Freedom Line Blog

According to an article in the journal Regulation, there are two ways to regulate the flow of administrative agency rules.  The “downstream” approach tries to “rein in onerous regulations after they have been promulgated.”  The “upstream” method allows Congress “to restrict administrative agencies before giving them rulemaking authority during the legislative process.”  The idea is to get fewer and less costly regulations with five key reforms:

1)      Require agencies to review existing regulations for inefficiency at a set time after implementation (which sounds like something similar to Texas’ Sunset process)

2)      Require agencies to eliminate duplicative rules if a new regulation would supersede an older one

3)      Limit the total number of regulations during implementation of any new law (an attempt to make rule writers more cautious when spending their regulatory chips)

4)      Establish a regulatory “pay-as-you-go” that rescinds one old rule for every new rule implemented (the authors also argue for a proportionality requirement that ensures against an economy-killing rule replacing a forgotten restriction no longer necessary)

5)      Prohibit new regulations where costs exceed benefits

The key perk of the last proposal is requiring agencies to engage in a formal cost-benefit analysis during the implementation phase.  That helps put the agency on record – and the voting public on notice – of the true impact about to hit before it’s too late.

Check out the short (4 page), tightly-argued article here.

H/T: Cato Institute

World Net Daily reports that a rediscovered C-SPAN video shows Eric Holder’s deputy linking the un-stimulating Recovery Act to funding for Project Gunrunner, a sister program to ATF’s Fast and Furious ‘gun-walking’ scheme to track guns sold to Mexican drug cartels.

Here’s the money quote from Deputy Attorney General David Ogden:

“Attorney General Holder and I are taking several new and aggressive steps as part of the administration’s comprehensive plan. Those steps include the following: DOJ’s Drug Enforcement Administration, which already has the largest U.S. drug enforcement presence in Mexico with 11 offices in that country, is placing 16 new DEA positions in southwest border field positions .., uh, field operations, specifically to target Mexican trafficking and associated violence,” he said.

“The DEA is also deploying four new mobile enforcement teams to specifically target Mexican methamphetamine trafficking both along the border and in U.S. cities impacted by the cartels,” he continued.

“DOJ’s bureau of Alcohol, Tobacco, Firearms and Explosives is increasing its efforts by adding 37 new employees and three new offices, using $10 million in Recovery Act funds and redeploying 100 personnel to the southwest border in the next 45 days to fortify its Project Gunrunner, which is aimed at disrupting arms trafficking between the United States and Mexico,” he said.  (Emphasis added)

The date of the press conference: March 24, 2009.  That’s fifteen months prior to the June 2010 memos that earlier this week showed Holder lying to Congress about when he was first aware of the ATF programs.

Holder has no credibility left.  It’s time to fire him, immediately.

With the unwashed masses “occupying” Wall Street and other financial centers throughout the country, Community-Organizer-in-Chief Barack Obama is trying to convince the protesters of crony capitalism that their grievance is really his.  From today’s Wall Street Journal:

Asked about the demonstrations that have spread to cities across the U.S., Mr. Obama empathized with protesters’ frustrations without embracing the movement: “The American people understand that not everybody has been following the rules; that Wall Street is an example of that.”

Haven’t been following the rules? How’s this for a list of people not following the rules:

• Treasury Secretary Timothy Geithner fails to pay federal income taxes while working at the taxpayer-supported International Monetary Fund

• Health and Human Services Secretary Kathleen Sebelius grants over 1,000 ObamaCare waivers – many of them to unions

• Energy Secretary Steven Chu rubber stamps another taxpayer subsidy to Solyndra after the company defaulted on a $535 million loan (the company couldn’t get sufficient venture capital funding but did grease the skids to get taxpayer money thanks to an Obama fundraiser – who was also an investor – pulling strings)

• Attorney General Eric Holder lies to Congress about allowing a criminally stupid ‘gun-walking’ program at ATF to continue that sends 2,000 guns to Mexican drug cartels, killing a Border Patrol Agent

• Education Secretary Arne Duncan violates the No Child Left Behind law by unilaterally issuing waivers that require recipients to accept White House dictated regulations that cannot get through Congress – an unheard of abuse of the waiver process

I could go on, but I think the point is made.  The American people are viscerally aware of a politically connected elite waging war on the rule of law.  But it’s the Tea Party, not those squatting outside America’s nodes of commerce, that has identified the biggest threat to prosperity.  It’s time to occupy the White House and the Cabinet with people who not only respect the law, but also know how to grow the economy in a real, free market fashion.

