan servicers if they modified loans before borrowers fell behind in their payments.
Or, if a lender lowered interest rates so that buyers were spending 38 percent of their monthly income on mortgage payments, the government would provide matching funds to lower that payment to 31 percent of income. The White House said such a reduction could equal $400 in monthly savings on a $220,000 mortgage.
The biggest problem with this plan, it seems, is the enormous moral hazard problem it creates:
Think this through for a second. Your home value, along with all your neighbors, has gone down in the last year. But now your neighbor, who bought above his means and can’t make the payments, because of a reset to the REAL monthly cost of the loan, is suddenly going to get a gift. Well what about you? You did the right thing. . You didn’t buy more than you could afford. But you don’t get a break.
The proponents say you have to stop the decline in housing prices. Why? We get e-mails every day from frustrated savers who believe now is there time to be rewarded—with a home, or investment property they can finally afford. But the government wants to do everything to punish those people, and keep them out of the market, even though they did the right thing.
Instead, they are going to have their taxpayer money transferred to someone who made bad decisions. $1,000 for the homeowner, $1,000 for each modification. That’s $2,000 per loan of YOUR MONEY being given away.
In addition to the rightly-felt resentment that this creates among those of us who were responsible in their home-buying decisions, a plan like this that simply bails out homeowners who entered into risky loans, and the banks that let them do it, sends a signal to people — no matter how badly you screw up, the government will be there to save you and make sure you don’t suffer the consequences of your bad decisions.
Moreover, it’s fairly clear that the plan, which is aimed at keeping people in homes they can’t afford, is entirely mis-directed:
There are many reasons for foreclosures, from borrowers getting into a house than they couldn’t afford to a job loss or other factors that cause loss of a family’s income. Whatever the cause of the homeowners’ troubles, the focus should not be primarily on keeping people in their homes, but on opportunities to improve their economic situation. If the government wants to spend $75 billion to help troubled homeowners, it would be better off giving a tax holiday to families subject to foreclosure, rather than attempts to stop the foreclosure from occurring that often have unintended consequences.
While all foreclosures are difficult, they are sometimes the least bad option for an individual borrower. They allow borrowers to walk away from both the home and the loan, at a cost to their credit rating, but not nearly as big a hit as they would take if they declared a personal bankruptcy.
Having borrowers continue to pay into a bad loan, even with reduced payments, takes away money they could be using to start over. Redefault rates from existing government-backed loan modification programs indicate that they are often ineffective. And in the case of borrowers facing job losses, staying in one’s home while being saddled with a mortgage can delay the necessary step of moving to an area with more job opportunities.
Most of all, this part of the plan seems to be aimed at the idea that the government must reinflate the housing bubble so that housing prices return to the “correct” level.
Here’s a clue, though. The only “correct” price for your house is the price that someone is willing to pay for it. Today.
The fact that it may have been worth a certain number, on paper, three years ago, doesn’t mean a thing; especially considering the fact that it was clear for some time that the housing bubble was unsustainable.
Obama’s plan, while ambitious, is even more mis-directed that the stimulus plan was. I would expect the results to be similar.
Cross-Posted at Below The Beltway
Over at The Truth About Cars, Ken Elias looks at the latest requests for an autobailout:
This is bad craziness. Never mind the cost. Or the fact that the bailout is doomed to failure. Government money provided to private enterprise on this basis completely distorts the function of the marketplace. It rewards incompetence. It perpetuates incompetence. The bailout does nothing to address GM’s fundamental inability to sustain car brands with class-leading products. Nor can it. It is not the government’s responsibility to pick a winner in a free market. Nor is it the government’s responsibility to “save” a loser.
What he said.