Most Americans oppose a mortgage bailout, both for borrowers and for lenders. They oppose bailouts for homeowners by a roughly 2-to-1 margin (53 percent to 29 percent). They oppose bailouts for lenders even more strongly, “by a 4-to-1 margin,” according to pollster Rasmussen Reports.
CEI earlier explained why mortgage bailouts are a terrible idea here, here, here, here, here, here, and here.
The National Center for Public Policy Research has a new study, and Internet ad, on the proposal to list the polar bear under the Endangered Species Act. They point out that, among other things, the population of polar bears in the wild has actually doubled in the last forty years. Aren’t endangered species supposed to be, well, in decline?
Now imagine that animals that are candidates for the endangered species list were treated like candidates for office, and you’ll be ready for the video.
Mark Tapscott writes about disgraced New York politician Eliot Spitzer’s hypocrisy in the Examiner. Spitzer flouted the rules while loudly berating others for real or imaginary transgressions, and supported bestowing fabulous riches on wealthy trial lawyers while attacking successful businessmen as being fatcats.
CEI earlier wrote about Spitzer’s overreaching and hypocrisy in The Nation’s Top Ten Worst State Attorneys General, and also in a letter published in the Wall Street Journal, an editorial in the Examiner, an issue analysis, and this blog.
In today’s New York Times, a feature story profiles a project to create a national economic planning supercomputer by the socialist government of Salvador Allende in Chile in the early 1970s. “Cybersyn,” as the project was known, consisted largely of “a clunky mainframe computer and a network of telex machines.”
A new exhibit in Chile’s presidential palace features a replica of a control chair (pictured right) that was part of the abortive project. The device may seem quaint today, but its being technologically dated makes it no less creepy. Its look is fittingly reminiscent of the furnishings in petty-tyrant Number 2′s control room in “The Prisoner.” And it would look equally at home in Woody Allen’s totalitarian dystopian film Sleeper (its pornographic-sounding name is even reminiscent of the “Orgasmatron” device featured in the film), which was released in 1973, the year Allende was deposed in a military coup.
Now 1973 may seem like ancient history today, but by then, Ludwig von Mises had already clearly shown why economic calculation is impossible without prices operating in a market system, and Friedrich Hayek had made the compelling case of why no single entity could ever gather sufficient knowledge to plan a national economy. Yet the self-appointed planners keep on trying, no matter how many times they fail — and they will always fail. Would that all such schemes end up as museum pieces! (Thanks to John LaBeaume for the Times link.)
Courtesy of Todd Zywicki at the Volokh Conspiracy, I’ve just learned that President Bush will be appointing William Kovacic to chair the Federal Trade Commission when current chairwoman Deborah Majoras leaves the agency in June. Kovacic has served as one of five members of the Commission since January 2006, and was confirmed by the Senate to that post. So, despite the Democratic controlled Senate’s on-going reluctance to confirm Bush Administration appointees, Kovacic will not need to be confirmed again in order to rise to the chairman’s position.
Despite naming often disappointing people to head various other federal agencies, Kovacic’s appointment extends President Bush’s streak of appointing genuinely superb FTC chairmen to three in a row. This is also the second time Bush has named a former George Mason School of Law professor to chair the agency (Tim Muris, one of my antitrust professors at Mason, being the first).
Morning edition had an amazing story about the government race to patent the atom bomb this morning. The patenting process actually jeopardized the secrecy of the project, but the government still went ahead so they would have a patent estate on all nuclear technology. What I really liked about this story is the loving care and fascination that 26-year old Alex Wellerstein put into documenting the nuclear patenting project.
Today, EPA Administrator Stephen Johnson announced that EPA would respond to the Supreme Court global warming case, Massachusetts v. EPA, by issuing an Advance Notice of Proposed Rulemaking (ANPR) to solicit public comment on a range of complex issues.
Before finalizing its response to the Court, EPA must figure out how recent statutory changes in EPA’s responsibility regarding fuel economy and renewable fuel standards would affect the setting of auto emission standards for carbon dioxide (CO2) and other greenhouse gases–a possible outcome of Mass v. EPA.
Above all, EPA must sort out how setting CO2 tailpipe standards might affect “many sources beyond just the cars and trucks considered by the Court, including schools, hospitals, power plants, aircraft, and ships.”
