Tag Archives: political economy

More Excessive Government

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US financial regulators are focusing renewed attention on Wall Street pay and are designing rules to curb compensation packages that could encourage excessive risk taking.

Regulators are considering requiring certain employees within Wall Street firms hand back bonuses for egregious blunders or fraud as part of incentive compensation rules the 2010 Dodd-Frank law mandated be written, according to people familiar with the negotiations. Including such a “clawback” provision in the rules would go beyond what regulators first proposed in 2011 but never finalized.

Congress created a bureaucracy, and it expanded it enormously with that Dodd-Frank. Now the bureaucrats have to do something to justify their existence. Regulators gotta regulate. And so we get this.

Never mind that the free market is a fine regulator, and “certain employees” and their “Wall Street firms” employers will be severely and promptly regulated when those excessive risks fail.

Government intrusion isn’t just not needed, though, it’s counterproductive. Now businesses, on and off Wall Street, will incur additional costs as they seek compliance, additional costs as they seek work-arounds, additional costs from the expanded field for nuisance suits (and legally legitimate ones), additional costs as they’re forced to negotiate even more complex compensation packages in order to hire the best, rather than the second best.

Such regulatory nonsense also is in large part duplicative and so wasteful. For instance:

Some banks are already voluntarily recouping money from employees who engage in misconduct or excessive risk.

We already have adequate laws (not regulations) on the books to handle both criminal and civil misconduct. Additional regulation here would be useless.

Too, that some businesses think such procedures are appropriate for them does not at all justify government interfering to impose such procedures on all of business.

Update: Corrected a typo in the third paragraph: Government intrusion isn’t just not needed….  <sigh>

The Judicial Branch and the Law

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In a couple of weeks, the Supreme Court will hear a case involving Federal subsidies to health coverage purchasers who bought their plans on ObamaMart instead of State exchanges. The Obamacare law limits those subsidies to purchasers via State exchanges argue the plaintiffs; the government demurs.

Some ACA critics fear the Supreme Court may hesitate to block the current subsidies because of a lack of confidence in the legislative branch in general.

Against that backdrop, Supreme Court Justice Ruth Bader Ginsburg has said

The current Congress is not equipped really to do anything[.]

That claim is the pseudo-logic President Barack Obama uses to justify his Executive Orders and “executive actions” that deliberately bypass Congress, and unconstitutionally so.

Justice Ginsburg, and others of like mind on the Supreme Court, may be entirely right on Congress’ ability—or willingness—to act. However, she, and they, would do well to remember that the Constitution they’re sworn to uphold does not authorize the Court to legislate in place of, or in addition to, Congress.

Justice Ginsburg and her fellows would do well to remember that the judiciary’s task is first to determine whether a law comports with the Constitution as the Constitution is written, and if it’s legitimate, to apply that law as that law is written.

Full stop.

It’s Time

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…for the Party of No to get out of the way and let legislation happen. House Minority Leader Nancy Pelosi (D, CA) had this to say through her spokesman Drew Hammill about her fellow Democrats’ insistence on shutting down DHS* in favor of protecting President Barack Obama’s unconstitutional “executive actions” concerning immigration:

With only four legislative days left until the Republican Homeland Security Shutdown, Speaker Boehner made it clear that he has no plan to avoid a government shutdown. The speaker’s reliance on talking points and finger-pointing was a sad reflection of the fact that the Tea Party continues to hold the gavel as they insist on their futile anti-immigrant grandstanding.

Government shutdown. Not DHS shutdown. No exaggeration there. Pelosi’s proxy statement more honestly reads

With only four legislative days left until the Senate Democrats’ Homeland Security Shutdown, Minority Leader Pelosi made it clear that neither she nor her Senate colleagues have a plan to avoid a department shutdown. The Minority Leader’s reliance on talking points and finger-pointing was a sad reflection of the fact that the Democratic Party insists on its futile illegal immigrant grandstanding and vote pandering.

Note, too, that the Democrats are willing to hold hostage American homeland safety against preservation of those “executive actions”—”hostage” being their term, not Republicans’.

 

*Never mind, in the Democrats’ panic mongering, that DHS won’t, in fact, shut down in any substantive way: all the protection forces, from TSA to border control will remain on the job. They just won’t be paid on time, courtesy of the Senate Democrats’ constant filibuster of the House-passed bill that fully funds DHS.

Journalistic…Naiveté

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Throughout the long negotiations over the fate of Iran’s nuclear program, President Hassan Rouhani has withstood scathing criticism from hard-liners at home by sticking to his case that a deal with his country’s longtime enemies will bring peace and prosperity.

So the political stakes are high for the moderate president as talks enter their homestretch toward a June deadline.

If he succeeds in sealing an agreement, Iran could see much-hoped-for relief from withering sanctions that are dragging down the economy at a time when the OPEC producer is trying to ride out a severe slump in oil prices.

This AP article goes on in this vein, touting the economic benefits to Iran, and so the political benefits to Rouhani, of “sealing an agreement.”

This is naïve. Success in “sealing an agreement” means Iran gets its nuclear weapon. Full stop. Economic and political benefits in the near term are purely side effects. Political benefits in the longer term are nuclear Iranian domination of the Middle East and the destruction of Israel.

So, unfortunately, is Dubai-based political analyst Theodore Karasik naïve.

Rouhani was elected on, promoted and supported the idea that he would help the Iranian economy recover. And of course the nuclear agreement is tied to that because of the sanction. If there is no nuclear deal, the presidency will go back to a more ultraconservative leader—under a nuclear Iran[.]

Iran remains under, has been under for quite some years, ultraconservative leadership. The mullahs, led by Supreme Leader Ayatollah Ali Khamenei, are in charge. Their global face, Rouhani, is just smoother about it than Rouhani’s predecessor Mahmoud Ahmadinejad.

What the AP (and, apparently, Karasik) constantly miss in this is that getting the weapon is the purpose of these “negotiations,” and the drive for the weapon is to satisfy Iran’s goal of wiping Israel from the map and beyond that of emphasizing that regional domination. The mullahs, after all, are less Islamic than they are political descendants of Cyrus, Darius, and the Xerxes. (A longer term side effect is the ability to arm Iran’s terrorist allies, don’t forget.)

Who’d-a Thunk?

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According to President Barack Obama’s Department of Education, his student loan forgiveness program already is experiencing cost overruns to the tune of nearly $22 billion. Obama’s 2010 PAYE expansion at the time was projected to add $9 billion to the taxpayers’ bill for students not repaying their debt. As the DoE put it,

The 2015 amount includes a net upward reestimate of $21.8 billion, primarily related to revised interest rates and increased participation in income-driven repayment plans.

Or, in the words of James Schneider, who wrote the article at the second link,

[S]welling enrollment due to looser loan rules is driving up costs….

Or, Romina Boccia, of the Heritage Foundation:

They didn’t account for the market risk in making these loans[.]

Or, Steve Ellis, of Taxpayers for Common Sense:

…hard to see how this is going to come out as a net positive as the administration predicts[.]

Or, Lindsey Burke, also with the Heritage Foundation:

Somebody pays for that loan forgiveness. And that is the three-quarters of Americans who don’t have bachelor’s degrees themselves.

Now, how does that work, exactly? Who could have expected such an outcome? Apparently everyone in the Universe except Democrats.