Freedom Line Blog

You know it’s shaping up to be a bad year for Democrats when the congressman most associated with pressuring banks to accelerate the growth in subprime mortgages says he hopes government mortgage giants Fannie Mae and Freddie Mac are dead within a year.  House Financial Services Committee Chairman Barney Frank (D-MA) told CNBC host Lawrence Kudlow that he no longer supports “pushing lower-income people into housing they couldn’t afford…”

So what could be motivating Frank’s flip-flop?  Kudlow thinks it could be the rare example of a politician admitting his mistake.  I’m betting it has more to do with the rise of Sean Bielat as a serious contender to challenge Frank in the upcoming general election.

The same week Frank offered his mea culpa to Kudlow, Frank’s campaign staff circulated information that Bielat was formerly a registered Democrat before switching to the Republican Party.  The implication is that Bielat can’t be trusted because he switched parties.

But in an impressively worded explanation, Bielat manages to highlight his resume as a former House page, Marine and Harvard graduate, and why at each step along the way he was more and more conflicted with the Democrats’ liberal agenda.  There’s even a polite reminder that Ronald Reagan was once a Democrat until its leftward tilt helped him discover his inner conservative.

Frank is obviously concerned about Bielat’s appeal this year because of his line of attack on Bielat: Don’t vote for Sean; he used to be a Democrat.  Too bad for Barney, though, because he still is.

In a year or two, we may look back on the City of Bell public employee compensation scandal as the modern day equivalent of Upton Sinclair’s The Jungle.  Both stories showed the general public how bad a particular industry behaved, and prompted serious, far-reaching reforms.

The chief villain in the Bell fiasco (so far) is its former city manager Robert Rizzo.  At the time of his resignation, Rizzo was making close to $800,000 a year, and due to earn hundreds of thousands of dollars a year from his public employee pension.  Now that he’s retired, the pension is kicking in – and so are taxpayers in cities that share Bell’s pension pool.

That means that Hesperia, CA, is on the hook for $80,000 of Rizzo’s estimated $600,000 a year pension (not to work!), even though it fired Rizzo after his four year stint ended in 1992.  Taxpayers in Rancho Cucamonga will be paying $160,000 of the bill, with Bell and other cities who never even hired Rizzo chipping in the rest.

And remember, the estimated $600,000 is owed to Rizzo – by law – every year for the rest of his life.  After being fired by at least two of the cities that hired him.  Insane.  Public employee pension reform may not be a “sexy” issue on the campaign stump, but it is certainly a topic that is sure to get people’s attention during this era of runaway government spending.

The Bell scandal may be the the last, best chance to reign in the power of the public employee unions before they ruin the American economy.

The Tea Party movement is going viral.  As reported earlier, the City of Bell, CA is now Exhibit A in corrupt government.  Thousands of the majority Hispanic population in Bell protested outside city hall after it was revealed that the city council raised local property taxes 50% beyond the legal limit.

Here’s a spot-on analysis of how the Tea Party movement’s call for limited – and constitutional – government is starting to bubble up in a growing number of communities.

When people wonder why the Tea Party and other grassroots political movements start, this is a great example.  Government at any level that grows haughty, insular, and corrupt generates a reaction towards accountability and more modest models of governance.  I’m certain that the protesters in Bell don’t see themselves as part of the Tea Party movement, but the two have more similarities than differences.  They’re angry at the local model of big government arrogance and at having their pockets picked — especially considering the relatively low average household income in this Southern California community, at just under $30,000.

H/T: Hot Air Blog

The New Republic’s John Judis is out today with a feature-length article titled, “The Unnecessary Fall,” a blow-by-blow recounting of how Barack Obama missed his opportunity to define his presidency in populist terms.  To Judis, the greatest betrayal of liberal America’s would-be Messiah is the latter’s failure to engage in confrontational politics.

Why has the White House failed to convince the public that it is fighting effectively on its behalf? The principal culprit is clearly Barack Obama. He has a strange aversion to confrontational politics. His aversion is strange because he was schooled in it, working as a community organizer in the 1980s, under the tutelage of activists who subscribed to teachings of the radical Saul Alinsky. But, when Obama departed for Harvard Law School in 1988, he left Alinsky and adversarial tactics behind.

