January 2012

Stimulus Subsidizes Corruption, Waste, Racism

by Hans Bader on March 10, 2009 · 2 comments

in Bailout Watch, Deregulate to Stimulate, Economy, Legal, Politics as Usual, Precaution & Risk, Regulation, Stimulus to Nowhere

The $800 billion stimulus package signed by Obama not only will make the economy shrink over the long-run, it will pay $88.6 million for unnecessary new construction in the Milwaukee School District, whose enrollment is shrinking so fast that it already has 15 vacant schools. And it will funnel over $355 million into the corrupt, racist Detroit schools, no strings attached.

Detroit is the fastest-shrinking big city in America. It once had two million people, but it has lost so many people that now it has only 800,000 residents, even as population in its suburbs holds steady. Its city council is blatantly, unapologetically racist toward white and Asian residents, something Obama’s Justice Department ignores.

Stock markets, which earlier fell after the Administration’s $8 trillion in new deficit spending spooked investors, are rising today on speculation that costly mark-to-market accounting rules will be suspended. But the Treasury Department says that the rules, which have been described as some of the “most destructive policies of the Bush Administration,” will merely be tweaked. If such rules had been in effect in the 1980s, “every major commercial bank would have collapsed.”

The stock markets fell like a stone since the Obama Administration pushed through its bailout and stimulus packages. Investors were spooked, as Stanford University economist Michael Boskin noted in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.”

LibertyWeek 33: Drinking Our Way to Economic Health

by Richard Morrison on March 10, 2009

in CEI Projects, Podcast

Welcome to Episode 33 of the LibertyWeek podcast, with your hosts Richard Morrison and Cord Blomquist and technical producer (and this week’s special guest) Ryan Young. After bidding our friend Thor Halvorssen a very happy birthday, we get a fresh recap from Ryan Young on the events of the Free State Project’s recent Liberty Forum in Nashua, New Hampshire (photos). Google’s CEO spurns Twitter (transcript via TechCrunch) in Technology News, John McCain and Richard Shelby say that the government should end the bailouts and let poorly-managed banks go bankrupt, and brewers pin their hopes on robust St. Patrick’s Day sales in this week’s edition of Beer News. Next, we go abroad for Scandal Watch where the Chinese government is cracking down on sub-optimal milk quality and finally back home to America for Olympic News, where the head of the U.S. Olympic Committee is calling it quits.

The honor of Tweet of the Week™ goes to dan_hayes of Reason.tv!

Enemies of Sound Money

by Ivan Osorio on March 9, 2009 · 1 comment

in Culture, Economy, Zeitgeist

From the blog of the great New Jersey-based independent radio station WFMU comes “Little Paper Airplanes,” a music video by the experimental rock band the Sursiks, that should put a smile on the faces of Murray Rothbard devotees — though it is a tad worrying to see monetary disaster find artistic expression. (Notice: strong language.)

(Thanks to Marc Scribner for the WFMU link.)

Sen. Richard Shelby, LOL*

by Richard Morrison on March 9, 2009 · 1 comment

in Bailout Watch, Economy, Stimulus to Nowhere

We normally don’t spend much time praising elected officials here at OpenMarket, but I have to make an exception (this week, at least) for Sen. Richard Shelby of Alabama. Over the weekend he appeared on TV and trashed the seemingly endless series of financial services bailouts, making the case that if these companies are incapable of functioning without billions of taxpayer dollars, the government should simply let them go into bankruptcy:

“Close them down, get them out of business,” Shelby, the senior Republican on the Senate Banking Committee, said on the ABC television program This Week With George Stephanopoulos. “If they’re dead, they ought to be buried.”

Finally, a sensible response. To paraphrase a Fox News commenter from last week, how is it that Treasury officials and banking gurus keep telling us that companies like to AIG are “too big to fail”? If you can’t continue to exist without a continual cash lifeline from the U.S. Treasury, you’ve ALREADY failed. All that’s left is an empty husk being refilled with more and more deficit spending. For his honesty and disregard of the self-interested Wall Street types who simply want more government money, Sen. Shelby wins this week’s coveted *Least Objectionable Legislator award from OpenMarket.org. Keep up the good work, senator!

Thanks to our own Wayne Crews for creating the LOL Award. May it be more often deserved!

