Sunday, February 28, 2010
But, you know, we share some of the views of the Tea Partiers in terms of the role of special interest in Washington, D.C., as — it just has to stop.So Democrats are somehow above taking money and cutting deals with special interests? This is her claim? My rebuttal, Take Geithner . . . please! He is but one of many Democrats with ties to special interests that are in positions of authority with regards to financial regulation.
At least 25 senior Obama administration officials previously held executive or board-of-director posts with some of the globe’s biggest financial houses, according to a new analysis for Portfolio.com by the Center for Responsive Politics (CRP), a campaign-finance watchdog group. (To see a full list of the officials with previous jobs on Wall Street, click here.)
Now the Bush administration was not better, and neither were any previous administrations. I'm not sure that you can adequately populate government staff without individuals knowledgeable about the industry. However, this often leads to a condition known as regulatory capture, where the regulators appear to be regulating for the benefit of the industry, not the general public. To some extent this process is inevitable, see Public Choice theory. Now this doesn't excuse Pelosi for her continued mendacity and slander against our movement, but it points out the complexity of the situation.
So how can we bring about financial reform? Much of what we are protesting in the Tea Party is the close ties between Big Business, especially Wall Street and Big Government the end result of which is taxpayer bailouts of risky behavior. The end result is the exact opposite of justice, the stockholders and the taxpayers get screwed and the bankers get bonuses. We don't begrudge the bonuses, we just don't think we should pay for them through the bailouts.
I am still working out a Tea Party position on bailouts that is cogent and deals with this complexity in a simple way. Here are some things to think about. First, we should demand that politicians allow at least some big banks to fail. The bankers have called the government's bluff and keep raking in the chips. Second, we should say, ok, if you're going to be too big to fail, fine, you're going to have to keep increasing your reserves so that you don't fail. (No time to fully flesh this out today, but I think reserve requirements should scale up once a firm reaches a significant market share. This will act as a brake on unbridled growth by one institution as well.)
Third, we should demand transparency for all financial assets. In October 2008, I had a chance to talk to some municipal bond traders. We were arguing about the need for a bailout, me contra, as you might expect. Since we got dug in our positions; I asked a different question, because even then it was obvious that the mortgage backed security free-fall was the real killer, roiling the markets. I asked if there had been transparency and good information about the underlying value of the assets backing the securities, would this problem have occurred. They agreed that it would not have because market forces would have come into play earlier, so their would have been more time for big firms to adjust.
In summary, we should demand an end to "too big to fail." We should demand transparency in the way that assets are priced. Finally, we should demand that banks can't take risks when their risks are subsidized, such as through deposit insurance. I welcome the comments of those more knowledgeable in this field than I.
Saturday, February 27, 2010
We had a great time showing solidarity with the hundreds who ignored the rain to have a great time. We signed petitions and listened to speeches and shook hands with people whose signs and T-shirts we liked. Bought some T-shirts from SarahB. We heard appeals from representatives of not one, but two candidates, who want to challenge Susan Davis in our predominantly Democrat 53rd Congressional district. Something is definitely going on.
Lots of folks driving by honked their support. Even a driver of a city bus honked, smiled and waved too. Something is going on.
Across the street the counter-demonstration was pretty thin. A few dozen tops. Also, I couldn't figure out their purpose. A bunch of them had peacenik signs, as if a pro-war platform is the focus of the Tea Parties. Another group had signs supporting universal health care, "Single Payer Now" and "Health Care is a Right not a Privilege" were two signs. But then I noticed that they also said they were from socialistworkers.org. What morons. The Tea Party position is that the Obamacare and like bills are socialist, and you guys go and make our point. Thanks for the help.
Roger Hedgecock was great. He talked about one person making a difference and standing up for what's right. I admit that I have often concluded that the average American didn't care about constitutional limits the way I did, but now I know otherwise. Like Winston Churchill said of another war against tyranny:
Never give in--never, never, never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.Afterwards, we got lunch nearby. We ended up at Cefalu Pizza. I may post a full review on B-Daddy's Other blog, but suffice to say they had Stone Pale Ale on draft and a terrific torpedo sub on baguette.
All in all and excellent day.
P.S. I have changed my masthead tag line to reflect the way that I believe I can best support the Tea Party movement, (Unofficial Chief Ideologist of the San Diego Tea Party Movement.) However, my ideology may or may not be mainstream to the movement. I invite the comments of Tea Partiers after viewing the Freedom Coalition Agenda, my semi-official platform, which pre-dates the Tea Parties. I will admit in advance that I am remiss in posting a plank about financial regulation and bailouts.
