Archive for category Constitution
Obama: Bailout King or Head Pusher?
Posted by Tom in California, Constitution, Democrats, Federalism, State Finances, Stimulus/Bailout on November 22, 2010
We read in today’s WSJ that 30 of the 50 states face deficits totaling more that $127 Billion. We also read that the Obama administration wants to permanently extend the federal subsidy for Build America Bonds, the program that uses your hard-earned dollars to reduce interest on state bond issues.
Steven Malanga in his op-ed, The ‘Build America’ Debt Bomb, points out the enabling nature of this addictive federal program for the spendthrift states. The BAB was initiated to help prop up the muni bond market at a time when private bond insurers were thought to be in trouble. It would subsidize higher rates so that new non-taxable investors would come into the muni market. It was designed as temporary and perhaps temporarily justifiable. But like all temporary taxes, like all temporary handouts, like all temporary unemployment insurance, and like all temporary bailouts, in the hands of the Democrats, it tends to become permanent.
The greatest user of the program is the bankrupt state of California which has issued $21 Billion of BABs. Note that CA’s credit is in the tank. Its taxes are among the highest. Its regulatory climate among the harshest. And its green regulatory costs astronomical. As you may have heard CA has an ongoing budget problem to the tune of $20 Billion. It’s ongoing in the sense that the $20 Billion is expected to repeat itself. With a Democratic governor and legislature, there is little hope. If CA can’t tax more for fear of driving out more businesses and CA can’t borrow more from traditional muni investors because its credit is in the tank, then it must look to new markets for lenders. Obama’s BAB drug will continue to serve up sucker new investors but at a costs to the U.S. taxpayers. Why should we pay this?
Malanga points out: “The Obama administration believes the BABs’ direct federal subsidy is a more efficient way to raise money than traditional tax-free municipals. But when money that would otherwise go to private business flows into subsidized government activities, resources are misallocated.
“This is no idle speculation: The financial press is full of stories of investment managers recommending BABs over corporate bonds with similar ratings, thanks to the advantage of federal subsidy. There is also a future bailout risk, given that the federal government might not allow a state or local government to default on a Build America Bond. None of this is what voters signed up for on Nov. 2.”
As I pointed out in a recent post, as long as someone else will pay for the free lunch, there is no reason for the states to stop stuffing themselves. States will only face reality when they are forced to face reality. Congress should reject the BAB extension, provide for state bankruptcy, and promote a constitutional amendment precluding the federal bailout of sovereign states. Oh, and repeal the 17th Amendment; we need a return to federalism.
Obama & Holder Get Their Wish: Terrorist Goes Free
Posted by Tom in Constitution, Defense, Justice, Terrorism on November 18, 2010
As suggested in my October post, Obama and Holder do not want Gitmo terrorists to suffer justice. They want them to go free. They try them in civilian courts so that the civilian rules of evidence and the constitutional protections accorded citizens will apply to these killer.
Yesterday, they got the desired result with one Ahmed Ghallani the first Guantanamo Bay detainee to be tried in a civilian court. Recall this is the follow that helped with the 1998 US embassy bombing. He was acquitted on all but one of the 285 charges against him.
The New York Post article, Terror-trial travesty, tells the story:
“After all, on the merits, the evidence against Ghailani was overwhelming:
* He helped buy the truck that carried the bomb in the attack on the embassy in Tanzania.
* A detonator was linked to him.
* A key witness had told authorities that he sold Ghailani the explosives.
Indeed, Ghailani practically confessed to his role in the affair himself. But his statements weren’t introduced at trial.
Defense lawyers had argued that Ghailani’s disclosures were inadmissible because they were coerced — and prosecutors were loath to risk having their entire case tossed by the judge.
Under normal circumstances, that’s fine. But this case involved a foreigner making war on America.”
In other words this is an enemy combatant, a foreigner who is not entitled to US constitutional rights including a civilian trial; he is entitled to a military tribunal.
The Post article also included a wonderful picture of Eric Holder, the Attorney General of the United States.
Would you buy a used car from this man?
