Archives for the 'Politics as Usual' Category
Farm Bill veto would be richly deserved
Welcome to OpenMarket.org! Please consider Subscribing to our RSS feed, so you don’t miss any of the news and analysis brought to you by CEI’s policy experts.
Right after House-Senate conferees announced that they had reached agreement on a new farm bill yesterday, the U.S. Secretary of Agriculture said that President Bush would veto it because it didn’t reform wasteful farm programs, continued to provide subsidies to rich farmers, and still used some budget machinations to hide the costs.
Indeed, the boondoggle bill deserves a White House rejection for its almost $300 billion of farm programs that will be paid for by taxpayers and consumers. Farm bills, however, no matter how wasteful, have a way of surviving, and this legislation may be no exception, since it’s a case study of bipartisanship gone bad.
Besides the sugar provisions we’ve written about here and here, the biofuels programs’ grants and loan guarantees, plus moneys for R&D and “energy efficiency” projects, together with the extension of the tariff on imported ethanol, will continue to exacerbate the food vs. fuel program.
Why I Empathize with Hillary Clinton (and Think Tim Russert Is Full of It)
The media is supposed to watch the government, but who monitors the media?
That’s what I was asking myself this morning, after I had fully digested Tim Russert’s shocking midnight announcement on Tuesday that the Democratic Party’s primary was over. Russert is the host of the most prestigious Sunday morning news talkie, Meet the Press, so he is a big player in the world of political coverage, and his word is paramount.
The establishment took its cue. Twenty-four hours later, every commentator of note had declared the race over. Today, Time Magazine is releasing a cover story titled “And the Winner Is…” accompanied by a glamour shot of the anointed nominee, Senator Barack Obama.
But there’s a problem: the race isn’t over! Senator Obama doesn’t have the requisite number of delegates to win the nomination outright. In fact, he doesn’t even have a majority. What is more, he hasn’t been all that effective in the states that the Dems need to win if they are to beat Senator John McCain, the presumed Republican nominee.
The Wednesday morning headlines should have read: “Candidates Split; Race Goes On.” Instead, Senator Clinton was buried by the media. Who would support her campaign now that every new political story touches upon the fact that a “deluded” Clinton is doomed? And without money, the lifeblood of politics, there can be no campaign.
Yogi Berra could probably say it best, but I’ll give it a try: This one’s over, not because it’s over, but because they say it’s over.
To be sure, I am no fan of Senator Clinton. Her style of politics repulses me. But I am even more disgusted by a media establishment that thinks it knows best.
You see, I am a global warming “denier” because energy poverty frightens me more than rising temperatures. So I empathize with Hillary, because all too often, the media decides to take the ball out of my hands, too.
Take Arianna Huffington, whose hugely popular website, the Huffington Post, dominates the policy blogosphere. While promoting her new book, she has been telling reporters that the media should not report both sides of the global warming debate. Her rationale? According to Huffington, it doesn’t serve the public’s interest. In effect, she is admitting that she thinks she knows what’s best for the public.
Huffington and Russert both labor under the misapprehension that what they believe is what we should believe. Unfortunately, they are indicative of their peers. The media’s inability to separate reporting from preaching has cost the Democratic Party a fair primary, and it is robbing American voters of honest debate on global warming.
President Threatens to Veto Bloated Housing Bill
President Bush has threatened to veto the bloated federal housing bill pushed by House leaders, saying it would reward special interests As John Berlau has noted, the bill could cost middle-class investors billions (such as people whose retirement accounts or mutual funds contain mortgage-backed securities). (The companies that issued risky mortgages typically don’t still possess them). That’s above and beyond the billions of dollars that its bailout of subprime borrowers will likely cost taxpayers.
The architect of the bill, Congressman Barney Frank, calls his own bill the payment of an economic ”ransom,” admitting that it rewards irresponsible people by bailing them out. His excuses for paying this ransom are decidedly lame. Moreover, his bill contains political pork for left-wing special interest groups like La Raza and the National Urban League.
Why the GINA “Genetic Discrimination” Law Is Bad
At Slate, Eric Posner explains why the Genetic Information Non-Discrimination Act is a bad idea as a basic concept. The law nevertheless recently passed the Senate 95-to-0 and the House 414-to-1 because politicians’ thinking is controlled by labels, not logic or substance, and no one (especially not sanctimonious people) wants to be labeled as being in favor of “discrimination,” as Richard Ford notes.
