January 2012

TARP Transparency: A Good Start, but Not Enough

by Ryan Young on August 13, 2009

in Bailout Watch, Economy

The new issue of the CEI Planet has an article of mine about proposed legislation to make the TARP bank bailout program more transparent.

Main point: more transparency would alleviate some of TARP’s symptoms. But TARP itself is a disease. The sooner Congress gains the political will to recover from its bailout fever, the better.

Read the rest of the Planet here.

Money Is Not Wealth

by Ryan Young on August 13, 2009 · 1 comment

in Economy, Odds & Ends

Here’s a letter I sent recently to The New York Times:

To the Editor:

Eric Zencey’s article “G.D.P. R.I.P” (August 10) correctly points out that GDP has limited usefulness in measuring well-being. But his case is muddled by confusing money with wealth. Money is a unit of measure, like a mile or a ton. But it is not itself wealth.

He writes, “If you get into a fender-bender and have your car fixed, G.D.P. goes up.” It actually stays the same. If I don’t get into the accident, I’ll just spend the repair money on something else. While the accident may have no effect on GDP, it does have an effect on wealth; I am inarguably poorer. Instead of a working car plus a new tv, I can enjoy only the car.

Zencey’s confusion is itself an example of why GDP does a poor job of measuring well-being.

RYAN YOUNG
Fellow in Regulatory Studies
Competitive Enterprise Institute
Washington, Aug. 10, 2009

RIP Les Paul, Legendary Guitarist & Inventor

by Ivan Osorio on August 13, 2009 · 1 comment

in Culture

Legendary guitarist and inventor Les Paul passed away today. Considering the enormous influence he had on modern music both as musician and inventor, it’s difficult to summarize it all. CNN notes:

In the 1930s and ’40s, he played with the bandleader Fred Waring and several big band singers, including Bing Crosby, Frank Sinatra and the Andrews Sisters, as well as with his own Les Paul Trio. In the early 1950s, he had a handful of huge hits with his then-wife, Mary Ford, such as “How High the Moon” and “Vaya Con Dios.”

His guitar style, heavily influenced by jazzman Django Reinhardt, featured lightning-quick runs and double-time rhythms. In 1948, after being involved in a severe car accident, he asked the doctor to set his arm permanently in a guitar-playing position.

Paul also credited Crosby for teaching him about timing, phrasing and preparation.

Crosby “didn’t say it, he did it — one time only. Unless he blew the lyrics, he did one take.”

Paul never stopped tinkering with electronics, and after Crosby gave him an early audiotape recorder, Paul went to work changing it. It eventually led to multitrack recording; on Paul and Ford’s hits, he plays many of the guitar parts, and Ford harmonizes with herself. Multitrack recording is now the industry standard.

But Paul likely will be best remembered for the Gibson Les Paul, a variation on the solid-body guitar he built in the early 1940s — “The Log” — and offered to the guitar company.

“For 10 years, I was a laugh,” he told CNN in an interview. “[But] kept pounding at them and pounding at them saying hey, here’s where it’s at. Here’s where tomorrow, this is it. You can drown out anybody with it. And you can make all these different sounds that you can’t do with a regular guitar.”

Gibson, spurred by rival Fender, finally took Paul up on his offer and introduced the model in 1952. It has since become the go-to guitar for such performers as Jimmy Page.

Paul is enshrined in the Rock and Roll Hall of Fame, the Grammy Hall of Fame, the Inventors Hall of Fame and the Songwriters Hall of Fame. He is survived by three sons, a daughter, five grandchildren and five great-grandchildren. Until recently he had a standing gig at New York’s Iridium Jazz Club, where he would play with a who’s-who of famed musicians.

He admired the places guitarists and engineers took his inventions, but he said there was nothing to replace good, old-fashioned elbow grease and soul.

Here’s a too-short list of some famous Les Paul guitar players.

Les Paul was precisely the kind of innovator whom the CEI video, “Human Achievement Hour,” is intended to honor.

