Archives: October, 2010

Signs of Rebellion

There have been a lot of claims about racist signs at tea parties over the past 18 months. And clearly there have been some. I used to go to antiwar rallies, and they would have people carrying giant 10-foot banners for various communist parties, which the media would politely ignore.

Emily Ekins, a graduate student in political science who has been interning at the Cato Institute, wondered just how many such signs there might be. So, as the Washington Post reports, she decided to find out:

A new analysis of political signs displayed at a tea party rally in Washington last month reveals that the vast majority of activists expressed narrow concerns about the government’s economic and spending policies and steered clear of the racially charged anti-Obama messages that have helped define some media coverage of such events.

Emily Ekins, a graduate student at UCLA, conducted the survey at the 9/12 Taxpayer March on Washington last month by scouring the crowd, row by row and hour by hour, and taking a picture of every sign she passed.

Ekins photographed about 250 signs, and more than half of those she saw reflected a “limited government ethos,” she found – touching on such topics as the role of government, liberty, taxes, spending, deficit and concern about socialism. Examples ranged from the simple message “$top the $pending” scrawled in black-marker block letters to more elaborate drawings of bar charts, stop signs and one poster with the slogan “Socialism is Legal Theft” and a stick-figure socialist pointing a gun at the head of a taxpayer.

There were uglier messages, too – including “Obama Bin Lyin’ - Impeach Now” and “Somewhere in Kenya a Village is Missing its Idiot.” But Ekins’s analysis showed that only about a quarter of all signs reflected direct anger with Obama. Only 5 percent of the total mentioned the president’s race or religion, and slightly more than 1 percent questioned his American citizenship.

Ekins’s conclusion is not that the racially charged messages are unimportant but that media coverage of tea party rallies over the past year have focused so heavily on the more controversial signs that it has contributed to the perception that such content dominates the tea party movement more than it actually does.

See the Post article for a slide show of some of the signs Emily photographed.

Why Won’t This Pig Fly? I’ve Tried Everything …

It’s fascinating to read Progressives as they think through a difficult policy problem. Kevin Drum writes (at Mother Jones!) that we can’t improve education or mitigate poverty:

“I continue to think that the biggest problem here is simply that no one has any really compelling answers… You can go down the list of every ed reform ever touted, and they either can’t scale up, turn out to have ambiguous results when proper studies are done, or simply wash out over time…

So is the answer to address concentrated poverty? Sure. Except that, if anything, attempts to address poverty have a worse track record than attempts to improve education.

I would really, really like someone to tell me I’m wrong. So far, though, no one has. At least, not to my satisfaction. But I’m willing to be schooled if anyone thinks I’m missing the big picture here.”

Wow, Progressives really are depressed this year. Ezra Klein, mostly agrees, Matt Yglesias and Kevin Carey seem more optimistic. But I doubt any of them have compelling answers for Drum’s concerns.

So Kevin, Ezra, I’m here to tell you … you’re wrong. Let me rephrase that. You are right that all your Progressive solutions to these problems are perpetual and necessary failures. But there is a solution.

We know what improves education, allows success to scale quickly, and saves money as well; a real market in education, aka private school choice, the freer and broader the better. The education problem is intractable only if the government continues to monopolize education services.

As I noted just the other day in response to Rhee’s resignation, the government school system is unreformable.

Meanwhile, the evidence is consistent and clear that private school choice, markets in education, work. And private school choice even helps the kids who remain in government schools. Ah, and it saves a lot of money.

I really can’t say it any better than Andrew Coulson, our director here at CEF, slightly edited; “Given that quality and productivity in every other sector of human activity have been maximized through the operation of minimally regulated markets, and that the same pattern can be seen in the field of education, it seems to me that we should emphasize the need to ensure the broadest possible access to the freest possible education marketplace.”

I can feel it … Drum and company are just this close to being mugged by reality.

Glory-of-Government Religiosity Finds Bailout Skeptics “Willfully Stupid”

When you believe in things that you don’t understand,
Then you suffer,
Superstition ain’t the way

- Stevie Wonder

David Ignatius is entitled to this opinion:

We have just lived through one of the more notable successes of government intervention in modern times – the auto and bank rescues that almost surely saved the country from another Great Depression.

