Houston's Clear Thinkers

February 8, 2010

The wisdom of Will

Tax simplification has been a frequent topic on this blog. So, I was enthused to see George Will knock the ball out of the park in describing the U.S. income tax system while addressing the issue in his WaPo Sunday column:

“Today's tax system was shaped by sadists who were trying to be nice: Every wrinkle in the code was put there to benefit this or that interest.”

The proposals that Will addresses would do more for the American economy than virtually any other proposal on the table at this point. Unfortunately, the proposals have virtually no chance of being implemented.

So it goes.

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February 5, 2010

Justice Kennedy notices a couple of troubling issues

Overcriminalization of life and the appalling condition of our country’s prison facilities have been frequent subjects on this blog over the years. At least one member of the U.S. Supreme Court has taken notice:

U.S. Supreme Court Justice Anthony M. Kennedy criticized California sentencing policies and crowded prisons Wednesday night, calling the influence that unionized prison guards had in passing the three-strikes law "sick."

In an otherwise courtly and humorous address to the Los Angeles legal community, Kennedy expressed obvious dismay over the state of corrections and rehabilitation in the country. He said U.S. sentences are eight times longer than those issued by European courts.

"California now has 185,000 people in prison at $32,500 a year" each, he said. He then urged voters and officials to compare that expense to what taxpayers spend per pupil in elementary schools.

"The three-strikes law sponsor is the correctional officers' union and that is sick!" Kennedy said of the measure mandating life sentences for third-time criminal offenders.

As Doug Berman points out, perhaps Justice Kennedy’s remarks are a prelude to the Supreme Court’s consideration of several important sentencing cases in its upcoming term. At some point, we need to ask ourselves the question – why are we doing this to ourselves?

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February 2, 2010

Running into the abyss

17th century philosopher Blaise Pascal observed in his Pensées that “we run heedlessly into the abyss after putting something in front of us to stop us seeing it.”

Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program, observed something similar in his quarterly report regarding the troubled TARP program:

The government's bailout of financial institutions deemed "too big to fail" has created a risk that the United States could face a worse fiscal meltdown in the future, an independent watchdog assigned to review the program told Congress on Sunday.

The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department.

"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.

Barofsky wrote the $700 billion financial bailout has encouraged more risk-taking because bank executives, who are still receiving massive bonuses, figure the government will come to the rescue the next time they steer their ships nearly aground.  .   .   .

None of what Barofsky reports is a surprise to regular readers of this blog. It was not rocket science.

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January 8, 2010

A better kind of security theater

The Reason.tv video below puts the Transportation Security Administration's silly security theater policies in perspective, while Bruce Schneier provides another excellent post on the kind of security (including some security theater) that makes much more sense.

Is anyone in Washington, D.C. even listening?

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January 7, 2010

What killed F.D.R.?

This interesting Lawrence Altman/NY Times article examines the theory that that an undiagnosed melanoma contributed to the death of President Franklin Delano Roosevent in 1945.

Of course, regular readers of this blog know that another killer disease -- the dire implications of which were not well-known in 1945 -- was probably the main cause of FDR's death.

But despite the historical curiosity, the most important point to glean from FDR's demise is the importance of continued investment in clinical and scientific research.

We sometimes forget that it was the generation of doctors and researchers who came of age after World War II who embraced the optimistic view of therapeutic intervention in the practice of medicine, which was a fundamental change from the sense of therapeutic powerlessness that was taught to these men by their pre-WWII professors. In short, it has not been that long since medical science has understood that it could cure disease and prolong life.

For example, if FDR's doctors had known in 1945 what specialists in hypertension discovered in the two following decades, then those doctors would never have allowed FDR to be subjected to the stress of the Yalta Conference that doomed Eastern Europe to almost 50 years of totalitarianism and economic deprivation.

Stated simply, earlier discovery of the research into the implications of hypertension could well have changed the course of human history.

In fact, we all tend to under-appreciate the advancements in medicine since World War II. For male babies born in the U.S. in 1960, the life expectancy was about 66.5 years and for female babies a tad over 73 years. By 2005, the live expectancies had increased to over 75 and 80 years respectively. Although medical advances don't account for all of those gains, newly-discovered drugs and medical devices -- as well as enhanced understanding of disease -- have had an enormous impact on improving the quality of life of most Americans.

Thus, as Congress considers reforming the U.S. health care finance system, it is important for citizens to understand that American medical care and research remains the hope of the world. The current health care finance system has generated enormous investment in that medical innovation, which has been a crucial and treasured export of America to the rest of the world.

Let's think hard before radically changing a system that generated the investment that produced those benefits for us and the rest of the world.

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December 29, 2009

Thinking about security theater

Given the Homeland Security Department and Transportation Security Administration's typically over-the-top reaction (see also here) to the Christmas Day attempt to blow up a jet flying into Detroit from Amsterdam, one wonders at what point the government's elaborate "security theater" will finally make flying so miserable that it will choke the life out of the U.S. airline industry? Professor Bainbridge provides a good roundup of the blogosphere's discussion of that and related issues.

The latest incident also reminded me of this prophetic Bruce Schneier post from about a month ago. Schneier does the best job that I've read of explaining why a balance between legitimate and symbolic is helpful in deterring terrorism, but that most of Homeland Security's security theater is utterly misguided, as well as a waste of time and resources.

The entire post is excellent, but two points he makes are particularly important.

First, Schneier observes that the governmental impulse "to do something" in response to an attack is mostly misdirected:

Often, this 'something' is directly related to the details of a recent event: we confiscate liquids, screen shoes, and ban box cutters on aeroplanes. But it's not the target and tactics of the last attack that are important, but the next attack. These measures are only effective if we happen to guess what the next terrorists are planning .   .   . Terrorists don't care what they blow up and it shouldn't be our goal merely to force the terrorists to make a minor change in their tactics or targets  .   .   .

Even more importantly, Schneier points out that the right kind of security theater -- that is, the best way to counteract the damage that terrorism attempts to inflict upon all of us -- is to act as if we are not scared of it:

The best way to help people feel secure is by acting secure around them. Instead of reacting to terrorism with fear, we -- and our leaders -- need to react with indomitability.

By not overreacting, by not responding to movie-plot threats, and by not becoming defensive, we demonstrate the resilience of our society, in our laws, our culture, our freedoms. There is a difference between indomitability and arrogant 'bring 'em on' ehetoric. There's a difference between accepting the inherent risk that comes with a free and open society, and hyping the threats .   .   .

Despite fearful rhetoric to the contrary, terrorism is not a transcendent threat. A terrorist attack cannot possibly destroy a country's way of life; it's only our reaction to that attack that can do that kind of damage.

Schneier is spot on. Rather than making air travel increasingly distasteful, Homeland Security and the TSA ought to be encouraging Americans to spit in the terrorists' collective eye by traveling even more by air under reasonably tolerable and legitimate security arrangements.

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December 1, 2009

Kay Bailey's health care finance confusion

What exactly is Texas Senator Kay Bailey Hutchison's political appeal?

She has never seemed to me to have a particularly good grasp of even basic issues. But I never dreamed that she actually supported universal health insurance even while mimicking the GOP party line against such a mandate all these years.

Uwe Reinhardt provides the Senate subcommittee context for Hutchinson's revelation:

[Hutchison] was proposing that women should not have to decide between spending $250 of their own money to get a mammogram or go without it, and that the key here is to get someone else — either public or private health insurance — to pay for it.

I cannot recall a clearer statement of unreserved support for universal and comprehensive health insurance for America and a more straightforward definition of rationing health care.

I am sure that she would extend her remarkable dictum on rationing to cover routine screening for other cancers as well — e.g., to colonoscopies for colon cancer, to P.S.A. tests and biopsies for prostate cancer or to regular examinations for thyroid cancer.

Furthermore, I would assume that her concern for timely medical attention extends even beyond cancer to the prevention of all serious illnesses — e.g., the control of blood pressure for Americans with hypertension through drug therapy or the prevention of diabetes.

In a nutshell, whether she realized it or not, hers is a clear clarion call for comprehensive, universal health insurance in America.

I don't agree with Senator Hutchison's viewpoint regarding universal coverage. However, I understand it and acknowledge that it's not an unreasonable position. I just don't think it's the best way to control the cost of health care services and products.

But why isn't she honest about her true position?

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November 25, 2009

"People get put in jail for importing lobsters"

The disturbing trend of an increasingly powerful federal government criminalizing all sorts of conduct that should not be criminalized has been a frequent topic (see also here) on this blog.

Adam Liptak of the NY Times, who has written extensively about the over-criminalization of American society, reports that a bipartisan group is finally organizing to do something about it:

“It’s a remarkable phenomenon,” said Norman L. Reimer, executive director of the National Association of Criminal Defense Lawyers. “The left and the right have bent to the point where they are now in agreement on many issues. In the area of criminal justice, the whole idea of less government, less intrusion, less regulation has taken hold.”

Edwin Meese III, who was known as a fervent supporter of law and order as attorney general in the Reagan administration, now spends much of his time criticizing what he calls the astounding number and vagueness of federal criminal laws.[.  .  .]

There are, the [Heritage Foundation] says, more than 4,400 criminal offenses in the federal code, many of them lacking a requirement that prosecutors prove traditional kinds of criminal intent.

“It’s a violation of federal law to give a false weather report,” Mr. Meese said.

“People get put in jail for importing lobsters.”

Nice quote from Meese, but Radley Balko points out that his involvement in the movement would mean more if he admitted his past involvement in the problem.

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November 18, 2009

Thinking about financial regulation

Peter Wallison and Steve Randy Waldman have each written a thought-provoking and important analysis of the effect of regulation on the recent financial crisis.

First Wallison:

What caused the financial crisis?

The widely accepted narrative, prominent in the media and pressed by the Obama administration, is that the crisis was caused by deregulation--the "repeal" of the Glass-Steagall Act and the failure to regulate both derivatives and mortgage brokers--which allowed excessive financial innovation, risk taking, and greed among financial players from mortgage brokers to Wall Street bankers.

With this diagnosis, the proposed remedy is more regulation and government control of the financial system, from the over-the-counter derivative markets to mortgage brokers and the compensation of CEOs.

The alternative explanation is that the crisis was caused by the government's own housing policies, which fostered the creation of 25 million subprime and other low-quality mortgages--almost 50 percent of all mortgages in the United States--that are now defaulting at unprecedented rates.

In this narrative, the fact that two-thirds of all these weak mortgages are now held by government agencies, or were produced by government requirements, shows that the demand for these mortgages--and the financial crisis itself--originated in Washington.

The problem for the administration's narrative is that its principal examples do not stand up to analysis: the repeal of a portion of the Glass-Steagall Act did not eliminate the restrictions on banks' securities activities (they were left unchanged), the mortgage brokers were responding to demand created by the government, and, there is no evidence that the failure to regulate credit default swaps (CDS) had any effect in causing or enhancing the financial crisis.

Without a persuasive explanation for the cause of the financial crisis, the administration's regulatory proposals rest on a mythic foundation.

And Waldman:

An enduring truth about financial regulation is this: Given the discretion to do so, financial regulators will always do the wrong thing.

Remember -- it's the incentives, folks.

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November 12, 2009

UPS vs. FedEx

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November 3, 2009

Why is Timothy Geithner still employed?

Last week, we learned that Timothy Geithner, while the head of the New York Fed, let Goldman Sachs and several other large investment banks fleece the Fed in connection with the AIG bailout.

Then, over the weekend, we learn that the Geithner-orchestrated $2.3 billion federal government investment in C.I.T. Group last fall without requiring debtor-in-possession financing protections under chapter 11 of the Bankruptcy Code is going to result in a total loss of that investment. Why? Because C.I.T. has decided to file bankruptcy now.

Now, in the big scheme of things, $2.3 billion is not all that much money when placed in the context of the federal budget and the American economy. Heck, it's not even close to as much as Geithner left on the table for the investment banks in regard to the AIG bailout.

But Geithner has proven beyond a reasonable doubt that he is in over his head. This bailout stuff is not rocket science.

Why is Geithner still Treasury Secretary?

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October 7, 2009

Fat chance

A couple of interesting health care-related items caught my eye today.

First, I went by my internist's office for my annual physical and noticed that another group of doctors had leased a much larger office across the hall from my doctor's office.

I peaked inside the new doctors' office window and noticed that the reception area was nicely furnished with plush leather sofas and chairs, flat screen TV's, handsome hardwood flooring and tasteful Persian rugs.

The opulence of the office prompted me to find out what kind of doctors were apparently doing so well, so I grabbed one of the doctor's cards from the reception area. It read (not the real name):

"John Smith, M.D., Laparoscopic Obesity Surgery"

Meanwhile, this NY Times article reveals the utterly unsurprising fact that New York City regulations requiring fast food restaurants to post the caloric content of their food did not induce obese consumers from eating less:

A study of New York City’s pioneering law on posting calories in restaurant chains suggests that when it comes to deciding what to order, people’s stomachs are more powerful than their brains.

The study, by several professors at New York University and Yale, tracked customers at four fast-food chains — McDonald’s, Wendy’s, Burger King and Kentucky Fried Chicken — in poor neighborhoods of New York City where there are high rates of obesity.

It found that about half the customers noticed the calorie counts, which were prominently posted on menu boards. About 28 percent of those who noticed them said the information had influenced their ordering, and 9 out of 10 of those said they had made healthier choices as a result.

But when the researchers checked receipts afterward, they found that people had, in fact, ordered slightly more calories than the typical customer had before the labeling law went into effect, in July 2008.

The findings, to be published Tuesday in the online version of the journal Health Affairs come amid the spreading popularity of calorie-counting proposals as a way to improve public health across the country.

“I think it does show us that labels are not enough,” Brian Elbel, an assistant professor at the New York University School of Medicine and the lead author of the study, said in an interview.

"Labels are not enough?" Makes one wonder what regulation Professor Elbel will suggest next -- maybe governmental rationing of fast food?

The argument in favor of these types of absurd governmental intrusions into our lives is that government subsidizes medical insurance, so government should attempt through regulation to decrease obesity, which unfairly heaps a portion of health-care costs relating to obesity on tax-paying citizens who are not obese.

But putting aside for a moment the debatable notion of whether obesity really increases health-care costs all that much, the far more effective regulation to decrease obesity would be to provide a financial incentive for citizens to lose weight. Namely, reduce the governmental subsidy of medical insurance for those who choose to remain obese.

Fat chance of that happening.

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September 3, 2009

An illusion of safety, but at what cost?

The only two airline-security measures that really matter -- fortified cockpit doors and the awareness of the flying public as to what a hijacking can mean -- have been in place virtually since the attacks of September 11, 2001.

Nevertheless, as Patrick Smith explains, the wasteful airport security process that we have allowed the Transportation Security Administration to impose on us continues unabated at a substantial direct cost and an even greater indirect one.

It's bad enough that the TSA's procedures do virtually nothing to discourage serious terrorist threats. But what's even worse is that the incompetent inspection process is really just "security theater" that makes a few naive travelers feel safer about airline travel.

And if all that weren't bad enough, the worst news is that once a governmental "safeguard" such as the TSA procedures are adopted, Congress is not interested in dismantling it even when it's clear that process is ineffective, expensive and obtrusive to citizens.

Smith sums up the dilemma well:

The novelty of the Sept. 11 attacks notwithstanding, the primary threat to commercial planes is, was and shall remain the smuggling aboard of explosives, which is what happened on Pan Am 103 [the Lockerbie explosion twenty years ago whose instigator was recently set free]. The bomb came onboard in a suitcase. The hijack paradigm changed forever on 9/11, rendering the inflight takeover concept unworkable for a terrorist. .   .   .

Yet whether by virtue of incompetence or willful ignorance, TSA continues to waste untold time and untold millions of dollars on a tedious, zero-tolerance fixation with blades and sharps. This does nothing to make us safer, and in fact draws security resources away from worthy pursuits.

Yes, TSA scans most bags for explosives. Mandates were put in place after 9/11 that have greatly increased the percentage of bags that are run through high-tech detectors, with a goal of screening all of them. But eight years later, screening is still not fully comprehensive. It does not yet include 100 percent of luggage and cargo, and procedures remain inadequate at many overseas airports from which thousands of U.S.-registered jetliners depart each week. Neither is there widespread screening for explosive materials that somebody can carry on his or her person. Good luck getting a hobby knife through a concourse checkpoint, while a pocket full of Semtex is unlikely to be noticed.   .   .   .

There is a level of inherent risk that we simply must learn to accept. But, if we are going to have an airport security apparatus, and if we are going to devote millions of tax dollars to the cause of thwarting attacks, can we please do it smartly and at least improve our odds? Am I the only one who finds it maddening, and even a little scary, that we can't get this right? Is it not a national disgrace that TSA should spend its time confiscating butter knives from uniformed pilots rather than focusing on deadly threats with a long historical precedent?

Where are the voices of protest? As I've said before, the airlines ought to be speaking out and pressuring TSA to revise its policies. I know it puts them in a tough spot, liability-wise -- carriers don't want to be perceived as opposing security, even when that security isn't helpful -- but much of what people despise about flying pertains to the TSA rigmarole.

And passengers, for their part, are apparently content with, or at least resigned to, the idea of security theater in lieu of the real thing. Indeed, rather than demand or expect change, hundreds of thousands of Americans have paid good money for the chance to simply circumvent the hassle of TSA.

Food for thought as Congress considers the creation of an even larger governmental apparatus as the "solution" to problems in the U.S. health care finance system.

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August 31, 2009

Rationing health care in a disaster

If you read one article health care-related this week, make it this extraordinary Sheri Fink/NY Times Magazine article on the impossible choices that the heroic doctors -- including Dr. Anna Pou -- faced at the former Memorial Medical Center in New Orleans in rationing limited medical and evacuation services for their patients during the chaotic aftermath of Hurricane Katrina.

Ms. Fink summarizes the issues raised by the issues that Dr. Pou and her colleagues well:

The story of Memorial Medical Center raises other questions:

Which patients should get a share of limited resources, and who decides?

What does it mean to do the greatest good for the greatest number, and does that end justify all means?

Where is the line between appropriate comfort care and mercy killing?

How, if at all, should doctors and nurses be held accountable for their actions in the most desperate of circumstances, especially when their government fails them?

Interestingly, after the federal, state and local governments largely failed the doctors, other workers and patients at Memorial in the aftermath of Katrina, get a load of how the government forces acted once the decision was made to arrest Dr. Pou:

AT ABOUT 9 P.M. on July 17, 2006 — nearly a year after floodwaters from Katrina swamped Memorial hospital — Pou opened the door of her home to find state and federal agents, clad in body armor and carrying weapons. They told her they had a warrant for her arrest on four counts of principal to second-degree murder.

Pou was wearing rumpled surgical scrubs from several hours of surgery she performed earlier in the day. She knew she was a target of the investigation, but her lawyer thought he had assurance that she could surrender voluntarily. “What about my patients?” she asked reflexively. An agent suggested that Pou call a colleague to take over their care. She was allowed to freshen up and then was read her rights, handcuffed and ultimately driven to the Orleans Parish jail.  .   .   .

