Archive for the 'regulation' Category

Some Lenders Object, Why Not Others?

20 Chrysler lenders or about 30% of the debt Chrysler owes lending institutions are objecting to getting fleeced in the governments planned “surgical bankruptcy” plan. In a normal bankruptcy the senior secured creditors (the lenders) are first in line, while unsecured lenders (UAW) and equity holders are last. This is the basis for the lenders’ complaint:

Creditors object to the way the restructuring benefits the United Auto Workers union, which is an unsecured creditor, for the $10.6bn Chrysler owes to its retiree healthcare fund.

“What’s happening is the senior secured creditors are going to get 29 cents on the dollar and the unsecured creditors are going to get $10bn,” said Mr Lauria.

Now I think the obvious unasked question is, if the lenders are getting such a raw deal, why are only these institution objecting? what about the other lenders making up 70% of the loans? Your indirect answer is present toward the last half of the article.

Chrysler’s four main banks – JPMorgan Chase, Goldman Sachs, Morgan Stanley and Citigroup – had received about $90bn in government bail-out [TARP] cash.

Now we see why these banks are going along with losing all this money. They are scared of the government’s wraith. After Congress almost retroactively changed their contracts with AIG, and Attorney Generals outright threatened AIG executives physical well being, these TARP banks realize that the government is NOT bound by following the rules of law and can punish them for not acting in the government’s best political interest, namely, making sure the UAW is placated.

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US Treasury Refusing Bank Repayments?

That’s what’s claimed in this article in the IBD. This becomes pretty thuggish when you add to the fact that these banks were (allegedly) outright threatened to take the TARP funds in the first place. The reason for all of this is to make the process as opaque as possible. The political establishment’s efforts at transparency thus far have been just a show to get elected and/or score political points. It’s obvious neither Obama nor Bush believed in it, so why should we expect it with the TARP funds?

The idea as I understand it is to make sure no one knows which banks needed the money so as to not cause a run on that bank. But that means the market doesn’t know which banks are good either and so rather than reward good banks it just waits the whole thing out. Now of course the gov’t can’t accept repayments because that would make it obvious that those banks that can’t pay back the money aren’t doing as well as those that can. This is a pretty clear refusal to let the market work ostensibly because it’s “broken”.

Now all this wouldn’t be as bad if it wasn’t the gov’t involved. Why? Because the gov’t interests are politics. You have people involved and now running things that aren’t looking out for the best of the company, nor the market, but for their best interests which are being popular. Combine that with the ignorance of the system or market and you get stuff like Maxine Walters’ crazy and conspiratorial questions. Combine that with grift and you get Chris Dodd and Barney Frank. So now with the gov’t involved we start seeing wild political demands on these banks with the full force of a hypocritically righteous rage. Limits on wage rates, specially targeted, punitive 90% taxes that go back on contracts, outright extralegal public threats to intimidate.

This is why it’s dangerous to deal with the government because the government has captured that industry and won’t give it back while it can still play with it (i.e. ruin it).

(edit to fix some atrocious spelling)

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Obama Fires Izzo

awards Michigan State 18 points.

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Chicago Tea Party

Rick Santelli just went off on Obama’s housing proposal live on CNBC from the commodities trading floor in Chicago.

It’s now the headline on Drudge:

VIDEO: ‘The government is promoting bad behavior… do we really want to subsidize the losers’ mortgages… This is America! How many of you people want to pay for your neighbor’s mortgage? President Obama are you listening? How about we all stop paying our mortgage! It’s a moral hazard’… MORE…


Who is John Galt?

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Utter Insanity

Those are the only words I can think to describe this proposal.

The Hubbard-Mayer plan calls for the government to revive the moribund housing market by providing just about everybody with access to a 30-year fixed-rate mortgage with a 4.5 percent interest rate. That’s almost a full percentage point lower than the average national rate of 5.47 percent currently.

Buyers could borrow as much as 95 percent of the value of the home they purchase. The plan might extend to those with existing mortgages, allowing them to refinance and get the same terms. When either type of deal is complete, the lender will place the loan with Fannie Mae or Freddie Mac.

Anyone refinancing with positive equity in their home would be relatively easy to accommodate. For those with negative equity — meaning the dollar amount of their mortgage exceeds the value of their house — Hubbard and Mayer recommend that homeowners and lenders split the loss evenly and start over with a clean mortgage reset to reflect the property’s current market value.

The sheer cost, $3trillion is mind bogglingly scary (and when was the last time anything government run ever came close to it’s initial cost estimate?). And let me just say, I’m simply amazed at the poorly thought out reporting from Mr. Hassett here. No thoughts about what happens when huge numbers of people default on these govt mortgages? How ripe the plan is for fraud and gaming? To say nothing of the unintended consequences, waste, and opportunity for patronage ripe in everything Congress does. Is this shallow thinking what passes for reporting at Bloomberg? Government doesn’t just get to throw out economic reality. There’s a reason why private banks don’t offer this.

It seems like every other week I see a new plan come out of congress that makes me think, “This is the worst idea I’ve ever heard” and I think each time it’s true but each time I’m shown how wrong I was.

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In Summary

Tyler Cowen states his basic views on the crisis. My response in italics:

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Glass-Steagall : RIP

Continuing the discussion on tonight’s podcast, one of the recurring themes of much of the commentary on our current financial crisis is that the cause is too much deregulation. Possibly there is some truth to this, though the evidence is rather vague. The most disturbing figure in all this is Barney Frank.

“We need stricter standards on loans.”

Except, the problem here wasn’t lack of regulation, but that the regulations were not enforced, or fraud, by lenders, brokers and their clients. More laws doesn’t help. This was also a failure of long standing, not new. I would suggest simplifying and increased enforcement would be a better option.

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Risk and Reward

Playground Many of us, when we hear the phrase “risk and reward” think of Wall Street.  Or business in general.

But in reality, “risk and reward” affect us throughout our lives.

Our parents take a risk when they conceive us.  They hope that we will provide them with more joy and satisfaction than heartache and pain.  They pray that we will be born relatively healthy rather than sickly.

As we get older, parents do their best to provide a fine environment for us to learn and grow.  What some adults seem to have forgotten, however (if they ever knew at all) – is that all gain requires some risk.  It is impossible to achieve rewards without taking on chances of failure.  Parents want to keep us safe.  Yet, too many protections and too much removal of risk can oddly enough produce difficulties.

Safety is meaningful only in the context of other benefits and risks. Safety always involves trade-offs — of opportunities, of scarce resources and, especially in the case of children’s play, of learning to manage risk. The question is whether the trade-off makes sense. Soft rubber matting will cushion any fall. This is probably a good thing, at least in situations where children may fall on their heads. But rubber matting also gets hot.

There’s only one solution. Someone on behalf of society must be authorized to make these choices. Courts must honor those decisions. Otherwise, the pious accusations of safety fanatics, empowered by the nearly universal fear of being sued, will guarantee a cultural spiral downwards toward the lowest common denominator.

For America’s children today, that means spending more than six hours per day staring at a screen. Is that the way we want our children to grow up?

Philip Howard of The Common Good lectured several years ago at The Center of the American Experiment, and it was my pleasure to be able to hear him then.  Mr. Howard and his organization are battling to return common sense to everyday society.

None of us want a dangerous place for our children – or for adults!  Still, we must never forget that a risk-free society is impossible to achieve.  The removal of some risks must be weighed against what we are sacrificing by removing that risk.  While sometimes we agree that the risk of harm is too great – other times we can see that the purported removal of risk actually heightens the odds of other, not immediately obvious, forms of harm.

If we never forget that reward entails some risk, then we all will be better served.

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When Families Fail

Because of my background in working with emotionally disturbed, learning disabled, and generally abused kids, I am often to drawn to stories about the results of extreme neglect of children. I saw some awfully hard cases with some of the kids I worked with, including a kid who was found as a toddler scrounging for food in a trash can with his younger brother before being put into the foster care system, and a young girl who, although not even ten years old, was “traded” by her mother for drugs on a routine basis. There are some really sick cases out there.

For example, a few years ago some foster parents were arrested and charged with aggravated assault and child endangerment after someone finally checked up on their kids and discovered a gruesome sight:

Two of the teenage boys were so badly nourished that they each weighed less than 50 pounds and stood about 4 feet tall, authorities said.

An investigation into the family began after police found the Jacksons’ 19-year-old son, Bruce Jackson, rummaging through a neighbor’s trash.

The young man, who was adopted in 1995, measured 4 feet and weighed 45 pounds. He also had apparent heart irregularities.

The three other boys, ages 14, 10, and 9, were removed from the home and hospitalized. The 14-year-old was 40 pounds and 4 feet tall.

Investigators said the couple received a yearly stipend of up to $28,000, but kept the boys locked out of the kitchen and fed them dry pancake batter.

Every state’s foster care system has a few stories like this, some more than others. The sad fact is that there are really bad people out there, for whatever reason, and some of them become parents and foster parents. How can these people become foster parents? Well, as bad as they end up being (and, it is actually pretty rare), they are still better than the home from which the foster kids are typically removed. For example, there’s the case of Danielle Crockett: (more…)

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Counterintuiting the FATA

Posted first at, the web’s best source of news and analysis of Central Asia and the Caucasus.

My friend Jeb Koogler and I co-wrote an op-ed in Thursday’s Christian Science Monitor, titled, “Myths in Al Qaeda’s ‘home’.” This matters tremendously as we ponder what to do (if anything) about the latest round of peace talks. A brief excerpt of our argument:

Given the growing reach of FATA-affiliated militants, it is becoming clear that developments in the tribal areas are central to NATO’s success in Afghanistan, as well as an important factor in the stability of nuclear-armed Pakistan and the security of both Europe and the United States. Yet many Western policymakers and pundits misread current events, espousing views and prescribing policies that are based more on stereotypes than on a solid grasp of the region’s history and culture.

Conventional wisdom suggests that the Pakistani Taliban pose a unique and insurmountable threat, that the Pashtuns are the problem, that the tribal areas are lawless and chaotic, and that the targeted assassinations are an effective deterrent against Islamic militancy. But none of these assertions are accurate.

Although the conventional thinking holds that the Pakistani Taliban and their leader Baitullah Mehsud are a formidable and unprecedented threat to the region, the movement is neither historically unique nor overwhelmingly powerful.

And so on (read the whole thing, natch). I anticipate many will quibble with our argument over targeted assassinations; I welcome any such discussion, so long as it’s kept civil.

Update: Here is another example of how perception can matter tremendously, and how pitiful U.S. planning has been in the area. It takes nine paragraphs of Eric Schmitt quoting a press conference on the problem of foreign militants entering Pakistan until he finds anonymous officials urging caution that the problem isn’t quite as bad as it was sold to the media. He then quotes anonymous officials in Pakistan who complain that things are just harder to do without a friendly dictator to bark orders at. Finally, in the last paragraph of a two-page story, he quotes another anonymous official who complains that U.S. relations with Pakistan are “toxic.” So many anonymous people!

Why is that, do you think? Could it be because the current civilian government doesn’t like that we supported the country’s military dictator through several rounds of stolen elections, the imposition of martial law and the cancellation of the country’s civil liberties? That, after the assassination of Benazir Bhutto, we supported him cancelling free press and arresting lawyers who were protesting for the reinstatement of the judicial system, instead of going after Baitullah Mehsud’s group? That, even after Pervez Musharraf’s tenure was clearly over, we insisted on bombing their territory as often as possible before they could have a chance to ask us to stop?

It should be no surprise relations with Pakistan are tense. We are dealing with a popularly elected government that is at least somewhat in tune with its generally poor and generally uneducated population, and is not a disconnected, whiskey-swilling, Oxford-educated dictator. Instead of bothering to learn how we can make U.S. policy congruous with Pakistan’s needs and problems over the past eight years, we just short-cut our way through using an autocracy… and now complain viciously when it is deposed and democracy is restored and we have to actually argue our case. Like it or not, much of the world does not view our cause as self-evidently good and just and righteous—we need to argue that it is so. That we haven’t bothered so speaks legions about how we view the people who live in the areas we invade.

