As Garrett Peck, author of The Prohibition Hangover, notes in The Washington Post, this is long overdue. (The op ed is due to appear in the Post’s Sunday edition, but it’s already online.) The ABC system, which several states adopted after the end of Prohibition in 1934, is today an anacrhonism that doesn’t even work very well.

ABC was once about promoting temperance, but the abstinence movement has basically died. Two-thirds of American adults drink alcohol. In reality, Virginia ABC is now about generating revenue for the state — and at that, it isn’t particularly efficient. Virginia can make more money — as can localities — by privatizing the system, both from auctioning the licenses and through ongoing tax revenue. The private sector will assume the operating costs, shifting ABC authority to where it properly belongs — regulation and enforcement.

And then there are the consumer implications.

Virginia’s ABC stores are a tower of mediocrity. They are centrally managed retail outlets that would have been palaces in the Soviet Union, but today they are anachronistic. They offer highly limited choices, often lacking exciting new brands or those with a cult following. Staff members generally aren’t knowledgeable about how to mix drinks or make cocktails. And the prices are artificially high because there is no competition: The state decides what to charge.

For more on The Prohibition Hangover, see here.

Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

The Democrats demonstrate a disdain for capitalism, free trade and the validity of contracts. They cheer the restriction of certain types of speech on campus and in federal law….Lately, the Democrats have been popularly associated with principled opposition to waging war in far-flung corners of the globe. But evidence on the ground today tells a somewhat different tale.

As for the GOP, it has outwardly abandoned the limited-government principles of Barry Goldwater and Ronald Reagan. Little other evidence is needed than the Medicare prescription drug benefit — with its $13-trillion unfunded liability — passed with a strong-arm campaign by the Bush White House and a Republican congressional majority.

Crane put some of the blame for the GOP’s shift on the supply-side movement’s emphasis on tax cuts and economic growth: “Supporters of those ideas didn’t talk about spending cuts, much less the proper role of government. They had the effect of replacing ‘liberty’ as the motivating force behind the GOP with ‘growth,’ a somewhat less-inspiring ideal.” Indeed a gigantic government may still periodically balance it’s fiscal budget (as occurred in the U.S. from 1998-2001); so it’s important to maintain liberty itself as the goal, rather than “good government.”

It’s not clear how one votes for limited governement anymore, so I enjoy my “Abstain” shirt. But Non-interventionism–how nice a platform that would be, from either party.

rather than fund a new federal job training program through a Department of Labor appropriation, Congress could mandate that all Fortune 500 firms provide, and pay for, such training. The first appears on the federal budget, the second does not. For politicians, it’s the perfect scheme. The government can spend — or, rather, force other people to spend — as much as it wants without adding to the deficit.

Decency demands this trickery stop; fortunately, a bill from Rep. Virginia Foxx looks like it would do some good on that front.

Having solved all of the community’s other problems, regulators now have the time to turn their attention to what is apparently a spat between neighbors. One resident is upset that the 15 cats (!) owned by a neighboring woman have been sullying his yard.

I might suggest that Coaseian bargaining might be a better solution than a law.

A fiat decision in favor of one party will leave at least one disputant dissatisfied. In this case, the cat lady is looking to move to a different town. Why not treat both parties as equals with rights to need to be respected? That approach is far more likely to generate an outcome everyone is happy with.

Presumably the offended neighbor is willing to pay some amount to keep the cats off of his yard. The cat lady is also willing to pay some price to keep her cats. Let them bargain, then. Maybe they can split the cost of building a fence. Whatever they agree on. The point is that there is a missing market here.

Allowing the parties to bargain creates that missing market. It allows the neighbors to come to a peaceful, mutually agreeable solution. Passing a law favoring one over the other is simply unfair.

The broken promises include his pledge to enact a “net spending cut,” his promise not to raise taxes on anyone making less than $250,000 a year, and his promise not to sign bills without first giving the public five days of notice.

The Congressional Budget Office says that Obama’s proposed budgets will explode the national debt through massive spending increases, increasing the already large deficits left behind by the Bush administration from $4.4 trillion to $9.3 trillion. His record-setting budgets flagrantly violate his promise to propose a “net spending cut.”