UPDATE: The strangest headline about Les Paul I’ve seen today.

And two nice tributes from some friends:

Brian Doherty at Reason.

Mark Hemingway at National Review Online.

Recession Ends in France, Without Massive and Costly U.S.-Style Stimulus Package

by Hans Bader on August 13, 2009 · 3 comments

in Features, International, Politics as Usual, Stimulus to Nowhere, Zeitgeist

The recession has ended in France, which avoided adopting a massive stimulus package like Obama’s $800 billion stimulus package.

France’s conservative President adopted a much smaller $31 billion stimulus package, which, unlike Obama’s, was focused on productive investment, not welfare or social services. $14.5 billion of France’s stimulus package was earmarked for injection “into private sector enterprises.” Billions more were for investments in infrastructure, construction projects, and railways.

In the U.S., Obama pushed through a much more costly, welfare-filled $800 billion stimulus package through fear-mongering. Obama claimed his stimulus package was needed to prevent “disaster” and “irreversible decline.”

But the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

The Obama Administration purged the stimulus package of most of the investments in roads and bridges originally suggested by economists, and filled it instead with welfare and social spending, out of political correctness, after feminist leaders complained that building and repairing roads and bridges would put unemployed blue-collar men to work, rather than women.

As Christina Hoff Sommers points out, “Men are bearing the brunt of the current economic crisis because they predominate in manufacturing and construction, the hardest-hit sectors, which have lost more than 3 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and health care, which gained 588,000 jobs during the same period.”

But when the Administration floated the concept of “an ambitious . . . stimulus program to modernize roads, bridges, schools, electrical grids, public transportation, and dams” as a way of “reinvigorating the hardest-hit sectors of the economy,” “Women’s groups were appalled,” asking “Where are the New Jobs for Women?” and denouncing what they called “The Macho Stimulus Plan.”

The Obama Administration quickly knuckled under to this pressure, replacing its recovery package with an $800 billion stimulus package that instead “skews job creation somewhat towards women” by spending money instead on social services like welfare that are administered mostly by female employees.

“A recent Associated Press story reports: ‘Stimulus Funds Go to Social Programs Over ‘Shovel-ready’ Projects.’ A team of six AP reporters who have been tracking the funds find that the $300 billion sent to the states is being used mainly for health care, education, unemployment benefits, food stamps, and other social services.” Or, as another AP report put it, “Stimulus Aid Favors Welfare, Not Work, Programs.” Less than 6 percent of it ended up going to transportation.

The stimulus package also repealed welfare reform, as Slate’s Mickey Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against meaningful welfare reform as an Illinois legislator. The stimulus package largely repeals the welfare-reform law passed by Congress in 1996.

Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

The stimulus package also imposes on states racial set-aside requirements and prevailing-wage requirements, which increase the cost to taxpayers of government contracts. The prevailing-wage requirements will inflate the cost of state construction and transportation projects by at least $17 billion. Racial set-asides also are very costly to taxpayers.

Racial quotas, set-asides, and affirmative action are also mandated by Obama’s health-care plan, drawing criticism from the U.S. Commission on Civil Rights

Earlier, the Civil Rights Commission criticized the Obama Administration for turning a blind eye to racist voter intimidation by black panthers, including an Obama poll watcher and Democratic official who used a nightstick and racial epithets to drive white voters away from a Philadelphia polling place.

Sugar on the table again

by Fran Smith on August 13, 2009 · 2 comments

in Features, International, Trade, Zeitgeist

Sugar got front-page notice from the Wall Street Journal today. The article focused on a letter sent to the Secretary of Agriculture to increase the amount of sugar that can be imported without tariffs.  Prominent food firms as well as several nonprofit groups, including CEI, signed the letter.

