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« January 2009 | Main | March 2009 »

February 26, 2009

I Don't Want to Say, "I Told You So..."

Just before the election, I was invited to an Obama campaign event at a private home, with Gloria Steinem as the featured speaker. The theme was, "Why Obama Will Be Good For the Jews."

Now, Gloria's good - as in competent - on exactly one issue, abortion. That's it. Get her off that subject and it's all newspaper quotations and secondary sources, which is exactly what happened when someone in the crowd asked her about Obama and Israel. Later, a friend of Gloria's from California explained to me that all these friends of hers - people who had helped found the very liberal New Israel Fund - knew Obama and trusted him.

"They are fooling themselves," I replied.

With Obama now having appointed a Saudi asset - bought and paid for, but no less willing, for all that - to head the National Intelligence Council, a man who thinks that Tienanmen Square was a result of excessive patience on the part of the Chinese government, a man who things that US Jews who support Israel are disloyal to the US, I think it's safe to say those people are asking themselves what the hell just happened.

What just happened is that your fellow Obama just showed you what he really thinks of you.

Creating Another Patronage Class

Or, "Taming the Wild Entrepreneur."

From the WSJ's description of the President's tax plan:

As expected, Mr. Obama proposed raising taxes on private-equity fund managers and venture capitalists, by taxing their profits as ordinary income instead of capital gains. That change would raise $23.9 billion over 10 years, according to White House budget office estimates.

I seem to recall the President making some comment in his speech to Congress about helping entrepreneurs. (Maybe I remember it because it was one of the few times where Nancy "Jumping Bean" Pelosi took a brief break from her calisthenics.) Where does the President think entrepreneurs get their capital? Removing this tax break may raise a few billion in the short term, but it removes a key incentive for capital to flow to entrepreneurs in the first place, which means that, like all tax increases, it will ultimately raise far less than projected.

This is self-defeating. Unless, of course, the President wants the government to pick the inventors who'll get the money instead. Almost certainly, he'll claim that he's supporting entrepreneurship by redirecting money into green energy startups. That, combined with his ongoing attack on the oil and coal industries, designed to make green power more competitive by making oil and coal more expensive, will allow him to claim that government investment in just as efficient and effective as private investment.

Of course, it does expand another patronage class, directing creativity where the government wants it to go, with the added satisfaction of making the inventor beg to the government for support.

As for the private-equity funds, those are the funds that have the most flexibility and creativity. Obviously, we'd want to punish them, as well. Stock appreciation is no less a capital gain when one of those funds sees the benefit, than when yours or my 401(k) or IRA sees it, but the President wants to treat them differently, because most private equity investors are successful and prosperous.

One last note. On Tuesday night, the President said that, "if you earn less than $250,000, your taxes won't go up one dime." Turns out he wasn't talking to individuals, but to married couples. If you live in the northeast, it's pretty common for each spouse to bring home $125,000 apiece, and it doesn't go all that far.

We really have elected a cross between FDR and Wesley Mouch.

The Axe Falls

E. W. Scripps has announced that Friday will be the last day of publication for the Rocky Mountain News. This is a sad day for Denver and Colorado, and given the state's pivotal position in national politics, it's not too good for the country, either.

The Rocky always had longer articles, better coverage, and sharper commentary than its surviving rival, the Denver Post. But a tabloid format and a series of poor marketing and business decisions left it unable to compete in the shrinking market for dead-tree-based news.

The Rocky was also one of the main reasons that the more liberal Post didn't become the utterly irresponsible caricature of a newspaper that the Star-Tribune and the Los Angeles Times have turned into. With the Rocky now gone, there will be less pressure on the Post to be a responsible outlet, rather than a mouthpiece for the Democratic party and its affiliates.

In past times, the Post would have picked up the important features and much of the news staff of the Rocky. However, the Post is facing financial problems of its own, laying off some editorial and management staff, and it's unclear how long it will continue to function, even without direct competition.

It's tempting to say that bloggers and other alternative media can step into the breach, and it may well be that a number of the reporters from the Rocky will try to develop their own sites for a living. And indeed, I'm sure we'll be able to pick up some of the slack.

But there's nothing like being on payroll to have the time to write and develop sources and stories. The Denver Press Club still has a bias against those who don't have major media organizations behind them, which limits credentialing and access to information and newsmakers. There's no question this is a serious loss for the area.

UPDATE: The Post will be taking on some Rocky staff, after all.

Borrowing for Consumption

While reading the section on foreign trade in the Economics study session, I came across this unfortunate paragraph:

In 2005, we borrowed almost $800 billion from abroad. In that year, private investment in buildings, plant, and equipment was $2270 billion and government investment in defense equipment and social projects was $430 billion. All this investment added to the nation's capital, and much of it increased productivity. Government also spends on education and health care services, which increased human capital. Our international borrowing is financing private and public investment, not consumption.

This is as untrue as it is is comforting.

Let's grant for the moment that everything they list here can be classified as investment. There's still roughly $10 trillion of other spending that took place that year, much of which was consumption. One can't simply assume that the $800 billion was borrowed solely to finance these projects.

