Author: Redactor

Categories
too much government

The Moral of the Madoff Story

Detecting fraud is one of the most important roles for government. But our friends in power tend to be incompetent at it.

This becomes clear in light of that most costly Ponzi scheme, Bernie Madoff’s.

Before he was caught, Madoff — who now paints signs in prison — perpetrated one of the longest-running scams in investment history. It wasn’t an investment scheme that lost its way. No, it was a fraud through and through. It cost his marks billions.

Joseph Cotchett, a lawyer for some of Madoff’s victims, interviewed the fraudster at length. Cotchett calls Madoff “charming” and “no dummy.” But he noted that his fraud was not a great work of sophistication: “It is amazing how simple it was.”

Still, the regulators responsible for finding this kind of fraud didn’t see it. Early in the millennium, Madoff thought he might get caught. In 2005, the SEC sat down with him, and he thought the gig was up. Regulators, insists Cotchett, did not dig “to the next level, and the next level was not deep by his own admission.”

Lots of folks clamor, these days, for more regulation. Here’s my advice: Improve the most basic form of regulation — protection against fraud — and build on success. Leave complicated micromanagement stuff alone until governments get competent at the very basics.

If you cannot detect an unsophisticated fraud, how can you run a very sophisticated economy?

This is Common Sense. I’m Paul Jacob.

Categories
Tenth Amendment federalism

The Tenth Amendment Movement

When Sarah Palin announced her resignation as governor of Alaska, she caused quite a stir. Both Palin haters and Palin lovers united in their inability to talk about much of anything else.

Then, a week later, she had an op-ed on environmental policy published in the Washington Post.

And then, not long after that, she signed a resolution declaring the state of Alaska sovereign under the Tenth Amendment, and telling the federal government to back off from engaging in activities not delegated to it in the United States Constitution.

This sounds weird to lovers of big government, to Palin haters in general. But even some Palin lovers misconstrued the event.

It was not about Sarah Palin. She was not the only governor to sign such a resolution. Tennessee’s Democratic governor, Phil Bredesen, had done the same thing, earlier.

In fact, it’s not about governors at all. Other states, like Oklahoma and New Hampshire, have passed similar resolutions. As I wrote recently at Townhall.com, “[a]ll these resolutions have passed state legislatures. It’s not just lone ‘whacko’ governors doing the deed. Deliberative bodies have decided these measures.”

What’s happening is the re-emergence of the original idea of our federation: A central power limited in scope, and states with different sets of powers and responsibilities.

And people’s rights and powers limiting both.

Yes, folks, there are signs of hope.

This is Common Sense. I’m Paul Jacob.

Categories
initiative, referendum, and recall tax policy

Pity the Politicians?

In tough times, who get hit hardest? According to the Center on Budget and Policy Priorities, “[a]t least 39 states have imposed cuts that hurt vulnerable residents.”

Why? Well, states have been spending at increasing rates for years now. And then came the slump, with less income — and fewer sales — to tax. So of course state revenues plummet.

And politicians must force themselves to do the thing they hate most: Cut.

But, as Steve Chapman argues in his column, “A Hole They Dug for Themselves,” simply by increasing spending no more than the rate of inflation, they would have avoided this. Chapman insists, “governors and legislators might have prepared for drought.”

One thing Chapman doesn’t say is that this spending limit idea has been on many states’ tables for some time. It’s often called TABOR, or the Taxpayer Bill of Rights. Such measures constitutionally limit spending to the rate of inflation plus the rate of population increase. Only voters can break this spending cap.

But politicians hate such measures, oppose them for all they are worth.

So, we may pity the poor, but let’s not shed one drop of sorrow for the politicians.

And, if you live in Maine or Washington state, vote for the TABOR-like initiatives that will be on the ballot this November. Help yourself, help the poor — by forcing politicians to spend as if things could change and tomorrow matters.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Medical Insurance to the Max

Get everybody into a medical insurance plan, fast! But how?

Lots of “universal coverage” talk assumes that most uninsured folks are “too poor.” But look, most young people don’t buy insurance because they are healthy. And I know oldsters who have gone through life without medical insurance. When they’ve needed a shot, or a few stitches, they’ve visited the doctor and paid the bill.