Friday, February 26, 2010
Now the House ethics committee has laid a turd at Speaker Pelosi's doorstep that is going to give her trouble (and hopefully harm the chances of passing Obamacare through distraction.) Here is a little tidbit:
When the Democrats took the majority in the House in 2006, here is what Pelosi said:
Ms. Pelosi did say she had not read the findings of the House ethics committee, which determined that he violated Congressional gift rules by accepting corporate-sponsored trips in 2007 and 2008. But she parsed the ruling a bit differently than the panel itself, saying it didn’t find that he had knowledge of the sponsorships himself. “And I think that’s an important statement they made,” she said.
The ethics report, however, said that while it had no evidence Mr. Rangel personally knew of the sponsors, “Representative Rangel was responsible for the knowledge and actions of his staff and the performance of their official duties.”
"The American people voted to restore integrity and honesty in Washington, D.C., and the Democrats intend to lead the most honest, most open and most ethical Congress in history."So now that the Speaker is faced with an ethical scandal, her response has been the typical stonewalling, obfuscation and outright lies we have come to expect from Washington. Certainly no better and probably worse than Republican responses to scandal. Even Moulitsas of DailyKos fame is calling for Rangel to give up his powerful Ways & Means chair. For an in depth analysis of why that isn't happening soon, you can read the Slate article here. But in summary, Rangel has too much power as a founding member of the Congressional Black Caucus and Pelosi got burned by them over the Jefferson, I've got cash in the freezer, scandal.
The Republican party need to pound the Democrats on this issue daily. In these times, saving Rangel is a loser for Pelosi. Running against Pelosi and Rangel in purple districts seems like an easy winning strategy. Now I say this, not out of love for Republicans, they have yet to win back my trust, but because I hope for gridlock so that the Congress doesn't pass bad bills. It seems like some of the worst ideas to come out of Congress are when one party is in full control of Senate, House and Presidency. Clintoncare was launched with Dem majorities, as was Obamacare. The Republicans pushed through the moronic Medicare part B drug entitlement, so they aren't exempt. So I say, hooray for divided government.
Thursday, February 25, 2010
What the f***?
I have spent a life time trying to unlearn bad habits I picked up from close association with sailors, so I am sympathetic to the idea that we shouldn't swear. But dang, you really think this law is going to help? And aren't you causing enough trouble, passing a Canadian style health care bill for California in the midst of its worst budget crisis ever?
It's enough to make me swear like a sailor.
Wednesday, February 24, 2010
The free-market system blunders into recession; its victims flock to the free-market banner. And here we go again.News flash, Mr. Frank, the collapse of so many financial institutions had nothing to do with the free market capitalism and everything to do with the crony capitalism of too big to fail. Even we really had a free market, then these firms would have gone under. (For a pretty reasonable historical perspective by an outsider on the Tea Party movement see Walter Russell Mead's Do Soldiers Drink Tea? The publication, the American Interest, seems a little too CFR for my readers, but it was still a good article.)
The reason the victims are flocking to the free-market banner is that those who truly espouse it's principles, like Ron Paul, have said all along, that too big to fail is a recipe for disaster and financial institutions should be allowed to fail.
Now I happen to not quite fully agree with Ron Paul, but he is clearly closer to the truth than Thomas Frank. It is time to add a plank to the Freedom Coalition agenda, my personal Tea Party agenda, about financial regulation. I just need to get a little more free time together for blogging. But my idea will be simple, if a financial institution is too big to fail, then it is too big to fail; and will have to have ever increasing reserves to ensure that it doesn't fail.
Meanwhile, see you Free-Marketeers on Harbor Drive on Saturday with your Gadsden Flags.
Saturday, February 20, 2010
Big Government has learned that Clintonistas are plotting a “push/pull” strategy. They plan to identify 7-8 national figures active in the tea party movement and engage in deep opposition research on them. If possible, they will identify one or two they can perhaps ‘turn’, either with money or threats, to create a mole in the movement. The others will be subjected to a full-on smear campaign.The idea is to identify all of us as "The leader of the Tea Party Movement." Here are some entries for Mrs. Daddy and myself.
In his book, The Fifth Discipline, Peter Senge talks about the scene in Spartacus, (video at Temple of Mut) where the slaves all stand up to say "I am Spartacus." In Chapter 11, Shared Vision, Senge has this to say about the power of shared vision, that in my opinion, the Tea Party represents:
... the loyalty of Spartacus' army was not to Spartacus the man. Their loyalty was to a shared vision which Spartacus had inspired--the idea that they could be free men. This vision was so compelling that no man could bear to give it up and return to slavery.
