Links and Minifeatures 2009 05 14 Thursday

Something is rotten in Obama's America

But what happened to the non-TARP bondholders was even worse. When they squawked, the administration tried to muscle them. Lawyers for the bondholders contend that senior representatives of the Obama administration threatened them. Michael Barone, the ultra-knowledgeable (and normally unflappable) editor of the Almanac of American Politics called it "gangster government."

and

The state of California faces a desperate fiscal situation. California now has the worst credit rating of any American state. Governor Arnold Schwarzenegger and the Democratic majority legislature have struggled to balance the books, as they are constitutionally obliged to do. They have raised taxes dramatically, but they have also cut some programs. Among the cuts: a $2-an-hour cut in the wages of home health-care workers.

Those workers were unionized, and their union -- the Service Employees International Union - carries clout in Obama's Washington. On Thursday, California state officials told the Los Angeles Times that they had received a warning: The federal government would deny California $6.8-billion in stimulus funds unless the wage cut was rescinded. Since the wage cut will save only about $74-million, the state will have little choice but to surrender.

If this doesn't disturb you, it's time to cut your soma intake.

The weakness and strength of Wikipedia. The weakness of the world media: Irish student hoaxes world's media with fake quote

He said it took him less than 15 minutes to fabricate and place a quote calculated to appeal to obituary writers without distorting Jarre's actual life experiences.

If anything, Fitzgerald said, he expected newspapers to avoid his quote because it had no link to a source - and even might trigger alarms as "too good to be true." But many blogs and several newspapers used the quotes at the start or finish of their obituaries.

Wikipedia did catch the error fairly quickly. But the major media did not, because it appealed to their prejudices.

Never trust Wikipedia without independent confirmation. It's not intended as a primary source. It's not trustworthy as a primary source - and to its credit, admits it. But that doesn't stop lazy idiots from using it as one.

Remember how the Obama administration frightened the public into spending at least $1.2 Trillion (looking more like $3 trillion) on Democratic interest groups while using scare language of what would happen if it wasn't passed?

Well compared to what actually happened after we did pass it, the scary unemployment scenario for if we hadn't is starting to look downright good.

The Worsening Social Security Outlook: A Guide to the 2009 Trustees' Report

The public has been ill-served by those who have groundlessly minimized the Social Security shortfall. The current wake-up call is coming too late to allow for a Social Security fix as benign as the one that could have been enacted years ago. It is still the case, however, that we will get a better solution and a more effective Social Security program if we act sooner rather than later.

Hot Air reemphasizes:

There is no trust fund. Social Security surpluses have always been used by the federal government for general-fund allotments, replaced essentially by IOUs. This became an issue in the 2000 presidential election, when Al Gore talked about a "lockbox" to keep Congress out of the surpluses. The "trust fund" consists of bonds, not cash, and they have to be redeemed by the US government, which already runs massive deficits.

Video: Are the elderly cost-effective?

What happens when the state controls all the resources? New resources do not develop, and the government winds up rationing care based on its own priorities, and not the priorities of the patients or caregivers. Professor Altman's suggestion that the elderly get hospice treatment to save scarce care resources is exactly the kind of decisions the state will make for its citizens, and it won't be limited to the elderly, either. Anyone whose value does not show a positive "cost-benefit" ratio to the state will also likely wind up without the kind of care necessary to stay alive and healthy.

The coming tax regime that will kill American productivity

This is a recurring theme with Obama and tax policy. He and his advisors use static analysis to predict results from tax increase, ignoring the effect that tax changes have on revenue. He assumes that a 7% increase in the capital-gains tax, to use one example, will result in a 7% increase in revenue from the previous year, but that's simply not the case. The tax hike will cause people to change behaviors to avoid paying higher taxes, either by cashing out this year (resulting in a loss of capital to the marketplace) or not selling off stakes in companies and investing the profit elsewhere. The effect of the change will itself limit revenues, probably more than the increased percentage will capture, making the policy a net loss to the government.

They know better, but using intentionally wrong figures makes it easier to sell to the public.

Very interesting. Unprecedented even FHA Ok with Up Front Tax Credit or, in other words, using the tax credit money at closing.

We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a downpayment. So FHA will permit trusted FHA-approved lenders and HUD-approved nonprofits, as well as state and local governmental entities to "monetize" the tax credit through short-term bridge loans. We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit. FHA will be publishing the details shortly.

This isn't necessarily to say the lenders themselves will permit it - but it's fine with the FHA. I suspect the lenders are going to run with it, myself. The stumbling block in the past has always been that people with a tax credit coming don't necessarily get the money. Sometimes they have other debts, sometimes they have an unexpected tax liability. When that happens, there's a short that has to be repaid, creating a debt and usually payments, impacting debt to income ratio among other things. But if the financial guarantor of FHA loans is saying they'll write the loan guarantee with such a bridge loan in place, who are the lenders (whose profit making loans are being guaranteed) to argue? The real question will be "on what terms will these short term bridge loans be written?"

Chrysler and the Rule of Law

Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?

Until Chrysler.

and

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

Lots of people don't understand what a big deal this is. As Prof. Zywicki makes clear, it's an actual constitutional violation Actually, it's at least two different constitutional violations, as well as an entire phalanx of lesser laws.

