Damn Lies

My progressive friends, for the most part, are happy to point to graphs and tables which reveal that the reason for the huge deficits created in the last three years lies at the feet of the much hated George W. Bush, and before him, the Dark Lord, Ronald Reagan.

My conservative friends have, at their fingertips, equally compelling charts, trendlines, and datasets that lay the blame squarely on Barack Obama and his compliant side-kick, Congressional democrats, who wish to take more money out of the pockets of the earners and give it, in larger chunks, to the non-earners.

While the two sides fiddle, Rome burns.

It really doesn’t matter now who spent the money that our country doesn’t have anymore. We can blame the recession, which has reduced GDP to the point that the economy cannot pay for our future expenditures, or we can blame the tax cuts that reduced federal revenues during these perilous times. From this sofa, the situation is two sides of the same coin. That is, no matter how it is sliced, we tried to have it both ways. We wanted to drive that Cadillac without making the payments, and our buddies in Congress gave us the keys.

The only statistics that matter now are the ones that tell us that we cannot sustain this level of spending. The only question remaining is the point in time when the people we elected to give us anything we wanted finally realize that they cannot fulfill their promises. After that, the only question is whether our nation will have enough time, and the national will, to solve the problem.

Promises are going to have to be broken, either voluntarily, and in a controlled fashion, or involuntarily, with the subtlety of a dull knife. We cannot remain on this path.

Man-Made Chicanery

William Galston has put up a timely post at the New Republic website which absolutely nails the current debacle in Washington. If I may quote liberally from his post, which should be read in its entirety:

Raising the debt ceiling is a man-made crisis amenable to straightforward policy remedies. Political will is all that is lacking. Not so the economic crisis that our preoccupation with fiscal policy has temporarily obscured.

…The IMF recently conducted a comparative study of ten post-war economic recoveries seven quarters after the business cycle trough, or recession’s end. Its findings for the United States are stunning. For employment and household finances, the current recovery is the weakest since the end of World War Two. For the business and financial sectors, it’s the strongest. The banks, recipients of lavish public funds and guarantees during the meltdown, are reporting a rapid recovery from their lows in profits, loan charge-offs, and equity-to-asset ratios. Meanwhile, growth in employment, disposable personal income, personal savings and consumption, and total GDP all anguish. Needless to say, investment in structures—residential and non-residential—comes in dead last. Were it not for a strong performance in equipment, software, and exports, the current recovery would barely have a pulse. The IMF study does nothing to weaken the increasingly credible thesis that downturns induced by financial crises differ structurally from those in normal business cycles.

…At the same time that the business and financial sectors are becoming decoupled from employment and household balance sheets, gaps among different parts of our population are growing. A report just out from the Pew Research Center shows that while the median net worth of all U.S. households declined by 28 percent between 2005 and 2009, the figure was 53 percent for African Americans and 66 percent for Hispanics. And these percentages mask an even more troubling reality: The assets of black and Hispanic households have just about been wiped out.

…This painfully slow recovery is rending the fabric of American society. In turn, these growing socio-economic gaps are contributing to the rising polarization of our politics and declining trust in government—developments that will make it even more difficult to forge agreements on the policies we’ll need to get out of this deep hole. No doubt adverse trends in the global economy are making things even worse. But in the end, our economic crisis is a governance crisis. The stalemate over the debt ceiling is a symptom of this systemic fact.

Note well his words: our economic crisis is a governance crisis.

The ABC Dilemma of Health Reform

 

Today’s Wall Street Journal has two columns regarding the state of health care reform, here and here. The second link discusses health care ‘reforms’ in New York, and how the concepts of community rating and guaranteed issue, while noble in intent, distort the marketplace. Further distortions arise when states mandate fringe coverages that are neither necessary to a healthy life nor applicable to the majority of insureds. Add to the mix laws that prevent insurers from selling policies across state lines and it becomes clear that regulation stultifies the marketplace.

The first link is to an article so brief, and yet so profound, that one wonders why action has not been taken. That action has not been taken surely illustrates the yawning gap that separates those who wish to make their own decisions from those who wish to increase their reliance on the bounties of the government.