In other words, we are our own worst enemies.

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GVO Summit: The Power of Organized Utopianism

One of the subtextual themes coming out of the conference so far is what can almost be called a double-standard: the participants demand the right to unrestricted speech, but recoil in horror at the consequences such speech brings. It is difficult to discuss this without denying, or, at the very least, denigrating the very real atrocities many have suffered for their writing—whether it is being tortured and sodomized in Egypt, threatened with gang rape in Kenya, or sentenced to death in Afghanistan. However, many of the participants seem to have what can only be called a utopian view of how free speech in both free and unfree societies operate.

Indeed, missing in much of this discussion about what, exactly, free speech and censorship are is a realization of what they are not. Several have complained that blogging can put their jobs at risk, or that if they agitate too loudly they face harassment. So what? In years past, I have been fired for blogging; as a result, for many years now, over many jobs, I have categorically refused to blog about them or on topics that would create a conflict of interest. According to several of the speakers here, that means I exist in a repressive speech environment and “suffer” under a despotic, freedom-hating regime.

If that is the case, then no one is free. And maybe that is true. But to a large degree, there is a tendency to confuse “freedom to speak” with “freedom to speak without consequence.”

The idea of consequences for speech is a tricky one to unravel. Many despotic governments, like Egypt, simply say crippling court cases and unwinnable libel suits are a “consequence” of speaking about political and commercial events within the country. One speaker, from Kenya, detailed how she began to receive not just death threats but rape threats over her activism during that country’s election crisis several months ago. Is that just a “consequence?”

Obviously, yes, but is it a fair one? The point I am getting at is, while it sounds really pretty to talk about how we all have the right to speak freely without threat or intimidation, the reality is that such a thing is so unrealistic as to be nearly childish. I cannot walk up to an overweight person on the street and yell, “you are FAT!” and realistically expect to face zero consequences for it. Similarly, in a work environment, which is by nature hierarchical and requires no small amount of subservience to superiors, I cannot freely speak my opinion to certain people and expect to remain employed. And what’s more, it is not reasonable to demand such a thing.


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Because Who Really Needs Evidence Anyway?


The Motion Picture Association of America said Friday intellectual-property holders should have the right to collect damages, perhaps as much as $150,000 per copyright violation, without having to prove infringement.

“Mandating such proof could thus have the pernicious effect of depriving copyright owners of a practical remedy against massive copyright infringement in many instances,” MPAA attorney Marie L. van Uitert wrote Friday to the federal judge overseeing the Jammie Thomas trial.

“It is often very difficult, and in some cases, impossible, to provide such direct proof when confronting modern forms of copyright infringement, whether over P2P networks or otherwise; understandably, copyright infringers typically do not keep records of infringement,” van Uitert wrote on behalf of the movie studios, a position shared with the Recording Industry Association of America, which sued Thomas, the single mother of two.

A Duluth, Minnesota, jury in October dinged Thomas $222,000 for “making available” 24 songs on the Kazaa network in the nation’s first and only RIAA case to go to trial. United States District Court Judge Michael Davis instructed the 12 panelists that they need only find Thomas had an open share folder, not that anyone from the public actually copied her files.

So collecting evidence is hard, so why should they even bother if they’re suing single mothers for hundreds of thousands of dollars? Crap like this makes me believe the nutroots who claim our country has been sold out to unaccountable corporations—in this case, it very much appears to be the case.

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It’s the Pollution, Stupid

Or more specifically it’s the soot, from our tailpipes, our industries, most of our electricity generation—and also from forest fires, volcanoes, and the wind. Black carbon soot is causing most of the loss of polar ice according to this recent piece from Scientific American. Yes, that Scientific American. The same Scientific American that seems to put global warming on it’s cover every other issue, usually including a Soviet-esque five year plan proposed by the editors. Check it out:

Belching from smokestacks, tailpipes and even forest fires, soot—or black carbon—can quickly sully any snow on which it happens to land. In the atmosphere, such aerosols can significantly cool the planet by scattering incoming radiation or helping form clouds that deflect incoming light. But on snow—even at concentrations below five parts per billion—such dark carbon triggers melting, and may be responsible for as much as 94 percent of Arctic warming.

“Impurities cause the snow to darken and absorb more sunlight,” says Charlie Zender, a climate physicist at the University of California, Irvine. “A surprisingly large temperature response is caused by a surprisingly small amount of impurities in snow in polar regions.”

What’s more, Charles Zender, the climate physicist at UC Irvine quoted in the piece, believes that this is warming we can actually do something about, and with policies far less drastically disruptive than those aimed at carbon dioxide production:

He argues that simple steps, such as fully burning fossil fuels in more efficient engines and using cleaner-burning cooking stoves, could help preserve the dwindling Arctic snow cover and ice (see video here). Even changing the timing of such soot emissions could play a role. “If you have to burn dirty fuel, you can do it in the fall or winter” when it will be buried under subsequent snowfall, Zender says. “If you can time your emissions so they have the least impact then you will not trigger these very sensitive regions to start warming by this ice albedo feedback process.”

Al Gore, call your office.

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Is The Evidence In On Minimum Wage?

Unemployment line When the most recent unemployment numbers were released, the media bleated about the highest percentage increase in the jobless rate since 1986. For example, The New York Times lamented:

The unemployment rate surged to 5.5 percent in May from 5 percent, the largest monthly spike in more than two decades, as the economy shed 49,000 jobs for a fifth month of decline, the Labor Department reported on Friday.

Economists construed the weak monthly jobs report as an indication of the pain assailing tens of millions of Americans amid an economic downturn that most experts assume is a recession.

The labor market is continuing to deteriorate, eroding the size of paychecks, just as gasoline and food prices surge, and as the declining value of real estate erodes the wealth and credit of many households.

Ed Morrissey was quick to point out why the numbers don’t support what the media narrative claims:

Up to now, employment had held steady through a rocky economy barely staying out of recession. In May, that changed for the worse, as unemployment rose to its highest level since October 2004. However, only 49,000 workers lost their jobs, which doesn’t nearly account for the four-tenths rise … The real story here is unemployment among entry-level workers to the employment system. In summer, teenagers and college students enter the marketplace looking for seasonal and part-time work. This accounts for the significant rise in job-seekers and the 0.4% increase in unemployment. Otherwise, an overall job loss of 49,000 jobs would account for a 0.04% increase in a market of 138 million workers.

fast food worker

King Banaian also took a look at the May numbers (in comparison with April), and while he disagrees somewhat with Ed’s account for the number of new entrants to the job market, he finds validity with respect to the rise in the unemployment rate: (more…)

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Where Do Most of Our Problems Come From?

From Congress and the unintended consequences of their actions. Bruce over at QandO has a post discussing an excellent piece by Walter Williams.

Most of the great problems we face are caused by politicians creating solutions to problems they created in the first place. Politicians and much of the public lose sight of the unavoidable fact that for every created benefit, there’s also a created cost or, as Nobel Laureate Milton Friedman said, “There’s no free lunch.”

Congress, doing the bidding of environmental extremists, created our energy supply problem. Oil and gas exploration in a tiny portion of the coastal plain of Alaska’s Arctic National Wildlife Refuge would, according to a 2002 U.S. Geological Survey’s estimate, increase our proven domestic oil reserves by about 50 percent.

The Pacific and Atlantic Oceans and eastern Gulf of Mexico offshore areas have enormous reserves of oil and natural gas. Congress has also placed these energy sources of oil off-limits. Because of onerous regulations, it has been 30-plus years since a new refinery has been built. Similar regulations also explain why the U.S. nuclear energy production is a fraction of what it might be.

Congress’ solution to our energy supply problems is not to relax supply restrictions but to enact the Energy Independence and Security Act of 2007 that mandates that oil companies mix more ethanol with their gasoline. Anyone with an ounce of brains would have realized that diverting crops from food to fuel use would raise the prices of a host of corn-related foods, such as corn-fed meat and dairy products.

Wheat and soybeans prices have also risen as a result of fewer acres being planted in favor of corn. A Purdue University study found the ethanol program has cost consumers $15 billion in higher food costs in 2007 and that it will be considerably higher in 2008.

This is in addition to Congress blocking use of our oil shale reserves and blocking importing of oil from Alberta’s tar sands.

So what will be done about these problems congress has created?

On May 1, Sen. Charles Schumer, New York Democrat and chairman of the Joint Economic Committee, convened a hearing on rising food prices saying, “The anxiety felt over higher food prices is going to be just as widespread, and will equal or surpass, the anger and frustrations so many Americans have about higher gas prices.” Congress’ proposed “solutions” to the energy and food mess it created include a windfall profits tax on oil companies, a gasoline tax holiday for the summer, increases in the food stamp program and foreign food aid. These measures will not solve the problem but will create new problems.

Now some people I’ve talked with like the higher gas prices as they spead up alternative energy development and make it more attractive to use right now. That’s a perfectly valid, and logical opinion to have I say. However that’s not the view of the people in congress. They can’t push for alternative energy and then decry high gas prices that they’ve helped to create. They’re either ignorant or pandering, or both. I’m not sure which is worse.

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Backdoor Kyoto — The Next Chapter

polar bears swimming

The march of the watermelons towards control of US policy continues apace:

Polar bears will now be listed as “threatened” under the Endangered Species Act.

But in announcing the listing, Secretary of the Interior Dirk Kempthorne said the decision should not be “misused” to regulate global climate change.

“Listing the polar bear as threatened can reduce avoidable losses of polar bears. But it should not open the door to use of the Endangered Species Act to regulate greenhouse gas emissions from automobiles, power plants, and other sources,” said Kempthorne.

“That would be a wholly inappropriate use of the ESA law. The ESA is not the right tool to set U.S. climate policy.”

It is certainly an inappropriate tool for shaping such policy. And it just as certainly the tool that will be used quite effectively to do so. Like I wrote over a year ago, this is nothing more than a backdoor way of implementing Kyoto in the US.

If the polar bear were listed as a threatened species, all federal agencies would have to ensure that anything they authorize that might affect polar bears will not jeopardize their survival or the sea ice where they live. That could include oil and gas exploration, commercial shipping or even releases of toxic contaminants or climate-affecting pollution.

Environmentalists hope that invoking the Endangered Species Act protections might eventually lead the government to reduce carbon dioxide emissions and other heat-trapping “greenhouse” gases blamed for warming the atmosphere.

“The Interior Department has pretty much explicitly said that they don’t think they have the authority to regulate greenhouse gas emission, but we know that the Endangered Species Act goes well beyond these walls, that it’s taken into account by other agencies,” said Kert Davies, research director for Greenpeace.

Since the above was written, the Supreme Court has ruled that the EPA does have the authority to regulate greenhouse gas emissions, but more importantly, under the ESA the government is required to evaluate any project that may have an impact on endangered species. Normally this would be limited to such species within the geographical span of the proposed project, but you can bet your bottom dollar that Greenpeace, et al., will attempt to draw a direct connection between whichever new project they are challenging and polar bears using the threat of increased greenhouse gas emissions.

The coup de grace, of course, will be when all private industry and behavior is brought with in the realm of the EPA’s regulation authority (my emphasis):

As Interior Secretary Dirk Kempthorne noted, the 1973 Endangered Species Act is “perhaps the least flexible law Congress has ever enacted.” In 2005, green litigants took advantage of this rigidity, suing the government to force it to label the polar bear at risk for extinction. Since the 1980s, the sea ice that the bears use to hunt and breed has been receding. Although the population has increased from a low of 12,000 in the 1960s to roughly 25,000 today – perhaps a record high – computer projections anticipate that Arctic pack ice will continue to melt over the next half-century. This could, maybe, someday, lead to population declines.