Obama broke his campaign promise not to raise taxes on anyone making less than $250,000 a year by signing into law a regressive excise tax increase to expand the SCHIP program, and by proposing a cap-and-trade energy tax that could charge up to $2 trillion, a massive cost that Obama himself has said will be passed “on to consumers,” as well as homeowners and motorists. (In 2008, Obama privately admitted to the San Francisco Chronicle that if he was elected, electricity bills would “skyrocket” under his administration, but it didn’t report that.)

He also broke his promise not to raise taxes by backing health-care bills that would impose a laundry list of new taxes on the middle class, including a tax on uninsured people.  Americans for Tax Reform earlier summarized the tax increases in ObamaCare: an individual mandate tax of $900 per individual or $3800 per family (if you don’t have health insurance); an employer mandate tax of $400 per employee if health coverage is not offered; an “excise tax on high-cost health plans”; a “medicine cabinet tax”; capping Flexible-Spending Accounts (FSA’s); abolishing most HSAs; and increasing tax penalties for HSAs.

The costly cap-and-trade energy bill supported by Obama would lead to big tax increases, administration officials privately have conceded, even though they publicly claim otherwise.  “Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times” by CEI.  It could raise household taxes by $1761 per year, equivalent to a 15 percent tax increase.   It would also result in “loss of steel, paper, aluminum, chemical, and cement manufacturing jobs.”  (Obama earlier admitted that “under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”)

Although cap-and-trade backers claim it will cut greenhouse gas emissions, it may perversely increase them and also result in dirtier air, as well as harming forests and water supplies.   It would enrich politically-connected corporations, and result in massive destruction of the world’s forests.   By expanding ethanol subsidies and mandates, it would cause enormous “damage to water supplies, soil health and air quality.” Ethanol subsidies have already resulted in forests being destroyed in the Third World, and by diverting cropland to fuel production away from food production, they have already caused famines that have killed countless people in the world’s poorest countries.

Over and over again, Obama has broken his campaign promise to give the public five days of notice before signing bills into law, including his very first law, the trial-lawyer backed Lilly Ledbetter Fair Pay Act. Obama also repeatedly made false claims about the Supreme Court decision that the Ledbetter law overruled, misstating the facts of that case and how long it gives employees to sue over pay discrimination (the Court did NOT say that employees have to sue even before discovering discrimination).

Obama broke seven campaign promises dealing with transparency and clean government in signing the $800 billion stimulus package, much of whose contents were secret until shortly before Congress voted on it, and whose 1400 pages went unread by most Congressmen who voted on it.  (It repealed welfare reform and contained loads of welfare, pork, and waste, while wiping out jobs in the export sector.)

Obama’s broken promises are part of a larger pattern of dishonesty. Obama claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run. Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed.

Case in point: Home Products International (HPI), an American company, makes ironing tables. So does Hardware, a Chinese company. I personally have no idea which firm makes the better ironing table. That’s for consumers to decide.

Or at least it should be for consumers to decide. But it doesn’t always work that way in practice. HPI seems to have already made that decision for us.

At HPI’s request, the International Trade Administration will continue to add anti-dumping duties to the price of the Chinese-made ironing tables. That way HPI doesn’t have to worry as much about competing. Sorry, consumers.

Is this fair? Of course not. But all too often, it is how regulation works.

Today, as The Wall Street Journal reports, National Mediation Board chair Elizabeth Dougherty wrote to more than a dozen Republican senators, protesting her colleagues’ proposed rule change (sent to the Federal Register on October 29) that would change the way in which votes are counted in organizing elections under the Railway Labor Act (RLA).

Under a 75-year-old interpretation of the Railway Labor Act, any employees who don’t vote on whether to create a union are counted as “no” votes. That means a union can’t be approved without a full majority of all employees voting in favor of it.

Under the National Labor Relations Act governing other industries, a union can be created as long as a majority of all votes cast are in favor of collective bargaining. In such elections, nonvotes don’t count either way.

Earlier this year, the White House named Linda Puchala, a former leader of a flight-attendant union, to the NMB to succeed Read Van de Water, a former lobbyist for Northwest Airlines. Harry Hoglander, a board member since 2002, is a former union leader for pilots.