But if his intention is to convince skeptics—and not just to rally the deflated spirits of those who came to Washington with high hopes of teaching Americans how to love their government—he does a lousy job.  A bold assertion like his requires supporting evidence more rigorous than hearsay, superstition, and the opinions of his friend, and former “Car Czar,”  Steven Rattner.

Ignatius considers the bailouts successful because GM is still in business and the banking sector didn’t collapse.  According to Ignatius (often channeling Rattner):

Private companies made bad decisions that put the U.S. economy at risk; government made good (if politically unpopular) decisions to keep these mismanaged companies afloat, fearing that a collapse would mean much worse trouble…Private actors made bad decisions, but public officials generally made good ones…Washington is such an easy target that we forget the real villains of this story are the bankers and auto executives who steered their companies toward disaster.

Well.

Where is the credible evidence that without the interventions we were headed for another Great Depression?  Where is support for the argument that it’s smart to keep “mismanaged companies afloat”?  Where are the convincing facts (not the figures produced by the Big Three’s PR machine in November 2008) that the auto industry would have shed 2 to 3 million jobs had the government not intervened to save GM and Chrysler on the administration’s terms?  Where are the soothing facts that the incentives to avoid failure in the banking and auto sectors have not been weakened by the interventions?  Where is the compelling defense against the charge that government policies that subsidized chosen firms in the mortgage industry created the incentives for risk-taking—that Ignatius pegs as the root cause of the problem—in the first place?

Apparently, Ignatius doesn’t swell with desire for limited constitutional government. He writes, “It’s one thing to denounce government when it fails to achieve its goals.  But to ignore government’s achievements in times of crisis is willfully stupid.”

It’s clear that Ignatius column is more of an ideologically-driven rant doubling as a pitch for Rattner’s new book about the heroic role of the Auto Task Force in saving the auto industry.   As I wrote a few months ago in response to Rattner’s chest-puffing:

Rattner’s verdict rests on the singular consideration that “a year after the government-sponsored bankruptcies of GM and Chrysler, both patients are alive and progressing well toward recovery.” But that’s like hailing the stable medical condition of a drunk driver after an accident, while ignoring the injuries to the family in the vehicle he struck.

The impact of the auto intervention on its victims doesn’t factor into Rattner’s analysis.

Rattner’s claim of auto “rescue” success is the product of a straw-man set-up. The most compelling objections to the bailout were not rooted in the belief that the government couldn’t use its assumed power to help GM and Chrysler.  On the contrary, the most compelling objections were over concerns that the government would do just that.  It is the consequences of that intervention—the undermining of the rule of law, the confiscations, the politically-driven decisions, and the distortion of market signals—that animated the most serious objections.

Thus, any verdict on the outcome of the auto industry intervention must take into account, among other things, the billions of dollars in property confiscated from the auto companies’ debt-holders; the higher risk premium built into U.S. corporate debt, as a result; the costs of denying Ford and the other more successful auto producers the spoils of competition (including additional market share and access to the resources misallocated at GM and Chrysler); the costs of rewarding irresponsible actors, like the United Autoworkers union, by insulating them from the outcomes of what should have been an apolitical bankruptcy proceeding; the effects of GM’s nationalization on production, investment, and public policy decisions; the diminution of U.S. moral authority to counsel foreign governments against market interventions that can adversely affect U.S. businesses competing abroad, and; the corrosive impact on America’s institutions of the illegal diversion of TARP funds under two presidential administrations.

It is willfully deceptive to direct the public’s attention away from these less discernible, but very consquential costs of the bailout.

White House Right to Oppose Moratorium

With the recent discovery of “robo-signers” and other paperwork problems in the mortgage foreclosure process, several prominent congressional Democrats have called for a national moratorium on mortgage foreclosures.  At least one large lender has already started to implement one.  A moratorium, however, would be irresponsible and harmful. And the White House is correct to oppose it.

Whatever mistakes might have been made by lenders do not change the basic fact: most foreclosures are happening because the borrower is not paying the mortgage.  I recently talked to one large lender who said of their delinquent mortgages that over a fourth have not made a payment in over two years.  How exactly is someone who has been getting two years of free rent a victim?