But of course, even these projects aren't all investment. Social projects may or may not simply be money down a hole. Education? To a point, but it's hard to see how another couple of hundred thousand sociology majors are going to materially contribute to the well-being of the country. Health care services? Certainly, except that the overwhelming majority of health care spending takes place in the last year of life. This isn't to say that those lives have no moral value - of course they do - only that their economic value is diminished. (Watch this, by the way, when the Democrats start arguing this summer that we can't afford health care for the old and sick, but count all health care spending as, "investment.")

No, in addition to buying things we no longer make ourselves, a lot of the spending cited above really is just consumption. It's a shame that an organization devoted to clear anbalytics can't get that right.

February 23, 2009

The Team That Couldn't Count Straight

President Obama has announced that he'll be placing Vice President Joe Biden in charge of overseeing the Spending & Debt Package passed a couple of weeks ago.

"The fact that I'm asking my vice president to personally lead this effort shows how important it is for our country and future to get this right," he said.

Biden, in his new role, would meet regularly with key members of the Cabinet, governors and mayor to make sure their efforts are speedy and effective. He is expected to make regular reports to the president that will be posted online at

You can't make this stuff up.

This from a VP who can't count to three, and a President who thinks we have to re-do the flag. Still, the way Washington does accounting, perhaps he's the perfect man for the job.

We were told, variously, that Joe Biden would add foreign policy gravitas to the incoming administration, and immediately after the election that he wouldn't have a significant policy role. As Jim Geraghty points out, every statement from Barack Obama comes with an expiration date, the trick is figuring out what it is.

Nevertheless, it's hard to see how this is a really a significant role for Biden. He's not going to know the innards of the cabinet departments any better than the various secretaries do. Running those agencies is already a more-than-full-time job for them (unless it's Commerce, of course), and rarely has any cabinet secretary been able to implement any sort of efficiency program. Just ask Jim Hacker.

If Obama were serious about spending this money wisely he wouldn't have pressed for this bill in the first place. So Biden's appointment, like much else with this administration, is probably intended to give the appearance of something important, rather than the substance.

You're So Vain, You Prob'ly Think This Post Is About You

I've heard of people sitting in church, convinced by a guilty conscience that the preacher is talking about them. But it takes read the newspaper and be convinced it's talking to them.

Hugh, you know we'd like to have you here in Colorado, under the right circumstances.

But it's hard to see how those circumstances include a dilletante's knowledge of Colorado politics, and a studio build-out large enough for a swimming pool and in-studio parking. Then again, the Winter X-Games sponsorship possibilities are intriguing.

Hugh Hewitt, the Warren Beatty of talk show hosts.

February 22, 2009

Nice Little Bank You Got There

Initially, I was in favor of the TARP. I believed it was necessary and useful to buy up distressed assets quickly, and provide reassurance to bank shareholders and managers. I still believe that had that been done, we could have avoided what we seem to be headed for - a replay at some level of 1930-31, with all its economic and financial uncertainty, with the Fed doing the right things, and the rest of the government making the same mistakes, that dwarf the Fed's ability to respond.

Let's just say that isn't how things have turned out. Instead, we've gotten an object lesson in what happens when you go into business with the government.

What happens is that the government may hold some of the shares, but it holds all of the cards. The government receives shares and/or preferred stock for its investment - often non entirely voluntary on the part of the banks. And then it proceeds to behave as though it were the only shareholder.

Executive pay is only the most obvious example. The Mugging of Bank of America, forcing it to swallow Merrill at its original price, is another:

In other words, the feds believe that the way to calm financial markets is to force the nation's largest, and a heretofore healthy, bank to swallow toxic assets it didn't want. In return, yesterday the Treasury agreed to invest $20 billion in BofA, for which the government will receive preferred shares paying 8%. Treasury, the FDIC and the Fed will also partially insure $118 billion in troubled assets -- mostly Merrill's. In return for this downside protection, BofA will have to render unto Caesar another $4 billion of preferred stock plus warrants.

These preferreds will also pay 8%, but private shareholders are not so fortunate. The agreement limits quarterly common stock dividends to a penny a share.

Other healthy banks, state and regional banks who weren't in trouble to begin with, were, ah, encouraged to take money they probably didn't need, money that's turning out to be expensive in more ways than one:

Bankers' Bank of the West

At year-end 2008, Bankers' Bank of the West had a risk-based capital ratio of 12.4 percent, high enough to be considered very well capitalized.


The bank issued the government preferred stock that pays 5 percent interest, plus another batch of preferred stock, equal to 5 percent of the amount requested, that pays 9 percent.


"It's extremely expensive capital, but we did this as a good-faith investment for our banks," Mitchell said. "The government will do very well on this program."

So the bank is over-paying for capital it doesn't need and can't invest, setting up trouble down the line. Thanks, Uncle Sam.

First Western

"For a growth company like us to raise new equity, people are looking for 15 percent to 20 percent returns over time," Wylie said. "To get preferred stock from this program is an inexpensive form of capital."

First Western's assets nearly doubled in 2008 to about $450 million. At the same time, its capital ratio was above 10 percent, Wylie said.

"We were encouraged by the regulators to do it, so we asked our investment bankers and lawyers whether we should take it because of the possible stigma," Wylie said. "They said, 'You're already a kind of partner with government because you're highly regulated.' (emphasis added -ed.)

