Category Archives: Socialism

The New Journalistic Socialism?

It’s no secret that dead-tree journalism has been on a significant slide lately. The product is faced with a dynamic new entrant to the market (the Internet), and it seems as if the “new media” is making the old obsolete.

In many industries, this would be a signal that it’s time to start finding newer and better ways to compete. A worthwhile journalist and the newspaper that employs those like him would find ways to distinguish themselves from the new competitors, and find a new (if different) niche that they could fill. The electric bulb didn’t put candle-makers out of business; they now litter our malls with franchises sporting aromatherapy jasmine candles on decorative saucers.

Competition is a difficult, uncertain process. For those of us in industries where it is fast-moving, like myself in the tech industry, it is that difficulty and the thrill of competing that keep us coming back for more. For some, though, the thrill of competition is to be feared. They’ve existed without it for so long that they’ve forgotten how to win. But they’ve found a better way — you don’t need to win when you have force on your side:

So the time is ripe for rethinking the First Amendment as a positive call for non-market support of a meaningful journalism.

It looks like we’re going through a painful transition from analogue to digital newspapers, from print to Internet. A comprehensive piece of legislation–let’s call it The News and Information for Democracy Act of 2011–could help lubricate the transition, determine whether there are common or collective approaches that would make the transition smoother, and possibly provide some transition support and supplement the working of “the market” with a sense of what the path should be from here to there.

Here’s an example: bring down the price of the Kindle or Sony Reader to under $25 and make the devices universal delivery systems for local and national papers; have each Kindle default-programmed to receive one of several competing national digital papers and one local paper, building in an annual fee for a newspaper fund that is billed to the holder of the low-cost or free apparatus.

I’ll admit — for the current crop of journalists, the advent of web-based reporting with an uncertain income stream certainly makes for a pretty scary time. That doesn’t justify socialism, though, any more than it justifies the candle-makers’ petition to block out the sun.

Yes, the business of journalism is changing. That may mean that it won’t support the numbers of journalists currently in the world. In a world where writers can reach an international audience with the stroke of a key, there may not be room for duplication of effort. But as long as there’s news, there will be a need for journalists, and as long as there’s readers, there will be an income stream (whether through paid subscription or advertising). The current business models are certainly not going to survive intact, but very few business models last anywhere near as long as that which has supported journalism.

It may mean that the business gets smaller, leaner, and more competitive. It may mean that it becomes much more highly specialized, or more local. It could mean — with the expansion of current “citizen journalism” — that journalism becomes more distributed and the way to earn a living is to be, like Glenn Reynolds, an aggregator which exists purely to separate the wheat from the chaff. It may mean any of these things, or countless others I haven’t even considered. It doesn’t mean, however, that you can simply replace my tax dollars with my subscription dollars and call it a wash.

Hat Tip: Reason Hit & Run

Quote Of The Day

From Ronald Bailey at Reason – Hit & Run:

“Intelligent design is to evolutionary biology what socialism is to free-market economics.”

Saying something like that is a good way to piss off your average left- or right-winger. Heck, it’s a good way to make the average human’s head explode, because the idea of interconnected complex systems that arise without conscious plan is entirely unfathomable to most of them.

The Logical Conclusion Of “Universal Healthcare”

Paul Hsieh, writing for the Christian Science Monitor, opens:

Imagine a country where the government regularly checks the waistlines of citizens over age 40. Anyone deemed too fat would be required to undergo diet counseling. Those who fail to lose sufficient weight could face further “reeducation” and their communities subject to stiff fines.

Is this some nightmarish dystopia?

No, this is contemporary Japan.

The Japanese government argues that it must regulate citizens’ lifestyles because it is paying their health costs. This highlights one of the greatly underappreciated dangers of “universal healthcare.” Any government that attempts to guarantee healthcare must also control its costs. The inevitable next step will be to seek to control citizens’ health and their behavior. Hence, Americans should beware that if we adopt universal healthcare, we also risk creating a “nanny state on steroids” antithetical to core American principles.

He goes on to provide quite a few anecdotal pieces of evidence from universal healthcare states, as well as some of the creeping nannyism found here between our own shores. Anecdotal evidence, of course, is not proof… But enough of it is suggestive of the old saying: “where there’s smoke, there’s fire.”

Among the problems of universal healthcare is a simple concept. When you rely on others to pay for what you need, you are inherently giving them a level of control over you. When you allow a monopoly organizations with guns and the power to tax to be the party upon which you rely, you ensure that you have basically no check on their level of control. In a free healthcare market, I could choose to be obese with the knowledge that my insurance premiums would go up (or that I may be uninsurable). In a socialized universal healthcare model, choice goes out the window.