Read the entire article. Whose judgment do you trust more? Dr. Pou and her colleagues? Or that of those governmental officials who decided to arrest her?

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August 19, 2009

Robert D. Novak, R.I.P.

Longtime Washington political columnist and television political pundit Robert D. Novak died yesterday, ending a virtually unparalleled 60-year career of reporting on national politics from the nation's capitol. David Broder, Jack Shafer. Tim Carney, Stephen Miller, Jeffrey Bell and the WSJ Editors do a good job of putting this formidable career and fascinating man in perspective.

Inasmuch as I was not particularly interested in Novak's obsessive-style of political reporting in his columns and on television, I didn't appreciate Novak until late in life. That changed when a friend recommended Novak's The Prince of Darkness: 50 Years Reporting in Washington (Crown 2007) (prior post here), which I probably would never have read but for my friend's urging.

Turns out that The Prince of Darkness is a thoroughly enjoyable read, particularly because Novak passes along his reflections on the relationships he had with virtually every major figure in American politics over the past 60 years, which pretty well spans my lifetime. I went from not really being interested in Novak to not being able to put the book down. It remains one of the most unexpectedly delightful books that I've read in the past couple of years.

Characters such as Novak are rare these days, and we are not the better for that.

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August 8, 2009

A good sign

One of the many fascinating aspects of golf is that you can learn much about a person by playing a round of golf with them.

Based on this Time article (h/t Geoff Shackelford), President Obama sounds as if he would fit in quite well with the groups in which I play golf regularly.

That makes me feel better.

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August 3, 2009

Unintended Consequences

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June 20, 2009

The Defense of Freedom

There is no question that President Obama is confronted with a delicate diplomatic situation in regard to the ongoing political unrest in Iran. But it is ironic that the main issue that is bubbling over on the streets of Tehran is the same one that John Quincy Adams addressed in the U.S. Supreme Court in the case of the illegally imported slaves that is wonderfully portrayed in the Stephen Spielberg movie, Amistad. In a magnificent performance, Anthony Hopkins plays the elderly Adams defending the slaves before the Supreme Court. Enjoy.

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June 12, 2009

Not a good week for freedom

First, in the face of a duplicitous government prosecution and a draconian trial penalty, Kevin Howard was forced to plead guilty to a crime that he did not commit.

Then, the executive branch of the federal government, unchecked by feckless legislative and judicial branches, undermined the U.S. Bankruptcy Code by preferring certain Chrysler creditors over others while improperly using the TARP legislation (see also here) -- which was expressly limited to financial institutions -- as a basis to loan billions to Chrysler. Moreover, the government's shots in regard to such matters are being called by a rank rookie.

Finally, the federal government seized $34 million of American citizens' funds without notice or judicial process simply because those citizens enjoy playing poker.

One of the clearest lessons of the 20th century is that large governments have the capacity to cause unspeakable evil. As these injustices unfold with nary a protest from our leaders, is that important lesson already forgotten?

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May 12, 2009

How did it come to this?

That's the question I kept asking myself as I watched former U.S. District Judge Sam Kent be sentenced to 33 months in federal prison yesterday (previous posts here).

I had an early-morning hearing in federal court yesterday and another one in the mid-afternoon. So, instead of returning to my office between hearings, I decided to attend the sentencing hearing for Judge Kent. It's not every day that a federal judge is sentenced to prison.

The first hour or so of the hearing was stupefying as prosecutors and Kent defense attorney Dick DeGuerin argued over objections to the government's pre-sentencing report. The main reason for the boredom was that, for the most part, no one except the lawyers in involved in the case and U.S. District Judge Roger Vinson knew what they were talking about. That vacuum of information was a direct result of Judge Vinson's dubious decision to keep a substantial amount of the information about the charges against Kent under seal and away from public scrutiny.

Judge Vinson's decision in that regard might have been somewhat defensible had the two victims of Kent's sexual assaults requested secrecy to preserve what little privacy they could salvage from this ordeal. But neither of the victims requested such treatment, and my sense is that Kent didn't want it, either.

So, Judge Vinson decided to conduct this case largely outside the public eye for his own reasons. In my 30 years of practicing law, I have never seen the volume of information in a case placed under seal as was done in this case.

In sentencing Kent, Judge Vinson claimed that he was upholding the justice system by showing that even a powerful judge is not above the law. Unfortunately, he undermined that same system by preventing the public from learning the details of the accusations against Kent and Kent's responses to those allegations.

Although the first part of the hearing could have induced a snooze, the pace picked up dramatically when the two victims of Kent's assaults made their way to the podium to make their victim statements to the court (one of the victim's statements is here, courtesy of the Houston Chronicle). Both victims were extremely impressive in their presentations, describing the emotional and family carnage that Kent's assaults and abuse of power caused. We also learned tidbits of information that likely would have been already been revealed had Judge Vinson not maintained such tight control over information:

The case manager reported Kent's assaults to her supervisor, who did not take appropriate steps to report it to higher authorities out of fear for her job;

A "culture of fear" existed among employees at the Galveston federal courthouse as a result of Kent's manipulative behavior and frequent drunkenness; and

Kent is estranged from much of his family.

There was a good bit of discussion from the victims and the lawyers regarding Kent's alcoholism and his "serious" psychological issues, for which Judge Vinson ordered him to continue treatment. Also, Kent has been rendered virtually insolvent from his funding of the cost of defense of the case.

For his part, Kent did a good job in his statement to the court, apologizing to his accusers, his staff, his family, other judges and "the system." He promised Judge Vinson that he would continue to rehabilitate himself regardless of the sentence. My sense was that Kent was sincere.

I do not know Kent personally. I handled several hearings in his court over the years and never had a problem with him.

However, I know plenty of lawyers who found Kent insufferable and rude (see also here), and I heard the rumors about his alleged favoritism of certain Galveston lawyers, particularly in admiralty cases. In 2001, the Chief Judge of the Southern District of Texas took the unprecedented step of reassigning 85 cases away from Kent that were being handled by one of Kent's best friends.

And now it appears that Kent was drinking heavily for much of the past decade and that he was frequently intoxicated while at the courthouse. You have to wonder whether concerns about Kent's behavior impacted out-of-town parties' decisions in cases such as this one?

So, I circle back to the question I asked at the beginning of this post -- how did the judicial career of Sam Kent come to this sordid and sad ending?

Where were Kent's "friends" who knew about his excessive drinking and other personal problems, and were in a position to intervene and help him before it was too late?

What are we to make of the federal government's human resources apparatus that an entire federal courthouse could have been placed under a culture of fear by the abusive behavior of one man?

And doesn't the Fifth Circuit Judicial Council have some explaining to do on why it issued its agreed order of public reprimand of Kent without interviewing either of the victims during the council's investigation?

Finally what are we to conclude about our justice system that the Houston Chronicle -- which, along with its coverage of Hurricane Ike, should have been won a Pulitzer Prize for its reporting on the Kent case -- provides much more information to the public about the crimes of an abusive judge than the prosecution of that judge?

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May 1, 2009

American Violet

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April 20, 2009

Clear Thinking to begin the week

Former Cardinals and Pirates outfielder Andy Van Slyke from this recent interview ($) in Baseball Prospectus:

"Well, [former Astros pitcher] Mike Scott, to me, is the best pitcher to ever pitch in the big leagues. I went 1-for-38 against him.  .  .  . Mike Scott, when he was at the apex of his career, was actually cheating very well. When he threw that forkball, and he scuffed it all up... he threw 97-98 mph, and then he'd throw a forkball that was in the 90s and I just couldn't hit him."

Q: Were there a lot of guys "cheating very well" in your era?

"I think there was more of it going on back then than there is today. You don't really see guys scuffing balls—you don't see guys with sandpaper—but it was very prevalent when I came to the big leagues. The guys... everybody knew who was doing it. It was just hard to catch them."

Arnold Kling on an upcoming debate that he will be having with Robert Kuttner regarding health care finance:

The debate should be about how the cost-benefit trade-offs and rationing will take place. I will argue that most health care spending should be paid for out of pocket, with insurance reimbursement only for very large expenses over a multi-year period. With consumers paying out of pocket, they will take price into account in making their choices, and they will self-ration. The alternative is to have government officials make the choices about what treatments people are to obtain. I do not think that this is a one-sided debate, in which one position is clearly better than the other. But I hope that Kuttner and I can have this debate, rather than go off into red herrings like drug company profits.

The Financial Times' Clive Cook chimes in on America's intractable but nonsensical drug prohibition policy ($) (other posts on drug prohibition are here):

How much misery can a policy cause before it is acknowledged as a failure and reversed?

The US “war on drugs” suggests there is no upper limit. The country’s implacable blend of prohibition and punitive criminal justice is wrong-headed in every way: immoral in principle, since it prosecutes victimless crimes, and in practice a disaster of remarkable proportions. Yet for a US politician to suggest wholesale reform of this brainless regime is still seen as an act of reckless self-harm. [.  .  .]

Strict enforcement,  .   .   .  has reduced drug use only modestly – supposing for the moment that this is even a legitimate objective. The collateral damage is of a different order altogether. Violence related to drug crimes has surged in Mexico and in US cities close to the border, giving rise to renewed interest in the topic.  .  .  . [.  .  .]

Few policies manage to fail so comprehensively, and what makes it all the odder is that the US has seen it all before. Everybody understands that alcohol prohibition in the 1920s suffered from many of the same pathologies – albeit on a smaller scale – and was eventually abandoned. [.  .  .]

Is an outbreak of common sense on this subject likely? Unfortunately, no. Only the most daring politicians seem willing to think about it seriously.  .  .   . [.  .  .]

Somebody in the White House should take a look. This national calamity is no laughing matter.

And finally, Mark Steyn notes the insidious nature of encroaching government regulation over citizens:

The proper response of free men to the trivial but degrading impositions of the state is to answer as [gun owner] Pierre Lemieux did. But it requires a kind of 24/7 tenacity few can muster - and the machinery of bureaucracy barely pauses to scoff: In an age of mass communication and computer records, the screen blips for the merest nano-second, and your gun rights disappear. The remorseless, incremental annexation of "individual existence" by technologically all-pervasive micro-regulation is a profound threat to free peoples. But do we have the will to resist it?

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April 11, 2009

Reason.tv on Tax Time

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April 3, 2009

The Tyranny of the Busybodies

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

- C. S. Lewis, God in the Dock

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April 1, 2009

The Wavering Rule of Law

So, because of prosecutorial misconduct, the Justice Department decides to move for dismissal of the political corruption case against former Alaska senator Ted Stevens (previous posts here and here).

Meanwhile, Jeff Skilling, who created billions of dollars in wealth and thousands of jobs by revolutionizing risk management of natural gas prices for producers and industrial consumers, sits in a Colorado prison cell under the weight of a barbaric 24-year prison sentence. Skilling's conviction involved even more egregious prosecutorial misconduct than the Stevens case. The criminal case against Skilling was materially weaker than the case against Stevens, too.

It is a sad reflection of the current state of American rule of law that the DOJ readily concedes prosecutorial misconduct against an arguably corrupt legislator, but ignores it in a shaky case against a businessperson who created many jobs and great wealth.

And how bizarre is it that America's primary business newspaper rightly decries the government's abuse of Stevens' due process rights but continues to ignore even worse abuses with regard to a creative and productive businessperson?

Update: Larry Ribstein chimes in, too.

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The Postrel Health Care Finance Articles

Clear Thinkers favorite Virginia Postrel (previous posts here) is well-known in health care finance circles for her authorship of a reasoned critique of one-payor, centralized health care plans back in the 1990's. She now writes for The Atlantic.

Over the past year or so, Virginia has been experiencing serious health care issues, so she has recently penned two extraordinary articles in The Atlantic (here and here) chronicling her personal experience with America's Byzantine health care finance system. Both articles are must-reads for anyone interested in these important issues, but here are a couple of snippets from the second article that are representative of the wisdom that Virginia provides:

Mr. Daily [a critic] shares a common belief, expressed less dramatically in other letters, that there is somewhere a pot of money dedicated to “health care” which “society” divides between winners and losers. In the United States, at least, there is no health care pot, any more than there is a pot for housing or education or magazine subscriptions. There is simply an economy, which includes health care among other goods, and the amount we spend on health care grows out of the largely decentralized decisions made by individuals and organizations. As productivity increases and prices drop in some areas—food, clothes, entertainment—we can afford to spend more on health care (even without overall economic growth or increased health-care efficiency). [.  .  .]

.  .  . We do not currently treat health care as a right. That we don’t is, in fact, what most letter writers are objecting to. Neither do we regard it exactly as a privilege, to be allocated to the worthy few or even to be limited to those who can afford to pay for it, directly or indirectly. Rather, it is a good, produced and purchased in a complex marketplace through a combination of individual, organizational, and political decisions.

Even this formulation is misleading, however. Health care isn’t a single good, nor, like food, is it easily defined in terms of a minimum to sustain life. Studying other countries’ supposedly universal systems only demonstrates how fraught the concept of “health care” is: one bundle of services in British Columbia and a less-generous one in Nova Scotia, one in England and another in Scotland, one in New Zealand before the election and another afterwards. Arguably the U.S. already has universal care, in the sense that everyone can get some care—if only from an emergency room—for some things, and that citizens (a critical word in this context) without money are covered by Medicaid.

The real issue is how you define “health care.” What gets included is a matter not only of medicine and economics but of culture and politics.

What limitations on health care are Americans willing to accept in return for universal coverage? That is one of the core issues that those who are currently crafting health care finance reform are assiduously avoiding. But true reform will never occur without addressing that issue.

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March 30, 2009

Henderson on the Nature of Government

David Henderson makes an insightful point about the Ryan Moats/Robert Powell run-in in Dallas last week in which Powell (the policeman) exhibited an utter lack of common sense, much less prosecutorial discretion (and this incident is apparently not the first time that Powell has exhibited this type of behavior):

So what is the essence? The issue of control. Read the abridged transcript of the interaction or, better yet, watch the whole 20-minute video. What comes out loud and clear is that the policeman was upset because the driver, Ryan Moats, tried passionately to tell him the nature of the emergency, whereas what Robert Powell saw as being primary was that Moats wait patiently while Powell wrote him a ticket. Even once a nurse came out from the hospital and assured the policeman that Moats's mother-in-law was dying, Powell, writing the ticket, said, "I'm almost done." Must get that ticket written no matter why Moats jumped a red light. [.  .  .]

This is the nature of government whether the government employees are policemen with guns on their sides or sometimes in their hands or are teachers in government-financed schools. The whole Powell-Moats incident reminds me of a passage from Steven E. Landsburg's book, Fair Play: What Your Child Can Teach You About Economics, Values, and the Meaning of Life. Landsburg tells of the propaganda his daughter Cayley's teachers subjected her to about the importance of not letting the water run when she brushed her teeth. Landsburg writes:

[.  .  .]

Where is the pattern, then? What general rule compels us to conserve water but not to conserve on resources devoted to education? The blunt truth is that there is no pattern, and the general rule is simply this: Only the teacher can tell you which resources should be conserved. The whole exercise is not about toothbrushing; it is about authority.

The Moats-Powell incident is a micro example of the government's proclivity to exert power arbitrarily. That essential nature is being largely ignored as the Obama Administration runs headlong into seeking even greater governmental regulation over broad sectors of the economy.

Given that one of the clearest lessons of the 20th century is the capacity of large government to cause unspeakable evil, any effort to centralize more power in the federal government should be subject to the most careful scrutiny and not the type of superficial posturing that Congress has exhibited to date.

Count me as not confident that Congress will oblige.

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March 28, 2009

Our Congress at work

I swear, you can't make this stuff up.

As regular readers of this blog know, I thought the federal bailout of AIG and various other Wall Street firms was a bad idea from the start because it prevented our bankruptcy system from allocating the risk of loss among the creditors of the financially-troubled firms.

Nevertheless, after various forces stoked a climate of fear, Congress approved broad bailout legislation even though it was clear at the time that few of the legislators understood what they were approving.

Not surprisingly, various large creditors of the financially-troubled firms did very well for themselves under the bailout legislation. Can't blame them for protecting their shareholders' interests, now can you?

So now, confronted with the fact that the bailout primarily benefited these large institutional creditors, various members of Congress and New York AG ("Attorney General" or "Aspiring Governor," take your pick) Andrew Cuomo are starting investigations into why AIG did precisely what it was supposed to do -- i.e., pay its bills -- with the bailout funds.

A little late, don't you think?

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March 26, 2009

Losing the grip on AIG

The business blogosphere was abuzz yesterday over publication of AIG executive Jake DeSantis' remarkable resignation letter to AIG CEO, Ed Liddy.

But what was even more remarkable was the reaction of some commentators that makes abundantly clear that common sense often evaporates in the face of big money.

DeSantis is a longtime AIG executive who worked for one of AIG's profitable units. When AIG was going down the tubes last year because of losses incurred in the company's untethered CDS trading unit, DeSantis agreed to stay on at a nominal salary and continue making profits in his unit in return for a substantial, but not over-market, bonus.

Such arrangements are not unusual for financially-troubled companies and might very well have been arranged even had AIG gone into a chapter 11 reorganization rather than become the subject of an ill-advised government bailout. In short, it's a good thing for creditors of AIG -- including now U.S. taxpayers -- that the company retain people such as DeSantis who might make the company profitable and valuable again.

Or course, we all know what happened when AIG disclosed publicly that it had made the bonus payments to DeSantis and other AIG executives. They were demonized in a manner that has not been seen since Enron.

DeSantis' resignation letter lays this all out and notes the indisputable hypocrisy of AIG executives and government officials who knew about these compensation arrangements, but who flamed the public uproar rather than provide the quite simple and reasonable explanation for the bonuses.

I mean really. Who could argue that DeSantis and the other similarly-situated AIG executives were treated in an abominable manner?

Well, up to the plate steps one Brian Montopoli, a CBSNews.com political reporter, who establishes beyond any doubt that he needs to remain a political, rather than business, reporter:

Mr. DeSantis is not a plumber. He is a Wall Street executive who has made millions of dollars. And it’s safe to assume that most plumbers don’t believe he has gotten a bad deal, AIG scandal notwithstanding.

In essence, Montopoli reasons that other people are working just as hard as DeSantis and they would gladly trade places with him if they could have made as much scratch as he has earned over the years. Given that DeSantis made a lot of money while he was at AIG, Montopoli thinks he is "tone deaf" for pointing out the injustice of being unfairly demonized and cheated out of the compensation that was promised to him in return for staying on at AIG under extremely difficult circumstances.

In short, those evil capitalist roaders deserve most of our scorn and they should just shut the hell up.

In the face of such addled reasoning, it's hard to know where to begin. But let's start by pointing out that Montopoli ignores the rather important fact that no one has stopped him or anyone else from attempting to compete with DeSantis in his area of business and make just as much money as he has over the years. The reality is that there are relatively few people who do what DeSantis does well. That's why he commands a larger salary than most of us.

The fact that DeSantis makes more money than we do doesn't mean that it's OK to screw him out of his compensation or that he shouldn't be heard to set the record straight when such an injustice takes place.