Of course, in the small number of cases where a real mistake has been made and a foreclosure is moving forward against a borrower who is current on their mortgage, the courts have the ability to stop that from proceeding.  In judicial foreclosure states the easiest solution to this problem is for the judge to ask the borrower, “When was the last payment you made?”  If it has been awhile, say over six months, then the foreclosure should proceed, and proceed quickly.

Its been four years since the housing market peaked.  Government policy has continued to delay the needed correction in our housing market.  A moratorium on foreclosures only puts off a turnaround in the housing market.  And if we ever expect or hope to see private capital come back into the mortgage market, then government needs to stop threatening to steal away that capital once it’s invested.  The current efforts by states to use technical mistakes by lenders to allow borrowers to remain in homes without paying could ultimately undermine the very concept of a mortgage: that it is a loan secured by property.  Instead, we risk seeing mortgages turned into another form of unsecured lending, which would raise interest rates for everyone.

Earmarkers Work to Penalize Earmark Opponents

Political gamesmanship has never seen a clearer illustration than in this CQ Politics article, “Locals Split on DeMint’s Earmark War.”

South Carolina Republican senator Jim DeMint opposes earmarks. Fellow South Carolina Republican Lindsey Graham supports earmarks and regularly requests them. (See a list of all 136 of his earmark requests for FY 2010 here.) 

Senator Graham’s request for a $400,000 earmark for the Port of Charleston hasn’t been awarded—perhaps because of DeMint’s opposition to earmarks.

Refusing to go along has a price. And in the article it’s a Republican operative who sinks the first shiv, suggesting that DeMint’s failure to earmark hurts South Carolina.

“What you’re hearing [in the state] is: the ideology of the tea party and catering to that movement will come at the expense of jobs in South Carolina,” said Chris Drummond, a South Carolina GOP strategist who formerly worked for Gov. Mark Sanford.

(Think a Republican wouldn’t criticize another Republican? Think again.)

The tax money used for earmarking is paid into the federal kitty by South Carolinians, of course. Getting some of the taxes they pay returned to the state is not the benefit it appears. If their money were left with them in the first place, they would spend it as they see fit, benefitting South Carolinians and their state much more than politically directed spending.

Next, Senate appropriation subcommittee chairman Byron Dorgan (D-ND) exploits the tension among members of his opposite party, clinical analysis masking his glee: “ ‘In cases where you have a state where one asks for an earmark, the other opposes all earmarks, that makes it a more difficult project to fund,’ he said.”

Then comes payback time. Senator Robert Bennett (R-UT) was ousted during the primary by a Tea Party/DeMint-favored candidate, so:

The office of subcommittee ranking member Robert F. Bennett (R-Utah) also told the Greenville News that the port was denied funding in part because “there was no request at all from Sen. DeMint.”

The article recites a number of other viewpoints on earmarking and earmarks in South Carolina, but the highlight is the parade of assailants on DeMint. Politics ain’t patty-cake, and earmark politics are no exception.

Great Job if You Can Get It

The British Telegraph reports that 250 Members of the European Parliament, along with 80 assistants and 70 bureaucrats who work for the center-right European People’s Party in the European Parliament, took a “three-day study break” at the holiday resort on the Portuguese island of Madeira. The taxpayer will pay $500,000 for the trip that included a stay in five-star hotels. The formal program included “a debate on controversial plans by the MEPs to increase the EU budget for 2011.”

The Primary Purpose of McCain-Feingold Revealed

Kenneth Vogel offers an unexpected insight into the nature of campaign finance regulation:

“[Wisconsin Senator Russell] Feingold faces an uphill battle against a novice opponent, who, perhaps ironically, has been the beneficiary of hundreds of thousands of dollars in ads attacking Feingold that would have been prohibited had McCain-Feingold remained intact.”

In other words, if Feingold’s campaign finance law had not proven to be contrary to the U.S. Constitution, he might well not be facing “an uphill battle” to serve a fourth term in Washington. The political speech that is causing Feingold problems would have been prohibited in that situation. But the First Amendment favors speech and not the re-election needs of senators.

Oddly, Vogel writes as if the freed political speech (“ads attacking Feingold”) is a bug rather than a feature of current law.