All banks are highly regulated. That doesn't mean they're in business with the government. This is also an admission that there aren't enough high-growth areas to invest in right now, and not for the foreseeable future, either. If you could get 15-20% in this environment, wouldn't you invest in these guys? Of course you would.

CoBiz Financial

CoBiz Financial, the parent company of Colorado Business Bank, struck a deal with the Treasury in November. For its $64.5 million, it issued preferred stock to the government that pays 5 percent for the first five years and 9 percent after. Because the bank has publicly traded stock, it also had to give the Treasury warrants to purchase 895,968 shares of CoBiz common stock at an exercise price of $10.79 per share.


By the end of the third quarter, before the provision, Colorado Business Bank still had a risk- based capital ratio above 12 percent. It was 14.5 percent at Dec. 31.

"The thought was we would take advantage of (TARP) and shore up our capital base," said CoBiz CEO Lyne Andrich.

"In this environment, more capital is always better than less. We're going to use it for growth. We believe this environment creates a lot of opportunities for acquisitions, but we didn't take the capital primarily for that purpose."

Again, if growth opportunities were out there, the bank was well-enough capitalized to lend as it was. If they aren't, they're shoving government money at questionable investments. And if acquisitions are the best way to grow, that in and of itself will provide a better home for those banks' assets.

There are a lot of reasons why bank nationalization is scary. And right now, we seem to be getting them all, even without the nationalization.

Blog Talk Radio

After a week of special events, the Rocky Mountain Alliance of Blogs returns to our normal schedule of webcasting, Tuesday nights at 8:30.

This week, we'll be talking to Evan Coyne Maloney, creator of the film Indoctrinate U, which takes on the pervasive and threatening political correctness on college campuses. Liberty on Film will be showing the film at its inaugural event this Thursday.

We'll also be talking to one of the few, the proud, the free-market Canadians, Nadeem Esmail of the Fraser Institute, about the dangers of single-payer health care, as Colorado prepares to take up HB-1273 which would start dragging us down the path to that baleful system.

Tuesday nights at 8:30, archives are forever.

How to Amend the Constitution Without Really Trying

What part of "Constitutional Amendment" do the Democrats have a problem with?

Now, they're floating a proposal for an end-run around TABOR using fees and cash funds as a Trojan Horse. You have to put together the various pieces, but there's a point where a piecemeal attack on TABOR turns into a successful nullification.

Warning: Extended Geekery Below

TABOR, the Taxpayer Bill of Rights, requires tax increases, or any change in tax policy that would result in a tax increase, to be approved by the voters. But fees can be increased ad infinitum, and according to a recent Supreme Court ruling, can be increased without limit, by the legislature, and the money taken in needn't be spent in any relation to the service on which the fee is levied. This means that money taken in by a vehicle registration fee, for instance, can be used for any purpsoe whatsoever.

Now when TABOR - a Constitutional Amendment - was passed, it stated that any pre-existing spending limits would be made permanent. Byrd-Arvescoug, passed in the late 80s, limited the general fund spending, discretionary spending, to a 6% per year increase. (This was passed as an attempt to head off TABOR, which limits overall spending increases to inflation + population increase, but TABOR passed anyway.)

There are also separate cash funds, supposed to be used for specific purposes, and funded by fees levied on government services and registrations. However, the legislature recently began raiding those funds - supposedly temporarily - to make up the general fund shortfall.

Now, Democrats in the legislature - along with the help of one Republican - are floating the novel legal theory that Byrd-Arvescoug isn't a spending limit, but an, "allocation strategy." This means they'd be able to pass a bill - without going to the people - to increase general fund spending by whatever they want.

And they'd fund that spending by taking the money out of cash funds, and raising fees until people screamed for a "more fair" allocation of the burden.

It seems that even in a recession, the least important thing the government wants to spend money on is more important that the most important thing you'll spend money on.

Progressively More Intrusive. Progressively More Restrictive. Progressively More Expensive.

February 20, 2009

George Washington

In the battle between George Washington and Abraham Lincoln for the title "Greatest President," put me down for Washington, although the difference between the two probably isn't measurable by current instruments.

What puts Washington over the top is his entire body of work, as they say in the Hall of Fame voting. Being the first President, and being the pre-eminent political personage of that era, Washington knew that what he did would set the tone and set precedents for generations to come. And while the republic was resilient enough to withstand even major errors - the Articles of Confederation come to mind - getting things right at the beginning would help it weather storms down the road.

Washington got virtually everything right.

He won the Revolutionary War, and then refused power and resigned, preventing a military mutiny over pay in the process. He chaired the Constitutional Convention, his mere presence as the presumptive first President being enough to allow the delegates to create an executive strong enough to govern. As President, he helped establish a protocol that befits a democracy, helped establish the relationship between Congress and the Presidency, and once again, relinquished power when he needn't have, as an example.

Adams was a greater revolutionary than President, Jefferson a better philospher, Madison a greater draftsman. Of the early Presidents, perhaps only Washington's Presidency lived up to his prior life.

February 19, 2009

Saving Your Local Newspaper - III

A couple of more quick thoughts on the evident, imminent demise of the Rocky, and Mike Littwin's comments on an earlier post.

First, the Seattle Post-Intelligencer may be looking at an online-only existence. So at least someone's taking the idea seriously.

