Monthly Archives: January 2016

It Must Be Dissolved

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Consumer Financial Protection Bureau, that is. Consider this example of its egregious behavior. When one of CFPB’s internal judges decided that

a New Jersey lender [PHH Corp] took illegal “kickbacks” from mortgage insurers, boosting costs for borrowers[,]

he fined the company $6 million. PHH appealed.

Richard Cordray, Director of the CFPB, took personal charge of the case and raised the penalty to $109 million. How dare a private company dispute with the CFPB!?

This abuse of power, even a power that the Democratic Party-controlled House and Senate conferred on the CFPB, together with a budget consisting of a blank check drawn on the Federal Reserve Bank System, when they created this thing six years ago, is a clear demonstration of the need to get rid of the CFPB and everything and everyone associated with it.

PHH’s case has been appealed to the DC Circuit, but there’s no need to wait. Get rid of this abusive, unaccountable board. Put this abusive, unaccountable Boyar out of a job.

The Supreme Court and Utilities

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The Supreme Court on Monday upheld the federal government’s ability to spur incentives for industrial businesses, schools and other large energy consumers to reduce power usage at times of peak demand.

The court, in a 6-2 ruling by Justice Elena Kagan, said the Federal Energy Regulatory Commission acted within its powers when it issued an order in 2011 requiring higher levels of compensation for some power customers that agreed to reduce their electricity use.

The Court likely is right on this, in that FERC’s rule is within the confines of the underlying law. However, this still is the government picking winners and losers, and this still is the government dictating to private enterprise what it must do.

The corrective answers that are required, then, are two: one is to withdraw FERC’s authority to issue such rules, to rescind Congress’ delegation of such rule-making to FERC (such a rescission is required across the board, but that’s for another writing).

The other required answer is to alter the underlying law that the FERC rule was…fleshing out. It’s a law that is no longer necessary and that, as the FERC rule demonstrates, has become vulnerable to Executive Branch abuse.

That law is Section 201 of the Federal Power Act, which

empowers FERC to regulate “the sale of electric energy at wholesale in interstate commerce.”

Congress’ authority (not an Executive Branch agency’s) to regulate interstate commerce is constitutionally limited to regularizing commerce among the States, not to dictate the terms of that commerce. Of course, for Congress to recover this authority and its limits, a third required answer consists of correcting a number of Supreme Court mistakes regarding how far Big Government may reach inside any State to regulate commerce there.

Party vs Party

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I’ve been on about a critical difference between the Democratic Party and the Republican Party in past posts. The difference of interest is in each Party’s belief in actual (republican) democracy: the Democrats prefer to settle deals behind closed doors and out of the public’s eye, and the Republicans are not at all timid about having their discussions out loud and out in front of their constituents and American voters generally. One Party talks democracy; the other Party lives it.

Here is that difference made manifest. Iowa Caucus‘ table lays out, side by side, the two Party’s procedures for running a caucus. It’s a long-ish table; I’ll summarize the salient points here.

Both parties use straw votes at caucus centers to identify Party voter preferences for candidates.

The Republican caucus has no minimum threshold for a candidate to get a delegate selection from the caucuses. There’s no guarantee that the succeeding conventions within Iowa will use the results of the straw poll for formal selection of delegates to the Party’s national convention, but there’s no pressure not to.

The Democrat caucus actively silences minority candidates—anyone with less than 15% of the caucus-goers’ support can kiss his role in the Iowa contest good-bye: he’s disqualified. Further, those caucus-goers who amount to that less than 15% support are actively pressured to change their allegiance to another candidate. It gets…better: that 15% threshold and active pressure to change allegiance carries through to every stage of formal Iowa delegate selection for the Democrats’ national convention.

So much for the value of the little guy’s input.

Delays, Delays

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Stalls, stalls. That’s what State is doing over the Clinton email national security disaster with its latest request to be “late” delivering the court-ordered documents.

“The Clinton email team must perform its work on site. … This storm will disrupt the Clinton email team’s current plans to work a significant number of hours throughout the upcoming weekend and could affect the number of documents that can be produced on January 29, 2016,” agency lawyers wrote in their request.

No. State has been stalling and outright obstructing this release for years—that’s why the matter is before a Federal court and under that court’s order and nominal supervision to deliver on a set schedule in the first place. All through that ordered schedule, too, State has continued to delay, stall, obstruct, release at less than the court-ordered rate. The latest such stall was when State whined that the Christmas holiday schedule for their precious email sorters was more important than complying with the Court’s order and the people’s right to know what Democratic Party Presidential candidate was doing with her private, unprotected email server while she was Secretary of State. This storm would be irrelevant if State had complied with the original requests in the first place, or had complied with the court’s order in the second place.

No. State plainly is now in contempt of court. The Federal judge needs to hold, promptly, a hearing wherein State supervisory personnel should show cause why they shouldn’t be jailed for their contempt until the emails have been delivered and the contempt condition resolved.

Another Advantage

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…of low oil prices. Low prices are good for American consumers, especially in winter, when we not only have to drive, but we have to heat our homes.

Here’s an additional advantage, though.

But falling crude prices, US-led sanctions and diminished oil exploration threaten Russia’s oil industry and raise questions about its capacity to continue underwriting President Vladimir Putin’s ambitions at home and abroad.

Sanctions hurt Russia in a lot of economic ways, but that interference with Putin’s designs on eastern Europe can last only as long as the sanctions régime holds up. The falloff in exploration actually would work to Russia’s (and Iran’s) benefit, were it to last a long time, as that would diminish supply relative to demand, and so would raise oil prices.

That’s the kicker, though. Russia (and Iran) need $100+ oil in order to balance their budgets. Today’s $30 price, which I think will last at least into the intermediate future, if fracking and shale oil haven’t more permanently altered the supply availability environment, means that if Putin wants to continue his aggression against his neighbors, if he wants to continue to try to reconquer those nations and so reconstitute the old Soviet Union empire, he’ll have to borrow money to do so.

However, the only thing he has with which to repay such debt is revenue from oil and natural gas sales; the Russian economy is that dependent on extraction—it produces nothing else. At today’s prices, Putin will have to sell 3+ times as much oil as he would have had to just a couple of years ago. That creates a vicious circle: the more oil he produces and sells, the longer downward pressure on oil price continues.

And with Iranian production entering the market shortly, courtesy of Khamenei’s Best Bud President Barack Obama, those prices will be the recipient of additional downward pressure.