Ms. Dougherty joined the NMB’s board in 2006. A registered Republican, she served as a labor adviser to Mr. Bush earlier this decade.

In September, the AFL-CIO union formally asked the NMB to adopt the same voting rules as the National Labor Relations Act, arguing that the unionization-election process under the Railway Labor Act is undemocratic.

In its proposal published Monday, the NMB agreed, saying that “few if any” democratic elections treat nonvotes as “no votes.” Allowing a contrary policy, as under the current NMB union-voting rules, “could allow those lacking the interest or will to vote to supersede the wishes of those who do take the time and trouble to cast ballots,” the agency added.

Opponents of the overhaul say the higher bar for unionization was set up to protect interstate commerce from disruption. They also argue the law hasn’t hindered unionization: Roughly two-thirds of airline employees and more than three-quarters of railroad workers are organized, according to industry estimates, far higher than the 12% rate across the entire U.S. economy.

That’s a major change, but the unions are not about to stop there in their efforts in this area. The Teamsters, in cooperation with UPS, are trying to move employees of FedEx — UPS’ competitor and a Teamsters organizing target — out from being regulated under the RLA to jurisdiction under the National Labor Relations Act (NLRA).

Unlike the NLRA, the Railway Labor Act requires unionization to be carried out company-wide. This prevents the creation of balkanized work rules that could result from piecemeal unionization at individual facilities. UPS began as a ground transport company, so most of its employees are covered under the NLRA.

However, the Teamsters are UPS have pursued that change through the legislative process. Now some union allies are pursuing a similar change through the regulatory process. When it comes to changing the organizing rules, Big Labor seems more likely to keep persisting.

For more on the RLA, see here.

Between 1934 and 1937—during the heart of the Great Depression—GDP grew at by an average of 9.5 percent annually.  In 1934, GDP grew by nearly 11 percent, but it would be six more years until the depression finally ended.  Clearly, GDP growth alone cannot be taken as an indicator that the economy is on the upswing.

It is also disheartening that the two major contributors to GDP growth in the third quarter were housing construction and auto sales, both of which were propped up by government subsidies.  Auto sales were boosted by the Cash for Clunkers program, and housing construction was driven by the $8,000 first time home buyer tax credit.

Combine this with other spurious accounting maneuvers used to calculate third quarter GDP, and it begins to appear that GDP might actually have decreased during this period.

In addition to phony GDP growth, there are other signs that the recession is not yet over.  Employment during the third quarter fell by over 750,000, and it is expected to fall further still.  Employment has been called a lagging indicator of economic health, but when economic health is measured in terms of the financial well-being of the population, employment is not a lagging indicator, it is the indicator.

The recent bankruptcy of CIT Group is another sign that our economic woes are far from over.  A recipient of $2.3 billion in TARP funds—deemed likely unrecoverable—CIT Group Inc. filed for Chapter 11 today, seeking protection from $10 billion in debt.  CIT finances close to one million businesses, and conducts business with over 80 percent of all Fortune 1000 companies, so there is enormous potential for negative secondary effects stemming from the bankruptcy.

The CIT Group bankruptcy comes on the heels of nine more bank failures on Friday, which brings this year’s total to 115.  These bank failures came at a cost of $2.5 billion to the FDIC deposit insurance fund.

There is a clear political incentive for Geithner and others to make efforts to convince us that this economic slump is over.  It is unfortunate that these efforts include no actual facts.

Economists have known for a long time that when you tax something, you get less of it. Apparently some state legislators want less commerce in their states.

In his latest Nation column, Greider takes those concerned about the $1.4 trillion budget deficit to task, claiming that their concerns are “grounded in ignorance and discredited nineteenth-century bromides.” Funny from a man who claims that economics is “not really a science so much as a value-laden form of prophecy,” and one who as recently as 2007 was referring negatively to the Reagan administration’s “exploding deficits” in the 1980s. He goes on to cite massive deficits during World War II as proof that spending a lot of money we don’t have necessarily produces fantastic results:

In an October 21 editorial arguing against just such additional spending, the Post warned citizens to disregard progressive commentators (like myself) who offer the example of World War II, when the government ran deficits many times larger than the current one. “In the deficit debates to come,” the Post insisted, “Mr. Obama should heed the hawks.”