Prior to its passage, I criticized GINA’s ban on employment discrimination in the National Law Journal for lacking a “direct threat” exception for public safety. The Economist’s blog suggested its ban on insurance discrimination could fundamentally undermine insurance markets and the availability of private health insurance in the long run.
The whims of Capitol Hill have real effects on real people
The Scientist has research grants as a theme this month, and the cover story tries to figure out what happens when NIH grants are denied because of budget cuts. The agency has gone from a 19.7 percent approval rating on Type 1 grants in 1999 to 9.1 percent approval rating in 2005. For Type 2 grants the approval rating has gone from more than 55 percent in 1999 to about 33 percent in 2005.
I am not pointing this out because I lament the loss of research funding, I think this type of funding belong in the private arena and should be funneled through 503(c)’s. I am pointing this out because this is a great story about the end results of the horse-trading that goes on in Congress.
This man’s laboratory might be the $100,000 spent by Congress on the High Falls Film Festival in Rochester, NY or the $200,000 spent on the American Cotton Museum in Greenville, TX. Not that I mind buying rich congress people tickets to museum openings and film festivals, but do they have to be so expensive?
The upcoming CEI dinner is a great alternative. It is amuch cheaper for taxpayers and we can offer speaking presidents, authors, great food, and great company.
Re: Sugar and the farm bill
Hans–
Glad you posted about the bloated farm bill and how sugar is treated. A “Sweetheart Deal” – how right the Washington Post is in its editorial today blasting farm bill proposals that would make the U.S. sugar program an even sweeter deal for producers while consumers foot the bill.
The current sugar program – which has expired but has been extended with other 2002 farm programs — is a system of price supports, domestic production restrictions, and restrictions on sugar imports. The new bill would distort the market even further. It would raise the price supports for U.S. sugar cane and sugar beets, thus guaranteeing sugar producers twice the world price; provide domestic producers with 85 percent of the U.S. market, and protect them from competition by turning imported sugar into ethanol. The Sweetener Users — a coalition of food, beverage, and confectioners pushing for reform of the sugar program — estimates that the farm bill will cost consumers about $2 billion over five years.
That sweet deal is one that the Bush Administration doesn’t like and is one of the issues that may indeed provoke a presidential veto. The Administration thinks real reform of the programs was needed, and income caps for who can receive subsidies should be lowered. But farm programs, especially sugar, get heavy support from their lobbyists and from Congress. Add to that the fact that the majority of farm bill money goes for food stamps and nutrition programs – which almost guarantees that urban, suburban, and rural representatives also want the bill to pass.
In a period where farmers are making unprecedented profits, and consumers are feeling the pinch of higher food prices, it should be a time when real reform of farm programs would have a chance. But don’t count on it.
Job-Killing Sugar Quotas Continue, Milking Consumers
Say bye bye to more American manufacturing jobs. The Washington Post editorialized today about sugar import quotas and price supports contained in the bloated federal farm bill, which have ”driven some U.S. candy producers either out of business or overseas” by increasing U.S. sugar prices. It costs consumers a bundle in higher prices to benefit a handful of subsidized American sugar producers, while antagonizing and impoverishing poor countries in the Caribbean and Latin America. The President has criticized the bloated farm bill, but may not do anything to block it, given his weak political position and other priorities. In Reason, Ronald Bailey describes the many ways that the current farm bill wastes taxpayer money and takes from the poor to give to the rich. In the National Review, Fran Smith earlier wrote about “the outrageous U.S. sugar regime,” which has cost taxpayers billions to benefit “a small number of large sugar-cane and sugar-beet producers.”
A tale of Wikipedia woes and highly politicized issues
As a science writer with a liberal arts/ social studies background, I frequently run into brick walls where I do not have detailed enough knowledge about the subject. Physics will be one of those subjects where I gladly admit to being more ignorant than I ought to. Messages from my friend Miranda Hvinden frequently sends me looking for definitions as well (she is a microbiologist and a smart cookie) because she sometimes delves into details beyond my scope of knowledge. I frequently turn to Wikipedia to get the scope of scientific theories and definitions of technical terms.
I used to love the online edition of Encyclopedia Britannica when I was in undergraduate school. I studied comparative religion and intellectual history, and the trusty old Britannica gave me run downs and overviews that got me into the subject matter quicker. The science journal Nature published a study where the accuracy of these two encyclopedic giants where ranked as pretty even when it came to the number of inaccuracies, to the chagrin of subscription based Encyclopedia Britannica.
