Thursday, April 22, 2010
Bankruptcy bill finally clears committee
Highly controversial, union-backed legislation that would make it more difficult for local governments to declare bankruptcy has made it out of the Senate Local Government Committee after a nearly yearlong stalemate.
Assembly Bill 155 by Assemblyman Tony Mendoza, D-Artesia, was passed by the Assembly nearly a year ago, but was bottled up in the Senate Local Government Committee because one Democrat, Lois Wolk of Davis, refused to vote for it.
Senate President Pro Tem Darrell Steinberg removed Wolk from the committee and with the change, the measure was approved on a 3-2 party-line vote.
The measure, backed by public employee unions, would require local governments to get permission from the California Debt and and Investment Advisory Commission, which is dominated by Democratic officials with union ties, before filing for bankruptcy.
Local government groups oppose the measure, contending that it creates a mechanism for their unions to extract conditions, such as a pledge not to abrogate labor contracts, in any bankruptcy action. ...
Wednesday, April 21, 2010
Could the U.S. become Argentina?
A century ago, if you had told typical citizens of Argentina (which at that time was enjoying the fourth-highest per capita income in the world) that it would decline to become just the 76th richest nation on a per capita basis in 2010, they probably would not have found it believable. They might have responded, "This could not happen; we are a nation rich in natural resources, with a great climate for agriculture. Our people are well educated and largely descended from European stock. We have property rights, the rule of law and an open free-market economy."
But the fact is, Argentina has been going downhill for eight decades, and it has the second-worst credit ranking in the entire world...
...Argentine courts are slow and corrupt. Property rights are not secure, and the government has willfully understated inflation statistics, causing foreign and domestic bondholders to lose much of their investments. The Obama administration unilaterally took away bondholders' rights in the GM and Chrysler cases and, in essence, took their assets and turned them over to the unions that had supported Mr. Obama.
Argentina has extensive labor regulations to favor unions, which greatly increase the cost of hiring. The Obama administration has supported costly labor regulations that the unions favor, which eventually will drive up the cost of hiring workers and result in higher unemployment.
Argentina has a long history of deficit spending, which, in turn, has made government debt burdens so high that the government refuses to pay the debt to the private domestic and international debt holders. Over the next 30 years, economists associated with the Bank for International Settlements in Basel, Switzerland, estimate (as have many U.S. economists) that the U.S. public debt will rise to between 200 percent and 500 percent of GDP. (It is now about 60 percent.) Debt levels of 200 percent to 500 percent cannot be supported; hence, the debt holders will face erosion of their capital through either inflation or nonpayment.
The U.S. is not yet Argentina, but, if many of the policies of the Obama administration are not reversed, America will only get poorer and, in as little as 30 years, become a middle-income country, while dozens of other countries will enjoy a higher standard of living.
Waco
...This is not quite the case, however, by the Clinton administration’s own admissions. CS gas was used at the compound, in order, as senior White House adviser George Stephanopoulos said, echoing senior Justice Department statements, to “try and pressure” those in the compound. It was hoped, he said, that as this “pressure was increased, the maternal instincts of the mothers might take over and they might try to leave with their kids” (Washington Times, April 23, 1995).
But the FBI knew beforehand that adults in the compound had gas masks; the gas therefore would not put pressure on them. On whom, then? If the FBI knew that the adults had gas masks, but went ahead with the gas attack anyway, it is plain that this “pressure” was brought directly against the children because, as the FBI knew, they could not fit into adult– size gas masks. “Maternal feelings”, the FBI hoped, would be unleashed in the mothers by watching their children choking, gasping and blistering from the gas.
The plan Reno approved and took to President Clinton for approval contemplated the children choking in the gas unprotected for forty-eight hours if necessary, to produce the requisite “maternal feelings”. By taking aim at the children with potentially lethal gas, their mothers would be compelled, according to the FBI plan repeatedly defended by the Clinton administration afterwards as “rational” planning, to flee with them into the arms of those trying to gas them. [Emphasis added.]
