Tag: special interests

Obama Proposes Further Delay on Fannie & Freddie

President Obama seems to be slowly waking up to the fact that the American public has grown tired of the endless bailout of Fannie Mae and Freddie Mac.  The public has also rejected the talking point that Fannie and Freddie were simply victims of a 100 year storm in the housing market.  So what’s Obama’s response?  To ask for public comment and have public forums.

This strategy is clearly one of delaying and avoiding any reform of Fannie and Freddie while pretending to care about the issue.  Where was the public comment and forums on the Volcker rule?  Seemingly the standard is that fixing the real causes of the financial crisis should be delayed and debated while efforts like the Dodd bill, which do nothing to avoid future financial crises, should be rushed without debate or comment.

Even more disingenious is couching reform of Fannie and Freddie under the rubic of “fixing mortgage finance”.  This is no more than an attempt to take the focus away from Fannie and Freddie and shift it to “abusive lending” and other non-causes of the crisis.

This isn’t rocket science.  The role of Fannie and Freddie in the financial crisis is well understood.  The only thing missing is the willingness of Obama and Congress to stand up to the special interests and protect the taxpayer against future bailouts.

Open All of Obama’s Health Care Meetings to C-SPAN

From my op-ed in The Daily Caller:

ObamaCare would dramatically expand government control over health care.

Each new power ObamaCare creates would be targeted by special interests looking for special favors, and held for ransom by politicians seeking a slice of the pie.

ObamaCare would guarantee that crucial decisions affecting your medical care would be made by the same people, through the same process that created the Cornhusker Kickback, for as far as the eye can see.

When ObamaCare supporters, like Kaiser Family Foundation president Drew Altman, claim that “voters are rejecting the process more than the substance” of the legislation, they’re missing the point.

When government grows, corruption grows.  When voters reject these corrupt side deals, they are rejecting the substance of ObamaCare.

If Obama is serious about fighting corruption, he should invite C-SPAN to into every meeting he holds with members of Congress.

Then we’ll see whether he’s lobbying House members based on the Senate bill’s merits, or promising House members judgeships or ambassadorships in exchange for their votes.

What’s going on behind those closed doors, anyway?  Aren’t you just a little bit curious?

Or does corruption only happen when Billy Tauzin is in the room?

Don’t Fear the Foreigner

You might have heard that the Citizens United decision will allow foreign corporations to become involved in American campaigns. You might have heard that from the President, in fact, whose speech decrying the decision said foreign corporations “may now get into the act” of pursuing their “special interests” in American politics.

Not true. Justice Kennedy explicitly says the Court did not decide whether Congress has the power to prevent “foreign individuals or associations from influencing our Nation’s political process.” Nothing in Citizens United prevents Congress from prohibiting such political spending by foreign corporations. The Supreme Court might uphold such a law or it might strike it down. The upholding or the striking down of such a law was left for another day. (Other parts of existing laws would also probably preclude foreign nationals or corporations from getting involved in American elections, as Brad Smith argues).

I don’t think I like the new populist Obama as much as I did the old rationalist Obama. The old Obama would have read a Supreme Court opinion before talking publicly about it.

Neither Standards Nor Shame Can Do the Job

Washington Post education columnist Jay Mathews has done it again: lifted my hopes up just to drop them right back down.

In November, you might recall, Mathews called for the elimination of the office of U.S. Secretary of Education. There just isn’t evidence that the Ed Sec has done much good, he wrote.

My reaction to that, of course: “Right on!”

Only sentences later, however, Mathews went on to declare that we should keep the U.S. Department of Education.

Huh?

Today, Mathews is calling for the eradication of something else that has done little demonstrable good – and has likely been a big loss – for American education: the No Child Left Behind Act. Mathews thinks that the law has run its course, and laments that under NCLB state tests – which are crucial to  standards-and-accountability-based reforms – “started soft and have gotten softer.”

The reason for this ever-squishier trend, of course, is that under NCLB states and schools are judged by test results, leading state politicians and educrats to do all they can to make good results as easy to get as possible. And no, that has not meant educating kids better – it’s meant making the tests easier to pass.

Unfortunately, despite again seeing its major failures, Mathews still can’t let go of federal education involvement. After calling for NCLB’s end, he declares that we instead need a national, federal test to judge how all states and schools are doing.

To his credit, Mathews does not propose that the feds write in-depth standards in multiple subjects, and he explicitly states that Washington should not be in the business of punishing or rewarding schools for test performance.

“Let’s let the states decide what do to with struggling schools,” he writes.

What’s especially important about this is that when there’s no money attached to test performance there’s little reason for teachers unions, administrators associations, and myriad other education interests to expend political capital gaming the tests, a major problem under NCLB.

But here’s the thing: While Mathews’ approach would do less harm than NCLB, it wouldn’t do much good. Mathews suggests that just having the feds “shame” states with bad national scores would force improvement, but we’ve seen public schools repeatedly shrug off massive ignominy since at least the 1983 publication of A Nation at Risk. As long as they keep getting their money, they couldn’t care much less.

So neither tough standards nor shaming have led to much improvement. Why?

As I’ve laid out before, it’s a simple matter of incentives.

With punitive accountability, the special interests that would be held to high standards have strong motivation – and usually the power – to demand dumbed-down tests, lowered minimum scores, or many other accountability dodges.  The result: Little or no improvement.

What if there are no serious ramifications?

Then the system gets its money no matter what and again there is little or no improvement.

It’s damned if you do, damned if you don’t!

So what are reformers to do? One thing: Take government – which will almost always be dominated by the people it employs – out of the accountability equation completely. Give parents control of education funds and make educators earn their pay by having to attract and satisfy customers.

Unfortunately, that still seems to be too great a leap for Jay Mathews. But one of these days, I’m certain, he’ll go all the way!

The Consequences of Regulation

The city of Alexandria, Virginia, passed a law in 2005 to require that each cab respond to two dispatch calls every day. WAMU reports on the results:

Says [driver Chaudhry] Ahmed, “If they’re going to do this kind of stuff, then for sure we’ll be out of business and standing in line at the unemployment office.”

Alexandria created the rule back in 2005 to prevent taxi drivers from spending all their time picking up fares at hotels and the airport. Since that time, one company has closed because it couldn’t meet the requirement and another has been put on probation. But Transportation Chief Bob Garback says the city doesn’t want to shut anybody down: “Our objective is just to make sure that we have reasonable taxi service here. Shutting companies down doesn’t really serve that purpose.”

Alexandria didn’t want to shut companies down. Someone just had an idea and decided to codify it, without much thought as to where cab drivers actually find passengers, how much it costs to respond to dispatches, and so on.

No doubt most regulators and legislators don’t want to shut companies down. But special interests and activists and irate citizens press their ideas, and policymakers respond. It always seems like a good idea at the time: guarantee every worker a minimum wage, put a cap on rising rents, or make sure that banks lend money to borrowers who can’t really afford a house. And then when low-skilled workers become too expensive to hire, or builders decide they can’t make a profit on new apartment houses, or millions of mortgage holders are unable to make their payments – well, “Our objective was just to do something reasonable. We never intended to screw up the workings of the market and cause firm closings, unemployment, apartment shortages, or a wave of defaults.” But that’s the result of throwing a monkey wrench into the economy.