Currently, U.S. sugar users are facing steep prices and a shortage of sugar.  Under  the U.S. sugar program – a system of price supports and import restrictions — there are quotas on the import of tariff-free sugar.  The USDA and the U.S. Trade Representative administer the import quotas for sugar, which must be consistent with the U.S. commitments to the World Trade Organization. That quota amount is allocated to 41 countries, which means that the sugar can enter the U.S. duty-free or with a low tariff.  Import amounts above that face a steep tariff, unless the USDA determines that the domestic supply can’t meet the demand and increases the quota amount.

That’s what the letter is asking:

Without a quota increase, consumers will pay higher prices, food manufacturing jobs will be at risk and trading patterns will be distorted. Please act now in the interest of all Americans.

According to earlier studies by the General Accountability Office and the OECD, the cost of U.S. sugar policies to American consumers ranges from $1.5 billion to $1.8 billion.  See here and here for CEI publications on the sugar issue.

Democratic Senator Blasts Union Boss

by Ivan Osorio on August 13, 2009 · 3 comments

in Labor, Politics as Usual, Regulation

It’s not every day that a Democratic Senator blasts a labor union, which is why the recent mini-controversy surrounding the nomination of United Transportation Union General Counsel Daniel Elliott to the Surface Transportation Board is not only amusing, but embarrassing for the Obama administration. The controversy erupted last week, when, as the Journal of Commerce reports:

Chairman Jay Rockefeller, D-W.Va., denounced a claim by the United Transportation Union of leveraging influence with the Obama administration from its political affairs committee for the appointments of Elliott at STB and Joseph Szabo to head the Federal Railroad Administration.

The UTU is the largest rail labor organization, representing mostly train conductors along with some other railroad workers. The FRA oversees rail safety, while the STB regulates economic issues including rail mergers and disputes with freight shippers.

Rockefeller called the union claim “this UTU idiocy,” said the statement was “totally inappropriate, absolutely inexcusable” and said UTU International President Malcolm Futhey should “write a letter of apology to this committee.”

Rockefeller further called the UTU statement, “one of the most embarrassing, ridiculous, self-aggrandizing, inappropriate, harmful — and a few other words – press release I can remember.” At the suggestion of Sen. Kay Bailey Hutchison (R-TX), Rockefeller placed a hold on Elliott’s nomination. Futhey did apologize, and the Senate confirmed Elliott soon after, but it’s so rare to see a prominent Democrat so strongly blast a union, that the UTU statement is worth quoting here:

“The selection by President Obama of Dan Elliott and Joe Szabo to head major transportation regulatory agencies is tribute to the political influence of the UTU, which flows from the UTU PAC,” said UTU International President Mike Futhey. “We have good reason to expect President Obama to reach into the UTU ranks for other appointments in the near future.”

Obama critics have accused his administration of being too cozy with organized labor, but it’s not often that a union says the same thing. This should put the onus on the administration to show some daylight between itself and Big Labor, but I won’t be holding my breath.

For an egregious example of Obama-union ties, see previous posts on the appointment of union ally Hilda Solis as Labor Secretary. (Thanks to Iain Murray for the tip.)

UBS and IRS reach an “agreement”

by Gary Howard on August 13, 2009 · 1 comment

in International, Legal, Personal Liberty

Yesterday my colleague at CEI, John Berlau, released a statement about the recently announced deal between Swiss bank UBS and the IRS.  It is being reported that the bank may end up turning over at least a portion of the over 50,000 names just to get the U.S. off its back.  As it seems, any agreement reached in this case will be the result of UBS being bullied by the IRS to divulge its customers names simply because it says so.  The potential slippery slope is evident.  In this scenario, the Federal government can persuade foreign companies to ignore the laws of their home nations basically by force.  Berlau makes the point that I have  been making in all of my blog posts on this issue, that advocates of civil liberties:

“should be alarmed by the U.S. government’s sweeping disregard of privacy interests in its demands to the Swiss”

These actions by Federal authorities are setting a bad precedent for the privacy of American citizens.  When the government can demand to know every detail of your financial life, what is there to stop it from exerting control over it? In addition, as I have said in past posts (and here), the disregard for the sovereignty of fellow nations exhibited by these demands is also concerning.  I agree with Berlau in his assessment that being in a similar situation, the U.S. might not be so willing to allow American companies to ignore its laws in order to acquiesce to another nation’s demands.