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February 23, 2009

The Journal's curious case of myopia

Bully for the Wall Street Journal for running this editorial last week decrying the prosecutorial misconduct of the Justice Department in obtaining the conviction of former Alaska Senator Ted Stevens on ethics charges (Mike over at the Crime and Federalism blog has posted a copy of the defense motion describing the prosecutorial misconduct here).

However, where was the nation's leading business newspaper when even more egregious prosecutorial misconduct was involved in criminal cases that the DOJ brought in regard to Enron, particularly the prosecution of Jeff Skilling?

Could it be that the Journal was invested in the DOJ's myth regarding Enron?

How ironic that the WSJ condemns prosecutorial misconduct with regard to the case against a politician, but largely ignores it in cases against businesspeople.

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February 21, 2009

Quotes of the Week

Emanuel Derman:

"The market wants Churchill and they keep tossing it Chamberlains."

John Nash (via David Henderson) on his progress out of mental illness in the late 1980's:

"Then gradually I began to intellectually reject some of the delusionally influenced lines of thinking which had been characteristic of my orientation. This began, most recognizably, with the rejection of politically-oriented thinking as essentially a hopeless waste of intellectual effort."

Dick Armey:

"In reality, no one spends someone else's money better than they spend their own. The charade of the current stimulus package, chockablock with earmarks to favored pet constituencies and virtually devoid of national policy considerations, is the logical consequence of Keynesianism in action. It is about politics and power, not sound economics, and I believe that the American people will reject it."

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February 14, 2009

An unintended consequence of drug prohibition

While this post from earlier in the week highlighted the historical backdrop to the United States' failed drug prohibition policy, this Telegraph.co.uk article passes along an unintended consequence of that policy that should put to rest any concerns about reconsidering it:

The Home Office has admitted that the street price of both cocaine and heroin has fallen by nearly half in the last ten years, making the most dangerous illegal drugs cheaper than they have ever been.

That means a line of cocaine can cost as little as £1, with an average price per line of between £2 and £4.

The average price of a pint of lager is around £2.75, although some pub chains have reacted to the credit crunch by cutting the price of a pint as low as 99p. A glass of wine typically costs £3.50.  .  .  .

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February 11, 2009

Interesting historical perspectives

Cato Unbound points us to a couple of articles that provide insightful observations on two of the crises that are swirling around us these days.

First, William Niskanen cautions us regarding the fear-mongering that supporters of the Obama Administration's fiscal stimulus plan are using to justify emergency passage of the plan:

This is the fifth time in my adult life that the president has asked for or asserted unprecedented authority on an expedited basis with little or no congressional review. Each of the prior occasions turned out to be a disaster. [.  .  .]

The only coherence in this plan is political, not whether it is an effective or efficient method to stimulate the economy.   .   .  .  Again, as in the four prior episodes, there is every reason not to rush to approve a program of such magnitude.

The primary reason for the current financial crisis is that many banks cannot evaluate their own solvency or that of their current or potential counter-parties, primarily because of the difficulty of valuing mortgage-backed securities and other complex derivatives, and neither TARP nor the fiscal stimulus plan addresses this problem.

Our political system, unfortunately, is strongly biased to try to protect people against the effects of a crisis without addressing the causes of the crisis. To Congress: Slow down. Make sure you understand the causes of the financial crisis and the potential solutions before you burden your children and your grandchildren with another trillion dollars of federal debt.

Your present course is best described as fiscal child abuse.

Meanwhile, as Texans continue to watch nervously to the south as the Mexican government teeters on the brink of losing control of large sectors of the country to drug kingpins, Dale Gieringer reminds us that the main cause of this crisis -- U.S. drug prohibition -- is the result of dubious public policy:

This week marks the centennial of a fateful landmark in U.S. history, the nation's first drug prohibition law.  On February 9, 1909, Congress passed the Opium Exclusion Act, barring the importation of opium for smoking as of April 1.  Thus began a hundred-year crusade that has unleashed unprecedented crime, violence and corruption around the world —a war with no victory in sight.

Long accustomed to federal drug control, most Americans are unaware that there was once a time when people were free to buy any drug, including opium, cocaine, and cannabis, at the pharmacy.  In that bygone era, drug-related crime and violence were largely unknown, and drug use was not a major public concern. [.  .  .]

Early 20th-century Americans would be astounded to see what a problem drugs have become since the establishment of drug prohibition. Every year, two million Americans are arrested and 400,000 imprisoned for drug offenses that did not exist in their time.  Drug laws are now the number-one source of crime in the U.S., with one-half of the entire adult population having violated them.

Long gone are the days when Americans were free to keep opium in their closet; today, even gravely suffering patients are denied pain-killing narcotics by their doctors out of fear of federal prosecution. While smoking opium has faded from the scene, the country is now rife with more potent and lethal narcotics, which are widely sold on the illegal market. 

Seen in retrospect, drug prohibition ranks as one of the great man-made disasters of the 20th century. .  .  .

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February 5, 2009

Thinking about Cheney's remarks

Many Americans were repulsed by the methods former Vice-President Dick Cheney used to consolidate and exercise war powers in the Executive Branch during the administration of George W. Bush.

Unfortunately, that controversy clouds many people's judgment on Cheney's many noteworthy accomplishments during his 30-year career in public service. He has been an extraordinary public servant.

My sense is that Cheney based his aggressive exercise of war powers during the Bush Administration in large part on classified information regarding the risk of more attacks on U.S. citizens after the attacks of September 11, 2001, a point that Barton Gellman notes in his seminal but generally critical book on the Cheney vice-presidency, Angler: The Cheney Vice-Presidency (Penguin 2008).

Cheney's public comments from earlier this week appear to be consistent with my impression regarding his assessment of the risk of further attacks.

Given that, when you have 25 minutes or so, take the time to watch the video below of Irwin Redlener's recent TED lecture on how the nature of a nuclear attack threat on the United States has changed, but our generally deficient approach to preparing for one has not.

As Dick Cheney says, fighting those who would levy such an attack on the U.S. is “a tough, mean, dirty, nasty business.”

Here's hoping that the Obama Administration is up to the task.

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January 25, 2009

Can Mayor White pull off another "win-win" deal?

Although the developers of the proposed Ashby high-rise condominium project didn't know it at the time, Houston Mayor Bill White did the developers a huge favor by putting up roadblocks to that project.

Can you imagine trying to peddle those condos in the current real estate market? Mayor White's blocking of the condos ended being a classic "win-win" deal.

Accordingly, I wonder if Mayor White might be inclined to do the same thing in regard to Houston's proposed soccer stadium?

Things aren't looking too rosy for MLS soccer these days:

Major League Soccer is not quite ready to carry its own night on TV.

After two years of anemic ratings that started low and finished lower, ESPN executives decided to cancel the league’s regular Thursday night telecast on ESPN2 this season.  .  .  .

“We didn’t see the kind of ratings climb we’d like to, so we’re trying something different,” said Scott Guglielmino, ESPN vice president of programming.

The decision to cancel the regular Thursday night game marks a stunning turnaround for a league that two years ago believed it was creating destination programming that would increase interest in MLS. But even the 2007 arrival of David Beckham couldn’t boost MLS ratings.

MLS games averaged a 0.2 rating and 289,000 viewers on ESPN2 in 2007. Those numbers dropped to 0.2/253,000 viewers the following year. Its highest rating during that period was Beckham’s second regular-season game in August 2007 that earned a 0.6/658,000 households.

Canceling “MLS Primetime Thursday” is a tacit admission that MLS is not strong enough to anchor a regular prime-time slot on its own. ESPN is entering the third year of an eight-year rights deal that pays MLS $8 million annually.

So, MLS franchises are being downgraded by the most important sports programming network in the nation, which can't be good for the value of those teams. The attendance at MLS games is poor, at least outside Houston and a couple of other cities. And the perception in sophisticated soccer circles is that the MLS is decidedly minor-league.

Meanwhile, Mayor White has already had Houstonians invest $20 million or so in buying downtown property at a premium price for the proposed soccer stadium, despite the fact that the city already owned nearby property that would have been perfectly fine for such a stadium. Moreover, the city will be on the hook for tens of millions of dollars more in infrastructure improvements if the Dynamo owners somehow cobble together their private financing for the stadium.

Now, it's looking as if the Dynamo may not even have a viable league to play in by the time the proposed soccer stadium is completed in a couple of years.

Pull the plug on the soccer stadium, Mayor. It will be another "win-win" deal.

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January 24, 2009

Oral history of the Bush White House

When you have a spare hour or so, check out this "Oral History of the Bush White House" by Cullen Murphy, Todd Purdum and Philippe Sands in the current issue of Vanity Fair.

The format of the article is a timeline recreating of the last eight years with participants' observations on many of the major moments and a number of minor ones, which often end up being as instructive as the reactions to the major ones.

The entire article is a must-read, but the following observations of Kenneth Adelman, a member of former Defense Secretary Donald Rumsfeld’s advisory Defense Policy Board, will give you a flavor.

The context of Adelman's comments are a confrontation that he had with the Defense Secretary several days after Rumsfeld had dismissed the significance of the breakdown of civil order in Iraq by publicly observing that "stuff happens":

So he says, It might be best if you got off the Defense Policy Board. You’re very negative. I said, I am negative, Don. You’re absolutely right. I’m not negative about our friendship. But I think your decisions have been abysmal when it really counted.

Start out with, you know, when you stood up there and said things—“Stuff happens.” I said, That’s your entry in Bartlett’s. The only thing people will remember about you is “Stuff happens.” I mean, how could you say that? “This is what free people do.” This is not what free people do. This is what barbarians do. And I said, Do you realize what the looting did to us? It legitimized the idea that liberation comes with chaos rather than with freedom and a better life. And it demystified the potency of American forces. Plus, destroying, what, 30 percent of the infrastructure.

I said, You have 140,000 troops there, and they didn’t do jack shit. I said, There was no order to stop the looting. And he says, There was an order. I said, Well, did you give the order? He says, I didn’t give the order, but someone around here gave the order. I said, Who gave the order?

So he takes out his yellow pad of paper and he writes down—he says, I’m going to tell you. I’ll get back to you and tell you. And I said, I’d like to know who gave the order, and write down the second question on your yellow pad there. Tell me why 140,000 U.S. troops in Iraq disobeyed the order. Write that down, too.

And so that was not a successful conversation.

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December 24, 2008

Playing fair

So, now Alaska Senator Ted Stevens is finding out that some federal prosecutors do not play fair (H/T Doug Berman). Of course, we've known that for quite some time down here in Houston.

Oh well, at least the mainstream media has strong incentives to expose such abuses in the case of a major political figure.

But do the same media incentives exist in the prosecution of a wealthy and unpopular businessperson?

What if the reporter most responsible for such a prosecution is, might we say, not particularly motivated to expose prosecutorial abuses? Or what if the reporter for the nation's most prominent business newspaper is so conflicted that he ignores the abuses even when they are playing out in front of him?

And the foregoing doesn't even consider what we should think when one of those reporters in another case actively attempts to help investors score on their positions at the expense of a company and its chief executives.

It's hard enough to maintain innocence against the overwhelming resources of the federal government when the prosecution plays fair. It's next to impossible to do so when it doesn't. What chance is there if the people responsible for exposing prosecutorial abuse have incentives that override that responsibility?

Ask Jeff Skilling.

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December 16, 2008

Blago blogging

The criminal troubles of an Illinois governor would not normally be one of this blog's topics, but this Michael Barone op-ed on the Rod Blagojevich affair is just too good not to pass along.

Barone is well-versed in the complicated web of influences that define Chicago politics, so he is right in his element explaining Blagojevich to other pundits not so steeped in Chicagoland:

The answer, .   .   . is that [Blagojevich is] not crazy, but simply stupid, hugely stupid. I've long since come to the conclusion that Rod Blagojevich is clearly the stupidest governor in all of our 50 states, and he may be the stupidest governor I've had occasion to write about in the four decades when I've been co-author of The Almanac of American Politics. And a stupid man (or woman) in high political office can be very dangerous to all concerned. I have long said that as a political operative I would prefer a smart opponent to a stupid opponent. If you're pretty smart yourself, you should be able to figure out what another pretty smart person will do. But whether you're smart or stupid, it's hard to figure out what a stupid person will do. That's even more true when the stupid politician is your political ally. Stupid people do all sorts of things that are against their own interests. Like tell the press on Monday that you wouldn't mind being taped, even when (as we learned on Tuesday) that you've been saying all kinds of things that you should have known could easily send you to the slammer.

Meanwhile, Joe Queenan compares Blago to Nero, and then wonders what we have come to when a governor of a big state can shake down Bank of America and nobody really notices:

The idea that the governor of a state as prosperous and important and sophisticated and upscale as Illinois would make this kind of threat is terrifying. Even more terrifying is that Bank of America saw no alternative but to give in. Yet even more terrifying is that nobody outside Chicago seems to have gotten terribly worked up about the situation, riveted as they are on the governor's more theatrical transgressions. But peddling a Senate seat or using scare tactics to shake down a newspaper are nowhere near so serious a menace to society as letting the government arbitrarily intervene in financial transactions between banks and creditors. A crooked governor we can all handle. But a governor who capriciously decides which commercial enterprises a bank must finance and which it can ignore is a scary proposition indeed.

Rome wasn't built in a day. But get the wrong politician in office, and you can burn it in a day.

Meanwhile, Patrick Fitzgerald, a prosecutor who is quite capable of pursuing a weak case that nevertheless puts him in the center of the media spotlight, ought to shut up about the Blagojevich case, says Victoria Toensing:

In the Dec. 9 press conference regarding the federal corruption charges against Gov. Blagojevich and his chief of staff, Mr. Fitzgerald violated the ethical requirement of the Justice Department guidelines that prior to trial a "prosecutor shall refrain from making extrajudicial comments that pose a serious and imminent threat of heightening public condemnation of the accused." The prosecutor is permitted to "inform the public of the nature and extent" of the charges. In the vernacular of all of us who practice criminal law, that means the prosecutor may not go "beyond the four corners" -- the specific facts -- in the complaint or indictment. He may also provide any other public-record information, the status of the case, the names of investigators, and request assistance. But he is not permitted to make the kind of inflammatory statements Mr. Fitzgerald made during his media appearance. [.  .  .]

Throughout the press conference about Gov. Blagojevich, Mr. Fitzgerald talked beyond the four corners of the complaint. He repeatedly characterized the conduct as "appalling." He opined that the governor "has taken us to a new low," while going on a "political corruption crime spree."

Of course, we know all about federal prosecutors violating such ethical duties down here in Houston.

Finally, the always insightful Larry Ribstein puts the Blagojevich affair in proper perspective:

Let's keep that in mind before we hand over more regulatory power to politicians because we think we can trust them more than the market participants who would be regulated.

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December 11, 2008

Would you buy a car from Congress?

The W$J's Holman Jenkins continues what should be Pulitzer Prize-winning commentary on the problems of the U.S. auto industry:

None of [Congress' complicity in the auto industry's problem] was mentioned at four days of congressional bailout hearings, because Detroit knows better than to suggest Congress has a role in the industry's problem.   .   . 

.   .   . The tragedy of GM and Ford is that, inside each, are perfectly viable businesses, albeit that have been slowly murdered over 30 years by CAFE. Both have decent global operations. At home, both have successful, profitable businesses selling pickups, SUVs and other larger vehicles to willing consumers, despite having to pay high UAW wages.

All this is dragged down by federal fuel-economy mandates that require them to lose tens of billions making small cars Americans don't want in high-cost UAW factories. Understand something: Ford and GM in Europe successfully sell cars that are small but not cheap. Europeans are willing to pay top dollar for a refined small car that gets excellent mileage, because they face gasoline prices as high as $9. Americans are not Europeans. In the U.S., except during bouts of high gas prices or in the grip of a Prius fad, the small cars that American consumers buy aren't bought for high mileage, but for low sticker prices. And the Big Three, with their high labor costs, cannot deliver as much value in a cheap car as the transplants can.

Under a law of politics, such truths were unmentionable in last week's televised circus because legislators are unwilling to do anything about them. They won't repeal CAFE because they fear the greens. They won't repeal CAFE's "two fleets" rule (which effectively requires the Big Three to make small cars in domestic factories) because they fear the UAW. They won't hike gas prices because they fear voters. [.  .  .]

We hate to admit it, but the only good idea from the bailout debate is the proposal for a new "auto czar." Along with disposing of Chrysler and downsizing Ford and GM, his job should be to confront Congress with its own policy cowardice and failure. If saving gasoline and Detroit are both worthy goals, let's ditch CAFE and institute a gasoline tax to make consumers value the cars government is forcing auto makers to build. If Congress doesn't have the tummy for that, at least ditch the "two fleets" rule so Detroit can import small cars to meet the mandate.

Alas, Barack Obama's vaunted "change" apparently doesn't include spending the political capital to make Congress acknowledge the failure of CAFE. If he can't do better than throw taxpayer money at a dismal policy disaster like our fuel-economy regulations (and so far he seems to be joining Congress in pretending it's all Detroit's fault), we might as well give up on his presidency along with any hope of progress on the nation's other unresolved dilemmas.

His campaign never really answered the question of whether he was Chance the Gardener or Abraham Lincoln. We might as well find out now.

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December 6, 2008

Frost/Nixon looks interesting

Rick Perlstein, author of Nixonland: The Rise of a President and the Fracturing of America (Scribner 2008), provides more insight into Nixon's fascinating relationship with television.

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November 28, 2008

Thoughts on the attacks in Mumbai

Remember -- overcoming fascists of all stripes takes a fighting spirit.

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November 19, 2008

Progress on the bailout front?

So, less than two months after this previous post noted that chapter 11 reorganizations with possible government financing of reorganization plans were the best tools to shake out the current financial crisis, even the NY Times (here and here) is promoting that approach for restructuring the Big Three automobile companies.

I guess that's a sign of real progress.

Funny how the way we typically handle such things in the civil justice system usually is the most efficient solution to the problems.

It sure beats having this bunch fumble around looking for an alternative solution.

By the way, I've mentioned this before, but it merits passing along again. One of the best ways to keep up on developments in regard to the current financial crisis is to check in frequently on the following sites: Clusterstock, Dealbreaker, and Felix Salmon.

The blogosphere rules!

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November 18, 2008

Thinking about markets

Now that folks have had at least a bit of time to reflect on the financial crisis on Wall Street, some good historical perspectives are starting to pop up, such as this Niall Ferguson Vanity Fair piece (previous posts on other Ferguson works are here). Toward the end, Ferguson makes an excellent point about market economies that is not widely understood:

The modern financial system is the product of centuries of economic evolution. Banks transformed money from metal coins into accounts, allowing ever larger aggregations of borrowing and lending. From the Renaissance on, government bonds introduced the securitization of streams of interest payments. From the 17th century on, equity in corporations could be bought and sold in public stock markets. From the 18th century on, central banks slowly learned how to moderate or exacerbate the business cycle. From the 19th century on, insurance was supplemented by futures, the first derivatives. And from the 20th century on, households were encouraged by government to skew their portfolios in favor of real estate.