The lawsuits were hardly motivated by concern for polar bear welfare. Instead, environmentalists asserted that the ice is thinning because of human-induced global warming. A formal endangered listing is one more arrow in their legal quiver as they try to run U.S. climate policy through the judiciary.

They’ll argue that emissions from power plants, refineries, automobiles – anything that produces carbon – would contribute to warming, thus contributing to habitat destruction, and thus should be restricted by the Endangered Species Act. This logic could be used to rewrite existing environmental policy to accommodate greenhouse gasses, purposes for which they were never intended but with economy-wide repercussions.

Is there any doubt that granting full regulatory control over all productive activities is the ultimate goal of these lawsuits? I’m sure that some in the movement are motivated entirely by their heart-felt concern for the welfare of animals and the environment. But the vast majority of these environmental activists are driven by the desire to bring capitalist forces to heel, towards which end their totalitarian instincts guide them. Passage of the ESA in 1973 was the first step in that cause. The combined forces of the AGW movement with this latest court victory may be all that’s needed to achieve their goal.

See also: McQ, who has more on the listing of polar bears as a threatened species.

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Hear, Hear

One of my girlfriends is smart as a whip and a talented artist to boot.  Cathy is also hard of hearing.

While Cathy can read lips and she also has a device that allows her to converse in very small groups, she is unable to hear in most other settings.  Last year, the two of us attended a fundraiser for Rudy Giuliani.  As we watched Rudy live on TV, I quietly “translated” what he was saying for Cathy.  Many of the other people in attendance thus realized how unfortunate it was that there weren’t closed captions for Cathy and people like her.

Elise Knopf, of the Minnesota Commission Serving Deaf and Hard of Hearing People wants the state of Minnesota to pass a law making it mandatory to have closed captions in political ads.  As you all know, my philosophy is to urge small government, and I’m not quite certain that people should be forced to include closed captions.  Nevertheless, I am very sure that the captions should be included in these ads – not to mention most everything else on TV!  Cathy has explained to me that the cost to do so is minimal – and that the captions can be invisible to those who do not need them.

Including those among us who cannot hear well or at all has a simple solution.  Let’s apply it.

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Try Legal Weed

No, not that. We’re talking Weed Beer. I’m talking about a beer made in the city of Weed, California. A local brewer there has named his beer after the small town. The Bureau of Alcohol Tobacco and Firearms however, wasn’t too pleased with their slogan on their bottle cap, “Try Legal Weed”.

Bureau spokesman Art Resnick said Monday that the bottle caps tell consumers to support an illegal drug

Since it literally says “legal weed” on it, I’m not sure how they think it refers to illegal weed. The owner of the brew counters with the fact that Budweiser is known as “bud”

“They sell Bud — we sell Weed.”

Just add this to another casualty in this ridiculous war on drugs.

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Open Minds

One of the toughest tasks to master is to keep an open mind.  We work hard to discover what we ultimately believe to be the truth.  After all that effort, often the last thing we wish to do is have to re-analyse, check – and toss out what we have labored so long to achieve.

Nevertheless, sometimes the honest course is to do just that!

Here is a man who took that course.

Science shows that adding chlorine to drinking water was the biggest advance in the history of public health, virtually eradicating water-borne diseases such as cholera. And the majority of our pharmaceuticals are based on chlorine chemistry. Simply put, chlorine is essential for our health.

My former colleagues ignored science and supported the ban, forcing my departure. Despite science concluding no known health risks – and ample benefits – from chlorine in drinking water, Greenpeace and other environmental groups have opposed its use for more than 20 years.

Opposition to the use of chemicals such as chlorine is part of a broader hostility to the use of industrial chemicals. Rachel Carson’s 1962 book, “Silent Spring,” had a significant impact on many pioneers of the green movement. The book raised concerns, many rooted in science, about the risks and negative environmental impact associated with the overuse of chemicals. But the initial healthy skepticism hardened into a mindset that treats virtually all industrial use of chemicals with suspicion.

Sadly, Greenpeace has evolved into an organization of extremism and politically motivated agendas.

And – if you think I am pointing fingers at others, I am – but at myself, too.  Just like most people, my mind frequently wishes to stay slammed shut – and I must work to insure that it does not happen.

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Ripple Effects in the Food Trade

Posted first at

When last I touched on the global food crisis and how it is impacting Afghanistan and the rest of Central Asia, I noted that countries continuing to ban wheat exports would make the problem worse by restricting the global market, driving up prices even more, and limiting national coping mechanisms. One of the countries producing a glut of wheat this year was Kazakhstan, whose farmers were enjoying rather handsome profits from the wheat trade. Until now.

Kazakhstan joined other Black Sea grain exporters in curbing shipments on Tuesday, suspending wheat exports until Sept. 1 to combat double-digit inflation in Central Asia’s largest economy.

Analysts said they expected the ban, which excludes flour and will take effect 10 days from now, to cause a short-term spike in world wheat prices as supplies from Russia and Ukraine are already constrained by export limits or tariffs.

This is not insignificant. While Kazakhstan couldn’t lower world prices too much with Australia in a serious rut, an export ban not only fuels price hikes (which are affected by perception as much as supply), but is seriously bad news for poor people trying to feed their families everywhere. As notes:

The other four Central Asian countries all import Kazakh grain, and the poor in all countries have been hit severely by recent price surges… Much of the region’s southern arable land is primarily used for growing cotton and cannot easily be converted into growing food crops.

Let’s hope that global food price inflation will come down during this year so that the Kazakh export ban really only has to last until September.

Yes, let us hope. Ben linked to some other interesting local anecdotes about how grain prices are adversely affecting quality of life in most of Central Asia, and they’re worth a read.

Kazakhstan’s behavior is confusing: though it is a much better reaction than a price freeze, an export restriction is of dubious benefit for combating inflation. Inflation is caused when money and credit increase out of proportion with an economy’s ability to produce goods and services. An export ban effectively limits the amount of goods Kazakhstan can produce by harming exporters—the Reuters report speculated it could potentially cause $800 million in losses.


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FEC Complaint Filed Against McCain


Some people are hoping to hoist John McCain on his own campaign finance petard. As satisfying as it would be to see the Senator receive a healthy dose of his bitter medicine, however, the complaints filed against him with the FEC will almost assuredly fail.

In the blogosphere it is the most recent complaint filed by Jane Hamsher, et al. that is getting the most attention.

Yesterday, on behalf of a large number of progressive bloggers and activists, Jane went to the FEC and filed an official complaint against PetardJohn McCain’s alleged campaign finance violations. We’ve been asking a lot of questions about this, and the answers have been less than forthcoming. So, instead of just sitting here and stewing about yet another GOP ethical problem, we decided to put our action where our concerns were.


As Markos of DailyKos pointed out in joining the complaint, “John McCain has officially blown past campaign spending limits mandated by his original acceptance of public campaign funding. While he has signaled his intent to withdraw from such financing, that has been hindered by the fact that he used the promise of public funding to secure a campaign loan.” Guess the campaign finance laws only apply when they aren’t inconvenient for McCain’s ambitions.

In truth, Hamsher’s complaint is a just piggy-backing off of the DNC’s complaint filed on February 25, 2008. Unsurprisingly, the DNC complaint is much more substantive:

In order to receive matching funds, John McCain signed a binding agreement with the FEC to accept spending limits and to abide by the conditions of receiving those funds. The FEC makes clear that any request to withdraw from the agreement must be granted by the FEC. In other words, McCain can’t just unilaterally withdraw. FEC Chairman David Mason made this clear in a letter to McCain advising him that the law requires the FEC to approve his request to withdraw from his contract.

According to past Commission rulings, the McCain campaign would not be allowed to withdraw from matching funds because it has already violated a key condition for being let out of the program – pledging matching funds as collateral for a private loan. McCain obtained a $4 million line of credit — drew $2,971,697 from it – and documents make clear that the promise of public financing was used to secure his loan.

The gravamen of both complaints is that McCain’s attempt to withdraw from the matching funds program, and thus to spend more than allowed thereunder, is a dead letter because he pledged the certification for federal matching funds as security for private financing. According to the FEC, withdrawal from the program will normally be automatically granted “prior to the payment date for any such funds to such candidate or his or her committee upon receipt of a written request signed by the candidate, provided that the certification of funds has not been pledged as security for private financing.” However, the loan documents tell a different story.

In November of 2007, McCain took out a $3 Million line of credit with Fidelity & Trust Bank of Maryland (see DNC Comp., Ex. 4, pdf p.18). As a part of that loan, McCain also executed a Security Agreement pledging all of his assets to the Bank as collateral, with the explicit exception of:

any certifications of matching fund eligibility currently possessed by [McCain] or obtained before January 1, 2008 and the right of John McCain 2008, Inc. and John McCain to receive payment under these certifications [which] are not collateral under the Commercial Security Agreement for this Loan.

(see pdf p.21). Such disclaiming language appears throughout the loan documents, making it abundantly clear that the Bank had no security interest in or to the certifications or any matching funds.

The entire loan was later modified, on December 17, 2007, raising the limit on the amount that could be borrowed to $4 Million. The modification also altered the language concerning the matching fund certifications. In particular, the parties had anticipated all along that McCain may withdraw from the program, and the documents addressed the scenario of McCain then losing the New Hampshire primary afterwards. In that case, McCain would then reapply (i.e. re-certify) for federal matching funds, and then pledge a security interest therein to the Bank. The Loan modification, changed the re-certification promise to include the next primary McCain ran in after withdrawal. (see pdf p.35).

In addition, the modification revised the “STATUS OF CURRENTLY HELD CERTIFICATIONS OF MATCHING FUNDS” to read:

[McCain] and Lender agree that any certifications of matching funds eligibility now held by [McCain], and the right of [McCain] to receive payment under such certifications, are not (and shall not be) collateral for the Loan.

At this point it should be painfully clear that neither McCain nor the Bank think that there is a security interest in the certification.

The DNC attempts to argue that despite the clear and unambiguous language to the contrary, McCain did in fact pledge a security interest in the certification … with respect to future matching funds! The DNC basically makes three arguments in order to prove its case:

(1) McCain’s promise to re-certify for matching funds in the event that he loses a primary after withdrawing from the program, and to grant a security interest in such certification and matching funds to the Bank, creates “a present encumbrance, however conditional, of the Campaign’s future interest in and entitlement to matching funds ….”

This argument is fallacious on its face. The FEC policy of automatically granting a request to withdraw from the program provided that the currently held certification has not been pledged does not have anything to do with future certifications. It only deals with a certification presently held by a candidate. That McCain promised to grant a security interest to future certifications, upon certain other conditions being met, is not material to the current certifications. Indeed, both the Bank and McCain understood that a security interest in the certification would prevent McCain from withdrawing, which is why they drafted the documents the way that they did.

Furthermore, even accepting the DNC’s argument as valid, it is self-defeating. If the Bank’s has a present security interest in future certifications, and that security interest prevents McCain’s withdrawal from the program, then the conditions precedent to the Bank perfecting it’s security interest (i.e. withdrawal and re-certification) cannot be met. Ergo, it has no security interest.

(2) McCain agreed to abide by, and to stay within, “overall or state spending limits set forth in the Federal Matching Funds Program,” regardless of whether the campaign was still participating in the program or not. The DNC reasons that these provisions are for the sole purpose of ensuring that McCain can receive future matching funds, and that the Bank can take a security interest therein.

The DNC is probably right about that, but so what? It still doesn’t create any security interest since not only was any such interest specifically and repeatedly disclaimed, the only possible interest the Bank could have would be in funds received after McCain withdrew from the program and then re-certified. At the time McCain attempted to withdraw from the program, the certification his campaign held was not encumbered. End of story.