An independent report on Waco written by the Harvard Professor of Law and Psychiatry, Alan A. Stone, for the then Deputy Attorney General Philip Heymann, says it “is difficult to believe that the US government would deliberately plan to expose twenty-five children, most of them infants and toddlers, to CS gas for forty-eight hours”. Unfortunately, however, that appears to have been exactly the plan.
The effect of CS gas on an unprotected infant exposed for only two to three hours is discussed in the report; in that case report, dating from the early 1970s, the child’s symptoms during the first twenty-four hours were upper respiratory; but, within forty-eight hours his face showed evidence of first degree burns, and he was in severe respiratory distress typical of chemical pneumonia. The infant had cyanosis, required urgent positive pressure pulmonary care, and was hospitalized for twenty– eight days. Other signs of toxicity appeared, including an enlarged liver.
Professor Stone’s report is measured, careful and damning. It is hard to know whether Heymann’s courage in commissioning it was a reason for his subsequent departure from the Justice Department. In the mean time, questions about the performance of the Justice Department are treated by the Clinton administration not as serious allegations of criminal activity, but as little more than a below-the-belt salvo in the culture wars.
I was shocked to read in Stone’s report that the Justice Department had undertaken, and had defended in the press as such, activities which if conducted in wartime would constitute war crimes. Because exposing the children to CS gas was the point of the FBI exercise: no children exposed, no pressure....
The New Orleans Beating: Real Violence, Real Evidence, No Media
...After Jindal, Barbour, and Perry had departed the restaurant from a rear entrance, an employee of Brennan’s announced to the demonstrators that the three were no longer present. The protesters refused to either leave or to cease the abusive chanting. Sometime either before or shortly after the New Orleans Police were called in a semi-successful effort to break up the protest, Louisiana GOP Chairman Roger Villere found himself blocked from exiting the restaurant’s front door. When Villere then tried to exit through the rear, he was chased by protesters. He made a narrow escape into a waiting taxi.
About an hour later, Bautsch and Brown exited through the front door into what appeared to be a dwindling demonstration. The duo were immediately “catcalled” by the remaining protesters, and were followed by a group of approximately five white males bearing a “counterculture” appearance. The pursuers made repeated insulting comments based largely in class-warfare rhetoric: “little blond bitch,” “you think you’re f***ing special.”
Brown told Bautsch to hurry towards their car. When they reached the 600 block of St. Louis Street, a block and a half from Brennan’s, Brown turned to gauge their progress.
At that time, the attack began.
Brown was immediately set upon by four of the assailants, thrown into a wrought-iron fence. Another assailant attacked Bautsch, knocking her to the ground and stomping on her leg. She suffered four breaks in the leg, requiring a steel rod during extensive surgery on April 10, and faces three months of recuperation.
Brown suffered a broken nose and jaw, and a concussion....
The Beholden State
How public-sector unions broke California
The camera focuses on an official of the Service Employees International Union (SEIU), California’s largest public-employee union, sitting in a legislative chamber and speaking into a microphone. “We helped to get you into office, and we got a good memory,” she says matter-of-factly to the elected officials outside the shot. “Come November, if you don’t back our program, we’ll get you out of office.’
The video has become a sensation among California taxpayer groups for its vivid depiction of the audacious power that public-sector unions wield in their state. The unions’ political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state’s public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation’s and a flood of firms and jobs escaping high taxes and stifling regulations. This toxic combination—high public-sector employee costs and sagging economic fortunes—has produced recurring budget crises in Sacramento and in virtually every municipality in the state.
How public employees became members of the elite class in a declining California offers a cautionary tale to the rest of the country, where the same process is happening in slower motion. The story starts half a century ago, when California public workers won bargaining rights and quickly learned how to elect their own bosses—that is, sympathetic politicians who would grant them outsize pay and benefits in exchange for their support. Over time, the unions have turned the state’s politics completely in their favor. The result: unaffordable benefits for civil servants; fiscal chaos in Sacramento and in cities and towns across the state; and angry taxpayers finally confronting the unionized masters of California’s unsustainable government....
...Four years later, the CTA reached new heights of thuggishness after a business-backed group began a petition to place a school-choice initiative on the state ballot. In a union-backed effort, teachers shadowed signature gatherers in shopping malls and aggressively dissuaded people from signing up. The tactic led to more than 40 confrontations and protests of harassment by signature gatherers. “They get in between the signer and the petition,” the head of the initiative said. “They scream at people. They threaten people.” CTA’s top official later justified the bullying: some ideas “are so evil that they should never even be presented to the voters,” he said.