Obama Insults America’s Allies, Endangers Economy

by Hans Bader on March 9, 2009 · 4 comments

in Bailout Watch, Economy, Employment, International, Politics as Usual, Stimulus to Nowhere

Not content with endangering the economy by pushing through $8 trillion in bailouts and welfare, Obama has now insulted the British, our only major ally in fighting the Afghanistan and Iraq Wars.

Obama did this by dissing both the late Winston Churchill, who led Europe’s fight against the Nazis, and the current British Prime Minister. Staffers then compounded the offense by deriding Britain as being no more important than any of the world’s 190 other countries. (That’s right. The country that invented parliamentary democracy and whose troops fought and died with ours in Korea and other bloody wars against totalitarian regimes is deemed no more important than a tiny county like Nauru, which has only 14,000 people and survives through money laundering and selling passports to non-citizens).

The only European country that has really helped the U.S. in Afghanistan and Iraq is Britain. France, Germany, etc., have only sent token contingents to Afghanistan (for non-combat roles) and nothing to Iraq. The less Britain is willing to do for us in the future, the more of our own troops we will have to put into Afghanistan in the future.

By the way, Obama’s election won’t get us anything from the French. The French president effusively praised Obama before his election, but then refused to send any additional troops or personnel to help the U.S. in Afghanistan after the election.

I recently visited my French relatives, who live near Nice. All of them –- ranging from my wife’s avowedly Marxist father, who called me the night of Obama’s election at 2 a.m. in the morning to congratulate me, to her centrist, more distant relatives –- say that Obama’s election doesn’t entitle the U.S. to any additional help or cooperation, whether it’s ending bans on American products, or sending more French troops to Afghanistan.

My wife’s dad takes Obama’s election as America’s confession that we were wrong all these years – a racist, imperialistic, oppressive, hegemonic power that deserves no help.

My wife’s more distant relatives, many of whom like the U.S., nevertheless say that France should look after itself and its own industries, and let the U.S., which is wealthier and more powerful, take on the exclusive role of rooting out the Taliban. And they think now is not the time for France to end its trade restrictions on U.S. products, even those that the WTO has said are invalid, since France needs all the jobs it can get.

Obama campaigned on the theme that he would get our allies to help us more, by replacing George Bush, whom he claimed had singlehandedly antagonized the world. But Obama’s election is getting us nothing from our “allies,” and only serves to embolden hostile countries like Russia, which ridiculed the Obama Administration for a recent gaffe in which the State Department incompetently translated the Russian word “reset,” with embarrassing results.

Buffett Opposes Card Check, but Don’t Forget Binding Arbitration

by Ivan Osorio on March 9, 2009

in Economy, Labor

Rumors of the so-called Employee Free Choice Act (EFCA) being introduced in the current Congress have come and gone — and will come again. Yet the Washington rumor mill being so active on this shows just how big an issue this is. For the unions, it is their number one priority, since they see it as a tool to reverse decades of membership decline. For the business community, it would impose yet another dead-weight cost in the middle of a severe economic slowdown.

EFCA would replace secret ballot union elections with a process known as card check, in which union organizers ask employees to sign union cards out in the open, exposing employees to the kind of high-pressure tactics secret ballots are designed to avoid. Public opposition began to turn against EFCA as this became known among the public. Now Senator Claire McCaskill (D-Mo.) says that Senate Democrats may not have the votes to break a Republican-led filibuster. And former Senator George McGovern has been joined by another prominent Democrat in his opposition to card check, Warren Buffett, who has President Obama’s ear (as the anger in a Center for American Progress response would indicate).

That protecting secret ballots should be popular is no surprise. But that’s not all there is to this bill. As former Labor Department officials Loren Smith and Vincent Vernuccio note, card check isn’t the only noxious element of EFCA. Binding arbitration, which has not received nearly as much attention, would essentially empower federally appointed arbitrators to impose a contract on any newly unionized business.

Once a business is unionized, management and the union have to come to terms on a contract for the unionized workers. This can take months or years as the two parties hammer out their differences.

Under EFCA’s proposed binding arbitration provision, the government would step in after 90 days and “work with” the two parties. All that is needed is one party to “request” the process. After another 30 days, the government would assign the case to an arbitrator (the rules for which would be written by the Obama administration) who would impose wage and benefit terms for the company for the next two years.