Wrong. The mobilization for World War II produced one of the most remarkable success stories in US economic history. War production not only overcame lingering weaknesses from the Great Depression but transformed the economic system into the modern powerhouse that became the platform for our long-running postwar prosperity. All this was achieved by the government, largely with borrowed money. By war’s end Washington had piled up federal debt totaling around 120 percent of annual GDP (nearly double today’s debt level).

During the wartime emergency the government took charge of the economy and rapidly shifted the industrial system to armaments while suppressing domestic consumption. Deficit spending force-fed the rapid development of new technologies and new basic industries. In a few short years, economic output expanded by about 75 percent. Despite rationing and wage and price controls, Americans at large were replenished: per capita income rose by almost 70 percent (with industrial jobs opened to women and blacks), and since people could not consume much, the savings rate reached extraordinary levels–23 percent of incomes. The government borrowed these savings and spent them in the national interest. The store of personal savings fueled the pent-up consumer demand driving postwar prosperity.

What Greider can’t seem to understand–and what his dime store Keynesian worldview won’t allow–is that the post-war United States did so well because nearly every other major developed economy was literally bombed out. It is easy to do comparatively well when your international competition is a pile of rubble and/or under the thumb of a totalitarian superpower. The Bretton Woods system established in 1945 required member states, among other things, to accept the dollar as the reserve currency and the United States spent decades providing liquidity to war-torn Western Europe. Furthermore, this system–which assumed U.S. economic hegemony–coupled with the reckless fiscal policies of future American administrations, was largely responsible for the severe economic problems experienced during 1970s. Great, right?

But it gets worse. Here’s his advice for the Obama administration:

Let’s hope President Obama and the political community brush aside the deficit hysteria and do what they need to do to restore the economy: that is, spend more money–a lot more money–and run up even larger deficits for some years to come. [original emphasis, original italics bolded due to formatting limitations]

Unfortunately, Greider probably doesn’t have to worry about not getting his wish (PDF).

Sure, Just What We Need: Yet Another Regulatory Government Agency
Jonathan Moore’s Letter to the Editor in the Boston Globe


>>Best of the Blogs
My Power Company Wants to Sell Me Climate Indulgences
by Ivan Osorio
The scheme appears simple enough. The mailer says, “When you sign up for Dominion Green Power, you add a little extra to your monthly bill which Dominion will use to purchase certified renewable energy certificates on your behalf.” And what does the consumer get in return? Well, that’s a good question. Dominion’s Green Power Web page features a video that features a family that “pays an extra 1.5 cents per kilowatt hour, and the money is used to purchase renewable energy certificates to support green energy development through a vendor called 3 Degrees.” And what does 3 Degrees actually do?

“Saving” Jobs Isn’t Always Good
by Michelle Minton
The Obama administration is patting itself on the back for saving the jobs of thousands of educators by doling out stimulus funds earlier in the year. . . When it comes to your child’s education, does that really seem like such a bad thing-should every teacher good or bad continue to teach? That is what the White House and the Dept. of Education assert when they pat themselves on the back for “creating” and saving 250,000 education jobs. Not only are they retaining many school-workers who, perhaps, deserve to be let go, but they are also preventing the emergence of a private market for education.

Reps. Maloney and Adler Push True Bipartisan Stimulus - Sarbanes Oxley Relief
by John Berlau
Led by Democratic Reps. Carolyn Maloney of New York and John Adler of New Jersey, two amendments will likely be introduced to the Investor Protection Act that would truly stimulate the economy by partially liberating investors, entrepreneurs and innovators from the shackles of a seven-year-old “investor protection” law that has added billions in costs while providing little if any benefits to investors and doing nothing to prevent the recent financial crisis: the Sarbanes-Oxley Act of 2002.


>>Liberty Week Podcast
Episode 66: The War on Commerce
We start with the lobbying war over net neutrality rules, Sen. Kerry’s search for a cap-and-trade legacy and a campaign finance scandal from Japan. We then move on to the White House’s War on Commerce and the allegedly immoral profits in the healthcare insurance industry.


