Topic: Government and Politics

No Vacancies on the Supreme Court, but a New “Tenth Justice”

The selection of Harvard Law School Dean Elana Kagan to be the next solicitor general (and the first woman nominated for a position known as the “Tenth Justice”) is not at all surprising.  While President-elect Obama is under great pressure to nominate more women for cabinet and judicial positions, in Kagan and former Stanford Law School Dean Kathleen Sullivan he had two highly credentialed candidates who would have been front-runners regardless of their gender.  Two things we know about Kagan is that she is very smart – even before the Supreme Court clerkship and record of scholarship, she won a Sachs Scholarship, sometimes called a “Princeton Rhodes” – and has done a fabulous job as dean (including poaching star professors from law schools across the country).  While the White House and Attorney General will, of course, be setting the administration’s legal policy, we can expect Kagan to defend those policy positions ferociously and expertly.  Whether those efforts will coincide with a defense of the individual liberty and limited government encapsulated in the Constitution remains to be seen.

Obama Wants 600,000 More Bureaucrats

In his weekly radio address, President-Elect Obama regurgitated some typical nonsese about how everyone “across the political spectrum” agrees that the burden of government spending should increase and that this somehow will “stimulate” the economy (for an explanation of why this is nonsense, see here). Perhaps the most disturbing aspect of his radio address, though, is that he says he wants to create three million new jobs, eighty percent of them in the private sector. I’m no math genius, but 20 percent of three million works out to be 600,000 new bureaucrats to harass the American people. This is hope and change?

Economists from across the political spectrum agree that if we don’t act swiftly and boldly, we could see a much deeper economic downturn that could lead to double digit unemployment and the American Dream slipping further and further out of reach. …we can’t just fall into the old Washington habit of throwing money at the problem. We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan—which is to create three million new jobs, more than eighty percent of them in the private sector.

TARP

The Bush administration has blown through the first $350 billion of your money that Congress authorized it to spend under the Troubled Asset Relief Fund. Treasury Secretary Henry Paulson is now asking for the second $350 billion.

Will Congress approve the second $350 billion of TARP money? I have no special skill at political speculation, but since a reporter asked, here are five reasons I think that it won’t, thankfully.

  1. It is not clear that the first $350 billion of TARP money has aided the economy at all. I suspect that all the recent Treasury micromanagement through TARP has destabilized the economy and delayed the recovery, not helped it. But certainly TARP supporters cannot claim any big success
  2. Congress and the general public are unhappy with the lack of transparency and poor oversight of TARP spending. President-elect Obama campaigned on creating a more transparent government. TARP spending does not fit into that Obama vision.
  3. Democrats don’t like TARP anymore. Democrats are unhappy that TARP money has bailed out Wall Street and not Main Street, to use their nomenclature. They are resisting further bailouts of financial firms.
  4. Republicans don’t like TARP anymore. Republicans in Congress are unhappy that the Treasury bailed out the auto firms with TARP money after they explictly opposed an auto bailout. They don’t want to give the new Democratic administration a similar open-ended opportunity to spend.
  5. The U.S. economy will recover from the current recession, and the Obama administration will want to take credit for it. Renewing TARP will muddy the waters for that credit-taking. For Obama, it is politically important that he “do something” in his first few months to the economy so that when the recovery comes he can claim success. TARP is a Bush thing, Obama needs something fresh and new.

What Obama should do is a pass a large corporate tax rate cut, which would spur long-run growth. Alas, Obama appears to be an old-fashioned Keynesian, and his credit-taking vehicle is shaping up to be a gigantic “stimulus” spending plan. I think that’s crackpot, as I touched on here, and will address in future blog posts.

The Bluegrass Porker

The following howler from Sen. Mitch McConnell (R-KY) in today’s Wall Street Journal is worth calling out:

Senate Minority Leader Mitch McConnell (R., Ky.) in a statement Monday supported the idea of using federal spending to boost the economy. But he warned that the price tag, which could approach $800 billion over two years, shouldn’t become an excuse for funding undeserving projects. “We should have a simple test: Will the yet-unwritten, reportedly trillion-dollar spending bill really create jobs and grow the economy – or will it simply create more government spending, more bureaucrats and deeper deficits?” Mr. McConnell said.