A shared vision is not an idea. It is not even an important idea such as freedom. It is, rather, a force in people's hearts, a force of impressive power. It may be inspired by an idea, but once it goes further--if it is compelling enough to acquire the support of more than one person--then it is no longer an abstraction. It is palpable. People begin to see it as if it exists. Few, if any, forces in human affairs are as powerful as shared vision.
Our shared vision is of free men and women ordering our own affairs as we deem best, with a limited government primarily concerned with protecting, not looting, our liberty. It is the vision of the Founding Fathers, and it lives on, because it is powerful and successful and no other political vision in the history of mankind has proved as compelling.
Friday, February 19, 2010
Health Care Insurance ≠ Health Care ≠ Health.
Health care reform purports to increase the health of Americans by increasing health care insurance. But health care insurance is not actually insurance, does not increase care and does not make us healthy. How could this be? First, most insurance policies, like your auto insurance, only pay off rarely, and then with considerable deductibles and paperwork. Health insurance pays for every visit to the doctor, it is not really insurance at all, but a way to subsidize treatment costs. Subsidize? Yes, because the insurance you are using either has a favored tax treatment, if funded by your employer, or is directly funded by the government if you are using Medicare, the VA, Medicaid, etc. But we can't really call this insurance. True insurance would be look something like having to reach $5000 per year in out of pocket expenses before it would kick in. This is important because cost containment is never going to happen without politically unacceptable rationing, or getting the consumer involved through the magic of the free market.
But people won't get needed treatment, some will argue. I don't think so. The average person is the best judge of their need for treatment. But stupid people will spread disease by not getting their flu shots, the left will argue. Not when they are already priced at $5 to $30.
Second, health care insurance doesn't increase the care delivered, because of two factors. In the relentless pursuit of cutting costs through bureaucracy, health care insurance makes the doctor's visit more expensive, because of the added staff needed. Second, both private insurance and medicare and medicaid all seek to drive down costs. This has the effect of decreasing the supply of health care available as doctor's opt out of medicare or choose to retire earlier to avoid the bureaucratic pain.
Finally, health care treatment doesn't necessarily make us healthier. Yes, treatment is often needed, but healthier life styles are often far more important to good health. But we don't pay to keep people healthy, only for obtaining treatment, and further, through a system that only pays out when people get sick. What a perverse set of incentives. I'm not saying that people get sick on purpose, but these incentives can't help but encourage the overuse of resources and discourage preventive activity.
I consider my own behavior. I have learned from experience that no doctor is going to help me once I get a cold or the flu. These are viruses that just have to run their course. As a result, when I think I might be exposed, or I start to feel like I might be getting sick, I take action. I get more rest, I gargle, I use zinc and vitamin C. (I don't care if you say the zinc and C don't work, in my experience, they work for me.) I am not always fully successful, but I reduce how long I am sick or avoid it altogether.
Think how much simpler health care would be for all Americans if most visits to the doctor were on a cash basis. Doctor's visits would be involve less waiting, no pesky insurance forms to fill out. Doctor's fees would be lower, no need to hire so many accountants and staff to navigate the labyrinth of the billing process. If you thought you were approaching your catastrophic cap, you could ask the provider for a summary of your costs for the year. (I know this is possible, because I carry no dental insurance, but use a flexible spending account. If I get behind in my claims, the dentist's office helps me catch up.) Finally, you might start shopping around for care, the same way you shop around for a good plumber or mechanic, going on line and looking at doctor's ratings and fees. This would have the free market goodness of driving poor doctor's out of business and improving the performance of the merely mediocre.
What about that whole "increasing health" thing? Hey I'm in the Tea Party, can't we all just take a little responsibility for that ourselves?
Unless we reform health insurance, starting with medicare and medicaid, we will never make progress on building a better health care system in this country.
Thursday, February 18, 2010
"Someone said that you wanted to hear a black man speak to you without a teleprompter."
Wednesday, February 17, 2010
In the meantime, we should still consider that burning fossil fuels might not be in our long term best interests. First, and foremost, the demand for oil has a tendency to enrich despots the world over; Saudi Arabia, Iran, China, Russia and Venezuela make the list of top ten oil producing nations. Interestingly, so does the United States, but it is not near as important to our economies than those other nations listed because our overall GDP is so much higher.
Second, burning fossil fuels is associated with air pollution and is the primary cause of air pollution. Air pollution is a factor in increased mortality in the United States, and presumably other countries. It would seem prudent to move away from sources of energy that increase the presence of particulate and noxious chemicals in the air.