Since the WSJ now operates behind a pay wall, the first article is copied below. I hope Rupert doesn’t mind….

Normal
0

false
false
false

EN-US
X-NONE
X-NONE

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:””;
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:”Calibri”,”sans-serif”;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;}

The ABC Dilemma of Health Reform
 
By VERNON L. SMITH

There is widespread agreement with the principle that our health-care system needs to be reformed. But our representatives and our neighbors have much trouble in reaching agreement on the particulars. There have been many legislative bills offered and hundreds of amendments with no clear path to a resolution.

Health-care systems everywhere encounter cost overruns and rationing devices, like queues, in their diverse attempts to deliver products for which demand has long grown faster than other economic sectors. Why is it so difficult to find the private and public means, the combination of markets and government assistance, that enables a preferred outcome to emerge?

This question has a simple answer that plagues health care everywhere.

The health-care provider, A, is in the position of recommending to the patient, B, what B should buy from A. A third party—the insurance company or the government—is paying A for it.

This structure defines an incentive nightmare. You do not have to be an economist to realize that, when phrased in this way, nobody knows how to solve this problem. Hence the many experiments, all of which have been deemed less than satisfactory.

I don’t know whether this problem has a solution. If it does, I think it requires us to find mechanisms whereby third-party payment is made to the patient, B, who in turn pays A, supplemented with any co-payment from B for services. Hence, from the moment B seeks services from A both know who is going to be paying A for what is delivered. A and B each has need for what the other brings to the table, and this structure carries the potential for nurturing the relationship between A and B. B is empowered to become better informed about the services recommended by various A’s that he might choose among, and the A’s might find it particularly important to build good reputations with B’s.

—Mr. Smith, the 2002 Nobel Laureate in economics, is professor at Chapman University.

 

 

 

Two Pages In The Wall Street Journal

Two pages in today’s Wall Street Journal encapsulate, for this observer, the dilemma our politicians face as federal spending spins out of control. 

Page A4:

Jobless Rate is Key to Fate of Democrats in 2010

…But one item may prove key: the national unemployment rate, which hit a 26-year high last month at 9.8%

…President Obama and the Democrats are all the more exposed on the jobs front because they touted the $787 billion economic-stimulus bill as a way to curb job losses.

 

It has been noted that the real unemployment rate in this country is currently 17%. Given the horror of that statistic, and the implications of long-term unemployment that crosses all demographic lines, one would think that getting people back to work immediately would be paramount.

Another article:

Arizona Sheriff’s Powers Cut

The Obama administration is curbing the powers of an Arizona sheriff who has led one of the most contentious fights against illegal immigrants.

Under an agreement involving local enforcement of federal immigration laws, Shefirr Joe Arpaio’s deputies will no longer have the authority to arrest suspected illegal immigrants in the streets in the course of their duty.

Unlike other participating in the program, Mr. Arpaio will be restricted to determining the immigration status of inmates booked into Maricopa county jails.

…Homeland Security Secretary Janet Napolitano ordered a comprehensive review of the 287g program shortly after taking office.

So the Feds are arbitrarily defining police powers in local jurisdictions. Hhhmmmmm

Page A5

Violent Deaths Shock Chicago Into Action

…Derrion Alberts, 16 years old, was beaten to death seven blocks from his school last month. A recording of the attack was posted online and widely viewed.

…Between September, 2008, and September, 2009, 398 Chicago students were shot…

…In response to the violence, Chief Executive Officer of Chicago Public Schools…announce a safety and security strategy that will target nearly 10,000 high-school students identified as at risk of becoming shooting victims. The project will connect some of them with mentors and part-time jobs in hopes of keeping the teens off the streets. The $30 million annual cost will be paid for by federal stimulus grants.

Stimulus grants for shovel ready projects? For infrastructure? Already committed, just not spent? Sounds like there is a pool of money sitting in a secret vault in Washington where certain social goals can be funded, regardless of their stimulatory (or not) effects.