(3) While the description of collateral excludes current certifications held by McCain, it implicitly includes “rights to receive matching funds, i.e., that come into existence, after January 1, 2008, based on matchable contributions received and presentations in good order made after that date … The modification makes clear again that, although the initial amount certified in December 2007 may not be part of the Collateral, the Collateral will include future amounts of matching funds paid, based on future submissions, even though based on the initial certification of eligibility.”

Although this argument is also wrong, it is certainly clever. If we assume that the specific exclusions of McCain’s certification found throughout the documents are simply ineffective, and that the limits on the Bank’s interest in such certification and the rights to any matching funds is only the good up to date of the modification, then the DNC’s argument that any certified funds after that date are in fact part of the Collateral might actually make some sense. However, there are a couple of problems with it.

First of all, there is only one certification, and that is the initial one made by McCain in August of 2007. When McCain withdrew from the program on February 7, 2008, it is implied that the initial amount certified had not been amended, and that no further funds had been certified for matching. Accordingly, once again there has not been a present security interest created, nor is it even clear that a future interest was anticipated by the Bank prior to McCain’s withdrawal and re-certification.

Secondly, looking at Exhibit 2 of the DNC Complaint we see that as of December 20, 2007 John McCain had certified $5,812,197.35 (also found here). However, when we look at the FEC data for 2008 Presidential Matching Fund Submissions, there are no new funds submitted for certification since the December 20 press release. If we accept the DNC’s argument as correct, and McCain has not in fact submitted any new funds for certification since December 20, 2007, then the Bank still does not have any security interest in the certification or matching funds.

Accordingly, the DNC’s Complaint will most likely be denied since the Bank quite clearly excluded McCain’s certification and any matching funds from becoming security for the loan. If McCain actually did submit funds after December 20, 2007 for certification, there is a colorable argument that such certified funds are pledged as collateral, but given the totality of the documents that’s not a very winnable position.

Regarding Hamsher’s Complaint, it tries to make the case that because the FEC has not yet granted McCain’s request that he withdraw from the program, that he is still bound by the spending caps, and that he has violated those caps. Even if she is right about McCain’s campaign exceeding the spending limits, McCain would certainly have a reasonable expectation to believe that he will eventually be released from the program, given that he complies with the provisos for an automatic grant of his request. Moreover, it would not be reasonable to expect to him to await the FEC’s decision on the matter when the commission doesn’t even have enough members to do so:

The only trouble is, the commission hasn’t got a quorum… and it won’t, until the Senate breaks a deadlock on approving nominees.

The FEC can’t deliver any decision yet, and prior opinions indicate clearly that McCain will be released. Why should he be restricted to the spending caps?

Furthermore, and this goes to all the arguments above, it’s not even clear that the FEC has the power to prevent McCain from withdrawing in the first place. The FEC thinks that the certification process creates a binding contract between the candidate and the commission, but it doesn’t look like any enforceable contract I’ve ever seen. There is no consideration, and there is no mutuality of obligation. A candidate can apply for the funds, but he can’t be required to actually take them, can he? If he were to take the funds, then there is probably an enforceable contract, but prior to that time the candidate is merely trying to establish eligibility. Imagine going to a bank and applying for a loan, and then having the bank sue you because your credit score does not allow you to qualify for a loan. That’s pretty much the argument being made.

So that’s the DNC and Hamsher case against McCain in a nut shell. He accepted a loan from a bank, specifically excluding as collateral any certification for matching federal funds, except that he secretly really did! Oh, and because the FEC hasn’t granted McCain permission to not accept federal matching funds, then he is still bound by the spending caps, and he’s violated those with reckless abandon. Needless to say, I don’t think either complaint will be successful.

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The Nationalization of the Housing Market

Regular readers know that I have been harping on the likely collapse in housing since this blog began. At this point I am hardly an outlier in being concerned, which means now the politicians and experts are ready to ride to the rescue. Proposals to increase regulation, bailout mortgage insurers, banks and even homeowners are being floated. Alan Blinder wants to bring back the 1930’s era state owned mortgage business.

Most of these proposals ignore that the real problem isn’t falling prices, or non credit worthy borrowers, but that housing needs to fall in price in many areas. Thus plans to stabilize the housing market, and cost estimates assuming such a stabilization, are likely doomed to be disasters, not to mention how bad it would be if they were successful longer term. We may be buying an expensive method of merely stretching the pain out. The cure to this crisis is falling prices. Politicians however, don’t like the medicine.

Anyway, to catch up on all these proposals, the state of the market now, and various amusing aspects of this whole mess, I have a large roundup of links, observations, and plenty of visual data for the curious.

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Tragic News for Leftists

Due to free markets, capitalism and freedom in general, the world is getting wealthier.

The last quarter century has witnessed remarkable progress of mankind. The world’s per capita inflation-adjusted income rose from $5400 in 1980 to $8500 in 2005.Schooling and life expectancy grew rapidly, while infant mortality and poverty fell just asfast. Compared to 1980, many more countries in the world are democratic today.

The last quarter century also saw wide acceptance of free market policies in both rich and poor countries: from private ownership, to free trade, to responsible budgets, to lower taxes. Three important events mark the beginning of this period. In 1979, Deng Xiao Ping started market reforms in China, which over the quarter century lifted hundreds of millions of people out of poverty. In the same year, Margaret Thatcher was elected Prime Minister in Britain, and initiated her radical reforms and a long period of growth. A year later, Ronald Reagan was elected President of the United States, and also embraced free market policies. All three of these leaders professed inspiration from the work of Milton Friedman. It is natural, then, to refer to the last quarter century as the Age of Milton Friedman.

Oh!  The agony of it all!

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Fundamentally there was no housing bubble?-Update

So claims Alex Tabarrok. Alex and his blogmate Tyler are two of my favorite bloggers, but on this matter I think Alex is wrong. Unlike for some, his argument doesn’t invite scorn from me, because humility should teach us that sometimes things are different, and we cannot always fully understand why, at least not until after the fact. Later people laugh at we fools for missing the obvious. It always seems obvious after the fact. A belief in uncertainty is a virtue in understanding markets, and history. That being said, I still think Alex is wrong.

The crux of his argument is this:

So if the massive run-up in house prices since 1997 was a bubble and if the bubble has now been popped we should see a massive drop in prices. But what has actually happened? House prices have certainly stopped increasing and they have dropped but they have not dropped to anywhere near the historic average (see chart in the extension). Since the peak in the second quarter of 2006 prices have dropped by about 5% at the national level (third quarter 2007).

Case Shiller All in One Index

Except the argument has never been that prices would decrease immediately or quickly. The consensus of those of us who have worried about this has been that it would be a transition which would take years. Housing doesn’t correct quickly as a rule.

Alex feels the market has shifted to a new higher equilibrium:

If we don’t see the massive drop back to “normal” levels then the run up in prices should be described as a shift to a new equilibrium – much as happened during World War II – see the chart. (It’s an important question to ask what changed and why?). In the shift to the new equilibrium there was some mild overshooting, especially due to the subprime over expansion, but fundamentally there was no housing bubble.

A History of Housing

I actually agree that in some markets we may see a new higher equilibrium, say California, but it will take a large drop first. Here is the chart showing price declines from above, but updated to reflect recent declines (Alex’s chart is old)

Updated-Case Shiller All in One Index


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An Argument Against Public Education

Via Glenn Reynolds, Wired posts an article describing the fight to include evolution in the science curriculum for students in Florida and Texas:

Charles Darwin was born 199 years ago Tuesday, but the debate he ignited about the origins of species rages on. Florida’s department of education will vote next week on a new science curriculum that could be in jeopardy, because some conservative counties oppose it.

Nine of Florida’s 64 counties have passed resolutions over the last two months condemning the new curriculum that explicitly calls for teaching evolution. The resolutions, passed in heavily Christian counties in the state’s northern reaches, demand that evolution be “balanced” with alternative theories, mainly creationist…

Watchdogs say the stakes are high in the pending vote. If Florida backpedals from evolution, Texas may follow suit. Texas is scheduled to update its own science standards this year. In November, an education official was fired for mentioning a pro-evolution lecture. Along with California, Florida and Texas are the largest purchasers of textbooks in the nation.

“Texas buys about 10 percent of all K-12 textbooks, and Florida buys another 8 percent,” said Lawrence Lerner, a science-curriculum expert at the Thomas B. Fordham Institute, an education watchdog. “If they want creationism in their textbooks, Wyoming may not have a choice.”

I still have a hard time swallowing this argument. Is the publishing world so archaic and backwards technologically that they can’t churn out different versions of textbooks for 18% of their customers, while delivering what the other 82% really want? Diane Ravitch made the same case in The Language Police (an excellent book; I highly recommend it), but I didn’t really buy it then either.

Nevertheless, the reason its even an issue is because the state mandates what the curriculum will be for each and every school.

Florida’s current science standards, which tell teachers what their students must learn, don’t mention evolution by name. In 2005, a prominent education think tank gave Florida a failing grade in science teaching, prompting education officials to overhaul the curriculum. The new standards, drafted last October, explicitly called evolution “the fundamental concept underlying all biology.”

But nine counties — Baker, Clay, Hamilton, Holmes, Jackson, Madison, St. Johns, Taylor and Washington — have passed resolutions officially calling for the teaching of evolution to be balanced with alternative explanations of life’s origins, almost certainly religious.

The resolutions have been patterned after the one from St. Johns County, which calls for “teaching the scientific strengths and weaknesses of the theory rather than teaching evolution as dogmatic fact.”

Critics say the resolutions’ language is thinly veiled creationism — either in the strictly biblical sense, or the more-modern take of “intelligent design,” which purports to use scientific methodology to prove divine intervention.

We’re concerned that we not impose state standards that prevent an open dialogue concerning other theories,” said David Buckles, superintendent of schools in Putnam County, which is also considering opposing the new curriculum. “Did life begin in ice? Or was it the Genesis version? Or intelligent design? We want the pros and cons of all of it.”

Looking just at the bolded portions, isn’t that where the problem lies? Does this issue ever come to a head if there weren’t some state regulators “imposing” rules on the schools? Or am I just some crazy libertarian nutter who doesn’t appreciate the value of a public education (yeah, some value)?

In fact, I do see the value in having an educated public, but over the past 30 years or so I don’t see governments actually accomplishing that task. Instead, we get propagandized curriculum that has little to no bearing on the real world. Classrooms are used as social science labs, and students are treated as the guinea pigs. Whether its the idiots trying to shove PC, multi-culti, white-people-are-racists nonsense down our kids throats, or bible-thumpers filling their heads with religion dressed up as science, I don’t see an educated populace being created. I see a bunch of poorly equipped kids being fed ridiculously antiquated and/or downright false ideas. And to top it all off, we are treated to nanny-staters of all types duking it out in a game of moral oneupmanship for our political amusement. How does any of that add to the value of public education?

I’m one of the lucky ones who can send my kids to private school (barely), but what about all those parents who don’t have that choice? Their kids are left to suffer at the hands of petty bureaucrats and teachers unions, each with their own agenda that’s applied in a “one size fits all” manner, regardless of what might be truly best for the child. And heaven forbid that a teacher develop his or her own method of educating. If that were allowed, then how would the bureaucrats maintain control? Next thing you know, they’ll want merit pay.

For so long as the state is in charge of education, these sorts of problems will only get worse. Are vouchers the answer? I think they would help by putting choice back into the hands of parents. But that wouldn’t do anything about abominations like No Child Left Behind, and the ridiculous wrangling over evolution that comes up again every couple of years. In my opinion, the best thing to do would be to get the state out of the business of education entirely.