I write quite a bit about politicized science issues, such as global warming and stem cells and plant biotechnology. And I can tell you that I never turn to Wikipedia on any of these issues. If it is an issue in the political arena, Wikipedia is not your friend. EVER! One of the columnists at the Financial Post has discovered this, because he actually spends some time editing articles on Wikipedia.
The columnist updated some incorrect information about one of the scientists who has involved himself in the global warming debate, but found out that his edits where immediately removed over and over again. The same person always did the removal.
Someone called Tabletop was undoing my edits, and, following what I suppose is Wikietiquette, also explained why. “Note that Peiser has retracted this critique and admits that he was wrong!” Tabletop said.
I undid Tabletop’s undoing of my edits, thinking I had an unassailable response: “Tabletop’s changes claim to represent Peiser’s views. I have checked with Peiser and he disputes Tabletop’s version.”
Tabletop undid my undid, claiming I could not speak for Peiser.
Why can Tabletop speak for Peiser but not I, who have his permission?, I thought. I redid Tabletop’s undid and protested: “Tabletop is distorting Peiser. She does not speak for him. Peiser has approved my description of events concerning him.”
Tabletop parried: “We have a reliable source to this. What Peiser has said to *you* is irrelevant.”
The columnist, whose name is Lawrence Solomon, ran into another mischaracterization of the views of a scientist that is active in the global warming debate. This time, politically correct Wikipedia entries where removing serious accounts of this person’s scientific track record and insinuating that he believes in Martians. Solomon has obviously given up contributing to Wikipedia by now, so he recounts the man’s science credentials in the Financial Post column instead of wasting his time on work that will be tossed out by less accurate writers with an angle.
By now, his columns and his edits have actually riled up some of the zealots that use Wikipedia as a political propaganda tool. Solomon posts another column where he shares the advice he has gotten from experienced Wikipedians, they all tell him not to write under his real name. This is counter intuitive for someone who writes for a living:
But how odd a thought that a writer would want anonymity. Or maybe not so odd. In the real world, those who want anonymity are either ashamed of their conduct — say, poison pen writers– or fear for their safety — say, writers inside China criticizing their government. In the world of Wicked Pedia, the same two reasons rule.
The world of online socializing can get ugly fast, because people feel anonymous behind their computers in their own homes. Anyone who has spent time on the Paleolithic bulletin board systems and UseNet can tell the tale that it always was so, and always will be so. Wikipedia is no different.
Solomon is not the only person who has run into pranksters and zealots with too much time on their hands on Wikipedia. Participants in the public debate have been declared dead, implied as participants in assignations and other criminal activities, and it is a problem that Wikipedia recognizes as a major obstacle to the quality of the Wikipedia brand. However, since Jimmy Wales proclaimed that he would operate with “stable” and audited entries in 2005, little has changed. We still have these issues.
I will continue to use Wikipedia for technical stuff, such as double checking the definitions of enzymes and ribosomes. I will also continue the rule that my professors at the Missouri School of Journalism drilled into my head, always verify the information from one source with another source. In the meantime know that Wikipedia is not a reliable source for information about political issues, or people that are involved in public debate about political issues.
Housing Bill Contains Left-Wing Pork: Subsidies for La Raza
Earlier, we wrote about how the economic “stimulus package” passed by Congress contained pork for left-wing groups like “La Raza” (Spanish for “the race”). Now, House banking committee chairman Barney Frank is including a $10 annual million earmark specifically for La Raza in the federal housing bill. La Raza also gets money from consumer class action settlements, even though its ideological activities — like suing employers over remarks that offend their illegal alien employees — don’t have anything to do with consumers. (Class action money ends up being diverted to political causes irrelevant to most consumers, like lobbying for affirmative action). We wrote earlier about Barney Frank’s terrible mortgage bailout bill and how it would harm the economy and rip off taxpayers.
How many EU bureacrats does it take to lift an import ban?
How long should it take to lift an import ban, when all the parties agree that there are no health safety or science issues involved? In the EU, it has taken 11 years and it is still working on the issue.
My buddy Richard North, author and former food safety inspector blogged about the EU ban on US poultry imports recently, when EU promised to deliver a “progress report” on their efforts to lift the import ban.
According to North, the EU banned US poultry imports because US poultry farmers wash the poultry in a disinfectant to eliminate pathogens such as e. coli and such. This is not allowed in the EU, so they stopped importing poultry from the US. EU’s version of the FDA has said this practice is not only safe, but desirable. EU bureaucrats however, know how angry EU poultry farmers will be if the ban is lifted, so they are dragging their feet, just like they do in every other case of import bans on agricultural products.