The rise of the white-collar CTA provides a good example of a fundamental political shift that took place everywhere in the labor movement. In the aftermath of World War II, at the height of its influence, organized labor was dominated by private workers; as a result, union members were often culturally conservative and economically pro-growth. But as government workers have come to dominate the movement, it has moved left. By the mid-nineties, the CTA was supporting causes well beyond its purview as a collective bargaining agent for teachers. In 1994, for instance, it opposed an initiative that prohibited illegal immigrants from using state government programs and another that banned the state from recognizing gay marriages performed elsewhere. Some union members began to complain that their dues were helping to advance a political agenda that they disagreed with. “They take our money and spend it as they see fit,” says Larry Sand, founder of the California Teachers Empowerment Network, an organization of teachers and former teachers opposed to the CTA’s noneducational politicking....
...The symbiotic relationship between the CCPOA and former governor Gray Davis provides a remarkable example of the union’s power. In 1998, when Davis first ran for governor, the union threw him its endorsement. Along with those much-needed law-and-order credentials, it also gave Davis $1.5 million in campaign contributions and another $1 million in independent ads supporting him. Four years later, as Davis geared up for reelection, he awarded the CCPOA a stunning 34 percent pay hike over five years, increasing the average base salary of a California prison guard from about $50,000 a year to $65,000—and this at a time when the unemployment rate in the state had been rising for nearly a year and a half and government revenues had been falling. The deal cost the state budget an additional $2 billion over the life of the contract. A union official described it admiringly as “the best labor contract in the history of California.” Eight weeks after the offer, the union donated $1 million to Davis’s reelection campaign....
...Even more troubling are the activities of the California Organization of Police and Sheriffs (COPS), a lobbying and advocacy group that has raised tens of millions of dollars from controversial soliciting campaigns. In one, COPS fund-raisers reportedly called residents of heavily immigrant neighborhoods and threatened to cut off their 911 services unless they donated. In another, a COPS fund-raiser reportedly offered to shave points off Californians’ driving records in exchange for donations. ...
...The results of union pressure are clear. In most states, cops and other safety officers can typically retire at 50 with a pension of about half their final working salary; in California, they often receive 90 percent of their pay if they retire at the same age....
...The SEIU’s rise in California illustrates again how modern labor’s biggest victories take place in back rooms, not on picket lines. In the late 1980s, the SEIU began eyeing a big jackpot: tens of thousands of home health-care workers being paid by California’s county-run Medicaid programs. The SEIU initiated a long legal effort to have those workers, who were independent contractors, declared government employees. When the courts finally agreed, the union went about organizing them—an easy task because governments rarely contest organizing campaigns, not wanting to seem anti-worker. The SEIU’s biggest victory was winning representation for 74,000 home health-care workers in Los Angeles County, the largest single organizing drive since the United Auto Workers unionized General Motors in 1937. Taxpayers paid a steep price: home health-care costs became the fastest-growing part of the Los Angeles County budget after the SEIU bargained for higher wages and benefits for these new recruits. The SEIU also organized home health-care workers in several other counties, reaching a whopping statewide total of 130,000 new members.
The SEIU’s California numbers have given it extraordinary resources to pour into political campaigns. The union’s major locals contributed a hefty $20 million in 2005 to defeat a series of initiatives to cap government growth and rein in union power. The SEIU has also spent millions over the years on initiatives to increase taxes, sometimes failing but on other occasions succeeding, as with a 2004 measure to impose a millionaires’ tax to finance more mental-health spending. With an overflowing war chest and hundreds of thousands of foot soldiers, the SEIU has been instrumental in getting local governments to pass living-wage laws in several California cities, including Los Angeles and San Francisco. And the union has also used its muscle in campaigns largely out of the public eye, as in 2003, when it pressured the board of CalPERS, the giant California public-employee pension fund, to stop investing in companies that outsourced government jobs to private contractors....
