Category: porkbarrel politics

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Accountability crime and punishment folly free trade & free markets insider corruption media and media people moral hazard national politics & policies porkbarrel politics property rights responsibility too much government

Déjà vu All Over Again

housing, bust, financial, meltdown, Government-Backed Mortgages, jail, punishment, cause

One of the stand-​bys of the post-​2008 mortgage finance bust, at least from left-​of-​center policy mavens, has been to ask: why has no banker gone to prison? They played a game of fraud and got rich. What a protected class — Cronyism! Plutocracy! Capitalism!

The why is much easier to understand if you read up on Round Two of the aughts’ boom-​bust scenario, as in Prashant Gopal’s coverage in Bloomberg, “Getting Rich on Government-​Backed Mortgages.” Gopal spotlights a non-​bank mortgage broker, Angelo Christian, who is making a killing selling houses to people with horrible credit, just as happened before 2008.

“Christian can do this kind of deal because he is, in effect, making the loan on behalf of the federal government through its most important affordable housing program,” Gopal writes. “It’s a sweet deal: He gets his nearly risk-​free commission. [His client] puts no money down. If things go south, the government ultimately bears the risk.”

So, should he go to jail?

Not really. He’s merely doing Congress’s bidding. 

Gopal notes that it is not banks that dominate this round. They are under too much scrutiny. But non-​banking loan intermediaries like Mr. Christian are swarming like flies on a cow’s behind.

There’s a problem in Gopal’s account though. “No one is saying the system is close to another collapse.” 

Well, plenty of people are saying that.

The Cassandras are just not being heeded.

Of course, they don’t know when the bust will happen.

They just know it will.

This is Common Sense. I’m Paul Jacob.

 

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Photo by Images Money on Flickr.

 

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Accountability general freedom nannyism national politics & policies political challengers porkbarrel politics responsibility too much government U.S. Constitution

How Bernie’s Like Trump

Bernie Sanders, Donald Trump, minimum wage, jobs, anchor, bait and switch, negotiation, bargaining

Yesterday I made fun of Bernie Sanders’ jobs guarantee idea. Today, let’s take it seriously.

Not as policy, mind you. As propaganda.

It’s not worth talking about as a policy because there is no policy yet. “It is not clear when Sanders will announce the plan,” Fox News relates, “and a Sanders spokesperson told the Post that it was still being crafted.” 

It is mere advocacy. A press release. Vaporware.

But that’s the key to it, really. The jobs guarantee isn’t policy. 

It’s a ploy.

Bernie Sanders knows there is hardly a hope of passing such a bill. He probably understands that the current fiscal mess precludes it. He might even understand that it is literally a horrible notion, the worst policy idea in the world, and he would still have reason to pitch for it relentlessly.

Because what he is really after is the hiking of the national minimum wage to $15/​hr. That is the next Democratic ratcheting up of government. And by insisting that the government guarantee $15/​hr jobs, he is readying everyone to accept, as a compromise, the hiking of the minimum wage to that very figure.

Yesterday I noted a link between socialism and slavery. But minimum wages link up not with slavery but unemployment.

Which Bernie knows all too well. Before he got in politics, he was a layabout, a bum.

Not like President Trump at all, that way.

But by fixing on one key, “anchor” concept ($15/​hr) and demanding the Moon, he might just get his mere lunacy, er, minimum wage hike.

And that is a Trumpian* ploy.

This is Common Sense. I’m Paul Jacob.

 

* Though Trump’s better. His “linguistic killshots” are far more memorable … because funny and (usually) visual.

 

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Accountability folly general freedom incumbents media and media people moral hazard nannyism national politics & policies political challengers porkbarrel politics responsibility too much government

Twirling Towards Freedom?

Citizen Kang, Simpsons, Bernie Sanders, socialism, health care, income, welfare

Does Bernie Sanders remind you of “Citizen Kang”?

Vermont’s [S]ocialist Senator is whipping up a new plan for America: to “guarantee a job with at least a $15-​per-​hour wage and health benefits to every adult American ‘who wants or needs one,’” we are told.

What was it that the slavering alien Kang promised* in The Simpsons’ eighth season opening episode? Well, we know how that episode ended, with Homer Simpson revealing the ’90s’-era presidential candidates to be aliens in disguise, Kang being elected, humanity enslaved, and Homer uttering the immortal words “Don’t blame me, I voted for Kodos.” 

And then Kodos, in cahoots with Kang, cracking the whip on Homer.

One shouldn’t have to read George Fitzhugh, the antebellum sociologist who attacked the very idea of free markets and free labor, insisting that slavery is a good thing and the very best form of socialism, to know that socialism and slavery go together hand in glove, whip in hand.

In an age of handouts for nothing, at least Sanders’ socialist proposal suggests productivity. But paying for it by nixing corporate “tax breaks”** is absurd. “Republicans have long opposed a federal jobs guarantee,” Fox News tells us, “saying such a plan would be too expensive and impractical.” And it’s productive people who would pay for it, making them de facto slaves to the system … even more than they are now.

But when socialists talk about “jobs,” worry about a more direct form of slavery.

And yes, I can imagine Bernie, with his four houses, flicking the whip.