North says if it comes down to the safety of EU consumers and the coddling of EU food producers, EU will choose coddling any day. Gods forbid that the benevolent government should protect the consumers they repeatedly claim they protect!
-And the answer to the question in the headline? I don’t know, cause the EU has yet to lift an import ban of importance…
Abrogating Peter’s Contract to Pay Paul — Mortgage Bailout’s Billion-Dollar Hit to Retirement Savings
Many commentators, such as Open Market’s Hans Bader, have done a diligent job tracking the costs to taxpayers of the mortgage bailout scheduled to be voted on this week. The Congressional Budget Office just came out with an estimate of $2.7 billion for H.R. 5830, the so-called FHA Houshing Stabilization and Homeownership Retention Act of 2008.
But there could be an even greater cost from the bill to millions of middle-class investors saving for their retirement or the education of their children. The bill has the Federal Housing Administration guarantee the refinancing of a mortgage in return from a “haircut” from the owners of the loan. The bill requires loans to be guranteed at no more than 90 percent of the value, meaning a 10 percent loss for investors. But this haircut will “shave” billions of dollars off from funds saved for retirement or education.
This bill not only “robs Peter to Pay Paul,” through taxpayers bailout of bad loans by banks and borrowers. It can also be said to “abrogate Paul’s contract to Peter.” This is because many of the mortgages often aren’t owned by the banks that service them, but frequently by millions of middle class investors through their interests in entitities that have mortgage-backed securities (MBS).
Many middle-class folks who have 401(k) accounts, mutual funds, money market funds or defined-benefit pensions are indirect holders of MBS. In fact, according to investment bank Credit Suisse, 14 percent of MBS are owned by pensions and mutual funds that serve middle-class savers.
So, let’s do some math. The bill authorizes the FHA to guarantee up to $300 billion in mortgages. With the 10 percent haircut, the loans were originally worth $333 billion. So $33 billion represents the potential lost savings by the private sector. Now assume a random 14 percent of the loans in this program represent those owned by pensions and mutual funds. 14 percent of $33 billion is $4.6 billion.
The bottom line is that middle-class savers and investors could be left with almost $5 billion less for retirement and education of their children. Another compelling reason this bailout is not worth the cost.
Drill for Oil to Save the Environment
In the Washington Post, Robert Samuelson’s column “Start Drilling“ points out that ethanol production is far worse for the environment than drilling for oil in Alaska’s Arctic tundra, yet Congress promotes ethanol subsidies to reduce our reliance on foreign oil, even as it blocks drilling in the Arctic and ”the Atlantic and Pacific coasts” that would do far more to reduce our reliance on foreign oil. “What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity,” he writes.
A news story today in the Post describes how ethanol production is devouring our food supply, even though a study shows that “greenhouse-gas emissions from corn and even cellulosic ethanol ‘exceed or match those from fossil fuels and therefore produce no greenhouse benefits.’ By encouraging an expansion of acreage, the study added, the use of U.S. cropland for ethanol could make climate conditions dramatically worse. And the runoff from increased use of fertilizers on expanded acreage would compound damage to waterways all the way to the Gulf of Mexico.”
In the American Spectator, Iain Murray notes that ethanol production has caused “food shortages and massive increases in food prices around the world. There have been food riots in Indonesia, Mexico, Egypt, and most recently, Haiti — where the poor have been reduced to eating cakes made with bleach and are on the verge of bringing the government down. Even in America, some grocery stores have begun to institute a form of rationing. Meanwhile, massive tracts of rainforest are being cleared in Indonesia to produce biodiesel, threatening the orangutan and other magnificent animals with extinction. In Brazil, the growth of sugar cultivation for ethanol is forcing food producers into the Amazon.”
By contrast, one of the Audubon Society’s chief bird sanctuaries (the Paul J. Rainey Wildlife Refuge in Louisiana), has 37 oil wells on site, and has produced natural gas for 50 years without harming the environment. Drilling for oil hasn’t harmed the birds a bit. But ethanol production causes environmental destruction, mass hunger, starvation, and rioting worldwide.
Disclosure: like many Americans, I have a retirement plan (both a 401(K) and an IRA). Like most retirement plans, it contains mutual funds. And most of those mutual funds own some stock in oil companies. So when politicians demand that the government impose a “windfall profits tax” on oil companies, what they are really trying to do is take money from my retirement plan — and your retirement plan, too, if you have one. That’s not going to encourage exploration for new sources of oil, or reduce our dependence on foreign oil.
