OPINION
ALEX TABARROK: “The Innovation Nation vs. the Warfare-Welfare State”
“We like to think of ourselves as an innovation nation, but our government is a warfare/welfare state. To build an economy for the 21st century we need to increase the rate of innovation and to do that we need to put innovation at the center of our national vision. Innovation, however, is not a priority of our massive federal government. Nearly two-thirds of the U.S. federal budget, $2.2 trillion annually, is spent on the four biggest warfare and welfare programs, Medicaid, Medicare, Defense and Social Security.”
A. BARTON HINKLE: “Virginia Should Fight the Federal Health Care Takeover”
“State lawmakers across the country are debating whether, and how, to set up such exchanges, which are encouraged by the 2010 federal health-care overhaul, or let the feds do it for them. The exchanges will act as clearinghouses where consumers can compare health insurance policies, a bit like the way you can compare travel deals on Expedia.com. Here in Virginia, legislators differ on whether the exchange should be an entity unto itself, or an arm of the State Corporation Commission. The correct answer is: neither. Virginia should not set up such an exchange at all. The commonwealth has nothing to gain by doing so, and a lot to lose.”
SEAN GALLAGHER: “The Fast, Fabulous, Allegedly Fradulent Life of Megaupload Founder Kim Dotcom”
“The man once known as Kim Schmitz (and as Kimble, and as Kim Tim Jim Vestor, and finally as Kim Dotcom), now awaiting extradition from New Zealand to face charges of conspiracy, money laundering and copyright crimes in the US, has enveloped his actual life in a cloud of hype and bluster that echo the worst of the dot-com bubble from which he took his new surname. In 2001, the Telegraph called Schmitz ‘a PR man’s nightmare and a journalist’s dream.’”
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“After spending $55 million of a $118.5 million grant from” the U.S. “Department of Energy, Ener1, an Indianapolis-based maker of batteries,” has just “declared bankruptcy.”
The White House had enthusiastically touted the company, which gave rise to an embarrassing gaffe by Vice President Biden:
Vice President Biden visited Ener1 one year ago, January 26, 2011. . .On several occasions, Biden called the company “Enron one” during his visit, invoking a seemingly unintentional but ultimately prescient reference to the collapse of the energy giant Enron. The company was also ranked number 67 in the White House Report: 100 Recovery Projects that are Changing America.
To some, the bankrupt firm is a “candidate in the increasingly competitive race to become the Next Solyndra.” But in reality, several other recipients of green-jobs subsidies under the stimulus package have already gone broke. CBS News had earlier reported that there were 11 Solyndras — that is, financially-troubled recipients of green-jobs subsidies, five of which had already filed for bankruptcy. After the CBS News report, Evergreen Energy, another green-jobs recipient, filed for bankruptcy.
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Have a listen here.
The state of Georgia recently passed strict new requirements for immigrant farm workers. Immigration Policy Analyst Alex Nowrasteh looks at the results of a new report released by the state. Workers are fleeing to other states, causing a labor shortage. Some farmers find they lose less money by actually letting their crops rot in the fields rather than comply with state and federal rules.
AEI’s James Pethokoukis says that the mass-refinancing plan proposed by President Obama in his State of the Union address would “result in higher financing costs going forward.” It’s designed to create a short-term “boost for the economy going into the election.” The plan would also harm bank shareholders and people approaching retirement (most mutual funds that people hold in their 401(k) plans have holdings in banks and thus would be harmed, reduced the size of people’s retirement plans, over the long run). Pethokoukis quotes a financial analyst at Guggenheim Washington Research Group who notes that “that a mass refinancing could permanently drive housing finance costs higher. This is a real threat as investors are likely to demand a premium if government policy materially accelerates prepayment rates.” Pethokoukis calls this mortgage bailout proposal Obama’s “January surprise.”
The Obama administration is also harming the housing market by pressuring banks to make risky loans to minorities with bad credit, using the threat of massive Justice Department lawsuits. The Assistant Attorney General for Civil Rights, Thomas Perez, has compared bankers to “Klansmen,” and extracted settlements from banks “setting aside prime-rate mortgages for low-income blacks and Hispanics with blemished credit,” and treating welfare “as valid income in mortgage applications,” noted Investor’s Business Daily.
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President Obama correctly pointed out in his State of the Union speech that he passed fewer regulations in his first three years than President Bush. Over at the Daily Caller, Wayne Crews crunched the numbers and found that Bush passed 12,588 regulations to Obama’s 10,810.
That’s an average of 4,196 rules per year for Bush, and 3,603 for Obama — nearly two fewer rules per day. For those who believe that Bush was a free-marketeer, Obama has given us another nail for that myth’s well-sealed coffin.
But that doesn’t mean President Obama is less of a regulator than his predecessor. He has passed fewer rules, but they tend to cost more. Regulations are classified as “significant” if they cost over $100 million per year. There are different technical definitions for “significant,” “economically significant,” and “major.” And the Federal Register gives different counts than NARA, the National Archives and Records Administration.
With those caveats in mind, the Federal Register data have President Bush passing 30 economically significant regulations in his first three years. Obama passed 953.
The difference is more than a factor of 30. Roughly one quarter of one percent of Bush’s rules were economically significant. Almost 9 percent of Obama’s are.
What the president said on Tuesday is technically correct. But, as with almost all political statements, there is more to the story.