Arbitrators generally take a split the baby approach and try to come to a middle ground between the two parties. This means the union can make outrageous demands then stonewall an employer knowing they may not get everything in arbitration but they can, with the help of the government, force the employer into concessions that may not be economically feasible for the company. An example would be a new car company — instead of a regular negation process a union could make outrageous demands and wait for an arbitrator to decide the terms of a contract. Understandably the arbitrator would not want to reinvent the wheel so he would look to other existing contracts in the industry. Soon this company would be shackled with the same type of crippling contract as the Big Three and the UAW.

So, Smith and Vernuccio (correctly) warn, EFCA opponents need to be vigilant of efforts to break up the bill’s component parts into separate bills, which could then pass much more quietly than the highly controversial EFCA.

For more on card check, see here and here.

The deep social meaning of couture fashion in Paris

by Fran Smith on March 9, 2009

in Culture

I thought at first it was a parody – Robin Givran’s Washington Post review of the fall fashion collections in Paris. But no. Givran’s take on the designer Rei Kawakubo’s new collection inspired by the “disenfranchised” was earnest and solemn. Givran begins her review describing an elderly beggar at the Louvre, who is swathed in layers of tattered clothing. She links those garments to those designed by Kawakubo and admires the fact that Kawakubo challenges other designers,’ for instance, “Kawakubo doesn’t believe a shirt requires two armholes.”

But then Givran takes us into the realm of the deep emotions underlying this “prescient” designer’s fashion show:

The show rode a wave of emotion from bliss to anger to sorrow and finally peacefulness. Its mood shifted from light to dark and back again. Rather than responding to the construction of the clothes — because it was impossible to really tell what was going on under all those layers — the audience reacted to the feelings and images those clothes evoked.

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But Kawakubo appropriated the one thing that forcefully announces the presence of the disenfranchised in the world, one of the few things that keep them from disappearing: Belongings. The rainbow of fabric in a Sudanese refugee camp, the piles of broken shoes in the U.S. Holocaust Memorial Museum, a stack of jackets and parkas in a coat drive. We might not see the individual, but we see their plight. We see something.

I guess Givran might think readers would find it frivolous during these tough economic times to trek to Paris to cover fashion. So she ends by linking the designer to today’s uncertain times:

But just when it seems that the fashion industry had given up on saying anything especially moving at a time when the future seems so uncertain, Kawakubo managed to reach beyond the clothes and right down to the complex emotions connected with them.

I was reminded of Miranda Priestly (the Meryl Streep character) in “The Devil Wears Prada” and her lecture about the importance of the fashion industry and “stuff” – with “cerulean” blue as the takeoff. That was satire.

CO Liquor Stores & Craft Brewers Against Consumers?

by Michelle Minton on March 9, 2009 · 1 comment

in Nanny State, Personal Liberty

After running into the owners of a Colorado Brewery this weekend, I stumbled on a battle going on in the state between, as the Brewers see it, liquor stores and grocery stores. Really, it is a battle between liquor stores and consumers. While it is predictable that liquor stores would try and block legislation that would allow any other store to carry beer I was extremely surprised to find that many craft brewers are adamantly taking the side of liquor stores and actively lobbying Colorado legislators to keep beer off grocery store shelves.
It is a very sad thing when businesses ask government to shield them from competition. It is even more depressing to see small businesses, which survive by their flexibility and loyal customer base, exhibit such anti-competitive and anti-consumer behavior.

The situation: In the state of Colorado, grocery stores and convenience stores are allowed to sell beer, but only if it is under 3.2% ABV which is lower than the average brew. They argue that they should be allowed to compete with liquor stores and serve their consumers better by lifting the percentage barrier on beer.

The arguments: Grocery stores, faced with increasing food prices and falling profits demand the ability to offer their consumers the products they want—including full-strength beer. Independent liquor stores as well as *some* craft brewers claim that grocery stores will carry only the top selling brands of beer and that changing the law will put independent and small liquor stores out of business resulting in reduced availability of craft beers.

The liquor store-craft brew argument is pure bunk. And it isn’t even a new argument. It’s the same old Wal-Mart myth repackaged in a beer cask. The oft heard claim is that a large store (like a Wal-Mart) moves into an area squeezing out smaller Mom-and-Pop competition. The truth is that any business moving into a new market will increase competition within the market. As in the case of Wal-Mart, if grocery stores enter the malt beverage market some independent stores probably will go out of business—but don’t blame the grocery stores. Blame the liquor stores for being uncompetitive; for not finding some way (either product variety, more convenience hours or location, better advertising) meet the demands of consumers—they should go out of business if they can’t provide what consumers want. The question then is, will craft brewers go out of business as a result of all this change? The answer is the same for the liquor stores: not if they are good craft brewers.