State Bankruptcy Law Needed, Likewise an Amendment
Posted by Tom in Bankruptcy, California, Congress, Constitution, Federalism, National Character, National Debt, State Finances, Unions on November 14, 2010
Fehrenbach’s San Antonio Express-News post in RCP today scared me. In discussing the states pension ponzi schemes, California and New York worst among them, he concludes: “When they go broke, no way will the federal apparat, Democrat or Republican, let them wreck the American economy through bankruptcy. Not the American way. We’ll print money, bail them out, while they re-elect the same folks who led them into Red Sea waters.” While this is contrary to the hope expressed in my recent post, it presents a stark warning that demands prescriptive action.
No one doubts that several states are de facto bankrupt. Their current expenses exceed their receipts. Their long term liabilities are unfunded and in most cases unrecorded. The assumptions for these long term obligations are unrealistic. Their public employee unions will not relent in demands for increases nor will they ever consider givebacks. Their liberal politicians will not cut government services since to do so will offend public employee unions. And while those politicians will raise taxes, to do so is to drive out taxpayers and taxpaying businesses who can vote with their feet. Finally, their credit ratings continue to deteriorate bringing these states ever closer to the financial precipice. Only last year California was issuing IOUs to suppliers.
The U.S. Bankruptcy Code provides for bankruptcies of municipalities, cities, counties, etc. but does not provide for the bankruptcy of states. This needs to be remedied immediately.
First, the new congress should pass legislation providing for state bankruptcy. There is no other logical way to reform state obligations.
Next, the new congress should also propose a constitutional amendment prohibiting the federal government from bailing out states that face bankruptcy.
The combination of these two measures if adopted will lend added force to political solutions necessary to reform these spendthrift states. Finally, this is a necessary step to a long needed return to the federalism this country was founded upon.
The United States simply cannot afford to bail out the bankrupt states. The federal government itself is close to bankruptcy.
NEH’s Insult to Vets
Posted by Tom in Academics, Centrally Managed Economy, Constitution, Democrats, Free Speech, National Character, National Endowments and GSEs on November 11, 2010
A despicable insult to our vets was the subject of Hannity’s interview of Professor Penelope Blake: The National Endowment for the Humanities sponsored a WWII-Pacific conference in Hawaii with $140,000 of our taxpayer money to promote a hate America message.
The conference included topics like: • Pearl Harbor and the Pacific War in Japanese History and Memory (Yaguchi, U of Tokyo • Pacific Islanders and the War: Remembering Guadalcanal as a Turning Point (White, U of Hawaii) • The Pacific War in Hawaiian Culture and History (Osorio, U of Hawaii) • The Hawai‘i Japanese American experience: racism, heroism, and beyond (Nishimoto, U of Hawaii)
It seems that these “academics” are basically anti-American, purveying the following propositions at the taxpayer funded conference:
- They maintain Japan was the ‘victim of Western opression’ to justify Pearl Harbor.
- Americans were ‘conquerors and invaders” in freeing Guam from the Japanese oppressors.
- U.S. war memorials like the Punchbowl National Memorial Cemetery are symbols of military aggression and brutality.
- U.S. military has repeatedly committed rapes throughout its history.
- Veterams’ memories of their own experiences in the war are suspect and influenced by media and their own self-delusion.
Now no one would deny these leftists their rights to speak their opinions freely, that is their constitutional right. But that this outrage, reminiscent of Obama’s apologies for America, continues under U.S. sponsorship is simply an unacceptable use of taxpayer money. Particularly at a time Obama, Reid, Pelosi and the Democrats have our economy burdened by recurring Trillion Dollar plus deficits and unsustainable debt. No, more than that, even in good times it is a shameful waste of taxpayer money, period!
It all gets down to the proper role of government. Is the purpose of government to fund the Great Society’s NEH, or NPR, or is that better left to sponsors of education and the arts? Private endowments, corporations and patrons do, as in times prior to the Great Society, sponsor education and the arts.
I wonder if our newly elected House has the guts to defund NPR and eliminate the NEH in the necessary upcoming budget cutting exercise. I sure hope so. After all under the leftist-Obama apologetics, the U.S. is no longer a “Great Society!”
I also wonder if the Senate were elected as originally set out in Article 1 Section 3 of the Constitution, instead of as set out in the 17th Amendment, if the NEA or NPR would exist today!
Finally, how many other National Endowments for the (fill in the blank) are in existence wasting our heard earned money? Time to find out!