Don’t bother me with the facts; we’re trying to save the world here!

That’s essentially what Patrick Michaels of the CATO Institute says the Environmental Protection Agency (EPA) did when it decided that carbon dioxide and other greenhouse gases endanger the environment and must be regulated.

The problem for EPA is that its own Inspector General recently stated that the process EPA used to justify its decision violated both federal law and scientific integrity.  According to Michaels, federal law requires any endangerment finding that is “highly influential” to be rigorously peer-reviewed to ensure that economy-altering regulations are based on the best science available.

EPA violated that standard when it based its endangerment finding on a facially biased United Nations report favorably reviewed by at least one federal climatologist who worked for EPA – a clear conflict of interest.

The stakes are high.  EPA’s endangerment finding is the legal basis for the agency to dictate energy regulations down to the kind of light bulb Americans can use in their homes.  By cooking the books that authority rests on, EPA has destroyed any credibility it may have had.

Let the legal challenges begin (again).

It certainly looks like U.S. Attorney General Eric Holder lied to Congress when he said on May 3^rd of this year that “I’m not sure of the exact date, but I probably heard about Fast and Furious for the first time over the last few weeks.”  The most generous accounting would limit Holder’s knowledge of the international gun scandal to no earlier than the beginning of 2011.

Not so reports CBS News.

Yet internal Justice Department documents show that at least ten months before that hearing, Holder began receiving frequent memos discussing Fast and Furious.

Specifically, memos dating from July, October, and November of 2010.  Spinners at Holder’s Department of Justice are trying to cover their boss by saying he misunderstood the question about when he first heard about Fast and Furious and its criminally negligent gun-walking element.

Spare us the feigned stupidity, Mr. Attorney General.  Among your many derelictions of duty, the gun-walking scandals offer the strongest rationale for your resignation.  Failing that, it may be time to consider impeachment proceedings.

For every crisis, there is an opportunity:

As part of the June budget agreement, the state will transfer to the 58 counties responsibilities for managing low-level offenders, as well as providing mental health, substance abuse and child protective services. It’s a Reaganesque approach – the idea that we can deliver better service at less cost by moving government decision-making closer to the people. Or, as Gov. Jerry Brown described Thursday, “It’s a bold vision of a new relationship between the state and local governments.”

It’s also a bow to fiscal reality.  Here’s to more (forced) bold thinking that gives local officials the power to best serve their neighbors.

According to Roll Call, it’s official: there will be at least one incumbent Republican senator having to defend his record against Tea Party criticisms next year.  The Tea Party Express, a group known for helping challengers Sharron Angle (NV), Joe Miller (AK), and Christine O’Donnell (DE) win Republican primaries, is backing Indiana State Treasurer Richard Mourdock’s bid to replace Senator Richard Lugar.

Though Mourdock presumably appreciates the support, he probably wants a better finish then the three mentioned above.  All lost in the general election.

The Heritage Foundation has a masterful indictment of Senator Harry Reid’s (D-NV) ham-handed attempt to use a FEMA budget bill to score political points.  Last week, Reid deliberately killed a House-passed continuing resolution funding FEMA for $3.5 billion while cutting $200 million in subsidies similar to the Solyndra loan fiasco.  Angry at the cuts, Reid sidelined the House bill and introduced his own with no cuts and more spending.

Yet when the Senate sensibly defeated Reid’s proposal, he chastised the chamber in a bizarre floor speech that tried to pin blame on Republicans for leaving disaster victims out in the cold.

Besides refusing responsibility for holding victims hostage so more green jobs could be subsidized, Reid’s implication was that without billions in taxpayer money, citizens would be left to fend for themselves.

As Heritage shows, Reid’s argument is simply not so.  With just a bit of calling around, the think tank found that disaster victims in Pennsylvania were being assisted by the Wyoming County United Way, the Seven Loaves Soup Kitchen and the Weinberg Regional Food Bank.  Each of these private voluntary groups reported record numbers of donations and applications to assist.