By that I don’t mean pulling out all tax dollars. Even though my children don’t actually benefit from it, I don’t have a problem with helping kids get an education. I just have a problem with the government being the one to control and deliver it. Instead, I’d say let all schools be private, and let the government funds used for education now be set aside for use by parents, without any strings attached. They could apply the money towards the school of their choice. And let the schools decide what and how they will teach. If one school doesn’t prepare kids for the future as well as another, then it will see a loss of income. It will be forced to give parents what they want, or go out of business. And for every school that is successful, thus earning a greater share of the tuition, another one will spring up to grab some of that lucrative pie. In the end, we would have schools that are responsive to the needs of children and their parents, and not beholden to local, state or national politics.

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We’ll Get To That Wind Farm Application – Eventually

And by eventually, they mean decades down the road.

This is a perfect example of government getting in the way of the innovation we need to dig ourselves out of our fossil fuel dependency.

If you want to build a wind farm in Minnesota right now, you’re in for a nasty surprise. A 612-year nasty surprise in fact.

The Midwest Independent Transmission System (MISO), the organization in charge of the power lines, has to approve every new project that will connect to existing power lines. And MISO is only used to dealing with coal-plant-sized projects. Thus, the current regulations say that they must dedicate 2 years of their time to every project that will connect to the grid.

Not only that, but they’re only allowed to process one application at a time.

This worked fine back when they were approving coal plants. Two years was plenty of time, and there weren’t enough giant fossil fuel plants to fill their docket.

But a system that worked fine for fossil fuel has completely broken down in the face of distributed wind energy. People filing an application with MISO to build a medium- to large-scale wind project (of which there are currently over three hundred) have a heck of a wait in front of them.

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His Own Petard?

(Cross Posted at Whatif?)

Mccain_3 When John McCain and George W. Bush were vying for their party’s nomination, I was a McCain fan. How could a person not be impressed by the man who refused to leave Vietnam’s prison camp to stand by his men?

As time has progressed, however, my admiration for McCain lessened. The biggest wound to my opinion of the man was McCain-Feingold. The notion that like-minded people are prevented from pooling their money and expressing themselves about political candidates has always struck me as a clear violation of our free speech rights. No arguments I have ever seen have even mildly dissuaded me from this belief.

Just in the last few days, I had some discussion with those who are strongly in favor of governmentally funded campaign financing. I argued that those with power and money will always find a way to influence politics; the best we can do is to insure that there is full and immediate disclosure as to where funds originate.

My friends responded that “no one pays attention to this”. There may well be truth in this statement. But I argued back that those who pay little or no attention are those who will be voting for someone because they are cute and charismatic, or because of some 10 second soundbite they saw in the middle of a reality show.

I then asked my friends about government financing. “Who gets the money? How much? When do you judge that others are ineligible for funding? What are the caps, and how do you determine them?” And so forth. This was met with: “We have discussed this before, and we will not change one another’s minds, so I am ending the conversation now.” How convenient. Questions are asked that cannot be answered – so the discussion stops.

Well, the discussion is not stopping for McCain now. With wealthy opposition, McCain is growling about his competitor who can self-fund as McCain cannot.

Money finds its way into the process no matter how many artificial barriers get imposed and artificial categories created for it. Americans express their support by their pocketbook — and they turn to other mechanisms when thwarted in efforts to directly support candidates. That accounts for the rise of 527s and their mostly-negative impact on national politics.

Now the author of the BCRA wants to complain about running against a candidate who self-funds. John McCain can’t have it both ways. If he dislikes the wealthy who have to spend their own money to challenge the power system, then get rid of the Byzantine mess that his McCain-Feingold bill has created — and its attendant insults to the First Amendment.

Is McCain being hoist by his own petard? Perhaps. We could find joy in a bit of universal justice at this spectacle. Instead, I would prefer to see this ransacking of our free speech rights simply killed and given the funeral it so richly deserves.

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Gates Capitalism

Commenting on Bill Gates’ advocacy for “kinder capitalism,” Steven Bainbridge notes:

But when did Bill Gates ever believe in capitalism? He’s an inveterate monopolist and has been since the beginning. Monopolists hate real capitalism, precisely because they hate competition. Monopolists love corporate social responsibility because it creates barriers to entry. So of course Bill Gates is going to turn “a cold shoulder to the blessings capitalism bestows.”

His follow-up is here.

Needless to say, Prof. Bainbridge is exactly right. In fact, it was something that Adam Smith warned of long ago:

To widen the market and to narrow the competition is always the interest of the dealers … The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted, till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

The Wealth of Nations, Book I Chapter XI

Another Smith quote seems appropriate to this situation as well:

I have never known much good done by those who affected to trade for the public good.

Here, here.

[HT: Instapundit]

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Market failure

From Peter Gordon:

This morning’s WSJ op-ed (“Gas Taxes Are High Enough”) by Mary E. Peters, Secretary of Transportation, suggests that this appointment belongs on the plus side of the ledger. She is the highest-ranking federal transportation official to openly embrace electronic road tolls on major highways. Highway congestion is often cited as a market failure in the texbooks. But not pricing when the means to do so at low cost are finally here is clearly a policy failure.

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A Strange Maps Addiction

It is a very beneficial habit. Steve Newton has really gotten the bug, and has a startling one showing the difference between North and South Korea. Looking at it reminded me of one I posted about a long time ago. So, being a fan of recycling posts, I thought it should be reprised:


Spontaneous order can be so cool

Russell Roberts tells us why. Here is what he is talking about.

The orderly part comes from the visual image that emerges and the implications of that images. Each flight is represented as an animated path of light between the departure city and the destination city. The visual image that results is an illuminated map of the United States. The borders of the country emerge and then cities even though no boundary or city is shown explicitly. The animation also evolves over time. At first, you see only darkness. Then the East Coast becomes illuminated and the light moves west as the sun rises across the country. Then Hawaii is lit up with planes going and leaving there. And at the end of the day, the last red-eye flights head westward from California.

The flights around the country aren’t random. They spring out of population density and the routes people want to travel. These are the source of the order and its visual representation. What you’re seeing is a visual representation of the market for air travel and its service of its customers.

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Clinton Proposes Perhaps the “dumbest solution to the current mortgage mess”

Jon Birger at CNN Money writes about a proposal Hillary Clinton floated at the Democratic Debates a few days ago. The plan was to have a “moratorium on foreclosures for 90 days [and] freezing interest rates for five years”. Birger goes on to explain why this is horrible, this idea; specifically the freezing interest rates part.

Interest rates on new mortgages would skyrocket – perhaps past 8 percent, as the mutual funds, pension funds and other investors who typically provide capital to the mortgage market shift their money into other investments where the government isn’t impairing returns. With higher mortgage rates eroding buying power, the downward pressure on home prices would only increase. Lower home prices would lead to even more defaults, as more folks who’d lost the equity in their homes choose to walk away from their mortgages.

Not to be outdone, John Edwards proposed freezing rates for 7 years. This is the danger of government intervention in the economy. We have economic geniuses at the Fed making very subtle changes that can still screw up, as Lance has talked about. Do you really trust ignorant politicians to muddle around even more?

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Free Shipping Illegal in France

I’m a big Amazon user. I think it’s a lazy guy thing. I know what I want, I don’t want to window shop at the mall or go to the hassle of actually driving and parking and wandering around in the mall lost (and I don’t even have any kids). What really got me using Amazon big time though, was their Amazon Prime program where you pay $79 a year for free shipping on everything sold by Amazon (though not some third party sellers). It’s simply a great site, great idea, and has completely revolutionized the way I shop.

France, however, doesn’t see it the same way. Michael talked about France’s aversion to capitalism and the free market a few days ago, and now we see it in action. France has declared free shipping illegal. In 1981 France passed a law making it illegal for book sellers to offer more than 5% discount on the list price, (who wants big discounts on books right?). This was done to protect French book stores from competition from supermarkets and other new retailers. has run into trouble with their offering free shipping on orders of €20 or over (it’s $25 in the US), and a court has ruled that this violates their protectionist law.

Amazon, however has opted to continue offering the free shipping, and is choosing to violate the law and pay the €1,000 a day fine. After 30 days though, the court can revisit the fine and will undoubtedly increase it greatly given Amazon’s open defiance of it. It also owes €100,000 to the French Booksellers’ Union for the court battle and for the losses it has apparently caused them. Imagine if Dell was forced to pay HP for the losses it cause them with their new computer manufacturing model. Doesn’t really spur lower prices and innovation does it?

So who is hurt by this? Amazon obviously, but also the consumers in France, who have plenty of time to read with their 35 hour work week. According to Cédric Manara, a law professor and e-commerce specialist at Edhec, a French business school in Nice, Germany has a similar law regulating the price of books, but remains unaffected. But I wonder how long that will be true given what’s happening in France.

(H/T Slashdot)

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Labour regulations in China and India: Economic Freedom in Relief

This is a stunning statistic:

…the annual expansion in China’s trade has been larger than India’s total annual trade during last several years.

Tyler Cowen hones in on this point, amongst a bounty of good points:

The most important factor that still holds back large [Indian] firms from entering these products is a set of draconian labour laws in India. Under these laws, it is virtually impossible for a firm with 100 or more employees to fire the workers even in the face of bankruptcy. It is equally difficult for the firms to reassign the workers from one task to another. These provisions impose very low worker productivity or a high real cost of labour. Large-scale capital-intensive sectors such as automobiles, where labour costs are a tiny proportion of the total costs, can profitably operate in such an environment. But the same is not true of large-scale labour-intensive sectors labour. Few foreign manufacturers are willing to enter India outside of a small subset of capital- and skilled-labour intensive sectors.

These kinds of rules damage economies around the world, but countries with the enormous poverty present in India are the least able to afford the luxury of such self inflicted wounds. Which goes to the point of the first chapter of the latest Index of Economic Freedom report.

Economic Fluidity: A Crucial Dimension of Economic Freedom

This essay argues that whether the economic infrastructure is “successful” or “perverse” and whether the “reward structure” is conducive to innovation and entrepreneurship rests on the degree of economic fluidity. Without constant mixing across boundaries, without the creation and testing of ideas, and without learning and adaptation, the specific character of the institutional structure matters little. Fluidity determines whether or not the structure will be successful in facilitating growth.

It isn’t capital, natural resources or education, it is the opportunity for all of those things to be deployed and redeployed. Entrepreneurial activity.

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Today’s links: Washington tries to step up

 (cross posted at Risk and Return)

Ben Bernanke gives Congress and the President the green light to take steps to stimulate the economy along with a warning:

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ChrisB and the Federal Reserve

Chris asked what he thought the Federal Reserve could have done differently. I gave him an answer, but there was more to be said. My full answer is here. Scroll around, there is a lot more on the what could have been done, what might be done, and the general risks which now surround our economy.

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Bloomberg Busted

From the “Holier Than Thou” department comes this interesting photo taken by Larry Fink for Wired Magazine. (link to larger photo)

Cheez-It Bloomberg

What’s that he’s reaching for with his right hand? Why, it’s a Cheez-ItTM!

After gaining national media attention for spearheading an almost total ban on trans fats in city restaurants starting last July, Bloomberg was photographed in this month’s issue of Wired magazine munching on those very same dangerous fats…

The mayor’s food choice directly counters the guidance of his own Department of Health, which specifies on its Web site that “there is no safe level of artificial trans fat consumption.” The site also points out that trans fats are responsible for at least 500 deaths in the city every year from heart disease.

That should be cautious news for Bloomberg, who in 2000 had a pair of stents inserted in his coronary artery to remove a blockage. The mayor says he takes a baby aspirin daily to reduce the risk of heart attack.