>>Support CEI
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Charles Huang

Web and Media Associate

Competitive Enterprise Institute

chuang@cei.org

http://www.cei.org

http://www.openmarket.org

202-331-1010

When your teenager drives drunk and wrecks the car, and you keep giving him a do-over—
repairing the car and handing him back the keys—he’s going to keep driving
drunk. Washington keeps giving the bad banks and Wall Street firms a do-over. Here are
the keys. Keep driving. The story always ends with a crash.

I’m mad at Wall Street. But I’m a lot madder at the people who gave them the keys to
drive our economy off the cliff.

An unintended consequence is that the state of Louisiana is up in arms. The sterilization rule essentially bans raw oysters, a local delicacy, for seven months every year. Sterilization also affects the flavor of cooked oysters, a common ingredient in Cajun cooking.

Restaurateurs are livid. One describes the rule as “ludicrous.”Another calls it “a nuclear bomb” for the oyster industry. State officials are also upset, and have issued strongly worded statements opposing the rule.

Maloney, whose most recent legislative accomplishment was the Credit Card Holders Bill of Rights that was signed by President Obama in May and hailed by liberal groups, has teamed with conservative Rep. Scott Garrett, R-N.J., to introduce an amendment to extend the exemption for smaller public companies – those with less than a $75 million market cap – from the costly audit of internal controls from the law’s Section 404 to at least June 2011 and until the Securities and Exchange Commission and Government Accountability Office each perform a study. This is important because the current exemption expires next June, and SEC Chairman Mary Schapiro recently said that there will absolutely, positively be no further extension, despite the limited research on the effects of Sarbox on the very smallest companies and the extensive research showing often devastating burdens on midsize and even large ones.

Rep. Adler goes one further. His amendment would exempt small and midsize companies – those with market caps of less than $700 million, the mark above which the SEC classifies companies as “large accelerated filers” – from Sarbox Section 404 until the SEC promulgates “regulations that take into consideration the different characteristics and limitations of various sized companies,” according to a “Dear Colleague” from Adler. In the letter, obtained by OpenMarket but not yet posted on the web, Adler states: “My amendment will increase America’s competitiveness within the global economy and create jobs here at home. When a company goes public, investors invest capital, the company expands and jobs are created.”

Indeed, new research from the University of Pittsburgh’s Kenneth Lehn and others demonstrates in detail the damage Sarbox is doing to job growth by showing how its costs reduce business spending on research and development and other precursors to job growth. Rammed through Congress in 2002 in the rush to “do something” after the Enron and WorldCom accounting scandals, Sarbox has had many perverse effects recognized by Republicans and Democrats. In 2006, now-Speaker Nancy Pelosi decried the law’s “unintended consequences” for entrepreneurs.

University of Rochester researcher Ivy Zhang has found that Sarbox has racked up $1.4 trillion in direct and indirect costs to the U.S. economy, with no quantifiable economic benefits. By far, the biggest cost is from Section 404’s internal control mandates, which the American Electronics Association calculated as costing U.S. public companies $35 billion a year, and as much as quadrupled an individual company’s auditing and compliance costs, according to the Foley & Lardner law and consulting firm.  This section’s price tag is largely because the Public Company Accounting Oversight Board, the powerful yet unaccountable regulator created by Sarbox (and whose constitutionality is being challenged in a case before Supreme Court this term in which CEI attorneys are serving as co-counsel), required full-blown audits for internal controls as well as a company’s number. That is what turned Sarbox into what has been called “The Accountants Full Employment Act,” in which accountants are reviewing “internal controls” such as possession of office key, the number of letters in an employee password and other items of little relevance to the average shareholder.

Tech journalist John Battelle reported that Sarbox was even frustrating for a company as big as Google, because of the extensive red tape that went along with documenting innovative technology. According to Battelle, becoming Sarbox compliant when Google went public in 2004 was “no small feat,” because “the law requires an audit trail of every third party transaction, and Google has millions of them a week in its [search] engine.” And keep in mind that Google already had a market cap of more than $1 billion when it went public in 2004. So the smaller innovative companies with the potential to be the Googles and Microsofts of tomorrow might not be able to get over this Sarbox hurdle and raise the capital they need by going public.