Obama’s Terrible Stimulus

During the recent presidential election, I found myself unfortunately defending Barack Obama from charges that were absurdely false (ex. Obama’s a foreigner, Obama’s a Muslim, Obama’s a terrorist) than demonstrating how absolutely terrible an Obama presidency would be for country and for individual liberty. Fortunately, Obama is demonstrating through his policy proposals how dangerous he is. The first example of his dangerous presidency is his so-called “stimulus” plan.

Obama calls his economic “recovery” plan the “American Recovery and Reinvestment Plan”. His plan calls for a series of new spending programs on everything from roads (to nowhere) to “green collar jobs” to another series of tax rebate checks.

Why is Obama’s plan terrible?

Obama’s plan is terrible for many reasons. The first obvious reason is that the country really cannot afford any new spending after blowing at least $8.4 trillion (in an overall economy of $13.8 trillion and shrinking) in bailouts for Bush and Paulson’s friends in the financial sector. The second reason is that very little of this new spending is actually permitted in the U.S. Constitution. The Federal government cannot “invest” in “green collar jobs” or any other type of jobs for that matter. The Federal government has no Constitutional role in education spending (which is another part of Obama’s “plan”). Thirdly, the areas where you can argue a legitimate duty of the Federal government, highway construction, is prone to abuse and wasteful spending through the earmarking process (which is the currency for corruption).

What about Obama’s tax cuts?

The tax cuts are probably the worst aspect of the plan. The left, including Barack Obama, were absolutely right to oppose the Bush tax cuts in 2001 and again in 2003. The Bush tax cuts were short sighted and were flawed economic thinking. Most importantly, the Bush tax cuts were paid for by borrowing instead of cutting spending. Which leads me to Obama’s tax cut plan which allows businesses to write off up to $250,000 in losses in 2009 and will give another rebate check of $500 for singles and $1000 for families. Obama suffice to say is not proposing any spending cuts (which are desperately needed if we are going to avoid a Weimar Germany-style financial collapse through hyperinflation) to pay for these reckless and irresponsible tax cuts.

Tax cuts are not good for individual liberty unless government spending is reduced along with it. Instead what usually happens is the LBJ-Bush-Obama economic theory which is we can cut taxes (temporarily) to appease the mob while we can borrow our way out of any financial shortfall the government finds itself in. When taxes have to be raised to pay for borrowing, the tax increases are higher than the money actually returned in the tax cut.

Overall the Obama “stimulus” plan is result of over 70 years of terrible economic thinking in the US which brought us “New Deal” type of mild socialism on the left and “supply-side” borrow and spend on the right.

The only viable economic alternative is the free market where role of government is limited to protecting the borders from invasion; enforcing laws protecting life, liberty, and property from force and fraud; and generally not much else. This is the only alternative to what’s facing us (lost liberty, hyperinflation, and the road to tyranny).

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at IJ and Rare. You can also find me over at the R Street Institute.

Grievous, That’s What

Kevin Drum, in response to a Tyler Cowen post explaining that we have very little evidence that fiscal stimulus actually works, suggests we try it anyway:

But do we need examples? I’d argue that we’re basically in terra incognita today. In the postwar era, we’ve virtually never seen an industrialized country, let alone the whole world, stuck in a liquidity trap before. The only example that comes to mind is Japan in the 90s, and their experience with fiscal stimulus was pretty mixed. Depending on your preconceptions, you could take the Japanese experience either as proof that massive stimulus doesn’t work or as evidence that not enough was done. And either way, it’s only one example, so it would hardly be proof enough for skeptics anyway.

That leaves us with theory, which suggests that government spending when monetary policy has lost traction helps to stimulate the economy. But even if doesn’t, my question to Tyler is this: what harm does it do to try? Assuming that stimulus spending is implemented even modestly well, it will, at a minimum, help out a bunch of people with continued employment and produce a bunch of infrastructure improvements that will enhance our future welfare. The downside is more debt, and I’m open to the argument that this is a bad thing to the extent that this debt is funded from overseas and produces further deterioration in our current account balance. But is that the argument against spending? Or is it something else?

“what harm does it do to try?”

Believe it or not, folks, that’s actually a serious question. So let’s take one moment to ask what harm would occur. We’re left with a few simple questions.

  1. Where is the money going to come from?
  2. What are the negative effects of the provisioning of this money?
  3. What better things could the money be doing?