The young lawyer who returned to Chicago and won a seat in the Illinois state Senate in 1996 practiced a very different style of politics. Obama’s principal accomplishments in Springfield were bills restricting lobbying and requiring videotaping of confessions in potential death penalty cases. He was not a typical blue-collar, bread-and-butter Chicago Democrat, but the kind of good government liberal that represents the upscale districts of the city, seeing in politics a higher calling and ill at ease with (although not in open opposition to) the city’s Democratic machine. He was also a post-racial politician who eschewed the hard-edged, angry rhetoric of Jesse Jackson. (That, too, is oddly reminiscent of Carter, who partly campaigned in 1976 as the white Southern antidote to George Wallace’s angry racial populism.)

Obama carried this outlook into the U.S. Senate, into his campaign for the presidency, and then, into the presidency itself. He is a cerebral, dispassionate, post-partisan; he wants to “end the political strategy that has been based on division,” to “turn the page” on the culture wars of the 1960s and the partisan battles of the 1990s. During the campaign, his aides jokingly referred to him as the “black Jesus.” While he can tolerate and even brush aside conflict, he is reluctant to actively foment it. “In a time of crisis, we can’t afford to govern out of anger,” he declared in February 2009. During his campaign and his first year in office, he held to a blind faith in bipartisanship, even as the Republicans voted as a bloc against his legislation. He is, perhaps, ill-suited in these respects for an era of bruising political warfare.

Ignoring Judis’ laughable attempt to paint Obama as a disappointed bipartisan, there’s nothing special about this era that makes politics any more or less “bruising.”  Leading is always tough.  As Judis indicates, maybe Obama isn’t.

With the Federal Reserve announcing it will increase the supply of paper money (i.e. dollars), it is once again time to consider the merits of (re)adopting the Gold Standard to help regulate the value of our nation’s currency.  Gold Standard 2012, a project of the American Principles Project, has a helpful video:

Victor Davis Hanson has some terrific commentary at National Review Online drawing out the distinctions between the well-paid, over-worked White House aides recently profiled by the New York Times, and the everyday Americans grinding it out during the Great Recession.

The Times wants to draw a sympathetic portrait of the heroic Obama cadre that suffers so much on our behalf. These are six-figure jobs that wear out one’s hands on the Blackberry, true, but serve as valuable stepping-stones to even higher-paying corporate jobs. And this is still a recession. This raise-the-bar griping will not go down well with the coal worker in Montana, the welder on a 30-story scaffold, or the oil worker offshore (e.g., it is not as if a Blackberry is going to blow up in one’s hands, or an acoustical tile is going to fall and crush one in the West Wing). It is all too reminiscent of the various explanations we’ve heard for why Michelle’s Costa del Sol sojourn was an understandable and much-needed refresher before the more arduous odyssey ahead on Martha’s Vineyard.

Maybe this was one of the reasons Robert Gates decided to stay on as Defense Secretary when Barack Obama became president.  Faced with budget deficits and needing funding for two wars, Gates is setting his sights on reducing the waste, fraud and abuse in military bureaucracy and contracting.

Rest assured, the Gates cuts will not imperil soldiers in the field.  In an eye-opening column by Ralph Peters, the Defense Secretary’s war on waste is an admirable contribution to the government-wide belt-tightening that needs to be done.  Peters highlights five key targets:

1. A reduction in the amount of overpaid contractors currently making up 39% of the Defense Department workforce
2. Pink slips for an overabundance of senior brass and staff
3. Eliminating redundant information technology offices
4. Curbing expensive self-studies that provide little value
5. Closing the Joint Forces Command, an ineffective inter-branch agency with no mission

According to Peters, Gates can prove there’s bite to his bark if he can get JFCOM closed despite the howls from its Virginia-based congressional delegation.

Stay tuned.

Here’s Rep. Paul Ryan’s (R-WI) take on President Barack Obama’s Clintonian ability to triangulate:

Looking ahead, Ryan says “a lot of people speculate on whether [President Obama] will triangulate like [Bill] Clinton did” after the GOP sweep in 1994. The Wisconsin Republican isn’t holding his breath. “I don’t know whether that’s really who [Obama] is,” Ryan says. “First, the economy is not going to be like it was in 1995 or 1996. Second, the president is a liberal and Clinton was arguably a centrist. And third, I just don’t think that [Obama] is willing to admit that all the things he did during the first two years of his presidency were wrong, because I don’t think he believes that. I don’t see a big triangulation happening.”

As summer traipses towards fall, the president’s persistence in his agenda is making it more and more likely that he will force his 2012 reelection campaign to be a referendum on him and his ideas.  Hopefully, Republicans will nominate someone who can not only define those deficiencies, but also articulate a better way forward.