FAA Stimulus Recipients Got Low Priority Ratings

More than $270 million in stimulus grants awarded by the Federal Aviation Administration have gone to projects that scored below the agency’s own threshold for weeding-out low-priority proposals…

The FAA typically steers grants to projects scoring above 41 on a scale from 1 to 100. For stimulus grants, the FAA raised the threshold to 62.

See above. This stinks, to me, of earmarks. Yet again, our elected officials cannot resist the urge to plunder our national wealth to reward their parochial minions.

From this man’s perspective, we have not learned from the lessons of the economic collapse.

Santayana was right…

 

Using the Constitution When It Suits

It’s safe to say that Jim Clyburn is not very happy with Governor Sanford and those that support the governor’s position on the stimulus funds. In fact, sometimes, it sounds like Mr. Clyburn is pretty damn mad that he cannot reach down into his carefully drawn district and make things happen the way he would like for them to happen. In that respect, to be fair, he’s not really much different from most of the elected-for-life politicians that inhabit Washington. Sometimes, it seems that personal relationships are more important that principal principle. And sometimes, politicians get a bit confused on which principles they stand on.

Here’s Rep. Clyburn, discussing the governor’s position, as quoted in a post from the Palmetto Scoop:

Whether or not you agree with Gov. Mark Sanford’s staunch opposition to accepting $700 million in federal stimulus money, this one thing is for certain: It has a lot of people on both sides of the issue angry.

Congressman James Clyburn — who has a propensity to “Hulk out” — was chief among those who has recently expressed outrage. Clyburn’s anger stemmed from the belief that Sanford’s rejecting the stimulus funds would result in up to 4,000 public school teachers losing their jobs.

Only, Clyburn’s directed the bulk of his rage at Attorney General Henry McMaster and Sen. Lindsey Graham.

Over the last several weeks and without even going to court—the proper venue to determine constitutionality of federal laws—[McMaster, Sanford and Graham] have gone out of their way to ensure that South Carolina continues its long history of providing a minimally adequate education,” Clyburn said, referring to measures by McMaster and Graham to clarify who, exactly, controls the discretionary money.

Got that? The federal courts are the proper place to determine the constitutionality of federal laws. Very reasonable position, in my humble opinion.

But then there is the issue of the legislation proposing statehood for the District of Columbia.  Rep. Clyburn has long been a supporter of statehood for the District despite the fact that the constituionality (there’s that word again) of the legislation is extremely doubtful. The Justice Department, over the past 40 years and several presidents, has cautioned that the proposed legislation will not pass muster in the courts. No matter. Observe in this report from PowerLine the willful disregard of the Constituion:

The Washington Post reported this morning that Attorney General Holder has rejected the legal opinion of the Department’s Office of Legal Counsel (OLC) that the D.C. voting rights bill pending in Congress is unconstitutional. As Ed Whelan explains, the new OLC–led by deputies selected and appointed by the Obama Administration–reached the same conclusion that the OLC has since the early 1960s (according to Ed), namely that the bill is unconstitutional.

Unhappy with that answer, Holder turned to the Solicitor General’s office to ask whether it "could defend the legislation if it were challenged after its enactment." Holder wasn’t asking the SG’s office whether the bill was constitutional, but rather whether a non-frivolous argument could be made in defense of its constitutionality. The SG’s office said one could be made.

But Holder is sworn to uphold the Constitution. One might have hoped that he would interpret this duty to mean taking positions consistent with office charged with making that determination for the Department (the OLC), an office that he testified "has probably the best lawyers in the Department." Alternatively, one might have hoped that, if Holder rejected the view of that office, he would do so based on sound advice that the bill in question is constitutional. Instead, as noted, he reversed the OLC based only on advice that a contrary view of the Constitution is not frivolous.

A lawyer representing an ordinary client is free, and may in some cases be obligated, to take weak but non-frivolous legal positions to promote a client’s interests. But the United States is not an ordinary client. And the Department of Justice should be what its name says, not the Department of Promoting the Political Goals of the President. As Andy McCarthy puts it, " the Justice Department is supposed to take the most legally sound position, not any position preferred by the president that may pass the laugh-test."

