Topic: Government and Politics

Bloomberg’s Banana Republic

Michael Bloomberg has decided to run for an additional term as mayor of New York. He will do so despite a law limiting mayors to two terms in New York.

Here’s some history. The voters twice endorsed the term limits law in 1993 and 1996. In 1993, the law passed by a margin of 59 percent to 41 percent. In 1996, the City Council tried to change the law to extend term from 8 to 12 years. The initiative making that change lost.

Of course, elected officials predicted disaster. Some agreed then but not now. John Mollenkopf, a well-known political scientist at the City University of New York said: “My initial reaction to the term limits was negative, but the experience of how they have worked has changed my mind. On balance, I think this feature of government does create openings for fresh thinking and new leadership.”

Bloomberg does not plan to put the change in term limits before the voters. Instead, he will try to get the City Council to extend his term. A New York Times survey of City Council members in early September found that a majority might support changing the term limits law. Perhaps that’s not surprising: two thirds of the City Council will be turned out of office in 2009 under the current law. If the mayor’s term can be extended, it will be easier to change the law for City Council members.

New Yorkers are not rolling over for Bloomberg. Gene Russianoff, a spokesman for the New York Public Interest Research Group, said of Bloomberg’s power grab: “Sadly, the move is worthy of ‘democracy’ in a banana republic.” Susan Lerner, executive director of Common Cause/NY, called the mayor’s stance “profoundly undemocratic and deeply disquieting.” Even Establishment types are opposing him, according to the New York Times.

Before his ambition got the best of him, Bloomberg himself “called for the need for restraints on elected leaders, dismissed the notion that anyone is indispensable, and once called an effort to revise the limits ‘disgusting.’”

Let’s see if New Yorkers agree with the mayor.

Treasury Can Only Spend $50 Billion Per Month

So why give them $700 billion?

Representative Spencer Bachus (R-AL) is before the House Rules Committee arguing that the Treasury Department can’t even use all of the $700 billion that the bailout legislation would authorize. Congress can allow Treasury some of the money, take a look later at a couple of months of the program, and see how well it’s being used.

His colleagues are beating him up for it, but it makes simple sense. The right answer is not to bail out Wall Street at all - and for heaven’s sake do away with the government-sponsored enterprises that got us here - but a compromiser would let the program run for a few months, with the new Congress in January taking a look at how it’s working.

George Will Is on a Roll

Another great column from George Will today, on the House’s “vote against rashness.” With a conservative’s sense of history, he traces some of the policy choices that brought us to today’s crisis:

Suppose that in 1979 the government had not engineered the first bailout of Chrysler (it, Ford and GM are about to get $25 billion in subsidized loans). Might there have been a more sober approach to risk throughout corporate America?

Suppose there had never been implicit government backing of Fannie Mae and Freddie Mac. Better yet, suppose those two had never existed – there was homeownership before them, just not at a level that the government thought proper. Absent Fannie and Freddie – absent government manipulation of the housing market – would there have developed the excessive diversion of capital into the housing stock?

But really, if you haven’t been reading George Will this year–on the problems with both Obama and McCain, on the automobile bailout, on local government fiscal crises–go here. And to read what he says about his new book, go here (pdf)

Cynical Senate Vote

The Senate is scheduled to vote tonight on the Wall Street bailout package, which now includes a provision to relieve taxpayers of a scheduled $60 billion or so jump in annual alternative minimum tax payments.

House Majority Leader Steny Hoyer noted, “there’s no doubt in my mind that the Senate added this [AMT provision] because they thought that’s the only way they could get it passed.”

Thus, despite the outpouring of public opposition to the bailout, Congress is determined to rig the vote and grab the people’s money anyway it can. The Senate is essentially saying to the public: “We won’t impose a $60 billion tax hike on you next year if you let us bailout Wall Street. And don’t worry about the $700 billion, we’ll just tack that on to the $5 trillion in public debt that your children and grandchildren already owe.”

There are too many insider experts and economists driving this debate, and too little recognition inside the Beltway about the basic injustice of a bailout. As many callers to the talk shows are saying, the government wants to take $700 billion from average hard-working families who followed the rules and give it to people who made bad, irresponsible, and even disastrous decisions.

Many economists are saying: “Well, I’m usually against intervention and subsides, but this case is special.” But that’s what they always say. The hunt for supposed “market failures” is a full-time pursuit for many modern economists, and it’s mainly nonsense. Back in January the administration and many top-flight economists created a similar crisis atmosophere, inducing Congress to pass the ridiculous “stimulus” bill. What did that achieve other that putting us $150 billion further into debt?

Subsidies Beget Subsidies

Sorry, this blog has nothing to do with the Wall Street mess, despite the title.

Instead, consider this tiny story in the WaPo that reveals the general inanity of our subsidized nation. The article, “Federal Grant to Provide Help To Low-Income Students” reports on a $1 million federal grant to the state of Virginia. 

Will the grant money be used to buy books for poor kids, or to help pay their tuition? Nope. It will go to hire bureaucrats to train kids on how to grab more education subsidies: “The agency plans … to help educate students about college, with a sizable focus on how to obtain financial aid.”

For more about the follies of federal granting, see Federal Aid to the States.

Statism 101

Kentucky Governor Steve Beshear is trying to seize some online casinos.   Unlike casinos that are on the land, online casinos are difficult for the government to tax.  According to Mr. Beshear,  if the tax collectors can’t get their paws on a business, then that business is a “leech” on the community.  This type of thinking comes from Statism 101 and will require reading works not listed on the syllabus.  Go here and here (pdf).