It the laws don't protect everyone, they don't protect anyone. For all of the accusations of highhandedness leveled at Obama's predecessor, that predecessor was diligent in following the rule of law. Complaints about his predecessor were essentially "he didn't give us everything we wanted! Waah!" Obama himself, however, has sponsored several actual legal violations, where those he treated roughly have been shorted upon what they were entitled to under the law.

Why is there not a fraction of the hue and cry his predecessor faced over much lesser accusations?

A budget with no shortage of lies

It's nothing new for presidents to give us bloated budgets with phony promises of belt-tightening at the end of the day. But never, ever, in the history of the republic has there been so irresponsibly gargantuan a budget defended by rhetoric so duplicitous as we are now seeing from President Barack Obama. "We cannot settle for a future of rising deficits and debts that our children cannot pay," he said last month, and he has talked as well about fiscal discipline, eliminating waste, increased efficiency, more focused policies and how dishonest President Bush was in leaving the wars in Iraq and Afghanistan "off the books." Well, yes, Bush did that thing and he shouldn't have, but everyone knew that money was being spent and the dishonesty, such as it was, is nothing - zero, zip, nada - next to Obama dressing up as a miser as he promotes a $3.59 trillion budget with a $1.2 trillion deficit on its back.

Read the whole thing.

Obama pretends to be frugal as we sink deeper in debt.

Actually, he doesn't even pretend to be frugal. He just says he's frugal

Remember President Obama's New Era of Responsibility? It got off to an inauspicious start, with a $787 billion economic stimulus package, a $410 billion appropriations bill, and a record $1.8 trillion budget deficit.

But now Obama wants to signal that he's getting serious about cutting the federal budget. Unfortunately, his plan hinges on the assumption that Americans do not know how to calculate percentages.

Last week the Obama administration, after going through the budget "line by line," unveiled $17 billion in budget cuts. That amounts to less than 0.5 percent of the president's proposed $3.6 trillion budget for the next fiscal year and less than 2 percent of the projected $1.3 trillion deficit.

'Thought Crimes' Bill Advances

Why is the press remaining mostly silent about the so-called "hate crimes law" that passed in the House on April 29? The Local Law Enforcement Hate Crimes Prevention Act passed in a 249-175 vote (17 Republicans joined with 231 Democrats). These Democrats should have been tested on their knowledge of the First Amendment, equal protection of the laws (14th Amendment), and the prohibition of double jeopardy (no American can be prosecuted twice for the same crime or offense). If they had been, they would have known that this proposal, now headed for a Senate vote, violates all these constitutional provisions.

Why is it suddenly acceptable for some people to be more equal than others?

The extra punishment applies only to these "protected classes." As Denver criminal defense lawyer Robert J Corry Jr. asked (Denver Post April 28): "Isn't every criminal act that harms another person a 'hate crime'?" Then, regarding a Colorado "hate crime" law, one of 45 such state laws, Corry wrote: "When a Colorado gang engaged in an initiation ritual of specifically seeking out a "white woman" to rape, the Boulder prosecutor declined to pursue 'hate crime' charges." She was not enough of one of its protected classes.

If this was a group of white men looking for a minority woman to rape, I doubt the same logic would have prevailed.

Rape is rape. Murder is murder. The racial, sexual, or religious identity of the victim being grounds for additional punishment contends that some people are more value than others, that it is somehow worse to commit these crimes with a certain specially protected class as the victim.

It also violates equal protection under the law.

This is a huge problem, and a guaranteed cause of additional violence in the future. Civil wars have been fought over this. Nations have shattered.

Not to mention that it's a constitutional violation.

It doesn't matter the angle, practical or theoretical, that you want to pursue. This creates special protected classes, and is no different in its roots than the century old (and now discontinued) practices of the Old South where a black person who killed a White Person got the death penalty while a White person who killed a Black person got a short jail sentence, if anything. Only the identities of who is protected and valued has changed.

Same old racist nonsense for a different era. Just because the identities of who is valued and who is not have been switched doesn't mean it's not still racism.

Obama Offers Security at the Expense of Liberty

Our would-be soft despots are offering Americans money and the promise of security against economic distress. The vastly increased cost of government will nonetheless nearly leave half of households free from the burden of paying federal income tax and eligible for occasional rebates. As CNN reporter Susan Roesgen said to a tea party protester, "Don't you realize that you're eligible for a $400 tax cut?"

In other words, take the money and shut up. Which brings to mind Tocqueville's warning: "Every measure which establishes legal charity on a permanent basis and gives to it an administrative form creates thereby a class unproductive and idle, living at the expense of the class which is industrious and given to work."

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.

Not to mention that they won't have the safety for long - and the next time the bill comes do, will have nothing to trade for more security. And that they've already given up the means of getting more.

Unions vs. Taxpayers

But then there is the U.S. public sector, where the mood seems very European these days. In New Jersey, which faces a $3.3 billion budget deficit, angry state workers have demonstrated in Trenton and taken Gov. Jon Corzine to court over his plan to require unpaid furloughs for public employees. In New York, public-sector unions have hit the airwaves with caustic ads denouncing Gov. David Paterson's promise to lay off state workers if they continue refusing to forgo wage hikes as part of an effort to close a $17.7 billion deficit. In Los Angeles County, where the schools face a budget deficit of nearly $600 million, school employees have balked at a salary freeze and vowed to oppose any layoffs that the board of education says it will have to pursue if workers don't agree to concessions.