Tag Archives: government

Progressive “Capitalism”

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The Wall Street Journal describes some concerning our illustrious Treasury Secretary nominee.

The terms of Mr Lew’s original employment contract with Citi included a bonus guarantee if he left the bank for a “high level position with the United States government or regulatory body.”

Most companies include incentives for top employees not to leave, but in this case the contract was written to reward Mr Lew for treating the bank like a revolving door.

There’s more:

…former Treasury Secretary Robert Rubin, who was paid more than $115 million while encouraging the risk-taking that would have destroyed Citi if not for a taxpayer rescue.

Mr Rubin was Mr Lew’s patron at the bank.  Mr Lew’s contract suggests that Citi knew from the start that Mr Lew was headed back to a powerful job in Washington, and that it wanted him to remember the bank fondly when he left.

Hmm….

 

h/t Falkenblog

Obama and our Constitution

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Michael Mukasy, President George Bush the Younger’s last Attorney General, in a recent Wall Street Journal op-ed described President Barack Obama’s leaked (should I say “surreptitiously released?”) white paper memo concerning presidential authority to conduct drone warfare, including against American citizens overseas.  Mukasey had this to say, in part, about the memo:

The memo mentions the president’s constitutional responsibility under Article II to defend the country, but it grounds the president’s authority to act not in the Constitution but in “the inherent right of the United States to national self-defense under international law…and the existence of an armed conflict with al-Qa’ida under international law.”

A moment’s reflection yields the insight that the US government’s powers are defined by the Constitution, not by international law, and that in any event international law is a highly elusive concept, there being no universally recognized source for it.  Yet here the Obama administration seems to prefer abandoning the Constitution altogether rather than relying on an inherent presidential power….

Because the Constitution is more than 100 years old, hard to understand, and not binding on anything, anyway.  And a law “professor” says we ought to just do away with it.  Plainly, our president buys that line, too.

Poverty and Welfare

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The connection isn’t only moral.  It’s economic, also, as new research is showing.

Richard Vedder, an economics professor at Ohio University says that our exploding welfare state has led to an American poverty rate of 14%—these welfare programs actually are

creating a dependency on government, which is unhealthy both for the individuals involved and their children, and also for the broader society[.]

Specifically, Department of Labor statistics show four programs in particular contribute to  Americans’ increasing dependence on government.

  • Food stamps, or The Supplemental Nutrition Assistance Program, as it’s now known.  Nearly 30 million more Americans receive them than in the year 2000.
  • Social Security Disability: 3 million Americans  received payments in 1990—today it’s 8.6 million.
  • Pell grants: 3.9 million students were awarded them in 2000.  Today it’s 9.7 million, even though  nearly half of graduates work in jobs that require no degree.
  • And extended unemployment benefits: 26 weeks had been the standard—today it’s 52 weeks or more for many [and during the Panic of 2008 and ensuing Obama Recovery, it’s run as long as 99 weeks].

This isn’t just academic theorizing, though.  Doug McKelway, in his article at the above link, talked, among others, to a sandwich shop owner in Maryland:

Kyle Murphy…described how anecdotal evidence he sees as an employer jibes with Vedder’s assessment.  He often sees new hires quit to seek government benefits.

“The people who know how to use the system best get the most out of it.  It’s not necessarily the people who need the assistance the most,” he said.  Murphy has seen many of his employees quit jobs, then claim they were fired to obtain unemployment benefits.

Vedder concludes,

We have had nearly four decades with growing incomes, rising standard of living for the majority, yet the poor have grown in number even as a proportion of the population.  So some of these policies are not working.

I’m more cynical: since they create a captive collection of voters for the hander-outers in government, maybe they are working.  Never mind that the outcome puts our republic at risk.

China’s Economic Course

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In a nation that’s facing a demographic implosion (a birth rate of around 1.5 against a rate of roughly 2.1 required to maintain current population levels, and an aging population (expected by 2050 (the current generation plus their children) to have four workers in the age band 50-64 for every three aged 15-29, and for every 100 people aged 20-64, 45 over 65), that chronically lives on the edge of famine, and that has a population increasingly aware of what could be compared to what is, the PRC government is not treating its poor or its farmers (22% of whom will be over 65 as early as 2030—the current generation) very well.  And so it’s not treating its society or its economy with any foresight.