The answer to #1 can be threefold. First, that it is raised by spending offsets elsewhere. No, stop laughing! Second, it can be raised through taxation. Third, it can come from borrowing. Fourth, it can be printed out of thin air.

So based on the answer to #1, you can comprehend an answer to #2. If it is raised through taxation, that results in money being siphoned away from the productive economy at a time when it desperately needs liquidity. Especially due to the fact that most taxes are either on income or profits, and taxing the hell out of the portions of business who are actually earning during the downturn is not helpful. If it is raised through borrowing, you run into the same problem. You’re taking money away from productive enterprises who may have some risk in their needed borrowing by offering huge amounts of “safe” investments to the people with money. Essentially, you exacerbate the “liquidity trap” as the government soaks up the little liquidity that exists. Arguably, the printing press is the best of bad options, especially in a deflationary debt spiral, because it may stop the bleeding. But as I mentioned a mere two months ago, I don’t think they’ll know when to shut off the pump.

Based on all the negative answers to #2, you get a sense of the problems with #3. The real productive part of society is the private sector. Siphoning money away from that portion of the economy through taxation or borrowing hampers the ability of the private sector to operate. Trying to create make-work projects using printed money has the appearance of being much better, but it is only a matter of appearances — the economic activity is not “real” and every dollar spent makes everyone poorer through an inflation tax.

Drum’s argument is similar to one often used regarding FDR: “His small-scale socialism is what kept people fed and clothed enough to keep them from overthrowing the whole system.” It’s a nice claim, because it cannot be disproved, but the inherent claim is much simpler — “Doing nothing would be far worse than doing something.”

Drum suggests that even though we do not have any evidence that a massive fiscal stimulus program would work, it’s better than nothing*. He wants to put the burden of proof on us to show that massive fiscal stimulus is worse than doing nothing. But I think that the party who wants to either tax, borrow, or print anywhere between hundreds of billions to a few trillions of dollars for stimulus should carry the burden of proof. The default position is not to spend this money, and an absence of evidence of the utility of doing so is only further reason that we should do nothing.
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Lining Up At The Trough

Don’t think it’s just Wall Street & the Big 3, everyone’s coming for this:

“We’re talking a significant bump up in Pell,” says Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers. The association is one of the organizations signing on to a letter to House Speaker Nancy Pelosi, D-Calif., that outlined the proposals, citing the need to help struggling families who cannot pay for college.

Other education groups signing on to the plan include the American Association of State Colleges and Universities, State Higher Education Executive Officers, the National Association of Student Financial Aid Administrators and the United States Student Association. The National Consumer Law Center and Project on Student Debt are other co-sponsors.

The move comes as automakers, mayors and other sectors are putting pressure on Congress for new federal spending to combat the recession. After passing a $700 billion financial bailout largely aimed at Wall Street, lawmakers are planning a large “Main Street” economic stimulus package with public works and construction spending and, education leaders hope, some attention to postsecondary education.

“I think everybody is going to fight for their fair share,” Nassirian says of the current budget climate.

As a result, long-time concerns about deficit spending and limited resources have all but vanished. “The budget always has checkmated many policy ideas we presented in the past,” Nassirian says. Of the abrupt shift in tone in Washington, he says, “It’s extraordinary.”

Am I the only one reaching straight to protect my wallet any time anyone starts talking about a “fair share”? To them, fairness means to make sure some other sucker pays the bill, and they get the reward. Fairness is ensuring that when they line up for free goodies, there are still some left when they get to the front of the line.

Put simply, most people’s definition of “fairness” scares the hell out of me.

Che, Mao, and Pop Culture

One thing that disturbs me to no end is the way despotic Communist serial killers like Ernesto “Che” Guevara and Mao Zedong are iconic figures in American pop culture. When I see someone wearing Che’s ugly mug on his/her chest, I want to ask him/her: “Do you really have any idea who this man was or what he did?” I suspect that if I were to ask, I’d get a blank stare.

This short video below from features interviews with two individuals who lived under the thumbs of Che and Mao. Neither are what you would call fans of these pop culture icons.

Return Of The WPA

Prior to the election, the question loomed — would a potential Obama administration govern as a political moderate?

The recession and financial crisis have solidified the answer… FDR and LBJ may have nothing on BHO!

President-elect Barack Obama is focusing his economic recovery strategy on making the biggest investment in the nation’s infrastructure since President Dwight D. Eisenhower created the interstate highway system a half-century ago.