Housing Finance and the 2008 Financial Crisis
...Before looking at the origins of the financial crisis, it is useful to dispose of some of the faulty theories put forward to explain the mess. Some commentators have blamed deregulation for the financial meltdown of 2008. One member of Congress blamed “unregulated free-market lending run amok.” Such an indictment is necessarily skimpy on the particulars, because there has actually been no recent dismantling of banking and financial regulations. Regulations were, in fact, intensified in the 1990s in ways that fed the development of the housing finance crisis, as discussed below.
Some critics of deregulation point to the bipartisan Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, as a source of recent problems. But that act opened the door for financial firms to diversify: a holding company that owns a commercial bank subsidiary may now also own insurance, mutual fund, and investment bank subsidiaries. Far from contributing to the recent turmoil, the greater freedom allowed by the 1999 act has been a blessing in containing the fallout. Without it, JPMorgan Chase could not have acquired Bear Stearns, nor could Bank of America have acquired Merrill Lynch—acquisitions that avoided losses to Bear’s and Merrill’s bondholders. (It is not the Act’s fault that the Fed sweetened the Bear Stearns acquisition at taxpayer expense and forced Bank of America to acquire Merrill Lynch when the bank wanted to scotch the deal). Without it, Goldman Sachs and Morgan Stanley could not have switched specialties to become bank holding companies when it became clear that they could no longer survive as investment banks....
...In the recession of 2001, the Federal Reserve System, under Chairman Alan Greenspan, began aggressively expanding the U.S. money supply. Year-over-year growth in the M2 monetary aggregate rose briefly above 10 percent, and remained above 8 percent entering the second half of 2003. The expansion was accompanied by the Fed repeatedly lowering its target for the federal funds (interbank short-term) interest rate. The federal funds rate began 2001 at 6.25 percent and ended the year at 1.75 percent. It was reduced further in 2002 and 2003, and reached a low in mid-2003 of 1 percent, where it stayed for a year. The real Fed funds rate was negative—meaning that nominal rates were lower than the contemporary rate of inflation— for two and a half years. In purchasing-power terms, during that period a borrower was not paying but rather gaining in proportion to what he borrowed. Economist Steve Hanke has summarized the result: “This set off the mother of all liquidity cycles and yet another massive demand bubble.”
The Taylor Rule—a formula devised by economist John Taylor of Stanford University—provides a standard method of estimating what federal funds rate would be consistent, conditional on current inflation and real income, with keeping the inflation rate to a chosen target rate. From early 2001 until late 2006, the Fed pushed the actual federal funds rate below the estimated rate that would have been consistent with targeting a 2 percent inflation rate.1 A fortiori, the Fed held the actual rate even further below the path, consistently targeting stability in nominal income. The gap was especially large—200 basis point or more—from mid-2003 to mid-2005.
The demand bubble thus created went heavily into real estate. From mid-2003 to mid-2007, while the dollar volume of final sales of goods and services was growing at 5 percent to 7 percent, real estate loans at commercial banks were growing at 10–17 percent....
...The Fed’s policy of lowering short-term interest rates not only fueled growth in the dollar volume of mortgage lending, but had unintended consequences for the type of mortgages written. By pushing very-short-term interest rates down so dramatically between 2001 and 2004, the Fed lowered short-term rates relative to 30-year rates. Adjustable-rate mortgages (ARMs), typically based on a one-year interest rate, became increasingly cheap relative to 30-year fixed-rate mortgages. Back in 2001, non-teaser ARM rates on average were 1.13 percent cheaper than 30-year fixed mortgages (5.84 percent vs. 6.97 percent). By 2004, as a result of the ultralow federal funds rate, the gap had grown to 1.94 percent (3.90 percent vs. 5.84 percent)....
...The International Monetary Fund corroborated the view that the Fed’s easy-credit policy fueled the housing bubble. After estimating the sensitivity of U.S. housing prices and residential investment to interest rates, IMF researchers found that “the increase in house prices and residential investment in the United States over the past six years would have been much more contained had short-term interest rates remained unchanged.”...