Finally, there is still a good chance that we are impacting the global climate. Catastrophically? Probably not, but let's not forget that economic dislocations caused by the effects of global warming would still be painful and cause localized hardship at a minimum.
So why am I opposed to "cap and trade?" The experience in Europe with massive fraud and the heavy give-aways in the current bill in Congress persuade me that "cap and trade" will do nothing but transfer wealth to favored or criminal groups. I want to curb carbon emissions in a way that does not harm the economy. The only way that will work is a slow phase in of a carbon tax, coupled with reductions in the income tax, either by rate decreases or rebates. The Carbon Tax Center has some decent economic arguments about how such a tax could be implemented in a revenue neutral way to prevent bankrupting the economy. The only piece they miss is the need for a global tax, because air pollution is a global problem. See study on Chinese air pollution reaching Los Angeles (how ironic).
Thursday, February 11, 2010
Tuesday, February 9, 2010
Senator Prodded Fed to Aid
Ailing Bank From Home State
The article details the efforts of Senator Robert Menendez (D-Clepto) to aid a Jersey bank owned by big contributors to his campaigns by trying to get the Fed to bail out First BankAmericano (I'm not making that up.)
The Fed did not acquiesce to this request; so this should have been the real "Man Bites Dog" headline.
Fed Denies Senator's Sleazy Request
The secret of the Apache success was their decentralized structure. They had no leader in the authoritarian sense, only leaders whom some tribal members chose to follow, but were not required to do so. When the Spanish burned Apache villages, they abandoned villages and became nomadic. The more the Spanish fought them, the stronger they became and the Spanish could not defeat them because they were so decentralized that no decisive blow could be brought to bear against them.
The Tea Party movement, is very much Apache in outlook, recent events notwithstanding. And I hope it stays that way. This is why the attacks on the movement have been so unsuccessful to date. In fact, this style of organization deliberately confounds the Alinsky tactics of the other side. Alinsky in turn devised his tactics to take down political entities that are in my view, mostly Aztec (centralized) in their structure (with some elements of Apache) by attacking the inevitable fissures in such organizations.
The Tea Party must coalesce around a few simple concepts, then it will have lasting impact. When key beliefs are widely agreed to, then the cultural norms will become self-enforcing and we will have a lasting movement. I nominate fiscal responsibility and a strict respect for the limits the constitution places on the federal government as the two most important and easily agreed upon planks for the movement. I welcome comment from my fellow tea partyers.
For a more comprehensive set of policies, see the Freedom Coalition agenda.
Monday, February 8, 2010
It's not accurate to blame this [failure to pass cap and trade/Obamacare] on the Republicans. From Arlen Specter's defection to Scott Brown's swearing in, Democrats had total control over the policy-making process. The only recourse the Republicans had was the First Amendment. They used it well, but don't let it be said that the President lacked access to it. Given Mr. Obama's bully pulpit and his omnipresence on the national stage, his voice has been louder than anybody's. If Mr. Obama has lost the public debate to the beleaguered rump that is the congressional GOP, he has nobody to blame but himself.Exactly. The President took office with a huge store of good will. Instead of finding programs or approaches on which to build a consensus, he chose a rigid ideological approach that has not served him well. Unless he changes course his policies will continue to languish.
Sunday, February 7, 2010
To set the stage, McCain had gotten a great bounce after nominating Sarah Palin as Vice President and at one point was leading Obama in the polls. He started to sink again, and the first debate on September 27 didn't seem to help. After the convention, the markets started to collapse and Paulson and Bush seemed panicked by the financial situation. There was some debate about bailing out AIG, and McCain initially spoke out against that, but didn't really follow through. AIG had been bailed out September 16. This seemed to stop his freefall in the polls. As the financial crisis seemed to deepen, McCain suspended his campaign and returned to Washington. He also suggested that the second debate be postponed. Further, McCain called for a meeting regarding the crisis, while Boehner was saying that he might not have the votes in the House to carry the TARP package for the President, and the Democrats were not going to pass it alone.
From the WSJ excerpt:
There it is. McCain had no alternative. You can disagree all you want about the details of that meeting, but the fact remains that McCain could have derailed the first stimulus and distanced himself from both Obama and Bush. Obama had called McCain's bluff. But McCain did not have the free market economics team in place to call "all in." After that it was all down hill for McCain and he never came any closer than that day to catching Obama.
Then he sprang the trap that the Democrats had set: "Yesterday, Senator McCain and I issued a joint statement, saying in one voice that this is no time to be playing politics. And on the way here, we were on the brink of a deal. Now, there are those who think we should start from scratch. ... If we are indeed starting over, the consequences could well be severe."