Speaking yesterday at a Chicago news conference and on NBC’s “Meet the Press,” Obama said state governors have many such projects that are “shovel ready,” meaning they could be undertaken swiftly and have an immediate impact on jobs.

He declined to specify a price tag for the stimulus, saying his advisers are “busy working, crunching the numbers, looking at the macroeconomic data to make a determination as to what the size and the scope of the economic recovery plan needs to be. But it is going to be substantial.

How substantial? Let’s just say that price is no object to this administration:

Later at the Chicago news conference, he said “more aggressive steps” are needed to cope with the housing crisis.

Even with the prospect of a federal budget shortfall approaching $1 trillion, “we can’t worry, short term, about the deficit,” he said on NBC. “We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving.”

It seems we’re in stage three of Reagan’s aphorism:

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

And oh, the subsidies will be expensive. We’ll all pay for them, whether through crushing taxation or runaway inflation, but we’ll pay. Welcome to the United State Formerly Known As America, people.

Roubini Advocates Nationalization Of Auto Industry

You know, Nouriel Roubini is smart. I’ve long believed that we should never treat those in opposition* like dullards, because that leads to sloppiness in fighting them. But I just don’t know how a smart person — an economist — can advocate the nationalization of our auto industry with a straight face.

“We’re spending $2 trillion to bail out financial institutions,” the economist notes. “What’s the fairness of not giving say $50 billion of low interest loans to automakers to help them restructure?

But Roubini is no ally of the auto industry CEOs currently making their case in Congress. He says any government aid must be “highly conditional” and only occur after a prepackaged bankruptcy that includes:

  • Replacement of current management
  • Concessions from both the UAW and automakers
  • A wipeout of existing equity and debt-holders
  • Temporary nationalization of the auto industry

The appointment of a “car czar” is clearly a touch subject but Roubini says those worried about moral hazard and issues like free enterprise are fighting the last war.

“There’s already massive amounts of government intervention in the economy, we’ve [crossed] that bridge,” he says. “The question now is, what are we doing to do right? If it takes an auto czar to really structure these firms, so be it.”

Have our “drug czar” or “poverty czar” or “education czar” ever solved a damn thing in their respective fields? No? So why think that an “auto czar” would actually improve things. Who’s to say that — once they get their hands in the cookie jar — the nationalization of the industry would be “temporary”? While it may not be a de jure nationalization in the future, I could see the industry going the way of the GSE’s, nominally private but publicly regulated.

Roubini seems to be offering the argument that only nationalizing some industries while letting others fall is “unfair”, as if nationalizing anything is fair. He wants the government to come in and bail out the automakers — throwing their owners [the shareholders] out the door — and take over… Just like Fannie… And he actually thinks this is a good idea?!

I’m sticking with my original instinct — let them survive or fail, hit bankruptcy if necessary, and go through the painful but required reorganization according to market economic principles. If you put an auto czar in charge, the reorganization will be done according to political principles, and we taxpayers will be saddled with these industries — and all the protectionism that goes with state-owned industries — for perpetuity.

* Of course, I wouldn’t necessarily consider Roubini in “opposition”, as an academic economist. He was rather prescient about not only the cause but the shape of our current financial meltdown. However, when someone suggests that we should have Washington appointees try to fix our ailing auto industry, I consider that a point worth opposing.

A Letter to Senator Kerry

Dear Senator Kerry,

I was aghast to read your response to my email on the subject of requiring people to get Federal government approval to work.  It is the sort of totalitarian policy I would expect from some right wing fascist dictatorship. I am especially stunned see a former nominee of the Democrat party send out a letter under his name defending such illiberal policies.

Let us ignore the obvious peril of permitting someone like a Bush appointee telling employers whom they may or may not hire.  Let us pretend that people will never be victimized by enemies withing the government.  Instead, let us pretend that this law will not be abused.

First, let us examine what you call an ‘illegal worker’.  I assume that you are not implying that people are somehow illegal.  That notion hopefully died with the victory of the civil rights movement in the 1960’s.  I am sure that what you meant was that rather some people are working illegally, i.e. without your permission.

So let us examine what workers do.

Workers produce things.  When they work for pay, selling their labor services to some customer who needs help getting something done, both the workers and the customer benefit.  The worker of course gets the wage that he values more than his time.  The customer gets the wealth created by the labor which they value more than the money they expend in paying for it.