While the brewers that I spoke with touted the importance of the craft brew movement in Colorado (no argument here) and the variety that exists in the state (again- that’s a fact) he didn’t seem to want to listen to the argument that grocery stores selling beer might open a whole new market for distribution. In fact, he downright admitted that “maybe” and “might” isn’t comforting when the system they currently have “works right now”.

So, there you have it, small businesses preserving the status quo. These brewers, who already have distribution contracts set in place with these small liquor stores, simply don’t want to think about how they could work to convince grocers to carry their beers or incense their fans to demand stores carry their brand, and liquor stores don’t want to have to think about how to carve a niche in a market where competition can enter freely.

In fact, the respective arguments of liquor stores and craft brewers are self-defeating when put together. If grocery stores will refuse to carry craft beer (as the brewers believe) and the liquor stores will lose customers to grocery store beer…liquor stores can devote more inventory to the craft beers that consumers obviously want and keep making a profit. As Philadelphia beer reporter “Joe Sixpack” said “If supermarkets squeeze out craft beer, it’ll only create alternative specialty beer retailers. Look at gourmet cheese. You can’t buy it at the Acme, but you still find it easily, in specialty shops, farmer markets and upscale places like Whole Foods.”

When I brought up the fact that Whole Foods grocery stores carry many craft beers and are often right next to liquor stores, the craft brewer I spoke with had to admit that Whole Foods was the exception to his vision of generic grocery store selection. But if selection in CO grocery stores really would be that bad, it would simply create more opportunity for stores like Whole Foods that recognize the demand for craft beers.

$8 Trillion in Bailouts; Undeserving Rich Benefit

by Hans Bader on March 8, 2009 · 8 comments

in Bailout Watch, Economy, Employment, Labor, Politics as Usual, Precaution & Risk, Sanctimony, Stimulus to Nowhere

Federal bailouts and related spending proposed by the Obama Administration now total 8 trillion dollars, according to the American Institute for Economic Research.

To pay for exploding federal spending, Obama’s Congressional allies are mulling huge tax increases. Rep. Jerry McNerney (D-Cal.) wants a 90 percent tax rate. Obama has spent more in his first 50 days, by far, than George Bush spent on the entire Iraq War. That includes a pork-filled $800 billion stimulus package that deceptively repealed welfare reform, and that the Congressional Budget Office admits will cut the size of America’s economy in the long run by exploding the national debt.

The bailouts and new spending will benefit many undeserving people who are well-to-do. The Treasury Department’s recently announced mortgage bailout will bail out irresponsible mortgage borrowers with big homes, high incomes and normal mortgage payments, covering mortgages up to $729,750.

People are suffering across much of the country, but not here in Washington, D.C., where the White House is throwing lavish parties and well-to-do residents are being enriched at taxpayer expense by Obama’s expansion of government. The expected hiring of up to 250,000 new bureaucrats by the Obama Administration is helping to prop up home values in Washington’s inner suburbs, while siphoning money out of less fortunate regions of the country. The bureaucrats’ pay will likely be much better than that of the far-more-numerous private sector employees whose jobs are being lost as a result of Obama’s deficit spending, which will crowd out private investment. Expensive restaurants and sellers of luxury goods in Washington, D.C. still seem to have plenty of business. My spend-thrift liberal neighbors, who have a second mortgage, are spending as conspicuously and prodigiously as ever.

The $800 billion stimulus package also subsidizes groups that helped spawn the mortgage crisis, like ACORN, which promoted “liar loans” and engaged in financial fraud and vote fraud.

An ally of ACORN, the Congressman Barney Frank, (D-Massachusetts) helped spawn the mortgage crisis by blocking needed reforms of the bankrupt government-sponsored mortgage giants, Fannie Mae and Freddie Mac, and backing “affordable housing” mandates that resulted in risky mortgage loans. But now this hypocrite wants a one-sided inquisition into who caused the crisis!

George McGovern on Card Check

by Cord Blomquist on March 7, 2009 · 1 comment

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=afjp4Cx-3W0 285 234]

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