Economies that combined all these institutional innovations performed better over the long run than those that did not, because financial intermediation generally permits a more efficient allocation of resources than, say, feudalism or central planning. For this reason, it is not wholly surprising that the Western financial model tended to spread around the world, first in the guise of imperialism, then in the guise of globalization.

Yet money’s ascent has not been, and can never be, a smooth one. On the contrary, financial history is a roller-coaster ride of ups and downs, bubbles and busts, manias and panics, shocks and crashes. The excesses of the Age of Leverage—the deluge of paper money, the asset-price inflation, the explosion of consumer and bank debt, and the hypertrophic growth of derivatives—were bound sooner or later to produce a really big crisis.

In short, markets are imperfect and sometimes quite messy. But they have stood the test of time in proving more efficient than the alternatives. Don't give up on them just yet.

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November 15, 2008

The Obama choices

Jan Greenburg sizes up the most likely chances that Obama will have to nominate justices to the U.S. Supreme Court.

The bottom line -- despite the advanced age of several of the justices, perhaps not as many as one would think.

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November 11, 2008

A stubbornly bad system

So, now that the Democrats have swept in a slate of judges to replace many longstanding GOP state district judges in Houston, the Chronicle runs an article about how some Republicans are calling for an alternative system for appointing judges.

Not surprisingly, the Democrats are not as enthusiastic, at least right now.

Of course, while the Republican judges have been controlling the courthouse over most of the past two decades, they weren't interested in rocking the boat to change the system, either.

However, the problem remains that, partisanship aside, doing nothing about the current Texas system of electing judges simply perpetuates a very bad system.

Thankfully, as Don Cruse reports, Chief Justice Wallace Jefferson of the Texas Supreme Court is showing leadership on the issue, just as the late John Hill and Tom Phillips did before him during their stints as Chief Justice.

But the potential for corruption in the Texas judicial election system perhaps best summed up by the following joke:

Taking his seat in his chambers, the judge faced the opposing lawyers.

"So," said the judge. "Each of you has presented me with a bribe."

Both lawyers squirmed uncomfortably.

"You, attorney Mohanty, gave me $50,000," observed the judge. "And you, attorney Venkat, gave
me $60,000."

The judge reached into his pocket, pulled out $10,000, and handed it to attorney Venkat.

"Now that I've returned $10,000 to attorney Venkat," exclaimed the judge proudly, "I'm going to
decide this case solely on its merits!"

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October 23, 2008

Stossel's Politically Incorrect Guide to Politics

If you didn't have the opportunity to watch or record it last Friday, then watch the following six YouTube segments of John Stossel's Politically Incorrect Guide to Politics when you have the time (the other five segments are below the break). The program is television at its best presenting and analyzing key issues involving government regulation of business and the impact of that regulation on the creation of jobs and wealth. Enjoy:

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October 21, 2008

Security theater

While considering the abject vacuity of the presidential candidates' positions on the major issues this election season, I started thinking about some minor issues that might make a difference in my vote.

For example, if either major candidate came out in favor of dismantling the "security" apparatus that the federal government has foisted upon us to make airline travel an aggravation, at best, and an ordeal most of the time, then that candidate would probably get my vote.

Alas, neither candidate has proposed such a dismantling.

Nevertheless, don't miss this clever-but-serious Jeffrey Goldberg/Atlantic.com article on the utter uselessness of the Transportation Safety Administration's airport security procedures (prior post here).

Inasmuch as the only two airport-security measures that really matter -- fortified cockpit doors and the awareness of the flying public as to what a hijacking can mean -- have been in place virtually since the attacks of September 11, 2001, Goldberg zeroes in on the wasteful airport security process that we have allowed the TSA to impose on us at a substantial direct cost and an even greater indirect one.

Moreover, that process does virtually nothing to discourage serious terrorist threats. Rather, the inspection process is "security theater" that simply makes a few naive travelers feel safer about airline travel.

Finally, if all that weren't bad enough, the worst news is that once a governmental "safeguard" such as the TSA apparatus is adopted, few politicians are interested in dismantling it even when it's clear that process is ineffective, expensive and obtrusive.

That's food for thought as we get ready to endure implementation of the next round of governmental regulation of business.

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October 19, 2008

Why some people should not vote

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October 16, 2008

Playing the Jimmy Carter card

You know it's desperation time for McCain when Victor Davis Hanson plays the Jimmy Carter card against Obama:

A great many moderates and conservatives are worn out and tired of Bush and Bush hatred, the European furor, serial charges of racism and illiberalism, and finally, in their weariness, think that Obama will, in a variety of ways, just make all the ickiness go away-as if he will make all of us be liked abroad and end racial and red/blue fighting at home. They should ask themselves whether Jimmy Carter restored American popularity with his human rights campaigns, praise of left-wing dictators, dialogue during the hostage crisis (cf. "The Great Satan"), boasts of no more inordinate fear of communism, etc., or whether Obama, in his Trinity/Acorn/Pfleger years, brought racial healing and understanding to Chicago.

This post from four years ago surveys the disastrous effect that the Carter Presidency had on the Democratic Party, and here is an earlier Hanson broadside on Carter.

The playing of the Jimmy Carter card reminded me of the following portrait of Carter penned by his first Treasury Secretary, W. Michael Blumenthal. The description is included on page 338 of Robert D. Novak's The Prince of Darkness: 50 Years Reporting in Washington (Crown 2007), which is a rollicking good read:

I saw [Carter] in 1977 and 1978 with outside groups in various settings, and I always felt that he made a very good impression because he would ask questions and listen. But I realized after a while that it was a PR operation because he paid absolutely no attention to what they said. He wrote it down, but nothing would happen with it. After a while, you get a sense of it. This was his way of trying to impress people.  .   .

He has a deep sense of inferiority, a very deep sense of inferiority. I discovered it when I began to realize that he confided in no one. Charlie {Chief Economic Adviser Charles Schultze] would have a weekly meeting with him, and he would come out and say to me that he had never worked for a man like that before. He never reacts. Occasionally, he would ask a question. He never debates. He never disagrees.  .  .  .

He doesn't want strong people. He ruled out [John] Dunlop [for Secretary of Labor] and he ruled out George Ball [for Secretary of State]. He ruled out when he knew the people were strong, aggressive, confrontational personalities. He didn't know me from Adam. He he known me, he would never have invited me in .  .  .

He dislikes people who are very strong and successful. That is why he doesn't like major businessmen, bankers or people who run big labor unions. You have to watch him, and he is very uncomfortable with them. He has this outward sort of politeness and gives his little spiel, but his eyes glaze over and latter on he frequently makes derogatory comments about them. He feels very put upon by these people, and it is essentially that he is afraid that they know more than he does .   .  .  .

The danger of isolation is great, and flattery is a commodity in abundance. We had a few Cabinet meetings, and people were kissing his ass. I asked if he recognized it when it was subtle and indirect, and he responded that he could tell. I could see increasingly that flattery went very far with him -- a person who does not recognize when he is being shamelessly flattered and who enjoys it.  .  .  .

He briefs very quickly with sort of a veneer of knowledge and he can give back in an orderly fashion, but he doesn't retain it for very long.  .   .   . I think the President when he came into office was a very inexperienced and poorly informed man.

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October 9, 2008

Say what?

As noted earlier here and here, the lack of leadership involved in the current credit crisis and related Treasury bailout really has been appalling. You don't think so? Check this out:

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October 8, 2008

Campaigning in 2008

Although things aren't going so well for the McCain-Palin campaign, it looks as if they have at least locked up The Villages, the golf-course retirement community in Florida that runs those cheesy commercials during PGA Tour golf tournament telecasts:

With thousands of supporters packing the streets and sidewalks of this massive retirement community, Alaska Gov. Sarah Palin took the safe route Sunday and said she and John McCain would reform Washington, put America on the path to energy independence and nurse a struggling economy back to health. [ .  .  . ]

At one point while signing autographs for the sweltering crowd, a surprised Palin laughed when a supporter reached over and handed her a giant, plastic lipstick replica -- an obvious reference to a joke delivered by Palin at the Republican National Convention. Palin's comment about the only difference between a pit bull and a hockey mom being lipstick has since inspired a volley of campaign rhetoric. As the crowd cheered, a smiling Palin autographed the novelty before moving on for more autographs and handshakes.

Meanwhile, it appears that the Obama-Biden campaign has conceded The Villages to McCain-Palin. At least that's what Senator Biden seems to indicate in the video below:

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October 5, 2008

Did McCain choose the wrong Palin?

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September 30, 2008

This is leadership?

I've already said my piece on the proposed Treasury Bailout of Wall Street, so I won't belabor that view.

In the meantime, there are much better places to keep up with the minute-by-minute political developments on the proposed bailout -- for example, check out Clusterstock, DealBreaker and Felix Salmon for astute and up-to-the-minute analysis.

However, one point from my previous post deserves further review -- that is, circumstances such as this provide us with a revealing view of our political leaders. Do they inspire positive and collaborative action in difficult times for the better good of society? Or do they attempt to generate support for their political position through fear-mongering and demagoguery?

In my view, President Bush's handling of the negotiations over the proposed bailout has been abysmal. As Jeff Matthews points out:

The President’s unfortunate choice of words—"this sucker could go down"—carry the same deer-in-headlights quality as his televised speech to the American people last week, in which he used the word “panic,” as we recall. At a minimum, it makes you nervous; at a maximum, it makes you want to throw up first and sell everything second.

What happened to the heroic, forward-looking rhetoric great leaders are supposed to provide in times of crisis?

FDR gave us “We have nothing to fear but fear itself.”

Churchill gave us “We shall fight on the beaches.”

George Bush cruises in with “This sucker could go down.”

We wonder: has a more irresponsible sentence been uttered, by anyone, during this entire crisis?

John Carney reports that President Bush wasn't any better today in responding to the House's rejection of the proposed bailout:

"We put forth a plan that was big because we got a big problem," Bush just said, sitting in a chair placed before a fireplace in the White House. He's meeting with advisers, he said. "I'm disappointed with the vote in Congress," the president said.

Was that his version of FDR's famous fireside chats? Bush looked annoyed he was being bothered with this stuff.

This from a President who failed to persuade more than a third of his own party members in the House for his position in response to a financial emergency?

Meanwhile, proving that dubious leadership is bipartisan, Democratic House Speaker Nancy Pelosi provided us with a lesson on how not to win support for a position:

Finally, Tina Fey didn't even need to change any of Sarah Palin's words to drive home the point that John McCain certainly didn't bolster his lack of financial and economic acumen with his running mate selection:

Update: More "leadership."

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September 26, 2008

Lord, help us!

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September 24, 2008

The Treasury Bailout is not rocket science

The debate over the proposed Treasury bailout of Wall Street firms is coming at a fortuitous time -- the election season. Be wary of any candidates who, after looking appropriately concerned about the dire predictions of the plan's promoters, throw up their hands and vote in favor of the bailout because "we just have to do something" even if they don't understand what they are doing.

The fear mongering that the promoters are using to sell the bailout is laughable. This is not rocket science.

For example, when Enron tanked in late 2001, it was the seventh largest public company in the U.S. Enron traded derivatives and other financial instruments with counterparties that were among Wall Street's biggest commercial and investment banks, which were heavily exposed to its losses. To make matters worse, these investments were concentrated in the energy sector, which is at least as important to the nation's economy as the housing sector that is at the center of the current crisis.

In short, at the time of its bankruptcy, Enron was one of the nation's largest publicly-owned companies, a vitally-important market-maker in the natural gas trading industry and a leader in hedging corporate risk through structured finance transactions.

Despite the huge wealth destruction that would result from Enron's insolvency, not one government or Wall Street leader proposed a bailout of Enron in order to preserve the huge value to the public of the natural gas trading industry and the market for structured finance transactions.

Enron's bankruptcy proceeded to cause enormous tremors through various industries -- particularly the energy industry -- because valuable resources for hedging risk of loss had evaporated seemingly overnight. The natural gas trading industry nearly fell apart completely, costing companies and their customers untold billions of dollars that they otherwise could have saved through hedging risk of loss. Similarly, the market for many structured finance transactions dried up, also costing companies another valuable avenue for hedging risk.

However, the nation's financial system did not break down. Companies adjusted to the changed circumstances and endured their additional costs as best they could. Markets also adjusted. Slowly but surely, both the natural gas trading industry and the market for structured finance transactions rebounded so that both are again providing companies with valuable alternatives for hedging risk and saving money.

Now, the tables are turned on Wall Street. Rather than facing the consequences of their risk-taking decisions in chapter 11, Wall Street's politically well-connected leaders are weaving their tales of doom for the overall economy to compliant governmental leaders who are only too willing to do their bidding.

In reality, each of these Wall Street firms should be required to endure the same thing that Enron and its creditors did -- a chapter 11 reorganization where equity gets wiped out and creditors either take a haircut on payment of their debts or convert their debt to equity in a reorganized firm that emerges from bankruptcy with a cleaned-up balance sheet.

That process ensures that investors and creditors who undertook the risk of investing or dealing with the bankrupt firms share the losses of their risk-taking. Moreover, it allows the firms that really are worth saving (as opposed to simply liquidating) to emerge from bankruptcy with an improved financial condition that should provide the firm with an enhanced opportunity to create wealth again.

What the bailout plan proposes to do is insulate investors and creditors from risk of loss by having the government -- funded by taxpayers such as you and me -- undertake that risk. There is simply no moral justification for foisting that risk on taxpayers and the only possible practical justification is that sorting all of these firms' problems out in chapter 11 might take awhile.

But even if the government saw fit to accelerate the Wall Street reorganizations to hedge the risk of a prolonged economic downturn, there is simply no reason for the government to overpay for assets from financially-troubled firms. Rather, the government should simply propose a plan that implements the going-concern liquidation and debt-for-equity reorganization features of chapter 11 on an accelerated basis in return for some reasonable financial contribution to the process. And you can bet that contribution doesn't need to be close to $700 billion.

Luigi Zingales, the Robert C. Mc Cormack Professor of Entrepreneurship and Finance at the University of Chicago, has written the most cogent piece I've seen to date on why the bailout is a bad idea. Even though it was wrong for the government to contribute to the massive amounts of wealth destruction that resulted from the demonization of Enron, the government was right not to bail out Enron. The circumstances are different now, so perhaps a different approach is more prudent than simply allowing all of these Wall Street companies to be sorted out in chapter 11.

But throwing $700 billion at investors and creditors who should be sharing the losses of their risk-taking is not even close to the best way of doing it.

Update: I couldn't help but laugh out loud this morning as Warren Buffett and the promoters of the Treasury bailout plan point to Buffett's sweet $5 billion investment in Goldman Sachs as an endorsement of the plan.

I prefer to look at what Buffett is doing rather than what he is saying.

What he is not doing is what Paulson and Bernanke want the U.S. Treasury to do -- buy investment banks' toxic assets. Rather, Buffett is buying preferred shares in Goldman with a big yield and warrants to buy Goldman stock at $115 (its trading at over $130) so that he can recover the profit his investment helps foster while Goldman transitions from an investment bank to a bank holding company over the next couple of years.

Meanwhile, Paulson and Bernanke keep promoting their plan to throw $700 billion at whatever trashy assets that Wall Street serves up to them.

It does not engender much confidence that Buffett can cut a far better deal with Wall Street's best-run investment bank than Paulson and Bernanke propose to cut with the worst-run ones.

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September 21, 2008

This is too easy

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September 11, 2008

Hank's Thank-You Note

Mr. Juggles over at Long or Short Capital passes along this fictional thank-you note from Treasury Secretary Hank Paulson to American taxpayers after this week's seemingly inevitable federal bailout of Freddie Mac and Fannie Mae (prior posts here):

Dear US Taxpayer,

I would like to congratulate you on your recent purchase. I am glad I was able to convince you that now is the ideal time to offer an uncapped backstop on a $5.2 trillion book of mortgages. We here at the Treasury Dept (along with our sisters over at the Fed), appreciate your repeat business. I am confident that this acquisition will be a profitable one; perhaps even more profitable than your recent purchase of JPMorgan’s Bear Stearns’ liabilities!

Please know that we are actively seeking more deals on which we can work together. I am confident we will find more interesting opportunities before the end of the year.

Yours Truly,
Hank Paulson

Herbert Spencer got it right long ago (H/T Bryan Caplan):

"The ultimate effect of shielding men from the effects of folly, is to fill the world with fools."

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September 4, 2008

Election 2008

Inasmuch as the 2008 U.S. Presidential campaign resembles a high school student council race in terms of sophistication, it appears that Jon Stewart and Comedy Central are going to have a field day between now and Election Day. Below are a recent segments on the "substance" of Obama's campaign and McCain's VP selection:

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August 13, 2008

The fall of a demagogue

I wasn't going to blog anything about John Edwards' recent public admission to an affair with Rielle Hunter. As has been noted many times previously on this blog, Edwards is a demagogue who represents the worst in American national politics. I would have much preferred that Edwards' demagoguery be the reason for the demise of his political career rather than a tawdry affair that is hurtful to Edwards' innocent family members, even if it was "oncologically correct," as Maureen Dowd put it.

But turning to Ms. Hunter, check out this Jonathan Darman/Newsweek article. What a piece of work. Once Hunter decided to pounce, Edwards never had a chance. It almost makes one feel sorry for him. Almost.

By the way, while considering matters political, don't miss Josh Green's Atlantic piece on the demise of the Hillary Clinton campaign (previous posts here).

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August 11, 2008

Barackroll

As political satire, the video below probably doesn't top this one, but it's close.

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July 28, 2008

Another innovative California industry

The New Yorker's David Samuels reports on how medical marijuana is changing a popular California industry:

Since 1996, when a referendum known as Proposition 215 was approved by California voters, it has been legal, under California state law, for authorized patients to possess or cultivate the drug. The proposition also allowed a grower to cultivate marijuana for a patient, as long as he had been designated a “primary caregiver” by that patient. Although much of the public discussion centered on the needs of patients with cancer, AIDS, and other diseases that are synonymous with extraordinary suffering, the language of the proposition was intentionally broad, covering any medical condition for which a licensed physician might judge marijuana to be an appropriate remedy—insomnia, say, or attention-deficit disorder. [.  .  .]

In 2003, the California State Legislature passed Senate Bill 420. The law was intended to clear up some of the confusion caused by Proposition 215, which had failed to specify how patients who could not grow their own pot were expected to obtain the drug, and how much pot could be cultivated for medical purposes. The law permitted any Californian with a doctor’s note to own up to six mature marijuana plants, or to possess up to half a pound of processed weed, which could be obtained from a patients’ collective or coöperative—terms that were not precisely defined in the statute. It also permitted a primary caregiver to be paid “reasonable compensation” for services provided to a qualified patient “to enable that person to use marijuana.” [.  .  .]

A drug-policy analyst named Jon Gettman recently estimated that in 2006 Californians grew more than twenty million pot plants. He reckoned that between 1981 and 2006 domestic marijuana production increased tenfold, making pot the leading cash crop in America, displacing corn. A 2005 State Department report put the country’s marijuana crop at twenty-two million pounds. The street value of California’s crop alone may be as high as fourteen billion dollars. [.  .  .]