Becky Akers, writing in The Christian Science Monitor, wants to know why everyone wants to force her to buy something she thinks makes no financial sense.

Ms. Akers admits that, though she is healthy and without insurance, she could get run over by a bus. But she bets she can cover most medical needs out of her savings and income.

Supporters of government managed medicine judge this irresponsible.

And yet, many of these critics are the same folks who insist that catastrophic medical insurance — the kind that is inexpensive because of huge deductibles — cover everybody, regardless of pre-existing conditions. But this turns insurance into a transfer program, workable only with high prices. Add full coverage rather than catastrophic, and medical insurance skyrockets beyond most people’s pay grade.

Yet if politicians would just stop tinkering with insurance, medical prices would come down for everyone, as Akers suggests . . . including, even the uninsurable, who would still require aid other than insurance.

If you are already sick, it’s too late to insure against sickness.

This is Common Sense. I’m Paul Jacob.

Categories
insider corruption

Arresting New Jersey

For the millions of people living in New Jersey, who’ve never been arrested on corruption charges, this one’s for you.

Recently, the FBI arrested 44 folks there, including two state legislators and three mayors. Big news, I guess, but hardly unusual by Jersey standards. The U.S. Attorney says the state’s politicians work in an “ethics-free zone.”

Chris Christie, now the Republican candidate for governor in 2009, used to be the U.S. Attorney. In seven years, he prosecuted 130 state and local politicians and convicted every single one of them.

Unfortunately, reducing corruption will take more than building additional prisons to hold politicians. The trick is empowering voters to hold government accountable — thereby putting less unchecked power in any individual’s hands.

Christie believes voters need the power of ballot initiatives. But earlier this year he said, “I hesitated about proposing initiative and referendum because my party had been such a failure on initiative and referendum ten years ago . . .”

Republicans gained a majority in both legislative chambers in part on a promise to enact a statewide initiative. Once in power, Republicans took a dive.

Christie pledges to be different, and to campaign with shoe leather: “I will travel around the state to publicly campaign for [initiative and referendum] and try to get the citizens to put pressure on their legislators to vote for this.”

In a usually safe state for Democrats, the latest polls show Christie with a sizable lead over Democrat Governor Jon Corzine.

This is Common Sense. I’m Paul Jacob.

Categories
term limits

Security Deposit for Term Limits?

Politicians do pay a price when they break a term limits pledge: No pledge breaker has ever been elected to higher office.

In 1992, Marty Meehan ran for Congress promising to serve four terms at most. In 1995, he rebuked congressmen for violating similar pledges, saying, “The best test of any politicians’ credibility on term limits, is whether they are willing to . . . limit their own service.” Meehan even filed a letter of resignation with the House clerk that supposedly would go into effect should he break his own word. But he did break it, finally leaving Congress only in 2007.

Meehan had always wanted to be governor. That was not to be.

Term limits have always been popular, and it’s embarrassing to be known for breaking a term limits pledge.

A new outfit called Alliance for Bonded Term Limits believes more than reputation should take a hit when politicians violate a term limits pledge. They think candidates should legally contract to pay up if they wimp out.

The plan, according to their website, is to “provide a vehicle for sincere candidates to demonstrate their commitment to limited tenure in office by voluntarily bonding their term limit promise with personal assets in advance of the election. These bonded assets of substantial worth will be forfeited to charity only if their promise is broken.”

Will it work? So far, the organization just has an idea. It’s a gleam in someone’s eye. But let’s keep our fingers crossed.

This is Common Sense. I’m Paul Jacob.

Categories
tax policy too much government

Nowhere to Run

Back in May, before partisan warfare in the New York state legislature temporarily stemmed the spate of bad legislation, the Democrats in that distinguished legislative body did the sort of thing Democrats do. Voted in a new tax.

Of course, Republicans often do the sort of thing Democrats do, too. When I say Democrats did it this time, I mean 32 Democrats voted in favor and zero Republicans.

