Freedom for Vietnam’s Bloggers
Today the House of Representatives is debating H. Res. 672, which would call on the government of Vietnam to release imprisoned bloggers and respect Internet freedom.
Here is an article or two about what is happening with Vietnamese bloggers.
Filed under: Foreign Policy and National Security; Law and Civil Liberties; Telecom, Internet & Information Policy
Parsing Pelosi: House Health Takeover Would Cost around $2.25 Trillion
Just like the Senate Finance Committee’s government takeover, the House of Representatives’ government takeover hides more than half of its cost by pushing those costs off the government’s budget and onto the private sector.
So when Speaker Pelosi says the House bill would cost under $900 billion, what she actually means is that it would cost around $2.25 trillion.
Filed under: Cato Publications; General; Health, Welfare & Entitlements
Taxpayers, Anyone? And How About Tuition Inflation?
The Student Aid and Fiscal Responsiblilty Act will probably be approved by the House of Representatives today, and to push it along the bill’s sponsor, Rep. George Miller (D-CA), makes clear for whom he is working:
Let’s remember whose voices really matter here. It’s time to listen to our students and our families.
First of all, do the voices of taxpayers not matter at all? You know, the folks who are going to foot the bill for all this largesse? Oh yeah – concentrated benefits, diffuse costs. And have students and their families really been trees falling in the wilderness with no one to hear them? With inflation-adjusted aid per full-time-equivalent student (table 3) rising from $4,454 in 1987 to $10,392 in 2007 — a 134 percent increase — it sure doesn’t seem so.
In fairness, the bill’s proponents have paid lip service to taxpayers, saying with straight and utterly deceptive faces that SAFRA won’t cost taxpayers a dime. The thing is, not only is this totally unsupportable according to several Congressional Budget Office analyses, it completely ingores that tax money is covering all of the costs of the bill. SAFRA would simply transfer taxpayer ducats from backing ostensibly private loans to loans directly from Washington, as well as lots of other federal expenditures.
And then there’s this: SAFRA supporters can talk all they want about helping students and families, but increasing grants and loans ultimately just hurts college-goers. Why? Because colleges and universities raise their prices to capture every additional penny of aid, as basic economics makes clear they would. So the only people politicians are ultimately helping are colleges, and by appearing to care ever so much about likely voters, themselves.
Filed under: Education and Child Policy; Finance, Banking & Monetary Policy; Government and Politics; Tax and Budget Policy
Did Bank CEO Compensation Cause the Financial Crisis?
Earlier this summer, the House of Representatives approved legislation intended to, as Rep. Frank, put it, “rein in compensation practices that encourage excessive risk-taking at the expense of companies, shareholders, employees, and ultimately the American taxpayer.”
While there are real and legitimate concerns over CEOs using bailout funds to reward themselves and give their employees bonuses, Washington has operated on the premise that excessive risk-taking by bank CEOs, due to mis-aligned incentives, caused, or at least contributed to, the financial crisis. But does this assertion stand up to close examination, or are we just seeing Congress trying to re-direct the public anger over bailouts away from itself and toward corporations?
As it turns out, a recent research paper by Professors Fahlenbrach (Ecole Polytechnique Federale de Lausanne) and Rene M. Stulz (Ohio State) conclude that “There is no evidence that banks with CEOs whose incentives were better aligned with the interests of their shareholders performed better during the crisis and some evidence that these banks actually performed worse…”
Professors Fahlenbrach and Stulz also find that “banks where CEOs had better incentives in terms of the dollar value of their stake in their bank performed significantly worse than banks where CEOs had poorer incentives. Stock options had no adverse impact on bank performance during the crisis.” While clearly many of the bank CEOs made bad bets that cost themselves and their shareholders, the data suggests that CEOs took these bets because they believed they would be profitable for the shareholders.
Of course what might be ex ante profitable for CEOs and bank shareholders might come at the expense of taxpayers. The solution then is not to further align bank CEOs with the shareholders, since both appear all too happy to gamble at the public expense, but to limit the ability of government to bailout these banks when their bets don’t pay off.
A Nation of Lawlessness
The matter of Chrysler’s bankruptcy seems to have rendered quaint our system of checks and balances. President Obama is breaking the law and the other two branches are letting him get away with it. One can probably understand how a smitten public might casually allow this president a stipend of unconstitutional acts, since he doesn’t scowl like Nixon or stutter like Bush. But, even a popular president (in particular, a popular president) must be held in check by the legislative and judicial branches.
And that’s not happening.
On Tuesday at 4:00 pm, Justice Ruth Bader Ginsburg “stayed pending further order” the bankruptcy-related transactions of Chrysler, giving hope the Supreme Court might hear the appeal filed on behalf of certain Indiana state pension and construction funds, who claim that their property rights as secured creditors were violated by the forced sale and that the use of Troubled Asset Relief Program funds to support Chrysler and facilitate its restructuring was illegal. Only 28 hours later, the Supreme Court decided against taking the appeal, despite the seemingly compelling issues at hand.
Just as the Bush administration was telling Congress last September that there was no time to debate the merits of a financial bailout and that the only course was to give Treasury Secretary Paulson carte blanche immediately to spend $700 billion, the Obama administration was telling the Supreme Court this week that time was of the essence and that Fiat would walk away from the Chrysler deal if it wasn’t allowed to proceed right away. Was that the decisive factor in the Supreme Courts rejection of the appeal? It seems to me the appeal contains some serious constitutional issues worthy of judicial consideration (consideration that goes beyond merely rubber-stamping the Obama administration’s pre-packaged, politically-driven bankruptcy plan for Chrysler, which is what Judge Gonzalez appears to have done).
But it’s now a done deal, possibly facilitated by illegalities.
Filed under: Government and Politics; Law and Civil Liberties; Trade and Immigration
Rumor re (House) GOP Supporting an Individual Mandate Quashed
I am reliably informed that the rumor that I perpetuated to which I responded here is untrue: House Republicans will not be endorsing an individual mandate.
Now let’s hope that Senate Republicans (and House Democrats, and Senate Democrats) show similar good sense.
Filed under: Cato Publications; Government and Politics; Health, Welfare & Entitlements
House GOP Insists Pelosi Hold States to Same Bailout Rules as the Big Three
Here’s an excerpt from a letter that House Republicans sent today to Speaker Nancy Pelosi:
We applaud your recent decision to require the “Big Three” automakers to submit a restructuring plan to Congress before either chamber would consider legislation providing additional federal aid to the auto industry. Unfortunately, the $87 billion allocated for more Medicaid money for states doesn’t appear to hold them accountable for ensuring that the tax dollars are spent wisely. Similar to what was requested of the automakers, we believe it is necessary to require our nation’s Governors to submit formal budget plans for their respective Medicaid programs detailing how additional funds will be spent before Congress considers any legislation to provide a temporary increase in the federal Medicaid match.
Seems reasonable, especially since the states’ irresponsible behavior is what got them into this mess in the first place.
The governors will probably squeal over such a requirement, which would indicate either that they have no plans for how to spend the money or that they would rather not share their plans publicly.
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