For instance:

In December 2010, when [Fu Liang]  says a campaign of harassment drove him off the small plot where he ran a fish farm, the local government paid Mr Fu just nine yuan ($1.45) a square meter for it.

The plot was quickly resold for 640 yuan [$103.11] per square meter to a developer, a national database of land transactions shows.  The developer has built villas that sell for 6,900 yuan [$1,111.67] a square meter.

A markup of a factor of nearly 10 at each stage.  Fu’s 9 yuan meter of fish farm was worth far more than he was paid.  In another sense, it was priceless, since he didn’t want to sell.

Mr Fu now is unemployed, one among tens of thousands of former farmers who inhabit the impoverished fringes of Chengdu, a city in southwestern China.  He has no heart to start another business.  “What’s the point if the government can just destroy it?” he says.

With no sense of irony, the PRC’s new president, Xi Jinping, claims to want strengthen that demographically unstable society and its unstable economy—through property (land) ownership.  After all, as Fu pointed out,

precarious land rights mean little incentive to invest in improving agricultural output, and no asset that can be sold to fund a move to the city.  Low compensation for the millions ousted from their land—coupled with ineligibility for social benefits because they aren’t registered as urban residents—means for many a life of poverty on the edges of the cities.

And no incentive to bring additional children—boys only, mind, in a mandated one child environment, with the bias’ own long-run population sustainability implications—into the world.  And the one-child policy was put in place explicitly to achieve the population reduction about to occur sharply.

Fat chance for any serious change:

“Push forward scientific development and advance social harmony,” proclaims a banner draped across one construction site, parroting a catch phrase of Xi’s predecessor, Hu Jintao.  Mr Fu, surveying a noodle bowl of highway overpasses, said, “A few years ago, this was all farmland.”

Because farmland—the means of feeding the population—stands in the way of progress.  Xi will have a great deal of trouble reversing that, especially with the money to be made converting farmland to urban land.

Friends, Americans, Countrymen

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With apologies to William Shakespeare, who knew more about politics and economics than generally is appreciated, here is a possible eulogy if we’re not very careful.

Friends, Americans, countrymen, lend me your ears;
I come to bury liberty, not to praise it.
The evil that men do lives after them;
The good is oft interred with their bones;
So let it be with individual liberty. The noble Obama
Hath told you it was ambitious:
If it were so, it was a grievous fault,
And grievously hath it answer’d it.
Here, under leave of Obama and the rest—
For Obama is an honourable man;
So are they all, all honourable men—
Come I to speak in liberty’s funeral.
It was my friend, faithful and just to me:
But Obama says liberty is ambitious;
And Obama is an honourable man.
It hath brought morality home to America
Whose prosperity did the general coffers fill:
Did this in liberty seem ambitious?
When that the poor have cried, liberty wept:
Ambition should be made of sterner stuff:
Yet Obama says it was ambitious;
And Obama is an honourable man.
You all did see that on the taxing
Men thrice reduced them,
Whence men did thrice prosper: was this ambition?
Yet Obama says “investment” is less ambitious;
And, sure, he is an honourable man.
I speak not to disprove what Obama spoke,
But here I am to speak what I do know.
You all did love liberty once, not without cause:
What cause withholds you then, to mourn for it?
O judgment! thou art fled to brutish beasts,
And men have lost their reason. Bear with me;
My heart is in the coffin there with liberty,
And I must pause till it come back to me.

…

But yesterday the word of liberty might
Have stood against the world; now lies it there.
And none so poor to do it reverence.
O masters, if I were disposed to stir
Your hearts and minds to mutiny and rage,
I should do Obama wrong, and Reid wrong,
Who, you all know, are honourable men:
I will not do them wrong; I rather choose
To wrong the dead, to wrong myself and you,
Than I will wrong such honourable men.
But here’s a parchment with the seal of liberty;
I found it in its closet, ’tis its will:
Let but the commons hear this testament—
Which, pardon me, I do not mean to read—
And they would go and kiss dead liberty’s wounds
And dip their napkins in its sacred blood,
Yea, beg a hair of it for memory,
And, dying, mention it within their wills,
Bequeathing it as a rich legacy
Unto their issue.