I recently spent six months, off and on, with ["Captain"] Blue [a pot broker] — at his apartment, in private homes, on farms, in pot grow rooms, and in other places where “medical marijuana” is produced, traded, sold, and consumed in California. During that time, I saw thousands of Tibetan prayer flags. The flags identify their owners with serenity and the conscious path, rather than with the sinister world of urban dope dealers, who flaunt muscles and guns, and charge exorbitant prices for mediocre product. For Blue and tens of thousands of like-minded individuals, Proposition 215 presented an opportunity to participate in a legally sanctioned experiment in altered living. The people I met in the high-end ganja business had an affinity for higher modes of thinking and being, including vegetarianism and eating organic food, practicing yoga, avoiding prescription drugs in favor of holistic healing methods, traveling to Indonesia and Thailand, fasting, and experimenting with hallucinogenic drugs. Many were also financially savvy, working long hours and making six-figure incomes.

Read the entire article. Meanwhile, take a moment to read about one of the many costly reminders of the misguided nature of American drug prohibition policy.

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July 6, 2008

An excellent primer for the political season

The Heritage Foundation provides this outstanding series of charts (example to the left) reflecting various issues relating to federal revenue and spending.

Recommended reading before listening to any candidate during the upcoming political campaigns.

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June 28, 2008

U.S. Energy Policy

Via Tom McMahon.

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June 26, 2008

Colbert on Hannity

Stephen Colbert channels Jessica Hagy in analyzing conservative talk-show host Sean Hannity.

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June 23, 2008

Clear thinking to begin the week

 

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June 8, 2008

Colbert v. Will

Clear Thinkers favorite Stephen Colbert finally meets his match -- syndicated columnist George Will:

By the way, check out Will's latest on Obama and McCain:

On Obama: "Obama's words mesmerize a nation accustomed to leaders who routinely use words with antic indifference to their accuracy."

On McCain: "If he really opposes torture, he will take pity on the public and master the use of a teleprompter."

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June 6, 2008

Hillary's flaw

The strangely obsolescent presidential campaign of Hillary Clinton is one of the most intriguing stories of this political season. The Financial Times' Clive Cook provides a spot on foreigner's perspective:

[Clinton's] performance last night was stunningly ill-judged, and speaks volumes about her fitness to lead—or lack of it. Under the circumstances, one can understand, maybe, a reluctance to concede. But to declare moral victory; to insist, knowing that she had lost, that she remains the stronger candidate; to start positioning herself to demand the VP slot as of right: all this was not just remarkably ungracious, it was also patently counter-productive from a strictly selfish point of view. Can’t she see that she has made it easier, not harder, for Obama to keep her off the ticket?

One of the CNN analysts debating Hillary’s non-concession speech mentioned emails coming in which said that Tuesday “needed to be her night.” At this one of the others spluttered, “It had to be her night? Obama just won!”… before, in a valuable moment of reckless honesty, referring to “the Clintons’ deranged narcissism”. Yes, I thought (recalling, incidentally, Alistair Campbell’s comment that Gordon Brown was “psychologically flawed”). Read her speech, and compare it with Obama’s. His extravagant (and tactically shrewd) praise of her; a speech addressed not just to the whole Democratic party but to the whole country; calculated, of course, calibrated—with nothing in it that was smug or self-regarding or sectarian. Contrast that with her perfunctory acknowledgement of him, followed by a recitation of her achievements and the obstacles that had been put in her way: Enough about our nominee, this is my night and I want to talk about me.

Something tells me that she is not cut out to be Obama’s deputy. If he puts her on the ticket, I think he will be making a big mistake.

Clinton's inability to compete with Obama's charismatic articulation of a vision for the country definitely worked against her in the campaign. But my sense is that the genesis of her downfall was voters' distrust of her inner Tracy Flick.

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June 2, 2008

Ron Paul, we hardly knew ye

This post from last June noted Houston-area Congressman Ron Paul's deft media touch on Comedy Central's Daily Show. Now, a year later, Jim Henley sums up the utter failure that Paul's presidential campaign became:

This fellow can’t spell "candidate," but by being willing to come out and say that Ron Paul Lost, he’s closer to wisdom than the entire staff of Takimag. The full measure of Paul’s failure isn’t even that he’s not going to be the Republican nominee. It’s that, even since everyone else dropped out of the race but Paul and McCain, he’s still been losing to Mike Huckabee in every state where the Huckster was on the ballot except Pennsyvlania (Paul was born in Pennsylvania.) Idaho is the only other primary state where he broke 10%. (He hit low double-digits in a few caucus states.) He has 35 delegates by CNN’s reckoning. Huckabee has 275 and Romney 255. With his $30 million in donations, he’s barely breaking the million-bucks-a-delegate mark. That’s ten times the much-ridiculed rate of Mitt Romney.

Paul failed to win any states, to move the GOP debate in his direction, to accrue significant delegates or to leverage his fund-raising into a third-party run. And word is he’s staying quiet about endorsing an independent because he doesn’t want the Congressional GOP leadership to strip him of committee assignments come the fall. Paul accomplished the one thing he’s always been good at: using political appeals to get people to send money. I don’t feel freer.

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May 13, 2008

Ignoring the noise from next door

The problems that the obsolescent U.S. drug prohibition policy exacerbate along the Texas-Mexico border are a frequent topic on this blog, so this Mary Anastasia O'Grady/W$J article on the latest developments in the drug war just south of the border caught my eye:

American nonchalance about drug use stands in sharp contrast to what is happening across the border in Mexico. There lawmen are taking heavy casualties in a showdown with drug-running crime syndicates. On Thursday the chief of the Mexican federal police, Edgar Millán Gómez, was assassinated by men waiting for him when he came home, becoming the latest and most prominent victim of the syndicates. [.  .  .]

It's no secret that the narcotics trade is like a roach infestation. If you see one shipment or dealer, you can be sure that there are many others that go undetected. That's why such brazen behavior at [San Diego State University] should be disturbing to America's drug warriors. The signs of an infestation are everywhere, making a joke of their 40-year claim that any day now they will wipe out American drug use. [.  .  .]

The upshot: Americans underwrite Mexico's vicious organized crime syndicates. The gringos get their drugs and the Mexican mafia gets weapons, technology and the means to buy off or intimidate anyone who gets in their way. Caught in the middle is a poor country striving to develop sound institutions for law enforcement.

The trouble for Mexico is that, even if it understands that U.S. demand is not going away, it cannot afford to cede large swaths of the country to the drug cartels. Thus Mexican President Felipe Calderón has made confronting organized crime a priority since taking office in December 2006. His attorney general, Eduardo Medina Mora, told me in February that the goal is to reclaim the state's authority where it has been lost to the mafias.

But after 17 months of engagement, while San Diego students party on, victory remains elusive and the Mexican death toll is mounting. Most of the drug-related killings since Mr. Calderón took office seem to be a result of battles between rival cartels. Still, the escalating violence is troubling. The official death toll attributable to organized crime since the Calderón crackdown began now stands at 3,995. Of that, 1,170 have died this year.

Especially alarming are the number of assassinations among military personnel and municipal, state and federal police officers. The total is 439 for the 17 months and 109 so far this year. Many of these victims have been ordinary police officers whose refusal to be bought off or back off cost them their lives.

But as the murder of police chief Millan makes clear, high rank offers no safety. Two weeks before he was gunned down, Roberto Velasco, the head of the organized crime division of the federal police, was shot in the head. The assailants took his car, which leaves open the possibility that it was a random event, but most Mexicans are not buying that theory. Eleven federal law enforcement agents have been killed in ambushes and executions in the last four weeks alone.

If U.S. law enforcement agencies were losing their finest at such a rate, you can bet Americans would give greater thought to the violence generated by high demand and prohibition. Our friends in Mexico deserve equal consideration.

The most troubling aspect of all this is that spillover violence toward U.S. authorities would probably just be met with beefed-up prohibition efforts. Are the vested interests who benefit from the outmoded-but-lucrative prohibition policy simply too entrenched for there to be serious Congressional consideration given to a more humane and cost-effective drug policy?

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May 11, 2008

Nixonland

George Will gives Rick Perlstein, author of Nixonland (Scribner 2008), a history lesson.

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May 10, 2008

Worth a watch

For those of you interested in the vexing issues involved in application of the death penalty and child predator laws, the scene below from Boston Legal is worth ten minutes of your time (H/T David Feige). I don't agree with everything that Alan Shore says in his argument to the U.S. Supreme Court, and the scene is certainly far-fetched, but it's a thought-provoking performance nonetheless:

 

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May 5, 2008

Chron: Sacrifice the local economy for the polar bears

Given the editorial slant of the Houston Chronicle over the past several years, it's not particularly surprising that the editors ran this editorial calling for polar bears to be declared an endangered species under the federal Endangered Species Act.

Unfortunately, it's also not surprising that the Chron editorial failed to mention that the oil and gas business -- a key source of jobs and wealth for Houston and the nation -- is likely to suffer considerable financial damage as a result of the polar bear listing push, which Hugh Hewitt notes "is not only an abuse of the ESA's original intent but also unsupported by the facts concerning the ice and the polar bears."

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April 29, 2008

Fueling food riots

Peter Gordon observed the other day that "politicians are better at creating problems than addressing them. Schools, housing, health care, transportation and others suffer from too much political attention."

Echoing that idea, Clear Thinkers favorite James Hamilton writes about one of the underlying economic reasons for food riots that are occurring in developing nations in some parts of the world:

As a result of ethanol subsidies and mandates, the dollar value of what we ourselves throw away in order to produce fuel in this fashion could be 50% greater than the value of the fuel itself. In other words, we could have more food for the Haitians, more fuel for us, and still have something left over for your other favorite cause, if we were simply to use our existing resources more wisely.

We have adopted this policy not because we want to drive our cars, but because our elected officials perceive a greater reward from generating a windfall for American farmers.

But the food price increases are now biting ordinary Americans as well. That could make those political calculations change, and may present be an opportunity for a nimble politician to demonstrate a bit of real leadership. I notice, for example, that although Senator Barack Obama (D-IL) was among those who voted in favor of the monstrous 2005 Energy Bill that began these mandates, Hillary Clinton (D-NY) and John McCain (R-AZ) were among the 26 senators who bravely voted against it.

Wouldn't it be refreshing if one of them actually tried to make this a campaign issue?

Sigh. Read the entire post.

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April 27, 2008

Thoughts for a Sunday

The NY Times' Adam Liptak has penned a couple of interesting articles recently (here and here) on a frequent topic of this blog (here, here, here, here, here, here, here, here, here, and here) -- the troubling incarceration rate in the United States.

With only 5% of the world's population, the U.S. now houses almost a quarter (2.3 million!) of the world's prisoners. One in 100 adults in the U.S. is now behind bars and 751 people are in U.S. prisons or jails for every 100,000 in population. The only other major industrialized nation that even comes close to that rate of incarceration is Russia with 627 prisoners for every 100,000 people. England’s rate is 151, Germany’s is 88 and Japan’s is 63. Attempting to keep all of this in perspective, Pepperdine University's James Q. Wilson provides this recent op-ed that puts the U.S. incarceration rate in a more favorable light with regard to reducing serious crime.

Among other things, these incarceration numbers certainly makes one wonder why on earth we are sending folks like Jeff Skilling, the NatWest Three, the Merrill Four and Jamie Olis to prison?

Meanwhile, in this five-part LA Times debate, Reason's Jacob Sullum takes on the Heritage Foundation’s Charles Stimson over one of the main reasons for the high U.S. incarceration rate -- drug prohibition. At least in this first installment, Sullum makes a much more compelling case than Stimson. And Peter Gordon has this sage observation about the genesis of drug prohibition.

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February 27, 2008

Dick Armey on immigration

I must admit, I never thought that former House Majority Leader Dick Armey would sound like a statesman to me. I was wrong. Watch the video to find out why.

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The diversity of Texas

Yes, Texas is a diverse place. It's a part of its charm. But following on this post from yesterday, that diversity does not make it an easy place to get one's arms around.

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February 26, 2008

The importance of running a Presidential campaign

On the heels of the Frank Rich/NY Times column castigating the Hillary Clinton campaign team, one of the best business law professors in the U.S. explains why the ability to run a large political campaign is an important qualification of a President:

A virtue of our political system as it is operated today is that it ensures that no one can be elected president who cannot run a major organization. This may not be enough – Bush ran two smooth campaigns but has had more trouble running a war. But it should at least be the price of admission.

And candidates should keep all this in mind before they go bashing "big business." If the candidates can't achieve the same level of competence as the firms they bash in bringing order out of chaos, they should just stay in the Senate and let others do the more important jobs.

Read the entire post. As this Richard Murray post indicates, early voting trends in Texas do not look good for the Clinton campaign.

By the way, did you catch the following Jon Stewart crack during the Oscars?: "Away From Her is about a woman who forgets about her husband. Hillary Clinton called it the feel-good movie of the year."

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February 25, 2008

Rate Congress on free trade

Check out this excellent Cato Institute website that allows you to evaluate the voting record of each member of the past six sessions of Congress on free trade issues.

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February 22, 2008

Hillary's redemption?

It's rare that I post on politics two days in a row (or even two times in a week, for that matter), but the meltdown of Hillary Clinton's presidential campaign has been one of those fascinating political developments that simply begs for analysis (yesterday's post is here).

David Berg, one of Houston's best trial lawyers and a longtime Democratic Party supporter, provides this insightful op-ed in the Chronicle yesterday explaining why he switched from supporting Clinton to Obama and why Clinton is suffering in comparison to Obama:

I guarantee you, as the oldest living man in America who has actually attended a Hannah Montana concert, my daughter is completely colorblind. From what I have seen of her generation, and that of my grown sons', that is the norm, not the exception. Racial politics simply won't work; not this time — and if all that good will seeps into the wider world — perhaps never again.

I wish, frankly, that the Clintons, who in many ways helped make Obama's candidacy possible, could hear firsthand how they let down so many people who cared about them and supported them through many tough years — how by their divisive tactics they have become the people and politics they deplore.

In short, I wish they could have been there Tuesday night to understand clearly how times and mores have changed and, perhaps, to understand how important it is that a new generation be given a chance.

By the way, on more mundane topics, it appears that Clinton's management ability is not what her supporters crack it up to be. $11,000 on pizza and $1,200 on Dunkin’ Donuts?

Meanwhile, NY Times columnist David Brooks examines the new political syndrome -- Obama Comedown Syndrome (a/k/a "OCS").

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February 21, 2008

Bashing the capitalist roaders

Does it appear to anyone else that Hillary Clinton is getting a bit desperate in attempting to salvage her campaign for the Democratic nomination? Get a load of this:

Sen. Hillary Clinton took a swipe at [investment bankers], suggesting wealthy investment bankers and hedge fund managers on Wall Street aren't doing real 'work.' [. . .]

"We also have to reward work more," Clinton told a small group of Ohio residents today. "and by that, I mean, I have people in New York working on Wall Street as investment managers, as hedge fund executives. Under the tax code, they can pay a lower percentage of their income in taxes on $50 million dollars, than a teacher, or a nurse, or a truck driver in Parma pays on $50,000. That's very discouraging to people." [. . .]

The line about investment fund and hedge fund managers has been introduced into Clinton's talking points as she campaigns across the economically struggling state of Ohio.

Investment bankers are certainly an easy target, but Clinton's statement that they don't do "real work" is either disingenuous or appallingly ignorant. Would Clinton say such a thing about other financial intermediaries such as real estate brokers? Investment bankers working on multi-billion dollar mergers are not all that different from real estate brokers -- they are financial intermediaries who get paid a commission for helping to originate and close deals. In short, they are being paid a fee for arranging a transaction between a willing buyer and a willing seller.

And believe me, for anyone who has ever seen investment bankers work a deal, it's definitely hard work. Finding potential buyers and sellers, persuading them to become involved in a transaction, and making the deal happen amidst the myriad of risks that could undermine it is not a cakewalk. Long hours, the ability to deal with rejection, the uncertainty of the fee until the deal closes, grinding travel and pressurized work conditions are just a few of the hardships that investment bankers endure.

Inasmuch as such work is hard, it's not for everybody. Thus, with really good investment bankers in short supply, they can command high compensation. And the good ones are well worth it. Where else will a seller or buyer find someone with a comprehensive list of direct contacts among potential parties to a transaction and extensive experience getting difficult deals closed? A principal to a transaction is simply renting those contacts and experience and, although often expensive, the investment banker is worth every penny if he or she can pull a deal together for the principal.

The foregoing is pretty basic stuff, so it's alarming that a Senator from a state with more investment bankers than any other would engage in demagoguery over them. John Carney over at Dealbreaker sums up the irony quite well:

"Now being the First Lady for eight years and a Senator from a state in which you've never lived, that's real work."

And lest the Obama crowd get too over-confident with Clinton's increasingly bizarre statements, get a load of this performance by Austin lawyer, former Austin mayor and current Texas state senator Kirk Watson, who has endorsed Obama:

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February 14, 2008

The aftermath of the Clemens hearing

Many folks have been asking me about my thoughts on the Roger Clemens saga, but I am so disappointed with the abysmal level of discourse regarding the Mitchell Commission Report and the issues involved with the use of steroids and other PED's in society that I find it hard to drum up much enthusiasm for addressing it. Compare the discussion of the issues from this earlier post with this live blog analysis of the questions and answers from Clemens hearing and you will see what I mean. Sort of makes you want to whipsaw the committee in the same manner as this Colman McCarthy/Washington Post op-ed, doesn't it? Art DeVany expresses similar sentiments.

Although I expressed reservations early on about the unconventional way in which Clemens' legal team has been defending the matter, I don't think the hearing measurably increased Clemens' risk of being charged criminally. In fact, in an odd way, the hearing may have actually mitigated that risk somewhat.

McNamee came across as such a manipulator that my sense is that it's doubtful that prosecutors would base a criminal case against Clemens primarily on McNamee's testimony. Thus, unless investigators come up with a conduit of the PED's who is willing to testify that the PED's were delivered to Clemens and McNamee, Clemens may avoid criminal charges. He is certainly not out of the woods yet, but the Congressional hearing probably hurt him more in the court of public opinion than it did with regard to a potential criminal case (Update: Peter Henning agrees with me).

Nevertheless, I'm not yet ready to bet on that prediction. At least without long odds in my favor.

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February 11, 2008

Vetting the Trans-Texas Corridor

This Ralph Blumenthal/NY Times article does a good job of summarizing the massive scale that is the proposed Trans-Texas Corridor project:

. . . the Trans-Texas Corridor, a public-private partnership unrivaled in the state’s — or probably any state’s — history, that would stretch well into the century and, if completed in full, end up costing around $200 billion. [. . .]

The plan envisions a 4,000-mile network of new toll roads, with car and truck lanes, rail lines, and pipeline and utilities zones, to bypass congested cities and speed freight to and from Mexico. [. . .]

The corridor project grew out of the 2002 governor’s race when [Governor] Rick Perry, . . . surprised transportation experts by taking ideas they had discussed a decade earlier, to little interest, and “supersizing them,” as one recalled.