As with any disaster, everyday Americans don’t wait for the government to mobilize.  Instead, they roll up their sleeves, stuff sand bags, serve hot food and help the devastated rebuild their lives and communities.  For statists like Harry Reid, people die without the government.  For those living in the real world, it’s people – not bureaucracies – that make recovery possible.

Fox News reports that ATF’s Fast and Furious botched gun-tracking operation to Mexican drug cartels didn’t stop at encouraging private gun owners to sell to known criminals with assurances of surveillance.  Six months before Border Patrol Agent Brian Terry was murdered with one of these weapons, ATF supervisors in Phoenix directed field agents to sell the guns directly.

The result was the same as when the guns came from private sellers: no surveillance was initiated by ATF to track the guns.  Instead, the buyers for the cartels were allowed to store them in a stash house and ship them south with impunity.

These are the kinds of revelations that get bureaus like ATF shut down.  Could it also be the scandal that sinks Attorney General Eric Holder, the man who oversees ATF’s operations?

Read the whole story here.

Today marks the release of Moneyball, a movie based on a book based on the true story of how the Oakland Athletics baseball team overcame a chintzy payroll to compete with high-dollar teams.  The book revolutionized the way many people think about baseball (and management in general) because of the A’s innovative use of player’s statistical data.

Today also saw top executives from Solyndra stonewalling Congress over how the company went from $535 million in federal subsidies to bankruptcy in less than three years.

Nine years after Moneyball was published – and eight years after Major League Baseball started testing for steroids – the A’s success tapered off in relation to falling production of steroid using players like Jason Giambi, Miguel Tejada, and others.  (National Review’s Neil Minkoff has the details here.)

So, despite the A’s perceived use of a superior technology, it looks more and more like they benefited from their proximity to the steroid capital of baseball: the San Francisco Bay Area (remember the Giants’ Barry Bonds?)

Something similar happened with Solyndra.  When the company’s solar technology was new it looked like the magic bullet for the “green economy,” so much so that investors and the Obama Administration threw caution to the wind, funded a fantasy, and put taxpayers on the hook for half a billion dollars.

The A’s only lost games and perhaps some credibility after their more-than-meets-the-eye initial success.  American taxpayers are losing their collective shirt with bad bets on Keynesian stimulus and market-distorting subsidies.  A’s fans might want to get new management.  Americans should demand it.

Foreign Policy offers a Top 10 list of the “craziest things ever said during a United Nations speech,” to help give context to today’s request for statehood recognition by the Palestinian Authority.

Among the leaders contributing to the list are Russia’s Nikita Khruschev (shoe banging and epithet); Palestine’s Yassir Arafat leading a “Zionism = racism” movement; Venezuela’s Hugo Chavez comparing President George W. Bush to Satan; and Iran’s Mahmoud  Ahmadinejad blaming the South Ossetia war on Israel.

Of the top ten, three include racist criticisms of Israel.  If Palestine gets statehood status and speaking privileges, expect that number to rise.

Bloomberg News reports the latest ultimatum from House Speaker John Boehner (R-OH) to President Barack Obama:

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem” with the aid and preference programs, Boehner, an Ohio Republican, said in a statement yesterday. “If the president submits these agreements promptly, I’m confident that all four bills can be signed into law by mid-October.”

Apart from Rep. Paul Ryan’s budget resolution and the president’s deficit reduction proposal, there may be no better example of how different is each party’s idea of sound economic policy.

Boehner wants Obama to release three trade treaties negotiated by the Bush Administration so that Americans and their counterparts in Columbia, South Korea and Panama can start enjoying the benefits of free trade.

For his part, Obama wants to force Republicans into funding another round of unemployment benefits, this time for workers displaced by the yet-to-be-ratified agreements.  That’s right: the president wants to spend money on people who may never be fired.

First of all, it’s fallacious to assume that businesses operating at historically low worker levels will fire employees; especially since increased trade opportunities are more likely to lead to hiring increases.  Moreover, Obama fails to recognize the cost of not enacting the three free trade agreements.  For instance, the U.S. Chamber of Commerce estimates that failure to ratify the agreements will cost 380,000 jobs due to missed business opportunities.