Let’s Return to Federalism
Posted by Tom in Centrally Managed Economy, Constitution, Federalism, Individual Freedom, National Character, National Debt, Statism on November 10, 2010
Too much power resides in Washington and too little with the States. The farther away power gets from the people, the more dangerous it is to the common good, the more intrusive it is to our freedom and independence, and the more costly it is, now to our great grandchildren!
The Constitution as originally established understandably reflected the founders fear of highly centralized national power. It created a federal republic. Recall Benjamin Franklin’s famous response, “We’ve given you a Republic, if you can keep it.” That republic was a marvelous structure of checks and balances on power, on centralized power.
Who was beholden to whom for the office held was wonderfully allocated to various constituencies. The executive was elected by an electoral college and had a four year term. The legislature of the people, the House, was elected directly by the people and based upon population. The analogy here was the House of Commons. And the people would express their control and sentiments most frequently, every two years. The Senators, only two from each state, were elected by the state legislatures and had terms of six years. The analogy here was the House of Lords. Finally the judiciary, then the Supreme Court, was appointed by the president with the advice and consent of the Senate and served for life.
This worked as structured, as a federal government, with local and state responsibility and control for years. The principle of “subsidiarity,” that needs would be best served at the lowest level of society, was in full force and flourished. Under this principle, the family, the social organization, the church, the local authority, etc. could all do things more effectively than the federal government miles away. States, counties, municipalities all had real responsibility and provided for the local needs much better than could be done by some distant government.
This worked in fact until the so-called progressives said that it didn’t work. The 17th Amendment to the Constitution was adopted in 1913. It provided for the direct election of Senators, rather than the election by state legislatures as set out in Article 1, Section 3.
Since that time we have witnessed ever increasing federal power and ever declining local power. We have seen control of local responsibility for important programs like education eroded. We have seen unfunded mandates levied upon the states and localities, like Medicaid. We have seen concentrated national unions influence the election of Senators. And we have now seen an out of control federal budget with unsustainable levels of debt that will subject our grandchildren to servitude.
There is an embryonic movement afoot to repeal the 17th Amendment. It is very much worth serious consideration. Todd Zywicki has an excellent post on NRO today, Repeal the Seventeenth Amendment. It’s well reasoned and persuasive.
From my perspective, we need to promote more individual and local responsibility and power and less in Washington DC. A repeal of the 17th Amendment would go a long way to doing so. It would likewise go a long way to starving the beast.
DOJ Wants Foreign Interpretation of U.S. Constitution
Posted by Tom in Constitution, Immigration, Judiciary, Justice, Legal, Presidency on October 28, 2010
Not only is Obama’s Department of Justice corrupt in voter fraud cases which it should prosecute but won’t, but it now doesn’t object to foreign countries advancing arguments to interpret the U.S. Constitution in its suit against a State of the Union!
One more example of how un-American Obama and Holder really are!
Slow Treck Toward Socialism…The NPR Example
Posted by Tom in Business, Centrally Managed Economy, Constitution, Government Regulation, Statism on October 24, 2010
Seth Lipsky’s WSJ piece, The Real Case for Defunding NPR, argues that government subsidy “casts a chill over markets in which entrepreneurs seek to raise capital for highbrow journalism.” He cites his own difficulty in raising money for independent journalism when the investor asks, “isn’t this already being done by public broadcasting?” There goes the investor, no market when similar programming is already being funded by the government.
It is a stretch to say that NPR is “being funded” by the government when only 1-3% of its budget comes from the taxpayers. But the other donations from foundations and subscribers are often tax deductible, so maybe that is not too big a stretch.
The simple point is that any taxpayer subsidy is an unnecessary use of public money. Government does not belong in the business of business. At least, not in a free, capitalistic market.
Of course this runs counter to the recent call for more taxpayer money to be poured into the losing media businesses:
“A small chorus is tuning up to demand not that the government get out of the way but that it actually step up its funding of the press. Last year a report—written by a former editor of the Washington Post, Leonard Downey, and issued under the auspices of the Columbia Journalism School—called for siphoning funds from the Federal Communications Commission’s surcharge on phone bills into a Fund for Local News that would underwrite “worthy initiatives in local news reporting.”