H/T: The Corner at National Review Online

Everyone except Paul Krugman at least acknowledges that paying for the recently extended unemployment benefits Congress just authorized is a serious issue; even if some consider it outweighed by other concerns.

In addition to increasing the national debt, extending unemployment benefits may also increase unemployment itself.  As Thomas Cooley explains in Forbes, studies show that unemployment benefits can reduce the urgency to find a new job.  However, Cooley mentions another phenomenon that bears further meditation:

Economists Lawrence Katz and Bruce Meyer, in a 1990 study, showed that an increase of one week of benefits increased the duration of unemployment by about 0.2 weeks. Note that some benefits have been extended up to 99 weeks. A back-of-the-envelope calculation means that going from 26 weeks of benefits to 99 would increase unemployment duration by about 14 weeks very close to the increase in duration shown in Figure 3. Recently, however, in a testimony to the Joint Economic Committee (April 29, 2010) the very same Katz said that the effects are small. The difference between the 1990 study and his current finding is that, according to his research, permanent job losses as opposed to temporary layoffs have played a bigger part in this recession. (Emphasis mine)

Unlike Krugman, I’m not one to quibble with logic and empirical data.  But the current unemployment situation is different from the usual circumstance of entities within a sector reshuffling the staff rosters.  Such events cause minor displacements – though not to individual workers and their families – and can be smoothed out when laid off workers find comparable employment in the same or similar industry.

This recession is different.  As the bolded text above shows there appears to be an economy-wide reduction in workforce afoot.  Employers are discovering unknown efficiencies with contingency workers.  In many cases, former full-time, full-benefit workers are being hired back as independent contractors for project work with no benefits.

Once employers get used to getting more production for less compensation, those former full-time, full-benefit jobs won’t be coming back.  That poses a serious quandary for limited government conservatives.  Should government provide a benefits supplement for those working multiple jobs, but still failing to pay the bills, even if it means adding to the deficit?  On the other hand, should benefits be cut to stop the fiscal bleeding with the hope that the former recipients find a way to make ends meet?

Whatever path is chosen, conservatives need to think hard about how to combine stopping the government spending with policies that enable sustainable private sector job creation.

During a television appearance over the weekend former Clinton Treasury Secretary Robert Rubin stumbled onto a hard truth for liberals when it comes to proving they can be trusted to reduce the deficit.

“If you could do it and it was credible and people believed it and it was real, I think that could do a lot for confidence.”

Let’s reword that a bit: If a deficit reduction plan was credible – meaning people believe it can work based on its assumptions and terms – and real – meaning the people proposing it are committed to implementing it – then the public would have confidence that the government could reduce the deficit.

Put another way: Credibility + Reality = Confidence

Applying that formula to ObamaCare and the Recovery Act shows just how much liberals fail to make the grade.

• Credibility: For months President Obama and Congressional Democrats swore that the individual mandate was not a tax, before claiming it was an excise tax so it can survive charges of being unconstitutional.
• Reality: A key argument for passing the Recovery Act was to keep unemployment below 8%.  Nearly $800 billion later, the number is 9.5%.
• Confidence: The latest RealClearPolitics average shows 60% of Americans agreeing that the country is on the wrong track.

So far, the liberals running Washington, D.C. have shown themselves anything but credible and based in reality.  No wonder nearly two-thirds of Americans have no confidence in them.

Here they go again.  After a week’s worth of media beatings for taking an expensive vacation to Spain that is costing American taxpayers $75,000 a day (for the security detail), the folks running the Obama Administration still haven’t learned how to avoid self-inflicted PR nightmares.

Here’s a brief reminder:

• Gifts of incompatible DVDs given to the British Prime Minister
• Gift of an IPOD to the Queen of England filled with President Obama’s speeches
• Conflicting directives from the White House Social Secretary that enabled the Salahis to gate crash a state dinner
• Excruciatingly slow response to the Gulf Oil Disaster that made the president look impotent
• Haphazard action plan thereafter that made him look incompetent
• Continuing to host a series of expensive private parties at the White House during a severe economic downturn

All of these can be chalked up to a group of people who were not – and so far, are not – ready for prime time.  According to columnist Kirsten Powers, if this keeps up the limelight may not be shining much longer:

Some argue that Michelle should be able to travel wherever she wants if she’s paying for it herself. This is naive. She is the first lady at a time when Americans are experiencing great economic pain. There are endless great locations here at home that she could put on the map with a visit — American hotels and restaurants that would be grateful for the business generated by such a high-profile visitor.