Just so we’re clear. Mayor Bloomberg initiates a crusade against trans fats, for which “there is no safe level” according to his own administration, because apparently people are too stupid to make their own choices about what and what not to eat. Yet, he has no qualms about scarfing down a bag of Cheez-ItsTM (which do contain some trans fats [see also after jump]) despite the fact that Bloomberg has a history of heart problems. According to one of the people who encouraged and promoted Bloomberg’s ban on the noxious unction:

“Trans fats cause heart attacks,” said Julie Greenstein, deputy director of health promotion policy for the Center for Science in the Public Interest, a Washington, D.C., lobbying group that advocated the ban in the city. “Trans fats raise bad cholesterol and decrease good cholesterol.”

Greenstein said even small amounts of trans fats in the diet can add up and cause big problems over time.

“If someone is concerned about heart health, he should cut out trans fat completely,” she said.

And here’s Bloomberg in his own words:

“You’re getting an ingredient out that nobody is going to miss.” September 2006, regarding the ban on trans fats

“We’re not trying to take away anybody’s ability to go out and have the kind of food they want in the quantities they want, but we are trying to make that food safer. If we can do it without trans fats, you’ll save … a couple of hundred lives a year in New York City.” December 2006

Yet another example of “do as I say, not as I do” nannyism. If Bloomberg thinks he can make intelligent decisions about what and what not to eat, and taking risks with his health by eating junk food, even after having two stents placed in his heart, then he should grant that courtesy to everyone else.

It won’t happen though, because nanny-staters persistently tell themselves and anyone who will listen that their proscriptions are for the good of everyone. They proclaim with all sincerity that the “common good” requires their iron fist, and try to convince you that the velvet glove encasing it will ease the pain just fine. In reality, they simply think that those upon whom they place these restrictions are too stupid to think for themselves — in this case, that would be all of NYC — and that their benevolent intervention is necessary to protect such idiots from themselves.

But when it comes to their own lives, well that’s much more complicated you see. Nanny-staters need to drive SUV’s and fly on private jets. Wind farms despoil their landscapes, causing unnecessary disturbances in their relaxation time when they do their best planning to save humanity. And don’t even get me started on how devastating it would be for you comrades people if the nanny-staters can’t have their Cheez-Its!

“Comrades!” he cried. “You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organization of this farm depend on us. Day and night we are watching over your welfare. It is for your sake that we drink that milk and eat those apples.”

Squealer, Animal Farm Ch. 3


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Bad Santa

bad santas

Thaddeus Tremayne sees potential legal troubles for St. Nick in the UK:

A frosty reception awaits Santa Claus in Britain this year. It seems that the much-loved benefactor of children everywhere is, in fact, suspected of being guilty of a number of illegal practices.

The jolly fatman’s employment practices are demanding particular scrutiny:

The Equality Commission has also weighed in with concerns about Santa’s employment practices. His policy of only working with elves is clearly discriminatory and leaves him open to prosecutions by pixies, faeries and goblins who are not being considered for employment due to their race.

The Department of Work and Pensions is also investigating the work practices of Santa on the basis that, over the Christmas period, he demands that his elvish workforce work around the clock in order to meet the seasonal demand. This is a clear and unequivocal flouting of the EU Working Time Directive which limits the working week to 48 hours and could give rise to a further prosecution.

There’s more, so RTWT.

The War on Christmas continues unabated! [/mock horror]

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Germany Warned About Minimum Wage Laws

Jean-Claude Trichet, the president of the European Central Bank, called them a “brake on employment”:

The warning came after several competitors to Deutsche Post, the former state monopoly, announced redundancies and the cancellation of investments in response to Berlin’s decision to impose a minimum wage in the postal sector last week.

Minimum wages are shaping up as a priority policy area for the government next year as the parties of the coalition seek to woo voters ahead of important regional elections. Angela Merkel, chancellor, said these could be extended next year to services sectors ranging from gardening to “temping” agencies.

“Setting minimum wages at levels which are not in line with productivity reduces the employment chances of less skilled workers and of the unemployed,” Mr Trichet told a conference in Berlin.

I must admit that I’m a bit surprised (pleasantly so) to see this sort of sage advice coming from Europe. I will be even more surprised if the advice is heeded.

Cui bono? The Financial Times article noted the most likely beneficiary:

Economists said the decision to impose minimum pay of €8-€9.80 ($11.70-$14.40) per hour in the postal sector would shield Deutsche Post from competition when the letters market is opened on January 1. Competitors said this would add to the Post’s existing privileges, including its exemption from value-added tax.

Bert Rürup, chairman of the five “wisemen”, the group of academics who advise the government on economic policy, said “the postal minimum wage has achieved its real industrial goal, namely to preserve Deutsche Post’s monopoly”….

Earlier this week, TNT and Hermes Logistik, two other Post competitors, said they had cancelled plans to enter the private letters market from January 1, when it opens to competition.

Public choice theory at work.

The minimum wage laws in question here work basically like a collective bargaining agreement.

The government used existing legislation last week that allows it to declare any wage agreement covering more than 50 per cent of a sector’s employees as the legal minimum for this sector. The construction and cleaning sectors are already subject to such legislation.

Dispelling any illusions that Angela Merkel is the second coming of Thatcher, not only are these minimum wage proposals coming from the liberal faction of her coalition, she is helping push them into law:

The Social Democratic party, junior partner in Ms Merkel’s coalition, has been the main driving force behind the minimum wage offensive. It is now encouraging employers and employees in 10 services sectors to submit minimum wage requests to the government by March next year.

The move has been more controversial in Ms Merkel’s CDU. Prominent opponents, such as Günther Oettinger, state premier of Baden-Württemberg, criticised the measure at the party’s annual conference on Monday.

Yet Ms Merkel made it clear other sectors would follow postal services. “When other sectors request it and the conditions are fulfilled, we will consider (adding them to the list),” she told delegates. “There can be no fair competition without minimum standards.”

Yes, Frau Merkel, but with minimum wages come higher labor costs, and firms find it harder to compete. Moreover, you create a situation where it’s difficult to get hired as a new employee since businesses can just pay the more experienced workers a bit more to work harder and/or purchase new technology. Why pay $14.00 an hour for someone you have to train when you can throw an extra $10.00 an hour at someone who knows how to do the job and will work harder? Or better yet, buy a software program or automated device that does the job and doesn’t demand benefits, time off or anything else, and comes at a fixed cost? Essentially, minimum wages price low skilled workers out of the market and cost smaller businesses too much to be able to compete. Again, cui bono?

Since Deutsche Post employs over half of all postmen in Germany, competitors have accused it of seeking to rob other players of their cost advantage by having its pay deal with the Verdi services sector union adopted as legal minimum by the government.

Whichever competitor is left standing.

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Whither The Middle Class?

Hillary and Obama agree on taxing Americans more, they just can’t agree on whether it’s the “middle” or “upper” class that they’re prepared to squeeze for votes (HT: Paul Caron):

Class, always an awkward topic in the United States, made a rare cameo appearance [Ed. note: Rare? Apparently Joel Achenbach is new to politics?] at a recent candidates debate in Las Vegas. The two front-running Democratic presidential contenders, Sen. Barack Obama (Ill.) and Sen. Hillary Rodham Clinton (N.Y.), sparred over tax policy and quickly got entangled in the question of whether someone making more than $97,000 a year is middle class or upper class. That’s upper class, Obama said. Not necessarily, suggested Clinton.


The exchange between Obama and Clinton began when the senator from Illinois said he was open to adjusting the cap on wages subject to the payroll tax. That’s the tax that the government prefers to call a “contribution” to Social Security. Under current law, a worker pays a flat percentage (and employers match it) of wages up to $97,500. Wages beyond that aren’t taxed.

Clinton responded by saying that lifting the payroll tax would mean a trillion-dollar tax increase, adding that she did not want to “fix the problems of Social Security on the backs of middle-class families and seniors.”

Obama replied: “Understand that only 6 percent of Americans make more than $97,000 a year. So 6 percent is not the middle class. It is the upper class.”

This exchange is rather reminiscent of the the trolls arguing over what a Hobbit is, whether or not it’s worth eating, and exactly how one should be prepared.

What’s more interesting, however, is to compare the wrangling over whether someone making $97,000 is too rich to keep his earned income to the wrangling over how a family making up to $83,000* is too poor to pay for their own health insurance:

The Senate Finance Committee recently voted to reauthorize the program. The Senate bill would expand eligibility to children in families with incomes up to 300 percent of the federal poverty level, or $62,000 for a family of four. House Democrats would raise income limits even higher — to 400 percent of the poverty level ($83,000 for a family of four) — well above the median income.

By these metrics, nearly half of all families in America are too poor to live without government assistance, while the rest are too rich to live without paying for everyone else.

Sort of makes you long for a “Leave Me The Heck Alone” kind of candidate, doesn’t it?

* (more…)

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Time to praise something admirable in politics and media

It is not often that we hear people willing to face the wrongheaded aspects of a view they hold. Jack Shafer is no friend of Rupert Murdoch, but it is refreshing to hear him take apart some of the main arguments against him and his influence. Kudos to him for taking on the unthinking shibboleths of those who agree with him. At least here he understands, unlike many, that diversity, choice and tolerance isn’t about a particular set of outcomes or set of views being prevalent, but about, well, diversity, choice and tolerance. I am really sick of hearing people justify restricting free speech in the name of free speech, being intolerant of views in the name of tolerance, restricting the outcomes of free choice in the garb of freedom of choice, restricting some types of diversity to ensure some other (usually superficial) form of diversity.

Read the whole thing.

Hat tip: Instapundit.

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Housing and the Red State-Blue State Divide

A Tale of two Townhouses


Virginia Postrel makes a point I will be exploring in more detail over the next few months in her latest essay at The Atlantic, the reasons behind the vast disparities in housing prices in our country. More interestingly she notices something I hadn’t really considered, at least not in the way she does. The cultural and political impact on the country of the divide such a situation creates. That impact is surprising, but seems true. I can’t recommend it highly enough.


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Enough Already

A couple of days ago I linked to McQ and Mark Steyn on the state of knowledge about the “poor family” whose child was used by Senate Democrats in their push to expand the SCHIP program. Here is why:

  1. The media was taking their story and basically pushing the story verbatim, no questions asked, as a telling narrative.
  2. They already qualify for CHIP. Exactly how does that justify expanding CHIP to cover people even less deserving?
  3. The claims were inaccurate, insurance to cover most of what they needed does not cost 1200/mo. Not even close.
  4. They had other resources to help with insurance such as family who could seemingly have helped out. They want to run their own business, sometimes that requires some real sacrifice. I have been there. Family and other resources came before I would have turned to the government (and I wasn’t making even 45k a year, and yes I had 4 children.) Health insurance shouldn’t be at the top of things to sacrifice. Eventually however, you need to look for more income. If the business can’t provide it, look elsewhere, even if it means another job. I did.
  5. They live in a 3000 sq. foot home. While I understand they bought it much cheaper, it is now worth a good deal. Before people such as them reach into my pocket, sell the house. Buy a 1300 sq foot home in a less expensive area. That is what I did when I was a struggling young entrepreneur. Now with the equity you pocketed you have no mortgage and/or a lot of money to provide for health insurance while you work to make the business a go. I have never owned a 3000 sq. foot home. It would be prohibitively expensive. They don’t need to either, even with 4 children. I know, I had 4 children in a 1300 sq. foot home. That is more than the average size of a home in the forties and fifties when families were much larger.
  6. I assumed they probably had someone covering the tuition. It turns out the school has one child on scholarship, the state pays for the child with disabilities to the tune of 23k a year. Isn’t 38k in help from the rest of society enough?
  7. He has business property. Once again, I hear that it could be losing money, etc. So what? Sell it then.
  8. Finally, once again, none of this was checked!

So, there you go. Of course it is being made out that those of us who find the idea of middle class people who have to make difficult choices a less than compelling rationale for vastly expanding a program to even more advantaged people are attacking children. That we would like for our media to check it out and tell us what the full implications of the Frost family’s situation is are smearing them.