At the heart of this dispute is the focus of each party.  Boehner and the Republicans want to spur economic growth.  Obama and the Democrats want to lock-in the growth of the entitlement state.

Boehner is right to demand action on both free trade and worker aid at the same time.  If Obama cries foul, it’s only because his childish attempt to spend more and get less was called out.

The Canadian Press reports that its government will hire consultants from Deloitte Inc. to devise ways to reduce annual spending by $4 billion by next March.  Cost of the contract: $19.8 million.

Here’s the Conservative government’s response to those badgering it for spending $90,000 a day to reduce spending:

A spokeswoman for Clement defended the contract, saying Ottawa needs the best advice available for reducing costs.

“Engaging private sector advisers who have been successful with cost-saving operational reviews will better enable ministers and deputy heads not only to compile their individual cost-savings proposals but also to provide practical advice on what to look for and how to execute their plans,” press secretary Heather Hume said in an email.

“As always, our government is committed to maintaining an open, fair and transparent procurement process while obtaining the best possible value for Canadians.”

If President Barack Obama and Congress are so willing to set aside the normal constitutional processes for writing budgets and tax policies (as evidenced by the creation of the congressional ‘supercommittee’ charged with finding $1.5 trillion in savings by Thanksgiving), why not go all the way and let experts in the private sector scrub the books and find the savings?

Hat tip to Rep. Darrell Issa (R-CA) and his staff at the House Committee on Government Oversight for sharing this “Myth v. Fact” explanation via email of the USPS’s alleged overpayment into the federal retirement system.

Myth: The Postal Service has overpaid by $50-$75 billion into the Civil Service Retirement System and Congress owes this money back.

Fact: There is no Postal Service overpayment.

The United States Postal Service was created in 1971 from the old Post Office Department in order to provide better mail delivery and let it act more like a business. In 1974, the Postal Service agreed to a formula to share the retiree costs of individuals who worked for both the Post Office Department and the Postal Service, calling it “proper, as a matter of principle.” Now, with revenues declining, the Postal Service argues that that formula is unfair. The Postal Service argues that if a formula it considers to be fair had been used instead, then it would be owed $50-$75 billion by the US Treasury.  This is an attempt to rewrite history. The original formula was instituted as part of a broader set of decisions concerning the creation of USPS.  For instance, those decisions included not charging any fee to USPS in return for the postal monopoly it was granted.  Another reason why it makes little sense to speak of an overpayment due to USPS is that the Postal Service had a clear requirement from 1971 until 2006 to raise postage rates to cover all costs, including its cost of retirement funding.  If a different formula had been used all these years that had resulted in lower annual payments by USPS for its federal employee retirement costs, those savings would have been used to lower the cost of postage rates.

Issa’s postal reform bill is up for consideration in a congressional subcommittee today.  You can get more information on his version of postal reform at this website.

The ATF’s “Project Gunrunner” and “Operation Fast and Furious” scandals continue show a cover-up by high-ranking officials in Eric Holder’s Department of Justice.  The most recent revelation was the emergence of tapes secretly recorded by an Arizona gun dealer who grew suspicious of ATF’s ability to intercept guns deliberately sold to Mexican drug cartels.

Howard made the tapes in March 2011 after a meeting he and his attorneys held with federal officials. In that meeting, Assistant U.S. Attorney Emory Hurley continued to insist the guns Lone Wolf sold were stopped and seized before reaching Mexico.

But ATF officials are quoted in a Washington Post article and the Spanish language daily La Opinion saying just the opposite — blaming Lone Wolf for “selling guns to the cartels” with no mention that Howard was operating under the federal government’s direction, encouragement and approval.

In related news, the Mexican government is seething because ATF brass and supervisors at Justice chose not to inform relevant officials of the gun-walking program.  After learning of the operation from news reports following Border Agent Brian Terry’s murder, the Mexican Attorney General said, “In no way would we have allowed [the selling of guns to drug cartels], because it is an attack on the safety of Mexicans.”

And an affront to American integrity as well.

NBC News reports a breath of fresh air for ailing U.S. manufacturing workers: Companies that once outsourced jobs to China are starting to bring some of them back.  Some of the reasons:

Labor costs are soaring by 40 percent a year, as migrant workers are becoming pickier, since there are more job opportunities at home. Also China’s one-child policy means there is no longer such a huge pool of young, dexterous workers. Bank lending is tightening and China’s currency is also appreciating by around 6 percent a year against the U.S. dollar, not quickly enough for US and European policymakers, but sufficient for factories on low margins to feel the pain.