The project grew to consist of four “priority segments:” new multimodal toll roads up to 1,200 feet wide paralleling Interstates 35 and 37 from Denison in North Texas to the Rio Grande Valley; a proposed I-69 from Texarkana to Houston and Laredo; I-45 from Dallas-Fort Worth to Houston; and I-10 from El Paso to Orange on the Louisiana border. But the exact routes are years away from being designated.

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February 9, 2008

Elevating form over substance

The McCain-Feingold campaign finance bill was not John McCain's finest hour. John Lott makes a good point about the utter hypocrisy of it all in connection with the Clintons' recent loan to Hillary's cash-strapped campaign:

Former President Clinton stands to reap around $20 million -- and will sever a politically sensitive partnership tie to Dubai -- by ending his high-profile business relationship with the investment firm of billionaire friend Ron Burkle. . . .

Obviously Clinton has gotten a lot of money from other sources, so there is no need to single out Burkle, but Burkle obviously can't donate $10 or $12 million to Clinton's campaign. Yet, if he pays Clinton for work that isn't very obvious, Clinton can then turn around and spend it on a campaign. Does it really matter that Burkle can't give the money directly to Clinton?

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February 4, 2008

A birthday wish

Don't miss Greg Mankiw's birthday wish:

My birthday wish is for all of us to stop asking what the government can do for us today. Instead, we should focus on what we can do together to prepare the economy for our children and grandchildren. That means getting ready to care more for ourselves in old age, perhaps by retiring later, perhaps by saving more. I hope that when I celebrate my 100th birthday in 2058, my descendants won’t look upon Grandpa and his generation as the biggest economic problem of their time.

Read the entire op-ed. Salient thought for a political season.

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An uncomfortable issue for John McCain

The hypocritical and unproductive nature of government policy regarding illegal drugs has been a frequent subject on this blog (see here, here, here and here), so this Radley Balko post about Cindy McCain, John McCain's wife, caught my eye:

. . .the problem with the hypocritical practice of letting politicians’ family members get off for drug crimes that land normal people in prison is that it doesn’t seem to do much in the way of making them more sympathetic. It just hardens them into more militant drug warriors.

Read the entire post.

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January 31, 2008

The wisdom of U.S. Presidential campaigns

Much is wrong with U.S. Presidential campaigns. They last much too long, are far too expensive and the rhetoric is mostly mind-numbing.

However, for all its faults, the messy process does have a way of eliminating the candidates that need to be weeded out (see also here and here).

By the way, Megan McArdle has the New York City perspective on Giuliani's withdrawal.

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January 29, 2008

Hillary Clinton's Inner Tracy Flick

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January 28, 2008

The costs of prohibition

The nature of the problems that confront Texans and law enforcement officers who live near the Texas-Mexico border have been a frequent topic on this blog (see here, here, and here). Those problems are exacerbated by the archaic nature of U.S. drug laws (see here and here).

This must-read Scott Henson post does an excellent job of defining the parameters of the increasingly serious problems on the Texas-Mexico border.

No Country for Old Men may be fiction, but the story it tells is very real.

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January 27, 2008

A truly frightening thought

It's been comforting that John Edwards' demagoguery has not generated the type of buzz and political support that would make him a top contender for the Democratic Party's presidential nomination. However, this Robert Novak/Rasmussen blurb ended my sense of comfort:

Illinois Democrats close to Sen. Barack Obama are quietly passing the word that John Edwards will be named attorney general in an Obama administration.

Installation at the Justice Department of multimillionaire trial lawyer Edwards would please not only the union leaders supporting him for president but organized labor in general. The unions relish the prospect of an unequivocal labor partisan as the nation's top legal officer.

What would an anti-business demagogue be like as attorney general? Here's a preview (another one here). That's not the way to encourage risk-taking for job and wealth creation.

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January 23, 2008

At least he's consistent

Well, at least Rudy Giuliani behaved consistently both before and after becoming Mayor of New York City (Reason's David Weigel also provides this interesting Giuliani piece along the same lines).

Having said that, I don't think that's the type of consistency that most reasoned folks want in a U.S. President.

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January 22, 2008

Birds of a feather?

Perhaps coincidentally, I came across the following two news reports consecutively yesterday morning. First from this BBC article:

Venezuelan President Hugo Chavez has threatened to nationalise farms, in an effort to tackle food shortages.

Government controls keep food prices low in shops to help even the poorest Venezuelans feed themselves.

But some farmers prefer to sell their produce in neighbouring countries where prices are higher, leading to shortages of bread, milk, eggs and meat.

In his weekly television show, Mr Chavez said farmers doing this should have their farms "expropriated". [. . .]

On Saturday, Mr Chavez threatened to nationalise banks which did not give enough low-interest loans to farmers.

Banks are not allowed to charge farmers interest higher than 15% - even though inflation last year ran at 22.5%.

"The bank that fails to comply must be sanctioned, and I am not talking about a little fine," he said. "The bank that does not comply must be seized." [. . .]

Critics say complying with government policy could drive some businesses into bankruptcy.

Then, a little closer to home, came this NY Times article on Democratic Party Presidential candidate Hillary Clinton's views on government control of the economy:

Senator Hillary Rodham Clinton said that if she became president, the federal government would take a more active role in the economy to address what she called the excesses of the market and of the Bush administration.

. . . Mrs. Clinton put her emphasis on issues like inequality and the role of institutions like government, rather than market forces, in addressing them.

She said that economic excesses — including executive-pay packages she characterized as often “offensive” and “wrong” and a tax code that had become “so far out of whack” in favoring the wealthy — were holding down middle-class living standards. [. . .]

“If you go back and look at our history, we were most successful when we had that balance between an effective, vigorous government and a dynamic, appropriately regulated market,” Mrs. Clinton said. “And we have systematically diminished the role and the responsibility of our government, and we have watched our market become imbalanced.”

She added: “I want to get back to the appropriate balance of power between government and the market.” [. . .]

“We’ve done it in previous generations,” she said, alluding to large-scale public projects like the interstate highway system and the space program. “But we’ve got to have a plan.” [. . .]

“Inequality is growing,” Mrs. Clinton said. “The middle class is stalled. The American dream is premised on a growing economy where people are in a meritocracy and, if they’re willing to work hard, they will realize the fruits of their labor.”

So, on one hand, Chavez is demonstrating that, even with the economic benefit of having high-priced oil to export, a government can still lower the living standards of its citizens if it tries hard enough.

On the other hand, Hillary does not appear to recognize that her proposals are quite capable of accomplishing the same thing within the world's most dynamic economy.

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The Thompson plan

Last week, Ironman over at Political Calculations reviewed the Giuliani income tax simplification plan. This week, he tackles the even more impressively simple tax simplification plan advocated by GOP Presidential candidate, Fred Thompson.

Of course, as if on cue, Thompson dropped out of the GOP race today.

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January 16, 2008

What's missing in the tax debate

Wouldn't it be nice if at least one of the Presidential candidates would embrace the basic reform that is really needed in the U.S. tax system? Simply simplification. Previous posts on tax simplification issues are here. Interestingly, one of my least favored Presidential candidates -- Rudy Giuliani -- has the best tax simplification proposal that I've seen so far during the campaign.

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January 14, 2008

Myths about oil are hard to dispel

Amidst the demagoguery of a U.S. Presidential campaign, it's rare to find the mainstream media willing to run Robert Bryce's common sense on energy policy and oil prices. For example:

Myth 3: Energy independence will let America choke off the flow of money to nasty countries.

Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Chavez's Venezuela. But the world marketplace doesn't work like that. Oil is a global commodity. Its price is set globally, not locally. Oil buyers are always seeking the lowest-cost supplier. So any Saudi crude being loaded at the Red Sea port of Yanbu that doesn't get purchased by a refinery in Corpus Christi or Houston will instead wind up in Singapore or Shanghai.

Refer to this article whenever you are listening to the candidates from either party start talking about energy policy. Come to think of it, while considering political choices, you should also keep handy this Bryan Caplan/WaPo op-ed entitled 5 Myths About Our Ballot-Box Behavior.

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January 8, 2008

The power of words

James Fallows hits on what I believe is a very important dynamic in Barack Obama's surge past Hillary Clinton among Democrats -- the power of words:

Words and deeds. Talk and action. Poetry and prose. Presidents obviously do best when they can do both.

But only Obama captured what is unique about a president's role. A President's actions matter -- Lyndon Johnson with his legislation, Richard Nixon with his opening to China -- but lots of other people can help shape policies. A President's words often matter more, and only he -- or she -- can express them. Grant led the Union Army, but Abraham Lincoln, in addition to selecting Grant, wrote and delivered his inaugural and Gettysburg addresses. Long before Franklin Roosevelt actually did anything about the Great Depression, his first inaugural address ("the only thing we have to fear...") was important in itself. The same was true of Winston Churchill just after he succeeded Neville Chamberlain. It would be years before the Nazi advance would be contained, but Churchill's words and bearing were indispensable to Britain's recovery.

On the other hand, George W. Bush's difficulty in expressing himself publicly has exacerbated the perception of a rudderless Administration. With that constant reminder over the past seven years, I'm surprised that Clinton's handlers don't have her better prepared to express herself well in public debates. Perhaps, as with Bush, she simply lacks the public speaking gift of her husband. But I am continually amazed at how often her extemporaneous public statements are littered with the ubiquitous "you know" crutch as she gathers her thoughts. That habit, as well as her instinct to default to a government solution on virtually every issue, fuels the perception that she lacks substance.

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January 5, 2008

The Great Debaters

My younger daughter, my wife and I took in Denzel Washington's new film the other night, The Great Debaters. Although the story was somewhat formulaic and the movie certainly not perfect, we found the movie to be hugely entertaining. The acting is superb, particularly the reliable Mr. Washington and newcomer Denzel Whitaker, a delightful young actor who literally steals the show as the youngest of the college debaters. Mr. Washington, who also directed, wisely decided to tell the story through Mr. Whitaker's character (James Farmer, Jr.), and Mr. Whitaker is more than up to the task. What a talent!

Interestingly, the always-excellent Forest Whitaker plays James Farmer, Sr., the father of the young Mr. Whitaker's character in the movie. However, despite their common last name, the two are not related.

At any rate, in discussing the movie on the way home afterward, my daughter observed that it sure is a good thing that the horrific racism depicted in the movie is not condoned in American society anymore. My reply was that brutal discrimination of blacks is still not as uncommon as we like to think. Scott Henson and Radley Balko comment on the unacceptable revelations of, at minimum, prosecutorial negligence in Dallas. Where is the outrage?

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December 18, 2007

That governmental Ponzi scheme

At the end of this common sense post that mostly points out that no useful public policy is served by the government denying grandparents the right to establish Health Savings Accounts for the benefit of their grandchildren, the always entertaining Art DeVany makes the following observation about a common topic on this blog -- Social Security reform (previous posts are here):

By the way, there is no such thing as social security. There are only people who are more or less secure against contingencies. They might pool their risks against these contingencies, but there is no effective way for a society to avoid risk. As a program for risk pooling, Social Security is very ineffective. It is not insurance, it is redistribution among generations. It is a Ponzi scheme because the risk pool is allocated from one generation to another. And, it is fraught with demographic risk and political risk. It will eventually go under or have to be modified substantially by disavowing the contract between generations because it is not sustainable.

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December 17, 2007

Giuliani's ideas on transparent government

Jim Dwyer of the NY Times reports that Republican presidential candidate Rudy Giuliani's ideas about transparency in government are quite similar to his crimebuster practices.

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November 30, 2007

Say what, John Edwards?

Following on the previous post, have you heard about demagogue John Edwards' latest proposal?

A two-year ban on advertising for prescription drugs.

Paul Jacob suggests a common sense ban of another sort.

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The key issue in the 2008 Presidential race

As usual, the Onion identifies the issue with precision:

Poll: Bullshit Is Most Important Issue For 2008 Voters

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November 16, 2007

Remembering 1968

In 1968, I was a 15-year old concentrating on playing various high school sports in Iowa City, a Midwestern college town. However, even in that somewhat sheltered environment, it was impossible not to realize that 1968 was an unusually tumultuous year. This Daniel Henninger/Opinion Journal op-ed reminds us of just what a wild ride 1968 was:

In 1968, Nicolas Sarkozy was 13 years old. John McCain was 32 and Hillary Clinton was 21. Barack Obama was 7. It is not beyond imagining that the precocious Messrs. Sarkozy and Obama were alert to events in 1968, but for the first wave of baby boomers just touching adulthood that year, it was the beginning of a strange journey.

Nearly any one of the events that went off in 1968 would have been enough to dominate another year. To list what actually happened that year even today boggles the mind, and spirit.

The year began with sales of the Beatles album, "Magical Mystery Tour." In retrospect, it was a premonition. In late January, North Korea captured the USS Pueblo and crew members. A week later, the North Vietnamese army launched the Tet offensive.

On Feb. 27, Walter Cronkite announced on CBS News that the U.S. had to negotiate a settlement to the Vietnam War. On March 12, Sen. Gene McCarthy defeated incumbent President Lyndon Johnson in the New Hampshire primary, aided by antiwar students that Sen. McCarthy called his "children's crusade." Two weeks later, LBJ announced on TV that he would not run for re-election. One week later, Martin Luther King Jr. was assassinated. It was only April 4.

There were race riots everywhere. On April 24, students occupied five buildings at Columbia University, protesting the war. In May bloody student riots erupted in France, likely witnessed by the impressionable Mr. Sarkozy.

On June 3, Valerie Solanas shot Andy Warhol in a New York City loft. Two days later, Sirhan Sirhan assassinated Robert F. Kennedy Jr. In August, the Soviet Union occupied Czechoslovakia. Seven days later, antiwar demonstrators at the Democratic convention fought pitched battles with the Chicago police.

On Nov. 4, having absorbed all this, the people of the United States voted. They gave 43.4% of their vote to Richard Nixon and 42.7% to Hubert Humphrey. Alabama Gov. George Wallace got 13.5%. Four years later, George Wallace was shot while running for president. 1968 lasted a long time.

Whatever civic culture the U.S. had until the 1960s, it was now transformed. After '68, we had a new kind of political and social culture, pounding like a jackhammer into the older bedrock. The country cracked. Look at those 1968 popular vote numbers; half the country went left and half went right.

Read the entire piece.

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November 15, 2007

Edwards returns to demagoguery

After an effective television ad, the John Edwards campaign returns to Edwards' usual form of demagoguery against business interests in the ad below:

By the way, one of Edwards' proposed ways in which to force Congress to take action on his call of universal health care coverage won't fly.

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November 7, 2007

Bad judgment alert

As if corruption in the Texas Youth Commission, the bursting state prison system, reform of the judicial selection system, or reorganization of TSU isn't enough to keep Texas legislators occupied. Now, a local state legislator is teaming up with a colleague to confront a truly important issue -- that Texans are not going to be able to watch certain NFL football games on certain cable television networks:

Cable companies and the NFL Network are competing for Texas lawmakers' support in their national fight over whether cable customers should be charged extra for the football channel.

While some cable companies have agreed to carry the network's eight regular-season games, Time Warner Cable, the largest in Texas, has not come to terms with the network.

Pressure has been mounting on all parties as the Dallas Cowboys' Nov. 29 matchup with the Green Bay Packers approaches. The game will only be shown on the NFL Network.

"I've had a lot more people contact me about NFL football the last two months instead of child protective services, windstorm insurance or worker's compensation, which are frankly more important issues," said Rep. Corbin Van Arsdale, R-Tomball. "I don't control what constituents call me about." [. . .]

Van Arsdale and Sen. Kim Brimer, R-Fort Worth, said last week that they would consider introducing consumer-oriented legislation in the 2009 session if the two sides don't reach an agreement.

"Cable companies need to focus on giving their customers what they want, which is football," Brimer said. [. . .]

Five Democratic members of the Texas House from Bexar County have sent letters to the Federal Communication Commission asking it to intercede in the argument.

Of course, all of these games are readily available on the Dish Network, so no consumer is prevented from buying that product if they want to see these NFL Network games bad enough. However, that doesn't stop the seemingly limitless amount of bad judgment in legislative circles over defining a legitimate legislative issue.

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November 5, 2007

Edwards scores

I've criticized John Edwards over the years for his demagogic tendencies. However, I must admit that the video below by the Edwards campaign is darn effective. Don't you know that Team Hillary will be working on those debating skills in the coming weeks?

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November 1, 2007

Speaking with authority

I swear, you can't make this stuff up.

On Tuesday morning, Ohio congressman and chronic Democratic Party presidential candidate Dennis Kucinich questioned President Bush's mental health:

"I seriously believe we have to start asking questions about his mental health," Kucinich, an Ohio congressman, said in an interview with The Philadelphia Inquirer's editorial board on Tuesday. "There's something wrong. He does not seem to understand his words have real impact."

On Tuesday evening during a debate between Democratic Party presidential candidates, Kucinich confirmed that he had once seen a UFO and that it was O.K. because former President Jimmy Carter once admitted that he had seen a UFO, too.

As the blog post notes, at least Carter didn't admit it on national television.

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October 31, 2007

Mayor White's L.A. moment

Houston Mayor Bill White is capriciously manipulating local governmental power to sidetrack development of a condominium project (nicknamed the "Ashby high-rise") in a neighborhood where he raises a substantial political campaign funds. The incident has received some national attention through this Wall Street Journal ($) article, which somehow suggests that Houston's phenomenal growth over the past 50 years has been in spite of -- rather than because of -- the city's lack of zoning and liberal land use policies.

At any rate, it's really a sad reflection of the state of political discourse in Houston that the Mayor has been given a pass on undermining a project for the benefit of his campaign war chest. The property was valued and sold to the present owners on the assumption that a large-scale redevelopment would be built there and the owners followed all the city's rules and regulations in obtaining the necessary permits to proceed with construction. When a few wealthy neighbors of the development pulled Mayor White's chain, he blithely ordered one of the city's approvals to be revised to delay the development and now is attempting to ramrod two ordinances through city council to stop the project altogether.

In short, the developers invested a substantial amount of money in buying the property and followed the laws in preparing the large-scale redevelopment, dozens of which dot Houston's landscape. Mayor White and his friends don't like the development, so White is changing the laws. And this is political leadership?

At any rate, all of this reminded me of this excellent Virginia Postrel/Atlantic.com article that compares the radically different land use policies of Los Angeles, on one hand, and Dallas (which are quite similar to Houston's), on the other. Suffice it to say that the likes of Mayor White favor the Los Angeles approach over that of Dallas and Houston. Think about that the next time you vote for mayor.

Update: The website for the group opposing the project is here. A copy of the proposed "emergency" ordinance is here.

Update 2: A recent West U Examiner article on the project is here.

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October 4, 2007

The genesis of bad regulations

I'm not an advocate of using cell phones indiscrimately while driving. In fact, I try to avoid it as much as possible. But every few months or so, some media outlet passes along another superficial story (see also here) on the latest study or tragic story that supposedly suggests that use of cell phones while driving leads to accidents and, thus, should be outlawed.