Enforcing Unconstitutional University PC
One of the most tragic manifestations of past racial discrimination has been the creation of a government-enforced racial spoils system in the name of affirmative action. That has given rise to a professional class of racial profiteers, such as the late Ron Brown, who are ever ready to help whites win the financial benefit of regulations originally approved to aid minorities.
The demand on people and institutions to abandon the principle of nondiscrimination has been particularly strong in academia. Although the U.S. Supreme Court has limited the role of race in admissions, the American Bar Association is now pushing to institutionalize de facto quotas. University of San Diego law professor Gail Heriot writes about the plight of George Mason University law school, known for its more conservative political orientation:
If you have ever wondered why colleges and universities seem to march in lockstep on controversial issues like affirmative action, here is one reason: Overly politicized accrediting agencies often demand it.
Given that federal funding hinges on accreditation, schools are not in a position to argue. That is precisely why the U.S. Department of Education, which gives accreditors their authority, must sometimes take corrective action. George Mason University’s law school in northern Virginia is an example of why corrective action is needed now.
Farm Bill reform? Don’t bet on it.
The 2007 Farm Bill, which has been in conference for months as conferees struggled with the threat of an Administration veto over budget-busting funding and lack of real reform, supposedly had a breakthrough last Friday. In an April 25, 2008 statement on the Senate Agriculture Committee’s website, Senator Tom Harkin (D-IA), committee chairman said:
. . . the core farm bill utilizing the $10 billion above baseline has been worked out among key farm bill negotiators. Specific details and funding will still have to be worked out and are all subject to ratification by the full conference committee.
Harkin had scheduled a meeting this evening of the conference committee members to reach final agreement on support programs and their funding. But that meeting was postponed until Tuesday.
According to the Detroit Free Press, negotiators hammered out an agreement to bring the Farm Bill within budget constraints:
A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7-billion package of tax breaks to be included in the bill, and on how to finance the overall package.
The outline includes an $861 million increase for nutrition programs, partially paid for by slashing crop subsidies by $400 million and cutting a program to pay farmers for ruined crops by $250 million.
In March 2008 during conference negotiations, the U.S. Department of Agriculture Secretary Ed Schafer had issued a statement noting that the President would veto the bill if it exceeded spending limits and did not include reform measures. As the statement noted:
Unfortunately, the Farm Bills that passed the House and the Senate last year failed to address the issues of reform and instead raised taxes on the American people. Recent proposals from the Senate are looking around the $10 billion level for new spending of our farm programs, and we’ve outlined a path from the Administration to get there.
But at a time when we are enjoying a booming farm economy with record commodity prices, record farm income, record exports, it’s simply unacceptable to provide spending that increases the size and scope of government while increasing taxes to the people who pay for it.
But expect more legerdemain in the budgeting. And don’t expect real reforms of farm support programs. Take the sugar program – a system of price supports, restrictions on domestic supply and of imports. According to AgWeb.com, the new sugar program would do the following:
– Sugar: The bill would raise the sugar loan rate three-quarters of a cent beginning in 2010, and changes the overall allotment quota to be a minimum of 85 percent of domestic consumption (previously was a set amount). It also includes a sugar-to-ethanol program.
More on Deadly Ethanol Subsidies
Nate Beeler has an an excellent editorial cartoon, “Food for Thought,” that captures the deadly and costly consequences of ethanol subsidies, in today’s Washington Examiner. Many go hungry because of the greed of a few. We wrote earlier about how ethanol subsidies are causing hunger and starvation worldwide. Rioting and violent protests have occurred in many countries, including Mexico, Pakistan, Egypt, Indonesia, Haiti, El Salvador, Bangladesh, Burkina Faso, Ivory Coast, Cameroon, Senegal, Ethiopia, Mauritania, Madagascar, and the Philippines. Ethanol subsidies are also contributing to environmental destruction.
-
About Us
OpenMarket.org is the staff blog of the Competitive Enterprise Institute. We believe that people improve their lives not through government regulation, but by making their own choices in a free marketplace. -
Search
-
Categories
Agriculture
Bureaucrash
CEI in the City
Culture
Economic Liberty
Energy
Environment
Global Warming
Healthcare Reform
Insurance
Intellectual Property
International
Legal
Mobility
Nanny State
Nano & Biotech
Odds & Ends
Personal Liberty
Politics as Usual
Precaution & Risk
Privacy
Sanctimony
Tech & Telecom
Trade
-
RSS Center