“The president of Columbia University, Lee Bollinger, has emerged as a leading voice for pouring more government money into news gathering. How badly would that chill the capital markets for those who dream of privately funded news gathering, completely independent of oversight by Congress?”
Don’t forget the Communists methodology was to first control the media and educational systems. This a logical takeover of society. Given the unfettered liberalism of our schools and universities and the obvious liberalism of the main stream media, we are well on our way to the leftist, socialistic, communistic takeover. Pick one.
So to Lipsky’s point, government interference in a marketplace, any marketplace, chills independent investment. This for a logical reason, how can private capital compete with the entity that prints the money! That chilling appears to be the goal of the leftists, witness the government ownership of and detailed interference in major private industries.
Simply put, investment in businesses is not a proper role for government. Constitutionally, it is ultra vires, that is legally beyond the legitimate power of government.
Islamic Terror of “Free” Press
Posted by Tom in Constitution, Democrats, Press on October 10, 2010
Wiley Miller’s Non Sequitur cartoon was pulled from the print edition of the Washington Post for fear of Obama or a fatwa is unclear. But it was pulled.
The editors were afraid to offend Muslims radical ones at that according to Andrew Alexander’s post. The liberal left press fades for fear of offending, or is it retribution? So much for character and American spirit!
Freedom vs. Statism
Posted by Tom in Centrally Managed Economy, Congress, Constitution, Democrats, Government Regulation, Individual Freedom, National Character, Statism on October 1, 2010
Congressman Tom Price (R-GA) and the Republican Study Committee present this stark contrast between thinking independent Americans and the leftist progressives, the Democrats, who control our government and are leading us down the Road to Serfdom, step by step.
November 2010 and November 2012 can’t come soon enough!
Constitution? He Don’t Need No Stinking Constitution!
Posted by Tom in Business, Centrally Managed Economy, Congress, Constitution, Financial Policy, Government Regulation, Presidency, Statism on September 19, 2010
Our little dictator Hussein Obama really doesn’t want any “checks and balances” not even when his own party has complete control of them. Yep, Obama has appointed that darling of the left, Elizabeth Warren, “assistant to him and special advisor” to the Treasury Secretary with respect to the new Consumer Financial Protection Bureau. She will oversee all aspects of consumer protection including personnel and planning. The bureau has independent rule making authority and can grant itself an annual budget of up to $646 million from the operations of the Fed. No need of Congressional appropriations.
Instead of appointing her Director of the bureau which would have required the “advice and consent” of the Senate, he makes her a tzar answering to no one. She offices in the Treasury Department which has no authority over her. She will have “direct access” to the supreme dictator himself.
A WSJ editorial, Elizabeth III, pretty well sums up her power–and inferentially Comrade Obama’s power. No constitutionally required “advice and consent,” and no Congressional appropriations! Absolute rule making that can only be overturned by a 2/3 vote of the new Financial Stability Oversight Council.
The Constitutional requirements are pretty clear. Obama knows them. “On July 21, Mr. Obama signed a bill passed by both Houses stating that the “Director shall be appointed by the President, by and with the advice and consent of the Senate.” Yet he ignores them in the face of opposition from his own party. Democratic Senator Chris Dodd warned the president that she was not confirmable. Obama’s answer–take your Constitution and shove it!
This is so outrageous that even the liberal Washington Post editorial leads with “President Obama picks Elizabeth Warren…and thumbs his nose at the Senate.” It concludes, “for all intents and purposes, the president has created, and filled, a de facto directorship. This might have been in keeping with the letter of the laws, but not with their spirit.”
Now think for a minute the power this de facto dictator will have over fiance laws and regulations. It will cover not only banks but merchants extending credit. Think of the conflicts with banking regulations that are sure to occur. And finally, think of the business uncertainty compounded by the prospect of new regulations and new conflicts.
With the voracious trial lawyers waiting in the wings to sue banks and merchants for a misplaced comma or unbolded printing, expect a slow down in the extension of credit and a consequent slow down in credit dependent sales. Force these slow downs back through the chain of production and you have a general economic deterioration. All coming at a time that our recovery is very weak.
I can’t help but recall Tom Cargill’s chess match analogy: when the referee announced an impending rule change in the middle of the match, the players had little incentive to continue playing, so the match stopped! This is exactly what Team Obama is doing to our economy!