Second, as to that claim about risk-taking. The PI employees may be examining a buyout. Still:

The Pacific Northwest Newspaper Guild is "trying to figure out if enough P-I employees are interested in a buyout that it would be worthwhile for us to bring out a consultant and to seek state money for a feasibility study," Guild Administrative Officer Liz Brown said. (emphasis mine.

State money? How about starting an "I Want My PI" site and asking for online contributions to that cause? (For that matter, how about using "I Want My Rocky" to ask for money to study alternatives?) How about seeking money from a local venture capitalist? I understand there are a few of those around the Seattle/Redmond area. How about the union ponying up the cash for its own study? It's commendable that they're considering buying out the paper, especially if they remain open to the online-only concept. But asking the taxpayers to fund a feasibility study?

Finally, Mike claims that a paid online version of the Rocky couldn't compete with a free version of the Post. Talk about assuming facts not in evidence. I said I thought it could, if it were better, and relentless pointed out its superiority to its customers. But there's another, more basic reason why this might work.

To claim that paid-for superior coverage can't compete with free schlock is saying that people won't pay for local and state news. At all. It's saying that what you do has no economic value And you don't believe that, or else you wouldn't continue writing, and couldn't continue drawing a paycheck for contributing nothing to anyone's well-being. And I don't believe that, or I wouldn't be willing to pay for an online Rocky, even one that included your columns. (We kid because we care.)

Which means that if the Rocky were able to charge - even a little - for its online product, the Post, which is laying off staff of its own, would immediately recognize another revenue stream and start charging for its own product.

Price competition isn't the issue here. The Rocky tried essentially giving away its product several years ago, and found it didn't help at all. It made, or was saddled with, some other handicaps as well. When I moved here 12 years ago, I made the mistake of assuming the Post was to be taken more seriously because 1) I knew the name, and 2) it was a broadsheet, and tabloid were, well, tabloid-ey. (They also kept Holger Jensen around in the same way the Mariners are bringing back Ken Griffey, Jr., but that's another story.)

It made these mistakes in a market that had been contracting for decades. This isn't about fighting that fact. It's about changing habits of mind that are saddling an important product with horrible, unsustainable costs.

February 18, 2009

Economic Sanity On The Hill, To A Point

The House Business Affairs and Labor Committee just voted to kill HB 1208, which would have proposed a state-wide Davis-Bacon prevailing wage rule on all state construction projects. While the bill was killed, 7-4, some of the reasons given for voting against it weren't encouraging. Rep Rice voted against, but prefers carrot to sticks. One would think that winning a contract would be enough of a carrot. He also equated this bill several times with TABOR and the 6% rule as "government by formula." So this doesn't necessarily mean enlightenment on the part of the committee Chairman.

It was also noted by the representative of small business that the bill would disproportionately affect minority workers. That was, of course, the implicit reason for the initial Davis-Bacon Act, pushed by white unions to exclude black workers from the work force. For some reason, Rep. Soper was unable or unwilling to distinguish between minority ownership and minority workers. There is, in fact, no reason the party and its candidates shouldn't make minority workers in Denver well aware of the affects of this legislation, and of which party tends to support it.

Saving Your Local Newspaper - II

In a comment response to "Saving Your Local Newspaper," Mike Littwin makes some interesting points that deserve a reply.

Some reporters put themselves personally at physical risk all the time, of course. But that's very different from experimenting with things that have never been done before. In fact, they often seem more threatened than excited by innovation. From Dan Rather's reaction to being mercilessly fact-checked, hurricanes are easier than criticism. His and CBS's reactions were all too typical, and hardly courageous.

Editors and columnists and reporters love controversy under the old rules. It meant they were selling papers. They could print a few letters to the editor about how that so-and-so Littwin was a jerk, and satisfy their readers that they were having a real discussion. But that sort of controversy isn't risk, it's reward. For the New York Times, having its inability to get basic facts right mocked relentlessly, that's risk. And for some reason, they don't seem to embrace it.

As for paid competing with free, it works when your product is better or when you have a niche. I could read BusinessWeek or Forbes for free. Sometimes, I even do. But I pay to read the Wall Street Journal.

  • Ditch the print edition. Or sell it only in limited quantities at stores. Your product is news, not paper. Everything about that print edition costs you money. The Post has pretty serious financial problems, too, and you'll have divested yourselves of the biggest industry design flaw.
  • Produce two products. A 700-word article that people are used to reading and have time for, and longer pieces. Point out - repeatedly - what questions the Post's reporting raises but leaves unanswered, and then answer them. Do this every day. Newspapers don't sell themselves, you know. This won't make you or anyone else at the Rocky liked over at the Post.
  • Limit online advertising. It'll make your product more attractive. Part of Isaacson's idea is to have both advertising and subscription revenue streams. We all agree pop-up online ads are annoying. I might not subscribe to the WSJ if every article were preceded by an in-my-face pitch for a $2,000,000 foreclosure in the Hamptons.
  • Charge reasonably for the archives, and make sure everything, back to 1859, is in there. (College students will work for remarkably low wages.) I will almost never pay $2.95 for a three year old story. But if I'm already paying $50 a year, another nickel or dime doesn't seem like so much. Certainly cheaper than driving down to DU to use Lexis-Nexis on the library computer.