If  UBS stood firm by making an agreement that doesn’t violate Swiss law or the privacy rights of those U.S. citizens,  maybe long-standing privacy protections will hold up for now.  But it is doubtful this is the case.  It is more likely that UBS has capitulated, at least to a degree, and the slope begins to slide into scary territory.  Unfortunately, some will frame this in class warfare terms, and declare that we should have no sympathy for folks with secret Swiss bank accounts.  Because its unfair, accordng to the feds, that they are cheating and getting out of paying taxes like the rest of us have to.  Except for the fact that we don’t know if that is completely true, and maybe the question we should be asking is whether the taxes we pay are fair at all.

Regulation of the Day 31: Fraud in Wholesale Oil Markets

by Ryan Young on August 13, 2009

in Deregulate to Stimulate, Economy, Energy, Regulation, Regulation of the Day

If you’re a wholesaler of crude oil or gasoline, a new FTC rule makes it illegal to engage in any business practice that “operates or would operate as a fraud or deceit upon any person”.

Not sure why that requires a brand new FTC rule. Fraud is already against the law.

Media Bias: The More, the Better

by Ryan Young on August 12, 2009

in Culture, Odds & Ends

David Boaz makes an excellent point about media coverage of President Obama’s health care proposal:

The media tendency to refer to the defeat of a big-government scheme as “failure” reflects a possibly unconscious bias toward government action.

Well put. Why not make it conscious, then? Call it truth in advertising.

An objective media would be nice. But we are unlikely to ever see such a thing. Even the very best reporters are human. And humans are biased. Different people are biased in different ways, of course. But objectivity is still a fiction. Being open about this ugly truth could do much to reduce public confusion.

If readers have a clearer idea of what exactly they’re reading, they can run the articles through their liberal and conservative B.S. filters as needed, and more easily get to the heart of the matter.

Few readers seem to bother so long as the liberal Washington Post and conservative Washington Times continue with their objectivity charades. Bias can be harmful and misleading, true. But denying it only avoids the problem. Let’s tackle it instead.

Fact Checkers: Obama Is Lying About Health Care

by Hans Bader on August 12, 2009 · 1 comment

in Healthcare, Nanny State, Personal Liberty, Regulation

USA Today caught Obama telling three fibs about health care, such as falsely claiming that “under the reform we’re proposing, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

Shikha Dalmia lists “Obama’s Top 5 Health-Care Lies” in Forbes Magazine.

“Lie One: No one will be compelled to buy coverage. . .

“Lie Two: No new taxes on employer benefits. . .

“Lie Three: Government can control rising health care costs better than the private sector. . .

“Lie Four: A public plan won’t be a Trojan horse for a single-payer monopoly. . .

“Lie Five: Patients don’t have to fear rationing. . .”

The U.S. Commission on Civil Rights has criticized provisions of ObamaCare for mandating racial set-asides that may be unconstitutional. ObamaCare would reinforce the worst features of the status quo, while exploding health-care costs, say Washington Post columnists.

Fran Smith lists a dozen constructive health-care reforms that could make health cheaper and more widely available — none of which Obama has even considered.

In the Wall Street Journal, Whole Foods CEO John Mackey lists another 8 obvious and long overdue health-care reforms that Obama has refused to consider that would make health-care cheaper and expand access to health-care, such as:

•?Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

•?Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

•?Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

•?Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

•?Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.

•?Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. ObamaCare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

The Heritage Foundation and the American Spectator list what they think are the “Top Ten Reasons Obamacare Is Wrong for America,” noting that “millions will lose their current insurance,” those who won’t will probably pay “more in premiums,” and small business owners will pay “higher taxes” than in “Europe,” and that Obamacare will “increase the deficit” and could lead to “taxpayer-funded abortions” and “rationing.”

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