In effect, two people (or one person and a company, or two companies) decide to engage in trade.  You have declared that some of these relationships are illegal.  I assume that you believe that these transactions should be illegal because someone was harmed (the alternative is too depraved to consider).  Obviously, the people engaged in the practice you want to make illegal are not harmed;  they wouldn’t enter into these arrangements if they didn’t feel that the trade was better than not trading at all.  Obviously the person who is harmed is someone else – someone not involved in the trade.

It is clear that you want the customer to be forced to deal only with a subset of labor sellers.  Much like the segregationists in Virginia who sought to prevent black people from marrying whomever they wished and limit them to only marrying other black people, you want to force employers only to employ people you approve of.  Of course this is ridiculous.  Am I harmed because your wife decided to marry you and not me?  Is Sacks 5th Avenue harmed because Target makes me a better offer?  The very notion is absurd.  Like the segregationists in the old south, you are taking your emotional disapproval of how other people interact each other and are threatening them with violence.  Of course, you don’t want to dirty your hands; the clubs that beat lawbreakers will be wielded by the police, allowing you to sleep comfortably in bed with no inconvenient memories threatening your delusion that you are somehow a moral person.

Much like the Mr and Mrs Loving who decided to ignore the racists in the Virginia legislature who declared their love ‘illegal’, people are deciding to do business despite your attempts to stop them.  You call it an ‘underground’ economy in an attempt to discredit it.  What I see are people heroically asserting their right to choose whom they do business with.  Of course they hide it from you!  If my wife and I had lived in the 60’s in Alabama, we’d hide our marriage from the Ku Klux Klan.  The fact that people are hiding from you does not discredit them – rather it discredits you.  Think about it!  People are hiding from you.  They are scared of you. Are you proud of this?  Do you consider this an accomplishment?  If your son came home from school proudly announcing that he’d bullied someone, would you tell him how proud your were of him?

I am told you are a religious man: when you face your creator on judgement day, I don’t think you will earn many brownie points by  telling your maker that your big accomplishment was threatening people who wished to peacefully do business with each other.

In these difficult times it is shameful that an influential senator like yourself is throwing rocks at your countrymen’s efforts to earn a living and improve their lives.  I hope you will come to your senses and stop threatening us and let us go about rebuilding our lives.

The letter that triggered my ire below the fold » Read more

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Seems Everyone Except Me Has Been Bailed Out Already

But maybe I can make use of this too:

The Federal Reserve and Treasury Department on Tuesday unveiled a plan to pump $800 billion into the struggling U.S. economy in an attempt to jumpstart lending by banks to consumers and small businesses.

The government hopes that these initiatives will enable more money to flow to consumers in the form of loans than has occurred so far in previous bailout plans.

One program will make $200 billion available from the Federal Reserve Bank of New York to holders of securities backed by consumer debt, such as credit cards, car loans and student loans.

Hey, my wife has a small business. I wonder if she can qualify for $100M or so? I might not need that lottery bailout ticket I bought at 7-11 anymore!

So, it appears that the TreasFed are desperately trying to improve consumer confidence in the run-up to the holiday season. But it’s not going to work. You know why?

To that end, government officials said that they would not set up the $200 billion consumer lending program until February. So officials couldn’t say if the mere announcement of the program would cause lenders to make more credit available to consumers in time for the holiday shopping season.

Paulson described the $200 billion consumer lending program as a first step, one that could be expanded later to include different kinds of debt, including assets backed by commercial real estate mortgages and business debt.

As you know, the government announcing that it is going to do something often has the effect of doing something. I.e. the passage of a tax cut that won’t take place for 1-2 years (or the non-extension of a tax cut that is temporary) tells the market what to expect moving forward, and they act on the expectations of future reality.

Unfortunately, in this case they can only act on uncertainty, not expectation of reality. The TreasFed already burst that expectation:

The larger part of the new program is geared toward ending the mortgage crisis, which was the original intent of the bank bailout plan proposed in September and signed into law in October.

That plan, known as the Troubled Asset Relief Program, or TARP, was quickly dropped for one in which Treasury instead made direct capital investments in banks in return for the government receiving preferred shares in the institutions getting funds.

We know that they’re going to change their minds as they see fit. So we cannot plan our holiday purchases based upon interventions the government MIGHT make to debt markets in February. We simply have no level of trust that those interventions will be made*.

Is there any other way to spin this than that they simply don’t know what they’re doing?
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Atlas Starting To Shrug In Healthcare Sector

While I am a vociferous opponent of socialized medicine or even some of the mandated-coverage plans floated by the left-ish folks in society, you’ll not find me defending our current healthcare system in America. Why? Because it’s “our healthcare system”, and not anything approaching a free market.