The lawmakers passed a so-called “Mobility Tax” on the residents of twelve counties to subsidize the Mass Transit Authority, which operates subways and buses in New York City. These include non-borough counties like Orange County. On a map of New York counties, you’ll see Orange lies near the Big Apple. But few residents there make much use of MTA transportation services.

As one of many Orange County residents put it, “Thruway drivers pay to operate the Thruway. We don’t get to tax the people of Manhattan to keep tolls down. Yet we are being asked to subsidize the MTA even more whether we use it or not.”

Public transportation should be privatized. In any case, though, passengers should pay their own fares. Hike the charge for a subway ride to four dollars, if necessary, and let riders demand better management. But don’t go after the wallets of people in the towns next door.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Health Rations and You

Want a laugh? To keep you from crying at what President Obama and the Congress are trying to do to health care in this country?

Over the decades, the federal government’s involvement in health care has been making it harder and harder for doctors and patients to make independent, sensible decisions about care.

Many advocates of “reform” deny the destructive consequences of past “reform” and insist that the only way to solve our problems is, in effect, to make them worse: Get government even more involved, tie the bureaucratic noose even tighter around the necks of patients and doctors.

Despite all the problems in the health care industry, we often still get great care because of the freedom that still exists. But what if advocates of Obamacare get their way and government takes over? Well, that’s the scenario satirized in a new two-minute video produced by the Sam Adams Alliance, all about “Health Rations and You.”

It adopts the black-and-white style of a 1950s-era educational film. “Health rationing. What is it? What does it mean for you?” And it’s all about how the Health Administration Bureau will give you nothing but “the best” medical care.

The video is funny. Memorable. Getting a lot of hits on YouTube. And it just might help stop this socialist monster in its tracks. Give it a look-see, and pass it on.

This is Common Sense. I’m Paul Jacob.

Categories
government transparency judiciary

The Judges, the Lawyers, and the People

In legal circles, when folks think of Missouri, they think of the “Missouri Plan.” Seventy years ago, Missouri instituted a new method of selecting judges, especially the judges that sit on the state’s supreme court. The plan was copied by many other states.

It is beloved by the insiders.

A few years ago, I wrote at Townhall.com: “[T]he Missouri Bar has something of a lock on the whole process. . . . It’s supposed to be non-partisan. Bottom line is that lawyers are in control.”

A judicial commission controlled by the state bar association picks the judges that the governor must then pick from — with the bulk of the commission’s work done behind closed doors.

Missourians are shocked when informed how the process works. So are folks in other states that have adopted the Missouri Plan. It isn’t transparent and it puts key decision-making on judges in the hands of an unelected special interest.

But things may be looking up. A group called Better Courts for Missouri submitted paperwork to start a new petition. The group aims to gather enough signatures to put a constitutional amendment on the ballot in 2010, to open up the system, make it more transparent.

Legislative attempts to change the system have failed. Generally, politically powerful lawyers are for a plan that lets lawyers have the biggest say.

Well, now they are up against competition. The people.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

Slavery Is Not Freedom

There is one fact about the health care “reform” legislation being debated in Washington, DC, that is unavoidable. The fact that it is coercive.

Governments coerce. It would be great if governmental force were used only to combat criminals, not also to tell us how to live our lives. But, alas, this is not the case.

If the proposed health care legislation is passed, it will result in new orders from the federal government that everyone must obey. Everyone: Doctors; employers; patients; taxpayers. One mandate would force you to sign up for health insurance if you currently lack it. Refuse, and you’ll pay a penalty. Unless you qualify for a “hardship exemption.”

Do we all know what this means? A Washington Post report claims that the notion of penalizing Americans who decline to sign up for health insurance “has its roots in the conservative philosophy of self-reliance.” Because, presumably, the best way to encourage self-reliance is to point a gun at people and tell them what to do “for their own good.”

This is worse than messy thinking. It is the opposite of the truth. Self-reliance is a matter of making choices. It implies the freedom to make choices. Self-reliance has nothing to do with Big Brother ordering you about as if your own thinking, values, and circumstances were irrelevant. And self-reliance has nothing to do with the current health care debate in Washington.

This is Common Sense. I’m Paul Jacob.