Good Riddance, Bob Bennett

Another edition of bullet pointed links to articles I haven't had time to write up but which are good.

• Peter Suderman of Reason.com looks at Paul Ryan, one of my favorite congressmen, and wonders if he's a serious reformer or just another compromised small government hypocrite. You decide.

• Harvard economist and former Reagan advisor, Martin Feldstein, argues in favor of an extension of the Bush tax cuts. I'm with him, natch.

• Former AG, Michael Mukasey, worries, rightly, that we are returned to a pre-9/11 (read: naive) mindset in treatment of terrorists. This is a problem. Unless you've forgotten history and think that these lucky breaks (panty bomber, failed Times Square bomb) are the new norm.

• To the point of terror and the Obama administration, Charles Krauthammer, one of the smartest opinionators out there, tackles the question of Miranda rights and the interrogation of terror suspects. Like immigration, this question isn't as easy at it seems.

• Another favorite of this blog, John Bolton (aka, The Mustachioed Badass), holds forth on the Greece-precipitated Euro-crisis.

• Meanwhile, Daniel Krauthammer reviews the Senate investigations into Goldman Sachs. I think this is a politically opportunistic show trial with little to no merit. Hopefully it also means Goldmanites will donate less to Obama in 2012. Maybe. Unless you think they'll also take advantage of any new regulatory regime to gain some advantage over competitors. That's probably what will happen. (h/t Scott L.)

• Bob Bennett is gone and I think it's a good thing. The MFM takes the liberal line that this is an example of hysterical conservative extremists over a good, reasonable, and conservative senator. Meanwhile, when Sestak defeats Specter in PA, that--that--will be a triumph over incumbency and a renewal of core American democratic principles. Huzzah for the little guy, or something.

• No weekly links post would be complete without at least one to my fav columnist, Bret Stephens. His column on Turkey carries extra weight for me as we recently traveled to Istanbul. I hope it doesn't turn into Iran; I'd like to go back someday.

• Finally, modern-day hero, General David Petraeus, was recently spoke at an AEI dinner wherein he received the Irving Kristol Award. His speech is (transcript here) is great review of the power of ideas helping to propel the success of The Surge. If you read nothing else from this week's list-o-links, read this.

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Post-ObamacareApocalypse: The Way Forward (UPDATED & Edited Wednesday)

Lot's of angry emails from people from whom I haven't heard in awhile. And with good reason. Never, in the history of this country, has legislation so transforming been passed with out a bi-partisan majority and against the will of the people.

Could the American people--through numerous opinion polls, the election of Scott Brown, the Tea Party movement, hundreds of thousands of emails, calls, and letters to member of Congress--have been any more clear about their opposition to, and in some instances, intense hate of, ObamaCare?

Though I plan on responding to everyone individually, I figured I'd give my opinion, in the form of what I'm reading/thinking/etc., to the question on everybody's minds: What next?

Before I even get to the practical stuff, let me remind us all (myself included) of what we are--we are Happy Warriors. Whatever else happens, it is always Morning in America. We must be positive, optimistic and upbeat as we respond to the haters on the extreme left. If there were no battles left to fight, life would be pretty boring.

First of all, here's the BookFace page of Dan Benishek, the guy who's challenging the pro-life Benedict Arnold, Bart Stupak. Join his group, donate to his campaign and do whatever else you can to help get him elected.

Also, you absolutely must get on that Twitter. Every last bit of news is broken first on Twitter. I'm not saying you have to follow me, but looking through the list of people I follow, would be a good place to start.

Yesterday, for instance, I was doing a running commentary while watching CSPAN on the interwebs. And so were lots and lots of other people.

Second, here's a few articles to educate you about our Nanny State future:

Tuesday 23 March

12:22pm BST: Jonah Goldberg on the ongoing culture war the left has wrought and will continue to bring as a result of the passage of Obamacare:

this legislation is a superconducting super collider of culture-war conflagrations. It will throw off new and unforeseen cultural spectacles for years to come (if it is not repealed). The grinding debate over the Stupak amendment was just a foretaste. The government has surged over the breakwater and is now going to flood the nooks and crannies of American life. Americans will now fight over what tax dollars should cover and not cover. Debates over "subsidizing" this "lifestyle" or that "personal choice" will erupt. And when conservatives complain, liberals will blame them for perpetuating the culture war.

Silver lining? Ross Douthat writes that now we get to see if all those crazy liberal predictions about Obamacare saving the planet, etc., will actually come true.

Amity Shlaes (one of the old man's fav columnists, BTW) writes that Democrats' math is more than just fuzzy, it's a straight up lie--or, as Douglas Holtz-Eakin put it, "fantasy in, fantasy out." (regarding those ridiculous CBO numbers)

Monday 22 March

Milton Friedman on "A Way Out of Soviet-Style Healthcare." I wish he were still around.

WSJ Op-Ed on the real question underlying the bill: 'who commands the country's medical resources--the people or the government?'

Megan McArdle on the Democrat Party's parliamentary hijinks, deception of the people, and contempt for the majority will.

Christopher DeMuth of AEI on the 'historical inevitability' of progressivism. What he doesn't point out is just how much theory today's progressives borrow from Karl Marx. Yes, that Karl Marx.

UPDATE 1:12pm BST: The NRO Symposium on What Now?

AND

'Paul Ryan is not ready to give up on the fight on health care.' Good thing.

UPDATE 2:16pm: There are a lot of things I really dislike and disagree with in this piece by David Frum, but he does make one very important point: Major legislative victory trumps legislative majority. I hope future Republican majorities take this to heart and pass conservative-transformative legislation.

In the future, we must have gamechangers. Getting the White House or a majority in Congress is worth very little if all we do is slow the increase of government and spending. Then Republicans are just Democrats-lite. Republican representatives must pass market-based reforms of all areas of government. They must do away entirely with departments like Education and above all, they must repeal Obamacare.