Through coverage mandates, Medicare, restrictions, licensing, employer-sponsored healthcare (an outgrowth of tax-advantaged treatment for companies), tort law, and mountains of paperwork, we’ve turned healthcare in America into a nuisance. Should we surprised, then, when our doctors have grown tired of playing the game?

Primary care doctors in the United States feel overworked and nearly half plan to either cut back on how many patients they see or quit medicine entirely, according to a survey released on Tuesday.

And 60 percent of 12,000 general practice physicians found they would not recommend medicine as a career.

“The whole thing has spun out of control. I plan to retire early even though I still love seeing patients. The process has just become too burdensome,” the Physicians’ Foundation, which conducted the survey, quoted one of the doctors as saying.

Eleven percent said they plan to retire and 13 percent said they plan to seek a job that removes them from active patient care. Twenty percent said they will cut back on patients seen and 10 percent plan to move to part-time work.

Current government proposals promise to “rein in costs” but I wonder how they intend to both rein in costs and keep supply from dropping.

The only happy doctors I know of are ones who have decided to work on a cash basis, and do not take insurance. Of course, they don’t stop their customers from claiming the visits to their own insurance, but they don’t take care of all the paperwork in the office. In the pediatric practice we take my son to, the head doctor (who is somewhat famous having written several books) follows this plan. Sadly, too few doctors have this opportunity, as most Americans either don’t have the time and energy to deal with the insurance companies themselves, or don’t have the funds to carry the cost while they wait. For my son, we visit one of the other doctors in the practice because we don’t have the time or knowledge to traverse the insurance world.

Regardless of what sort of healthcare system we have in America (even if we returned to a free market), Americans will have to understand that health care is not a free lunch. What we may have now may be (like many things in America) the worst of both worlds — all the downsides of socialism without any of the efficiencies of capitalism. In such a minefield of cross purposes and inefficiencies, it’s not surprising that many providers are willing to walk away.

With the potential socialization of health care in an Obama administration, we may soon find ourselves in the same situation as Britain — importing our doctors from overseas because it becomes a job “Americans won’t do”.

Barack Obama’s Really Bad Plans For The Auto Industry

President-Elect Obama has already signaled his support for a Federal bailout for the automobile industry, but that only seems to be the beginning of what seems to be a plan to involve the Federal Government in the automobile industry to an unprecedented extent.

For example, he seems to like the idea of appointing a single individual with the authority to remake an entire industry:

The troubles of the ailing auto industry are quickly becoming a major focus for President-Elect Barack Obama’s young administration. As Congress and President Bush debate an industry bailout, sources indicate that Obama may favor creating a White House office, headed by an “auto industry czar,” to oversee reforming the troubled American auto industry.

The Detroit News reports that both “Bush and Obama are signaling they may favor appointment of an auto czar to oversee the government’s efforts to funnel emergency assistance to automakers.” Congressional leaders and members of both the outgoing and incoming administrations have all said that automakers might receive federal aid only on certain dictions, including efforts “to further improve fuel efficiency and show that they have a plan to return to profitability. Automakers could also be required to give the government preferred stock in the companies and accept government representatives as board members. As in the 1979-80 Chrysler bailout, workers may have to make wage concessions.”

As if that wasn’t enough, Obama’s transition team is apparently talking about implementing congestion charges on American highways:

The Manchester Evening News reports that President-elect Barack Obama’s transition team has contacted Jack Opiola, a transportation principal for the firm Booz, Allen and Hamilton. Opiola the brains behind a program to tax drivers £5 (US $8) when entering the city of Manchester during peak hours. “I was ‘noticed’ by key people in the Obama campaign and I have been providing input to his strategy team in Chicago, including information about Greater Manchester’s bid,” Opiola said. Previously, Senator Obama’s most specific transportation proposal was a proposal to create a $60b toll road bank. In March, Obama endorsed New York City Mayor Michael Bloomberg’s scheme to charge a $9 toll on cars and a $22 toll for trucks that enter downtown Manhattan during working hours. Hoping to fill the gap with specifics, the American Association of State Highway and Transportation Officials (AASHTO) last month submitted a detailed $544 billion transportation re-authorization proposal designed to encourage the new administration to shore-up the domestic economy with heavy spending on infrastructure projects.

The new programs would be paid for with massive new tax hikes, including a per-mile driving tax that would begin with “proof of concept” trials as early as 2010. The tax would initially be one cent per mile to generate an estimated $32.4b a year. An extra one cent per gallon in the federal gasoline tax would generate another $1.8b, and a national sales tax on cars of one percent would generate $7.6b.