Indeed, as CEI and several of its free-market brethren explained in a recent amicus brief and in coalition letters to President Bush and Senator Dianne Feinstein, EPA regulation of CO2 from new cars and trucks under Section 202 of the Clean Air Act could compel the agency to regulate CO2 emissions from potentially hundreds of thousands of small- to mid-sized farms, factories, and buildings under the Act’s Prevention of Significant Deterioration (PSD) program–a result Congress clearly did not intend when, in 1970, it enacted Section 202, a provision dealing solely with emissions from new motor vehicles.
Congressional reaction to EPA’s decision to proceed with the “appropriate care and attention this complex issue demands” rather than “rushing” to regulate CO2, was predictable.
Senate Environment and Public Works Chairman Barbara Boxer (D-CA) stated: ”For nearly eight years, this Administration has tried to duck its obligation to address global warming pollution. A year ago, the Supreme Court ruled that greenhouse gases are covered under the Clean Air Act. Now, instead of action, we get more foot-dragging.”
Two quick comments. First, as a technical matter, EPA did not receive an official remand from the Court of Appeals, where the case originated, until September 14, 2007. Second, and more importantly, it wasn’t until December or thereabouts that EPA began to understand the enormity of the regulatory burden it might inadvertently unleash by rushing to set CO2 standards for motor vehicles.
The first wake up call came from attorney Peter Glaser in testimony (November 8, 2007) before the House Committee on Oversight and Government Reform. The U.S. Chamber reinforced Glaser’s message in a December 12, 2007 open letter to Congress. The free market coalition also weighed in via the aforementioned letters to President Bush (Dec. 16, 2007) and Sen. Feinstein (Feb. 20, 2008).
You’d think by now Sen. Boxer would get it. Maybe she does. Maybe what really bugs her is that the Bush administration today narrowly avoided a public policy disaster. Just think, if EPA had rushed to set CO2 standards for new cars and trucks, the ensuing regulatory cascade could have given us the equivalent of a dozen Kyoto Protocols, yet without Sen. Boxer or any of her allies on the Hill voting for it or taking responsibility for the economic fallout. It would all have been George Bush’s mess. How convenient for them!
Thanks to Administrator Johnson’s decision, Boxer can no longer pretend that Mass v EPA is just about minor tweaks in new-car fuel economy standards. If she wants to regulate auto emissions, she must also accept responsibility for the broader and heavier regulatory burdens this could impose on the U.S. economy. No wonder she’s irked!
Ed Markey (D-CA) responded flippantly to Johnson’s ANPR letter: “The ‘A’ in this document should stand for ‘absurd.’ … This cynical step by EPA to announce an ‘Advanced Notice of Proposed Rulemaking’ in the coming months should be seen for what it is: an “Aspirational Notice of Procrastinational Rulemaking’.” Markey has no excuse for spouting such drivel. He understands full well the regulatory morass EPA could create if it followed his advice, because Peter Glaser explained it to him in testimony just two weeks ago.
Today is the last day to vote for the free market and against overregulation in a debate I am participating at the web site of the magazine The Economist. If Open Market readers aren’t enthused about any of the candidates in this year’s presidential election, here is a venue where their vote could make a difference and the principles of freedom are definitely at stake. If CEI and I and the free-market side win this debate, it could have a positive influence on the larger debate over regulation of financial markets.
I am arguing in favor of the proposition, “By intervening to regulate business and financial risks, governments have made things worse.” To vote for me and for less regulation, go to the site, http://www.economist.com/debate, register (registration is free), and cast your vote as “PRO.” Voting continues all through today, and will cease tomorrow at an unspecified time.
The voting is neck and neck. I am now winning 52 to 48 percent, after being down earlier this week 47 to 53 percent. Every vote counts for the free-market to squeak out a victory in these challenging times when much of the media is blaming deregulation for all the ongoing financial woes.
Today, after being attacked by three “featured participants” arguing for an ever-expanding regulatory state, I finally get an ally among the guest commenters. Thomas Firey, managing editor of the Cato Institute’s magazine Regulation, writes a masterful refutation of the nostalgia among the commenters for New Deal banking regulations.
“Let us consider just how well US banking regulation ‘worked’ in the post-war period,” Firey writes. “[T]hroughout the post-war period, costs to borrowers were much higher than they are today. Since the banking deregulations of 1980-91, terms for both depositors and borrowers have improved greatly.”