And new, groundbreaking research shows that Sarbanes-Oxley hits cutting edge software and biotechnology firms especially hard, reducing the amounts they spend on research and development that could lead to new fields that create new job.  A 2008 paper from University of Pittsburgh economist Kenneth Lehn that was selected for a conference of the Federal Reserve Bank of Atlanta finds that “greater evaluation and testing of

internal controls [is] required for firms with activities involving specialized knowledge.” And Lehn’s study includes data from 2007, after the SEC and PCAOB supposed “tailored” Sarbox to make compliance easier for smaller companies.

A letter from The Biotechnology Industry Organization that Lehn cites states that biotech firms “are directing precious resources from core research and development of new therapies for patients” to costly Sarbox compliance.

And ironically, the bells and whistles of Sarbanes-Oxley’s “internal controls” may ironically be taking the core focus off of rooting out fraud. In 2007 Countrywide Financial Corp. was praised for its Sarbox controls by the Institute of Internal Auditors. Two years and many scandals later, its former executives have been charged with securities fraud. And certainly, overall transparency doesn’t increase when companies go private or delay going public, as many have chosen to do because of Sarbox’s costs.

In addition to the valuable Adler and Maloney-Garrett measures, Rep. Michelle Bachmann, R-Minn., will likely introduce a worthy amendment to keep the underlying Investor Protection Act from expanding Sarbox and the PCAOB’s reach to include non-public broker dealers (an incredible power grab that jettisons the whole justification for Sarbox protection of average investors – they might have to change the name to the NCAOB – Nonpublic Company Accounting Oversight Board) until the Supreme Court rules on the entity’s constitutionality.

Her amendment will  also likely propose transferring the responsibility of appointing powerful members of the PCAOB from the SEC to the President, with Senate confirmation. This is what CEI and other attorneys argue in the court case is constitutionally required, since PCAOB members are important “principal officers” with authority to make rules that have such a large impact on the U.S. economy. The Bachmann amendment is also bipartisan in spirit, as it gives more power to President Obama, but also institutes the constitutional accountability needed for this powerful agency.

There’s just one problem: he never said any such thing. He said the very opposite!

A liberal reporter for Capitol Media Services, Howard Fischer, made the claim that Scalia said he would have voted to uphold segregation, in a story carried in the East Valley Tribune. But as even liberal law professor Jack Balkin, who was initially fooled by the story, now admits, it’s pure bunk: a video recording of the event shows that Scalia actually said he would have voted to strike down segregation.

Before the error was uncovered, the story circulated all around the internet, including at CQ Politics’ Political Wire, and as a result, we can expect to see the false claim repeated for weeks in the press. (Political Wire, for example, contains a commentary by Taegan Doddard entitled, “Scalia Would Have Voted to Keep School Segregation.”)

This sort of reporting is typical for liberal court reporters, who routinely make false claims that make conservatives or businesses look bad or politically-correct constituencies look good. A classic example is the Ledbetter v. Goodyear decision, which Linda Greenhouse of the New York Times deliberately distorted to make it seem like the Supreme Court had created a rule that discrimination plaintiffs have to sue even before they could have learned about pay discrimination. (In fact, the plaintiff in the Ledbetter case had known of the pay disparity she later claimed was discriminatory for at least 5 years before complaining to the EEOC. By distorting the facts of the case, and what the Supreme Court actually held, the press also created a political weapon for the Obama campaign to use against McCain in the 2008 campaign.)

Another example is the Duke Lacrosse case, where the prosecutor was later jailed for misconduct for pressing a baseless interracial rape case against innocent Lacrosse players. DNA evidence proved the players were innocent, and North Carolina’s attorney general admitted that they were in fact innocent. But the New York Times’ Duff Wilson claimed that a substantial “body of evidence” pointed to the defendants’ guilt.