...The expansion in risky mortgages to underqualified borrowers was an imprudence fostered by the federal government. As elaborated in the paragraphs to follow, there were several ways that Congress and the executive branch encouraged the expansion. The first way was loosening down-payment standards on mortgages guaranteed by the Federal Housing Administration. The second was strengthening the Community Reinvestment Act. The third was pressure on lenders by the Department of Housing and Urban Development. The fourth and most important way was subsidizing, through implicit taxpayer guarantees, the dramatic expansion of the government-sponsored mortgage buyers Fannie Mae and Freddie Mac; pointedly refusing to moderate the moral hazard problem of implicit guarantees or otherwise rein in the hyperexpansion of Fannie and Freddie; and increasingly pushing Fannie and Freddie to promote affordable housing through expanded purchases of nonprime loans to low-income applicants....
...Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low- and moderate-income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target—42 percent of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50 percent in 2000 and 52 percent in 2005.
For 1996, HUD required that 12 percent of all mortgage purchases by Fannie and Freddie be “special affordable” loans, typically to borrowers with income less than 60% of their area’s median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down....
...The hyperexpansion of Fannie Mae and Freddie Mac was made possible by their implicit backing from the U.S. Treasury. To fund their enormous growth, Fannie Mae and Freddie Mac had to borrow huge sums in wholesale financial markets. Institutional investors were willing to lend to the government-sponsored mortgage companies cheaply—at rates only slightly above those on the Treasury’s risk-free securities and well below those paid by other financial intermediaries—despite the risk of default that would normally attach to private firms holding such highly leveraged and poorly diversified portfolios. The investors were so willing only because they thought that the Treasury would repay them should Fannie or Freddie be unable. As it turns out, they were right. ...
Obama’s Fannie and Freddie Amnesia
...The president’s complicity in the housing collapse hasn’t stopped him from pinning the blame on Republicans, “special interests,” and Wall Street “fat cats.” As he does with other problems, the president blames everyone except himself and his party.
As I recounted in a Cato Policy Analysis, Fannie and Freddie epitomized the tawdry relationship between businesses that receive special federal breaks and policymakers. Democrats, including Obama’s chief of staff Rahm Emanuel, played a key role in facilitating Fannie and Freddie’s destructive activities. Emanuel, a then recent senior adviser to President Clinton, was appointed by Clinton to Freddie Mac’s board of directors, where he earned $320,000 in compensation and sold company stock worth more than $100,000.
Then there’s the current Office of Management and Budget director, Peter Orszag. In 2002, Fannie Mae commissioned a paper authored by Nobel Laureate Joseph Stiglitz, Jonathan Orszag, and Peter Orszag, who was then at the Brookings Institution. The study concluded that “the probability of default by the GSEs is extremely small.” Oops.
Given the company Obama keeps, it’s not surprising that the administration still hasn’t come up for a plan on what to do with Fannie and Freddie.
The administration has intentionally not incorporated Fannie and Freddie into the federal budget in order to hide the cost to taxpayers. ...
Saturday, April 17, 2010
What the whistleblower prosecution says about the Obama DOJ
The more I think and read about the Obama DOJ's prosecution of NSA whistleblower Thomas Drake, the more I think this might actually be one of the worst steps the Obama administration has taken yet, if not the single worst step -- and that's obviously saying a lot. During the Bush years, in the wake of the NSA scandal, I used to write post after post about how warped and dangerous it was that the Bush DOJ was protecting the people who criminally spied on Americans (Bush, Cheney Michael Hayden) while simultaneously threatening to prosecute the whistle-blowers who exposed misconduct. But the Bush DOJ never actually followed through on those menacing threats; no NSA whistle-blowers were indicted during Bush's term (though several were threatened). It took the election of Barack Obama for that to happen, as his handpicked Assistant Attorney General publicly boasted yesterday of the indictment against Drake.
Aside from the indefensible fact that only crimes committed by high-level Bush officials -- but nobody else -- enjoy the benefits of Obama's "Look Forward, Not Backward" decree, think about the interests being served by this prosecution....