Cell phones are a distraction while driving. No question about that. But so are conversations with passengers. Are we going to outlaw those, too? Granted, much cell phone use is trivial and unnecessary, but cell phones have unquestionably been a tremendous improvement in communications. Wouldn't it be prudent at least to perform some cost-benefit analysis of the probable impact of outlawing a valuable improvement in communications before foisting yet another regulation on the public?

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September 17, 2007

Jane Fonda, global warmer

Freakonomics authors Stephen J. Dubner and Steven D. Levitt discover the not insubstantial impact that actress Jane Fonda has had on the United States' continued reliance on coal and other fossil fuels rather than clean and cheap nuclear energy.

Of course, Larry Ribstein has been writing about this phenomenom for years.

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September 6, 2007

Considering Giuliani

Daniel Drezner has an interesting recent observation about Rudy Giuliani's presidential bid:

Take this for what you will:

Over the past month, I've had at least two dozen conversations with various people about Rudy Giuliani's presidential campaign. A lot of these people are Democrats, but there were a healthy number of Republicans and independents as well. These are all smart observers of politics who generally do not make knee-jerk assessments. The one common denominator was that, at some point, all of these people had lived in the New York City area while Rudy was mayor.

What is astonishing is that, despite the fact that this collection of individuals would likely disagree about pretty much everything, there was an airtight conensus about one and only one point:

A Giuliani presidency would be an unmitigated disaster for the United States. That is all.

UPDATE: Commenters have reasonably asked the "why?" question. For some answers from New Yorkers, click here and here.

Here is my contribution on why Giuliani should not be elected president.

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September 4, 2007

You don't say?

This NY Times article reports on more research that goes into the "who needs a research project to prove that?" category:

. . . the broader question — whether police officers in some towns are motivated by fund-raising as well as safety when writing traffic tickets — has been examined systematically by others. Michael D. Makowsky, a doctoral student in economics, and Thomas Stratmann, an economics professor, both at George Mason University, studied the issue in a recent paper, “Political Economy at Any Speed: What Determines Traffic Citations?”

They examined every warning and citation written by police officers in all of Massachusetts, excluding Boston, during a two-month period in 2001 — over 60,000 in all. Their conclusion wasn’t shocking to an economist: money matters, even in traffic violations. They found a statistical link between a town’s finances and the likelihood that its police officers would issue a speeding ticket. The details are a little sticky, but they show that tickets were issued more often in places that were short on cash, and that out-of-towners received tickets more often than drivers with local addresses.

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August 10, 2007

Spitzer channels Dr. Phil

Has the mainstream media sentenced the Lord of Regulation to sensitivity training?

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August 8, 2007

The cultural legacy of politicizing religion

The pastor of the local church that my family and I attend has used the pulpit from time to time to advocate political positions and certain politicians, which I have always viewed as a dubious practice. I was reminded of my pastor's sermons as I read this Cathy Young/ReasonOnline article on the questionable cultural legacy of the late Jerry Falwell:

Though the movement Falwell helped launch was unable to enact much of its agenda into law, there is no question that it transformed the American political landscape. Even the battles it hasn’t won, such as the effort to teach “intelligent design” in schools on a par with evolution, are still battles it was able to force on its opponents.

More broadly, it helped create a climate in which the language of politics is saturated with references to God, a political culture in which a major political magazine (Newsweek) can ask a presidential candidate (Howard Dean) whether he believes in Jesus Christ as the son of God and the path to eternal life.

Despite these political inroads, Falwell’s brand of religious conservatism has suffered losses in the culture wars. Feminism, its radical excesses mostly discarded, has become firmly integrated into America’s cultural mainstream. (Even, apparently, in Falwell’s own family: His daughter is a surgeon.) Acceptance of gays is now at a level that would have been unthinkable in 1980. Sexual content in mainstream entertainment has steadily increased, and adults-only material is more available than ever thanks to new technologies. While divorce rates have dropped somewhat, so have marriage rates; in much of America, sex between single adults is widely accepted as a social norm.

Along those same lines, this CNN article reports on a Kentucky church's "Court Watch" program in which volunteers attend court hearings to monitor how judges are handling drug-related cases. It's clear that the members of the church group are not interested in facilitating leniency in sentencing in such cases.

Several years ago, while sweating a jury in a civil case at the courthouse, I attended the daily initial appearance docket call in the juvenile criminal court next door. It was a heartbreaking experience and prompted me to begin doing pro bono work in the local juvenile criminal justice system. Since then, I've attended numerous such initial appearance dockets in the juvenile criminal justice system. I have never seen a member of any Christian organization attending one of those dockets.

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August 4, 2007

Latest on the Las Vegas Monofail

With the crunch worsening over the past several weeks in the credit markets, the bankruptcy reorganization forces are gearing up and eyeing potential debtors. Well, in this Heartland blog post, Thomas A. Rubin predicts one of the probable debtors that will need serious reorganization -- the Las Vegas Monorail Company (prior posts here):

In short, the Las Vegas Monorail appears headed straight down the path to bankruptcy by approximately the year 2010 with nothing on the horizon that could prevent it – other than, perhaps, an ill-conceived government bailout or the absolute dumbest group of investors/suckers in recent financial history.

This result should come as a surprise to no one. Over the last several decades, I know of only one U.S. rail transit system, or quasi-transit system, that has come remotely close to covering its operating costs out of fares and other operating revenues (the Seattle Monorail), and none that have made any contribution what-so-ever to capital costs. However, the Las Vegas Monorail promoters assured everyone that operating revenues would not only cover operating costs, but would also cover all the debt service costs of the bonds sold to pay for the construction of the Monorail. [. . .]

One hopes that someone, somewhere, in a public sector decision-making capacity will tell the various casinos along the right of way that, if they want to see it continue to operate, well, it is all theirs.

Read the entire post, which lays out the public risks involved in even a privately-financed boondoggle of this nature. Meanwhile, this clever Political Calculations post comes up with an entertaining solution to achieving the same benefits of a light rail system at a far cheaper cost.

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August 2, 2007

The Incarceration Nation

Following on this post from yesterday on a troubling growth sector in the burgeoning prison industry, Doug Berman points to this daunting Boston Review piece by Glenn C. Loury, the Merton P. Stoltz Professor of the Social Sciences in the Department of Economics at Brown University. Loury reviews the increasingly brutal nature of punishment in American society:

Crime rates peaked in 1992 and have dropped sharply since. Even as crime rates fell, however, imprisonment rates remained high and continued their upward march. The result, the current American prison system, is a leviathan unmatched in human history.

According to a 2005 report of the International Centre for Prison Studies in London, the United States—with five percent of the world’s population—houses 25 percent of the world’s inmates. Our incarceration rate (714 per 100,000 residents) is almost 40 percent greater than those of our nearest competitors (the Bahamas, Belarus, and Russia). Other industrial democracies, even those with significant crime problems of their own, are much less punitive: our incarceration rate is 6.2 times that of Canada, 7.8 times that of France, and 12.3 times that of Japan. We have a corrections sector that employs more Americans than the combined work forces of General Motors, Ford, and Wal-Mart, the three largest corporate employers in the country, and we are spending some $200 billion annually on law enforcement and corrections at all levels of government, a fourfold increase (in constant dollars) over the past quarter century.

Never before has a supposedly free country denied basic liberty to so many of its citizens. In December 2006, some 2.25 million persons were being held in the nearly 5,000 prisons and jails that are scattered across America’s urban and rural landscapes. One third of inmates in state prisons are violent criminals, convicted of homicide, rape, or robbery. But the other two thirds consist mainly of property and drug offenders. Inmates are disproportionately drawn from the most disadvantaged parts of society. On average, state inmates have fewer than 11 years of schooling. They are also vastly disproportionately black and brown. [. . .]

Despite a sharp national decline in crime, American criminal justice has become crueler and less caring than it has been at any other time in our modern history. Why? [. . .]

My recitation of the brutal facts about punishment in today’s America may sound to some like a primal scream at this monstrous social machine that is grinding poor black communities to dust. And I confess that these brutal facts do at times incline me to cry out in despair. But my argument is analytical, not existential. Its principal thesis is this: we law-abiding, middle-class Americans have made decisions about social policy and incarceration, and we benefit from those decisions, and that means from a system of suffering, rooted in state violence, meted out at our request. We had choices and we decided to be more punitive. Our society — the society we have made — creates criminogenic conditions in our sprawling urban ghettos, and then acts out rituals of punishment against them as some awful form of human sacrifice.

This situation raises a moral problem that we cannot avoid. We cannot pretend that there are more important problems in our society, or that this circumstance is the necessary solution to other, more pressing problems—unless we are also prepared to say that we have turned our backs on the ideal of equality for all citizens and abandoned the principles of justice. We ought to ask ourselves two questions: Just what manner of people are we Americans? And in light of this, what are our obligations to our fellow citizens—even those who break our laws?

There is much, much more. Take the time to read the entire piece.

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August 1, 2007

A disturbing growth industry

This New York Times article reports on one of the expensive consequences of the increasing criminalization of everything -- already overcrowded state prisons looking to export inmates:

Chronic prison overcrowding has corrections officials in Hawaii and at least seven other states looking increasingly across state lines for scarce prison beds, usually in prisons run by private companies. Facing a court mandate, California last week transferred 40 inmates to Mississippi and has plans for at least 8,000 to be sent out of state.

The long-distance arrangements account for a small fraction of the country’s total prison population — about 10,000 inmates, federal officials estimate — but corrections officials in states with the most crowded prisons say the numbers are growing. One private prison company that houses inmates both in-state and out of state, the Corrections Corporation of America, announced last year that it would spend $213 million on construction and renovation projects for 5,000 prisoners by next year. [. . .]

But while the out-of-state transfers are helping states that have been unwilling, or too slow, to build enough prisons of their own, they have also raised concerns among some corrections officials about excessive prisoner churn, consistency among the private vendors and safety in some prisons.

Moving inmates from prison to prison disrupts training and rehabilitation programs and puts stress on tenuous family bonds, corrections officials say, making it more difficult to break the cycle of inmates committing new crimes after their release. Several recidivism studies have found that convicts who keep in touch with family members through visits and phone privileges are less likely to violate their parole or commit new offenses. There have been no studies that focused specifically on out-of-state placements.

See related earlier posts here and here. By the way, if you are interested in understanding the main reason why we are dealing with this seemingly endless cycle of criminalization and imprisonment, then check out the clever minute and a half video below for the answer:

Scott Henson, the Texas blogger-expert on prison overcrowding, has more here.

Update: Has America become the Incarceration Nation?

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John Edwards, demagogue

Democratic Party presidential candidate John Edwards has been a frequent topic on this blog, but it's rare that his special style of demagoguery is captured as succiently as in this video of a bit over a minute. I don't know what's more disturbing -- Edwards' rantings, the audience's unquestioning acceptance of them, or the fact that the Edwards campaign is promoting the video as an example of Edwards' charm.

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July 25, 2007

A bully exposed

As noted in this post from a couple of weeks ago, more than a few folks are not losing any sleep over the fact that former crusading state attorney general and current New York Governor Eliot Spitzer is having trouble getting along with with his new playmates in Albany.

But now things are getting even more interesting. According to a report issued yesterday by Andrew Cuomo, Spitzer's successor as New York AG (and perhaps as governor sooner than we thought), Spitzer's aides used the state police to gather information about whether Spitzer’s chief political rival, Joseph Bruno, improperly used state-owned aircraft for political purposes. To make matters worse, when the improper use of state police was revealed, Spitzer’s communications director, Darren Dopp, concocted a false story as to why the aides sought the information. Although the Cuomo report concluded that the aides’ conduct was “not unlawful,” Spitzer suspended Dopp and conceded at a press conference that his administration had “grossly mishandled” the situation. And all this occurred despite the fact that Cuomo's report was not thoroughly prepared.

Spitzer has a lot of experience in the area of "grossly mishandling" situations. OpinionJounal notes the same thing.

The irony of Spitzer's plight has generated quite a few entertaining blog post titles around the blogosphere, the best of which are Ellen Podgor's (she of "Busted for Yoga" fame) "Spitzer Spitzered" and Nathan Koppel's "Spitzer Schadenfreude." Seems as if Spitzer is redefining the bully pulpit.

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July 23, 2007

Dalrymple on Tony Blair

The recent resignation of U.K. Prime Minister Tony Blair provides an opportunity for British psychiatrist and author, Anthony Daniels (who writes under the pen name of Theodore Dalrymple), to provide this interesting early appraisal of the Blair years:

There undoubtedly were things to be grateful for during the Blair years. His support for American policy in Iraq won him much sympathy in the U.S., of course. He was often eloquent in defense of liberty. And under Mr. Blair's leadership, Britain enjoyed 10 years of uninterrupted economic growth, leaving large parts of the country prosperous as never before. London became one of the world's richest cities, vying with New York to be the global economy's financial center. Mr. Blair did inherit a strapping economy from his predecessor, and he left its management more or less to the man who succeeds him, Gordon Brown. Still, unlike previous Labour prime ministers, he did not preside over an economic crisis: in itself, something to be proud of.

But how history will judge him overall, and whether it will absolve him (to adapt slightly a phrase coined by a famous, though now ailing, Antillean dictator), is another matter [. . .]

Tony Blair was the perfect politician for an age of short attention spans. What he said on one day had no necessary connection with what he said on the following day: and if someone pointed out the contradiction, he would use his favorite phrase, "It's time to move on," as if detecting contradictions in what he said were some kind of curious psychological symptom in the person detecting them.

Many have surmised that there was an essential flaw in Mr. Blair's makeup that turned him gradually from the most popular to the most unpopular prime minister of recent history. The problem is to name that essential flaw. As a psychiatrist, I found this problem peculiarly irritating (bearing in mind that it is always highly speculative to make a diagnosis at a distance). But finally, a possible solution arrived in a flash of illumination. Mr. Blair suffered from a condition previously unknown to me: delusions of honesty.

Check out the entire op-ed. It's worth the time.

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July 16, 2007

Fair tax?

Greg Mankiw provides this particularly lucid analysis of the current status of the progressive U.S. income tax system. Keep it handy when listening to the demagoguery over tax rates that will take place during the upcoming 2008 Presidential campaign.

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July 13, 2007

The McCain meltdown

The fellows over at Professors R-Squared are having a rather fun time chronicling the remarkably quick demise of the John McCain Presidential Campaign (see here and here). But the best line on the McCain campaign meltdown still came from Jay Leno earlier in the week:

"Sen. John Edwards began what he's calling his poverty tour today. He's visiting people who have no money and no hope. His first stop: John McCain's campaign headquarters."

Posted by Tom at 12:45 AM | Comments (1) | TrackBack (0)

Myths of the war

My nephew Richard and I had a good laugh about the new Homeland Security Threat Level on the left that resulted from Michael Chertoff's ill-advised warning regarding the terror threat from earlier in the week. But kidding aside, following on this earlier post regarding James Fallows' Atlantic Monthly piece, this Steve Chapman RCP op-ed provides a level-headed analysis of the actual threat of an attack from Islamic fascists and the counterproductive nature of the Bush Administration's characterization of the conflict as a global "war on terror." Check it out.

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July 11, 2007

Spitzer is suffering?

So New York Governor Eliot Spitzer and his family just don't know whether the rough and tumble nature of politics at the state level of New York is worth the severe emotional toll.

I wonder what Theodore Sihpol, Hank Greenberg, John Whitehead, Richard Grasso and Kenneth Langone, among others, think about that?

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June 12, 2007

How the Presidents stack up

This Wall Street Journal Online provides this nifty graphic overview of the approval ratings of all U.S. presidents since Truman. Take a few minutes to check it out and enjoy the surprises of a quick history refresher. For example, I had forgotten about the length of the bounce in President Carter's approval ratings after the Iranian hostage crisis began in late 1979. Of course, that bounce didn't last as the hostage crisis dragged on for over a year, contributing substantially to Carter's loss to Ronald Reagan in the 1980 election.

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June 8, 2007

Snow Fall

Robin Moroney over at The Wall Street Journal's Informed Reader blog picks up on this interesting Ken Dermota/Atlantic ($) article that reports on the weird economics relating to the demand, the supply and the price of cocaine:

Demand for cocaine stays steady, Colombia’s coca fields are destroyed, yet the drug’s street price in the U.S. continues to fall . . . [as] drug smugglers and dealers have eked out efficiencies in their operations to keep their prices low. The U.S. Coast Guard has been able to catch only a small percentage of the drugs entering the country since President Nixon declared a “war on drugs” in 1971. In 2000, the U.S. decided to switch tactics and take the fight to Colombia, which produces 90% of the cocaine sold in the U.S. Since then, it has spent $4.7 billion fighting rebels who grow and sell the crop, as well as spraying coca fields from the air.

The price of cocaine—the pure version, not crack—has kept falling. In the early 1980s, the price of a gram of cocaine was about $600. By the late 1990s the price had fallen to about $200. According to the Drug Enforcement Administration, the street price of a gram of cocaine in 2005 was $20-$25 in New York, $30-$100 in Los Angeles and $100-$125 in Denver.

Some of the price decrease has come from more efficient distribution networks. Some New York smugglers have chosen to eliminate the middleman and pick up their drugs directly from Colombia, offering “factory-to-you” prices. The surging trade with Mexico has increased the nooks and crannies for drugs to be hidden as they cross the border, making smuggling both safer and cheaper.

Labor costs also have decreased. Street vendors take a smaller cut of the drug’s proceeds. A lot of the drug dealers who fell prey to an aggressive imprisonment campaign in the 1990s are now leaving prison. Their felony conviction and minimal job experience means they have few other ways to make money and are willing to take a pay cut.

The falling street price also reflects the lower risk of handling the drug. The violence of the 1980s crack boom has faded and, since 2001, federal drug prosecutions have fallen 25% as agents get diverted to the hunt for terrorists.

While the Atlantic article focuses on why the price of cocaine continues to drop even though the supply sources are declining, what's particularly interesting is that the demand for cocaine is not rising dramatically as the price declines. Given its addictive nature, it makes sense that the demand for cocaine would be somewhat price inelastic, but it seems logical that demand would increase at least to some extent as the price falls. This does not appear to be happening. Sounds like a good exam question for an economics course.

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It's not been a good week for federal agencies

First, it was the dubious decision of the Federal Trade Commission to sue to enjoin the proposed merger between natural foods grocers Whole Foods Markets and Wild Oats Markets.

Then, as this Daniel Drezner post notes, Federal Communications Commission chairman Kevin Martin chose a rather interesting way to criticize the Second Circuit Court of Appeals decision this week striking down the FCC's policy governing "fleeting expletives" on television.

So it goes in the wacky world of governmental regulation.

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June 7, 2007

Giuliani's hypocrisy

Doug Berman notes that Rudy Giuliani thinks that Scooter Libby got a raw deal. That is unquestionably correct, but what Giuliani failed to mention is that he is one of the politicians primarily responsible for the culture of criminalization that gobbles up productive citizens such as Libby.