I don't want to see the paper die at the end of the month. I like the Rocky. One of the reasons the Post hasn't spun off into Star-Tribune levels of irresponsibility is the existence of the Rocky. I don't blame the Rocky for others' hare-brained ideas of government subsidies. It's all too easy to beat up on other people for not wanting to compete.

But whatever newspapers are doing isn't working, and this refusal even to try is an much symptomatic as it is causational.

February 17, 2009

Saving Your Local Newspaper

Every time I talk to someone from the Rocky, indeed, every time I talk to someone from any newspaper who likes the Rocky, I float the idea of ditching the paper version, stripping out all the extraneous coverage, and going back to charging for their content.

The response would make crickets chirping sound like an oncoming tornado.

Maybe now that Walter Isaacson has proposed the same idea, it'll get another look. He lays out the case against an advertising-only model, while still preserving and charging for what local newspapers do best.

One of the most creative arguments against came from a reporter for the Grand Junction Sentinel, who argued that newspapers couldn't compete against local television. Two answers: 1) they did for 50 years, and 2) local TV can't compete with newspapers for actual content.

Look, I'd never pay for access to the news departments at Channels 4, 7, 9, and 31. I don't watch now for free, and I'm not sure how much they'd have to pay me to watch. But I'd pay, oh, $50 a year for the online Rocky, as long as I didn't get sued for quoting from its work.

In fact, such a product would be better than the printed paper. It could preserve the current forms and lengths, since those are what people are used to reading, and perhaps even what they have time for. But it could also allow for longer-format writing, which indulges what writers really like to do: write. So Lynn Bartels produces a 700-word piece on the legislature, and then a longer-form, 2000-word discussion of a particular bill that's caught her eye. Meanwhile, the Post, stuck with a paper edition, can only choke out 500 words that barely lets people know there is a story.

I think Isaacson (along with Littwin) too easily dismisses liberal bias as a source of decline. Yes, the papers have many hits online, but still look elsewhere for coverage of stories, and many of those people reading the Denver Post online then go to other sites for the analysis.

But liberal bias may be killing the papers in another way - a lack of entrepreneurial spirit which would save the industry, even in this economy. Reporters simply aren't interested in taking that kind of a chance, which requires a completely different way of thinking , risk-taking, and actual competition. Instead, they create sites like, "I Want My Rocky," that make people feel better and do absolutely nothing to preserve the paper or the brand. That's why they're reporters and not businessmen.

And that's also why their newspaper is about to disappear.

Blog Talk Radio

Had a fine show this evening, picking over the Pork Bill with a couple of Roast attendees, and a caller from Canon City, John Williams, plugging his new non-profit, soon online at (Callers are always welcome.)

We also spoke at lengths with local Ron Paul-contingent leader Chris Maj, mostly about Austrian-school economics. I'm a big fan of Russ Roberts's Econ Talk podcasts, and he's got a fine one on the Austrian take on the current financial crisis.

Next week: Evan Coyne Maloney, creator of Indoctrinate U. Liberty on Film is sponsoring a screening next Thursday, so find out what all the fuss is about, and then go see the movie.

"This Pork Ain't Kosher"

Fantastic coverage of the anti-Pork rally at the Capitol this afternoon:

Michael Sandoval has pictures and video.

The People's Press Collective has a couple of posts.

And El Marco photoblogged the event as well.

Join us this evening on the Blog Talk Radio show as Michael, Randy, and I chew over the pork.

Live From The Pork Roast

The RMA will be hosting a special edition of Blog Talk Radio today at noon, Mountain Time, with me in the studio, and Randy Ketner, of both Night Twister and Red County, calling in on remote from the State Capitol.  The Independence Institute and the Colorado Republican Party are sponsoring a Pork Roast there, in honor of President Obama's signing the Stimulus Pork Bill here in Denver this afternoon.

Listen Live as we make our feelings about this Federal power grab known!

UPDATE: Well, that was an experience.  Nothing like doing a remote on a windy day without a microphone muffler.  Try again this evening as we rehash the day's events, and talk politics and economics with Chris Maj of the Colorado Constitutional Republicans, a group spawned by the candidacy of Ron Paul

February 13, 2009


Probably stands for the "United for the Forced Collectivization of Workers."

The union has opposed actual free choice here in Colorado. Twice. Three times, as last year they were one of a group of unions dedicated to blackmailing businesses into withdrawing support for right-to-work. (That practice of blackmail was recently endorsed by the Democrats on the House State, Veterans, and Military Affairs Committee.)

And now, the union is part of a group, Change to Win, who has sent a letter to banks, and their Congressional regulators, arguing that their taking TARP money abrogates their First Amendment rights. They banks evidently incurred the union's wrath by opposing Congressional attempts to impose card-check on the national level.

So not only do they oppose free choice for workers, they oppose free speech for opponents.

February 12, 2009

He's Here to Stimulate You

It's like that old Saturday Night Live sketch making fun of Collyfornia's current governor, "Hans and Franz." He's Barack Obama, and he's here to!

Never mind that the CEO of Caterpillar doesn't think he'll be stimulated for some time to come.