...It's not hyperbole to say that Bush's decision to use the NSA to spy domestically on American citizens was one of the most significant stories of this generation. It was long recognized that turning the NSA inward was one of the greatest dangers to freedom, as Sen. Frank Church warned back in 1975, after he investigated America's secret surveillance apparatus: "That capability at any time could be turned around on the American people and no American would have any privacy left, such is the capability to monitor everything: telephone conversations, telegrams, it doesn't matter. There would be no place to hide." It was, of course, the December 16, 2005, New York Times article by Jim Risen and Eric Lichtblau which first disclosed that the Bush NSA was illegally eavesdropping on American citizens inside the U.S., but Gorman's articles regarding the Trailblazer program -- in the time period covered by the indictment, using NSA sources (almost certainly including Drake) -- provided crucial details about how and why the Bush NSA dispensed with key safeguards to protect innocent Americans from such invasive domestic surveillance....
...Think about to whose interests the Obama DOJ is devoted given that -- while they protect the most profound Bush crimes based on the Presidential decree of "Look Forward, Not Backward" -- they chose this whistle-blower to prosecute (and Drake, incidentally, is apparently impoverished, as he's been assigned a Public Defender to represent him). In the process, of course, the Obama DOJ also intimidates and deters future whistle-blowers from exposing what they know, thus further suffocating one of the very few remaining mechanisms Americans have to learn about what takes place behind the virtually impenetrable Wall of Secrecy surrounding the Surveillance State -- a Wall of Secrecy which the Obama administration, through its promiscuous use of "state secrets" and immunity claims, has relentlessly fortified and expanded. Anyone who doubts that whistle-blower prosecutions like this are intended to prevent any further disclosures of wrongdoing should simply review the 2008 Pentagon report which identified WikiLeaks as a major threat to the U.S. and proposed that exposure and prosecution of their sources would crush their ability to obtain further leaks....
Lawyer: Laptops took thousands of images
The system that Lower Merion school officials used to track lost and stolen laptops wound up secretly capturing thousands of images, including photographs of students in their homes, Web sites they visited, and excerpts of their online chats, says a new motion filed in a suit against the district.
More than once, the motion asserts, the camera on Robbins' school-issued laptop took photos of Robbins as he slept in his bed. Each time, it fired the images off to network servers at the school district.
Back at district offices, the Robbins motion says, employees with access to the images marveled at the tracking software. It was like a window into "a little LMSD soap opera," a staffer is quoted as saying in an e-mail to Carol Cafiero, the administrator running the program.
"I know, I love it," she is quoted as having replied....
School District Allegedly Snapped Thousands of Student Webcam Spy Pics
A webcam spying scandal at a suburban Philadelphia school district is broadening, with lawyers claiming the district secretly snapped thousands of webcam images of students using school-issued laptops without the pupils’ knowledge or consent.
Some of the images included pictures of youths at home, in bed or even “partially dressed,” according to a Thursday filing in the case. Pupils’ online chats were also captured, as well as a record of the websites they visited.
Pennsylvania high school officials are accused of spying on their students through webcams on district issued Macbooks. Here is a picture a webcam took of a sophmore sleeping at home
Pennsylvania high school officials are accused of spying on students with webcams on district-issued Macbooks. Here is sophomore Blake Robbins sleeping at home in an image secretly and allegedly taken by his school's laptop. (Posted here with permission of Robbins' attorneys)
When the story first broke in February, the district said the cameras were activated only handful of times when a laptop was reported stolen or missing — an assertion lawyers suing the district say is false.
“Discovery to date has now revealed that thousands of webcam pictures and screen shots (.pdf) have been taken from numerous other students in their homes, many of which never reported their laptops lost or missing,” attorney Mark Haltzman wrote in a Thursday federal court filing....
Va. Christian group officer accused of embezzling $700,000
A top officer of a nonprofit Christian missionary group has been arrested for allegedly embezzling more than $700,000 from the Northern Virginia group and using it to support a "lavish lifestyle" that included buying a Porsche sport-utility vehicle and renting a second residence, Loudoun County authorities said Friday....
They Thought They Were Free
The Germans, 1933-45
"What no one seemed to notice," said a colleague of mine, a philologist, "was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know, it doesn’t make people close to their government to be told that this is a people’s government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing, to do with knowing one is governing.
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.
"This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter....