One does not expect to hear Rep. Clyburn demand, in the context of DC statehood, and with the words he used so powerfully when attacking Gov. Sanford and the state Attorney General, to wit: "… without even going to court—the proper venue to determine constitutionality of federal laws…" that the Congress of the United States follow the law of the land when acting in pursuit of their political goals.

Sadly, the pursuit of power trumps principle every time……

 

Why the Democrats are in Trouble

 

Recently my fellow blogger Xark put up a post that passed along a purported comment on a righty blog. I tried to alert him of my suspicion that he had plucked some low-hanging fruit that likely was meant as bait for the progressive elements.

So, in the spirit of sharing political stupidity, please consider the following:

CWCID: My Hunting Spot

Hope and Change We Can’t Believe In

From an question by Jake Tapper of ABC News:

TAPPER:  Secretary Vilsack a few moments ago spoke about saving $18 million in savings by modernizing financial systems, $400,000 by canceling a consulting contract.  And he spoke very movingly about everybody’s tightening their belts in this nation, therefore, the government needs to do so.  You probably know where I’m heading with this. The president is going to sign a bill — the spending bill — which contains $8 billion in earmarks.  Democrats in the Senate are now calling for the president, if not make an effort to have it stripped in the Senate, to veto the bill. Evan Bayh has an op-ed in the Wall Street Journal today. I don’t fully understand this argument that this is — we’re moving forward.  This bill hasn’t even come to the president’s desk yet. If you guys are really serious, why not take the bull by the horns and get this stuff out of the omnibus spending bill?

GIBBS:  Let me try again.  What we’ve talked about before, this is the culmination of the legislative business from the previous fiscal year and the previous Congress. The president is greatly concerned, and I think that shows in the efforts that he’s taken to illuminate through transparency and accountability wasteful spending and earmarks in legislation.  That’s why he put his on the Internet.  That’s why he hasn’t asked for any in the past few years.  And the president believes that we can work with Congress to reduce wasteful spending in the future.

TAPPER: But why not now?

GIBBS:  Well, we are…

TAPPER:  I guess — you make it sound as if the legislation is written and it’s just waiting for him to sign, and it’s not.  It’s being worked on right now on Capitol Hill.  It’s in the progress of being assembled.  So it’s not that he comes to office and this is outstanding business.

GIBBS:  Well — well, it is outstanding business in the sense that typically appropriations bills are done before half the fiscal year is over.

TAPPER:  Right.  But it’s not too late to, like, tell Harry Reid:  If you send this to me…… with this $18 billion — this $8 billion…

GIBBS:  I think, as I said before, that the president will lay out some very clear objectives on how we move forward.  There will be, over the course of the next several years, dozens and dozens of appropriations bills that cross his desk.  And we’ll change the rules going forward, understanding that we have to deal with last year’s business.

Can someone explain to me why the Obama administration is not doing what he promised to do? With his sky-high approval ratings, can’t he see that the public wants him to follow through on his promise and is willing to support him in effecting his campaign pledge to make a clean break with business as usual in Washington?

Or is he more afraid of Steny Hoyer, Nancy Pelosi, or willing to be stared down by Harry Reid?

Or is it more of the tired old "Obama Lied" ….

Change We Can Believe In…

 

Evan Bayh, D-Indiana writing in today’s Wall Street Journal, makes the following points:

This week, the United States Senate will vote on a spending package to fund the federal government for the remainder of this fiscal year. The Omnibus Appropriations Act of 2009 is a sprawling, $410 billion compilation of nine spending measures that lacks the slightest hint of austerity from the federal government or the recipients of its largess.

The Senate should reject this bill. If we do not, President Barack Obama should veto it.

The omnibus increases discretionary spending by 8% over last fiscal year’s levels, dwarfing the rate of inflation across a broad swath of issues including agriculture, financial services, foreign relations, energy and water programs, and legislative branch operations. Such increases might be appropriate for a nation flush with cash or unconcerned with fiscal prudence, but America is neither.