Of course, slapping a new tax on USA-based job creators will stifle any trend towards manufacturing growth China’s growth might enable.

Mr. President, have pity on the working man…

When it was passed back in 2003, New Mexico’s law allowing illegal immigrants to receive state drivers’ licenses was billed as a way to make the roads safer by requiring illegals to pass a driving test and carry insurance.

For all the hoopla, a recent study showed that New Mexico is second in the nation for percentage of uninsured drivers on the road at 25.7 percent.  As for making New Mexico safer, a different reality has emerged:

The unintended consequence has been an eruption in criminal rings assisting illegal immigrants in obtaining New Mexico driver’s licenses. In the past year, the state has indicted members of at least seven operations on fraud charges.

The consequence may have been unintended, but it was foreseeable.  Extending a legal privilege to a person whose very existence breaks the law of the country encourages more law-breaking.

It’s a good thing for New Mexico that newly elected Governor Susana Martinez is a former prosecutor.  Too bad for America that President Barack Obama isn’t.

An interesting critique is starting to surface: Big Government and Big Business are conspiring to enrich themselves at the expense of job and wealth creation for the middle and lower classes.  Demographer Joel Kotkin is noticing it.  So too, is potential GOP presidential candidate Sarah Palin.

As Kotkin notes, grassroots Democrats are noticing that President Barack Obama’s neglect of job creation is costing their members dearly.  (Just ask California Democrat Maxine Waters.)  Republican presidential frontrunner Rick Perry is weakest on the issue of crony capitalism.  Palin’s critique of the Big Business-Big Government axis could expand a core Tea Party theme into a viable national campaign.

Of course, this argument may fizzle, but it’s interesting to see quite different commentators coming out with the same idea.

While congressional investigators continue to probe into whether the Obama Administration broke federal laws in awarding a $535 million loan to now-bankrupt Solyndra, the Wall Street Journal details how crony capitalism prolonged a series of bad decisions by the solar company’s management.

Here’s the money paragraph:

In mid-2009, Solyndra had a choice: It could hunker down with its existing factory and try to slash costs to meet competition, drawing on additional private capital as needed, according to the people familiar with the company. Or, with a loan from Uncle Sam, it could gamble and build a brand-new, bigger factory in a bid to gain economies of scale and dominate the market.

Choosing to gamble, Solyndra overbuilt its manufacturing capacity, and continued rushing to market a product that was not marketed – or priced – correctly.

As the WSJ article makes clear, not all of Solyndra’s problems were the result of inept management.  An unexpected drop in the price of a competing product turned Solyndra’s profitability upside down.  The market was sending Solyndra’s management a message to rethink their strategies.  The Obama Administration bypassed that all-important-process with huge amounts of money to continue pursuing failure.

Come to think of it, that pretty much sums up the president’s thinking when it comes to government spending.  No wonder his new jobs plan is dead on arrival.

Yesterday was a victory of sorts for those of us who want Congress to clip the wings of the regulatory state.  In a near-perfect party-line vote the House of Representatives passed a measure prohibiting the National Labor Relations Board (NLRB) from harassing businesses like Boeing for moving to business friendly states.

Earlier this year, the liberal majority on the NLRB sued Boeing for opening up a new factory in South Carolina – a right-to-work state – instead of expanding its existing manufacturing presence in Washington state, a union shop state.  For the first time in its history, NLRB interpreted its congressionally delegated authority to include the power to punish a private business for relocating some of its operations to more profitable climes.

Congress now has an opportunity to correct NLRB’s overly broad interpretation.

NRLB’s unprecedented decision merits a brush back response like the one the GOP-controlled House delivered yesterday.  Though the measure is likely to die in the Democrat-controlled Senate, the Boeing-NLRB tussle should be some Republican presidential candidate’s Exhibit A on the regulatory overreach of Obama’s federal government.

Unions can only grow if businesses grow first.  It’s time for the liberals at the NLRB and elsewhere to remember that simple truth.

H/T: Washington Times