Saturday, April 10, 2010
Olbermann on Obama's assassination program
...What's most striking to me about all of this is that -- as I noted yesterday (and as Olbermann stressed) -- George Bush's decision merely to eavesdrop on American citizens without oversight, or to detain without due process Americans such as Jose Padilla and Yaser Hamdi, provoked years of vehement, vocal and intense complaints from Democrats and progressives. All of that was disparaged as Bush claiming the powers of a King, a vicious attack on the Constitution, a violation of Our Values, the trampling on the Rule of Law. Yet here you have Barack Obama not merely eavesdropping on or detaining Americans without oversight, but ordering them killed with no oversight and no due process of any kind. And the reaction among leading Democrats and progressives is largely non-existent, which is why Olbermann's extensive coverage of it is important. Just imagine what the reaction would have been among progressive editorial pages, liberal opinion-makers and Democratic politicians if this story had been about George Bush and Dick Cheney targeting American citizens for due-process-free and oversight-less CIA assassinations....
...Here again, we see one of the principal and longest-lasting effects of the Obama presidency: to put a pretty, eloquent, progressive face on what (until quite recently) was ostensibly considered by a large segment of the citizenry to be tyrannical right-wing extremism (e.g., indefinite detention, military commissions, "state secrets" used to block judicial review, an endless and always-expanding "War on Terror," immunity for war criminals, rampant corporatism -- and now unchecked presidential assassinations of American citizens), and thus to transform what were once bitter, partisan controversies into harmonious, bipartisan consensus...
George W. Bush 'knew Guantánamo prisoners were innocent'
George W. Bush, Dick Cheney and Donald Rumsfeld covered up that hundreds of innocent men were sent to the Guantánamo Bay prison camp because they feared that releasing them would harm the push for war in Iraq and the broader War on Terror, according to a new document obtained by The Times.
The accusations were made by Lawrence Wilkerson, a top aide to Colin Powell, the former Republican Secretary of State, in a signed declaration to support a lawsuit filed by a Guantánamo detainee. It is the first time that such allegations have been made by a senior member of the Bush Administration.
Colonel Wilkerson, who was General Powell’s chief of staff when he ran the State Department, was most critical of Mr Cheney and Mr Rumsfeld. He claimed that the former Vice-President and Defence Secretary knew that the majority of the initial 742 detainees sent to Guantánamo in 2002 were innocent but believed that it was “politically impossible to release them”. ...
Friday, April 09, 2010
NY gov candidate blames Cuomo for mortgage crisis
Republican candidate for New York governor Carl Paladino on Tuesday blamed Democrat Andrew Cuomo and his policies as President Clinton's housing secretary for the sub-prime mortgage crisis that helped trigger the recession.
The millionaire Buffalo developer said Cuomo initiated policies that helped poor people qualify for adjustable rate mortgages they didn't understand and couldn't afford once rates rose.
Paladino said the defaulted mortgages cost poor families their homes, while other taxpayers lost retirement funds in the ensuing Wall Street meltdown.
Cuomo, who was the federal housing secretary in the late 1990s, didn't immediately comment. The one-term attorney general is considering a run for governor.
Paladino said that as secretary for Housing and Urban Development, Cuomo "couldn't wait to get in front of the cameras at press conferences" to say how he was encouraging the federally chartered mortgage giants Fannie Mae and Freddie Mac "to lower their standards so every American can enjoy having a house."
"He did a terrible injustice to those poor Americans telling them they could have a house they couldn't afford," Paladino told reporters a day after he formally announced his campaign for governor. "He did a more egregious injustice to the taxpayers and the people who had homes as he created the sub-prime meltdown, which resulted in lower valuations."
"He was initiator of a policy that was carried by others," Paladino said, naming Clinton and Republican President George W. Bush. "It turned into a monster ... all in the name of Andrew's political career."...
Chaos in the Massachusetts Health Care Market
Want a preview of ObamaCare in action? Check out the Massachusetts insurance market—which earlier this week entered a state of "market chaos" after Governor Deval Patrick denied a host of health insurance rate increases.
On Tuesday, the state's individual insurance market effectively shut down as insurers refused to comply with the state's rejection of 235 of 274 proposed health insurance rate increases.