Drafted last year, the bill did not pass due to Congress’s long-standing budgetary dysfunction and the frustrating delays it yields in our appropriations work. Since then, economic and fiscal circumstances have changed dramatically, which is why the Senate should go back to the drawing board. The economic downturn requires new policies, not more of the same.

This is quite a different response from the words of Rahm Emanuel, who dismissively observed on national television:

"That’s last year’s business".

Proving, I guess, that Emanuel bows to the gods of politics instead of the gods of common sense, the long view, national self-interest, or even the god of preservation.

If this story is any indication, maybe the enormity of the economic problems is beginning to sink into some reaches of the democratic party. From the San Francisco Gate, buried in a story about the effect of earmarks on the local scene, is this brief paragraph:

Some Democrats are beginning to call for more reform to make sure that earmarks aren’t used to reward friends or campaign contributors.

Rep. Jackie Speier, D-Hillsborough, joined 19 other mostly conservative House Democrats to vote against the spending bill last week because of her concerns. She did not request any projects in the bill, but agreed to carry over requests made by her predecessor, San Mateo Rep. Tom Lantos, who died in February 2008.

"For all the talk of reform, Congress continues to pass spending bills loaded with earmarks without enough time to fully examine where the money is going," she said after the vote.

Speier is now trying a novel experiment: She’s put together a citizen’s oversight panel to recommend projects for federal funding, chaired by Stanford law professor Lawrence Lessig, a critic of earmarks, and including local elected, business and labor leaders. If the model works, she may offer legislation to expand it nationally.

"I love it," Keith Ashdown, a spokesman for Taxpayers for Common Sense, said of Speier’s plan. "I want to see more details, but it means lawmakers are not chasing dollars because their campaign contributors are interested in (an earmark.) It’s all transparent. It’s a great idea."

What Speier is proposing is certainly a move in the right direction, i.e., an open process, with input from the citizenry, that removes the odor of venality from the current process. But, in a larger sense, her suggestions are nothing more than an attempt to make a silk purse from a sow’s ear.

Objectively, I understand the concept of earmarks. Wikipedia provides more detail:

Congressional earmarks are often defined loosely as anonymously authored guarantees of federal funds to particular recipients in appropriations-related documents.

The federal Office of Management and Budget defines earmarks as funds provided by Congress for projects or programs where the congressional direction (in bill or report language) circumvents Executive Branch merit-based or competitive allocation processes, or specifies the location or recipient, or otherwise curtails the ability of the Executive Branch to manage critical aspects of the funds allocation process. (emph. mine)

Attempts have been made to define earmarks in ethics and budget reform legislation. However, due to the controversial nature of earmarks and the effects these definitions would have on Congressional power, none of these has been widely accepted.

Despite the lack of a consensus definition, the one used most widely was developed by the Congressional Research Service, the public policy research arm of the U.S. Congress:

"Provisions associated with legislation (appropriations or general legislation) that specify certain congressional spending priorities or in revenue bills that apply to a very limited number of individuals or entities. Earmarks may appear in either the legislative text or report language (committee reports accompanying reported bills and joint explanatory statement accompanying a conference report)."[2]

In the United States legislative appropriations process, Congress is required, by the limits specified under Article I, Section 9 of the United States Constitution, to pass legislation directing all appropriations of money drawn from the U.S. Treasury. This provides Congress with the power to earmark funds it appropriates to be spent on specific named projects. The earmarking process has become a regular part of the process of allocating funds within the Federal government.

Earmarking differs from the broader appropriations process, defined in the Constitution, in which Congress grants a yearly lump sum of money to a Federal agency. These monies are allocated by the agency according to its legal authority and internal budgeting process. With an earmark, Congress has given itself the ability to direct a specified amount of money from an agency’s budget to be spent on a particular project, without the Members of the Congress having to identify themselves or the project. (emph. mine)

A history of earmarks informs that the process suborns the intent of the Constitution, that it is a recent development, and its growth in terms of spendig and absolute numbers has been exponential over the last 40 years. Sourcewatch provides perspective:

While many lawmakers, including Senate Minority Leader Harry Reid (D-Nev.), have proclaimed that earmarking has been common since the founding of America, recent research has indicated otherwise.