But, of course, there was no deal yet. [Rep. Spencer] Bachus [R., Ala.] had been maneuvered into giving credibility to the appearance of one. But he, [House Minority Leader John] Boehner and [Senate Minority Leader Mitch] McConnell had since issued statements disclaiming the idea that there ever had been a deal. Now Obama and the Democrats were skillfully setting up the story line that McCain's intervention had polarized the situation and that Republicans were walking away from an agreement. It was brilliant political theater that was about to degenerate into farce. Skipping protocol, the president turned to McCain to offer him a chance to respond: "I think it's fair that I give you the chance to speak next."
But McCain demurred. "I'll wait my turn," he said. It was an incredible moment, in every sense. This was supposed to be McCain's meeting—he'd called it, not the president, who had simply accommodated the Republican candidate's wishes. Now it looked as if McCain had no plan at all—his idea had been to suspend his campaign and summon us all to this meeting. It was not a strategy, it was a political gambit, and the Democrats had matched it with one of their own.
In hindsight, I don't think the TARP was needed to stabilize the system. I am not an expert, but I know that financial institutes are judged by different standards for bankruptcy than are other businesses. Emergency action may have been needed, but it might have been a holiday on financial institution bankruptcy filings or some other fix that didn't commit the taxpayers to unlimited liability. I know for a fact that the TARP was a bad policy.
The voters went on to make a rational choice. Polls at the time showed the TARP plan to be unpopular, but given that both candidates ultimately supported a continuation of Bush policies, they voted for the one who appeared to have handled the crisis calmly, not the one who grandstanded like Michael Scott, but couldn't back up his play.
Poll history here, if you want to check my time line.
My initial thoughts at the time here and here.
Saturday, February 6, 2010
Meanwhile leftism (also known as liberalism, but not in this space) continues to blame the benighted sots of the voting public for not knowing that Obamacare is good for them, along with all the other do-gooder schemes of the left. Slate has the latest entry in this genre. Obama himself is selling this snake oil, starting with his state of the union and continuing to peddle the lie that if we just understand the details of his wonderful proposals, we would love the bill. In fact the opposite has been proved, the more people learn about the proposed health care funding legislation, the less they like it. But Obama somehow claims that "evil" insurance companies have a bigger megaphone than the President of the United States and have drown out his message. Meanwhile the Wall Street Journal savages big pharma for playing footsie with the Dems and details how they will get screwed anyway.
Meanwhile, Obama appears not to have given up on the legislation. I am not sure what is driving him, but I think the more focuses on health care the more of a disaster the mid-term elections will be for his party. I am conflicted, because if any bill is passed, no matter how watered down, it is going to be a bad bill. However, watching the slow motion self destruction by the Democrats in trying to achieve this Pyrrhic victory elicits a certain schadenfreude. As is noted in the NYT article, the chances do not appear very good that any legislation will emerge. From the article:
The President just isn't very smart, I have decided. His vision is so incompatible with the manner in which the Senate and House actually operate that he should know this is unworkable. If so, one must think him a cynic of the first order, but I am not so sure and it scares me to think he believes his own junior high level of understanding of the political process.
In his rallying cry to a crowd of cheering supporters on Thursday, Mr. Obama described, in the clearest terms yet, his vision of how to enact comprehensive health legislation: House and Senate Democrats would resolve their differences and decide on a “final bill.” They would then invite “our Republican friends to present their ideas.” The president would convene a meeting of Democrats, Republicans and health care experts to debate the proposals, in plain-spoken terms, for the benefit of the American people.
Then, Mr. Obama said, “we have got to move forward on a vote.”
The president did not say how he would resolve the knotty questions of policy, procedure and politics facing Congress.
Friday, February 5, 2010
Tuesday, February 2, 2010
Dean has the Tea Party ladies blushing with his effusive but well deserved praise for their efforts. I agree with Sarah B in the comments that the Tea Party is most effective as a leaderless movement. Although, she doesn't explicitly say so, I think that this lack of structure blunts the leftist, Alinsky tactic of personalizing and freezing the opposition, see rule 13. The MSM tried to do that with the Tea Party movement, but because it is genuinely grass roots, there is no one to go gunning for. Unfortunately, the current lesson in my leadership class advances the case that hierarchies are an inevitable outcome of the structures of the human mind. I think that this movement will eventually succumb, but not before doing a world of good.
Dean calls the likens his current status as a Republican as a sentence to a halfway house. I like the description as a former Libertarian, and current libertarian-Republican (it's all in the spelling).