According to the Wall Street Journal, the compromise bill is, as is often the case with Washington compromises, worse than either bill that went in:

The latest version of the economic-stimulus package is expected to provide less near-term support for the economy and make it less likely that the economy will pull itself out of recession before late this year.

The $789.5 billion deal, reached by House and Senate negotiators Wednesday, indicates the Obama administration was willing to reduce its goal of creating or saving four million jobs. The new plan pares some aid to state and local governments that was aimed at preventing job cuts and reduces tax breaks for workers that were intended to spur quick spending.

Reducing the payroll-tax cut for workers by about 20% -- to $400 per individual or $800 per family -- also diminishes another element that was expected to help the economy in the first half of this year.

Of course, we'll have to take Mr. Reddy's word for it, since the Democrats have already gone back on their promise to make the bill public and available online before they vote on it.

With each iteration, it becomes clearer that this isn't a "stimulus" bill in any meaningful sense, even if such a bill were possible in any meaningful sense. Larger and larger portions of the spending take place in the out years, where they have no stimulative effect. They do, however, manage to achieve through spending many of the Democrats' fondest wishes without serious debate or scrutiny.

Remember that this Big Blue Boulder of a Bill is only possible because our filibuster depends on Arlen Specter, Susan Collins, and Olympia Snowe. And that's only because of the sterling representation of Liddy Dole, Ted Stevens, and John Sununu.

Legislative Watch

It's a big couple of weeks coming up for the State House of Representatives, with some very good bills, and some very bad bills coming up for consideration in committee.

Here, then, are the six bills that caught my eye, along with their committee assignments, and when they're scheduled for hearing, and what room, in case you want to listen online to what your elected reps have to say:

The Good:

1256 - Interstate Purchase of Health Care

2/18 PM Session Room 112 (Business Affairs & Labor)

This bill would set up a structure for permitting Colorado residents to buy health insurance from out-of-state insurers. Sponsored by Cinsy Acree, it's the kind of free-market, trust-people-to-make-their-own-decisions legislation we should all be looking for. If for that reason alone, we can be sure it'll fail on a party-line vote. But it's good to get the Dems on record as believing that Coloradoans are dumber than other citizens when it comes to making insurance decisions.

1258 - Limit Extraterritorial Municipal Condemnation

2/19 AM Session Room 112 (State, Veterans, & Military Affairs)

Finally. After last year's grease fire of a State Supreme Court decision permitting the extra-territorial condemnation of property, the legislature is set to take up a bill putting a straight-jacket on this kind of behavior. Sure, it's one thing when Telluride goes after a developer out in the middle of nowhere, but sooner or later Jefferson and Adams Counties are going to getting into a spitting match over this kind of thing, and someone's going to get hurt.

1264 - Higher Ed Costs for State Inmates

2/16 PM Session Room 112 (Education)

At least, I think it's a good bill. Basically, it would keep prison from becoming a scholarship program for higher ed here in the state. I'm not certain how many inmates are studying Kierkegaard in the slammer (prison sentences must be lived forward, but understood backward), but this seems like a good idea. Just make sure that when the Dems inevitably call for shutting down prisons because they're not reforming inmates, you remind them whose fault that is.

The Bad:

1226 - No-Fault Insurance (Personal Injury Protection)

2/18 AM Session Room 112 (Business Affairs & Labor)

Wow. We're continually being told that we're in the worst economy since the Great Depression. We're about to see Congress pass a spending bill that'll make things even worse. And Anne McGihon wants to return Colorado to the bad old days of high-priced insurance and even higher rates of uninsured drivers. Can't anybody here play this game?

1267 - Higher Ed Pervasively Sectarian

2/23 PM Session Room 112 (Education)

The current law on money going to students revolves around what kind of institution they're attending. So if you're going to a "pervasively secular" institution, but studying for the seminary, you can still get help with interpreters, books, seeing-eye dogs, that kind of thing. This is apparently too much for some folks to bear, so they want to restrict state aid based on what you're studying. Just remember that this one came from the legislature, not from the courts.

1273 - Single-Payer Health Care

2/25 AM Session Room OSC (Business Affairs & Labor)

This is the Big One. It sets up a commission to start working out the details of health care rationing right here in River City. If you don't like your health plan choices now, you may have to change jobs. If you don't like your health care choices in a few years, you may have to leave the state.

Tried By War

On this, the 200th Anniversary of perhaps our greatest President - I'm still holding out for Washington, but perhaps that's on the basis of his entire body of work - it's worth considering his role as Commander-in-Chief. Not merely as described in Eliot Cohen's leadership study, Supreme Command, but his role specificallly in shaping policy, strategy, and operations. Other Presidents have had to fill that role, although none under such critical circumstances as Lincoln.

James McPherson, who is rapidly becoming one of our finest popular Civil War historians, published his Tried By War: Abraham Lincoln as Commander-in-Chief last year. In it, he follows the progress of Lincoln as Commander-in-Chief, first trying to save the Union by preventing the war, then trying to win it as expeditiously as possible. The progress of the war itself is almost background, the battles and campaigns making cameo appearances in support of the main story - Lincoln's conduct of command.

Much of the anecdotal material is well-known: Lincoln's depressions after defeats, his constamt urgings of McClellan and other generals to press forward, and his exultation after the victories at Atlanta and Richmond.