OPINION
MEGAN MCARDLE: “The President’s Nostalgianomics”
“Obama, stymied by an economy that’s still pretty weak, and an opposition that has no more interest in cooperating with him than Republicans did with Hoover, has turned to a laundry list of weak proposals that sound pleasing to interest groups, but wouldn’t achieve much. Of those, the best was allowing students who study here to stay here; the stupidest was probably adding yet another investigation of bank fraud (what have you been doing for the last three years, Mr. President?) And the worst was the bizarre proposal for states to force students to stay in school until graduation or the age of 18.”
NICHOLAS AGAR: “The High Price of Long Life”
“Here I address the dangerous consequences of a widespread belief that human aging could be halted or reversed. If anti-aging medicine is to become a reality, then the various theories about how to halt or reverse the aging process will require testing on human subjects. Carrying out such tests will place unprecedented pressure on the rules protecting human participants in clinical trials, which are already routinely ignored.”
CHARLES GASPARINO: “Adding Up to Nothing”
“Three years after the Hope and Change president took office, Hope turns out to mean high taxes and lots of regulations, and Change consists of celebrating the government’s takeover of General Motors and belittling technological progress that destroys some jobs even as it creates others. The Great Uniter is all about class warfare.”
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Many soundbites sound good, but have very harmful consequences in the real world. That’s the case for President Obama’s proposal in his State of the Union Address to not allow anyone to leave school until age 18 or graduation. This proposal originated with “the National Education Association, which stands to gain from the idea a measurable boost to its dues-paying ranks, and which has in fact proposed mandatory schooling for nongraduates up to age 21.” This proposal could result in an increase in school violence by bored and frustrated 17-year-olds who hate school but are forced to attend. It would also make it even harder for teachers to maintain order in dangerous schools, contributing to an exodus of talented teachers who would rather teach than be babysitters or policemen. And it could result in truancy charges and arrests for parents who fail to get their stubborn, fully-grown offspring to attend school.
As one commenter notes, “If the union is really pushing something like this, I wonder how many of the members actually welcome it. How many teachers really want to deal with a 17 year old who doesn’t want to be in school? The type that drop out can’t be a joy to teach.” Commenting on the NEA’s ultimate desire to keep people in school until age 21 (Obama wants every American to attend college or at least get “more than a high-school diploma”), another commenter notes, “I suppose Obama would send the cops after those notoriously unproductive dropouts Bill Gates and Mark Zuckerberg.”
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Last week, the Metropolitan Washington Airports Authority announced it was considering scrapping the Silver Line stop at Dulles Airport.
Though the Silver line was designed specifically to provide service to Dulles Airport, MWAA Board Member Bob Brown said it “wouldn’t be much of an additional burden on riders because even if Metro stopped at the airport people would still have to take a hike to the airport terminal” (1,150 feet – more than three football fields).
That’s right, MWAA just admitted that the proposed metro stop at Dulles Airport would be so inconvenient that air travelers aren’t likely to use it. So if the Silver Line is really just a westward extension of commuter rail that might not even stop at Dulles Airport, why is MWAA still involved?
More importantly, why would Virginia (one of only eight states with a AAA bond rating and the only one to have kept it without interruption for the last seventy years) surrender authority over a $6.8 billion infrastructure project to a notoriously secretive and debt-addicted semi-private entity like MWAA?
Virginia turning the reins of a large and complex project over to an opaque agency with a worse credit rating than France might seem completely backwards, but maybe the alternative to MWAA is even worse. One argument in favor of giving MWAA jurisdiction over planning the Silver Line is that it is a less wasteful and incompetent entity than the Kafkaesque Washington Metropolitan Area Transit Authority, which will ultimately run it.
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American Europhiles love to make comparisons between the entire United States and the rich Nordic countries in order to advocate America’s “Europeanization.” But comparing these two is deceiving. I explain why below in a letter I wrote to The New York Times.
To the Editor:
In “Why is Europe a Dirty Word?” (Jan. 14), Mr. Kristof claims that US emulation of Europe is not such a bad idea, holding up Norway’s higher GDP per capita as an example why.
But Norway’s wealth stems from its enormous natural resources in the North Sea—not its “superior” economic system. I suppose Mr. Kristof would also idolize Qatar—the richest country in the world per capita. Never mind its complete dependence on oil and gas reserves.
It is also not fair to compare a small homogenous country like Norway—a pocket of wealth in Europe—to the entire economically and demographically diverse United States. When compared to similar areas in America, like Connecticut, Norway’s GDP per capita pales in comparison.
The US and Norway are not like-for-like comparisons.
MATTHEW MELCHIORRE
Washington, Jan. 17, 2011
The writer is an Adjunct Analyst at the Competitive Enterprise Institute.
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President Obama has spent billions of dollars in taxpayer money on subsidizing foreign firms through his failed “green energy” programs, so it was ironic and hypocritical when he attacked outsourcing in his State of the Union address. As former congressional economist Chris Edwards notes, Obama made many blatantly false claims about outsourcing and corporate taxation in his speech. Here are just a few:
Claim: “Right now, companies get tax breaks for moving jobs and profits overseas.”
False: There are no such breaks. Instead, we punish U.S. and foreign businesses for investing and creating jobs here.
Claim: “If you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it.”
False: There is no such tax deduction. . .
Claim: “From now on, every multinational company should have to pay a basic minimum tax.”
False: We’ve already got a corporate “alternative minimum tax,” and it’s an idiotic waste of accounting resources that ought to be repealed.
Claim: “It is time to stop rewarding businesses that ship jobs overseas.”
False: We penalize them for locating jobs here. Besides, the overseas operations of U.S. companies generally complement domestic jobs by boosting U.S. exports.
Claim: “Companies that choose to stay in America get hit with one of the highest tax rates in the world.”
True: Our rate is 40 percent, which compares to the global average rate of just 23 percent.
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