If it’s a huge sacrifice for her, so be it. Sacrifice is actually a noble trait, last I checked.

Plus, if she keeps this up, she will be able to vacation anywhere she wants in about two years.

Courtesy of Gary North’s website, here’s a video on Canada’s best – and at 11 terms, longest-serving – mayor, Hazel McCallion.

The recession is not getting better.  In a “snap” analysis by Reuters the following lowlights from the jobs front is not encouraging.

* Temporary jobs dropped by 5,600, reversing a streak of strong gains that economists had viewed as a hopeful sign that hiring would pick up.

* Normally, companies load up on temps at the beginning of a recovery when they are waiting for confirmation that growth is gaining momentum. This recovery has been unusual in that temporary hiring did not herald a jump in private hiring.

* Private hiring totaled a lackluster 71,000 in July, below expectations for 90,000 in a Reuters poll. June’s tally was revised down to just 31,000 from an initially reported 83,000.

* Government hiring was another worrisome sign. The loss of 202,000 positions reflected the loss of 143,000 temporary Census jobs.

* The total also included 38,000 jobs lost in local government. For most municipalities, the fiscal year began on July 1, and government associations have been warning that huge budget gaps would force aggressive job and spending cuts. July’s report suggests local governments got a quick start.

With the evidence mounting of a prolonged economic downturn, it’s time for someone – Republicans, Tea Parties, etc. – to start making the moral case against the liberal approach to (mis)managing the economy.  People are losing their ability to support themselves independently, making welfare a more attractive – and necessary – option for increasing numbers of middle class workers.  Not only is expanding the welfare state unsustainable, it harms the entrepreneurial spirit that makes economic recovery possible.

In order for America to get back to work, the incoming wave of office holders this November needs to remove the barriers to productivity that are killing employment growth.

CFIF Senior Fellow Troy Senik today reviews the most recent fix-it guide for California state politics in the Opinion section of the Wall Street Journal.  According to Senik the book, California Crackup, does a great job detailing the problems; especially the unintended consequences of pro-taxpayer measures like Proposition 13.  However, the “solutions” section leaves too much off the table – like taking on the mounting pension crisis spurred by public employee unions.

Read the entire column here.

Today’s Senate vote to confirm Elena Kagan to the U.S. Supreme Court was unsurprising because a majority of senators had already committed their “Yea” votes.  Curious, though, was the support of Senator Judd Gregg (R-NH).  You may remember that Gregg was the man who turned down President Barack Obama’s offer to be Commerce Secretary, and then set about hammering the Obama Administration’s fiscal profligacy.

He also opted not to seek reelection after his term ends next January.  Here’s Gregg’s statement on why he voted for Kagan:

Senator Gregg stated, “The Senate’s duty to provide advice and consent on Presidential nominations to the Supreme Court is one of its most significant constitutional responsibilities.  Separate and distinct from its legislative function, the confirmation process requires the Senate to put aside politics and conduct a frank and evenhanded review of the nominee’s record, qualifications and demonstrated ability to apply the law in a fair and impartial manner.

“I have met personally with Solicitor General Elena Kagan, reviewed her record, and followed her testimony before the Senate Judiciary Committee.  During this process, Ms. Kagan has pledged that she will exercise judicial restraint and decide each case that comes before her based on the law, with objectivity and without regard to her personal views.  She also has served the American people under two different administrations and has a strong legal academic background.   She is qualified to serve on the U.S. Supreme Court.

“Ms. Kagan and I may have different political philosophies, but I believe that the confirmation process should be based on qualifications, not ideological litmus tests or political affiliation.  I will vote for her confirmation.”

Please.  Kagan served in two Democrat administrations and published three articles in nearly two decades as an “academic.” The only qualifications Kagan has to be an Associate Justice is a Harvard law degree and an uncanny ability to land jobs for which she has no preparation.

That’s the question raised in four states after recent events suggest that state and local Democrat officials are backing several alleged Tea Party candidates.  According to a report by Politico, incidents in Pennsylvania, New Jersey, Florida and Michigan are prompting calls for more scrutiny of third party challengers in tight races.

The accusations range from helping tea party activists circulate candidate petition sheets to underwriting the creation of official tea parties, which then put forth slates of candidates that local conservatives accuse of being rife with Democratic plants.

In all of the affected races, the outcome is expected to be close enough that a third-party candidate who wins just a few percentage points could end up swinging the outcome to the Democratic congressman or candidate.