What McPherson adds is structure. About 20 years ago, Edward Luttwak famously created levels of strategy - grand strategy, strategy, theatre-level strategy, and tactics. McPherson does something similar, defining five interconnected levels in which Lincoln - indeed, all commanders-in-chief - must operate: National Policy, National Strategy, Military Strategy, Military Operations, and Military Tactics. Lincoln worked in all five, although we typically remember him more for his hectoring his general in the area of military operations.

What McPherson remembers, and what Lincoln never lost sight of, is that war is also a political activity. From the outset, he set a National Policy - the preservation of the union. All else was to support that Policy, starting with National Strategy. At first, the best strategy was to ignore slavery as an issue. Later, as the war stretched on, and Southern Unionist sentiment failed to manifest itself, National Strategy changed to the liberation of the slaves and a more aggressive military posture.

Lincoln, almost before many of his generals, realized that military operations would have to be coordinated in time, to offset the South's advantage of interior lines of operation. And at the tactical level, he supported the purchase of the repeating rifle, and the eventual jettisonning of the cumbersome supply trains which slowed down Union advances.

McPherson also dwells on the political management of the war, especially during the critical election year of 1864. We all know that McClellan captured the Democratic nomination on a peace platform, from which he immediately began to pull back. Union sentiment swung back and forth, wildly over-reacting to both victories and setbacks, fanned by an equally voluble press.

Advances early in the year were tempered by defeats and stalls on both fronts, and by Jubal Early's attack on Washington from the rear. We think of the Lincoln-Grant relationship as rock-solid, but McPherson points out that:

Neither Lincoln nor Grant could have been in a good mood when they met on July 31 for a discussion that lasted five hours. No record was made of their conversation. Lincoln may have come as close as he ever did to chewing out Grant for all the failures that had occurred during the past six weeks.

Copperheads in the North were promoting reunion without victory, while the Southern leadership was selling the peace as a means to independence, after all. "The publicity surrounding these peace overtures should have put to rest the Copperhead argument that the nation could have peace and reunion without military victory. But it did not."

Even after Atlanta and Richmond, Lincoln understood that public opinion could be lost. We tend to forget how vital Sheridan's campaign in the Shennandoah and George Thomas's defeat of Hood in Tennessee were to sealing the final victory.

And in a further reminder that the more things change, the more they stay the same:

Union captives in Southern prison camps could not vote in the presidential election, of course, but most other soldiers could. By 1864 all Northern states except the three whose legislatures were controlled by Democrats - Illinois, Indiana, and New Jersey - had provided for soldiers to cast absentee ballots. Those three exceptions seemed to indicate that Democrats knew quite well which way most soldiers would vote.

Moat of these reminders and surprises come in the last 75 pages of the book. But the whole thing is well worth reading. And a reminder that a successful wartime President needs to be involved in all aspects of the conduct of the war. That it really is too imporant to be left to the generals.

The Adults Step In

Tuesday night on the Blog Talk Radio show, the RMA discussed the curious case of Marie Morrow, a senior at Cherokee Trail High School, a Young Marine in Douglas County, and a victim of the draconian zero-tolerance laws. She was first suspended, and awaiting possible expulsion over fake guns locked in her car in the school parking lot.

This is beyond absurd. The student who saw the fake rifles - used for drill team practice - did the right thing by reporting what he thought were real guns. But the suspension was meted out and the expulsion hearing held knowing that the guns weren't real

Now, the adults, in the form of Aurora City Councilman Ryan Frazier, have weighed in. Councilman Frazier, in far more diplomatic and statesmanlike language than I could have mustered, has sent the following letter to Mary Chesley, Superintendant of Cherry Creek Schools:

I've reviewed pertinent information from the Aurora Police Department as to events leading up to Ms. Marie Morrow's suspension and I've come to understand the circumstances surrounding this particular case. I am writing to express my utmost disapproval of any further disciplinary action, including expulsion, of Marie Morrow, a senior at Cherokee Trail High School.

I'm respectful of the Federal and State laws concerning firearms in and around school property and calls for mandatory expulsion of any student who carries, brings, uses or possess a dangerous weapon in and around school property. In this case, common sense must prevail as the circumstances reveal that not only were these "Drill" props, but Ms. Morrow is a member of the Douglas County Young Marines where she exercises regularly with these props. Additionally, these props are not dangerous, were not intended to be used dangerously, and further were stowed away in Ms. Morrow's vehicle. I understand that under state law they can be interpreted to meet the definition of a weapon, and that as administrators, your staff and legal counsel may feel there is little room for flexibility. However, I respectfully ask you to consider the reality and impact this will have on our community and most importantly Ms. Morrow's future.

I request that your administration and those parties to any hearing concerning this matter allow common sense to prevail. Please allow Ms. Morrow to return to school and complete her high school experience successfully.

Respectfully on behalf of myself and my constituents,
Ryan L. Frazier,
City Council Member, At-Large
Aurora, CO

It's worth noting in passing that common-sense revisions to these laws - passed or strengthened in response to the murders at Columbine - are being resisted or blocked by Democrats who are just ideologically opposed even to the appearance of guns. For a party that has just voted against making actual education spending transparent to those footing the bill, this is apparently what passes for education reform.