The guys at Power Line with their Silver Linings.

In yesterdays Washington Post, Randy Barnett, a constitutional lawyer at Georgetown, asked, "Is health care reform Constitutional?" Requiring people to purchase heath care? I don't think so.

UPDATE 2:37p: Watch Paul Ryan and Mike Pence (two potential contenders for the 2012 GOP Presidential nomination) speechify about health care and rights and freedom.

Romney's condemnation of Obamacare--"unconscionable abuse of power"

Also, there's this: Blame Bush.

UPDATE 3:22p: Greg Mankiw: "How long can the President wait before he comes clean with the American people and explains how high taxes need to rise to pay for his vision of government?"

UPDATE 4:36p: Today's WSJ Op-Ed on the passage of Obamacare:

We fought this bill so vigorously because we have studied government health care in other countries, and the results include much higher taxes, slower economic growth and worse medical care.

Some of my friends argued in favor of this bill because "finally their (fill in the blank) member of the family would be able to get care." Well, sure, if by "care" you mean that according to the bill, they can "technically" see a doctor. The reality will be much different. Just hope that your cancer ridden (fill in the blank) isn't getting on in age, because their care will be rationed.

The WSJ's Kimberley Strassel on all the threats, bribes, and kickbacks required to pass Obamacare. Are you okay with this sort of behavior?

(I'll update this post periodically throughout the day and week as I come across more stuff of note)

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

What This Election Wasn't, Part 137

There is so much misinformation floating around out there, I could spend all my time reading and debunking the electoral interpretations of various pundits. Don't worry, I won't. I'll focus on the ones that interest me most.

Andrew Gelman, no conservative partisan, has the first one:

The election was pretty close. Obama won by about 5% of the vote, consistent with the latest polls and consistent with his forecast vote based on forecasts based on the economy.

(emphasis in original)

After all the reports we got about how transformational this election would be, how the youth vote would turn out in record numbers and how turnout itself would blow every previous election out of the water.

Well, it didn't. 18% of young voters turned out compared to 17% last time.

Yeah, Obama-hipsters, speak truth to power!

And overall turnout? Roughly comparable to 2004--even with all of the fake, dead, & felonious signed up by ACORN.

As for realignment? Nothing to see here. Jennifer Marsico of AEI:

The 2008 election was an important election. But it can hardly be considered realigning.

Mr. Obama won by portraying the Bush presidency as a series of mistakes that need to be avoided in the future -- essentially encouraging voters to think about the short-term past, not the long-term future.

Put another way, Mr. Obama got about 40,000 fewer votes in Ohio than John Kerry got four years ago. Mr. Obama carried the state when Mr. Kerry did not because Republicans stayed home. Nationally, the anticipated record turnout didn't materialize. About the same percentage of registered voters came out this year as in 2004. And was that a realignment year?

(emphasis added)

Wholesale rejection of conservatism? Nah, not buying it. I'll give you rejection of Bush and critique of the current economic crisis, but neither of these things are a knock on conservatism as an ideology. Republicans may be down for the count, but it's not because of their ideology. There is a wide divide between ideology and implementation.

More from Gelman (click the link for accompanying scatterplots):

The red/blue map was not redrawn; it was more of a national partisan swing. The standard deviation of the state swings (excluding D.C. and the unusual case of Hawaii) was 3.3%. That is, after accounting for the national swing in Obama’s favor, most of the states were within 3% of where they were, compared to their relative positions in 2004.

The standard deviation of these state swings was 2.4%. This was even less variation–2004 was basically a replay of 2000–still, the relative state swings of 3.3% in 2008 were not large by historical standards.

Again, Obama didn’t redraw the map; he shifted the map over in his favor. (Or, to put it more precisely, the economy shifted the map over in the Democrats’ favor and Obama took advantage of this.)

(italics added, bold in original)

Folks, the election is no more complicated than this. Trace the trajectory of the polls and the take a look at the exit poll data (Scroll down to the last bit of data. I think you'll find that the economy numbers match up pretty well with the overall election numbers).

The tanking of the economy in middle September through October lost John McCain this election. Granted, correlation doesn't prove causation, but we've got some pretty strong evidence.


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Democrats, Barack Obama & Fannie/Freddy

Who's to blame? Let AEI's Kevin Hassett tell the tale:

The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.

Turning Point

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even "on the page'' of allowable interpretations.

[...]

Greenspan's Warning

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie "continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. "We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: "It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable.

[...]

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

[...]

The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.

Obama's Huge Tax Increase

Over at my NewsBusters day job, I linked to an article in The American about the effect of Obama's tax plan on America's marginal tax rates.

As Alex Brill and Alan D. Viard--both economists--show, his "middle-class tax cuts" would actually result in an increase in taxes--especially for the middle class. See the chart below:

h/t: Greg Mankiw

*UPDATE 14 August 3:00pm PST: I just received an email from co-author of the article cited above, AEI Resident Scholar, Alan Viard. He writes:

The article does not find that Obama's plan "would actually result in an increase in taxes--especially for the middle class." As our article makes clear, most people would pay lower taxes under Obama's plan because he would cut taxes for the lower and middle classes.

The point of our article, available at

http://www.american.com/archive/2008/august-08-08/the-folly-of-obama2019s-tax-plan

is that Obama's tax cuts are designed in ways that raise marginal tax rates and therefore reduce incentives to earn income. The marginal rate rises because the size of the tax cut falls as income rises. But, tax payments are lower under Obama's plan (than under current law) at all of the income levels shown in our chart. (emphasis added)

This is an important distinction and I am glad to correct the misconception.


If you have tips, questions, comments or suggestions, email me at lybberty@gmail.com.