Power of Paper

When I have an op-ed on an electronic site, such as NRO, I will receive maybe 1 or 2 emails with feedback from strangers. My op-ed on tax cheats and tax reform yesterday in the Washington Post generated 33 responses from strangers. Most came between about 8:30 am and 12 noon as people were likely sitting down with their morning coffee and flipping through the old-fashioned paper pages of Outlook.  

For the record, 29 were generally favorable toward my comments and major tax reform, although about half of those folks rapped me for not coming down harder on the tax cheats. Four responses were quite negative or hostile.

All the comments were quite thoughtful except one: “FU to you and Steve Forbes on the flat tax BS propaganda.” To that person, I am assigning homework: Please read this study and my book and send me a more sophisticated critique.

Stop the Madness!!

According to Bloomberg.com:

U.S. Taxpayers Risk $9.7 Trillion on Bailouts as Senate Votes

The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages…

Only the stimulus package to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates approved in 2008 have been voted on by lawmakers. The remaining $8 trillion in commitments are lending programs and guarantees, almost all under the authority of the Fed and the FDIC. The recipients’ names have not been disclosed.

“We’ve seen money go out the back door of this government unlike any time in the history of our country,” Senator Byron Dorgan, a North Dakota Democrat, said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

The pledges, amounting to almost two-thirds of the value of everything produced in the U.S. last year, are intended to rescue the financial system after the credit markets seized up about 18 months ago. The promises are composed of about $1 trillion in stimulus packages, around $3 trillion in lending and spending and $5.7 trillion in agreements to provide aid….

The $9.7 trillion in pledges would be enough to send a $1,430 check to every man, woman and child alive in the world. It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office data, and is almost enough to pay off every home mortgage loan in the U.S., calculated at $10.5 trillion by the Federal Reserve…

Commitments may expand again soon. Treasury Secretary Timothy Geithner postponed an announcement scheduled for today that was to focus on new guarantees for illiquid assets to insure against losses without taking them off banks’ balance sheets. The Treasury said it would delay the announcement until after the Senate votes on the stimulus package…

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and then Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return…

Lamar Smith vs. the WSJ

House Judiciary Committee ranking member Lamar Smith (R-TX) wrote a plea for E-Verify, the federal worker background check system, in the Washington Times yesterday. He dedicates the first paragraphs to a broad analogy between immigrant workers and burglars, then says:

E-Verify is the federal government’s system that enables businesses to hire legal workers. It is a sure way to protect jobs for U.S. citizen and legal immigrant workers alike, and ensure their jobs aren’t stolen by illegal immigrants.

Time was when Republicans opposed regulation rather than extolling it.

Smith’s advocacy for increased regulation in the name of a closed society is handily eclipsed by the Wall Street Journal’s editorial on the topic this morning, reporting on the status of the effort to expand E-Verify through the economic stimulus legislation:

[W]e’re happy to report that negotiators so far have rejected a troublesome amendment that would require any business receiving stimulus funds to enroll in E-Verify, a government program for determining work eligibility. The last thing employers need now is more bureaucratic red tape.

And the Journal is talking about solutions:

Illegal immigration tends to flow and ebb based on the strength of the U.S. economy. Given the recession, it’s likely to decline in the short-run, and Congress might use the lull to enact some substantive policy reforms. Work-site enforcement should be part of a broader immigration debate, not something slipped into a stimulus bill to placate protectionists.

The winner, by a knockout: the Wall Street Journal.

Oh, So That’s The Problem

David Brooks on the Chris Matthews show explaining

I’m willing to forgive a little corruption…I think the biggest problem in Washington is not that we have too many people taking money….The biggest problem is we don’t have–know–have enough people who know how to pass legislation.

Not enough legislation.  I knew there was a problem.  Now back to the $800 billion stimulus.

Come On! Get a Piece of the Stimulus!

The lobbying frenzy to get each interest group’s agenda into the kitchen-sink stimulus bill continues to accelerate. Veterans groups want subsidies for veterans. The Creative Coalition, an association of people who have made millions by producing profitable art, argues that taxpayer-funded subsidies to unprofitable arts will produce another Orson Welles, Saul Bellow, or Burt Lancaster. One prominent actor, Patrick Swayze, is understandably more concerned that the bill include “maximum funding” for cancer research. Energy billionaire T. Boone Pickens wants energy subsidies in the bill. “The Water & Wastewater Equipment Manufacturers Association is urging congressional leaders to dedicate funding for water and wastewater projects.” Religious liberals are pushing for hikes in welfare spending. Florida congressmen want more spending on space programs. I cited more examples a week ago:

“A Republican [in Ohio] called it a once-in-a-lifetime opportunity.” “Cities, towns ready to vie for stimulus funds.” “Road Builders Compete for Slice of Stimulus.” “West Michigan’s stimulus wish list.” “A State with a Wish List for Stimulus Spending.” “Steel industry lobbyists seem to have persuaded the House to insert a “Buy American” provision in the stimulus bill it passed last week.” “JetBlue Goes to Washington to Discuss Economic Stimulus Plan.”

As with the TARP bailout, the lobbying will only heat up if and when the bill is passed. At that point, instead of trying to get your favorite line item into the bill, the challenge will become finding a member of Congress to pressure the bureaucracy to agree that your project meets the criteria for funding laid out in the bill. Considering that the headline summary of the bill runs 13 pages, it shouldn’t be too hard to find a provision to cover just about anything. And then, instead of productive activity, yet more money and talent will be directed to seeking subsidies from government. That’s no way to stimulate actual economic growth, though it will certainly stimulate the economy of Washington, D.C., and its prosperous suburbs.

Could It Be They’re Listening?

While Friday’s compromise on the bankrupting “stimulus” would just dust snow off a glacier – and who knows what will end up in the final version – there is a small silver lining for those of us at Cato’s Center for Educational Freedom: education saw the biggest reductions.

For months we have been hammering away at the utter waste of cramming yet more bucks into already obese schools, and maybe, just maybe, someone has been listening. They haven’t been listening all that well – there’s still a Toll House factory’s worth of extra dough for everything from Head Start to Pell Grants – but compared to the already passed House version, the compromise bill would eliminate $40 billion from the “State Fiscal Stabilization Fund” (a massive bailout for hugely bloated state education apparatuses) and all of the money for k-12 and higher education facility construction. So, even if the remaining bill still robs children tomorrow to enrich education bureaucrats today, at least there’s a bit of movement in the right direction.

Tom Paxton’s Grammy

Folksinger Tom Paxton received a Grammy Lifetime Achievement Award Sunday night. He’s probably best known for his antiwar and civil-rights songs from the 1960s and 1970s. But on this blog he’s most celebrated for “I Am Changing My Name to Fannie Mae” (originally written in 1979 as “I’m Changing My Name to Chrysler.”) You can hear Paxton sing it here. Those who think Tom Paxton is a better songwriter than singer can hear Arlo Guthrie’s version instead.

If only they’d let him sing “I Am Changing My Name to Stimulus” at the Grammys: “When they hand a trillion grand out, I’ll be standing with my hand out.” Or maybe even “The Ballad of Ron Paul”!

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