If that happens, then any idea that taxes would go down for most Americans, which Obama promised during the campaign, would be nothing but a lie.

Finally, Andrew Sullivan points to this old article that Obama wrote a few years back:

[W]e should then ensure that, within a decade, every new car sold in America can run on flexible fuel. We can advance this goal by offering manufacturers a $100 tax credit for every flexible-fuel tank they install before the decade is up.

As my friend Tom Daschle details in this report, millions of people driving flexible-fuel vehicles don’t even know it. The auto companies shouldn’t get CAFE credit for making these cars if they don’t let buyers know about them, so the entire auto industry should follow GM’s lead and put a yellow gas cap on all flexible fuel vehicles, and notify consumers in writing as well.

These may be admirable goals, but as Sullivan points out, accomplishing them, or trying to, via government fiat and state ownership of the auto companies isn’t the way to do it.

As Sully goes on to note, this is a test for Obama:

This is a real test for Obama: is he a market-friendly pragmatist or a knee-jerk socialist?

During the campaign and since the election, more than a few people told me that Obama was a indeed a market-friendly pragmatist. How he handles this will go a long way toward determining if they were right or not.

Originally posted at Below The Beltway

The Next Washington Bailout…

…Is going to Republicans in Washington:

Congressional Democrats announced today that they had agreed to a bailout plan for Republicans after last week’s devastating election results. While exact details are unavailable, sources tell us that the Republicans will be given 4 seats in the Senate and 15 in the House. Nancy Pelosi said in a statement today: “We’ve established pretty clearly over the last several months that failed strategies and management should not necessarily have to result in losses in market share, particularly for well-connected Washington insiders.”

Go click over for the rest of it… It only gets more funny.

Doublespeak of The Day

Yesterday from Obama (google cache here, screenshot here):

Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year.

Obama today:

Obama will call on citizens of all ages to serve America, by setting a goal that all middle school and high school students do 50 hours of community service a year and by developing a plan so that all college students who conduct 100 hours of community service receive a universal and fully refundable tax credit ensuring that the first $4,000 of their college education is completely free.

He’s going to “set a goal”, and I’m sure before all is said and done, it will be dangerously close to a requirement.

It’s already scary, and it’s still more than 2 months before he actually becomes President.

Bailout — Rent Seeking IS Sound Financial Management In This Environment

Regional bank BB&T, prevalent throughout the Southeast, is known for their opposition to government intervention in markets. After Kelo, they announced that they would not lend for private projects that made us of eminent domain. It is, then, sad to see them jumping into this:

Most of the banks say they want the capital so they can make more loans, though some could also have an eye on buying up other firms. BB&T’s CEO, John Allison, hinted at that possibility on Monday, when BB&T announced its $3.1 billion infusion.

“For us, the additional capital will not only extend and strengthen our lending capacity, but provide other strategic options as well,” said Allison, who is famous in the banking world for his opposition to government intervention.

When I still lived in Atlanta, I nearly made the jump to BB&T based solely on their response to Kelo. I moved away, but always had a soft spot in my heart for a bank that refused to participate in a moral wrong, even if it meant they were forgoing profit.

So I’m disappointed to see them jump into the bailout. At the same time, though, I can’t quite blame them. As the head of Citigroup said last year, “As long as the music is playing, you’ve got to get up and dance.” Washington is the conductor, and John Allison might well accept that when Washington plays a waltz, it doesn’t make much sense to dance a jig.

So what’s happened? Rent seeking is even more in vogue than usual, as the number of banks lining up to feed at the trough makes some investors worry about those who might choose not to gorge themselves:

Only days ago, many healthy banks were saying they didn’t need taxpayer money under the Troubled Asset Relief Program. These healthy banks said they worried that taking government investments could unfairly tar them as in need of a bailout. In the past week, that perception has been reversed, due in large part to efforts by Treasury, banking lobbyists and legal advisers to sell the TARP.

Now institutions across the U.S. worry that if they don’t try for the money, the market will judge them as too unhealthy to qualify, or lacking the savvy to deploy cheap government capital on acquisitions and investments.

“There’s a perception in the market that the government is actively picking winners and losers… we wanted it well-known in the market that we’re on the list of survivors,” said Roy Whitehead, chairman, president and CEO of Washington Federal Inc. in Seattle, one of about 20 regional banks approved by Treasury for the program last week.