Didn’t the Republican Senator from Kentucky, along with his Republican congressional colleagues and Republican president, oversee the largest federal spending binge in decades?

If history is any guide, it’s a good bet that Sen. McConnell thinks “creating jobs” means funneling taxpayer pork to the state of Kentucky. Back in October, when he was struggling for reelection, the Washington Post reported that “McConnell boasts of the projects he has brought to Kentucky – a total of $500 million for the state last year, he said last week. He lists every project he has brought to every town he visits, and argues that Lunsford couldn’t do the same.”

Apparently it’s perfectly acceptable to “create more government spending, more bureaucrats and deeper deficits” when Sen. McConnell and his party are running the show.

(For a list of Sen. McConnell’s recent pork grabbing, which totals $195 million, check out the Citizens Against Government Waste’s 2008 Pig Book by clicking here and selecting his name from the pull-down menu.)

I’m Changing My Name to Bank Holding Company

It was a Merry Christmas for GMAC, which learned on Christmas Eve that the Federal Reserve had approved its application to become a bank holding company. That gives GMAC “access to new sources of funding, including a potential infusion of taxpayer dollars from the Treasury Department and loans from the Fed itself,” as the Washington Post explains. Of course, that’s on top of the $13 billion that General Motors itself has been granted as a short-term bailout until a bigger bailout can be arranged. 

GMAC isn’t the only company that has suddenly become a “bank holding company” in order to cash in on the $700 billion financial bailout. Late one night in November, American Express was granted the same privilege. Not to mention Morgan Stanley, Goldman Sachs, CIT…

Maybe it’s time for a new version of Tom Paxton’s classic song “I’m Changing My Name to Chrysler,” sung here by Arlo Guthrie: “When they hand a million grand out, I’ll be standing with my hand out.” Of course, there’s already been a new version, “I’m Changing My Name to Fannie Mae,” sung here by Arlo and here by Paxton. Besides the name of the company, they had to make a few other changes in the lyrics, like “When they hand a trillion grand out, I’ll be standing with my hand out.”

So take it away, Tom and Arlo: I’m Changing My Name to Bank Holding Company.

Great Moments in Local Government

This story probably has a deeper meaning for those concerned about a hyper-sensitive society. It also probably raises the hackles of those trying to protect 2nd Amendment rights. But my immediate reaction was that only government could do something as stupid as arrest a 10-year old boy for having a toy cap gun:

The latest case of zero-tolerance at the public schools has a 10-year-old student sadder and wiser, and facing expulsion and long-term juvenile detention. And it has his mother worried that his punishment has already been harsher than the offense demands. “I think I shouldn’t have brought a gun to school in the first place,” said the student, Alandis Ford, sitting at home Thursday night with his mother, Tosha Ford, at his side. Alandis’ gun was a “cap gun,” a toy cowboy six-shooter that his mother bought for him. “We got it from Wal-Mart for $5.96,” Tosha Ford said, “in the toy section right next to the cowboy hats. That’s what he wanted because it was just like the ones he was studying for the Civil War” in his fifth-grade class at Fairview Elementary School. …Tosha said that Wednesday afternoon, after school, “six police officers actually rushed into the door” of their home. “He [Alandis] opened the door because they’re police. And then they just kind of pushed him out of the way, and asked him, ‘Well where’s the gun, where’s the real gun?’ And they called him a liar… they booked him, and they fingerprinted him.” …Alandis was charged with possessing a weapon on school property and with terroristic acts and threats. …Sherri Viniard, the Director of Public Relations for the Newton County School System, emailed a statement to 11Alive News Thursday that reads, in part: “Student safety is our primary concern, and although this was a toy gun, it is still a very serious offense and it is a violation of school rules. We will not tolerate weapons of any kind on school property.” Alandis had his first hearing in juvenile court on Thursday. Tosha said the case worker assigned to Alandis will recommend a period of probation, rather than juvenile detention. The judge will make the final decision. Tosha said Alandis is not allowed back in school for now. She has a meeting scheduled with school administrators. She does not know if he will be expelled, and is hoping for no more than a ten-day suspension.