The idea of directing federal money to specific local projects originally came from Rep. John Calhoun (D-S.C.) when he proposed the Bonus Bill of 1817 to construct highways linking the East and South of the United States to its Western frontier. At the time, these projects were referred to as "internal improvements." Calhoun wanted to use the earnings bonus from the Second Bank of the United States specifically for this program, arguing that the General Welfare and Post Roads clauses of the US Constitution called for it. President James Madison vetoed the bill as unconstitutional. He explained his reasoning in the following message:

Such a view of the Constitution would have the effect of giving to Congress a general power of legislation instead of the defined and limited one hitherto understood to belong to them, the terms ‘common defense and general welfare’ embracing every object and act within the purview of a legislative trust. (emph. mine)

Taxpayers for Common Sense, an independent watchdog organization, has argued that widespread earmarking is a relatively new phenomenon in American politics. The organization cites the evolution of earmarks since the 1970s. The 1970 Defense Appropriations Bill had a dozen earmarks; the 1980 bill had 62; and by 2005, the defense bill included 2,671. Among the earmarks in the 2005 bill was money to eradicate brown tree snakes in Guam. [2]

Similar increases are seen in the history of the Transportation Appropriations Bill. When President Dwight Eisenhower proposed the first national highway bill in the 1950s, there were two projects singled out for specific funding. In August 2005, when Congress passed a six year, $286.4 billion Transportation Bill, there were 6,371 earmarks, ranging from $200,000 for a deer avoidance system in Weedsport, New York to $3 million for dust control mitigation on Arkansas’ rural roads. [3]

In all, there were roughly 15,000 congressional earmarks in 2005 at a total cost of $47 billion

There is a lot of fingerpointing in Washington, and a lot of blame placing. Disregard for the moment the immaturity of that behavior, and focus on the notion that the body politic of this country has, from both sides of the aisle, gorged themselves at the trough of the national treasury. And we, the citizens, have happily grabbed our own small piece of the pie with quiet satisfaction.

Having supported our elected officials through this process over the last forty years, how can we expect the current crop of appropriators to act any differently?

Friends, it is time for real change that has to come from the ballot box.

Bush-Hilter Yields to the Obama Nation

The Obama Revolution has wasted little time taking control of the state organs. Hilary watches as her promised perch on the world stage is reduced by a succession of “Special Envoys” who take their instructions from a committee of factotums working deep in the bowels of the OEOB. Never mind that they didn’t need Congressional approval (or vetting by the IRS). And being Secretary of the Treasury doesn’t mean much when there’s a posse of equally important financiers whispering in the ear of The One in his office while What’s-His-Name can’t get an appointment. And so it goes, drip by drip, in the corridors of power.

It now appears that the lust for absolute power in Washington was not just the goal of the fascist Bush and his frog-marching sidekick Cheney. Now it is clear that no right(ahem) thinking politician would go through the Augean Stables of running for the Presidency, raising $750 Million ($20 at a pop, we’re told), appearing before adoring crowds around the world, just to kick the can of Big Decisions down the road to Congress, the people’s building. Now we understand that our community organizer and US Senator (for 4 years) means what he says: That he represents a new and better way, that he will change the way Washington operates, that he will fix our country. Remember, folks, he won.

Now we understand. Bi-parisanship means appointing Republicans of a certain tilt to a Cabinet that exists to employ the loyal, not to operate as a Federal agency. Power is not to be shared lightly nor control allowed to pass beyond the reach of the Central Office.

So Judd Gregg, erstwhile Republican, becomes the latest politician to relinquish the reins of power that are Constitutionally his to protect. In return for his appointment as Secretary of Commerce, he will cede control of the Census Count to those unnamed factotums in the bowels of the White House and the OEOB. Who will, in due course, assign the task of conducting our National Census to their long-time ally, ACORN. You remember ACORN…they of the voter fraud cases in many states, the dead men, the fake names, all for the purpose of ensuring the election of the Democrat candidate in whichever Congressional/Presidential election.

What’s wrong with this picture?

H/T Samizdata

And Michael Barone adds his thoughts.