Tag: legislation

More on Justin Amash

I wrote yesterday about a candidate for the House of Representatives who offered an interesting and critical look at his experience as a state legislator in Michigan. This candidate, Justin Amash, both reads the bills he votes on and posts explanations for his votes on his Facebook page. Here are two of his explanations:

Justin Amash just voted no on HBs 6038 and 6226, which impose stiff penalties and prison sentences on individuals who possess or use two synthetic drugs: one that mimics the effects of ecstasy and another that mimics the effects of marijuana. I have never possessed or used illicit drugs, nor should anyone. But this legislation is more about sensationalism than actual public protection. HB 6038 passed 105-1. HB 6226 passed 104-1.

Justin Amash just voted no on HR 294, which “recognize[s] the perfect game pitched by Armando Galarraga of the Detroit Tigers on June 2, 2010, against the Cleveland Indians.” Congrats to Mr. Galarraga for his outstanding performance and achievement, but I’m not the commissioner of Major League Baseball, and this resolution is not an appropriate legislative matter. It passed 101-5.

If he keeps this up, I may stop being cynical about politics which would be a problem because I don’t know any other way to be, having living in DC for 18 years. But I’m willing to give it a try.

You can have a look at his other explanations for his votes here. (Make sure you go down to the older posts on his wall to get his explanations).

Short-Sighted Rules for Affordable Housing

The state of Maryland wants more people to have affordable housing – at least if they’ve already got it. Concerned that the owners of mobile home parks might sell the land for other uses, “affordable housing advocates” succesfully lobbied Maryland legislators this year for

legislation that, they say, discourages owners of mobile-home parks from selling their properties. If the landowner does sell, it provides the homeowner with some protection.

Under the law, which was passed earlier this year, a mobile-home park owner who wants to sell and change land use must give written notification to the residents and provide displaced homeowners with a relocation plan and relocation assistance that equals 10 months’ worth of rent. The legislation applies to mobile parks with more than 38 sites.

Now the first thing to be said about this is that it is theft. That’s become so common in legislatures that we’ve become accustomed to it. But we shouldn’t lose sight of what happened here: Some people spent their own money to buy land. They rented that land to people with mobile homes, who knew that they were not buying the land, they were just renting a place to park their mobile homes. (The word “mobile” might be a tipoff that they’re made to move.) And then the government took away the owner’s right to change the use of his land. The owner could still sell it, of course, as long as he gives written notification of his plans, provides the renters with a “relocation plan,” and pays them 10 months’ rent to leave his land. That’s a huge burden; the government has simply appropriated much of the value of the owner’s land.

But there’s an obvious long-term consequence here, too, one that the Washington Post didn’t get to in its 1000-word story. What’s going to occur to a landowner as she reads this story? She’s going to think, if I allow anyone to park a mobile home on my property, I’ll be permanently harnessed to that tenant, like a medieval serf. So maybe I’d better not rent any space to a mobile home owner. But then she’s going to think a bit further: What about other kinds of affordable housing? If I build inexpensive apartments or bungalows, and rent them to people who need affordable housing, will the state of Maryland decide that I shouldn’t be allowed to change the use of the land or sell it? After all, wealthy Montgomery County, Maryland – which doesn’t have many mobile homes – does have a 20-page handbook of rules and restrictions for any owner who might want to convert an apartment building to condominiums, including the county’s right to buy the land and a guarantee of lifetime tenancies for low-income elderly tenants. William Tucker pointed out in a 1997 Cato paper how rent control laws usually had to be followed by condo conversion restrictions, as building owners tried to find some way to make a profit on their buildings. And then of course the whole series of attempts to “protect” affordable housing leads to housing shortages and sky-high rents.

If you want people to supply affordable housing, it’s probably a good idea not to pile taxes, restrictions, and threats of confiscation on the backs of those who do.

Three Steps to Comprehensive Immigration Reform

Congress can and should pass comprehensive immigration reform in 2010. Any legislation worthy of the name would:

1) offer legalization to undocumented workers who have been here for several years, pass a security check, and pay a reasonable fine and back taxes;

2) create a temporary-visa program sufficient to meet future labor needs of a growing economy; and

3) enforce the law against those who still insist on working outside the system, but in a way that does not restrict the freedom of American citizens.

Reform would reduce illegal immigration by offering a legal alternative. It would tighten border security by allowing U.S. agents to focus on intercepting real criminals and terrorists, not dishwashers and gardeners. And it would expand output, investment, and job opportunities for middle-class Americans. Polls show a majority of Americans will accept the three-fold approach to reform. Recent elections confirm that support for reform is a modest plus with swing voters, and a huge plus with Hispanics.

This is an issue where both major parties can work together to fix our immigration system in a way that boosts the economy, enhances security, and expands liberty.

For more, see Cato’s research on immigration.