As noted earlier here and here, Giuliani's politically-motivated prosecution of Michael Milken and related destruction of Drexel Burnham during the late 1980's ignited the criminalization of business interests that reached its peak with the destruction of Arthur Andersen, the prosecution of former Enron executives Jeff Skilling and Ken Lay last year and the ongoing trial of former Hollinger CEO Conrad Black this year. Indeed, the Bush Administration's willingness to toss business interests into the cauldron of internecine criminal prosecutions for transient political purposes has largely undermined the Republican Party's credibility in challenging the motives of dubious white collar prosecutions of businesspersons or politicians.

And lest you think that rich and powerful people are the only ones affected by what Giuliani has helped wrought, remember the name of Lisa Jones. As Daniel Fischel brilliantly explains in his book Payback: The Conspiracy to Destroy Michael Milken and his Financial Revolution (Harper-Collins 1995), Jones is a remarkable American success story -- a teenage runaway and high school dropout who worked her way up through the ranks of Drexel to become the top assistant to one of Drexel's most successful traders. Giuliani threatened to indict Jones in an effort to get her to turn on Milken (sound familiar?), but Jones refused to give in and remained loyal to Milken and Drexel to the end. Giuliani eventually prosecuted and convicted Jones for crimes that were never proven (sound familiar?) and she was sentenced to a year and a half in prison, later reduced to ten months. Other than Milken, Jones was the only longtime employee of Drexel Burnham who ever spent time in prison.

I don't know about you, but that's not the political legacy I'm looking for in a presidential candidate.

Posted by Tom at 4:15 AM | Comments (2) | TrackBack (0)

Ron Paul shines on The Daily Show

Republican Congressman and GOP Presidential candidate Ron Paul from the Houston area exhibits a deft media touch while handling an interview by Jon Stewart of The Daily Show.

Banjo Jones must be proud.

Paul's political warts and quirks -- and there are many -- will become exposed as the campaign wears on. However, his willingness to speak his mind -- a rarity in American Presidential campaigns -- is refreshing.

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June 2, 2007

Edwardsian demagoguery

As if on cue after this post from yesterday, Democratic Presidential candidate John Edwards is engaging in his usual brand of demagogery (earlier examples here):

Democratic presidential hopeful John Edwards says a wave of mergers in the oil industry should be investigated by the Justice Department to see what impact they have had on soaring gasoline prices.

During a campaign stop in Silicon Valley Thursday, Edwards planned to berate the oil industry for "anticompetitive actions" and outline an energy plan he says would reduce oil imports "and get us on a path to be virtually petroleum-free within a generation."

"Vertically integrated companies like Exxon Mobil own every step of the production process -- from extraction to refining to sale at the pump, enabling them to foreclose competition," says an outline of Edward's energy plan.

Now, you can peruse the "Economics-Energy Prices" category archive of this blog and find many credible resources that utterly debunk Edwards' theory regarding the cause of rising gasoline prices. But Andrew Morriss, one of Larry Ribstein's colleagues at the University of Illinois College of Law, provides this handy SSRN paper in which he cogently explains that governmental interference with gasoline markets has a far larger impact on gasoline prices than anything Exxon Mobil does:

Rising gasoline prices have brought energy issues back to the forefront of public policy debates. Gasoline markets today are the result of almost a hundred years of conflicting regulatory policies, which have left them dangerously fragmented. In this article, I analyze that regulatory history, highlighting the unintended consequences of regulation that have pushed the United States into a series of loosely connected regional markets rather than a broad, deep national market. This fragmentation leaves the American economy is vulnerable to natural disasters, terrorist attacks, and foreign dictators in ways that it need not be. It also produces higher prices for consumers and reduced innovation by refiners.

TigerHawk understands, too.

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June 1, 2007

What is it about John Edwards?

Presidential politics is outside the usual scope of this blog, but Democratic candidate John Edwards is a lawyer and was so underwhelming as the 2004 Democratic Vice-Presidential candidate that he became a fairly regular topic with his frequent gaffes. Well, along those lines, in this article in this week's Time magazine, former Kerry campaign advisor Bob Shrum new book is previewed and here's some of what Shrum has to say about Kerry's first meeting with John Edwards when he was considering him as the VP candidate:

Kerry talked with several potential picks, including Gephardt and Edwards. He was comfortable after his conversations with Gephardt, but even queasier about Edwards after they met. Edwards had told Kerry he was going to share a story with him that he'd never told anyone else—that after his son Wade had been killed, he climbed onto the slab at the funeral home, laid there and hugged his body, and promised that he'd do all he could to make life better for people, to live up to Wade's ideals of service. Kerry was stunned, not moved, because, as he told me later, Edwards had recounted the same exact story to him, almost in the exact same words, a year or two before—and with the same preface, that he'd never shared the memory with anyone else. Kerry said he found it chilling . . . [. . .]

Kerry also wanted a specific reassurance. He asked Edwards for a commitment that if he was chosen and the ticket lost, Edwards wouldn't run against him in 2008. Edwards agreed "absolutely," as Kerry recalled him saying. If Kerry had shared this at the time, I would have told him what I did later: it was naive to think he could rely on a promise like that.

Shrum also alleges that Edwards told him that wanted to vote against the Iraq War, but didn't do so because he thought it would hurt his career.

Now, Shrum has not been the most successful political advisor, so perhaps these allegations should be taken with a grain of salt as the sour grapes of a bitter man with an ax to grind. But much of it sure seems consistent with what was revealed about Edwards during the 2004 campaign. Given his lackluster performance during the 2004 campaign, and now with a former prominent Democratic Party advisor throwing him under the campaign bus, how does Edwards remain a serious political candidate?

Perhaps the answer lies somewhere in this development.

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May 31, 2007

Mapping political contributions

This is interesting. Maplight.org is a new Web site that attempts to correlate lawmakers’ voting records with the money they’ve accepted from special interest groups. Other sites such as OpenSecrets.org provide information on the source of candidates financing, but to my knowledge, Maplight.org is the first site that attempts to establish the relationship between money given and votes actually cast.

Click the "Video Tour" button on the home page and the site takes you through a six-minute video that illustrates the site's purpose. In deliberating on the U. S.- Oman Free Trade Agreement, the video reveals that special interests in favor of the bill -- such as pharmaceutical companies and aircraft manufacturers -- gave each senator an average of $244,000. On the other hand, lobbyists for the anti-poverty and consumer groups that opposed the bill could generate only $38,000 per senator. Under the "Timeline of Contributions" button, you can see that the contributions increased during the six weeks leading up to the vote and a hyperlink is provided to the name of each member of Congress so that you can see how much money each legislator received.

Oh yeah, in case you had any question about it, the bill passed. ;^)

Maplight.org is not particularly user-friendly, but the folks who designed the website are still adding features and data to the site. It's definitely worth plugging around for awhile and checking back in on from time to time. As they say in the smoke-filled rooms, it's always good to know who is for sale in Washington. ;^)

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April 25, 2007

Go Barney Go!

Barney Frank, that conflicted anti-business Congressional crusader (see here and here) who is nevertheless challenging the federal government's ludicrous prohibition of internet gambling, has decided to introduce legislation to overturn the prohibition, and he thinks it has a chance of passing.

Good for Barney. But how sad is it that Rep. Frank -- who is essentially a socialist with regard to economics, business and big government issues -- is one of the only national politicians who is willing to advocate reasonable and common sense restraints on the federal government's prosecutorial power against business interests?

Posted by Tom at 4:30 AM | Comments (1) | TrackBack (0)

April 22, 2007

Protecting the Metroplex from the evils of poker

This post from late last year reported on the dubious policy of the Dallas Police Department to deploy SWAT teams to bust peaceful poker games. To update that precarious state of affairs, Radley Balko passes along this long email from a fellow who was arrested during one of the raids, even though he was simply chopping veggies for the gamblers to eat. The following is a glimpse of what occurred during the raid:

The raid occurred around 7:40 p.m. I was in the kitchen area which was just inside the front door when suddenly there was loud banging from the door. Within seconds, the room was full of Dallas SWAT officers yelling for everyone to put their hands in the air. Behind the Dallas SWAT team came many more law enforcement officers and several camera crews for the A&E reality show, Dallas SWAT. The camera crew’s chests were clearly marked as “A&E Film Crew.”

Bear in mind that, prior to police entering, the place was virtually quiet. There was the sound of poker chips in the air, but not much else. The players were essentially professionals and working stiffs having fun…there were doctors, lawyers, accountants, and other professionals. There was hardly anything “dangerous” about the place at all. In fact, the cops found no weapons in the facility or on anyone there. The show of force and weaponry brought by the cops was simply outrageous and unjustified, given the circumstances, but, then again, are they enforcing the law or making a TV show?

Read the entire post. Feel safer?

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April 18, 2007

Thoughts on the tragedy at Virginia Tech

The New York Times:

Sympathy was not enough at the time of Columbine, and eight years later it is not enough. What is needed, urgently, is stronger controls over the lethal weapons that cause such wasteful carnage and such unbearable loss.

Art DeVany:

The Virginia Tech tragedy reminds me, sadly, of what John Lott said in his article that I posted a few days ago. He said students were sitting ducks because of college gun laws. If only one student had been carrying a gun -- and guys in Blacksburg know how to handle guns -- it might have been very different.

The London Times Online:

The simple truth is that Americans themselves remain unwilling to take drastic measures to restrict gun availability. This is rooted deep in the American belief in individual freedom and a powerful suspicion of government. Americans are deeply leery of efforts by government to restrict the freedom to defend themselves. A sizeable minority, perhaps a majority, believe the risk that criminals will perpetrate events such as yesterday’s is a painful but necessary price to pay to protect that freedom.

William Anderson, commenting on Columbine after the 9/11 attacks, but equally applicable to Virginia Tech:

When the police arrived after hearing reports of a massacre under way inside Columbine High School, they did not storm the building to catch the criminals. Instead, these heavily armed officers, wearing their famous coalscuttle helmets, surrounded the outside of the school, "sealing the perimeter," according to their spokesmen.

Inside the high school, Eric Harris and Dylan Kliebold were running freely through the halls, merrily killing and wounding unarmed teachers and students as they tried to escape. In the end, the police didn’t even have to fire a shot, as the two miscreants ended their own lives. Thus, people were treated to a worthless show of force by the authorities, which did almost nothing to save anyone caught in the building.

David Kopel channels that thought in this WSJ ($) op-ed:

At Virginia Tech's sprawling campus in southwestern Va., the local police arrived at the engineering building a few minutes after the start of the murder spree, and after a few critical minutes, broke through the doors that Cho Seung-Hui had apparently chained shut. From what we know now, Cho committed suicide when he realized he'd soon be confronted by the police. But by then, 30 people had been murdered.

But let's take a step back in time. Last year the Virginia legislature defeated a bill that would have ended the "gun-free zones" in Virginia's public universities. At the time, a Virginia Tech associate vice president praised the General Assembly's action "because this will help parents, students, faculty and visitors feel safe on our campus." In an August 2006 editorial for the Roanoke Times, he declared: "Guns don't belong in classrooms. They never will. Virginia Tech has a very sound policy preventing same."

Actually, Virginia Tech's policy only made the killer safer, for it was only the law-abiding victims, and not the criminal, who were prevented from having guns. Virginia Tech's policy bans all guns on campus (except for police and the university's own security guards); even faculty members are prohibited from keeping guns in their cars.

Peter Gordon:

Few differences are as clarifying as attitudes towards "gun control". (The quotation marks give me away.) (1) Control advocates trust the authorities to protect us -- and to somehow enforce gun control (consider long-standing attempts at heroin control and consider how carefully the DMV screens auto drivers); and (2) Gun control advocates cannot distinguish between the gun and the owner. Mere access makes us all equally dangerous. I have problems with both thought patterns.

And even amidst the terrible carnage, courage and humanity still shine:

A 76-year-old Jewish-Romanian lecturer was hailed a hero after blocking his classroom door long enough for many of his students to escape the Virginia Tech gunman, before being shot dead.

Liviu Librescu, a Holocaust survivor, pressed himself against the door of the classroom while shots were fired in the corridor and surrounding rooms. He stood firm, attempting to barricade the door, while his students clambered out of the windows.

The last person to see Professor Liviu Librescu alive appears to have been Alec Calhoun, a student at Virginia Tech who turned as he prepared to leap from a high classroom window to see the elderly academic holding shut the classroom door. The student jumped, and lived. Minutes later, the professor was shot dead.

There is no meaningful distinction between one relative’s grief and another’s sorrow as the bereaved converge on Blacksburg from as near as Roanoke and as far as India. But it is worth reflecting on the significance of Professor Librescu’s life of quiet heroism, which encompassed the Holocaust, a career of internationally admired teaching and research, and a final act of sacrifice that saved at least nine other lives.

The son of Romanian Jewish parents, he was sent to a Soviet labour camp as a boy after his father was deported by the Nazis. He was repatriated to communist Romania only to be forced out of academia there for his Israeli sympathies. A personal intervention by Menachem Begin enabled him to emigrate with his wife to Israel, from where he visited the US on a sabbatical in 1986, and chose to stay. The appalling ironies of his murder by a crazed student after a life of such fortitude and generosity will not be lost on anyone who hears his story.

Yet neither should those who mourn him forget the role that America played in his life. As for so many other survivors of the mid-20th century’s genocidal convulsions, the US was for this inspiring teacher both a beacon of hope and a welcoming new home. Founded on the idea of liberty, it also made, for him, a reality of that idea. Let those he saved now make the most of it.

Update: The NY Times has more on Professor Librescu here.

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April 10, 2007

Washington's biggest business

The Washington Post has just concluded this 27 installment series over the past couple of months on lobbying in Washington, D.C. Although not particularly analytical in terms of evaluating the costs and benefits of lobbying, the series is well worth reading as a thorough review of the enormous growth of the business over the past generation. The following is from the final installment:

As the reach of the federal government extended into more corners of American life, opportunities for lobbyists proliferated. . . Over these three decades the amount of money spent on Washington lobbying increased from tens of millions to billions a year. The number of free-lance lobbyists offering services to paying clients has grown from scores to thousands. [Lobbyist Gerald S.J.] Cassidy was one of the first to become a millionaire by lobbying; he now has plenty of company.

The term "lobbyist" does not do full justice to the complex status of today's most successful practitioners, who can play the roles of influence peddlers, campaign contributors and fundraisers, political advisers, restaurateurs, benefactors of local cultural and charitable institutions, country gentlemen and more. They have helped make greater Washington one of the wealthiest regions in America.

The entire series is here.

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March 26, 2007

The Gonzales affair

I leave to the political blogs the current spat over former Houstonian and current Attorney General Alberto Gonzales' handling of the firing of eight U.S. Attorneys from various parts of the country, but I did chuckle over Jay Leno's comment from one of his monolouge's from late last week:

President Bush held a news conference where he accused the Democrats of playing politics with the firing of the U.S. attorneys. You know, the attorneys he fired for not playing politics.

I don't know enough about the facts of this affair to make an informed judgment on what ought to be done. However, it does occur to me that the President should be a bit troubled that his Attorney General does not know how to fire some subordinates properly. The database of emails relating to the firings is here.

Posted by Tom at 4:20 AM | Comments (1) | TrackBack (0)

March 9, 2007

Levinson and Balkin on the Dred Scott case

Longtime University of Texas Law Professor Sandy Levinson has teamed up with Jack Balkin of Balkinization fame to author a new SSRN paper, 13 Ways of Looking at Dred Scott. For a provocative abstract, check the following out:

Dred Scott v. Sanford is a classic case that is relevant to almost every important question of contemporary constitutional theory.

Dred Scott connected race to social status, to citizenship, and to being a part of the American people. One hundred fifty years later these connections still haunt us; and the twin questions of who is truly American and who American belongs to still roil our national debates.

Dred Scott is a case about threats to national security and whether the Constitution is a suicide pact. It concerns whether the Constitution follows the flag and whether constitutional rights obtain in federally held lands overseas. And it asks whether, as Chief Justice Taney famously said of blacks, there are indeed some people who have no rights we Americans are bound to respect.

Dred Scott remains the most salient example in debates over the legitimacy of substantive due process. It subverts our intuitions about the relative merits of originalism and living constitutionalism. It symbolizes the problem of constitutional evil and the question whether responsibility for great injustices lies in the Constitution itself or in the judges who apply it.

Finally, Dred Scott encapsulates the central problems of judicial review in a constitutional democracy. On the one hand, Dred Scott raises perennial questions about the judicial role in cases of profound moral and political disagreement, and about judicial responsibility for the backlash and political upheaval that may result from judicial review. On the other hand, the political context of the Dred Scott decision suggests that the Supreme Court rarely strays far from the wishes of the dominant national political coalition. It raises the unsettling possibility that, given larger social and political forces, what courts do in highly contested cases is far less important than we imagine.

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March 7, 2007

The politics of destruction

In this International Herald Tribune article, Michael Oxley -- the "Oxley" of the Sarbanes-Oxley corporate governance statute -- confirms the vacuous nature of the politicians who passed that destructive law and encouraged the destruction of Arthur Andersen and various Enron executives:

Presiding over a recent dinner in Paris for more than 200 accountants, Oxley — the former Republican congressman from Ohio and co-author of the Sarbanes-Oxley corporate governance law — was asked during the question period whether he realized he had helped create one of the most crushing financial burdens ever imposed on business.

Was Oxley aware, his questioners asked, that the law that he and Senator Paul Sarbanes, a Maryland Democrat, rushed onto the books five years ago after the collapse of Enron and WorldCom had contributed to a sharp decline in listings on U.S. stock exchanges? And, knowing what he knows now about the cost and effects of the law, would Oxley — who retired in January after 25 years in Congress — have done it any differently?

"Absolutely," Oxley answered. "Frankly, I would have written it differently, and he would have written it differently," he added, referring to Sarbanes. "But it was not normal times." [. . .]

"Everybody felt like Rome was burning," Oxley, 62, recalled during an interview after the dinner in Paris. "People felt like they were getting cheated. It was unlike anything I had ever seen in Congress in 25 years in terms of the heat from the body politic. And all the members were feeling it."

Until that moment, a bill to tighten corporate controls had been languishing in the Congress for years, held back by lobbying by big business. But suddenly, the impetus was there, and the firestorm led Oxley, then head of the House committee that oversees America's financial services industry, to quickly push forward a solution based on that measure to calm the hysteria of voters.[ . . .]

in the summer of 2002, with pressure also mounting from the administration of President George W. Bush, there was no question that the bill needed to be pushed through, however imperfect.

"The president called Paul and I down to the White House almost immediately after the Senate passed its bill, 97 to 0" on July 15, Oxley recalled.

"I remember it was in the Cabinet Room and you could see the pressure he was under because the Democrats were pressing his relationship with 'Kenny boy'" — a reference to Kenneth Lay, the chief executive of Enron, who had sought help from the administration to avoid a bankruptcy filing in the weeks before the giant energy trading company collapsed.

"The president basically said, 'Get this wrapped up,'" Oxley said. The House and Senate quickly agreed on a new draft, and Bush signed the bill into law on July 30. [. . .]

A month later, Arthur Andersen, the accounting firm that had been convicted of obstructing the government's investigation into the collapse of Enron, declared bankruptcy after 89 years in business, crushed by Enron-related liabilities.

The Andersen prosecution was "a White House decision," Oxley said. "They had to really look tough and so they decided at the highest levels they w