Monthly Archives: March 2016

In Which Mr Pollock Is On The Right Track

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Alex Pollock is a Distinguished Senior Fellow at the R Street Institute, and he had a suggestion regarding Fannie Mae and Freddie Mack.

The moment Fannie and Freddie have returned to the government cash equal to all the principal and a full 10% annual return [a goal to which F&F are very close], Congress should declare the Treasury’s senior preferred stock as retired,….

Following this, Fannie and Freddie would be very close to the non-government controlled private enterprises they should be.

But then Pollock veered off the track.

…and simultaneously that these companies be treated as systemically important financial institutions.

In a truly free market economy, there is no such thing as a systemically important financial institution; the very concept is a complete non sequitur.

Aside from that, designating these as SIFIs both would keep taxpayers on the hook to bail these institutions out the next time their poor judgment or bad luck straiten them, and it would increase the likelihood of their bankruptcy by reducing risk and thereby removing incentives to behave more cautiously and fiscally responsibly in that free market.

Dissent Democrat Style

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The Democrats in the Federal government permit dissent: they dissent from anyone else’s right to dissent.  Here’s a case in point.

Attorney General Lynch told the Senate last week that her department had referred a request to prosecute climate dissent to the Federal Bureau of Investigation.  Specifically, it was referred to the FBI’s criminal investigative division.

Yep.  President Barack Obama’s (D) Attorney General actually referred a case of disagreeing with the Left to the FBI for criminal investigation.  Or for a security review.

One of the Senators questioning Lynch at that hearing was Sheldon Whitehouse (D, RI), of RICO the dissenters infamy.  While he wondered idly about using the FBI in a “civil” case of suing climate scientists for dissenting over global warming, he had nary a word about the criminal investigation, nor even Lynch’s decision to refer dissent for criminal investigation in the first place.

Tough To Do Inside the EU, Though

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Here’s an area where it really would be good to look like Europe, or at least the UK part of it.

UK Treasury chief George Osborne unveiled a major shake-up of corporate taxes in Britain on Wednesday, saying he intends to lower the main rate companies pay to less than half the rate levied on firms in the US.

Of course, such tax rate competition is hard to do in the EU, what with the European Commission’s utter dislike for it.

It may be that the British really will need to leave the European Union, if they want to compete in the global economy.

The House Budget Blueprint On Offer

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The debate is well worth having.

House conservatives have vowed to block a fiscal 2017 budget put forth by Republican leadership Tuesday, saying it doesn’t cut spending enough and creating uncertainty over the GOP’s ability to pass a fiscal blueprint this year.

Never mind that the blueprint cuts spending by $6.5 trillion over the next 10 years and, if future Congresses stick to the plan would eliminate deficits and so permit beginning to pay down the nation’s $19 trillion debt.  The cuts in the first year of these 10 years don’t go far enough to suit these self-styled conservatives (small-c, you’ll note).

It’s certainly true that real cuts in the hand are worth two (or more) promised cuts in later years; however, this is the first budget plan in decades that actually, explicitly promises those later cuts and to that concrete end.

But: as these guys consider blowing up another budget plan, they need to ask themselves how much spending they’ll be able to cut if they force a plan that has no hope of being enacted?  What do they think will be the value of their political symbolism?

Federally Mandated Wages

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Here’s another fiasco-in-waiting being manufactured by the Progressive-Democrat Party and its leader, President Barack Obama.

The Obama administration has advanced to the final stages a contentious rule that will make millions more Americans eligible for overtime pay….

The Labor Department sent its final version of the overtime-pay regulation to the White House Office of Management and Budget on Monday for review, according to an administration official.

This rule will force employers to pay overtime for hours worked beyond 40 in a week to salaried workers whose annual basic salary is $50,440 or less—an increase of more than 200%.

As any grade schooler who’s on an allowance knows, when the price of something goes up, the grade schooler buys less of that thing.  When the price of labor goes up….

This government interference in the private economy will have two effects: salaried employees who used to put in the overtime now will be barred from that—to the overall detriment of the company’s productivity and so competitiveness, and from that to the detriment of the jobs of that company.

Alternatively, the company, in an effort to maintain company-level productivity, will suck up and pay the overtime.  This will drive up the cost of the company’s products, reduce the funding available for R&D, and from that harm the competitiveness of the company to the detriment of the jobs at that company.

Alternatively, the company will hire fewer workers, replace fewer workers who depart for any of a variety of reasons, to the detriment of employment generally.

These folks of the Left know that; they’re some of the smartest people around, as they assure us.  But, hey—union votes.