CBS News legal “analyst” Andrew Cohen repeatedly denounced the Duke lacrosse players, calling for the gagging of their attorneys. At a time when few journalists dared question the rape claim for fear of being seen as politically incorrect, Cohen absurdly claimed that the media had rushed to the “defense” of the players and that “there is no balanced coverage in the Duke case. There is just one defense-themed story after another.” He demanded for prosecutor Mike Nifong “the privilege of seeing the case unfold at trial” against the players, rather than dropping the prosecution.

Sadly, both Wilson and Cohen still have their jobs, suggesting that liberal bias is viewed as a plus when it comes to employment with the “mainstream” media. (Cohen’s “evidence-free” commentaries denouncing Justice Scalia are a self-parody of left-wing bias.)

I don’t agree with Justice Scalia on everything. (See my law journal article criticizing the ruling he and the “conservative” justices issued in Morse v. Frederick.)  But the liberal bias of Supreme Court press coverage is obvious to me.

UPDATE, Oct. 27, 4:12 p.m.: the reporter who made the false claim about Scalia (Howard Fischer) has now deleted his claim that Scalia would uphold segregation from his story, tacitly admitting that he was wrong.  But he did not disclose the error in his original story for readers.  As a commenter to his story, jayr23, notes

“Sorry Scalia. I disagree with you in general but it looks like you were terribly misquoted here. The only hack is the reporter.

Mr. Fischer should probably correct this and then apologize.

BTW, a correction is not simply a deletion of the offending material! Sheesh. Journalism has sunk to an all time low.”

SECOND UPDATE, Oct. 27, 6:22 p.m.: The erroneous story’s internet version has now been revised to contain a vague reference to its error, in a passage that reads:

“Editor’s note: This is an updated version of a story that was originally posted Oct. 26. It removes an incorrect reference to Brown v. Board of Education in the initial version.”

The federal government does, however, have a problem with big compensation packages at private banks like Bank of America and Citigroup, even for new executives and talented managers who had nothing to do with any financial mismanagement.  Obama’s pay czar, Ken Feinberg, a major donor to liberal politicians like Senator Chris Dodd (who recommended Feinberg for the job after he gave Dodd more than $9000), is now chopping compensation more at basically self-supporting institutions like Bank of America than at completely-bailed out entities like Chrysler.  (Many expect Chrysler to go under despite a $70 billion auto bailout.  Even the recently departed car czar, Rattner, admits Chrysler should perhaps have been allowed to go under, from a coldly economic point of view, given its gross mismanagement and dim prospects. Bank of America’s recently departed ex-CEO was a moderate Republican; by contrast, Chrysler is owned mostly by the left-wing United Auto Workers Union, which received majority ownership from the Obama administration at taxpayer expense, through a politicized bankruptcy process).

Some of the “bailed-out” banks subject to the pay czar weren’t really bailed out: they gave the federal government preferred stock in exchange for federal bailout money only under duress, after they were told that for them not to take federal bailout money would stigmatize the banks that truly needed it, and that if they failed to take the money, bank regulators would make their lives hell. As the Treasury Secretary told the banks, “if a capital infusion is not appealing, you should be aware your regulator will require it in any circumstance.” Regulators also forced Bank of America to take over failing investment bank Merrill Lynch, and pressured it to hide the resulting losses from its shareholders.

Feinberg’s actions have already left taxpayers worse off by forcing Citigroup to get rid of a profitable subsidiary. As finance professor Roy C. Smith noted in Sunday’s Washington Post, “Feinberg’s actions . . . are not going to improve either the government’s chances of getting its money back or the prospects of repairing these damaged companies. Because of his recommendations, Citigroup agreed to sell its profitable Phibro unit at an extremely low price of only one or two times earnings in order to avoid having to pay a talented trader a $100 million contractual share of the profits he had earned. The most successful of the remaining employees of Citigroup, AIG and Bank of America have been given an incentive to leave their posts, and the firms will be constrained in hiring replacements.”

Many competent executives whose pay is threatened by the pay czar are now leaving for other firms that (for the moment) are beyond his reach. The result is lousier management at banks that the FDIC insures, and that the federal government now owns stock in.

The pay czar’s political patron, Senator Dodd, received sweetheart loans from the reckless, bankrupt subprime lender Countrywide, and a massive gift from Edward Downe, in the form of a luxurious “cottage” in Ireland he received in a “cut rate real estate deal” for hundreds of thousands of dollars less than fair market value.