So far, there is no direct evidence of an official Democrat-directed conspiracy to recruit and fund Tea Party candidates.  However, a third party spoiler strategy makes much more sense than the Democratic National Committee’s recent pledge to convince Americans that the Tea Party and GOP are one in the same.

Could this be another example of “government” working better at the local level?

As usual, Jay Cost has an eyebrow raising piece of analysis – today discussing in Technicolor detail how President Barack Obama’s narrow geographic popularity foretold of a need to govern from the center of the country; not the center of his party.

What he should have done instead was disarm his opponents. If he had built initial policy proposals from the middle, he could have wooed the moderate flank of the Republican party, marginalized the conservatives, and alleviated the concerns of those gettable voters in the South and the Midwest. This is precisely what Bill Clinton did between 1995 and 2000, and it is what the President’s promises of “post-partisanship” suggested.

Our system of government can only produce policy when geographically broad coalitions favor it. The Senate, more than any other institution, forces such breadth. Obama created breadth the wrong way. He watered down initially liberal legislation to prompt just enough moderate Democrats to sign on. Instead, he should have built policy from the center, then worked to pick up enough votes on either side. The left would have been disappointed, but the right would have been marginalized and, most importantly, Independent voters – who have abandoned the President in droves – might still be on board.

One of the great ironies of liberal politicians is that they so often discount the yen of conservative intellectuals to participate in policy making.  People like Rep. Paul Ryan (R-WI) and former House Speaker Newt Gingrich (R-GA) are driven by ideas, and enjoy the process of fashioning policies that get as many of them enacted as possible.

But they are not necessarily “my-way-or-the-highway” types.  Ryan’s Roadmap for America’s Future is a multi-decade plan for balancing the budget.  Implicit in its longevity is Ryan’s willingness to work out compromises that preserve Social Security and Medicare while making them fiscally sound.  For his part, Gingrich has always been the kind of politician willing to hammer out solutions with the other side, as he attempted to do with Bill Clinton.

People wonder why we don’t have bipartisan breakthroughs anymore.  In part, it’s because politicians like Barack Obama don’t have the political sense to “spread the success around” turning their adversaries into cooperators.

As CFIF reported, there is more to Kris Kobach than being the principal drafter of the Arizona’s illegal immigration law SB 1070.  Last night, Kobach secured the Kansas Republican Party’s nomination for Secretary of State.  The accomplishment makes him likely the highest profile SOS candidate in the country, and is sure to put election law-related issues at the forefront of the midterm elections.  First up on Kobach’s agenda?  Requiring all voters to provide a photo ID when casting a ballot.

Stay tuned.

“For want of a nail the shoe was lost.  For want of a shoe the horse was lost.  For want of a horse the rider was lost.  For want of a rider the battle was lost.  For want of a battle the kingdom was lost.  And all for the want of a horseshoe nail.”

Today’s lesson in unintended consequences comes from an article that covers several flash points threatening to engulf a relatively peaceful Iraq into renewed chaos.  One item shines brightest.

The Iraqi government can’t provide more than 4 to 6 hours of electricity a day to most of its citizens.  With local temperatures many degrees over 100, people are rioting because of it.

Consider what they’re not rioting about: the escape of four convicted terrorists from prison; a five month delay in forming a coalition government to lead the nation; suicide bombings that killed 50 people; a stalemate in deciding how to divide the country’s oil revenues.

And yet what’s the issue that caused people to “smash government offices” and demand change?  Keeping the electricity running.

Ideas like liberty, commerce and opportunity don’t get a lot of attention when basic services like relief from oppressive heat aren’t being delivered.

The sooner the terrorists inside Iraq figure out that merely being a competent public administrator will probably be enough to get democratic control of the national government, the sooner the Arab world’s only experiment in democracy will cease.

All for want of a steady supply of energy.

Thanks be to Hugh Hewitt who today highlights a multi-level government project to build a $50 million safety net 20 feet below the Golden Gate bridge to catch would-be suicide jumpers.  Apparently, about two dozen people a year jump to their deaths from one of San Francisco’s most popular attractions, and I’ll be the last person to quibble with the notion that every life is worth saving.

But as Hewitt points out, even the interest on $50 million could do a lot to reduce the conditions that create a suicidal decision.  Much like the economy, it would be nice if the people running government at all levels would concentrate more on creating the conditions for success instead of constructing elaborate safety nets when regulations fail people.

While I’m glad to see the Bay Area concerned with preserving at least one form of human life from senseless destruction, surely $50 million could do more good for more people than stringing out a last-ditch safety net for about 25 people a year.

H/T: Washington Examiner