When the music is playing, you might as well dance. In our sad state of corporatist rule, rent-seeking is preferred to responsible asset management.

Third Party Debate

The City Club of Cleveland extended an invitation to the top six presidential candidates*. Of the six candidates, Libertarian Party candidate Bob Barr, Constitution Party candidate Chuck Baldwin, and independent candidate Ralph Nader participated; Democrat Barack Obama, Republican John McCain, and Green Party candidate Cynthia McKinney were no-shows.

Unlike the debates we have already seen in this cycle, the candidates in this debate actually debated the issues!

*The candidates who could theoretically receive the requisite electoral vote to win the presidency

Social Security: The Betrayal Between Generations

If you think the “bailout from hell” is going to be painful to taxpayers, wait until the bill comes due for Social Security, Medicare, and Medicaid. According to Dallas Fed President Richard Fisher, the unfunded liability for Social Security and Medicare sits at an incredible $99.2 trillion. This figure does not account for the myriad of other existing so-called entitlement programs or even consider future wealth redistribution entitlement programs Barack Obama and the Democrats wish to burden the taxpayer with.

The looming Social Security crisis is one which angers me to no end. If you are under 40, you should be angry too. The payroll taxes which are forcibly taken out of your paycheck by the federal government are given to current retirees. There will be little or nothing left when you retire but you will still be paying the bill for those who have benefited from your labors.

Yet anyone who dares to suggest even putting aside a small percentage of FICA withholding into private accounts is accused by the Left of trying to undermine Social Security. AARP and other such organizations run attack ads aimed at the elderly to make them believe they will be kicked into the streets if any such reforms are suggested by anyone who recognizes a need to reform the system. is currently running a very entertaining, humorous, and informative animated series which explains exactly how royally we are getting screwed by this Ponzi scheme we call Social Security. Here are the first four episodes:

Best Biden Interview Ever

Found via Michelle Malkin

UPDATE: The campaign retaliates by denying the TV station access for the rest of the campaign.

WFTV-Channel 9’s Barbara West conducted a satellite interview with Sen. Joe Biden on Thursday. A friend says it’s some of the best entertainment he’s seen recently. What do you think?

West wondered about Sen. Barack Obama’s comment, to Joe the Plumber, about spreading the wealth. She quoted Karl Marx and asked how Obama isn’t being a Marxist with the “spreading the wealth” comment.

“Are you joking?” said Biden, who is Obama’s running mate. “No,” West said.

West later asked Biden about his comments that Obama could be tested early on as president. She wondered if the Delaware senator was saying America’s days as the world’s leading power were over.

“I don’t know who’s writing your questions,” Biden shot back.

Biden so disliked West’s line of questioning that the Obama campaign canceled a WFTV interview with Jill Biden, the candidate’s wife.

“This cancellation is non-negotiable, and further opportunities for your station to interview with this campaign are unlikely, at best for the duration of the remaining days until the election,” wrote Laura K. McGinnis, Central Florida communications director for the Obama campaign.

McGinnis said the Biden cancellation was “a result of her husband’s experience yesterday during the satellite interview with Barbara West.”

Here’s a link to the interview:

WFTV news director Bob Jordan said, “When you get a shot to ask these candidates, you want to make the most of it. They usually give you five minutes.”

Jordan said political campaigns in general pick and choose the stations they like. And stations often pose softball questions during the satellite interviews.

“Mr. Biden didn’t like the questions,” Jordan said. “We choose not to ask softball questions.”

Jordan added, “I’m crying foul on this one.”

What did you think of the interview?

I think the news directors response was perfect.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

A slight profundity

A question was asked of me recently: “Why don’t libertarians and real conservatives win elections”.

Simple really.

True libertarians and conservatives share the same electoral disadvantage:

True libertarians and real conservatives, CANNOT win electorally, in a climate where everyone is allowed to vote; and that “everyone” includes the huge politically created classes (both underclass, and “elite”) that exists because of governments meddling, and live at government sufferance.

True libertarians and conservatives only have answers that make those folks, and those who “support” or worship them, feel bad about themselves; and solutions that are against their short term interests.

Until these permanent classes of government dependents are eliminated (or at the least, politically neutered); government will continue, with the active support of these people (and those who “support” and worship them); to vote in the GOVERNMENTS interest:

That is, to increase the size, scope, reach, and power of the government, and to use that power to redistribute ever more wealth; making the class of government dependents ever larger, and reinforcing that dependency ever more.

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” — Alexis de Tocqueville

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

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