Banks will now be pressured to make even more risky, low-income loans. Obama has sent to Congress his proposal to create a politically correct entity called the Consumer Financial Protection Agency. “The agency would be in charge of enforcing the Community Reinvestment Act, a law that prods banks to make loans in low-income communities.”

Government pressure on banks to make low-income loans was a key reason for the mortgage meltdown and the financial crisis. Yet Obama’s disturbing proposal would empower the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness.  The Community Reinvestment Act was a key contributor to the financial crisis.

The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates.

But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.” (The government-sponsored mortgage giants Fannie Mae and Freddie Mac went broke, costing taxpayers perhaps $200 billion.  Fannie Mae apparently has engaged in massive accounting fraud, and has used intimidation to fight reform).

Worse, Obama’s plan is “largely the product of extensive conversations” with two lawmakers responsible for the corrupt status quo, Chris Dodd and Barney Frank, and it expands the reach of regulations that have been used by left-wing groups to extort payoffs from banks.

Answer: Way too much government!

In a new CEI paper, One Nation, Ungovernable?, Clyde Wayne Crews lays out an agenda for setting America on the path to economic recovery. From lifting burdensome regulations and restrictions on executive compensation to fostering competition and restraining federal spending, Crews calls for an end to the “bailout culture” that’s spread throughout the capitol, and a return to more responsible policies that promote growth and liberty.

As Crews notes, “If government intervention were stimulative, the nation should be overflowing with wealth and job creation already.” Obviously, the folks on Capitol Hill got it wrong. Wealth comes from policies that unleash the creativity and industriousness of private citizens and companies, not from massive regulation or wasteful government  “investment.”  Deregulation and markets encourage competition and growth and create jobs.

Calling all legislators: please take a few moments and read One Nation, Ungovernable? Fret not, at only six pages, it’s far shorter than most of the tax-and-spend bills you’ll see this year.

In other news, a study by PriceWaterhouseCoopers found that the provisions in the Senate health care “reform” bill sponsored by Sen. Max Baucus (D-Mont.) would add $1,700 a year to the cost of family coverage in 2013 and $600 for a single person. By 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

CEI’s Greg Conko calls the Baucus bill “worse than the disease.”  In a recently-released paper, “A Cure Worse than the Disease: Obama Care Won’t Cut Costs, But May Cut Quality,” Conko notes that most of the alleged cost-cutting measures in the Baucus bill merely shift costs from the federal government onto the states or private payers, without reducing long-term health care inflation.  The only measures that could conceivably reduce the annual rate of growth in health care costs would erect government barriers between patients and their doctors, while jeopardizing long-term medical innovation.

A new study by the Oliver Wyman consultancy found that provisions contained in the health-care reform bills, like guaranteed issue and community rating mandates, would drive up premiums by 50 percent for individual policies and 19 percent for small group plans.

A study from the Independence Institute says that ObamaCare would drive up inflation and medical-care costs, while shrinking the economy.

As CEI’s Conko notes, many states have highly concentrated markets.  In Hawaii, Rhode Island, and Alaska, for example, 95 percent or more of the health insurance market is served by just two insurers.  But Obama and congressional Democrats oppose letting insurers compete across state lines, blocking competition that could make health insurance cheaper.  Other countries with cheaper health insurance permit insurers to compete nationally.

ObamaCare would raise taxes.  It would also explode state and federal budget deficits, and would actually cost $2 trillion — far more than its promised $800 billion price tag.  It also ignores needed reforms that would actually reduce the costs of health care, like steps to reduce the cost of defensive medicine, which wastes $200 billion annually.  And it contains special-interest pork, like racial preferences.

Government pressure on banks to make more risky loans in low-income neighborhoods was a key reason for the mortgage meltdown. Yet President Obama’s disturbing proposal would empower the new agency to enforce the Community Reinvestment Act without regard for banks’ financial safety and soundness.  The Community Reinvestment Act was a key contributor to the financial crisis.

The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates.  But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax cheat Timothy Geithner, even though he admits that “Fannie and Freddie were a core part of what went wrong in our system.”