The dispute has already put the two sides in court. Insurance companies are now claiming that the rejected rate increases mean they won't be able to operate at a profit, and arguing that no actuary would approve the sort of rates that state insurance regulators say they expect. Actuary sign-off is not only important for fiscal stability—it's a legal requirement in the state....
Sunday, April 04, 2010
Vatican Priest Likens Criticism Over Abuse to Anti-Semitism
ROME — A senior Vatican priest, speaking before Pope Benedict XVI at a Good Friday service, compared the world’s outrage at sexual abuse scandals in the Catholic Church to the persecution of the Jews, prompting angry responses from victims’ advocates and consternation from Jewish groups. ...
...“With a minimum of irony, I will say that today is Good Friday, when they pray that the Lord illuminate our hearts so we recognize Jesus,” Rabbi Di Segni said, referring to a prayer in the traditional Catholic liturgy calling for the conversion of the Jews. “We also pray that the Lord illuminate theirs.” ...
Glenn Harlan Reynolds: Progressives can't get past the Knowledge Problem
...The United States Code -- containing federal statutory law -- is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes226volumes.
No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can't be aware of all the real-world complications it's producing, it can't even understand the legal and regulatory implications of what it's doing.
There's good news and bad news in that. The bad news is obvious: We're governed not just by people who do screw up constantly, but by people who can't help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or "better" rules will do any good: Incompetence is built into the system.
The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don't know what they're doing.
If that doesn't encourage skepticism toward big government, it's hard to imagine what will.
Friday, April 02, 2010
With health bill, Obama has sown the seeds of a budget crisis
When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service -- the bond rating agency -- published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.
Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, historians will note, were equally shortsighted and self-centered -- though their quest was for political glory, not financial gain. ...
...Two weeks before the House vote, the Congressional Budget Office released its estimate of Obama's budget, including its health-care program. From 2011 to 2020, the cumulative deficit is almost $10 trillion. Adding 2009 and 2010, the total rises to $12.7 trillion. In 2020, the projected annual deficit is $1.25 trillion, equal to 5.6 percent of the economy (gross domestic product). That assumes economic recovery, with unemployment at 5 percent. Spending is almost 30 percent higher than taxes. Total debt held by the public rises from 40 percent of GDP in 2008 to 90 percent in 2020, close to its post-World War II peak. ...
...But the CBO estimate is misleading, because it must embody the law's many unrealistic assumptions and gimmicks. Benefits are phased in "so that the first 10 years of [higher] revenue would be used to pay for only six years of spending" increases, a former CBO director, Douglas Holtz-Eakin, wrote in the New York Times on March 20. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there's the "doc fix" -- higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade. ...
Vallejo's Painful Lessons in Municipal Bankruptcy
Two years after going broke, the California city still isn't free of its crushing pension obligations.
In 2008, Vallejo, Calif., was nearly broke. Faced with falling tax revenues, rising pension costs, and unmovable public-employee unions, the city was unable to pay its bills and declared bankruptcy. Now, as it prepares to emerge from Chapter 9, officials in Los Angeles, San Diego and other cities across the state are looking to see if Vallejo has blazed a trail for them to get out from under their own crushing pension costs. What they're finding is that even bankruptcy may not be enough to break the grip unions have on the public purse. ...
Coverage Now for Sick Children? Check Fine Print
WASHINGTON — Just days after President Obama signed the new health care law, insurance companies are already arguing that, at least for now, they do not have to provide one of the benefits that the president calls a centerpiece of the law: coverage for certain children with pre-existing conditions.
Mr. Obama, speaking at a health care rally in northern Virginia on March 19, said, “Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions.”
The authors of the law say they meant to ban all forms of discrimination against children with pre-existing conditions like asthma, diabetes, birth defects, orthopedic problems, leukemia, cystic fibrosis and sickle cell disease. The goal, they say, was to provide those youngsters with access to insurance and to a full range of benefits once they are in a health plan.
To insurance companies, the language of the law is not so clear.
Insurers agree that if they provide insurance for a child, they must cover pre-existing conditions. But, they say, the law does not require them to write insurance for the child and it does not guarantee the “availability of coverage” for all until 2014. ...
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