In the meantime, let's hope that the schools make the right decision in this case.

February 1, 2009

AP Warns GOP Against "Risky" Opposition to Debt

Opposition to excessive debt as "analyzed" by the AP:

Analysis: GOP gambles in opposing Obama stimulus


AP White House Correspondent Jennifer Loven contributed to this report.

At least two of these folks come with a history. Charles Babington, when at the Washington Post, and Jennifer Loven, in her current position as Democratic flack for the AP, each have a history of writing briefs for the current Democratic position disguised as news reporting or analysis, with Loven having trouble interpreting polls correctly.

WASHINGTON (AP) Eight days after Barack Obama took office as a "change" president, House Republicans have made a huge political gamble that could set the tone for the next election cycle.

In unanimously opposing the massive spending bill that Obama says is crucial to reviving the economy, they signaled they are not cowed by his November win or his calls for a new era of bipartisanship. Obama's popularity will slacken, they say, and even if it doesn't voters will reward a party that makes principled stands for restrained spending and bigger tax cuts.

As usual, "bipartisanship" for Democrats means, "do it our way." The cuts to the package were trivial, the remainder a wish-list of payoffs, new permanent spending, and disguised protectionism.

Democratic officials think Republicans are misreading Americans' hunger for action. And if they are right, the GOP could face a third round of election setbacks next year.

Ah, "Democratic officials" believe there's a Republican gamble, therefore there is one. No possibility that the gamble is on the Democrats' side instead.

The rest of the article is essentially a Democratic press release, repeating claims that the Republicans are rooting for a weaker economy, and that tax cuts for people who don't pay income taxes are actually offset against payroll taxes. Remarkable that when the Democratic party spent 2006-2007 talking about, "the worst economy since the Great Depression," and actively undercutting the war effort in Iraq, the AP never found time to accuse them of rooting against their country's economy or military.

The House vote makes it easier for Democrats to portray the entire Republican Party as a do-nothing, head-in-the-sand group, though GOP officials call that unfair.
It certainly will make it easier for the AP to portray the GOP that way, as only GOP officials will call it unfair.
Both parties point to polls that they say show support for their respective viewpoints. White House chief of Staff Rahm Emanuel told House Republican moderates this week that surveys find about 80 percent support for the stimulus legislation.

House GOP leaders, meanwhile, cited a poll Thursday in which most respondents said the stimulus bill is too expensive. It also found, they said, that 71 percent think it's unfair to give refund checks to people who do not pay federal income taxes.

I don't believe published polls supporting Emanuel's position exist, and the AP doesn't cite any; Gallup has a slim 53% majority supporting the bill, while Rasmussen has the bill supported by 42-39. And while the Gallup poll has independents supporting it 46-40, Rasmussen has them opposing it 50-27. The AP reports no numbers for the Republican claims, and instead focuses on the unfairness of tax cuts.

In reality, the political decision here is easy to make. As Powerline pointed out, if the package is seen to be successful, the Democrats will get credit regardless of how the Republicans vote. If the package is seen not to have helped, then Republicans who vote for it will once again have forfeited a chance to distinguish themselves from Democrats.

In the world of the AP, only Republicans always take political risks by acting on principle.

Let's Hold Off On That Debt

Just as the Senate is ready to take up the Government Discretionary Expansion Act of 2009, i.e., the Debt Bill, comes evidence that the credit markets are starting to work again.

The Wall Street Journal has reported in recent days that

  1. the commercial paper market - short-term financing for corporations that they need to continue operations - is recovering.
  2. the corporate debt market saw a record issuance in January, although some of that was a result of government-guaranteed debt
  3. junk debt - the riskiest corporate debt out there - saw its best month since July of last year

All of this is happening at the same time that long-term interest rates on government debt are rising, making the so-called stimulus bill even more expensive, and sovereign debt all over the world is starting to look riskier.

The economy doesn't function primarily on government debt, and God willing, it never will. It functions on private credit. While it's a relief that incoming tax-dodger Geithner is partial to retaining a private banking system - as though government banks have ever been more reliable than private institutions - we need to remember that private finance is where the action is. And right now, it's showing signs of life. In other words, the monetary stimulus and stabilization seems to have done its job, and the fiscal stimulus will only make things worse.

Which shouldn't be a surprise. While Central-Planner-In-Chief Obama may have decreed that banks oughtn't be making profits right now, but why on earth, when the economy tanks, do policy-makers just seem to forget that businessmen, including bankers, want to make money?


Power, Faith, and Fantasy

Six Days of War

An Army of Davids

Learning to Read Midrash

Size Matters

Deals From Hell

A War Like No Other


A Civil War

Supreme Command

The (Mis)Behavior of Markets

The Wisdom of Crowds

Inventing Money

When Genius Failed

Blink: The Power of Thinking Without Thinking

Back in Action : An American Soldier's Story of Courage, Faith and Fortitude

How Would You Move Mt. Fuji?

Good to Great

Built to Last

Financial Fine Print

The Day the Universe Changed


The Multiple Identities of the Middle-East

The Case for Democracy

A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam

The Italians

Zakhor: Jewish History and Jewish Memory

Beyond the Verse: Talmudic Readings and Lectures

Reading Levinas/Reading Talmud