I felt the links I referenced showed reasonable objections to the narrative and the ridiculous case that families such as the Frosts show how important it is to expand SCHIP up the income stream. They may in fact be struggling, but they live a lifestyle that many would consider outside the realm of the “deserving” poor, or as deserving of pity. They are middle class people who need to prioritize.

Nor are most of the questions smears. I read at several sites about Michelle Malkin “stalking” them. I then read the piece and found it quite sympathetic to the Frosts while still questioning the use of their tale.

However, I have read some things which bother me. The Frosts are being lambasted, called names, described in the most unflattering terms by some. I am always amazed at the ability of people to act as if they know people who they know little about, and condemn them. I make all the notes above as an illustration as to why they do not justify the policy they are being used to promote. I would never claim that they need to do any of the things I list above. Those are my choices and possible solutions, they made others. It hardly justifies sneering contempt, or scathing denunciations. Just as businessman have a right to take all the deductions the law allows (a right they have probably exercised themselves) CHIP was available, they used it. We can say we wouldn’t have, or that the program is serving people who we think shouldn’t be covered. We can point out that if the program didn’t exist they could have purchased insurance.

It is no reason however for parents trying their best to provide for their family under the law to be subject to some of the more mean spirited denunciations of their character. I don’t know Halsey Frost. He may be a man who disagrees about what the purpose of government should be, but in all other respects he may be remarkable. Generous, kind, loving toward his children, active in his community. He may have an attachment to the house that makes the sacrifices of forgoing the money he could receive from it worthwhile. It is the home his children have always known, and that can mean a lot.

I may not believe that choice deserves having me subsidize it, especially since in similar circumstances; no, much more difficult financial circumstances; I chose not to go that route. However, I will not denigrate his character in general for choosing differently. It was legal for him to use the program (assuming that is true, and I will not convict him without proof.) I reserve my disdain for those using him and a media which refused to provide the proper context. We don’t know Mr. Frost, and have no business making claims about his character to make our point. I am sick of this kind of thing from liberals, conservatives and yes, even libertarians.

Enough already.

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News Brief, À Cause Des Garçons Edition

Cross-posted on The Conjecturer.

Defense & The War

  • Dear God. The USAF thinks it will win counterinsurgencies by copying the Viet Cong? These guys are almost as bad as the PMFs. In a must-read analysis, Abu Muqawama concludes, “This, America, is your uniformed military leadership. Be proud.” Oh I am.
  • “The reliable replacement warhead is a symptom.” Of what, you’ll have to read.
  • Interesting take on the leaky spook that led to Al Qaeda going dark.
  • The Instapundit unintentionally demonstrates that chaos is not a given as troops pull out of Iraq.

Around the World

  • For its first few post-Turkmenbashi months, Nathan and I were speculating about what kinds of reform Stomatologbashi might bring to Turkmenistan. There were opportunities for better internet access, more open borders, a better education system, maybe even loosened speech codes. Joshua Kucera went there, and heard some fascinatingly conflicting things about what that might shape up to be.
  • I’ve begun sponsoring small businesses through Kiva. You should too. I also wonder what exactly might be happening in Waziristan—a for real real battle, or another dog and pony show for the reporters? It’s way too early to say, and it’s damned frustrating it’s so dangerous for reporters.
  • Support Craig Murray in his battle against censorship at the hands of a wealthy thug.
  • Kazakhstan’s bid for the Chair of the OSCE, covered in some depth here and here, gets a slightly more insider treatment from Arseny sees something odd: for the first time, the request to postpone the chairmanship has come from Kazakhstan itself, instead of sanctimonious EU insiders. What could that mean? There are also some interesting questions about their national security strategy that are worth reading.
  • Ms. Boyd is back from Costa Rica, giving us the insider scoop on CAFTA. Welcome back!
  • Hahaha! German economists are complaining that chimpanzees behave according to economic models, but people don’t! Of course! That means people are wrong, not those models!
  • All those people who think China is to blame for Burma (including me) are wrong: it is really Thailand.
  • I’m sure this is the first time someone has slacked off at work to edit a Wiki fan page. EVER.
  • Péter Marton gazes into the information black hole of Pakistan’s FATA.

Back at Home

  • Is it possible to be principled and patriotic and still think we should lose a war? McQ doesn’t see how, but I suppose he’s never read Chesterton’s thoughts on patriotism. If your country is behaving immorally, it can be principled to wish for her defeat. Then again, I doubt the people wanting us to “lose” (and the way it’s defined there is awfully sloppy, and falls for the false victory/defeat choice people persist in thinking we face in Iraq) think as deeply about it.
  • The RIAA hates your CD burner and radio station. Seriously. Their successful, “treat the customer as a criminal” business model must be resulting in good profits, right? Right.
  • Everything about this story is shameful. State secrets be damned—this man was abducted off the street, tortured for months, then dumped on a hillside in Albania. By the CIA, or maybe one of its contractors. And SCOTUS refuses to hear his plea, we suspect because the Bush Administration proclaims it would reveal “state secrets.” Like our policy of kidnapping and torturing innocent people? Seriously, when did Bush become Brezhnev>?
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Left Wing Attacks on Right Wing Punditry

So, how low can they go?

An Air America producer just sent over some transcript from an interview their Richard Greene (not our Richard Greene) conducted with Elizabeth Edwards, in which she questioned Rush Limbaugh’s Vietnam exemption:

” My classmates went to Vietnam, he did not. He was 4F. He had a medical disability, the same medical disability that probably should have stopped him from spending a lifetime in a radio announcer’s chair; but it is true, isn’t it? If he has an inoperable position that allows him not to serve, presumably it should not allow him to sit for long periods of time the way he does. I think this is a serious enough offense for the people who fund him, who buy ads and allow him to be on the air, need to be asked if this is what they really stand for, do they think it is all right for someone who has never served to denigrate the men and women who have simply because they are expressing an opinion. Frankly, I thought that is what we are fighting for.”

I bet they can go lower. And it’s not just Rush either.

I do know one thing, the more they attack Rush, the more the right is going to gel together and fight the left. Which is a good thing, well, unless you’re a dyed in the wool leftist/liberal/democrat/progressive.

Meanwhile, Mike Pence (IN) is calling for action on a bill that would “prohibit the Federal Communications Commission (FCC) from setting rules and policies reinstating the so-called Fairness Doctrine.”

“If anyone ever doubted that there is enmity between Democrats and American talk radio, they need look no further than the personal attacks leveled on Rush Limbaugh on the floor of the Senate,” said Rep. Mike Pence (R-Ind.), the sponsor of legislation shielding broadcasters from government interference. “I thought it astonishing that members of the U.S. Senate would engage in repeated and distorted personal attacks on a private citizen. It gives evidence of a level of frustration with conservative talk radio that is very troubling to anyone who cherishes the medium.”

Pence, a former professional talk radio host, and Rep. Greg Walden (R-Ore.), a radio station owner, on Monday sent letters to House Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.) and Energy and Commerce Committee Chairman John Dingell (D-Mich.) demanding a vote on the Broadcaster Freedom Act.

In their letters, Pence and Walden cited broad support for their bill as well as a vote on an appropriations amendment earlier this year showing that many Democrats are wary of angering politically influential radio personalities such as Limbaugh. The Republican lawmakers gave Democratic leaders a deadline of the end of next week.


Yep, they can go lower… via Hot Air

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News Brief, Capture/release Edition

Repeated at The Conjecturer.

Defense & the War

  • P.W. Singer on how no one is really asking the right questions about Blackwater and PMCs in general. Contrary to other arguments, it is a question of legality and accountability, since even employees accused of and fired for committing crimes like murder have not been prosecuted for it. But it is more importantly a question of whether their role in the conflict is even proper. Seeing how badly they’ve undermined our goal of “winning over” the Iraqis and lied about the extend of their activities, I think it’s time we made the hard choice to not only establish firm ROE and strict and explicit legal consequences similar to what the regular military faces, but that we need to make a deliberate choice to wean ourselves off the private military industry—especially since it is becoming more and more clear that they were used in the first place not to defray cost but to avoid embarrassing political considerations.
  • Then there is the question of what sorts of contracts Blackwater has with the CIA.
  • Oh, and we can add famous neocon Max Boot as among those who think PMCs like Blackwater exist in legal limbo and need stricter oversight. He finds it “outrageous that almost no American contractors have been held criminally liable for conduct in Iraq or Afghanistan, but hundreds of soldiers have been court-martialed.” Strange so many people think PMCs, even those who are not morally opposed to their use, think they exist in a legal blackhole. We’re all wrong, I guess.
  • David Axe has more on how the Air Force might adapt to more properly fulfill a COIN war.
  • I’m torn on whether it is petty nationalism or legitimate concnern behind Bill Gertz’s piece on a Chinese military contractor snatching up 3Com. It could go either way—nefarious or just good economics. But national defense is one of the few areas where I think it’s okay to break with free market principles.

Around the World

  • Kim Jong-il “warmed” to Roh Moo Hyun during a summit. Whether it turns into anything interesting, or winds up like every other “Sunshine Policy”-era meeting remains to be seen.
  • Zimbabwe is “running out of wheat.” But Robert Mugabe is an anti-colonialist, so I guess that makes it okay to starve your country to death.
  • Back in April, Stephan Faris wrote an article for The Atlantic in which he argued that climate change, rather than official government action, was the primary driver of conflict in Darfur. It is a pattern sadly repeated throughout the Sahel, in which nomads compete with farmers for arable land as the Sahara advances. I think he needlessly downplayed the role of the Sudanese government, but environmental conditions can be a huge source of conflict. Enter the Tuareg and Hausa, who are actually collaborating to avoid desertification turn southern Niger into another Darfur. One of their methods—so-called “water traps”—sounds like something you’d see in Dune. Which I guess is the point. Might we not be too far away from stillsuits?
  • Abdullahi Yusuf Ahmed, the sort-of president of Somalia, is in trouble. It’s too much to summarize, but basically Somaliland—the de facto but not de jure independent region in the northwest of the country—is about to go to all out war with neighboring Puntland.
  • Volodiya Putin will continue to rule Russia as prime minister (though I’m not as certain he’ll falter when oil exports level off in a few years). Meanwhile, Gazprom is going cut Ukraine the frack off from its heating gas if it doesn’t pay up. This seems like as good a time as any to mention Yulia Timoshenko totally doesn’t like it but she’s still a tasty little piece of slavic political hottness (the extra t is for extra hotness). (Lance- Now Josh has done it. I have already explained to him that mentioning Yulia requires a photo. Links are not acceptable. Therefore he is being docked a weeks pay and I am inserting a photo.)
  • The Anonymous Lobbyist sinks her teeth into Burma, and I came out of it laughing, then crying.

Back at Home

  • Since when had soon to be former Wonkette editor Alex Pareene begun banging some dude’s wife? I love that this came out in the comments section of a story about how they let an unarmed robber filch $80 off them.
  • According to Sony BMG, ripping the music I own on CDs I purchased into my unshared iTunes library is stealing. This what I mean when I say the music industry, at least the major labels, need to fracking go out of business, at least if they’re going to treat their customer base as criminals.
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Cities of Men

I have not touched on the subject of the often hostile turn our culture has taken towards men, especially when it comes to their relationships with children. It is not that I don’t agree that that is a concern, in fact quite the opposite. I have in deeply personal ways been effected by this cultural distrust. I have had employment denied specifically because I was male and the position involved being around children, I have had to run a business involving children under the constant worry of accusations or potential client discomfort. Thus this short post at Instapundit hit home. Here is the quote from Slate:

My younger, 13-year-old sister is having a slumber party for her birthday, and invited three or so of her 13- to 14-year-old girlfriends to our house. Shortly after, “Sara’s” mother suggested that my sister’s party should be held at “Tammy’s” house. Why? Because Tammy has a single mother. Sara’s mother is concerned that my father will be in his house during the festivities. There is no reason to be concerned about my father doing anything inappropriate to any of the girls (all the parents have met each other), but she is just uncomfortable about the idea of her daughter sleeping in the same house with another nonfamily man. She has also convinced the other parents that a change of venue would be a good idea. Although Tammy’s mother is willing to host the event, my family is offended that the situation has come to this. Since when is it a crime to have a happy two-parent household?