I won’t be voting for him, if he runs. 

Or for Kodos.

This is Common Sense. I’m Paul Jacob.

 

* Actually, Kang was known not for a promise but for his campaign speech (as Bill Clinton), saying, “[W]e must move forward, not backward; upward, not forward; and always twirling, twirling, twirling towards freedom!” 

** The only funding source mentioned in the reports I read.

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Accountability folly general freedom government transparency moral hazard national politics & policies porkbarrel politics responsibility too much government

While the Clock Ticks

national debt, debt clock, Mercatus Center, economics, economy, folly,

Pushing annual federal spending over a trillion bucks into the red?

It has consequences. 

“Our debt is growing, and it’s growing fast,” writes Veronique de Rugy at Reason. “Though it’s a shame that lawmakers passed tax cuts without cutting spending to offset short-​term losses in revenue, there’s no doubt that Social Security and Medicare deficits are almost entirely to blame for our impending debt crisis.”

Ms. de Rugy, a senior research fellow at the Mercatus Center, has a typo in the version of her article that I read (it has probably since been corrected): “Based on current trends, the debt held by the public is set to reach $15.7 trillion by the end of this year and continue rising to $28.7 trillion by 2028.” She surely meant “$25.7 trillion,” since the current debt clock figure shows the U.S. public debt at over $21 trillion. Still, $25.7 seems a bit high … but at this point we can leave the exact numbers to the professionals.

We just know that the debt’s too damn high.

As de Rugy explains, it has present as well as future cost. And, yes, entitlements are the biggest problem — but even more than Ms. de Rugy suggests. Congress owes the Social Security “trust fund” (in Al Gore’s infamous and non-​existent “lock box”) nearly $3 trillion.

Our solons would have to (painfully) switch from revenue deficits to revenue surpluses just to pay off its debt to a much-​relied upon institution.

What will happen, though, is surely this: Congress will borrow more from elsewhere to pay what Social Security needs — which all too soon will be a lot more than $3 trillion. 

That’s not Common Sense. (But I am Paul Jacob.)

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Accountability free trade & free markets local leaders porkbarrel politics tax policy too much government

Selling Us Out

Maryland legislature, pork, Amazon, tax break, Jeff Bezos, Senator Roger Manno

Last week, Maryland’s Legislature enacted an $8.5 billion package of tax breaks and infrastructure improvements to lure Amazon into building its second corporate headquarters in Montgomery County, Maryland, bordering Washington, D.C.

State Senator Roger Manno, the only legislator from the county to vote against the subsidy, dubbed it “a $5 billion tax break for the richest man in the world.…”*

Today, the Montgomery County Council will consider a further proposal to streamline its zoning process, cutting in half the time the county takes to review a proposed development.

“We are trying to make sure our processes are consistent with everybody else,” County Executive Ike Leggett explained, adding that the county now “sometimes takes 100 to 120 days, while many other jurisdictions are much less than that.”

Did Leggett say “consistent with everybody else”? Well, the new zoning rules won’t apply to every business, just those planning to hire 25,000 workers. Or more. 

“It’s neutral to the employer,” County Council President Hans Riemer slyly suggested. “It’s a proposal that would allow any really large employer to come in and build under certain terms.”

But only Amazon would be large enough.

“Really what it does is it creates predictability, reliability,” offered Riemer. But wouldn’t every other business also benefit from “predictability” and “reliability”?

“I think the Amazon proposal made the county realize … that it needed to look at some of its practices and where it has been criticized,” noted Bob Buchanan, chairman of the Montgomery County Economic Development Corporation. “We were more process versus results.”

And the county intends to remain that way … for “every” current business.

This is Common Sense. I’m Paul Jacob.

 

* He was referring, of course, to Amazon founder and owner of the Washington Post, Jeff Bezos.

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Accountability folly free trade & free markets general freedom government transparency local leaders moral hazard nannyism porkbarrel politics responsibility too much government

Bailing on Mass Transit

mass transit, metro, cars. low income, recession

Around the country, our major metropolitan transit systems have hit the skids. “Between 2016 and 2017, ridership fell in each of the seven largest transit markets,” the Washington Post informs.

You might guess that the reason for declines in ridership might have something to do with bad planning and poor service. Washington, D.C.’s Metro system, with which I am all-​too familiar, is a horror … run by people I wouldn’t trust to sweep your driveway much less mine, and certainly not to manage how I get between those (or any other) two locations.

But the Post quotes an urban planning scholar who attributes the decline (in part) “to increased car ownership, particularly among low-​income and immigrant populations, who were in a better position to afford cars following the Great Recession.” 

This puts planners in a pickle since, he explains, if “low-​income people are doing better, getting the ability to move around like everyone else, it’s hard to say that what we should do is get them to remove themselves from their cars and back on trains and buses.”

Shockingly sensible — especially coming from a planning specialist. “Transit systems should deliver quality service to low-​income people,” he insists. “But low-​income people do not owe us a transit system.”

Well, maybe that’s the problem, this notion that governments “owe” this service to “low-​income people.”

After all, web-​based services like Uber and Lyft have shown how market innovations provide the best ways to move millions.

This is Common Sense. I’m Paul Jacob.

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