Firey also argues that while stricter lending regulations may have benefitted the lenders and borrowers involved in the 1 million subprime loans now in default, “what of the other 5 million subprime loans that are in good standing, most of which have provided people with homes that they otherwise could not have purchased?”
I make many of the same points in my “Closing Statement” that was posted yesterday. “Indeed, when looked at in terms of distribution, the housing boom’s benefits may have been even more widely dispersed than those of the tech boom,” I argue. “Nearly 70% of US families and close to one-half of American black and Latino families now own the homes in which they live.” I remind readers that the overall foreclosures, while numbering in the millions in correspondence with the dramatic increase in the number of homeowners, is still only 2.04 percent of all mortgage loans.
I argue that while some volatility is the price we pay for a dynamic economy that improves everyone’s standard of living, “volatility can be much reduced through the introduction of what we should call a second stage of deregulation. Let us deregulate private risk management, as we have risk-taking, for ordinary investors as well as hedge-fund fat cats.”
As an example, I propose lifting restrictions that make it difficult for mutual funds to short stocks and other securities. Allowing mutual funds to engage in the same strategies as the smart hedge funds that shorted subprime loans would bring gains to middle-class investors and would have sent a stonger signal to the markets that something was wrong with mortgage securities.
Appreciate any feedback or suggestions from Open Market readers on deregulating risk management. In the meantime, make your freedom-loving voice heard today in the Economist debate!
With U.S. farm production and farmers’ incomes soaring, why is a bloated farm bill likely to sweep through the House-Senate conference this spring? The Wall Street Journal in a front-page article gives some reasons:
The farm bill has its roots in the Great Depression, when about a quarter of the U.S. population lived on farms and endured extraordinary economic hardship. As first conceived in the 1930s, the bill was designed to be a temporary boost to farm income.
It has since evolved into a thicket of hard-to-cut programs, providing payments and special loans to farmers to counteract swings in commodity prices and ensure market stability, as well as income. Subsidies flow to growers of corn, wheat and cotton, among other commodities. The legislation has also become a vehicle for funding food stamps, land conservation and school lunches, to name a few things, attracting supporters whose constituents have little or nothing to do with farms.
Last year, advocates of farm bill reform worked long and hard, but the fact that the Farm Bill includes well-funded programs that urban politicians support — food stamps and nutrition programs — and large-scale conservation programs that environmental supporters pushed for meant reformers had few Congressional leaders for the fight. In addition, farm groups that didn’t receive subsidies and used to push for agricultural reform were co-opted with research and development monies targeted to such groups as the fruit and vegetable producers.
President Bush has threatened to veto the bill, if caps on who can receive farm support aren’t in the legislation and if some of the funding sleight-of-hand isn’t corrected. The conference may give in on a few of those points, but it’s almost inevitable that the final legislation will represent even more pork that taxpayers have to provide for farm producers.
Earlier, I wrote about how immigration authorities were poised to deport Saman Kareem Ahmad because he belonged to a group that rose up against Iraqi dictator Saddam Hussein, who was ousted by American troops. They claimed his opposition to the Iraqi government during “Operation Desert Storm and Operation Iraqi Freedom” made him a terrorist!
Other immigrants deemed “terrorists” by immigration authorities “include U.S. allies that fought against” the ”Taliban government in Afghanistan” – a regime that aided and abetted Osama Bin Laden — as well as ”Montagnard tribesmen who fought with U.S. forces in Vietnam,” and members of minority groups subjected to massacre and rape by ”Burma’s military junta and Sudan’s Islamic leaders.”
Belatedly, the immigration bureaucracy has now changed course, and will “temporarily stop denying green cards to refugees and other legal immigrants tied to groups that sought to topple foreign dictatorships, placing their cases on hold while it determines more ‘logical, common-sense’ rules for judging them.”
The prior policy of deporting opponents of repressive and genocidal regimes was only partly the result of bureaucratic rigidity, mindlessness, and incompetence. It also owed much to the very broad definition of “terrorist” in the immigration laws Congress passed, which were ”written so that the definition of a terrorist organization and activity is very, very broad.” This sad situation demonstrates that legislators should not unthinkingly vote for so-called “anti-terrorism” provisions without considering their full implications. Legislators are frequently thoughtless and illogical when it comes to immigration.
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