Been there, done that. Dr. Helen has had numerous posts on the topic, with this post being particularly relevant and her request worth considering:

The psychological damage to children of not having men around to interact with because of these scare tactics is never mentioned but something that should be considered by the Virginia Department of Health when they develop such ads. Surely, they can come up with something creative that would help make people aware of sexual predators but would not demonize men in general, most of whom are innocent.

Yes we are. I suffer from a particularly damaging affliction. I love children. I also am a very “physical” person. I am affectionate. I hug, pick them up, kiss, the whole bit. Not to be immodest, but kids like me. Teenagers, middle schoolers, toddlers. They like me. I have been able to get by in life while refusing to have to refrain from being myself, for doing things that a woman is admired for, but from a man are looked at with suspicion. Those traits are part of what I believe made me effective in my former career. I was a male figure who was able to be confidently male, and yet had the courage and position to be empathetic and even affectionate. Still, I had to be careful. While I have a few incidents I could relate, and may yet at some future date, and the issue is not unrelated to my eventual decision to change my career, others have covered that ground fairly well.

What I do think is that some aspects of how we have gotten to this point are somewhat unacknowledged, or rarely remarked upon for they are not born of hostility to men or some other easily identified grievance, but from attempts, often misguided, to accomplish other goals. One is the way modern schooling divorces children from the wider world around them, a world of adults and most specifically men, in favor of a milieu dominated by hundreds of children their own age (and is one reason I chose to home school my own children, to expand their social experience.) It goes beyond schooling however into the entire way in which we make space for children in our society in general. Like many aspects of studying modern life one of the first to really note this was Jane Jacobs in her seminal work from 1961, The Death and Life of Great American Cities.

This work, one which every social reformer and policy maker should come to grips with, but few do except to use to justify what they want to do anyway, examines the particulars of city life and how the planning and social theories of the time were foundering upon the actual way that cities and their residents behave. One neglected observation appears on pages 83 and 84 of this great book:

Play on lively, diversified sidewalks differs from virtually all other daily incidental play offered American children today: It is play not conducted in a matriarchy.

Most city architectural designers and planners are men. Curiously, they design and plan to exclude men as part of normal daytime life wherever people live. In planning residential life, they aim at filling the presumed daily needs of impossibly vacuous housewives and preschool tots. They plan, in short, strictly for matriarchal societies.

The Ideal of a matriarchy inevitably accompanies all planning in which residences are isolated from other parts of life. It accompanies all planning for children in which their incidental play is set apart in its own preserves. Whatever adult society does accompany the daily life of children affected by such planning has to be a matriarchy…All housing projects are.

Men are not an abstraction. They are either around, in person, or they are not…men who are part of normal daily life, as opposed to men who put in an occasional playground appearance while they substitute for women or imitate the occupations of women.

The opportunity…of playing and growing up in a daily world composed of both men and women is possible and usual for children who play on lively, diversified city sidewalks. I cannot understand why this arrangement should be discouraged by planning and by zoning.

It is a shame that in all the discussion of this great work so little of it has been focused on this observation. Jacob’s was arguing against the tendency of reformers and planners to emphasize public spaces and parks, or in modern parlance, “green spaces” as opposed to the actual streets and homes in which children grew up. These public spaces, un-patrolled by people with any personal stake or ownership in the space were typically the most dangerous places in a city. Often denigrated, “the streets” were actually safer. Those streets were owned or supervised by the men who owned the establishments along them. By removing them, and their businesses, in favor of projects filled with parks and other commonly owned spaces amongst the residences, neighborhoods suffered from higher crime and removal of men from the lives of children.

Of course Jacobs’ work deals with cities, not suburbs or smaller towns. And Jacob’s missed emphasizing, as she should have, that it was the sense of ownership of the particular areas of the street which made such an arrangement work, not the mere presence of businesses. The breakdown in the sense that proprietors could say who and who could not occupy the spaces on those sidewalks rendered Jacobs’ observations less relevant. The point about our divorce from men as a regular part of children’s lives is important though. Field trips and mentoring cannot replace it. She describes in detail the shuffling off of children, in ways that are as applicable to suburbs today as they were then, to controlled activities. Scripted play, arts and crafts, athletics, libraries and assorted other activities developed top down to deal with youth that not only destroy much unscripted play, but are dominated by women and the values of women. Things which are more likely to appeal to boys, or involve being around men, are severely restricted. The kind of unscripted play, in the kind of places, which boys are likely to engage in are given the least room. Thus the popularity of The Dangerous Book for Boys. We all recognize this. What we don’t acknowledge is the loss from having the world of children so divorced from the world in which most men live, the world of work and business, in the first place.

I have no grand recommendation to make to fix this, such as reinstating apprenticeship or other traditional forms of workforce training, nor do I wish to encourage such social engineering. Many of the benefits of present arrangements should not be dismissed without thought. Yet the cordoning off of children has a cost, and as her point I put in bold above implicitly warned of, we have made men an abstraction, and it shouldn’t surprise us that it is a scary one.

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Urban Policy

I recently did an interview, about an hour and a half long, on the ongoing, and fruitful, efforts to revitalize downtown Baton Rouge. We discussed a wide variety of related topics to development; economics, regulatory barriers, the work of the great Jane Jacobs, new urbanism, smart growth, the arts, affordable housing, architecture and design, aesthetics and much more. Many readers of this blog will appreciate that the editor cut it down to a few paraphrases.

Unfortunately you may not be so lucky when I edit myself. More on this topic in coming weeks.

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Trying to find common cause on the size of the state

One of Matthew Yglesias’ salient virtues as a man of the left is that he is economically literate. I realize that his audience on the left would be much smaller if he spent more time on things like this, but it is exactly the kind of talk that the Democratic party, and the left more generally, needs to hear:

Doesn’t it seem like at least half the problem here is that you need a license to be an interior decorator? In general, the amount of seemingly unnecessary small business regulation on a state and local level is fairly mind-boggling and one suspects that 70 percent or so of it is totally unnecessary and only serves the interests of incumbent operators looking to throw roadblocks in the path of potential competition.

A credible campaign to actually do something about this, with the left seeing it as the price to pay for the regulation that is most important to them, and likely the most justifiable, would be a godsend. Instead, we get to hear any attempt to deregulate as wishing to destroy the environment, maiming workers, keeping the poor down and ripping off the public (and Matt is not innocent on that score either.)

Whatever  the percentage that is totally unnecessary, there is also a large number of licenses and other regulations that have costs which severely outweigh their benefits. Kevin Drum sees the problem with the corporate income tax. I suggest that with a few observations along those lines as actual political programs and many a libertarian could start voting more consistently with Democrats. Heck, a number of conservatives might start eying the party a little less warily. Unfortunately these occasional nods to areas we should be able to agree on are all we get, the actual policies and campaigns are all about the areas we have little agreement on, and these areas of potential agreement are treated as vicious fantasies of the right wing whatever Matt and Kevin think. See the comments. Most are relatively polite in their disagreement, if a Republican were making the point I am sure they wouldn’t be, but as we can see it is a non starter.

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The Ever Expanding Reach of the State

Radley nails this:

So I guess once you’re elected to Congress, you’re immune from drunk driving laws; you can stash the evidence that you’ve committed a crime in your office, because investigators aren’t allowed to search it; if you kill someone because you’ve got a lead foot and blew a stop sign, the taxpayers will cover your financial liability; and, we learn today, you can commit whatever Internet-related crimes you please, because the police aren’t allowed to search your computer.

Meanwhile, the same Congress that has immunized itself from much of the law is also responsible for the ever-expanding federal criminal code, which we can thank for our shamefully enormous and still-soaring prison population, which is by far and away the largest in the world.

You have lawmakers who feel they’re above the law. And who at the same time are criminalizing anything and everything they find tacky, repugnant, or immoral.

Forgive the lofty language, but you know what? This isn’t healthy for our republic.

If you didn’t get it, he thinks the first problem helps lead to the second. I concur and it is true at the state and local level as well. Thus we have problems such as these. Glenn Reynolds asks “what are we going to do about it?” On that score I am less than optimistic. As long as voters believe that growing the power of the state is justified we cannot reduce these men and womens power, and they will not meaningfully reduce their privileges.

As Matthew Yglesias has acknowledged, liberals firmly believe in expanding the power of the state for moral reasons, as do conservatives. That those moral ends lead to different policies does not change that they do see the state as the shaper of the particular (as opposed to general moral ends such as freedom or autonomy) moral outcomes they desire. To change that means changing that view. Few people are willing to do that, or reasonably restrict that impulse, even if they could do so in a bargain that others wouldn’t impose competing moral agendas. So liberals are unwilling to accept non violent sexual or racial discrimination even if it leads to a world where conservatives cannot pass laws forbidding certain sexual practices. Not to mention that in large areas they generally agree, such as on drug policy, whether illicit or for legal medications. If the larger entity of government does not satisfy most voters, it is not because of its size or reach, but the purposes that size and reach is put to which alienates them. Sadly, they will not sacrifice the reach they want to restrict the reach they don’t. Yglesias and Jonah Goldberg, reasonable and sharp liberals and conservatives, state that quite clearly in an exchange with Brink Lindsey at Cato Unbound. I think their point is sound. With such competing and often incoherent demands for the state we have little reason for great optimism.

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Regulation and disclosure often destroys information

From Robert Lawson:

I hopped on the Chipotle website the other day looking for nutritional information on my favorite meal (carnitas burrito, rice, black beans, mild, hot, and green salsa, lettuce). But thanks to the nanny state, THEY CAN’T TELL ME!.

Unfortunately, for the time being Chipotle can no longer publicly post calorie and nutritional information on our website, due to a regulation recently enacted by the New York City Department of Health. This regulation states that if a restaurant posts calorie information online, it must also post that information on the menu boards of its New York City Restaurants. Unfortunately, as written, this regulation would require us to post (using the same size type as is on the menu) the calorie information for every possible burrito, taco, and burrito bowl configuration. As you can imagine, there are thousands and thousands of possible combinations, making it impossible to post this information in our New York City restaurants.

This kind of thing happens in many places. Take the plight of customers at a brokerage house wanting information on an IPO. They call up the broker who offers to send them a prospectus. The prospectus is 256 pages long and the customer will not read the whole thing, and if he did it is so filled with legalese that he wouldn’t understand it or pull the relevant information from it anyway. That is also true for all but a tiny percentage of brokers or advisor’s who work with the public. The broker could highlight or in some other fashion point to the relevant information in the 256 pages. That though is illegal, they cannot put sticky notes or anything. The broker has a short summary of three or more pages which pulls all the most relevant information for the client to know so the broker can discuss it intelligently. These can be quite informative. Unfortunately the broker cannot give or even show this to the customer as they are only allowed to give them the actual prospectus, which the client will not read.

All of these restrictions have legitimate rationale’s designed to curb actual abuses.

So what is the upshot? The client basically is at the mercy of whatever the broker says, with no reasonable way to check it or whether the broker is representing the materials he has accurately. Each individual restriction discourages a real issue, but as a whole it leaves the customer with less useful information and more exposed to the manipulations of bad actors. It also leaves the broker who prefers to document all of the information he gives a client no way to do that which relies on anything but his word (such as contemporary notes.) Actually handing a client a short, bulleted document that can be referenced which contains his basis for discussion could protect him or her as well.

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