SEC vs. Goldman Sachs: Legislation by Demonization

The Obama administration thinks it has discovered the perfect formula to cram legislation through in a hurry:  Demonize some prominent firm within an industry you plan to redesign, and then pass a law that has nothing to do with the accusation against the demonized firm.  They did this with health insurance and now they’re trying it with finance.

With health insurance, the demon was Anthem Blue Cross Blue Shield of California, which Obama accused of raising premiums by “anywhere from 35 to 39 percent.” Why didn’t some curious reporter interview a single person who actually paid 39% more, or quote from a letter announcing such an increase?  Because it didn’t happen.  Insurance premiums are regulated by the states, and California wouldn’t approve such a boost.  Yet the media’s uncritical outrage over that 39% rumor helped to enact an intrusive, redistributive health bill that has nothing to do with health insurance premiums (which remain regulated by the states).

Today, the new demon de jour is Goldman Sachs, a handy scapegoat to promote hasty financial rejiggering schemes  The SEC’s suspiciously-timed civil suit against Goldman looks as flimsy as the last month’s health insurance story.  It also looks unlikely to win in court.

As Washington Post columnist Sebastian Mallaby explains, “This is a non-scandal. The securities in question, so-called synthetic collateralized debt obligations, cannot exist unless somebody is betting that they will lose value.”  In such a zero-sum contest, big investors who went long knew perfectly well that other investors had to be taking the other side of the bet.  Goldman lost $90 million by betting this CDO would go up; John Paulson went short.

Columnists have moralized about the unfairness of the short investor (Paulson) negotiating the terms of this deal with a long investor, ACA Management, which had the last word. This too, notes Mallaby, “is another non-scandal.  An investor who wants to bet against a bundle of mortgages is entitled to suggest what should go into the bundle. The buyer is equally entitled to make counter-suggestions.  As the SEC’s complaint states clearly, the lead buyer in this deal, a boutique called ACA that specialized in mortgage securities, did precisely that.”

Like the earlier fuming about Anthem California, this new SEC publicity stunt is likewise irrelevant to the pending legislation.  Congress hopes to get standardized derivatives traded on an exchange. But synthetic collateralized debt obligations dealing with a customized bundle of securities could not possibly be traded on an exchange, and would therefore be untouched by reform.

Losses sustained by a few financial speculators on one exotic derivative had nothing to do with starting a global recession in December 2007 or the related financial crisis of September 2008. The core of the latter crisis was mortgage-backed securities per se, yet Goldman was only the 12th largest private MBS issuer in 2007.  Fannie Mae and Freddie Mac were and are the biggest risk; any reform that excludes them is a fraud.

The SEC’s dubious civil suit against Goldman is a wasteful diversion at best. It has nothing to do with the Obama administration’s suicidal impulse to impose more tough regulations and taxes on banks to encourage them to lend more.

[Cross-posted at NRO’s The Corner]

Media Coverage of the Health Care Overhaul

Over the course of the health care debate, the media often reported and editorialized – and sometimes it was impossible to tell the difference – quite favorably on the Democratic proposals running through Congress. While some upheld their journalistic responsibility to scrutinize and offer objective analysis of the legislation, many did not.

It was not surprising to read stories almost daily about how Obamacare would lift millions of poor, elderly, sick, and generally down-trodden Americans out of financial and medical crisis, and even go so far as to singlehandedly save the lives of hundreds of thousands of Americans over the course of the next decade. (It would even provide one free turkey for Thanksgiving to every family living 400 percent below the poverty level.)

This morning, however, the headlines read something like this:

  • Lawmakers, Staff May Lose Coverage” (New York Times): Adds the Times, “The confusion raises the inevitable question: If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?”

My question is this: where were these reporters before the passage of the health care bill?

On ObamaCare, Don’t Put Your Faith in the Courts

Now that the Obama health plan is law, more than a dozen states are asserting that Congress has exceeded its Commerce Clause power in imposing a mandate on individuals to purchase health insurance from private companies. No doubt, individual citizens will challenge the individual mandate on their own behalf.

States are also asserting that the threat to withhold all Medicaid payments if the states do not set up health insurance exchanges and enact other regulations amounts to coercion and unconstitutional commandeering of states by the federal government.

No one who opposes ObamaCare should put their faith in the Supreme Court to strike down an act of Congress, no matter how unprecedented and unconstitutional it may be. Nor should those who support ObamaCare be confident that the Supreme Court will uphold these provisions.

Legal challenges cannot take the place of political action. The Court hates to strike down popular legislation, but if the legislation is unpopular, one or both houses of Congress have changed parties and only a filibuster or presidential veto is preventing repeal, then the Court may feel more comfortable upholding the Constitution.

Thursday Links

  • Now that the health care bill is law, you should know exactly how it’s going to affect you, your premiums, and your coverage over the next few years. Here’s a helpful breakdown.
  • As the health care overhaul crosses home plate, global warming legislation steps up to bat.
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